JUDGMENT : Heard Mr. Ajit Kumar, Senior counsel appearing on behalf of the petitioners assisted by Mr. Amit Kumar Tiwari, Advocate. 2. Heard Mr. Rajiv Ranjan, Senior counsel appearing on behalf of the respondents assisted by Mr. Ashok Yadav, Advocate and Mr. Shrey Mishra, Advocate. 3. This writ petition has been filed for the following relief: “For quashing of (a) Reference No. TA/P&S/2002/5367 dated 10.11.2003 issued by the Dy. Manager (L&E), Bokaro Steel Plant, Bokaro Steel City, addressed to the petitioner no.1 as contained in Annexure – 7 to this amended writ application. (b) Ref. No.TA/P&S/203/265, dated 21.01.2004 issued by the Dy. Manager (L&E) to the petitioner to the petitioner no.2, as contained in Annexure- 12 to this amended writ application; and (c) Ref. Letter No. TA/P&S/2002/5153 dated 23.10.2003 issued by the Deputy Manager (L&S), Bokaro steel Plant, Bokaro steel City, Bokaro, to the petitioner no.3, as contained in Annexure – 15 to this amended writ application. Whereby imposing arbitrary and unconscionable condition for renewal of their long lease agreement for their respective plots and for suitable writ / order / direction commanding upon and directing the respondents not to take any coercive steps for eviction or otherwise in respect of their respective plots on any unjust ground. (ii) For quashing of the letter no. TA/LRA/R/2013-419, dated 11.02.2013, which has been issued to the substituted legal heirs and representative of the orginal petitioner no.2 namely Rajballabh Singh, directing them to deposit Rs. 54,72,581.48/- after calculating the renewal charge, the security money, deviation penalty, liquidation, damages, after adjustment of earlier security deposit during the pendency of the connected writ petition and even during the stay granted by this Hon’ble Court vide its order dated 03.03.2004 (Annexure-23 to this amended writ application) (Amendment prayer vide order dated 08.08.2013). (iii) For quashing and setting aside the Steel Authority of India Board’s Resolution taken in the 284th Meeting of its Board of Directors held on 11.12.2002 including the resolution of the 282nd Meeting dated 24.09.2002, so far it affects the cases of the old lessees like the petitioners and more particularly the rates/amount of premium which have been prescribed exorbitantly high without any valid basis and behind the back of the petitioners and has been made applicable upon them. And the petitioners further pray for quashing of the said resolution so far as it relates to fixation of rent and other charges which have been directed to be calculated upon the basis of the arbitrary prescribed premium.” 4. Counsel appearing on behalf of the petitioners submits as under: (i). Although in the instant writ petition, the decision taken by the Board of Directors of respondent-Steel Authority of India Limited in its 284th meeting on 11.12.2002 as well as 282nd meeting of the Board of Director held on 24.09.2002 are under challenge but the specific case of the petitioners is that the resolution taken in these meetings are not applicable to the petitioners at all. He has further raised an issue as to whether the demand of premium for renewal of lease which is about 400 times as compared to the existing lease in light of its renewal clause is violative of Article 14 of the Constitution of India. Accordingly, the petitioners have also prayed for quashing of the demand which has been raised by the respondents for the purposes of renewal of the lease which is admittedly based on the two resolutions based on 284th meeting of the Board of Directors held on 11.12.2002 and 282nd meeting of the Board of Directors of the respondents held on 24.09.2002. (ii). So far as petitioner no.1 is concerned, it is the specific case that her predecessor in interest, M.N. Mishra was one of the displaced person who lost his house, homestead land etc. which was acquired for the purposes of setting up of Bokaro Steel Plant and he had applied for lease in City Centre, Sector –IV, Bokaro, Steel City, for setting up a shop of cloth and readymade garments and also for his residence as he was displaced person. (iii). The said property was allotted to him vide letter dated 04.10.1969 on lease hold basis for a period of 30 years subject to advance annual rent @ Rs.4000/- per acre i.e., Rs.88/- and security money without interest amounting to Rs.88/- and premium deposit for 30 years lease @ Rs.9,000/- per acre amounting to Rs.199/-. (iv). Accordingly, a lease agreement dated 22.6.1970 was executed, which provided for a renewal clause. (v). Subsequently, in the year 1998, said M.N. Mishra, intended to transfer his interest in the leasehold plot in favour of the petitioner no. (iv). Accordingly, a lease agreement dated 22.6.1970 was executed, which provided for a renewal clause. (v). Subsequently, in the year 1998, said M.N. Mishra, intended to transfer his interest in the leasehold plot in favour of the petitioner no. 1 and for that purpose he applied for permission to transfer which was granted vide letter dated 07.10.1998, upon payment of certain transfer fee. (vi). Thereafter, the property was transferred in favour of the petitioner no.1 vide registered deed executed by said Sri M.N. Mishra on 23.10.1998, and her name was transferred in the relevant register of the respondents. (vii). The term of lease was to expire shortly and therefore the petitioner no.1 made a request for renewal of lease, as per the lease agreement, vide letter dated 16.02.2000, which remained pending with the respondents for long time and ultimately vide letter dated 10.11.2003, the respondents imposed condition for renewal upon payment of premium amount of Rs.1,19,296/- for a period of 33 years. By referring to aforesaid letter dated 10.11.2003, the counsel for the petitioners submits that the renewal premium has been demanded @ 25 % of applicable land premium rate of Rs.3,200/- i.e., @ Rs. 800/- per square meter. He further submits that other connected calculations have also been made on the basis of this premium amount. (viii). The counsel submits that pursuant to aforesaid communication, the petitioner no.1 made a representation addressed to the Deputy General Manager, Land and Estate Bokaro Steel Plant, Bokaro requesting them to arrange a meeting for settlement of terms of renewal of lease, but in spite of this representation, a letter was issued to the petitioners asking to deposit the amount within a period of 15 days which was the cause of action for filing this writ petition. (ix). So far as petitioner no. 2 is concerned, he was allotted Plot No. S1 and S2 at City Centre, Sector – IV, Bokaro Steel City to set-up his L.P.G. Gas Agency (Indane) which was allotted to him by the Government of India as a dependent of Late Samarjit Singh, who had sacrificed his life for the nation during the INDO-PAK war of 1971 while serving in Indian Navy. The agreement for lease was for 30 years and was registered on 07.06.1973 which was for plot- S1. Subsequently, another plot was given to the petitioner no.2 which was plot no. The agreement for lease was for 30 years and was registered on 07.06.1973 which was for plot- S1. Subsequently, another plot was given to the petitioner no.2 which was plot no. S2 for a period of 22 years by registered deed of lease agreement dated 22.05.1981. The plot no. S1 was for a premium of Rs.1,116/- and for plot no. S-2 was for a premium of Rs.24,793/- and the annual total rent was Rs. 496/- for two plots. (x). In the case of petitioner no.2 also, the period of lease was about to expire and accordingly petitioner no.2 requested for renewal of the lease pursuant to which the respondents vide letter dated 21.01.2004, asked the petitioner no.2 to pay the premium amounting to Rs.8,02,680/- being the renewal premium @ 25 % of applicable land premium rate of Rs.3,200/- i.e., @ Rs. 800/- per square meter and other connected calculations have also been made on the basis of this premium amount. (xi). Similarly, the petitioner no.3 was allotted plot in City Centre, Sector – IV, Bokaro Steel City by order of allotment dated 03.07.1973 for the purposes of setting up automobile business on the basis of lease agreement for 30 years for an area measuring 3175 square yard equivalent to 2654.7 square meter for which the initial premium was fixed @ Rs.5903/- and the annual rent was fixed @ Rs2624/-. As the lease was about to expire on 23.06.2003, the petitioner no.3 had applied for renewal of lease much prior to the expiry of lease, which was responded to by the respondents vide letter dated 23.10.2003 whereby the petitioner no.3 was asked to deposit the premium amounting to Rs. 21,23,763.49/-. This document is contained in Annexure – 16 and the renewal premium has been demanded @ 25 % of applicable land premium rate of Rs.3,200/- i.e., @ Rs. 800/- per square meter. He further submits that other connected calculations have also been made on the basis of this premium amount. (xii). Counsel for the petitioners submits that at the stage of filing of the writ petition, the petitioners were not aware as to the basis on which such exorbitant premium and other amounts were demanded from the petitioners and therefore they challenge the same by filing a writ petition. (xiii). (xii). Counsel for the petitioners submits that at the stage of filing of the writ petition, the petitioners were not aware as to the basis on which such exorbitant premium and other amounts were demanded from the petitioners and therefore they challenge the same by filing a writ petition. (xiii). However, in the counter-affidavit, the respondents tried to justify the premium amount on the basis of decision of Board of Directors dated 24.09.2002 read with the decision of Board of Director dated 11.12.2002. In such circumstances, these two decisions were challenged by the petitioners by filing an interlocutory application for amendment of the writ petition which was initially rejected but subsequently in Letters Patent Appeal, the amendment was allowed and the amended writ petition has been filed which is being argued. (xiv). Counsel for the petitioners submits that although the property was allotted for the purposes of setting up of shop premises in the city center for business purpose, but as per the terms and conditions of the lease deed itself, the respondents had sanctioned the map for construction of residence-cum-commercial complex in terms of clause 15 of the lease deed. He submits that accordingly the land use of the property which was allotted to the petitioners was residence-cum-commercial and with due permission of the respondents as permissible under the terms of the lease deed. (xv). With this background, counsel for the petitioners submits that the decisions by way of resolutions which have been referred to by the respondents arising out of 282nd and 284th meeting of the Board of Directors has no applicability. By referring to the decision of 282nd meeting of the Board of Directors held on 24.09.2002, he refers to the various clauses and submits that upon perusal of this particular document, it appears that it relates to revised rates towards premium/consideration for land leased for commercial, educational, social, religious, cultural and such other purposes (except residential) and for that purpose, the respondents had got the properties valued by HDFC for the purposes of allotment of land to government/ outside agencies in Steel townships including the township at Bokaro. It was found that there are 14 land rates connected with residential units which vary from town to town and even from sector to sector in the same town. It was found that there are 14 land rates connected with residential units which vary from town to town and even from sector to sector in the same town. However, there was only one land rate for commercial purpose uniformly applicable in all the SAIL towns in all their sectors. (xvi). Therefore, he submits that it is clearly indicated in the 282nd meeting of the Board of Directors that the decisions contained in the same has to uniformly apply for different purposes i.e., commercial, educational, social, religious, cultural, non-profit making institutions and such other purposes (except residential). In this particular document, the land rate for Bokaro Steel Limited at City Centre was indicated to be Rs.3200/- per square meter which finds reference in all the impugned letters issued by the respondents demanding premium for renewal. He submits that as the property involved in this case had duly permitted land use as residence-cum-commercial therefore the decision taken in minutes of meeting of Board of Directors held on 24.09.2002 has no applicability. (xvii). He thereafter refers to resolution pursuant to 284th meeting of Board of Directors held on 11.12.2002, which was issued in furtherance to the minutes of meeting dated 24.09.2002 and in the said resolution, it was decided that it would cover those earlier cases of allotment of land also where stipulation exist to apply the revised terms and conditions on renewal of lease. By referring to the resolution pursuant to minutes of meeting dated 11.12.2002, the counsel submits that the norms for allotment of plot size with respect to various categories educational, professional, religious institutions, cultural organization, libraries, bank shops, cinema halls etc. was provided and at clause 3.8, it was decided that the lease shall be renewed on payment of renewal charges @ 25 percent of the applicable land premium prevailing on the date of renewal and the ground rent was fixed to be 1 % of the applicable land premium and service charges were fixed @ 2 % of the applicable land premium. (xviii). (xviii). He submits that this decision dated 11.12.2002 was in furtherance of the meeting held on 24.09.2002 and from the conjoint reading of these two documents, it is clear that the prescribed rate was in regard to the properties which are of the nature of commercial, educational, social, religious, cultural, non-profit making institutions and such other purposes (except residential) and so far as the residential colony is concerned, the same was to be governed by the land rate for the concerned location. Counsel for the petitioners submit that the properties of the petitioners are no longer purely commercial properties and the sanction of the building plan for residence-cum-commercial was done by the respondents in terms of the lease agreement and therefore the aforesaid two resolutions arising out of the Board of Meeting taken in 282nd and 284th meetings do not apply to these kinds of properties. He submits that residence-cum-commercial properties have not been dealt with in the said two resolutions. (xix). Counsel for the petitioners submits that in view of aforesaid circumstances, the respondents having applied the said two resolutions, there has been an exorbitant increase in the rate of the premium being demanded by the respondents. He submits that there is no dispute that the renewal of lease would be a fresh lease but the decisions is required to be taken in accordance with law and the respondents having referred to the aforesaid two resolutions and having applied the same to the properties of the petitioners which are commercial-cum-residential, such action on the part of the respondents is arbitrary, complete non-application of mind and hence violative of Article 14 of the Constitution of India. He submits that ex-facie these two resolutions particularly, the rates mentioned therein, do not apply for residential or to residential-cum-commercial premises. (xx). He submits that for the purposes of ascertaining the premium for the nature of premises which are being occupied by the petitioners, a fresh assessment is required to be done by the respondents and the decisions taken in the aforesaid two meetings cannot apply. Application of the decisions taken in these two meetings, is an arbitrary exercise of power and suffers from complete non-application of mind by the respondents so far as applicability of decisions of these two meeting are concerned. (xxi). Application of the decisions taken in these two meetings, is an arbitrary exercise of power and suffers from complete non-application of mind by the respondents so far as applicability of decisions of these two meeting are concerned. (xxi). Counsel for the petitioners has also referred to judgment passed by Hon’ble Supreme Court reported in 2009 (1) SCC 150 (Karnataka State Forest Industries Corporation versus Indian Bricks) para 38 and 39 to submit that although a writ petition under normal circumstances arising out of contractual obligations may not lie for the enforcement of the terms of contract, but if the action of the State is arbitrary or discriminatory and is thus violative of Article 14 of the Constitution of India, then the writ petition would be maintainable. He submits that a duty is cast on the authorities, who are State within the meaning of Article 12 of the Constitution of India, to act fairly and in accordance with law so that their actions confirm to mandate of Article 14 of the Constitution of India. He submits that there is no dispute that the respondent-Steel Authority of India Limited (SAIL) is “State” within the meaning of Article 12 of the Constitution of India. (xxii). He further refers to judgment passed by Bombay High Court in case reported in 2005 (2) MH.L.J. 644 (Indian Oil Corporation versus State of Maharashtra) in W.P No.1041 of 2002 decided on 14.01.2005 and refers to para – 11, 12, and 13 of the said judgment and submits that the ordinary law which is applicable to the other private players in the field relating to rent control is not applicable to the State, but still the State cannot resort to profiteering by taking a decision on demand of premium on land while leasing out to various authorities and they cannot escape from their obligations under Article 14 of the Constitution of India. He also refers to another judgment by Hon’ble Supreme Court (2004) 3 SCC 214 para – 19 of the said judgment to submit that it has been held by Hon’ble Supreme Court that the balance has to be struck between the two streams and this judgment has been followed in 2005 (2) MH.L.J. 644 (Indian Oil Corporation versus State of Maharashtra) (supra). He has also referred to another judgment reported in (2012) 13 SCC 165 (Voltas Limited versus Tahsildar, Thane and others) para – 31 and 33 to submit that the respondents having allowed the petitioners to change the land use from commercial to residence- cum- commercial, therefore at the time of renewal of lease, property cannot be treated as purely commercial and it has to be treated as residence-cum-commercial. He further submits that such change in land use was duly contemplated in the lease deed itself as is apparent from the various clauses of the lease deed particularly clause no.15 thereof. (xxiii). He submits that even in the cases of lease of the property, the respondents herein are governed by Article 14 of the Constitution of India and if any action is found arbitrary then certainly the writ petition is maintainable under Article 226 of the Constitution of India. He has also submitted by referring to a judgment passed by Hon’ble Supreme Court reported in AIR 1965 SC 1871 to submit that the premium is charged once and the rent is charged from time to time. 5. Learned Senior counsel appearing on behalf of the respondent on the other hand submits as under: (i). The instant writ petition itself is not maintainable and for that he refers to a judgment passed by Hon’ble Supreme Court reported in (1977) 3 SCC 457 (Smt. Raj Rani and another versus Kailash Chand and another) and he submits that the Hon’ble Supreme Court in this judgment has held that where the contract entered into between the State and private person and the contract is non-statutory and purely contractual and the rights and liabilities of the parties are governed by the terms of the contract, then under such circumstances, the remedy under Article 226 of the Constitution of India is not open to the complainant. Such category purely falls under the category where question of pure breach of contract are involved and no writ can lie under Article 226 of the Constitution of India. (ii). Such category purely falls under the category where question of pure breach of contract are involved and no writ can lie under Article 226 of the Constitution of India. (ii). He further refers to a judgment passed by this Court reported in (2006) 2 JLJR 250 (HC) (Santosh Narayan @ Santosh Kumar and Another versus Steel Authority of India Ltd. And others) wherein the writ petitioner had filed a writ petition before this Court challenging demand made by the respondent- SAIL on account of development cost of land and it was indicated that on account of non-payment, the agreement of lease will be terminated. He submits that in this particular case this Hon’ble Court by referring to the judgment passed by Hon’ble Supreme Court reported in (1977) 3 SCC 457 (supra) has held that the writ petition is not maintainable and it was for the petitioners to seek remedy through competent court of civil jurisdiction, as the questions therein arose out of the clauses of the lease deed. (iii). He also refers to another judgment reported in 2004 (1) JCR 127 (Suraj Prasad versus Steel Authority of India Limited and others) and submits that this judgment is also on similar lines and in this judgment also this Court has been pleased to hold that writ petition is not maintainable following the ratio of judgment passed by Hon’ble Supreme Court reported in (1977) 3 SCC 457 (supra). (iv). He has also referred to another judgment passed by Hon’ble Supreme Court reported in (1989) 2 SCC 505 (State of U.P and others versus Maharaja Dharmander Prasad Singh and others) and referred to para – 27 and 28 of the said judgment wherein, it was held that the issues relating to forfeiture and cancellation of lease should not be permitted to be agitated under Article 226 of the Constitution of India. (v). Further on the merits of the case, learned counsel refers to clause - 29 of the lease deed and he submits that there is a clear stipulation under clause - 29 that the renewal will be a fresh lease and accordingly it is open to the respondents to provide and demand the premium, rent, security money etc. as per the terms and conditions of the lease. as per the terms and conditions of the lease. He also refers to the schedule to the lease deed wherein it has been clearly mentioned that the property has been allocated for commercial purpose and he submits that merely because of clause no. 15 of the lease deed, indicates that the respondents may permit the use of the property as dwelling house, office or shop or for any lawful purpose, the same will not change the nature of land use from commercial to residential. (vi). Accordingly, he submits that the nature of property continues to be commercial and therefore the decisions taken vide aforesaid two resolutions vide 284th meeting on 11.12.2002 and 282nd meeting on 24.09.2002 of the Board of Director of respondents is fully applicable. (vii). However, during the course of arguments, the fact that there has been a sanction of construction for residence - cum -commercial purpose has not been disputed by the respondents, but he submits that in spite of such sanction the nature of land use of the property continues to be commercial as the entire area is commercial as per the land use prescribed by the respondents. He submits that mere sanction of residential-cum-commercial complex over the property has no bearing in the matter. Accordingly, he submits that the decisions taken vide resolutions on 24.09.2002 and 11.12.2002 which is the basis for raising the demand of premium etc. upon the petitioners for renewal of lease is fully justified. 6. After hearing the counsel for the parties and considering the materials on record, this Court finds as under: (i). Admittedly the properties involved in this case are located in city center of Bokaro. (ii). The petitioners have entered into lease deeds in connection with the property involved in this case and as per the terms of lease they have filed application for renewal of lease which ultimately led to issuance of the impugned demands of premium and other charges contained in letters dated 10.11.2003, 21.01.2004 and 23.10.2003 with respect to petitioner nos. 1, 2 and 3 respectively. (iii). 1, 2 and 3 respectively. (iii). This Court further finds that the demand of the premium amount and other charges as mentioned in impugned demand is @ 800 per square meter which is 25 % of Rs.3200 per square meter and it is the specific case of the respondents in the counter affidavit that this demand is based on two Board meetings being 282nd Board meeting held on 24.09.2002 and 284th meeting held on 11.12.2002. In such circumstances, the writ petition was amended and the decisions of the Board is under challenge. (iv). During the course of arguments, the petitioners have specifically argued that these decisions have no applicability to the premises involved in this case and this point was specifically responded to by the respondents during the course of arguments. The respondents have opposed the writ petition on the point of maintainability of the writ petition. (v). It would be proper to deal first with the point of maintainability of the writ petition. (vi). On the point of maintainability of this writ petition, this Court finds that the central issue which is involved in this case is the applicability of aforesaid two resolutions, based on aforesaid two Board meetings, on the renewal of lease of the petitioners. These are the decisions taken by the respondents and the specific case of the petitioners is that these two resolutions do not cover the case of the petitioners as the property of the petitioners has undertaken a permitted change in land use by virtue of sanction of the use of the property as residential-cum-commercial. In such circumstances, this Court finds that adjudication of this writ petition may not involve interpretation of the terms and conditions of lease between the parties and the issue to be examined is whether the decisions which has been taken in the aforesaid Board meetings dated 24.09.2002 and 11.12.2002 at all applies to the petitioners or not. This Court further finds that in arriving at any finding on this point, it may be required to incidentally examine or refer to a few terms and conditions of the lease which stand admitted by both the parties. This Court further finds that in arriving at any finding on this point, it may be required to incidentally examine or refer to a few terms and conditions of the lease which stand admitted by both the parties. Therefore, this Court finds that in order to examine the action of the respondents in applying aforesaid two decisions upon the petitioners, a question of violation of Article 14 of the Constitution of India may arise as the specific argument of the petitioners is that the decisions which has been taken in the aforesaid Board meetings of the respondents dated 24.09.2002 and 11.12.2002 has no applicability to the petitioners and the respondents have arbitrarily applied the same to the petitioners. (vii). The respondents have relied upon the judgment passed by Hon’ble Supreme Court reported in (1977) 3 SCC 457 (supra) which has been followed in judgment passed by this court reported in 2004 (1) JCR 127 (Suraj Prasad versus Steel Authority of India Limited and others) and reported in (2006) 2 JLJR 250 (HC) (Santosh Narayan @ Santosh Kumar and Another versus Steel Authority of India Ltd. And others). The law in connection with state acting in contractual field and applicability of Article 14 of the Constitution of India has been considered and laid down by Hon’ble Supreme Court reported in (1977) 3 SCC 457 (supra). For better appreciation of the case at hand, it would be useful to quote some of the paragraphs of the said judgment which are as follows:- “9. Dr Singhvi’s argument that the State Government had some special obligations attached to it would have appeared more plausible if it could be shown that the State or its officers or agents had practised some discrimination against the petitioners-appellants at the very threshold or at the time of entry into the field of contract so as to exclude them from consideration when compared with others on any unreasonable or unsustainable ground struck by Article 14 of the Constitution. It is true that Article 14 of the Constitution imports a limitation or imposes an obligation upon the State’s executive power under Article 298 of the Constitution. All constitutional powers carry corresponding obligations with them. This is the rule of law which regulates the operation of organs of Government functioning under a Constitution. It is true that Article 14 of the Constitution imports a limitation or imposes an obligation upon the State’s executive power under Article 298 of the Constitution. All constitutional powers carry corresponding obligations with them. This is the rule of law which regulates the operation of organs of Government functioning under a Constitution. And, this is exactly what was meant to be laid down by this Court in Erusian Equipment and Chemicals Ltd. v. State of West Bengal on which learned Counsel for the appellants sought to rely strongly. It was held there (at p. 677) (SCC p.74, para 12): “Under Article 298 of the Constitution the Executive power of the Union and the State shall extend to the carrying on of any trade and to the acquisition, holding and disposal of property and the making of contracts for any purpose. The State can carry on executive function by making a law or without making a law. The exercise of such powers and functions in trade by the State is subject to Part III of the Constitution. Article 14 speaks of equality before the law and equal protection of the laws. Equality of opportunity should apply to matters of public contracts. The State has the right to trade. The State has there the duty to observe equality. An ordinary individual can choose not to deal with any person. The Government cannot choose to exclude persons by discrimination. The order of black-listing has the effect of depriving a person of equality of opportunity in the matter of public contract. A person who is on the approved list is unable to enter into advantageous relations with the Government because of the order of blacklisting. A person who has been dealing with the Government in the matter of sale and purchase of materials has a legitimate interest or expectation. When the State acts to the prejudice of a person it has to be supported by legality.” 10. It is thus clear that the Erusian Equipment & Chemicals Ltd. case involved discrimination at the very threshold or at the time of entry into the field of consideration of persons with whom the Government could contract at all. When the State acts to the prejudice of a person it has to be supported by legality.” 10. It is thus clear that the Erusian Equipment & Chemicals Ltd. case involved discrimination at the very threshold or at the time of entry into the field of consideration of persons with whom the Government could contract at all. At this stage, no doubt, the State acts purely in its executive capacity and is bound by the obligations which dealings of the State with the individual citizens import into every transaction entered into in exercise of its constitutional powers. But, after the State or its agents have entered into the field of ordinary contract, the relations are no longer governed by the constitutional provisions but by the legally valid contract which determines rights and obligations of the parties inter se. No question arises of violation of Article 14 or of any other constitutional provision when the State or its agents, purporting to act within this field, perform any act. In this sphere, they can only claim rights conferred upon them by contract and are bound by the terms of the contract only unless some statute steps in and confers some special statutory power or obligation on the State in the contractual field which is apart from contract. 11. In the cases before us the contracts do not contain any statutory terms or obligations and no statutory power or obligation which could attract the application of Article 14 of the Constitution is involved here. Even in cases where the question is of choice or consideration of competing claims before an entry into the field of contract facts have to be investigated and found before the question of a violation of Article 14 could arise. If those facts are disputed and require assessment of evidence the correctness of which can only be tested satisfactorily by talking detailed evidence, involving examination and cross-examination of witnesses, the case could not be conveniently or satisfactorily decided in proceedings under Article 226 of the Constitution. Such proceedings are summary proceedings reserved for extraordinary cases where the exceptional and what are described as, perhaps not quite accurately, “prerogative” powers of the Court are invoked. We are certain that the cases before us are not such in which powers under Article 226 of the Constitution could be invoked. 20. Such proceedings are summary proceedings reserved for extraordinary cases where the exceptional and what are described as, perhaps not quite accurately, “prerogative” powers of the Court are invoked. We are certain that the cases before us are not such in which powers under Article 226 of the Constitution could be invoked. 20. Learned Solicitor General, appearing for the State, contended that there could be no aspect of Article 14 of the Constitution involved in a case where no comparison of the facts and circumstances of a particular petitioner’s case with those of other persons said to be similarly situated is involved. In such a case, he submitted, there was no possibility of inferring a discrimination. In reply, learned Counsel for the appellants sought to direct our attention towards some allegations showing that there was discrimination between appellants and other parties governed by similar contracts in other areas. We doubt very much whether the doctrine of discrimination can be at all availed of against the State’s action purporting to be taken solely within the contractual field when no aspect of any statutory or constitutional obligation appears either from incontrovertible facts or applicable legal provisions. Indeed, it has been held in C.K. Achuthan v. State of Kerala that no question of a violation of Article 14 arises even where one out of the several persons is selected by the State for a particular contractual transaction. Learned Counsel for the appellants submitted that there was a conflict between what was laid down here and the law declared by this Court in Erusian Equipment & Chemicals Ltd case. We think that the two cases are distinguishable on facts. The propositions of law laid down in the two cases must be read in the context of facts established in each case. In any event, the cases before us do not raise any question of discrimination alleged at the stage of entry into the contractual area which could attract the application of Article 14. 21. In the cases before us, allegations on which a violation of Article 14 could be based are neither properly made nor established. Before any adjudication on the question whether Article 14 of the Constitution could possibly be said to have been violated, as between persons governed by similar contracts, they must be properly put in issue and established. 21. In the cases before us, allegations on which a violation of Article 14 could be based are neither properly made nor established. Before any adjudication on the question whether Article 14 of the Constitution could possibly be said to have been violated, as between persons governed by similar contracts, they must be properly put in issue and established. Even if the appellants could be said to have raised any aspect of Article 14 of the Constitution and this Article could at all be held to operate within the contractual field whenever the State enters into such contracts, which we gravely doubt, such questions of fact do not appear to have been argued before the High Court. And, in any event, they are of such a nature that they cannot be satisfactorily decided without a detailed adduction of evidence, which is only possible in ordinary civil suits, to establish that the State, acting in its executive capacity through its officers, has discriminated between parties identically situated. On the allegations and affidavit evidence before us we cannot reach such a conclusion. Moreover, as we have already indicated earlier, the correct view is that it is the contract and not the executive power, regulated by the Constitution, which governs the relations of the parties on facts apparent in the cases before us. (viii). From perusal of para 20 of the aforesaid judgment, this court finds that the cases which were subject matter before the Hon’ble Supreme Court did not raise any question of discrimination alleged at the stage of entry into contractual area which could attract applicability of Article 14 of the Constitution of India and accordingly on facts the judgment passed by the Hon’ble Supreme Court reported in (1975) 1 SCC 70 (Erusian Equipment and Chemical Ltd. Versus State of West Bengal) was distinguished. In para 12,14 and 17 of the judgment reported in (1975) 1 SCC 70 it has been held as under:- “12. Under Article 298 of the Constitution the executive power of the Union and the State shall extend to the carrying on of any trade and to the acquisition, holding and disposal of property and the making of contracts for any purpose. The State can carry on executive function by making a law or without making a law. Under Article 298 of the Constitution the executive power of the Union and the State shall extend to the carrying on of any trade and to the acquisition, holding and disposal of property and the making of contracts for any purpose. The State can carry on executive function by making a law or without making a law. The exercise of such powers and functions in trade by the State is subject to Part III of the Constitution. Article 14 speaks of equality before the law and equal protection of the laws. Equality of opportunity should apply to matters of public contracts. The State has the right to trade. The State has there the duty to observe equality. An ordinary individual can choose not to deal with any person. The Government cannot choose to exclude persons by discrimination. The order of blacklisting has the effect of depriving a person of equality of opportunity in the matter of public contract. A person who is on the approved list is unable to enter into advantageous relations with the Government because of the order of blacklisting. A person who has been dealing with the Government in the matter of sale and purchase of materials has a legitimate interest or expectation. When the State acts to the prejudice of a person it has to be supported by legality. 14. The State can enter into contract with any person it chooses. No person has a fundamental right to insist that the Government must enter into a contract with him. A citizen has a right to earn livelihood and to pursue any trade. A citizen has a right to claim equal treatment to enter into a contract which may be proper, necessary and essential to his lawful calling. 17. The Government is a Government of laws and not of men. It is true that neither the petitioner nor the respondent has any right to enter into a contract but they are entitled to equal treatment with others who offer tender or quotations for the purchase of the goods. This privilege arises because it is the Government which is trading with the public and the democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions. Hohfeld treats privileges as a form of liberty as opposed to a duty. This privilege arises because it is the Government which is trading with the public and the democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions. Hohfeld treats privileges as a form of liberty as opposed to a duty. The activities of the Government have a public element and, therefore, there should be fairness and equality. The State need not enter into any contract with any one but if it does so, it must do so fairly without discrimination and without unfair procedure. Reputation is a part of a person’s character and personality. Blacklisting tarnishes one’s reputation. (ix). It has been held by Hon’ble Supreme court in judgment passed in the case of Karnataka State Forest Industries Corpn. v. Indian Rocks, (2009) 1 SCC 150 at para 38 and 39 as follows:- “38. Although ordinarily a superior court in exercise of its writ jurisdiction would not enforce the terms of a contract qua contract, it is trite that when an action of the State is arbitrary or discriminatory and, thus, violative of Article 14 of the Constitution of India, a writ petition would be maintainable. (See ABL International Ltd. v. Export Credit Guarantee Corpn. of India Ltd.) 39. There cannot be any doubt whatsoever that a writ of mandamus can be issued only when there exists a legal right in the writ petition and a corresponding legal duty on the part of the State, but then if any action on the part of the State is wholly unfair or arbitrary, the superior courts are not powerless. …………..” (x). It has been held by Hon’ble Supreme court in judgment passed in the case of Jamshed Hormusji Wadia v. Board of Trustees, Port of Mumbai, (2004) 3 SCC 214 , at para 16, 18 and 19 as follows: “16. The position of law is settled that the State and its authorities including instrumentalities of States have to be just, fair and reasonable in all their activities including those in the field of contracts. Even while playing the role of a landlord or a tenant, the State and its authorities remain so and cannot be heard or seen causing displeasure or discomfort to Article 14 of the Constitution of India. 18. In our opinion, in the field of contracts the State and its instrumentalities ought to so design their activities as would ensure fair competition and non-discrimination. 18. In our opinion, in the field of contracts the State and its instrumentalities ought to so design their activities as would ensure fair competition and non-discrimination. They can augment their resources but the object should be to serve the public cause and to do public good by resorting to fair and reasonable methods. ……………….. 19. A balance has to be struck between the two extremes. Having been exempted from the operation of rent control legislation, the courts cannot hold them tied to the same shackles from which the State and its instrumentalities have been freed by the legislature in their wisdom and thereby requiring them to be ruled indirectly or by analogy by the same law from which they are exempt. Otherwise, it would tantamount to defeating the exemption clause consciously enacted by the legislature. At the same time the liberty given to the State and its instrumentalities by the statute enacted under the Constitution does not exempt them from honouring the Constitution itself. They continue to be ruled by Article 14. The validity of their actions in the field of landlord-tenant relationship is available to be tested not under the rent control legislation but under the Constitution. The rent control legislations are temporary, if not seasonal; the Constitution is permanent and an all-time law.” (xi). In view of the aforesaid, this Court finds that Article 14 of the Constitution of India not only gives protection against discrimination but also gives protection against arbitrary and unfair exercise of power by the State even at the stage of entering into contract with any person. In the instant case, the matter relates to renewal of lease and there is no dispute between the parties on the point that the lease, if any, would be a fresh lease. (xii). The central issue involved in this case is applicability of aforesaid two decisions taken on 24.09.2002 and 11.12.2002 by the Board of the respondents which relates to grant of fresh leases and renewal of leases in various townships of the respondent at various locations situated at different cities in different states. (xii). The central issue involved in this case is applicability of aforesaid two decisions taken on 24.09.2002 and 11.12.2002 by the Board of the respondents which relates to grant of fresh leases and renewal of leases in various townships of the respondent at various locations situated at different cities in different states. What is required to be examined in this case is whether the respondent has acted fairly and not arbitrarily in the touchstone of Article 14 of the Constitution of India while communicating to the petitioners regarding applicability of the aforesaid two decisions taken on 24.09.2002 and 11.12.2002 by the Board in the matter of renewal of lease of the petitioners. (xiii). This Court finds that the applicability of the aforesaid two decisions taken on 24.09.2002 and 11.12.2002 can be examined even without going into the various clauses of the lease deed, in as much as, admittedly the respondents themselves have sanctioned the use of property as residential- cum -commercial and it is required to be examined as to whether the aforesaid two decisions apply to such premises. (xiv). In view of the aforesaid scope of enquiry involved in this case, this Court is of the considered view that the ratio of the judgment relied upon by the respondents reported in (1977) 3 SCC 457 (supra) does not apply to the facts and circumstances of this case. Accordingly, the judgments passed by this Court following the ratio of judgment reported in (1977) 3 SCC 457 (supra) also do not apply to the facts and circumstances of this case. So far as another judgment relied upon by the respondents reported in (1989) 2 SCC 505 (State of U.P and others versus Maharaja Dharmander Prasad Singh and others) is concerned, the same also does not apply to the facts and circumstances of this case and the limited issue involved in this case as the case before the Hon’ble Supreme Court related to forfeiture and cancellation of lease and also involved disputed questions of facts which could not have been adjudicated in writ jurisdiction. In view of the aforesaid, the point of maintainability of the writ petition is decided against the respondents and the writ petition is being decided to the extent of the limited issue mentioned above. (xv). In view of the aforesaid, the point of maintainability of the writ petition is decided against the respondents and the writ petition is being decided to the extent of the limited issue mentioned above. (xv). This Court is of the considered view that there may be various land uses which includes industrial, commercial, residential and also mix land use which may be residential- cum- commercial or commercial- cum -industrial and others. The use of land as residence- cum -commercial cannot be said to be on the same footing as that of purely commercial. It is not the case of the respondents that the sanction of building as residential - cum - commercial is against the permitted use under the lease deed. The specific case is that in spite of this permitted land use the property continues to be commercial as the property was allocated to the petitioners for establishment of shop in commercial area. (xvi). This Court finds that once the property has been permitted to be used for residential - cum - commercial purposes by way of proper sanction of building plan by the respondents themselves which in turn is as per the provisions of the lease deed itself, the nature of the property of the petitioners does not continue to be purely commercial and the same is to be treated as residential –cum- commercial for all purposes including for the purposes of renewal of lease deed. (xvii). The Board of Directors of the respondents in their 263rd meeting held on 22nd Sept. 2000 had approved a set of revised guidelines for allotment of lands on lease basis to Government/outside agencies in Steel Townships. The validity of these guidelines was upto 31st March 2003. (xviii). In partial supersession of earlier resolution No. 7669 dated 22nd September, 2000 the revision of rates of premium/consideration for lands at BSL, BSP, RSP & DSP townships’ as recommended by HDFC for leasing of land to Government/outside agencies and the application of revised rates uniformly towards premium/consideration for lands leased for commercial, educational, social, religious, cultural & such other purposes (except residential) was approved in 282nd meeting of the, Board of Directors Dated 24th SEPTEMBER, 2002 and the following recommendations were made: “Recommendations “In partial supersession of earlier resolution No. 7669 dated 22nd September, 2000. the rates of premium/consideration for lands at BSL, BSP, RSP & DSP townships may be revised as recommended by HDFC for leasing of lands to Government/ outside agencies and that the revised rates may be uniformly applicable towards premium/consideration for lands leased for commercial, educational, social, religious, cultural & such other purposes (except residential)”. Subsequently in 284th Board meeting, the Respondents approved the terms and conditions for lease in connection with allotment of land and also provided that it would also cover those earlier cases of allotment of land. The said resolution of 284th Board meeting also prescribed the plot size for allotment under various categories. In 284th MEETING OF THE, BOARDO OF DIRECTORS Dated 11th DECEMBER, 2002 made following recommendations:- “Recommendations The revised terms and conditions for allotment of land to Government/outside agencies in Steel Plants/Units townships on Lease basis, as proposed in the agenda note may be approved. The Terms and Conditions shall be applicable for allotment of land on lease basis to Government / outside agencies in the Steel Plants/Units, Townships retrospectively with effect from 24h September, 2002 till 3l" March, 2005 and would cover those earlier cases of allotment of land also where stipulation exists to apply the revised terms and conditions to such allotment.” (xix). This Court finds that the aforesaid two resolutions did not whisper a word about such premises where the property was permitted to be used as residential- cum- commercial which are involved in this writ petition (xx). This Court finds that from the perusal of the decisions taken on 24.09.2002, the Board of Directors of the Respondents have consciously decided not to touch the residential premises as the rates of the residential premises were different in different areas depending upon the township. It further appears that there has been no investigation in connection with the properties which are permitted to be used as residential-cum-commercial. It is not the case of the respondents that the decision taken in the Board of meeting dated 24.09.2002 and 11.12.2002 also covers residential premises. The specific case is that the land use of the area i.e., city center at Bokaro as per the town plan of Bokaro Steel City is commercial and therefore the properties are required to be treated as commercial. (xxi). The specific case is that the land use of the area i.e., city center at Bokaro as per the town plan of Bokaro Steel City is commercial and therefore the properties are required to be treated as commercial. (xxi). This contention of the respondents is rejected in view of the fact that admittedly the property has been permitted to be used as residential- cum- commercial by sanction of building plan and this property cannot be treated as purely commercial for the purposes of renewal of lease/ fresh lease as contended by the respondents. This Court is of the considered view that the property having been permitted to be used for residential- cum- commercial, even though situated in commercial area as contended by the respondents, constitute a category in itself and it cannot be said to be purely commercial any more. Accordingly, this Court finds that the decision taken in the Board meeting of the respondents dated 24.09.2002 and 11.12.2002 have no applicability to the premises involved in this case and therefore demand of premium for renewal of lease from the petitioners on the basis of the said decisions is an arbitrary exercise of power by the respondents which cannot be sustained in the eyes of law. This Court further finds that the respondents are certainly free to fix the premium and other charges as per their own wisdom in accordance with law but fixing of premium and rent on the basis of aforesaid two decisions cannot be sustained in the eyes of law as the said decisions were not meant for the nature of the premises involved in this case i.e., residential- cum- commercial. 7. As a cumulative effect to the aforesaid findings, the impugned demand of premium and other charges dated 10.11.2003, 21.01.2004 and 23.10.2003 with respect to petitioner nos. 1, 2 and 3 respectively which have been raised by applying the aforesaid two decisions of the Board of the Respondents are hereby set-aside and the respondents are free to take appropriate decision by considering the nature of the property and the permissible uses which these properties have been put to and a raise fresh demand upon the petitioners for the purposes of renewal of the lease/fresh lease. 8. Accordingly, this writ petition is allowed to the aforesaid extent.