JUDGMENT
Lentin, J.
1. Property vesting in the Bombay Municipal Corporation for the purpose of the BEST Undertaking cannot be disposed of or trifled with to confer a private benefit. Such is the ratio of this judgment.
2. Hereunder the facts : —
(A) The respondent 3 is Mr. P. B. Kerkar. For 14 years he was the General Manager of the BEST (the 2nd respondent), an Undertaking of the Bombay Municipal Corporation (the 1st respondent). He retired on 1-10-1985 after putting in an all-told service of 34 years with the BEST.
(B) The 3rd respondent is the allottee of a flat in a co-operative housing society at Ghatkopar of which he is a member. However during his tenure as General Manager, he occupied the General Manager’s quarters at
BEST Marg, Bombay, which indeed he was entitled to do.
(C) On 8thAug. 1985 while he was General Manager, the respondent 3 made an application to the 2nd respondent that as he would have to vacate his official residence at BEST Marg on retirement and as it would be inconvenient to him and his wife to shift to Ghaikopar, the Undertaking should allot him, in exchange for his Ghatkopar flat, a flat on rental basis in Meher Mansion at Co-operage (a prime locality in Bombay), where Grade I and failing them Grade II officers of the respondent 2 Undertaking are housed during the tenure of their service. The terms and conditions offered by the respondent 3 were (i) that the Meher Mansion flat be allotted to him on rental basis during his and his wife’s lifetime, whichever was later; (ii) that the 3rd respondent would pay as rent to the 2nd respondent Undertaking the difference of Rs. 23/75 per month (rounded off to Rs. 25/-) being the amount which the 2nd respondent Undertaking stood to lose by allotting the Meher Mansion flat to him and using his Ghatkopar flat for the 2nd respondent’s officers; (iii) on the termination of the tenancy the successors and legal heirs of the 3rd respondent and his wife would vacate the Meher Mansion flat and correspondingly possession of the Ghatkopar flat would be given to them; (iv) garaging, servicing and repairing facilities to the 3rd respondent’s motor car would be made available at the prevailing rates; and (v) he would be allowed use of the telephone installed in the Meher Mansion flat for which he would pay the bills and the bills of the telephone installed in the Ghatkopar flat would be paid by the respondent 2 Undertaking.
(D) The 3rd respondent’s application was submitted by the respondent 2 Undertaking to its Audit Committee for recommendation.
(E) Unfortunately for the 3rd respondent, far from recommending this transaction, the 2nd respondent’s Chief Auditor strenuously vetoed it by his report dt. 19th Aug. 1985 on the ground that such a transaction would be discriminatory and in contravention of the policy laid down and in variance with Service Regulations, unless they were amended.
(F) However in the teeth of the Chief Auditor’s report, the Committee of the 2nd respondent Undertaking went ahead and passed a resolution dt. 6th Sept. 1985 granting the 3rd respondent’s application except for the garage and repair facilities. The same day the 2nd respondent’s Engineer-in-Chief addressed a letter to the 3rd respondent authorising him to take possession of flat No. 14 in Meher Mansion.
(G) As a result, on 28th Sept. 1985 the Association of Officers of the respondent 2 undertaking filed a writ petition in this Court for setting aside the allotment of the Meher Mansion flat to the 3rd respondent. That writ petition was dismissed by the learned single judge. Hence this appeal.
3. The respondents seek to justify this transaction on the strength of Section 460-Q(c) of the Bombay Municipal Corporation Act, which contains provisions governing disposal of municipal property. On the other hand, according to the appellants, it is not Section 460-Q which is attracted, but the requisite Rules and Regulations framed as empowered by Section 460-V. In any event, according to the appellants, the provisions of Section 460-Q(d) would be attracted.
4. These contentions of the appellants were, among other contentions, negatived by the learned single Judge However, it is unnecessary for the purpose of this appeal to enter into this particular controversy. We shall proceed on the basis that the action taken by the respondent 2 Undertaking was under Section 460-Q(c).
5. It is not in dispute, as indeed it cannot be, that under Section 460-Q municipal property vesting in the Corporation for the purpose of the BEST Undertaking can be disposed of in the manner and subject to the safeguards set out in that section. For that matter, Mr. Singhvi fairly made a statement before us, which we took down and reproduce in his own words, that “Section 460-Q empowers the BEST Committee to sell or grant a lease of property vesting in the Corporation for the purpose of the BEST”. Mr. Singhvi added (we took down and reproduce his own words): “Meher Mansion admittedly vests in the Corporation, hence under Section 460-Q the BEST Committee can sell or lease any flat in Meher Mansion.”
6. We agree with Mr. Singhvi when he says that property vesting in the respondent 1 Corporation must vest for the purpose of the respondent 2 Undertaking. Hence indisputably the sequitur non squitur must necessarily be that property which vests in the respondent I Corporation for the purpose of the respondent 2 Undertaking can be disposed of only for the purpose of the respondent 2 Undertaking,
7. The question which therefore must inevitably arise is : Was this transaction for the purpose of the 2nd respondent Undertaking?
Mr. Singhvi says, yes it was, intended as it was to accommodate the 2nd respondent’s officers in the 3rd respondent’s Ghatkopar flat instead of in the 2nd respondent’s flat at Meher Mansion, which according to Mr. Singhvi the officers of the respondent 2 did not want to occupy.
8. This, in polite terms, is somewhat an over-simplification. The real answer is to be found from the 3rd respondent’s application and the admissions made by respondents 1 and 2 themselves. The reason given in the forefront by the respondent 3 in his application was inconvenience to himself and his wife in having to reside at Ghat kopar after the respondent 3 vacated his official accommodation at BEST Marg on retirement. Such was the reason given in the forefront by the respondent 3 for wanting a flat at Meher Mansion, which is at a stone’s throw from BEST Marg. He also “incidentally” stated that flats in Meher Mansion “are not in demand by senior officers of the Undertaking” as they “are not convenient to them for living in this area is little costly” (sic), with a rider that “in few of the cases, the officers of the Municipal Corporation have been given flats in Corporation’s Quarters on ‘rental basis’ after their retirement”, (sic).
9. While the record does not reveal the correctness of these reasons “incidentally” given by the respondent 3 there is substantial evidence to the contrary. What stares one in the face is that the prime consideration which prompted the respondent 3 to ask for this exchange was to save himself and his wife the inconvenience of residing at Ghatkoper after his retirement. And no doubt the 2nd respondent Undertaking was willing to fall in with the desire of the respondent 3, as a result of which the Chief Auditor’s objections were overriden without a word of explanation.
10. Inconvenience to an officer on retirement can never be the yardstick for an allocation in his favour of property vested in the Corporation for the purpose of the Undertaking. The purpose of the Undertaking must necessarily be to do acts and deeds not in furtherance of the convenience of its officers who have retired but for its own furtherance, and that of the general public which the Undertaking is intended and expected to serve. We fail to see how the purpose of the Undertaking could-possibly be served, much less advanced, by this admittedly unprecedented expedient resorted to in order to save the respondent 3 and his wife the inconvenience of having to reside in his own flat at Ghatkopar after his retirement.
11. Power under Section 460 0 must be exercised reasonably and bona fide for the purpose for which the power was granted. Where an authority acts under power given by statute, the power must be exercised for the purpose of that statute and is circumscribed by the same. Barium Chemicals Ltd. v. Company Law Board, . Nor can largess be granted in the absence of power and policy. Ramana Dayaram v. International Airport Authority of India, , 1637. We see none of this in the instant case, as the power exercised was not for the purpose of the 2nd respondent Undertaking, but to save the 3rd respondent ‘and his wife the inconvenience of residing at Ghatkoper after the 3rd respondent’s retirement. You do not play ducks and drakes with property vesting in the Corporation for the purpose the BEST Undertaking. By this transaction what was served and intended to be served was not the latter, but the private purpose of the 3rd respondent. The exercise of power in this case was both arbitrary and discriminatory.
12. Admittedly this has been the first time in the history of the Corporation and the Undertaking that power has been exercised in this manner in furtherance of such a transaction. This was told to us by Mr. Singhvi himself. We hasten to add that an unprecedented act by itself may not necessarily be arbitrary or discriminatory, if it was done for the purpose of the Undertaking which this transaction was not,
13. If the respondent 2 Undertaking felt obliged to show its appreciation to the 3rd respondent for the long and meritorious service put in by him, it was most welcome to do so, but not in the manner it was done. No purpose of the respondent 2 Undertaking was thereby served, much less advanced. The ramifications of such an unhealthy precedent would lead to favouritism, arbitrariness, abuse of power and chaos, not only in this service but in other services as well.
14. It is futile for the respondents to say that because their officers did not want flats in Meher Mansion, this expedient of exchange of flats was resorted to, as also by reason of the fact that there were no officers’ quarters at Ghatkopar. All this is in the nature of a face-saving device, an afterthought and an ipse dixit in a pathetic attempt to circumvent the indefensible. This is brought to the fore by the admission made by respondents 1 and 2 in their affidavit in rejoinder that the Meher Mansion flat was given to the respondent 3 after retirement for meritorious service. Thus the truth is out. This transaction took place not at the behest of the Corporation or the Undertaking, but at the instance of the respondent 3 while he was still in office as General Manager, and for the convenience of himself and his wife and not at the instance or for the convenience of the Corporation or the Undertaking or for the purpose of either. For that matter, even the Resolution does not say that this transaction was for the purpose of benefit or in the interest of the 1st respondent Corporation or the respondent 2 Undertaking.
15. It is not without its own significance that even assuming that there was a paucity of Grade I officers wanting flats in Meher Mansion, Grade II officers could also stake their claim. To suggest that out of this large number of officers not a single Grade I or Grade II serving officers wanted or was eligible for a flat in Meher Mansion or preferred to bear the inconvenience of transit accommodation, strains credulity to the limit. In sanctioning this transaction, the intention was clearly to single out the 3rd respondent for favour and preferential treatment.
16. What else could it be, when, to give but two instances, Officer S. Y. Mahajan who was eligible on 1st Sept. 1985 for a flat at Meher Mansion was side tracked, yet 5 days later on 6th Sept. 1985, the 3rd respondent was given a flat at Meher Mansion after his retirement. Similarly officer Dar had made a request for a flat at Meher Mansion in February 1982 and was allotted a flat at Malabar Hill as no flat was then available at Meher Mansion. Dar accepted the Malabar Hill accommodation subject to his name being kept on the waiting list for a flat at Meher Mansion. Even so he was not given it, but instead the 3rd respondent was, and that too after he ceased to be in service of the Undertaking.
17. These instances merely project violation of the principle, which, even without them, was observed in the breach.
18. We however do not go by instances such as the above, but by the principle of the ‘exercise. We say : Appreciate your retiring officers, honour the deserving, even reward them, but not a t the cost of the purpose of the BEST for which property is vested in the Corporation.
19. The version of respondent Nos. 1 and 2 that there was an urgent need for flats at Ghatkopar is yet another face-saving device and at best is in the nature of another ipse dixit. Pray, how did this “urgent need” suddenly arise only on the verge of the 3rd respondent’s retirement? It is also without its own significance that it was not until recently that the 3rd respondent’s Ghatkopar flat has been occupied by an officer of the 2nd respondent Undertaking. Until then for 2 years it was vacant as no officer wanted to reside there.
20. The appeal is allowed. The judgment and order of the learned single Judge are set aside. The rule is made absolute in terms of prayer (a) of the petition. Since the 3rd respondent adopted the stand taken by respondents 1 and 2, he must join them in paying the costs. The respondents shall pay to the appellants the costs throughout.
21. On Mr. Singhvi application, operation of this order is stayed till 15-4-1988.