wp4431-11.sxw 1 spb IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 4431 OF 2011 Rev. Bathuel Ramchandra Tiwade ... Petitioner. V/s. 1 Rev.Dn. Albert Dattoba Londhe & Ors. ... Respondents. --- Mr. M.L.Patil for the Petitioner. Mr. C. G. Patil for the Respondent Nos.1 to 4. Mr. Suresh Kamble for Respondent No.6. Mr. Amit Shete for the Respondent Nos. 7 to 10. --- CORAM : G.S. GODBOLE, J. DATED : 28th NOVEMBER, 2011. P.C. : 1 Heard Mr. M.L. Patil, Advocate for the Petitioner, Mr. Chetan Patil for the Respondent Nos. 1 to 4, Mr. Kamble for the Respondent No.6 and Mr. Shete for the Respondent Nos. 7 to 10. 2 By order dated 12.07.2011 notice for final disposal at the stage of admission had been issued. Hence, Rule. Rule made returnable forthwith by consent of the Advocates. wp4431-11.sxw 2 3 Petitioner is one of the Trustees of the Trust known as “Commission on Ecumenical Mission and Relations of the United Presbyterian Church in U.S.A.), Kolhapur”. Respondent No. 6 is “Kolhapur Church Council” (K.C.C.). There is third Trust known as “Kolhapur Diocesan Council” (KDC). The Petitioner is the Trustee of the Trust namely, C.O.E.M.A.R. Trust and there is no dispute about their status. 4 It is the case of the Petitioner that from the available Trust Funds, the Petitioner was constructing commercial complex and after the complex is constructed the same was to be used for generating funds. 5 The Respondent Nos. 1 to 5 have filed Application No.10 of 2008 before the Joint Charity Commissioner, Kolhapur, Region Kolhapur under section 41E of the Bombay Public Trust Act, 1950 (BPT Act) and an injunction was sought against the construction of the Petitioner. In this proceeding the Opponent No.3 therein filed the Reply which states that COEMAR Trust is owner of the property. Some portion has been given to K.C.C. under the lease deed. KDC is running an Industrial Training Centre known as “Sangli Industrial School” and for the purpose of running funds to support the project work of Sangli Industrial School, the Trust wp4431-11.sxw 3 has submitted an Application to the Sangli, Miraj & Kukpwad Municipal Corporation for granting requisite Building permission. 6 A separate Reply was filed by the KCC in which it was stated that though the building permission has been granted on mentioning the entire land including the land leased out to the KCC, no construction was being carried out on the land leased to KCC. The learned Joint Charity Commissioner, Kolhapur framed three points for consideration. The Joint C.C., Pune I/c. of the office of the Joint C.C. Kolhapur decided the Application No. 10/2008 by impugned Judgment and Order dated 30th July, 2010. The first reason given against the Opponent was that since portion of the land had been leased to K.C.C. applying for permission to construct a structure on the entire land does not stand to reason. Thereafter, the said Authority has observed in paragraphs 10 and 11 thus : “10 Assuming for the sake of discussion that COEMAR Trust is razing construction over the disputed property, which is not let out to KCC, necessary permission ought to have been taken from the competent authority under related provisions of The Bombay Public Trusts Act, 1950. No such permission has been secured by the COEMAR Trust. Without there being permission of this authority, COEMAR Trust is not entitled to utilize funds or raise funds for constructing commercial structure over the disputed property and thereby change its nature. To sum up, it has to be held that, the Opponent Nos. 1 to 4 and Opponent No.5 are raising construction over the disputed property in wp4431-11.sxw 4 collusion with each other unlawfully and illegally without any authority. In short, the construction of proposed commercial structure over the disputed property is unauthorized. I, therefore, record my finding on Point No.1 in the affirmative as above. 11 POINTS NOS. 2 AND 3: As stated earlier by virtue of proposed construction over the disputed property, its nature would be changed. It is not allowed in law. Since the open site of COEMAR Trust is being altered to a commercial site and its benefits are being released in favour of KDC Trust for upgrading Sangli Industrial School, it has to be informed that, the disputed property is in danger of being wasted and damaged or improperly alienated by Opponents Nos. 1 to 4, who are the Trustees of COEMAR Trust. Under such a situation, the property is required to be protected by this Authority as contemplated by the provisions of Section 41-E of the Bombay Public Trusts Act, 1950. I, therefore record my findings on Points Nos. 2 and 3 in the affirmative as above.” 7 Aggrieved by this order, Misc. Civil Application No. 205 of 2010 was filed under Section 41-E (5) of the BPT Act in the District Court, Sangli and by the impugned Judgment and Order dated 02.04.2011, the learned District Judge -3, Sangli has dismissed the said Application. It has been interalia observed by the learned District Judge in paragraph 11 of the Judgment thus : “11 Section 36 of the Bombay Public Trust Act speaks about alienation of immovable property of public trust. Sub clause (b) says that no lease for period exceeding three years in case of non-agricultural land shall be valid without previous sanction of Charity Commissioner. It further speaks that sanction may be accorded subject to such conditions as wp4431-11.sxw 5 Charity Commissioner may thinks fit to impose regard being had to the interest, benefit or protection of the trust. Meaning thereby Section 36 bars leasing out immovable property of trust without previous sanction of charity commissioner. If trustees satisfy the charity commissioner for any type of transaction in respect of trust property, the charity commissioner is competent enough to grant sanction. Admittedly, no where it is the case of the opponents that they have applied for such type of sanction from charity commissioner. On the contrary, it is the case of the opponents that proposed construction is being made on disputed property for benefit of trust and if lease period is exceeded for more than three years, the question of sanction will come in picture. There is no positive evidence from the side of opponents about period of lease and by considering any future event as submitted on behalf of the opponents, no lease period can be considered in favour of the opponents for not applying the provisions of Section 36 of the Bombay Public Trust Act. Joint Charity Commissioner who is competent authority while dealing with such matter in impugned order has specifically observed that opponent Nos. 1 to 4 and 5 are raising construction over disputed property of the trust in collusion with each other and therefore, trust property is in danger of being wasted and damaged at the hands of the opponents. Such observations of learned Joint Charity Commissioner also fortify with contentions of opponents that they are constructing commercial complex to generate its own funds for upgradation of K.D.C. Second contention of opponents that for the purpose of earning funds and to support financial status of Sangli Industrial School affiliate to K.D.C. proposed construction is being raised on disputed property also demonstrate that proposed construction is not as per provision applicable to trust property and its alienation.” 8 An Affidavit-in-Reply has been filed by Respondent No.1- Rev. Dn. Albert Dattoba Londhe in which it is contended that the building wp4431-11.sxw 6 permission has been obtained for the entire land. It is further contended that the K.D.C. is entirely different and distinct Trust having no concern with the COEMAR Trust and hence very purpose for which the construction was being carried out, namely, for supporting the Sangli Industrial School run by K.D.C. will make it clear that the amount spent in the construction of the building was being mis-utilized and hence, waste of Trust’s funds had been duly proved. 9 Mr. M.L. Patil, learned counsel for the Petitioner pointed out that there is nothing on record to show that any funds were being borrowed. He pointed out that all the lands were mentioned in the Application. The new construction was proposed to be raised only on that land which was not subject a matter of lease in favour of the K.C.C.. He submitted that as and when premises in the new construction are to be alienated or given on rent or sold, encumbered in any manner whatsoever permission of the Charity Commissioner under section 36 would be obtained. He submitted that the Joint Charity Commissioner and the learned District Judge has completely mis-construed the provisions of Section 36 of the BPT Act, 1950. He further submitted that there is no requirement of law that for construction of a building of the Trust from the funds available with the wp4431-11.sxw 7 Trust, sanction of the Charity Commissioner is required. 10 Mr. Kamble, learned Advocate appearing for the Respondent No.6- K.C.C. supported Mr. M.L.Patil, learned Advocate for the Petitioner. Mr. Chetan Patil, learned counsel appearing for the Respondent Nos. 1 to 4, however, strenuously argued that all the requirements of Section 41-E were fulfilled in this case. Pointing to the Reply filed before the Joint C.C., he submitted that the Reply expressly stated that the new construction was being raised to raise funds for supporting K.D.C. which was completely a different Trust and hence, it is clear that the funds of COEMAR Trust were being wasted. He submitted that considering entire scheme of Sections 35, 36 and 36-A construction in question required prior sanction of the Charity Commissioner and since prior sanction had not been taken, the entire construction was illegal and a case for interference under section 41-E had been made out. 11 I have carefully considered the rival contentions. It is no doubt true that in the Reply filed before the Joint Charity Commissioner, it is clearly stated that the construction was being raised so as to utilize the commercial potential of the land/ property of the Trust and to use the said funds to wp4431-11.sxw 8 support the Sangli Industrial School conducted by K.D.C. However, only on that count it was improper to jump to the conclusion that the property of the Trust is being wasted or alienated so as to damage the property or interest of the Trust. It is difficult to accept the contentions of Mr. Chetan Patil, learned Advocate for Respondent Nos. 1 to 4 that even for construction of a new building, permission of the Charity Commissioner under Sections 36A and 35 is required. Section 35 merely deals with the investment of public trust money. In fact sub-section (1) of Section 35 clearly stipulates that where the trust property consists of money and cannot be applied immediately or at any early date to the purposes of the public trust, the trustees shall be bound to deposit the money in any Schedule Bank etc.. It is thus clear that if the Trust Fund/ money can be applied immediately or at any early date to the purposes of the Public Trust, there is no mandate or statutory requirement, requiring the Trustees to invest the money. Section 35 merely deals with the instrument or security in which the excess funds of the Trust can be deposited will have no application to the facts of the present case. 12 So far as Section 36 is concerned, it deals with the alienation of the immovable property of the Public Trust. In this case what is being wp4431-11.sxw 9 constructed is a commercial complex. As and when the construction is completed and the Trust decides to alienate the tenaments in such complex, the Trustees are bound to submit an application to the Charity Commissioner and only after being satisfied that the sale/alienation is beneficial to the Trust, the Charity Commissioner is empowered to grant sanction for such alienation. That stage is yet to be reached and such stage will be reached only after the construction is complete. In my opinion, the Joint Charity Commissioner and the learned District Judge have clearly mis-read and mis-construed the provisions of Section 36 of the Act and have read something in the Statute which is impermissible. 13 The submission of Mr. Chetan Patil that Section 36 A will apply also does not find favour with me. Section 36-A does not contemplate taking any prior permission of the Charity Commissioner if the funds of the trust are being used for the object of the Trust. It is not the case of the Respondent Nos. 1 to 4 that either the Charity Commissioner or the District Judge have recorded a finding that the Trustees have borrowed funds for the purpose of construction. In the absence of any such finding, it is difficult to accept the submission of Mr. Chetan Patil that Section 36-A is attracted. wp4431-11.sxw 10 14 One more aspect appears to have been completely overlooked by the learned Joint Charity Commissioner and the learned District Judge. Perusal of the photographs available on the record shows that the RCC work of the ground plus one floor is complete and the RCC work of the second floor is also partly complete. Granting an injunction which is not restricted to a particular date or not restricted to happening of a particular event would result in a situation where a half constructed building will be left to rot without any utility. Viewed thus, the balance of convenience was certainly in favour of the Trustees of COEMAR and against the Respondent Nos.1 to 4. For overlooking this aspect also, the impugned Judgments and orders are not sustainable. 15 It is, however, necessary to consider one submission of Mr. Chetan Patil. According to him some unknown builder is involved in the construction of a new building and with a view to favour that unknown builder the Trustees are acting against the interest of the Trust. At this stage, there is nothing on record to support this contention save and except the submission of Mr. Chetan Patil that the audit report do not indicate spending of Trust funds for the construction in question. As wp4431-11.sxw 11 stated above it is difficult to hold that Section 36 is attracted in so far as construction of a new building over the Trust property is concerned. However, if the trustees intend to use constructed tenaments for the purpose of augmenting or enhancing income for the Trust, then three important conditions will have to be imposed namely, (1) that absolutely no alienation of the newly constructed tenaments even for a period less than three years as contemplated by section 36, shall be done by the Trustees without obtaining sanction of the Charity Commissioner and, (2) if the Trustees apply for obtaining sanction for alienation of the building to the Charity Commissioner, for aforesaid alienations, the Charity Commissioner shall issue notice of such Application to the Respondent Nos. 1 to 4 herein and they will be entitled to participate in the proceedings so as to ensure that the interest of the Trust is not jeopardized and, (3) Funds of the Trust shall be used only for the stated objects of the Trust. Needless to state that if supporting the K.D.C. is not one of the objects of the Trust then funds generated from the alienation cannot be used for supporting the K.D.C.. 16 While allowing this Writ Petition, it is necessary to clarify that the Petition is being allowed subject to the aforesaid conditions. wp4431-11.sxw 12 17 Hence, I pass following order : i. The impugned Judgment and Order dated 30th July, 2010 passed by the learned Joint Charity Commissioner, Pune I/c. Jt. Charity Commissioner Kolhapur Region,Kolhapur in Application No. 10 of 2008, Exh. ‘F’ pages 40 to 47 and the impugned Judgment and Order dated 02.04.2011 passed by the learned District Judge-3 Sangli in Misc. Civil Application No.205 /2010 Exh. G, pages 48 to 64 are hereby quashed and set aside and the Application No. 10 of 2008 is dismissed. However, this will be subject to the following conditions : (a) that absolutely no alienation of the newly constructed tenaments even for a period less than three years as contemplated by section 36, shall be done by the Trustees without obtaining sanction of the Charity Commissioner; b) if the Trustees apply for obtaining sanction for alienation of the building to the Charity Commissioner, for aforesaid alienations, the Charity Commissioner shall issue notice of such Application to the Respondent Nos. 1 to 4 wp4431-11.sxw 13 herein and they will be entitled to participate in the proceedings so as to ensure that the interest of the Trust is not jeopardized, and ; (c) Funds of the Trust shall be used only for the stated objects of the Trust. Needless to state that if supporting the K.D.C. is not one of the objects of the Trust then funds generated from the alienation cannot be used for supporting the K.D.C.. Rule is made partly absolute in the aforesaid terms with no order as to costs. [G. S. GODBOLE, J.]