1 907 wp 8798.10.doc K IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 8798 OF 2010 Shree Vithal Dev, Trimbakeshwar Dev Trust and anr. ..Petitioners. Vs. Joint Charity Commissioner, Pune & Anr. ..Respondents. Mr. J.Shekhar & Co. for petitioners. Ms. P.S.Cardozo, AGP for respondent nos.1 and 2. CORAM : K.K.TATED, J. DATED : 01/04/2011. PC: 1 Heard learned counsel for the parties. 2 By consent matter is taken on board for final hearing at the stage of admission itself. 3 By this petition under Article 227 of Constitution of India, Petitioners - original applicants are challenging the 2 907 wp 8798.10.doc order dated 21st September, 2010 passed by the learned Joint Charity Commissioner, Pune in Application No. 25 of 2010 under section 36(1)(a) of the Bombay Public Trust Act, 1950 rejecting Petitioners application for permission to sell part of their property in the interest of Trust. 4 A few facts of the matter are as under: Petitioner no.1 - Shri Vithal Dev Trimbakeshwar Dev Trust is a public charitable trust having its objects of religious activities within its area of operation and it is performing all the objects as per the scheme settled thereto. Petitioner is having approximately 200 acres of land on the schedule ‘A’ maintained by office of the Charity Commissioner. However, there are number of tenants on the property of Petitioners. Due to poor source of income and unavailability of sufficient funds Petitioners decided to sell 47 R land bearing old survey no.49, new survey no.72 situated at mauje Kasabe, Karad, taluka Karad, district Satara on as is where is basis subject to the sanction of the Charity Commissioner. They decided to sell the said property for renovation of temple and for other purpose, to 3 907 wp 8798.10.doc that effect they passed appropriate resolution in the meeting of the Board of Trustees. They also obtained estimate of expenditure from Vinayak Shamrao Phuke, Engineer and Contractor of the proposed renovation work for Vithal Dev Trimbakeshwar Dev Trust. The estimate shows expenses of Rs.8,96,083/-. Considering the estimate, petitioners issued public notice in Marathi as well as English news papers dated 14th July, 2010 and 15th July, 2010 calling sealed offers from prospective purchaser. In those advertisements, it is specifically stated that “the property is in possession of the tenants, the sale of the property is on, as is where is, basis subject to the sanction of Joint Charity Commissioner, Pune”. Pursuant to the said advertisements, in all six persons submitted their tenders, those are as under: 1 Shri Baburao Dadu Mohite, r/o Aagashivnagar, taluka Karad, Rs.15,500/- per R. 2 Shri Onkar Construction, 90 Somwar Peth, Karad, Rs.20,500/- per R. 3 Ravindra Kulkarni, r/o Koyana vasahat, Karad, Rs.14,700/- per R. 4 Sahara Construction, Javed Kadar Pathan, r/o Karad, Rs.18,800/- per R. 4 907 wp 8798.10.doc 5 Ganesh Dattatray Yadav, r/o Saidapur, Rs.16,750/- per R. 6 Ganesh Rajaram Jadhav, r/o Satara, Rs.13,800/- per R. 5 Considering the highest bidder Shri Onkar Construction, petitioners decided to sell the property ad- measuring 47 R of land from old survey no.69 and new survey no.72. 6 Thereafter, petitioners filed application for permission to sell, being application no.31 of 2009 under section 36(1) (a) of the Bombay Public Trust Act, 1950 before the Joint Charity Commissioner, Pune Region, Pune, on the ground that trustees of the said trust, vide resolution dated 28th October, 2009 decided to sell the said land. The trust was in need of funds for renovation of the temple of Lord Vithal Dev and Trimbakeshwar Dev. By passing another resolution, said trust invited offers from respective purchasers, five persons came forward to purchase the property, the highest offer was of Shri Onkar Construction, a registered partnership firm, Karad. Shri Onkar 5 907 wp 8798.10.doc Construction was ready and willing to purchase the said property at the rate of Rs.20,500/- per R. Petitioners had stated in the said application that as per the estimate of the Government authorised valuer, the market value of the said land was Rs.8,34,250/-. Market value of the said land as recorded in the office of the Sub Registrar, Karad was Rs.7,21,694/-, whereas the highest bidder Shri Onkar Construction agreed to purchase the said property for Rs.9,63,500/-. 7 The petitioner made averments in the said application that the said land ad-measuring 47 R was not fetching any income and the said land was not in the actual possession of the Trust, for the last several years, tenants were cultivating the said land. Therefore, it is in the interest of the Trust to sell the said property which is not fetching any income and which is in possession of the tenants. 8 The said application being Application no.31 of 2009 was rejected by the Joint Charity Commissioner, Pune Region, Pune by its order dated 5th July, 2010 on the ground 6 907 wp 8798.10.doc that in the revenue record, the said land is described as Inam Category III land and tenant is cultivating the said land. As per letter dated 16th January, 2007 sent to the Charity Commissioner by Chief Secretary, Law and Judiciary Department, it has been suggested that while considering application for permission to sell Inam Category III land, precaution must be taken as far as possible and to avoid further complication, such permission may be rejected. The Charity Commissioner suggested that since the petitioners are having other landed property, it might sell some of the landed property fetching meager income to meet the expenses for renovation of those temples. On this ground, the said application was rejected by the Joint Charity Commissioner, Pune Region, Pune. 9 Thereafter, Petitioners approached the Government for permission to sell the said land, by removing it from Category III Inam land. Accordingly, the respondent no.2/State Government vide its order dated 8th July, 2010 was pleased to allow the Petitioner’s prayer and excluded the property from Inam Category III land. 7 907 wp 8798.10.doc 10 After obtaining the order dated 8th July, 2010 from respondent no.2, the petitioners preferred another application no.25 of 2010 under section 36(1)(a) of the Bombay Public Trusts Act for sale of the said property on 28th July, 2010. In the said application, they explained the necessity for sale of the said land to carry out renovation work of the temples. They stated in their application that the temple is in a dilapidated condition, thousands of devotees are visiting the said temple, considering the need of renovation and providing proper facilities to the devotees, they required funds and that on considering the present financial condition of the Trust, it was impossible for the Trust to carry out renovation work and provide proper facilities to the devotees and therefore, they decided to sell the said property which was not fetching any income to the Trust and was in possession of the tenants. 11 The learned Joint Charity Commissioner, Pune by its order dated 21st September, 2010 rejected petitioners application on the ground that tenants were occupying the said property and it was not in the interest of tenants to 8 907 wp 8798.10.doc evict them. He further observed that the renovation work of the temple was not so urgent that the Trust could not undertake the said work without selling the said property. He further held that in future the said property might fetch more amount. 12 Being aggrieved by the order dated 21st September, 2010 passed by the learned Joint Charity Commissioner, Pune, petitioners preferred this writ petition under Article 227 of the Constitution of India. The learned counsel appearing on behalf of the petitioners submits that the respondent no.1 ought to have appreciated that the petitioner is facing acute deficiency of funds and therefore, it was necessary to dispose of one of its assets to the highest bidder for the valuable consideration to carry out the religious objects of the Charitable Trust. He further submits that respondent no.1 ought to have considered that even though the Petitioner-Trust have huge immovable property, it intends to sell small portion thereof as per needs of Petitioner-Trust and such conduct demonstrates the bonafide approach of the Petitioner-Trust to consider 9 907 wp 8798.10.doc favourably the application under section 36(1)(a) of the said Act. 13 The learned counsel appearing on behalf of petitioners further submits that the learned Joint Charity Commissioner failed to appreciate that the renovation and reconstruction of the temple was the most urgent work to be undertake by the Trust and therefore, it was in urgent need of the funds and the Trustees for that purpose resolved to sell a small portion of the land of the Trust, which was not fetching any income to the Trust. 14 He further submits that respondent no.1 has irrelevantly discussed the issue of tenant situated in the property and even though Petitioners have submitted no objections of the tenants for transferring the property to the prospective purchaser, the authority rejected their application for the sale. He further submits that the petitioners in their public notice specifically stated that they want to sell their property on as is where is basis and they also disclosed in their advertisement that at present tenants are occupying the said property. 10 907 wp 8798.10.doc 15 He further submits that the Government valuer assessed the market value of the property to the tune of Rs.6,31,680/-, whereas the highest bidder Shri Onkar Construction is ready and willing to pay sum of Rs.9,20,000/- which is in the interest of the trust. 16 During the course of the arguments, the learned counsel appearing on behalf of the Petitioner tendered the affidavit of Shri Onkar Construction, highest bidder stating that the highest bidder is going to take care of the tenants according to law. Therefore, there is no question of spending any amount by the Petitioner to settle any dispute with the tenants, out of the consideration which the Trust was to get from this transaction. On the basis of those submissions, the learned counsel appearing on behalf of Petitioner submits that in the interest of justice, the impugned order passed by the Joint Charity Commissioner, Pune be set aside and the Petitioners’ Application no.25 of 2010 to sell the said property ad-measuring 47 R to the highest bidder Shri Onkar Construction, may be allowed. 11 907 wp 8798.10.doc 17 The learned AGP appearing on behalf of respondent vehemently opposed the present writ petition. She submits that the learned Joint Charity Commissioner, Pune, has rightly considered even the interest of protected tenants on the suit land. She further submits that the Petitioners failed to produce any cogent evidence on record to show that they require funds for renovation of the temple building. She further submits that there is not an iota of evidence on record to show that the temple building is in a dilapidated condition. She further submits that petitioners have several other properties which they can sell for collecting the funds to renovate, if necessary, the temple building. Therefore, according to her, there is no substance in the present writ petition and the same is liable to be dismissed with costs. 18 Perused the record and proceedings of the matter and considered the submissions of the learned counsel appearing for the parties. 12 907 wp 8798.10.doc 19 The petitioner is a public charitable institution. They have to maintain the temple as per the approved amended scheme for the management and administration of the Petitioner-Trust. Whether they are entitled to sell a small portion of the immovable property of the Trust for raising funds to renovate the temple is to be considered in this case. For that purpose it is necessary to consider some of the clauses of the said scheme: “4/- Objects of the trust: The objects of the trust shall be as follows:- i) to perform puja, archas of the deity and also to perform annual utsav as per the practice and custom prevailing therein. ii) To keep the premises of the temple in good and proper condition. iii) If there is any surplus fund the same be spent for the education of the children residing at Karad where the devasthan is situated. 21/- The Payment of management expenses:- The trustees shall out of the rent, profit, 13 907 wp 8798.10.doc income and interest of the trust properties in the first instance pay all the rates taxes, assessments and other necessary outgoings and in the next place pay all the proper costs, charges and expenses of and incidental to the administration and management of the trust properties as well as the costs of current and ordinary repairs to and the upkeep of the immovable properties, preservation and safe custody of movable properties belonging to the trust, if any, and thereafter set apart 10% of the total gross income as reserve fund for the purpose of heavy repairs, renovation or rebuilding of the immovable properties if any, belonging to the trust and pay and apply the balance for the objects of the trust hereinbefore mentioned after providing for the other remark funds such as building fund, depreciation fund, investment, fluctuation fund/or any other fund as may be decided by the trustees. 22/- Repairs:- The trustees shall keep in good and substantial repairs all immovable properties belonging to the said Trust. The trustees shall invite tenders for repairs, construction, alternations, 14 907 wp 8798.10.doc modifications or changing any layout, if the estimate exceeds Rs.5000/- provided the work is not done departmentally. 25/- Power of sale mortgage:- The trustees shall have power to sell, mortgage, exchange, gift or lease out any immovable property belonging to the trust subject to the conditions and restrictions as laid down by Section 36 of the Bombay Public Trusts Act, 1950.” 20 One thing is clear from these clauses that Petitioner- Trust have right to sell their property if they require money to maintain/renovate the temple and other buildings. 21 Therefore, the short question which arises in this petition is, whether the impugned order passed by the learned Joint Charity Commissioner, Pune under section 36(1)(a) of the Bombay Trust Act dated 21st September, 2010 is sustainable in law particularly when the Joint Charity Commissioner has come to the conclusion that the financial need of the Trust is genuine and that there is no dispute regarding the fact that the consideration which is 15 907 wp 8798.10.doc to be received by the sale of the said property by the Trust is more than adequate consideration. Before the controversy between the parties can be decided, it would be relevant to refer to the provisions of the section 36(1)(a) of the Bombay Public Trust Act, which reads thus: “36. Alienation of immovable property of public trust – (1) Notwithstanding anything contained in the instrument of trust- a) no sale, exchange or gift of any immovable property, and b) --------------- shall be valid without the previous sanction of the Charity Commissioner, Sanction may be accorded subject to such condition as the Charity Commissioner may think fit to impose, regard being had to the interest, benefit or protection of the trust” 22 From the perusal of the above section, it is clear that the Charity Commissioner is empowered to scrutinize application for sale or transfer of the immovable property which is owned by the Trust in order to ensure that the 16 907 wp 8798.10.doc property is being sold for an adequate consideration and that the money is going to be utilized for fulfilling the aims and objects of the Trust and it is not likely to be frittered away by the Trustees. The Apex Court and also this Court has time and again held that the Charity Commissioner has to consider the needs of the Trust and to meet them grant permission when the property of the Trust is being sold after following proper procedure and the market value of the said property is being received by the Trust. 23 The Division Bench of this court in the matter of Madhukar Sunderlal Sheth and others vs. S.K. Laul and others, reported in 1993 Mh.L.J. 1107 has observed in paragraph 5 as under: “5. The Charity Commissioner, under the Bombay Public Trust Act is required to give his sanction bearing in mind the interest, benefit and protection of the trust. He has to apply his mind, inter alia, to the price at which the property is to be sold under the agreement. The Charity Commissioner has the power, in a given 17 907 wp 8798.10.doc case, to come to the conclusion that the price at which the trustees have agreed to sell the property is not the price which would secure adequate benefit to the trust and he may reject the agreement on that ground. Even the terms of the agreement of sale which the trustees may have entered into, are liable to be examined by the Charity Commissioner at the time when he grants his sanction. Approval by the Charity Commissioner ensures reasonableness of the agreement of sale. These factors will also have to be borne in mind by the Income Tax Authorities while exercising their power under section 269UD. The discretionary power under that section cannot be exercised arbitrarily. It will have to be exercised bearing in mind the purpose for which it is conferred. Hence, the submission of the petitioner that if there is delay on the part of the Charity Commissioner in granting sanction, and there is a rise in the property market, the purchaser of such a property will be at a disadvantage, loses its force. The question of consideration has to be considered by the income-tax authorities in the context of the special circumstances 18 907 wp 8798.10.doc which accompany a sale by a public trust. The purchaser can also apply in accordance with law for an early sanction by the Charity Commissioner.” 24 Similarly, the learned single Judge of this court (Coram: S.P.Bharucha, J., as he then was) in the case of Arunodaya Prefab vs. M.D. Kambli and others, reported in 1979 Mh.L.J. 104 observed as under: “22. Before parting with this case, I would add this note of caution. If the Charity Commissioner directs trustees to invite offers for sale of trust property in respect whereof the trustees have already entered into an agreement for sale and applied for sanction thereof, there are bound to be difficulties of the sort which have occurred in this petition. If the Charity Commissioner is inclined to direct the trustees to invite offers for the sale of trust property, he must first ascertain that the trustees would be willing to sell the property to one of these offers. Where an agreement for sale has been arrived at and is sent up for sanction, the Charity Commissioner must satisfy 19 907 wp 8798.10.doc himself of the adequacy of the price offered upon the basis of instance of sale in the locality or upon an architects’ report or upon some similar basis.” 25 In the present case, the Petitioners issued public notice in two news papers English and Marathi, calling for the bids for sale of 47 R of land. In those advertisements, it is specifically stated that the property is in possession of the tenants, the sale of property is on, as is where is, basis subject to sanction of the Joint Charity Commissioner, Pune. Pursuant to the said tender notice, they received bids from six persons. Out of them Shri Onkar Construction offered to purchase the suit property at the rate of Rs.20,500/- per R i.e. for Rs.9,63,500/-. In the affidavit of Shri Onkar Construction’s Partner Mr. Manohar Joshi, dated 1st April, 2011, it is specifically stated that they were going to settle either financially and/or as per due procedure of law with the tenants who were in possession of the suit property. 26 The learned counsel appearing on behalf of Petitioners tendered in all 13 photographs of the structure 20 907 wp 8798.10.doc of the temple. Photographs are taken on record. They are marked as Exhibit ‘A’ to ‘J’ for identification. It is crystal clear from those photographs that temple building requires repairs. 27 The Petitioners also placed on record, copy of the resolution passed by the Trustees for renovation after considering the factual position on the spot. Thereafter, they called estimate from Vinayak Shamrao Phuke, Engineer and Contractor, who stated that renovation of main temple and compound wall and other repairs would require at-least Rs.8,96,083/-. The petitioner in their application specifically stated that considering the amount required for renovation and the present position of the trust, it is necessary for them to sell some property for collecting funds. 28 It is very clear from their application that the suit property which they want to sell is not fetching any income to the Trust. The said property is occupied by the tenants and therefore, petitioners decided to dispose of the said 21 907 wp 8798.10.doc property. Though these facts are considered by the learned Joint Charity Commissioner, he dismissed their application only on the ground that it is going to affect the interests of the tenants. That cannot be a ground for rejecting petitioners’ application especially when the Petitioners in the application specifically stated that they were selling the property on “as is where is” basis and also they disclosed that there were some tenants. Not only that the partner of Shri Onkar Construction has also filed his affidavit dated 1st April, 2011 before this court accepting the liability of the tenants. Therefore, there is no question of any liability for the petitioners to settle with the tenants. 29 Taking into consideration all the facts mentioned above, the irresistible conclusion is that the Petitioners have satisfactorily complied with all the requirements of section 36(1)(a) of the Bombay Public Trust Act, 1950 for the grant of permission to sell the Trust property and therefore, there is no impediment for the Joint Charity Commissioner to allow the Petitioners’ application and to grant them permission to sell the aforesaid property of the Trust. 22 907 wp 8798.10.doc 30 Consequently, the Petition is allowed. The learned Joint Charity Commissioner, Pune Division, Pune is directed to grant permission to the Petitioners for sale of their property, being the land ad-measuring 47 R bearing old survey no.69, new survey no.72 situate at mauje Kasabe, Karad, taluka Karad, district Satara, as stated in their application. 31 The Writ Petition is disposed of accordingly. (K.K.Tated, J.)