IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No 16657 of 2004 SPECIAL CIVIL APPLICATION No 16716 of 2004 SPECIAL CIVIL APPLICATION No 515 of 2005 For Approval and Signature: HON'BLE MR.JUSTICE K.M.MEHTA ============================================================ 1. Whether Reporters of Local Papers may be allowed : YES to see the judgements? 2. To be referred to the Reporter or not? : YES 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the concerned : NO Magistrate/Magistrates,Judge/Judges,Tribunal/Tribunals? -------------------------------------------------------------- PIUSHKUMAR JAYANTILAL GANDHI TRUSTEE Versus RAMESHCHANDRA GORDHANBHAI PATEL -------------------------------------------------------------- Appearance: Special Civil Application No. 16657 of 2004 MR PM THAKKAR WITH MS SHAILI A KAPADIA for Petitioner No. 1-2 MR RD DAVE for Respondent No. 1-2 MR MUKESH PATEL, AGP for Respondent No. 3 -------------------------------------------------------- SPECIAL CIVIL APPLICATION No 16716 of 2004 -------------------------------------------------------------- DETOSTOP INDIA LTD Versus GHANCHI HARILAL GIRDHARLAL WILL KHANGI TRUST -------------------------------------------------------------- Appearance: Special Civil Application No. 16716 of 2004 MR MI MERCHANT for Petitioner No. 1 MR PM THAKKAR WITH MS SHAILI KAPADIA for Respondent No. 1 MR RD DAVE for Respondent No. 2-3 MR MUKESH PATEL, AGP for Respondent No. 4 -------------------------------------------------------------- SPECIAL CIVIL APPLICATION No 515 of 2005 -------------------------------------------------------------- RAMESHCHANDRA GORDHANBHAI PATEL Versus GANCHI HARILAL GIRDHARLAL PUBLIC TRUST -------------------------------------------------------------- Appearance: Special Civil Application No. 515 of 2005 MR RD DAVE for Petitioner No. 1-2 MR PM THAKKAR WITH MS SHAILI KAPADIA for Respondent No. 1-1/2, MR MUKESH PATEL, AGP for Respondent No. 2 MR MI MERCHANT for Respondent No.3 MR JB PARDIWALA for Respondent No. 4 -------------------------------------------------------- CORAM : HON'BLE MR.JUSTICE K.M.MEHTA Date of decision: 12/05/2005 C.A.V. JUDGEMENT Special Civil Application No.16657 of 2004. 1. Rule. Mr.R.D.Dave, learned advocate waives service of rule on behalf of respondents No.1 and 2, and Mr.Mukesh Patel, learned AGP waives service of rule on behalf of respondent No.3. Special Civil Application No.16716 of 2004. 1.1 Rule. Ms.Sahili A.Kapadia, learned advocate waives service of rule on behalf of respondent No.1 - trust, Mr.R.D.Dave, learned advocate waives service of rule on behalf of respondent No.2 & 3 and Mr.Mukesh Patel, ld. AGP waives service of rule on behalf of respondent No.4 Charity Commissioner. Special Civil Application No.515 of 2005. 1.1A Rule. Ms.Shaili Kapadia, learned advocate waives service of rule on behalf of respondent No.1- trust, Mr.Mukesh Patel, learned AGP waives service of rule on behalf of respondent No.2, Mr.M.I.Merchant, learned advocate waives service of rule on behalf of respondent No.3 M/s.Detostop India Pvt. Ltd. and Mr.J.B.Pardiwala, learned advocate waives service of rule on behalf of respondent No.4 Parshwa Realty Pvt. Ltd. 1.2 It may be noted that in all the three matters the respective petitioners have challenged the order of the Gujarat Revenue Tribunal in Appeal No.53 of 2003 dated 25.10.2004 and, therefore, I have heard all these matters together because these petitions raise common question of facts and law in this behalf. 2. Special Civil Application No.16657 of 2004 filed by Ghanchi Harilal Girdharlal Public Trust. 2.1 Ghanchi Harilal Girdharlal Public Trust (hereinafter referred to as a "Trust") and others, petitioners, have filed this petition through their trustees Piyushkumar Jayantilal Gandhi and Chandrakant Chimanlal Gandhi with a prayer that this Court may issue a writ of certiorari or writ of mandamus or any other appropriate writ, order or direction, quashing and setting aside the order of Gujarat Revenue Tribunal in Appeal No.TEN.AA/53/2003 dated 25th October, 2004, and further be pleased to restore the order of Joint Charity Commissioner dated 14th November, 2003. The said petition was filed on 14th December, 2004. 3. The facts giving rise to this petition are as under:- 3.1 There is an immovable property situated at Final Plot No.146, T.P.Scheme No.19 of Village Manjalpur, Vadodara, ad-measuring about 2908 sq.mtrs. of land (hereinafter referred to as "the property in question"). Originally, one Shri Ghanchi Harilal Girdharlal was the owner of the land, however, Harilal Girdharlal Ghanchi had executed a will dated 9.9.1951, thereby a trust was created which was registered under provisions of Bombay Public Trusts Act as public trust. By virtue of the said will, which is on page 31 of the paper book, there were two trustees namely, one Nagjibhai Chhotalal Ghanchi and one Chimanlal Ghanchi and property in question was vested in the trust and become property of the trust. 3.2 After the death of Harilal Girdharlal Ghanchi, the trustees were managing the said property. Somewhere on 19.1.2002 the trustees passed a resolution to sell the property in question. From the record it appears that, in the said building, there were some tenants also and the trust decided to sell the property in question along with the tenants. Thereafter, as per Section 36(1) of the Bombay Public Trusts Act (hereinafter referred to as "the Act"), the trustees filed an application dated 4.2.2002 before the Joint Charity Commissioner seeking prior permission for such sale of the property in question. It was stated that, because of properties is tenanted, the trust receives only Rs.435/- per month as income/rent of the property. It was decided that whoever gives highest price the trust will sell the same. Originally, the property in question was used as Dharamshala, but as the property is situated far away from S.T.Depo and Baroda Station, the same was not so used as Dharamshala. It was also stated that the trust have carried out the valuation report on the said land, and in the said report, the value of the property comes to Rs.10,51,000/- (dated 29.1.2002). The said report was also annexed along with the application. 3.3 In view of the said application, the Joint Charity Commissioner passed an order dated 17.12.2002 to publish an advertisement in the newspaper as per the draft given by him inviting offers for the sale of said property in question, and for that purpose upset price was fixed at Rs.12,51,000/-. Pursuant to the aforesaid order, advertisement was published on 19.12.2002 in local newspaper "Loksatta Jansatta - Baroda Edition" which is produced on page 40 of the petition i.e. in Special Civil Application No.515 of 2005. 3.4 Rameshchandra Gordhanbhai Patel - petitioner of Special Civil Application No. 515 of 2005 being interested in the property jointly submitted offer for Rs.25,00,000/- along with demand draft of Rs.2,25,000/and subsequently on 15.1.2003 gave another pay order of Rs.26,000/- being aggregate 10% of the offer. 3.4A M/s.Detostop India Pvt. Ltd. whose ultimate offer was accepted had initially given E.M.D. Rs.2,50,000/- by cheque though requirement was of draft/pay order, however ultimately the trust has waives the said condition and ultimately he offered highest price of Rs.25,61,000/and, therefore, his offer was accepted. As the revenue tribunal judgment set aside the approval of the Charity Commissioner of sale in his favour, he has filed Special Civil Application No.16716 of 2004. 3.5 Pursuant to the aforesaid advertisement, the Joint Charity Commissioner received five offers and the Joint Charity Commissioner opened the said offers on 13.1.2003 in presence of the parties. As per the said advertisement, the following offers were received: ----------------------------------------------------------------- Sr. Name of the party Amount No. offered Rs. ---------------------------------------------------------------- 1. Rameshchandra Gordhanbhai Patel and Rachnaben Maheshbhai Patel 25,00,000/- (Petitioner in SCA No.515/2005) 2. M/s.Detostop India Ltd. 25,00,000/- (EMD of Rs.2,50,000/- by cheque was given, though requirement was demand draft/pay order) (Petitioner in SCA No.16716/2004 Respondent No.3 in SCA 515/2004) 3. Dhananjay B. Patel 21,00,000/- (EMD by cheque was given, though requirement was demand draft/pay order) 4. Kantilal A.Patel 18,21,000/- 5. Sigma Trisec 19,11,100/- ---------------------------------------------------------------- 3.6 Thereafter the trust passed a resolution dated 19.3.2003 to accept the offer of Shri Kantilal A.Patel, who offered only Rs.18,21,000/- against which the petitioners offered Rs.25,00,000/-. It was stated that Rameshchandra Gordhanbhai Patel were ready and willing to raise their offer, if required, at the time of bidding. 3.7 From the record it appears that the offer of M/s.Detostop India Limited respondent No.3 in Special Civil Application No.515 of 2005 offered with some conditions which is submitted along with its letter. Rameshchandra Gordhanbhai Patel objected to the offer of M/s.Detostop India Limited and also objected to the resolution dated 19.3.2003 passed by the trust. 3.8 From the record it appears at this stage that Rameshchandra Gordhanbhai Patel filed an application before the Joint Charity Commissioner on 21.4.2203 with a request that as his offer is highest, his offer may be accepted. The said application is at page 54 of Special Civil Application No.16657 of 2004. The trust filed its reply against the said application of Rameshchandra Gordhanbhai Patel on 28.4.2003 before the Charity Commissioner in which they requested that the trust has passed a resolution and also filed an application and also requested to give necessary permission to sell the property in question. Rameshchandra Gordhanbhai Patel thereafter filed further objections on 19.5.2003. 3.9 Thereafter the matter was placed before the Joint Charity Commissioner and the Joint Charity Commissioner considered the fact that the original building has been given on lease and the trust is able to get only Rs.435/per month by way of rent. The trust has also passed necessary resolution, necessary advertisement has also been issued and pursuant to that there were inter-se bidding. The Charity Commissioner has stated that in this case the respondent No.3 has given offer of Rs.25,61,000/- and, therefore, his tender/offer may be accepted. The Charity Commissioner has stated that all procedural requirements has been followed and that the trust is able to get more price than the market price as per the valuation report and the same is in the interest of the trust. The said order is very well reasoned order by which the Charity Commissioner has given approval in this behalf. The said order has been produced at page 62/A of the paper book in petition filed by the trust. 3.10 Being aggrieved and dissatisfied with the said order, Rameshchandra Gordhanbhai Patel and others filed appeal before the Gujarat Revenue Tribunal being Appeal No.53 of 2003 on 4.12.2003, and also prayed for interim stay of the impugned order by separate application. 3.11 From the record it appears that, though separate stay application was filed along with the appeal, which is on page 81 of the paper book filed on somewhere in December 2003, the tribunal did not pass any interim order of stay in this behalf. 3.11A From the record it appears that the trust, namely, respondent No.1 in tenancy appeal before the Gujarat Revenue Tribunal stated that, the trust had filed purshis before the tribunal on 29.12.2003 stating, inter-alia that they will not execute sale deed for a period of 20 days and to give a date for a final disposal of appeal. Thereafter the trust has filed an application on 8.3.2004 in which it was stated that the Charity Commissioner granted permission on 14.11.2003 in which it was directed that the sale deed has to be executed within six months, and as there is no stay and if the sale deed is not executed within six months, there will be breach of the order of the Charity Commissioner. In view of the same it was requested that the trust may be permitted to sell the land in question during pendency of the appeal. Thereafter on 17.3.2004 the petitioner also filed another purshis before the tribunal stating that it has to execute the order passed by the Jt.Charity Commissioner dated 14.11.2003. It has also filed application on 22.4.2004 and thereafter it was stated that the trust has sold the property on 6.5.2004 in question to M/s.Detostop India Pvt.Ltd. after receiving full consideration. 3.12 From the record it appears that thereafter the Gujarat Revenue Tribunal (hereinafter referred to as "tribunal") heard the matter and after considering the facts and circumstances of the case and ultimately by its order dated 8.11.2004 pleased to partly allowed the appeal filed by Rameshchandra Gordhanbhai Patel and pleased to quash and set aside the approval granted by the Charity Commissioner in this behalf. 3.13 Being aggrieved and dissatisfied with the said order of the tribunal, the trust preferred Special Civil Application No.16657 of 2004 before this Court somewhere on 14th December, 2004, has challenged the order of tribunal. 3.14 From the record it appears that M/s.Detostop India Ltd. whose offer was accepted by the trust preferred Special Civil Application No.16716 of 2004 before this Court challenging the order of the tribunal somewhere on 15th December, 2004. 3.15 From the record it appears that Rameshchandra Gordhanbhai Patel, who had also given offer in connection with the property in question preferred Special Civil Application No. 515 of 2005 has also challenged the order of the tribunal dated 25.10.2004 (communicated on 8.11.2004) only to the extent thereby the tribunal rejected the prayer for accepting offer of the tribunal and further be pleased to direct the respondent No.1 trust to accept the offer of the petitioner for Rs.25,61,000/in respect of the property in question. The said petition was filed on 17.1.2005. 3.16 From the record it appears that though the offer of M/s.Detostop India Pvt.Ltd. - respondent No.3 in SCA No.515 of 2005 was accepted, however, he has stated that ultimately sale deed may be executed between the trust and M/s.Parshwa Realty Pvt. Ltd. - respondent No.4 in the said SCA No.515 of 2005. So ultimately sale deed has been executed by the trust in favour of respondent No.4 by accepting full consideration ( i.e. Rs.25,61,000/-) on 6.5.2004. 3.17 That is how in the petition filed by Rameshchandra Gordhanbhai Patel i.e. SCA No.515 of 2005, they have made trustees of the trust Ghanchi Harilal Girdharlal Public Trust respondent No.1, Jt.Charity Commissioner respondent No.2, M/s.Detostop India Ltd. respondent No.3 and M/s.Parshwa Realty Pvt. Ltd respondent No.4, and though these matters have bee heard together, for the sake of convenience and brevity, I will consider respective parties as petitioner and respondents as described in SCA No.515 of 2005. In view of the same, first of all, I will consider the submissions of Mr.R.D.Dave, learned advocate appearing on behalf of petitioner - Rameshchandra Gordhanbhai Patel and others, who has also assailed the order of Jt.Charity Commissioner as well as the tribunal so far as the same is against them. 4. Submission of Mr.R.D.Dave, learned Advocate on behalf of Rameshchandra Gordhanbhai Patel:- 4.1 The petitioners supports order passed by tribunal setting aside order of the Joint Charity Commissioner, however, he is aggrieved by not accepting offer of the petitioners though there is substantial compliance of conditions as the petitioners submitted short fall in EMD on 15.1.2003 whereas the last date of accepting the offer was 13.1.2003. 4.2 The Joint Charity Commissioner in his order dated 14.11.2003 specifically directed that his order of granting permission to sell in favour of the trust is subject to appeal which may be filed under sec.36(3) of the Bombay Public Trust Act. Sec.36(4) of the said Act provides that decision of Charity Commissioner shall, subject to provision of sub-section (3) be final. Meaning thereby, the statute itself provides that such division of Charity Commissioner under sub-section (1) does not become final until appeal is decided under sub-section (3) by Gujarat Revenue Tribunal. Meaning thereby, so long as appeal is pending before tribunal, the trust cannot give effect to the order passed by Joint Charity Commissioner and cannot transfer the property of the trust so as to make appeal infructuous. 4.3 It was submitted that the offer of M/s.Detostop India Ltd. was not accompanied with Earnest Money Deposit (EMD) as required in the tender advertisement as a condition for making the offer. This condition is mandatory and eligibility condition for making offer. Non compliance thereof would make the offer ineligible and permission for transfer of property to such ineligible person would be void-ab-initio. 4.4 In support of the same, the learned advocate has relied upon the decision in the case of Monarch Infrastructure Pvt. Ltd. Vs. Commissioner, Ulhasnagar Municipal Corporation and others reported in AIR 2000 SC 2272, particularly paras 12, 13 and 14 which reads as under: 4.4A 12. If we bear these principles in mind, the High Court is justified in setting aside the award of contract in favour of M/s.Monarch Infrastructure (P) Ltd. because it had not fulfilled the conditions relating to Clause 6(a) of the Tender Notice but the same was deleted subsequent to the last date of acceptance of tenders. If that is so, the arguments advanced on behalf of M/s.Konark Infrastructure (P) Ltd. in regard to allegation of mala fides of the Commissioner of the Municipal Corporation in showing special favour to M/s.Monarch Infrastructure (P) Ltd. or the other contentions raised in the High Court and reiterated before us are insignificant because the High Court had set aside the award made in favour of M/s.Monarch Infrastructure (P) Ltd. The High Court had taken the view that if a term of the tender having been deleted after the players entered into the arena it is like changing the rules of the game after it had began and, therefore, if the Government or the Municipal Corporation was free to alter the conditions fresh process of tender was the only alternative permissible. Therefore, we find that the course adopted by the High Court in the circumstances is justified because by reason of deletion of a particular condition the wider net will be permissible and a larger participation or more attractives bids could be offered. 4.4B 13. Now it is necessary to consider the case of Ramachand Mahadev Rao. One of the conditions to make offer is regarding the earnest money deposit for a sum of Rs.1.70 crores in the form of crossed Demand Draft/Pay Order or Cash. Ramachand Mahadev Rao got prepared a cheque for Rs.1.70 crores as required from the bank and submitted the tender just before the expiry of the time on April 19, 2000. He further alleges that in haste and confusion he misplaced the Demand Draft and was in a wrong impression that a mere photocopy of the draft duly notarised will be sufficient and, therefore, he submitted photocopy of the Demand Draft along with other relevant documents. The conditions of the "Notice Inviting Tender" is that the same should be accompanied by a Demand Draft/pay order or cash and in no other form. It is clear from the statement made by him as to in what manner he could gather an impression that a photocopy of the Demand Draft duly notarised would be sufficient nor it could be said that it is naive to accept a mere statement that Demand Draft for a sum of Rs.1.70 crores obtained for the purpose of submitting the same along with the tender documents could be misplaced in the manner suggested in the application. Therefore, the Municipal Corporation is justified in rejecting the tender offer made by Ramchand Mahadev Rao as not fulfilling the conditions of the Tender Notice. 4.4C 14. Now we will turn to the last question formulated by us. The High Court had directed the commencement of new tender process subject to such terms and conditions, which will be prescribed by the Municipal Corporation. New terms and conditions have been prescribed apparently bearing in mind the nature of contract, which is only collection of octroi as an agent and depositing the same with the Corporation. In addition, earnest money and the performance of bank guarantee are insisted upon; collection of octroi have to be made on day to day basis and payment must be made on weekly basis entailing, in case of default, cancellation of the contract. We cannot say whether these conditions are better than what were prescribed earlier for in such matters the authority calling for tenders is the best Judge. We do not think that we should intercede to restore status quo ante the conditions arising in Clauses 6(a) and 6(b) of the Tender Booket and bid offered much earlier by M/s.Konark Infrastructure (P) Ltd. should be accepted, for it filed a writ petition, which was allowed with direction for calling for fresh tenders. Public interest in the present case would be definitely served by reason of allowing the tender process to be completed by accepting the higher offer made by M/s.Monarch Infrastructure (P) Ltd. subject to raising its bid to Rs.42 crores matching with that of Ramchand Mahadeo Rao, though invalid, for Rs.41,51,00,000/- for the period of 11 months which he is willing to raise to Rs.42 crores. We are not allowing M/s.Konark Infrastructure (P) Ltd. or M/s. Jai Krishna Infrastructure such an opportunity as they had made lower bids." 4.5 It was further submitted that since the order of the Charity Commissioner is conditional and subject to division in appeal, underlined principles of Section 7 of Contract Act would be applicable. Permission for sale is conditional therefore unless and until such condition is fulfilled permission does not become final. Therefore, the parties and trust are bound by decision in appeal. 4.6 The learned advocate has relied upon another decision in the case of Haridwar Singh Vs. Bagun Sumbrui and others reported in AIR 1972 SC 1242, particularly para 8 on page 1245 which reads as under: 4.6A "In this case, it is not the want of communication of the confirmation by the Government to the appellant that really stands in the way of there being a concluded contract, but rather the want of confirmation by the Government of the conditional acceptance by the Divisional Forest Officer. The appellant's bid was for Rs.92,001/-. The acceptance of the bid by the Divisional Forest Officer was, therefore, subject to confirmation by Government. The proceedings of the Minister dated November 27, 1970, would show that he did not confirm the acceptance of the offer by the Divisional Forest Officer. What the Minister did was not to confirm the acceptance made by the Divisional Forest Officer, but to accept the offer made by the appellant in his communication dated October 26, 1970, that he would take the coup for the reserved price of Rs.95,000/-. There was, therefore, no confirmation of the acceptance of the bid to take the coup in settlement for the amount of Rs.92,001/-. If the offer that was accepted was the offer contained in the communication of the appellant dated October 26, 1970, we do not think that there was any communication of the acceptance of that offer to the appellant. The telegram sent to the Conservator of Forest, Hazaribaug, by the Government on November 28, 1970, cannot be considered as a communication of the acceptance of that offer to the appellant. The acceptance of the offer was not even put in the course of transmission to the appellant; and so even assuming that an acceptance need not come to the knowledge of the offerer, the appellant cannot contend that there was a concluded contract on the basis of his offer contained in his communication dated October 26, 1970, as the acceptance of that offer was not put in the course of transmission. Quite apart from that, the appellant himself revoked the offer made by him on October 26, 1970, by his letter dated November 3, 1970, in which he stated that the coup may be settled upon him at the highest bid made by him in the auction. We are, therefore, of the opinion that there was no concluded contract between the appellant and the Government." 4.7 It was further submitted that the sale deed dated 6.5.2004 executed by trust in favour of respondent No.4 during pendency of appeal before tribunal is void for the following reasons:- 4.7A (a) Respondent No.4 did not make any offer pursuant to advertisement and therefore sale deed cannot be executed in favour of respondent No.4 by trust. 4.7B (b) Offer of the respondent No.3 confirming party is held to be invalid by tribunal. Moreover there is no provision for nomination in the tender condition or in advertisement. Therefore, in absence of specific provision, trust has no authority to execute sale deed in favour of respondent No.4.