IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.8127 OF 2008 1.Vijay K.Mehta, 2.Sushila V.Mehta, 3.Dr.Amritlal C.Shah, A-791, Bandra Reclamation, Bandra (West), Mumbai-400 050. ...Petitioners Versus 1.Charu K.Mehta, 2.Rekha H.Sheth, 3.Niket V.Mehta, A-791, Bandra Reclamation, Bandra (West), Mumbai-400 050. 4.Mithun H.Mehta, 311-312 Chadda Crescent, Sector-17, Vashi, Navi Mumbai-400 705. 5.Jatin V.Mehta, C-203, Nirman Vihar, Rajmata Jijabai Road, Andheri (W), Mumbai-400 093. 6.Sandeep Rathi, 61, Alaknanda, Road No.10, J.V.P.D. Scheme, Juhu, Mumbai - 400 049. 7.Sanjay Bhutada, C-6, Gautam Towers, Gokhale Road, Naupada, Thane (W), Mumbai-400 602. 8.Kishor K.Mehta, Usha Kiran, 18th floor, 15, Carmichael Road, Mumbai - 400 026. : 2 : 9.Rajiv K.Mehta, Usha Kiran, 23rd floor, 15, Carmichael Road, Mumbai - 400 026. 10.Prashant K.Mehta, Usha Kiran, 18th floor, 15, Carmichael Road, Mumbai - 400 026. 11.Prabodh K.Mehta 12.Rashmi K.Mehta 13.Chetan P.Mehta 14.Nanik Rupani 15.Vijay Choraria, A-791, Bandra Reclamation, Bandra (West), Mumbai-400 050. 16.The Joint Charity Commissioner, Greater Mumbai Region, Mumbai. ...Respondents ...... Mr.Iqbal Chagla, Sr.Counsel with Mr.Sanjay Jain, Mr.Kunal Vajani, Atul Daga and Mr.Rohan Dakshini i/b M/s.Wadia Ghandy & Co. for Petitioner. Mr.Mahesh Jethmalani with Mr.Raj Patel, Mr.Anushak Davar, Ms.Hetal Thakore i/b M/s.Thakore Jariwala & Associates for Respondent No.1. Mr.Janak Dwarkadas, Sr.Counsel with Ms.Jyoti Shah i/b M/s.Daru Shah & Co. for Respondent No.2. Mr.Pranav Badheka with Mr.Amey Nabar i/b Hariani & Co. for Respondent No.8. Ms.R.C.Nichani i/b Hariani & Co. for Respondents 9 & 10. Mr.Jay Kansara i/b Paras Kuhad & Associates for : 3 : Respondents 11 to 15. Mr.P.P.Kakade, A.G.P. for Respondent No.16. ...... CORAM: A.M.KHANWILKAR, J. CORAM: A.M.KHANWILKAR, J. CORAM: A.M.KHANWILKAR, J. FEBRUARY 2, 2009. FEBRUARY 2, 2009. FEBRUARY 2, 2009. ORDER : ORDER : ORDER : 1. This Writ Petition takes exception to the decision of the Joint Charity Commissioner (hereinafter referred to as ‘the JCC’ for the sake of convenience), Greater Mumbai, Region Mumbai dated 10th October 2008 passed on Application (Exhibit 2), whereby, pending enquiry of charges, the five trustees (including the present three Petitioners) have been suspended in exercise of powers under Section 41D(3) of the Bombay Public Trusts Act, 1950 (hereinafter referred to as ‘the Act’). This Petition has been finally heard at the admission stage, by consent. 2. The moot question that needs to be addressed in this Petition is: whether the exercise of powers under Section 41D(3) of the Act by the JCC can be said to be just and proper in the : 4 : fact situation of the present case? 3. The background in which the present matter arises is that the Respondent No.1 filed Application before the JCC for initiating action under Section 41D of the Act against nine trustees of the Lilavati Kirtilal Mehta Medical Trust (hereinafter referred to as ‘the Trust’) on certain allegations elaborated in the said Application. The said Application is registered as Application No.17 of 2006. The Respondent No.1 claims to be a permanent trustee of the said Trust. The Trust is running a super speciality hospital in the name of "Lilavati Hospital" at Bandra, Mumbai and is a well-known hospital in the Country. The hospital has facility of 300 beds and out patients department, casualty department, etc. It engages nearly 1700 employees and 230 consultant Doctors attached to the hospital. In the said Application moved by the Respondent No.1, after allowing the parties to exchange documents and pleadings, the JCC by his order dated 3rd June 2008 on finding prima facie material to indicate the complicity of the said nine trustees proceeded to frame following : 5 : eight charges : : 6 : "C H A R G E S 1) The opponents No.1 to 9, trustees of the trust advanced huge amounts more than Rs.15 crores to M/s.Mayfair Realtors Pvt.Ltd. & Vesta India Pvt.Ltd. for procuring medical equipments during years 2001-02 to 2003-04 without taking proper care & despite failure by these companies to supply the equipments, did not take steps to recover the money & thus, continuously neglected their duties & committed mis feasance & also dealt improperly with the trust property. 2) The opponents No.1 to 9, trustees of the trust, gave donations regularly to the tune of Rs.6.36 crores from year 2003-04 to 2005-06 to Madhulaxmi Trust, without verifying that the donations are utilised to fulfil objects of the trust and thus, continuously neglected the duties & committed mis feasance & also dealt improperly with the trust property. 3) The opponents No.1 to 9, trustees of the trust & committed mis feasance & also dealt improperly with the trust property purchased a Honda Accord Car MH 02 MA 4343 for and in the name of Mr.Dushyant Mehta & thus dealt improperly with trust funds & mis appropriated the trust money. 4) Opponent No.9, a trustee of the trust, utilised the trust funds to the tune of Rs.36,06,470/- during financial years 2003-04 to 2005-06 towards payments of his credit cards & thus received personal benefits from trust funds & thereby mis-appropriated the trust money & committed mal feasance. 5) The opponents No.1 to 9, trustees of the trust arranged meetings of the trustees as well as other meetings at Antewerp, Belgium & other foreign : 7 : countries instead of India & spent huge amounts to the tune of Rs.58,40,456/- from year 2002-03 to August, 2006 & squandered the trust money & committed mis feasance & also dealt improperly with the trust property. 6) The opponents No.1 to 9, trustees of the trust have spent money from trust funds to meet travelling expenses of Mr.Suresh Motwani who has no concern with the trust, for his trips to Goa & Dubai & committed mis feasance & also dealt improperly with the trust property. 7) The opponents No.1 to 9, trustees of the trust, advanced amount of Rs.2.75 crores to M/s.Albina Developers Pvt.Ltd. without verifying its track record & without taking proper care & acted negligently in dealing with this transaction & committed mis feasance & also dealt improperly with the trust property. 8) The opponents No.1 to 9, trustees of the trust, allowed mis use of a trust account for the purpose of clandestine transaction in favour of Golden Sea Shell C.H. & thereby committed mal feasance." 4. Insofar as the relief claimed by the Respondent No.1 in Application (Exhibit 2) to suspend the trustees during the pendency of the enquiry, the JCC by the same order proceeded to hold that at the relevant time, he was not in a position to identify a fit person to be appointed to discharge the duties in place of the suspended trustees, which order could be passed in exercise : 8 : of provisions under Section 41D(4) of the Act. Against the said decision, the two trustees against whom charges were framed by the JCC filed Writ Petition No.3849 of 2008. The three other trustees against whom no allegations were made in the main Application filed by Respondent No.1 or any charges framed, filed separate Writ Petition being Writ Petition No.3850 of 2008 questioning the correctness of the decision of the JCC in his order dated 3rd June 2008. Both these Petitions were disposed of by the Single Judge of this Court on 11th July 2008. Insofar as the three trustees against whom there were no allegations in the Application or charges framed, the Court observed that the order passed against them, which was impugned in their Writ Petition was in gross violation of the principles of natural justice. By the said Judgement, the learned Single Judge was, however, pleased to set-aside only the interim order dated 3rd June 2008 and issued direction to the JCC to pass fresh interim order in accordance with law. Significantly, the relief as claimed by the two trustees in Writ Petition No.3849 of 2008 to set-aside the order framing charge against them : 9 : was not disturbed. The parties had moved the same learned Single Judge of this Court for speaking to minutes of the order passed earlier, which application was disposed of on 15th July 2008. The matter then proceeded before the JCC for passing necessary interim order afresh. 5. At the same time, the Petitioners in Writ Petition No.3849 of 2008 questioned the correctness of the view taken by the learned Single Judge in its Judgment dated 11th July 2008 and in turn, the order passed by the JCC framing charges by way of Letters Patent Appeal No.328 of 2008. 6. The JCC instead of deciding the pending Application (Exhibit 2) filed by the Respondent No.1 for suspending the charged trustees in exercise of powers under Section 41D(3) of the Act, adjourned the matter by order dated 23rd July 2008. Consequently, Writ Petition was filed challenging order dated 23rd July 2008 passed below Exhibit 1 in Application No.17/2007 being Writ Petition No.5732 of 2008. The said Writ Petition came to be disposed of on 9th September 2008 inter alia : 10 : directing the JCC to expeditiously decide Application (Exhibit 2) filed by the Respondent No.1 herein in accordance with law and not to pass a mechanical order of suspension solely on the ground that charges have already been framed against the concerned trustees. All questions in that behalf were left open. It is not necessary to refer to the other issues dealt with in the said decision. 7. Against this decision also, Letters Patent Appeal has been carried by the two trustees against whom charges have been framed by the JCC under order dated 3rd June 2008. In the pending Letters Patent Appeals, the Division Bench of this Court on 1st October 2008 passed following order: "P.C. : 1. The learned counsel for the parties agree that the matter be taken up for disposal at the stage of admission. Tentatively, this court is listing the matter at 20.10.2008 at 3.00 p.m. 2. In the meantime, the proceedings before the Joint Charity Commissioner in the matter will go on. We make it clear that the Joint Charity Commissioner would not implement or give effect to the order which he may pass after concluding the hearing, if it is adverse to the : 11 : appellant/trustees and the order passed by the learned single Judge (A.M.Khanwilkar, J) will continue to operate in the field as it sufficiently protects the interest of the trust." 8. In view of this order, the JCC proceeded to consider the Application (Exhibit 2) in view of the direction issued by the Single Judge in Writ Petition No.5732 of 2008 decided on 9th September 2008. After granting opportunity to both sides to file affidavits and further material, the JCC proceeded to dispose of the said Application (Exhibit 2) by his order dated 10th October 2008. The JCC passed the following order: "O R D E R 1) Pending disposal of charges, the trustees, respondent No.1 (Smt.Rekhaben Seth), Respondent No.3 (Smt.Sushila Mehta), Respondent No.6 (Dr.Amrutlal Shah), Respondent No.8 (Shri Niket Mehta) & respondent No.9 (Shri Vijay Mehta) of Lilavati Kirtilal Mehta Medical trust are put under suspension. 2) This order will not be implemented till further directions are received from Hon.High Court in Letters Patent Appeal No.328 of 2008 in Writ Petition No.3849/2008 with Letters Patent Appeal no.330 of 2008 in Writ Petition No.5732/2008, pending there. 3) The applicant (Ex.2) is accordingly : 12 : disposed of." 9. It is this order which is subject matter of challenge in the present Writ petition at the instance of three trustees out of five suspended trustees. Here it may be clarified that although charges have been framed against nine trustees, as four trustees have tendered resignation and were no more associated with the Trust, the question of suspending the said trustees did not arise. For that reason, the JCC proceeded to consider Application (Exhibit 2) only against five charged trustees who continued to be on the Trust. The two other suspended trustees besides the three Petitioners herein have not chosen to challenge the order of suspension. Whereas, the present Petition has been filed only by the three suspended trustees who were Respondent No.9, Respondent No.3 and Respondent No.6 respectively in the proceedings before the JCC. 10. To complete the narration of relevant events, it may be appropriate to refer to two other orders of this Court passed by the Division Bench : 13 : in pending Letters Patent Appeals. The one passed on 20th October 2008 and the other passed on 24th October 2008, which are reproduced thus: ORDER DATED 20TH OCTOBER 2008 ORDER DATED 20TH OCTOBER 2008 ORDER DATED 20TH OCTOBER 2008 "P.C.: 1. Heard the learned counsel for the parties. 2. A preliminary issue is raised by the respondents regarding maintainability of these appeals. Sufficient time would be required for this court to hear the matter as this court proposes to dispose of the appeals at the stage of admission itself. In the meantime, the interim order passed by this court can continue to operate. We further make it clear that in place of trustees who have been suspended, no new trustees would be appointed or nominated. 3. The learned counsel for the appellants submit that as far as the order of suspension is concerned, the appellants propose to independently challenge the same. We make it clear that the pendency of these Letters Patent Appeals do not preclude the appellants from challenging the order of suspension by which they are aggrieved and which is a fresh cause of action in the matter. 4. In view of the fact that the appellants propose to challenge the order of suspension, our interim order which has been continued would stand extinguished as soon as the order of suspension is challenged before the learned single Judge and decision in the matter is taken. 5. Stand over to 24th November, 2008". : 14 : ORDER DATED 24TH OCTOBER 2008 ORDER DATED 24TH OCTOBER 2008 ORDER DATED 24TH OCTOBER 2008 "P.C.: 1. This application is made for speaking to minutes of the order dated 20th October, 2008. 2. We have heard the parties. In para 2 of the said order the last sentence namely, "We further make it clear that in place of trustees who have been suspended, no new trustees shall be appointed or nominated." stands substituted by "Parties will maintain statusquo on the board of trustees of the trust." 3. Para 4 of the said order is not required and therefore, stands deleted." 11. The learned Counsel appearing for the charged trustees against whom suspension order has been passed by the JCC have criticized the order of suspension on the argument that the charges framed by the JCC are ex-facie untenable. If so, the question of suspending the charged trustees on the basis of such infirm charges would be inappropriate. It was argued that there was no material to substantiate the finding recorded by the JCC that there was likelihood of further misuse of powers or influencing witnesses and tampering with the evidence. The said finding is based on conjecture and surmises. If that opinion is to be : 15 : discarded then there is no tangible material to sustain the order of suspension. This argument is on the premiss that the order of suspension during the pendency of enquiry is a drastic order and cannot be passed merely as a consequence of the order framing charges. It was argued that there was no possibility of any loss likely to be caused to the Trust on account of any action of the charged trustees. To buttress this argument, amongst others, reliance was placed on communication sent on the letterhead of M/s.Vesta India Ltd., dated 1st October 2008, under the signature of its authorised signatory Mr.Suresh Motwani. According to the suspended trustees, the said document was indicative of positive steps being taken by the charged trustees for recovery of the amount receivable by the Trust. It was contended that in any case, there was enough safeguards to check the activities of the charged trustees. In that, the charges were founded on the transactions effected between year 2001 to 2006 in respect of which, the entire record was already in custody of the JCC. There was no question of tampering the said record. Besides, as the charge : 16 : was founded on documents, the question of influencing the witnesses was a misplaced apprehension. It was then argued that the other trustees including the rival camp would continue to be associated in taking any decision for and on behalf of the Trust. Moreover, the Supreme Court appointed regime of Joint Administrators was also in place. Besides, the earlier restriction imposed by the JCC and as modified by this Court in its order dated 9th September 2008 restraining the charged trustees from taking any policy decision and to enter into any financial transaction with regard to the Trust without prior approval of the JCC till further orders was sufficient to protect the interest of the Trust. It was contended that there was neither possibility of charged Trustees influencing the enquiry or causing any loss to the Trust. In that case, there was absolutely no necessity to suspend the charged trustees and the enquiry can proceed even without suspension of the said trustees. It was then contended that already five trustees out of the nine charged trustees have resigned. The Respondents 14 and 15 have been restrained from acting as trustees. In such a : 17 : situation, the Trust will not be able to function especially in absence of Petitioner No.1 who for all this period responsibly discharged his duties and was successful in enhancing the income of the Trust manifold. On the above arguments, the order of suspending the Petitioners herein from acting as Trustees during the pendency of the enquiry has been challenged as inappropriate and unwarranted. 12. The question is: whether the order passed by the JCC suspending the Petitioners herein can be said to be manifestly wrong, perverse and untenable. To consider this aspect, we will have to advert to the reasons recorded by the JCC for recording his satisfaction to order suspension of the Petitioners herein and two others during the pendency of the enquiry in exercise of powers under Section 41D(3) of the Act. The JCC has first considered the decision of the Apex Court in the case of Sri Digyadarsan Rajendra Ramdassjivaru v. Sri Digyadarsan Rajendra Ramdassjivaru v. Sri Digyadarsan Rajendra Ramdassjivaru v. The State of Andhra Pradesh reported in 1969 (1) The State of Andhra Pradesh reported in 1969 (1) The State of Andhra Pradesh reported in 1969 (1) SCC 844 SCC 844 SCC 844 and another unreported Judgment of Division Bench of our High court in the case of Gulabsingh Gulabsingh Gulabsingh Dipa Chavan & Ors. v. Joint Charity Commissioner, Dipa Chavan & Ors. v. Joint Charity Commissioner, Dipa Chavan & Ors. v. Joint Charity Commissioner, : 18 : Maharashtra State, Bombay & Anr. (Special Civil Maharashtra State, Bombay & Anr. (Special Civil Maharashtra State, Bombay & Anr. (Special Civil Application No.1912/1976) decided on 18th December Application No.1912/1976) decided on 18th December Application No.1912/1976) decided on 18th December 1978 1978 1978 and deduced the principles to be kept in mind for exercising powers under Section 41D(3) of the Act to suspend the charged trustees during the pendency of the enquiry. It has then adverted to the decision in the case of K.K.Ramamurthy Vs. K.K.Ramamurthy Vs. K.K.Ramamurthy Vs. State of Kerala reported in 1972(II) L.L.J. 509 State of Kerala reported in 1972(II) L.L.J. 509 State of Kerala reported in 1972(II) L.L.J. 509, which deals with the principle to be kept in mind while suspending a civil servant against whom disciplinary proceedings are initiated. Reference is then made to another decision in the case of State of Orissa Vs. Bimal Kumar Mohanti reported State of Orissa Vs. Bimal Kumar Mohanti reported State of Orissa Vs. Bimal Kumar Mohanti reported in (1994) 4 SCC 126 in (1994) 4 SCC 126 in (1994) 4 SCC 126. Once again, this case deals with the suspension of Government Officer during the pendency of disciplinary enquiry. The JCC after culling out the principles stated in these decisions, proceeded to observe that many factors to be considered for suspension of Government Servant during pendency of Departmental Enquiry may be applicable for exercising powers under section 41D(3) of the Act to suspend the charged trustees during the pendency of enquiry. The JCC has adverted to the principle that the Court or the : 19 : Tribunal must consider each case on its own facts and no general law could be laid. That suspension is not a punishment, but is only one of forbidding or disabling an employee to discharge the duties of office or post held by him. That the suspension must be a step-in-aid to the ultimate result of the investigation or enquiry and lastly, that the Authority should always keep in mind public interest of the impact of the delinquent’s continuance in office while facing departmental enquiry or trial of a criminal charge. The JCC has then adverted to the decision of Sub-Divisional Sub-Divisional Sub-Divisional Officer Vs. Shambhu Singh reported in 1969 (1) SCC Officer Vs. Shambhu Singh reported in 1969 (1) SCC Officer Vs. Shambhu Singh reported in 1969 (1) SCC 825 825 825, which dealt with person who was not a Government Servant but an elected representative. Even so, the principle highlighted is that the existence of power must be exercised when it is absolutely essential for the discharge of the power conferred and not merely that it is convenient to have such a power. The JCC has then adverted to two other decisions of the Supreme Court relied by the contesting Respondents which expounds the principles to be kept in mind by the Court while granting interim relief. The JCC has noted that : 20 : the said principles cannot be applied for exercise of powers under Section 41D(3) of the Act as the authority is not granting any interim relief as such in favour of any individual but is expected to pass an order in the interest of the Trust for its better management and to prevent further misuse of the Trust affairs at the hands of the charged trustees during the pendency of the enquiry and to prevent the trustees from hampering the course of investigation. In other words, the JCC first proceeded to examine the principles that ought to be borne in mind to exercise powers under Section 41D(3) of the Act and noted that gravity or seriousness of the charges, nature of evidence, necessity to keep the charged trustees away from the administration of Trust and from sphere of influence by passing order of suspension and that each case differs on facts. 13. The JCC then proceeded to examine other points raised on behalf of the charged trustees such as main Application is not maintainable, it is barred by limitation, barred by principles of res-judicata, etc. That the Applicant’s son had : 21 : filed two criminal complaints based on same allegations against the Respondents which have been dismissed by the Court, for which, principle of double jeopardy would be attracted. That the names of some of the trustees are not on record and change reports are pending. That charges are factually incorrect. The JCC has rejected each of these objections on the finding that the same were already addressed on the earlier occasion and were not relevant for deciding the matter in issue for exercising powers under Section 41D(3) of the Act to suspend the charged trustees during the pendency of the enquiry. 14. The JCC then adverted to the argument of the charged trustees that in any case, it was not a case of misfeasance or malfeasance but lapse of lesser degree. To consider this argument, the JCC proceeded to consider the charges already framed in seriatim, which, in his opinion, were suggestive of the gravity of charges. The JCC has adverted to the arguments in respect of each of the said charge and rejected the argument of the charged trustees. : 22 : 15. The JCC has