SCA/17131/2004 1 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 17131 of 2004 For Approval and Signature: HONOURABLE MR.JUSTICE K.M.MEHTA ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ?No 2 To be referred to the Reporter or not ?No 3 Whether their Lordships wish to see the fair copy of the judgment ?No 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ?No 5 Whether it is to be circulated to the civil judge ?No ========================================================= KISHAN CONSTRUCTION THRO.PARTNER - Petitioner(s) Versus DARA M MISTRY & 14 - Respondent(s) ========================================================= Appearance : MR RS SANJANWALA for Petitioner(s) : 1, MR KN DASTOOR WITH MR KI SHAH for Respondent(s) : 1 - 4. MR PG DESAI WITH MR MI MERCHANT for Respondent(s) : 5 - 14. MRS KRISHNA RAVAL for Joint Charity Commissioner – Resp.No.15. ========================================================= CORAM : HONOURABLE MR.JUSTICE K.M.MEHTA Date : 18/04/2006 CAV JUDGMENT 1. Kishan Construction – a partnership firm, SCA/17131/2004 2 JUDGMENT petitioner, through its partner Jitendra H.Desai has filed this petition under Articles 226 and 227 of the Constitution of India, for a writ of certiorari or a writ in the nature of certiorari for quashing and setting aside the order dated 23rd December, 2004, passed by the learned Joint Charity Commissioner in Misc.Application No.15 of 2004. The learned Joint Charity Commissioner has passed the order under Section 41A of the Bombay Public Trusts Act, 1950. The learned Joint Charity Commissioner by his impugned order issued certain directions particularly the Charity Commissioner did not approve the lease deed in favour of the petitioner dated 24th March, 2004, executed by the Board of Trustees, Surat Parsi Panchayat - respondent No.5 to respondent No.14 by which petitioner was put in possession of the land in question. 2. The facts giving rise to this petition are as under:- 2.1 In Surat large number of Parsi Communities are staying and for the benefit of Parsi Communities, SCA/17131/2004 3 JUDGMENT a public trust i.e. Surat Parsi Panchayat – respondent No.5 through Board of Trustees administering certain property of the said trust has been created under the provisions of Bombay Public Trusts Act, 1950 ( hereinafter referred to as “BPT Act”). The subject matter of this petition is certain lands held by the trust which is known as “Dokhma Land”. This land is connected with the disposal of the dead bodies of the Parsis and the religious ceremonies connected therewith in accordance with the religious tenets, traditions, practices, doctrines and customs prevalent for more than 100 years. This system of the disposal of the dead bodies consists of well – like structures where the bodies are placed. These are required to be surrounded by large areas of vegetation with tall trees for the nurture of vultures. They eat away and dispose of the dead bodies with amazing speed. This system as being in vogue since centuries as commanded in the Parsi Religion. 2.2 It further appears that the Board of Trustees had executed a lease of deed in favour of SCA/17131/2004 4 JUDGMENT the petitioner – M/s. Kishan Construction, a partnership firm, on 24th March, 2004, by which the petitioner was put in possession of the land in question [i.e., confers leasehold rights upon the petitioner for the period of 34 months]. The petitioner thereafter used the land in question and have acted accordingly. 2.3 During the operative period of the above lease, respondent No.1 – the Board of Trustees, Surat Parsi Panchayat, respondent No.2 – Darayas N.Master, respondent No.3 – Dr.D.D.Dumasia, respondent No.4 Dr.H.D.Dodhwala, who are also Parsis had filed an application on 13th July, 2004, before the Charity Commissioner with a prayer invoking powers conferred under Section 41A of the BPT Act. The said application was accompanied by application for interim relief. The Charity Commissioner passed an interim order on 13th July, 2004, restraining the trustees as well as petitioner not to carry out any further activities in this behalf. Thereafter petitioner as well as other respondents served with the notice issued by the office of the Charity SCA/17131/2004 5 JUDGMENT Commissioner. The respondents filed their reply. The petitioner also filed its reply opposing the said application. The petitioner has also filed reply before the Charity Commissioner on 16th August, 2004. 2.4 The Charity Commissioner heard the matter and passed the order on 23.12.2004 issuing certain directions under Sec.41A of the BPT Act. The learned Charity Commissioner has treated deed of lease entered into between the Board of Trustees and petitioner as void ab-initio. 2.5 Being aggrieved and dissatisfied with the aforesaid order, as indicated above, M/s. Kishan Construction, petitioner, has filed petition being Special Civil Application No. 17131 of 2004 before this Court challenging the order of the Charity Commissioner dated 23.12.2004. 2.6 From the record it appears that there were two Misc.Applications No.15/04 and 16/04. However, both the matters have been decided by common judgment by the order of the Charity Commissioner dated SCA/17131/2004 6 JUDGMENT 23.12.2004. However, as there were two different orders, the Kishan Construction filed two Special Civil Applications, for which I have considered the main matter i.e. Special Civil Application No.17131 of 2004 for which I have heard in this behalf. However, there was separate Judicial Misc.Application No.16/04 the petitioner also filed separate Special Civil Application No.17137 of 2004, that is how the Kishan Construction filed two matters. However both the petition raises the question regarding legality and validity of the order of the Charity Commissioner. 2.7 It may be noted that the Board of Trustees of Surat Parsi Panchayat have also filed a petition challenging the said order of Charity Commissioner dated 23.12.2004, that was a Special Civil Application No.825/05 which was filed on 20.1.2005 and this matter was also heard alongwith the said order in this behalf. This matter also raises same question of facts and law in this behalf. 2.8 As far as the matter of Kishan Construction is SCA/17131/2004 7 JUDGMENT concerned, the Board of Trustees are respondents whereas Special Civil Application No.825/05, the Board of Trustees have filed a petition and in that petition they are petitioners in that matter. Similarly the trustees have also filed second petition being Special Civil Application No.861/06 because, as indicated above, there was two Misc.Petitions where also similar challenge of the order of the Charity Commissioner. However, this petition also raises common question and therefore I have heard two matters of Kishan Construction and two matters filed by the Board of Trustees together. However, for the purpose of convenience and for the sake of brevity, I have taken the facts of only the matter of Special Civil Application No.17131 of 2004 which I have heard as main matter. 3. Mr.Rashesh S.Sanjanwala, learned Counsel appeared on behalf of the petitioner. He has made following submissions: 3.1 The learned advocate has submitted that the impugned order i.e., order dated 23.12.2004 passed by SCA/17131/2004 8 JUDGMENT the Charity Commissioner is wholly without jurisdiction as none of the directions sought by the respondents No.1 to 4 fall within the scope and ambit of Section 41A of the BPT Act. The learned Joint Charity Commissioner has failed to appreciate the ratio of the various decisions of this Court interpreting Section 41A of the BPT Act. The reliefs as sought for are incapable of being granted under Section 41A of the BPT Act as transfer of property has already taken place and the petitioners are in possession of the lands in question. The deed of lease having already been executed, and the petitioners having been put in possession, the transfer of property is complete and such transfer cannot be interfered with in exercise of powers conferred in Sec.41A of the BPT Act. If at all, proceedings in Civil Court are required to be initiated either by the respondents No.1 to 4 hereinafter obtaining prior permission of the Charity Commissioner. 3.2 In support of the aforesaid contention, he has relied upon Sec.41A of the BPT Act which reads as SCA/17131/2004 9 JUDGMENT under: “Sec.41A. Power of Charity Commissioner to issue directions to trustees and other persons. (1) Subject to the provisions of this Act, the Charity Commissioner may from time to time, issue directions to any trustee of a public trust or any person connected therewith to ensure that such trust is properly administered and the income thereof is properly accounted for or duly appropriated and applied to the objects and for the purpose of the trust. (2) It shall be the duty of every such trustee and person to comply with a direction issued to him under sub-sec.(1).” “Sec.50 provides for suits relating to public trust:- “Sec.51 provides for consent of Charity Commissioner for institution of suit: 3.3 Relying upon the aforesaid provisions, the SCA/17131/2004 10 JUDGMENT learned Counsel further submitted that, Section 41-A of the Act cannot be invoked for issuing directions to the petitioner who are neither trustees nor any person connected therewith. The learned Counsel further submitted that the said Sec.41A of the BPT Act is also not attracted as the directions sought do not concern administration and the income of the trust. Thus, the reliefs as prayed for could not have been granted under Sec.41A of the BPT Act. The learned Joint Charity Commissioner has, however, failed to appreciate the ratio of the various decisions of this Court in the true perspective. 3.4 In support of the interpretation of Sec.41A of the BPT Act, the learned Counsel has relied upon Division Bench judgment of this Court in the case of Syedna Mohamed Burhanuddin the 52nd Dai-ul-Multaq and Head of the Dawoodi Bohra Community Vs. Charity Commissioner, Gujarat State, Ahmedabad and Others reported in 1992(1) GLH 331, particularly para 42 on page 362 which reads as under: “The language of Section 41A does not contemplate SCA/17131/2004 11 JUDGMENT issuance of general directions to all the trusts. A general direction which may be necessary to be issued to all public trusts will not ordinarily be left to the discretion of the Charity Commissioner. Its very nature will require it to be made the subject-matter of a statutory rule under the said Act. Issuance of such a direction can hardly be left to the human weakness of the Charity Commissioner. Section 41A, therefore, in our opinion contemplates cases of individual trusts which may be suffering on account of the human weaknesses or lapses of the trustees. Section 41A is to be brought into play where some exceptional, unforeseen, unexpected or peculiar situation has arisen in the administration of a public trust which is required to be cared by a remedial direction or where circumstances have arisen foreboding such a situation which requires a preventive measure in the form of a direction. We, therefore, think that this argument of the learned Government Pleader, flowing from imaginary apprehensions, is misconceived. In this connection, we also cannot overlook the fact that SCA/17131/2004 12 JUDGMENT failure to comply with directions issued under Section 41A is visited upon by penal consequences under Section 67 of the said Act.” 3.5 After relying upon the aforesaid judgment, the learned counsel submitted that the order of the Charity Commissioner is contrary to and inconsistent with the principles laid down by a Division Bench judgment of this Court and therefore the order of the Charity Commissioner is bad in law. 3.6 The learned Counsel submitted that, without prejudice to the above (original objector in the proceedings of Sec.41-A of the BPT Act) concerns the purposes for which the land in question was given to the trust. The respondents No.1 to 4 have objected to the transfer on the ground that the land in question is 'Dokhma' land and as such cannot be sold and/or transferred by the trust. On internal pages 25 to 28 of the impugned order, the said objection has been dealt with. The learned Joint Charity Commissioner has cast the entire burden of proving that the land in question is not a dokhma land upon the trust and SCA/17131/2004 13 JUDGMENT has proceeded to issue the direction having found that the trust has failed to prove that the land in question is not a dokhma land, which is neither legal nor proper. The burden of proving that the land in question is a dokhma land and as such cannot be transferred lies on the respondents No.1 to 4 and they having failed to discharge the said burden, the learned Joint Charity Commissioner ought to have held that the said objection is not sustainable. 3.7 The learned advocate further submitted that, in any view of the matter, the impugned directions have been issued without recording any positive finding on the issues as to whether (i) the land in question is Dokhma land, and (ii) the land can be sold by the trust considering the use of the land, the requirements of the trust, the apprehended encroachment on the land and the inability of the trust to protect the possession of the land. 3.8 The learned advocate further submitted that the respondents No.1 to 4 have also raised an issue based on Sec.55 of the BPT Act, which provides SCA/17131/2004 14 JUDGMENT doctrine of Cy pres which means as near as possible, inter alia, contending that, if the lands which are otherwise required to be used as dokhma land, have become incapable of such use, it was obligatory for the trust to make necessary application under Sec.55 of the BPT Act. The petitioner submits that, in the facts of the case, Sec.55 of the BPT Act does not get attracted. It is nobody's case that the original object for which the trust is created has failed or that the income of any surplus balance of any public trust has not been utilised or is not likely to be utilised. The requirement of making such application contemplated under Sec.55 of the BPT Act has not arisen in the facts of the case and as such interference in exercise of powers under Sec.41A of the BPT Act was not called for. 3.9 The learned Joint Charity Commissioner has issued the impugned directions having come to the conclusion that no attempt is made by the trust to obtain the highest rates for the lands in question. The petitioner submits that the purpose behind the entire transaction has been explained by the trust in SCA/17131/2004 15 JUDGMENT the affidavit filed in the proceedings under Sec.41A of the BPT Act. On the contrary, as the trust was not in a position to maintain possession of lands and as tenant of a small portion of the land in question was threatening to encroach upon the entire parcel of land, the part of lands were given on lease to the petitioners for the purpose of securing possession and maintaining possession of the entire land. Under the circumstances, the return of income is not a relevant criteria and the ability of the petitioner to maintain the land and to return the same to the trust as and when called upon to do so is of vital importance. The petitioner submits that the provisions of the BPT Act do not oblige the trust to issue public advertisement and to obtain the highest possible price before transferring any of its properties. It is further submitted that, in view of the above finding, the learned Joint Charity Commissioner has not even independently ascertained that the lease rental being paid by the petitioner to the trust is adequate, considering all the relevant aspects of the matter. SCA/17131/2004 16 JUDGMENT 4. During the course of the hearing, the trust has expressed desire to sell the lands in question without prejudice to their rights and contentions in this behalf. The petitioner, as lessees of the land, have also not objected to the proposed sale on “as is where is basis” provided the petitioner is permitted to submit its bid and provided that in case the petitioner is not the successful bidder, the amount of Rs.2.25 crores, being the amount paid by the petitioners to the trust, interest thereon and expenses incurred by the petitioner for securing possession of the land and for developing the land are reimbursed to the petitioners. 5. In view of the above, all the issues can be gone into in the application under Sec.36 of the BPT Act that may be filed by the trust. For the reasons stated hereinabove, the learned advocate submitted that the order of the learned Joint Charity Commissioner is required to be quashed and set aside and some directions may be issued in this behalf. (a) That the trust would be at liberty to apply SCA/17131/2004 17 JUDGMENT under Sec.36 of the BPT Act for permission to sell the land (irrespective of the period). (b) If any such application is made, the Charity Commissioner will adjudicate the issue as to whether the trust is entitled to sell the land and if the trust is found competent to sell the land, the learned Joint Charity Commissioner shall grant permission, however, subject to the following conditions: i. The trust will have to invite offers from intending purchasers by issuing advertisements in newspapers having wide circulation. ii. That the Earnest Money Deposit shall be fixed at Rs.2.25 crores considering the fact that Kishan Construction is already out of pocket by approximately Rs.2.25 crores. iii. Kishan Construction shall also be permitted to submit its offer. SCA/17131/2004 18 JUDGMENT iv. If Kishan Construction is found to be successful bidder, then the amount of Rs.2.25 crores shall be adjusted against the purchase price to be paid by Kishan Construction. v. The sale shall be on “as is where is whatever there is” basis. vi. If Kishan Construction does not succeed in purchasing the land, an amount of Rs.2.25 crores will be paid over to Kishan Construction out of the consideration to be paid by the third party purchaser (without any intent). vii. In case Kishan Construction does not succeed in purchasing the lands then the validity and the legality of the agreement can be gone into in the proceeding under Sec.41A of the BPT Act provided the said proceedings are found to be maintainable in light of the law settled by this Court. 6. On behalf of the trust, I have heard SCA/17131/2004 19 JUDGMENT Mr.Prashant G.Desai, learned Senior Counsel with Mr.M.I.Merchant, learned advocate in this behalf. It may be noted that the trustees have also filed a petition being Special Civil Application No.861 of 2005. 6.1 It is the case of the learned counsel for the trust in Special Civil Application No. 861 of 2005 that the petition filed by them may be treated as reply to the file of the petition filed by Kishan Construction. 6.2 The learned Counsels have submitted as under:- 6.3 They submitted that the trust entered into a lease agreement with Kishan Construction in respect of immovable properties situated at village Karanj having Survey No.16, paiki T.P.Scheme No.3, Final Plot No.33 ad-measuring 13760 sq.mts. (1600 sq.yards) for a period of 34 months. The copy of the said registered deed was registered with the office of the Sub-Registrar at Surat. They also relied upon the provisions which they have filed before the Charity SCA/17131/2004 20 JUDGMENT Commissioner in this behalf. 6.4 The Charity Commissioner ought to have appreciated the fact that the registered lease deed entered into between the trust and the lease is only for a period of 34 months and therefore no previous sanction under Sec.36 of the Act is not necessary before entering into such an agreement. 6.5 The learned Counsel further submitted that the Charity Commissioner has committed an error of law as well as of fact in incorrectly interpreting the sum and substance of the lease deed and has wrongly come to the conclusion that the lease deed is void, inoperative as it is entered into in contravention of the provisions of Sec.36 of the Act. It was submitted that the Charity Commissioner has exceeded his power and jurisdiction in issuing directions which are not covered under the provisions of Sec.41A of the BPT Act. The learned Counsel further submitted that the Charity Commissioner has totally lost sight of the fact that the previous sanction of the authority under the Act is necessary only when the lease is for SCA/17131/2004 21 JUDGMENT a period of exceeding 3 years in case of a non- agricultural land. In the instant case, the lease agreement is for a period of 34 months only and the parties have incorporated a condition wherein if in future in case of extension of such lease, the permission of the authority under Sec.36 of the BPT Act is to be obtained. At this stage, when the period of lease does not exceed 36 months, the authority ought not to have issued the impugned directions. 6.6 The learned Counsel further submitted that the Charity Commissioner has not been able to properly interpret the provisions of Sec.55 of the Act. The provisions of Sec.55 of the Act applies to the income or surplus of the trust and it does not apply to the immovable property, and therefore the proceeding wrongly on such assumption has caused miscarriage of justice which deserves to be quashed and set aside. 6.7 It was further submitted that the authority has not properly appreciated the various terms of the lease deed and has not properly understood the SCA/17131/2004 22 JUDGMENT intention of the parties. The terms in the lease deed for extension and for obtaining the permission of the authority under the Act as and when the deed is extended is permissible under the law and there is no question of obtaining ex-post-facto permission. For the sake of argument, if at all ex-post-facto permission is to be obtained, then also as per the various decisions of High Courts, the said can be granted in appropriate cases. The observations that such permission cannot be granted reflects the non- application of mind on the part of the authority below viz. Charity Commissioner. 6.8 The learned Counsel further submitted that the authority below has incorrectly raised doubts and aspersions against the trustees of trust regarding entering into the lease deed with the lease and has wrongly smelt collusion and favourism. 6.9 The learned Counsel further submitted that the Charity Commissioner has caused a grave miscarriage of justice in coming to the conclusion and also proceeding on the assumption that the lease deed is SCA/17131/2004 23 JUDGMENT void ab initio and is in contravention to the provisions of Sec.36 of the BPT Act. 6.10 The learned Counsel further submitted that the Charity Commissioner has incorrectly come to the conclusion that the Civil Court's jurisdiction is total ousted in the matter of Sec.36 of the BPT Act. In the facts and circumstances of the present case, the findings of the Charity Commissioner below that the Civil Court's jurisdiction is barred is totally illegal, and therefore, deserves to be quashed and set aside. 6.11 The learned counsel further submitted that the Charity Commissioner has incorrectly interpreted word “ensured” and has wrongly proceeded on the presumption that the provisions of Sec.41A of the BPT Act are entirely remedial in nature. If the provisions of Sec.41A of the BPT Act are closely read, then it is crystal clear that these powers are to be exercised subject to the provisions of the Act. Meaning thereby that if a particular power/remedy is given to the other authority/court, then the SCA/17131/2004 24 JUDGMENT jurisdiction of the Charity Commissioner under Sec.41A of the Act is barred, and not appreciating such facts makes the order bad in the eyes of law, without jurisdiction and therefore, deserves to be quashed and set aside. 6.12 The learned Counsel further submitted that the Charity Commissioner has not properly appreciated the fact that the petitioner trustees have in their own wisdom with a view to further developing the trust and utilising the income received from such property for achieving the better objects of