ssp 1 WP(L) 1210 of 2011 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION (L) NO.1210 OF 2011 Charu K. Mehta and Ors. .....Petitioners versus Lilavati Kirtilal Mehta Medical Trust and Ors. ..... Respondents WITH WRIT PETITION NO.948 OF 2011 Lilavati Kirtilal Mehta Medical Trust and Anr. .....Petitioners. Versus Union Bank of India and Ors. .....Respondents Mr.Mahesh Jethmalani, Senior Advocate with Mr.Vineet Naik, Mr.Pranav Badheka, Mr.Raj Patel, Mr.Karl Tamboli i/by M/s.Thakore Jariwala and Associates, for the petitioners in WP(L) No.1210 of 2011 and for respondent No.8 in WP No.948 of 2011. Mr.Janak Dwarkadas, Senior Advocate with Mr.Jay Kansara i/by Vidhi Partners, for the petitioners in WP No.948 of 2011. Mr.Janak Dwarkadas, Senior Advocate with Mr.Kunal Vajani, Ms.Pranaya Goyal i/by Wadia Ghandy & Co., for respondent Nos.1 and 9 in WP(L) No. 1210 of 2011. Mr.M.P.Rao, Senior Advocate with Mr.Nainesh Amin i/by N.N.Amin & Co., for respondent Nos.11 and 12 in WP(L) No.1210 of 2011 and for respondent Nos.1 and 2 in WP No.948 of 2011. Mr.D.D.Madon, Senior Advocate with Mr.Jay Kansara i/by Vidhi Partners, for respondent Nos.3 to 5 in WP(L) No.1210 of 2011. Mr.D.D.Madon, Senior Advocate with Mr.Kunal Vajani, Ms.Pranaya Goyal i/by Wadia Ghandy & Co., for respondent No.11 in WP No.948 of 2011. Mr.Pratik Sakseria with Ms.J.N.Shah i/by Daru Shah & Co., for respondent No.6 in WP(L) No.1210 of 2011. Mr.J.N.Shah i/by Daru Shah & Co., for respondent No.6 in WP No.948 of 2011. Ms.Neelam Jadhav, for respondent No.14 in WP No.948 of 2011. Mr.Benney Chatterjee, for respondent – Union of India. CORAM: P.B.MAJMUDAR & MRS.MRIDULA BHATKAR, JJ. DATE: 25 th JULY, 2011 ssp 2 WP(L) 1210 of 2011 P.C. 1. Once again two groups of Lilavati Hospital and Research Centre, is before this Court by way of these two writ petitions. It seems that unending dispute is going on between two groups of Public Trust. Various litigations have been carried out by both the sides from time to time. So far as the present dispute raised in both these writ petitions is concerned, it is in connection with the directions given by Union Bank of India to the trustees of the Trust, who are operating bank accounts of the Hospital run by the Trust namely ‘Lilavati Hospital & Research Centre’. There are various bank accounts opened by the said Trust with the Union Bank of India. It is pointed out to the Court that there are 17 bank accounts opened by the Trust with the said Bank. 2. On 09-04-2011, the Union Bank of India informed both the groups i.e. Charu Mehta group and other group of the trustees which are managing the affairs of the said Trust and which group is managing the bank accounts of the Trust, that since adverse and contradictory instructions have been given by the two groups of the trustees, the bank has frozen all the fixed deposits of the Trust. The said letter also contains a fact that the bank has already applied before the Charity Commissioner, seeking appropriate directions relating to the operations in the Trust accounts. There is also a reference in the said letter that a Public Interest ssp 3 WP(L) 1210 of 2011 Litigation is filed in the Supreme Court to unearth black money and bring it to the country and the Supreme Court had issued notices to the Central Bureau of Investigation and Enforcement Directorate to show cause as to whether investigation should be ordered against the Groups of Trustees headed by Mr.Prabodh Mehta and also to find out whether the Trust money was used for money laundering. 3. The aforesaid decision of the Union Bank of India is challenged and impugned in Writ Petition No.948 of 2011. The second petition is filed by other group i.e. Charu Mehta Group with a prayer that appropriate writ directions may be given to the bank authority relating to the continuation of the operation of the bank accounts of the Trust. Lilavati Hospital and Research Centre is a Public Charitable Trust registered under the provisions of Bombay Public Trust Act, 1950. The said Trust runs hospital namely Lilavati Hospital and Research Centre at Bandra Reclamation, Bandra (W), Mumbai. Various bank accounts have been opened in the name of the said Trust by elected trustees namely Chetan P. Mehta and others. It seems that at present three people are operating the said bank accounts namely, the Vice President of the Hospital, The Director (Finance) of the Hospital and the Chief General Manager of the Hospital. These three people are operating the bank accounts in view of the resolution of the Trust dated 24-11-2008, which is ssp 4 WP(L) 1210 of 2011 passed by the trustees who claim to be elected trustees by way of majority. 4. Mr.Janak Dwarkadas, learned Counsel appearing for petitioners in Writ Petition No.948 of 2011 and Mr.Madon, learned counsel appearing for respondents in both the petitions, vehemently submitted that the directions given by the Bank regarding freezing the bank accounts of the Trust is not sustainable and no such order could have been passed by the Respondent-Bank without ascertaining the real facts. It is submitted that the only alternative available to the Bank is to approach the Charity Commissioner, who is required to consider the interest of the Trust and to pass consequential order if any material is brought before the Charity Commissioner regarding mis-management or siphoning of the Trust’s amount in any manner by the Trustees, who are in majority at present. It is submitted that the other group i.e. Charu Mehta Group, filed various proceedings from time to time and tried to take over the management, but having failed to do so, ultimately tried to obstruct the smooth functioning by making applications after applications to the Bank. It is submitted that a change report is already submitted before the Charity Commissioner and the Charity Commissioner has not taken any final decision in this behalf. It is also submitted that if the bank accounts of the Trust are frozen, it will be difficult for the Trust to carry out its day to day routine activities and it will paralyze the activities of the Trust. It is ssp 5 WP(L) 1210 of 2011 submitted that the Trust in the past, has not tried to siphon away the money and have not utilized any amount of the Trust by investing the same in the Swiss Bank and none of the trustees are involved in the money laundering business in any manner. 5. Mr.Jethmalani, learned counsel appearing for the petitioners in Writ Petition (L) No.1210 of 2011, on the other hand, strenuously submitted that there is no intention on the part of the petitioners to take away the management in any manner and the petition is filed with a view to protect the interest of the Trust and to safeguard the affairs of the Trust. It is submitted that income tax raid was carried out at the Hospital and at the private premises of the concerned trustees. Mr.Jethmalani further submitted that in a Public Interest Litigation before the Supreme Court which is in connection with the money laundering, a reference is also given regarding the activities of Prabodh Mehta Group. It is submitted that ultimately a Special Investigation Team is constituted by the Supreme Court, which may consider this aspect while conducting an enquiry and till then, it is in the interest of the Trust that the other group should not be allowed to operate bank accounts or in any case, the expenditure of more than `15,00,000/- cannot be allowed to be incurred by the other group without permission of the Charity Commissioner. It is submitted that there are serious allegations of misfeasance and mal- ssp 6 WP(L) 1210 of 2011 practices against the functioning of the Trust. 6. Learned counsel appearing for the respondent-Bank submitted that bank has no personal interest regarding fight between the two groups. He submitted that when two groups of the Trust are giving contradictory instructions from time to time, it is difficult for the bank to allow smooth functioning of the bank accounts, as in future, somebody may make allegations as to why the bank has permitted the said accounts being operated. It is further submitted that the bank therefore asked the Trustees to clarify its stand in this behalf. 7. Learned counsel appearing for the Income Tax Department, argued that it is true that Income Tax raid was carried out at the hospital premises on 11-04-2011 as well as at the residence of the Trustees of the Hospital and on the basis of the said raid, appraisal report is being prepared, which would be kept in a sealed covered and would be given to the Assessing Officer. 8. We have heard the learned counsel appearing in the matter at length and have gone through the allegations made in both these writ petitions. It is required to be noted that even though the Bank had written a letter regarding freezing of bank accounts on 09-04-2011, it is not in dispute that the respondent Bank has not proceeded further on the basis of the said letter and the bank accounts are in operation as on today. ssp 7 WP(L) 1210 of 2011 The respondent Bank has already preferred an application before the Assistant Charity Commissioner on 11-01-2011 and the matter is still pending at the level of Assistant Charity Commissioner and it seems that no order has been passed in this behalf. 9. The main question which is required to be considered at this stage, is whether this Court while exercising its extra-ordinary jurisdiction under Article 226 of the Constitution of India should pass orders by which the decision taken by the Bank to freeze the bank accounts should be upheld or as to what other directions can be given considering the interest of the Trust. It is not in dispute that the Trust in question is a Public Charitable Trust, registered under the Bombay Public Trust Act. The Assistant Charity Commissioner is required to monitor the affairs of the Trust from time to time. It is unfortunate that even though the respondent Bank has preferred applications before the Assistant Charity Commissioner as back as in January 2011, he has not taken any ultimate decision one way or other, though more than six months have elapsed. In our view, when any complaint or application is made to the Assistant Charity Commissioner in this behalf, it is the bounden duty of the said authority to adjudicate the same and pass an appropriate order, even while considering the provisions of Section 41(a) of the Act. If any complaint is made to the Assistant Charity Commissioner about the mis- ssp 8 WP(L) 1210 of 2011 management of the funds of the Trust, it is the statutory duty of the Assistant Charity Commissioner to adjudicate the said aspect and to pass such orders in order to safeguard the interest of the Trust and amount of the Public Trust. Unfortunately, the Assistant Charity Commissioner has failed to discharge his duty in an appropriate manner and seems to have remain silent spectator allowing both the groups to fight inter se. Even if one side may be interested in delaying the proceedings, the Assistant Charity Commissioner should not feel himself in a helpless position and after application of mind and after considering the record, the Assistant Charity Commissioner is required to pass appropriate order in this behalf. The Assistant Charity Commissioner prima facie has failed to discharge his duties, as he has not taken any steps, nor has he decided the application of the bank. We take a serious note regarding the manner in which the Assistant Charity Commissioner has conducted the proceedings. 10. Be that as it may, when the application is pending before the Assistant Charity Commissioner and when serious allegations are made, to which of course, we are not required to say anything in any manner about the mis-management of the funds of the Trust, the Charity Commissioner is directed to decide the said issue and to pass appropriate order while keeping the sole object of the interest of the trust in mind. At this stage, in these proceedings we are not required to find out whether ssp 9 WP(L) 1210 of 2011 the say of one group is correct or not, as this aspect is required to be decided by the Charity Commissioner after considering the record and after hearing the concerned parties. If other group is not cooperating with the early hearing, the Charity Commissioner may pass suitable orders after going through the record. At this stage, Mr.Dwarkadas and Mr.Madon pointed out that the Trustees of the Hospital are not parties in connection with the proceedings regarding money laundering proceedings, which are pending before the Supreme Court. Though, Mr.Jethmalani argues otherwise, in our view, it is not necessary to go into the said question, as we are of the opinion that whether the bank accounts are required to be operated through existing one group of Trustees which is managing the affairs as on today or any amendment is required to be made in this behalf, is to be decided by the Charity Commissioner after going through the record of the case and after hearing both the sides as well as the respondent Bank in this behalf. The Charity Commissioner is required to decide the said issue regarding operating the bank accounts, afresh, de novo and irrespective of whatever order might have been passed in the past and in view of change of circumstance which may justify to pass appropriate directions regarding the operating the bank accounts. At this stage, Mr.Jethmalani argued that his group of Trustees is not interested in operating the bank accounts or taking over the management. ssp 10 WP(L) 1210 of 2011 It is submitted by him that the grievance of his client is only in connection with the smooth functioning of the management and to see that financial affairs of the Trust is properly regulated and no money is misused in any manner. It is suggested that any expenditure more than `15,00,000/- may not be allowed to be incurred by the other group without permission of the Assistant Charity Commissioner. 11. In our view, at this stage, it would not be proper to give such directions as this Court is not expected to decide disputed questions of facts in its extra ordinary jurisdiction under Article 226 of the Constitution of India and it is for the Charity Commissioner to examine these aspects without delay. Considering the facts and circumstances of the case, we direct the Charity Commissioner to take appropriate decision as to whether any amendment is required to be made in the existing position regarding operating bank accounts and as to whether any further directions are required to be given to ensure and safeguard financial interest of the Trust. All these aspects are entirely left for the consideration of the Charity Commissioner and the Charity Commissioner shall decide the same latest by 16-08-2011 without fail. Registry is directed to send writ of this Court to the Charity Commissioner forthwith. The Charity Commissioner shall apply his mind to the facts and circumstances of the case and shall pass appropriate orders without ssp 11 WP(L) 1210 of 2011 further delay in this behalf. The group of Trustees, who is in the management, shall not directly or indirectly siphon away the funds in any manner. It is argued by Mr.Dwarkadas and Mr.Madon that they never tried to siphon away the money in any manner in the past and the allegations made by the other side are baseless and without any substance. The Charity Commissioner shall comply with the aforesaid directions without fail and shall decide the aforesaid points even if any group fails to cooperate in the proceedings. Considering the nature of the dispute and the fact that Assistant Charity Commissioner has failed to discharge his duty, we direct the Charity Commissioner to take up the matter himself and shall decide the same in the light of the aforesaid directions, as per the record of the case and its own merits. 12. Even the change report which is pending is required to be adjudicated forthwith so that litigation can be curtailed to a considerable extent and it should be disposed of within a period of six months from today. If any earlier directions are given by any Court in this behalf, the same should be strictly followed and should not be breached. 4. In view of what has been stated hereinabove, the writ petitions are disposed of. ( MRS.MRIDULA BHATKAR, J. ) ( P.B.MAJMUDAR, J. )