1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION LETTERS PATENT APPEAL NO. 165 OF 2009 AND CIVIL APPLICATION NO. 198 OF 2009 IN WRIT PETITION NO. 7360 OF 2008 Quality Dairy Private Limited ........Appellant versus M/s. J.V. Construction & Developers & ors........Respondents. Mr. A.A.Kumbhakoni i/b J.M. Pawar adv. for the Appellant. Mr. S.S. Shah adv. for respondent no.1. Mr. P.K. Samdhani Sr. adv. With Rahul Dwarkadas & Nevaille Mukerji i/b. Wadia Ghandhy & Co. adv. for the Respondent no.2. Mr. R.M. Patne AGP for respondent no.3. CORAM: J. N. PATEL Acting. C.J. AND B. R. GAVAI, J. DATED : 4th February, 2010. JUDGMENT: ( Per B.R. Gavai J.) Heard. Admit. By consent heard forthwith. 1. This appeal challenges the order passed by the learned Single Judge of this court dated 10-12-2008 in Writ Petition No. 2360/08. The brief facts giving rise to the present appeal are as under: 2. That the properties involved in the present dispute are situated at village Anjaneri and Peghalwadi. The Court Receiver 2 was appointed in respect of the said properties by the Special Court constituted under the Trial of Offences Relating to Transactions in Securities Act. Though the Court Receiver advertised the sale of properties thrice, no buyer was available. It appears that the Special Court permitted sale of the properties by private treaty on an application being made. The respondent no.2- trust offered a sum of Rs. 4,02,00,000 crores for the said properties in lot no.1 and 70 lakhs for the properties in lot no.2. On an application being made before the court by the decree holder and respondent no.2, the Special Court vide order dated 12-1-2003 granted permission to sell the suit properties to respondent no.2 therein. The respondent no.2 accordingly deposited the entire consideration of the amount to the Court Receiver and put the respondent no.2-trust in possession thereof. 3. It appears that thereafter the respondent no.1 found it difficult to clear the dues of MSEB and therefore it was decided by respondent no.2 trust to sell the properties to some other parties. Accordingly, after private negotiations with the present appellant, the respondent no.2 decided to sell the properties to the appellant herein for an amount of Rs. 5,60,00,000. The respondent no.2 thereafter filed an application bearing no. 232/06 before the Special Court seeking a direction to the Court Receiver to execute the conveyance in favour of the nominee namely respondent no.2 herein. The said application was allowed and permission was given to execute the sale deed in favour of respondent no.2- trust or its nominee, subject to the permission by the Charity 3 Commissioner. Subsequently, an application came to be filed by the respondent no.2- trust under the provisions of sec. 36(1)(a) of the Bombay Public Trust Act for sale and transfer of the immovable properties to the appellant herein. The said permission was granted vide order dated 12-1-2007 on certain terms and conditions. The respondent no.1 herein made an attempt to intervene before the Charity Commissioner. However, the permission to do so was rejected. 4. The respondent no.1 herein thereafter filed Writ Petition no. 4081/07 challenging the order passed by the Charity Commissioner on 12-1-2007. The respondent no.1 had expressed its willingness to purchase properties for an amount of Rs. 7,21,00,000. In addition to this, the respondent no.1 also agreed to clear the arrears of tax and all liabilities including the electricity charges etc. The Court vide order dated 12-1-2007 while disposing of the petition, permitted the respondent no.1 herein to appear before the Charity Commissioner, in the application pending before the said authority filed by the respondent-trust. The respondent no.1 herein was granted liberty to raise all the questions which were raised in the said petition. The application pending before the Charity Commissioner was filed filed by the respondent no.2-trust, for modification of the order dated 12-1-2007. The Charity Commissioner vide order dated 22-10-2008 allowed the application filed by the respondent -trust and permitted the respondent-trust to execute the conveyance for the said properties in favour of present appellant and its two 4 partners. The application for intervention filed by the respondent no.1 came to be rejected. 5. Being aggrieved thereby the Writ Petition no. 7360/08 came to be filed before this court. The same was allowed by the learned Single Judge vide order dated 10-12-2008. The learned Single Judge while allowing the petition has held that the Charity Commissioner could have considered the application filed by the respondent-trust only after advertising the sale of the properties and as such the action of the Charity Commissioner granting permission for execution of the sale deed was not proper in law. 6. Mr. Kumbhakoni the learned counsel appearing on behalf of the appellant submitted that the learned Single Judge has erred in observing that the proceedings under sec. 36 ought to have been allowed by the Charity Commissioner. He submits that in fact the procedure as required under the provisions of sec. 36 was followed by the Charity Commissioner before the order was passed on 12-1-2007. It is therefore submitted that, the observations in this regard are totally contrary to the record. Mr.Kumbhakoni further submitted that the observations by the learned Single Judge that there is no question of execution of sale deed in favour of the appellant is also not tenable in law in as much as vide order dated 14th December 2007 the Special court had directed that the sale deed be executed in favour of the auction purchaser only. It is submitted that this was so because it was noticed that there was some problem in execution of the sale deed, in favour of the appellant since the auction purchaser was a public trust. 5 7. From the record, it is clear that there are series of litigations pertaining to the subject matter. No doubt vide order dated 12-1-2007 the respondent no.2 herein was granted permission to alienate the property in favour of the appellant. However the said order came to be challenged by the respondent no.1, herein by way of W.P.No. 4081/07. It will be necessary to refer to certain observations of the learned Single Judge in the order dated 1-11-2007 in W.P. No.4081/07, which are as under: “The main grievance is that the trust property should not have permitted to be sold without a public notice in that regard. The next submission is that the consideration for which the trust property is being alienated is not for just and fair market value but is too much on the lower side. It is submitted that the Charity Commissioner being custodian of the trust need to bear in mind the interest of trust. The petitioner with a view to show its bonafides has placed on record an affidavit and undertaking expressing readiness and willingness to purchaser the subject property for consideration of Rs. 7,21,00,000 and to substantiate the petitioners keenness in making the said offer pay orders in the sum of Rs. 7,21,00,000 are drawn on IDBI bank in the name of the respondent no.1-trust. The said pay orders are purchased on 23-2-2007 from the bank and are revalidated after expiry of the term and are kept alive till date. It would not be out of place to notice that the respondent no.2 has 6 agreed to purchase the subject property for a consideration of Rs. 4,75,00,000 whereas the petitioner has shown its readiness and willingness to purchase the suit property at a minimum of Rs. 7,21,00,000. The petitioner is also ready to suffer all the liabilities qua the subject property such as taxes arrears of electricity bills etc.” (emphasis supplied) 9. After making the aforesaid observations, the learned Single Judge finding that a subsequent major event i.e. filing of application by the respondent-trust before Charity Commissioner, seeking modification of the orders dated 12-1-2007 and 9-2-2007 had taken place, observed that it was not necessary to adjudicate the issue raised by the petitioner. The learned Single Judge found that the said application dated 25-7-2007, was in substance an application under sec. 36 of the Bombay Public Trusts Act. The learned Single Judge therefore relegated the petitioner therein (respondent no.1 herein) to the Charity Commissioner, leaving all questions raised in the said petition open to be agitated before the Charity Commissioner. The learned Single Judge also observed that it shall be open for the petitioner in the petition to substantiate its offer before the Charity Commissioner and the learned Charity Commissioner was directed to decide the application filed by the respondent-trust after taking into consideration the submissions of the petitioner therein (respondent no.1 herein). It is thus clear that the learned Charity Commissioner was required to decide the matter in the light of the 7 observations aforesaid by the learned Single Judge in W.P. No. 4081/07. 10. It is pertinent to note that the present appellant was a party respondent in the said writ petition and after hearing him, the orders were passed by the learned Single Judge. The appellant has not challenged the order passed in the said Writ Petition and has accepted the same. It is thus clear that in view of the aforesaid observations the learned Charity Commissioner was required to take into consideration, the contentions raised by the respondent no.1 herein, before passing the order on the application filed by the respondent-trust. It cannot be disputed that the main purpose behind the provisions for granting of permission under section 36 is to safe guard the interest of trust and what is of paramount consideration is the best possible interest of the trust in question. It is also not in dispute that the offer made by the respondent no.1 herein was atleast more than Rs. 1,46,00,000. Not only this but respondent no.1 has also accepted to take the pending liability of electricity charges, taxes etc. in addition to his offer. It is also to be seen that the respondent no.1 herein had show his bonafides and had also offered the pay orders in the sum of Rs. 7,21,00,000 drawn on IDBI bank in the name of the respondent-trust. 11. In these backgrounds, the learned Charity Commissioner ought to have taken into consideration, as to what decision would have been in the best interest of the respondent-trust. However, we find that the learned Charity Commissioner has erred in 8 observing that this court in W.P.No. 4081/07 had only directed considering the application of respondent no.1 herein and not directed it to call fresh offer or go for open bidding. As is seen from the order dated 1-11-2007 in W.P.No.4081/07 the learned Charity Commissioner was directed to decide the application filed by the trust after taking into consideration the submissions of the petitioner therein (respondent no.1 herein). We have already reproduced what were the main contentions in the said writ petition. If the entire order of the learned Single Judge in he said writ petition is read, we are of the view that the observations of the Charity Commissioner in this respect are not correct. 12. In any case in the present appeal, we are only considering the correctness of the order passed by the learned Single Judge in W.P.No. 7360/08 dated 10-12-2008. It can be seen from the order dated 14-12-2007 that the learned Special Court had directed the Court Receiver to execute the sale deed only in favour of the auction purchaser. We therefore find that the contentions raised by the appellant in this regard is without any substance. The learned Single Judge after considering the submissions on behalf of the parties held that under sec. 36 it was incumbent upon the Charity Commissioner to have advertised the sale of the properties before grant of permission. We have already stated hereinabove that the offer of respondent no.1 is mush better and superior offer than the offer of appellant and it is quite possible that if fresh bids are invited by advertising, the 9 respondent-trust may get much better offer. In this view of the matter, we do not find any error in the view taken by the learned Single Judge, warranting any interference. 13. The appeal is therefore without any merit and as such dismissed. (Acting. C. J.) (B.R. Gavai, J.) 10