-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION Writ Petition No.350 of 2008 Rashid Oomer ..Petitioner vs. 1. Joint Charity Commissioner Maharashtra State and ors. ..Respondents Shri Rohit Kapadia, Sr.Advocate with Shri Zal Andhyarujina, Shri Girish Dave, Smt.Sheeba Ajwani and Smt.Janki Doshi i/b M/s Dave and Girish and Co. for petitioner. Smt.V.S.Mhaispurkar, A.G.P. for respondent nos.1, 4 and 6 Shri B.D.Joshi i/b Smt.Varsha Palav for respondent no.3. Shri R.V.Govilkar for respondent nos. 7 and 10 CORAM: S.C.DHARMADHIKARI J. CORAM: S.C.DHARMADHIKARI J. CORAM: S.C.DHARMADHIKARI J. 14th March, 2008 14th March, 2008 14th March, 2008 P.C. P.C. P.C. 1. Rule. Learned Counsel for the contesting respondents waive service. By consent, Rule made returnable forthwith. 2. This writ petition under Articles 226 and 227 of the Constitution of India is directed against the order dated 12th September, 2007 delivered by the Joint Charity Commissioner, Greater Mumbai Region, Mumbai on an application No.J-4/38 of 2003. -2- 3. One Haji Ismail Haji Habib Charity Trust which is registered as a Public Charitable Trust under Bombay Public Trust Act, 1950, bearing PTR No.B 161 filed the above application invoking jurisdiction of the Charity Commissioner, Mumbai under sec.36(1)(a) of the same, and seeking sanction for sale of the trust property. The Trust property is bearing Cadastral Survey Nos.216 and 217 of Girgaun Division situated at Kandewadi, Khadilkar Road, Cow lane, Girgaon, Mumbai. 4. The petitioner before me is a Trustee of the Trust. Respondent Nos. 7 to 11 are other trustees. Respondent nos. 1 and 4 are the Charity Commissioner and Joint Charity Commissioner respectively. Respondent No.2 is a tenants’ Association whereas respondent no.3 is the builder and developer to whom the Trust property has been agreed to be sold. Respondent Nos.3, 7 and 10 are the contesting respondents. Others are served but absent. 5. The transaction with regard to which the sanction was sought is between the Trustees and other purchasers, but, ultimately respondent no.3 was found to be the highest bidder by the -3- Joint Charity Commissioner and that is how sanction to the sale of the trust property came to be granted. 6. The case of the petitioner is that the Trust is a very old Trust and its object and purpose is to help Kutchi Memon Sect in Mumbai by making provision for money so that they are aided and assisted in several acts including their old age and disability. 7. After setting out the yearly gross income from the Trust properties by way of rent and outgoings, it is urged that the Trust was actively considering disposal of the property as the Trust was finding it difficult, with the limited resources, to manage the same. Even redevelopment of the old structures was not possible. Accordingly an unanimous resolution was passed on 9th July, 2002 by the Trustees. They decided to dispose of the above property on "as is where is basis". They called for valuation report from one Aziz Sharifi. 8. Thereafter, public notice dated 31st July, 2002 was issued inviting offers. Two offers were received one from Mr.Mahendra Vora and one -4- from respondent nos. 5 to this petition. The first offer was for Rs.5,00,000/- whereas respondent no.5’s offer was for Rs.31,00,000/- Mr.Mahendra Vora enhanced his offer to Rs.54,50,000/- whereas respondent no.5 offered Rs.55,00,000/- 20% of the amount by pay order was also deposited by respondent no.5. Further resolution was passed on 13th January, 2003 wherein the trustees recorded that respondent no.5 was the highest bidder. They resolved to accept the bid of respondent no.5. They authorised respondent no.7 the then Chairman of the Board of Trustees to sign the application for and on behalf of the Board of Trustees for getting sanction from the Charity Commissioner to sell the property. 9. On 10th February, 2003 the Memorandum of Understanding (MoU) was executed with respondent no.5 by the trustees subject to sanction from the Charity Commissioner. 10. An application, copy of which is at Exh.G was filed after the above resolution. 11. When the matter was pending before the Charity Commissioner, the tenants’ Association -5- made an application to intervene. They expressed their willingness to purchase the Trust Property. 12. The order of the Charity Commissioner proceeds on the basis that the application for intervention by the Tenants’ Association was allowed and they participated in the proceeding/bidding. Considering that respondent no.3 appeared before the Charity Commissioner suomoto, the then Joint Charity Commissioner decided to initiate fresh bidding process. That was opposed by the Tenants’ Association. However, objections were rejected by the order dated 11th May, 2007. The Tenants’ Association challenged that order in Writ Petition No.4471 of 2007 before this Court. That was dismissed on 19th July, 2007. 13. On 3rd September, 2007, the bidding took place in the Charity Commissioner’s office and respondent nos.3 and 5 participated in the same. 14. The events thereafter also need to be noticed in as much as M/s Mighty Engineers (Respondent no.5) addressed a letter to the Joint Charity Commissioner and urged that -6- respondent no.3 has failed to deposit 25% of the bid amount. They urged that the bid of 2nd highest bidder namely M/s Mighty Engineers should be accepted. 15. It appears that there was no cognisance taken of that request and that is how writ petition no.7070 of 2007 was preferred by M/s Mighty Engineers. That was placed before the learned single Judge of this Court on 28th September, 2007. The Charity Commissioner’s decision of inviting fresh bids was challenged and the entire exercise culminating in entertaining the bid of respondent no.3 also came to be impugned. The Joint Charity Commissioner’s order was perused by the learned single Judge and after hearing parties, he observed in paras 2 and 3 as under: "2. In the above facts and circumstances the petitioner is challenging the decision of the Joint Charity Commissioner. I do not find any fault with the decision of the Joint Charity Commissioner in accepting the offer of M/s Tulja Bhavani Developers as the same was the highest offer. The -7- decision of the Joint Charity Commissioner protects the interest of the Trust and the same cannot be faulted. 3. The learned Counsel for the petitioner has submitted that the petitioner is ready and willing to enhance its offer and wants to have a proper bidding before this Court. While passing the order in the earlier Writ Petition, which is referred to hereinabove, I have observed that the Charity Commissioner must try to attend the finality to the bidding process as the application is pending for almost four years. Now that a very good offer has been received. I do not see any reason to further continue the said process before this Court. In the result the writ petition is summarily dismissed." 16. The process ended in summary dismissal of that writ petition. The Charity Commissioner had prior thereto on 12th September, 2007 after completing the bidding process, allowed the -8- application of trustees, granted permission under sec.36(1)(a) of the B.P.T. Act. The offer of respondent no.3 of Rs.15 crores plus construction of 1000 sq.ft. built area for the Trust and 15000 sq.ft.built up area for community hall was accepted, permission granted thereto on the terms and conditions more specifically set out in the said order. 17 It is this order of the Joint Charity Commissioner which is subject matter of challenge in the present petition. 18. Shri Kapadia, learned Senior Counsel appearing for the petitioner, submits that the order of the Joint Charity Commissioner is vitiated by serious error apparent on the face of record. He submits that the Charity Commissioner has assumed jurisdiction which is not conferred in law. He submits that the Charity Commissioner cannot make or create a transaction for the Trust so also the Charity Commissioner cannot alter the transaction or its nature. He submits that the power under section 36(1)(a) of granting sanction does not empower the Charity Commissioner to do the aforesaid acts. He submits that the power that has been -9- conferred by the statute must be exercised in tune with the object of the Trust. In the present case, the Trust specifically desires that the transaction has to be in money alone. The bid was also not a composite or mixed one. If such was the nature of the bid and the Resolution of the Trustees, then, the Charity Commissioner has no power to disregard it. The Charity Commissioner cannot ignore an Application which is filed before him and keep it pending. He cannot pass the final order in contradiction with this application. 19. Even otherwise, the impugned order is perverse. According to Shri Kapadia, the Charity Commissioner should ensure the best price. In the present case, the advertisement was issued in the year 2002. That advertisement was issued at the time when the property prices were not the one prevailing now. In such circumstances, in furtherance of such a public advertisement limited bids were placed before the Trustees and the Charity Commissioner. By merely directing that the bidding be held before him the Charity Commissioner cannot ensure best price. His directions in paras 9 and 10 of the impugned order are de-hors the powers. The -10- order is also vague apart from being vitiated by lack of power. The Charity Commissioner had no jurisdiction in so far as issuing a direction with regard to certain areas/portion being handed over to a Mandal and the developer making available certain built up space. That apart, there is no provision made about the ownership of the portion carvded out for use of Mandal, in the impugned order. Alternatively, the Charity Commissioner should have directed that all monies must be deposited with the Trust. 20. Shri Kapadia was at pains to point out that in the light of the application that was filed by the petitioner which is on behalf of the Trust there was no authority to take cognisance of the request and sanction the transaction. In fact, the mandate was to the contrary and the Trustees had resolved that if the transaction is not of complete sale on "as is where is basis" then no other option is acceptable to them. There is no power in the Trustees of delegation. No such authority can be given by the Trustees. That apart, when there was an application on record the Charity Commissioner should not have ignored the same. He invites my attention to the application Exh.81. He also invites my -11- attention to section 36(1)(b) and (1)(c) and submits that they are exhaustive of the Charity Commissioner’s powers. He cannot travel beyond these provisions. Section 36(1)(c) is intended to achieve the object of section 36(1)(a) and (1)(b). It is a machinery or enabling provision. No other mode of disposal or transfer of the property can be introduced. 21. Assuming without admitting that there is a power of the nature exercised in the present case, the objects of the Trust cannot be over looked. Interest, benefit or protection of the Trust is paramount factor. What the Charity Commissioner has done is that he has partly extinguished the Trust. He could not have done so in exercise of powers conferred upon him. Shri Kapadia invited my attention to the objects of the Trust. It is a Trust meant for serving and protecting the interest of Kutchee Memon Sect. Mr.Kapadia submits that the order of the Charity Commissioner cannot depart from it. The order of the Charity Commissioner cannot defeat the objects of the Trust. The order of the Charity Commissioner suffers from perversity in ignoring the application. The Charity Commissioner has gone contrary to the wishes of -12- the Trust. He could not have as a quasi judicial body brushed aside the objects and purpose for which the Trust was established and act contrary to the interest of the Trust pass any order. For all these reasons the impugned order deserves to be quashed and set aside. Shri Kapadia has also urged that the order is vague. There is no indication as to who will manage the property/area which is built upon and constructed. That does not go to the Mandal. If hall is not constructed, then, there is no other provision. However, if the development does not take place, then, what is to happen to the portion is not clear at all. In such circumstances, apart from perversity the order is bad for uncertainty and vagueness. Shri Kapadia has submitted that reduction of the area which will be handed over to the developers (15000 sq.ft.) and earmarked for development has depressed the price. The Trust would have got much more had the Charity Commissioner allowed further bidding. In such circumstances, the entire order must be set aside. The earlier writ petition cannot be obstacle to the petitioners challenging the impugned order in as much as it is a subsequent event and the petitioner has come before this Court in his -13- capacity of a Trustee. Hence, the principle of resjudicata would have no application. 22. In support of the above contentions, Shri Kapadia has relied upon the Full Bench Decision of this Court reported in 2007(3) Mh.L.J.717 (Sailesh Developers and another Vs.Joint Charity Commissioner, Maharashtra and others). 23. Shri Govilkar appearing for the Trustees has contended that the impugned order does not require any interference under Articles 226 and 227 of the Constitution of India. He submits that this is not a further appeal. This Court cannot substitute its view with that of the Charity Commissioner. He submits that the property is in a very bad condition. Infact the property is not required by the Trust at all. The object and purpose of the Trust can be fulfilled and achieved by income from the property. Ultimately, charity is for Kutchee Memons and that can be done from the proceeds from the property. 24. Shri Govilkar has also highlighted the conduct of the petitioner and submitted that it is also relevant for the purpose of entertaining -14- this writ petition. He submits that the petitioner cannot get any equitable and discretionary relief as by his conduct he has disentitled himself. Shri Govilkar has invited my attention to the Resolution passed by the Trustees. He submits that the petitioner was at one time Chairman of the Trust and party to the unanimous resolution. Once the petitioner agrees that there is compelling necessity and that the Trust property is to be disposed of, then, all other aspects are for the Charity Commissioner to decide while according sanction.The Trust has gone to the Charity Commissioner after duly fulfilling the procedure. The Charity Commissioner thereafter has invited bids and all his acts are in the interest of the Trust. The unanimous resolution authorises one Ismail H.A.Nakhuda who is the present Chairman to do all such acts as are necessary for the purpose of pursuing the application. The said Shri Nakhuda has taken all decisions pursuant to this authority. Merely because the application made by the petitioner is not disposed of by specific order that is no ground to interfere in as much as the said Shri Nakhuda has pursued the application with full authority. There are final orders -15- passed now and the petitioner cannot raise this issue as an after thought. Shri Govilkar has invited my attention to the application made to the Charity Commissioner (Exh.G). He submits that all details are set out therein. The petitioner is a party to this application. The property has to be sold on as is where is basis and as it is. Considering the state of the property, and when the petitioner has agreed to the entire arrangement including the manner in which the same is to be disposed of, then, at his instance the impugned order cannot be set aside. Shri Govilkar has also contended that the Charity Commissioner’s order/directions are not contrary to the interest of the Trust or public interest. He submits that after the sale is complete and property is transferred fully so also conveyed to third party purchasers, the directions by the Charity Commissioner are based upon the willingness of respondent no.3 purchaser to perform certain acts and deeds. If he is ready to buy the property on the conditions imposed which are in the interest and for the benefit of the Trust, then, there is no reason to interfere. Once the property has changed hands the Trust is not concerned with anything. He submits that the objects of the -16- Trust are clear and the directions are not in any manner contrary to them.. There is no extinction of the Trust nor any fraud on the beneficiaries. For all these reasons, he prays that the writ petition be dismissed. 25. Shri Balkrishna D.Joshi appearing for respondent no.3 apart from adopting the arguments of Shri Govilkar submits that the present writ petition is at the instance of one unsuccessful bidder. The petitioner is not coming forward as a trustee. M/s Mighty Engineers had already approached this Court urging same grounds and their writ petition was dismissed. The Trust was a party to the said writ petition. Earlier the Tenants’ Association had approached this Court and their writ petition was dismissed so also the L.P.A. therefrom. The same issues are being raised again. Inviting my attention to paragraphs 28 and 29 of the Full Bench decision he submits that the powers of the Charity Commissioner had been outlined in the said decision and the present order in no way conflicts with the same. He submits that the petition is not bonafide and, therefore, deserves to be dismissed with costs. -17- 26. For properly appreciating the rival contentions, a reference can usefully be made to section 36 of the Bombay Public Trust Act, 1950. The same reads thus: "36. Alienation of immovable property of public trust: (1) Notwithstanding anything contained in the instrument of Trust; (a) no sale, exchange or gift of any immvoable property, and (b) no lease for a period exceeding ten years in the case of agricultural land or for a period exceeding three years in the case of non agricultural land or a building belonging to a public trust, shall be valid without the previous sanction of the Charity Commissioner. (Sanction may be accorded subject to such condition as the Charity Commissioner may think fit to impose, regard being had to the interest, benefit or protection of the trust; (c) If the Charity Commissioner is satisfied that in the interest of any public trust any immovable property thereof should be disposed of, he may, on application, authorise any trustee to dispose of such property subject to such conditions as he may think fit to impose, regard being had to the interest or benefit or protection of the Trust. (2) The Charity Commissioner may revoke the sanction given under clause (a) or clause (b) of sub-section (1) on the ground that such sanction was obtained by fraud or misrepresentation made to him or by concealing from the Charity Commissioner, facts material for the purpose of giving sanction; and direct the Trustee to take such steps within a period of one hundred and eighty days from the date of revocation (or such -18- further period not exceeding in the aggregate one year as the Charity Commissioner may from time to time determine) as may be specified in the direction for the recovery of the property. (3) No sanction shall be revoked under this section unless the person in whose favour such sanction has been made has been given a reasonable opportunity to show cause why the sanction should not be revoked. (4) If, in the opinion of the Charity Commissioner, the trustee has failed to take effective steps within the period specified in sub-section (2), or it is not possible to recover the property with reasonable effort or expense, the Charity Commissioner may assess any advantage received by the trustee and direct him to pay compensation to the trust equivalent to the advantage so assessed." A bare perusal of this provision would indicate that the Charity Commissioner has been conferred with the exclusive power in so far as sanction to sale of the Trust property. This power prevails over anything contained in the Trust Deed to the contrary. Sale, exchange or gift of any immovable property and the lease for a period exceeding ten years in case of agricultural land or for a period of exceeding 3 years in the case of non agricultural land or building belonging to the public Trust is what is covered by this provision. Neither the sale, exchange or gift of any immovable property nor -19- the lease as provided above shall be valid without the previous sanction of the Charity Commissioner. Sanction may be accorded subject to such conditions as the Charity Commissioner may think fit to impose, regard being had to the interest, benefit or protection of the Trust. Sub-clause (c) of section 36(1) provides that the Charity Commissioner being satisfied that in the interest of any public trust, any immovable property thereof should be disposed of, he may, on application, authorise any trustee to dispose of such property subject to such conditions as he may think fit to impose regard being had to the interest or benefit or protection of the trust. 27. The Full Bench of this Court in the decision (supra) was concerned with resolving the controversy and conflict which arose out of two Division Bench judgments of this Court. The questions that were formulated by the Division Bench, which made reference to the Full Bench, are set out in paragraph one (1) of the decision of the Full Bench and thereafter rival contentions have been set out. The Full Bench thereafter proceeds to consider the rival contentions. Para 22 onwards of this decision -20- are devoted to that aspect and ultimately in paras 26 to 29 the Full Bench observed thus: "26. The submission of Shri Tulzapurkar, learned senior Counsel was that the decision of the Apex Court in the case of Mehrwan (supra) does not lay down any proposition of law and the said case is decided on its peculiar facts. This submission is not correct. The Apex Court does hold that the Charity Commissioner while exercising the power under section 36(1) must explore possibility of having a deal of the Trust property on better terms as the object of the Trust should be accomplished in the best of its interest. Shri Tulzapurkar relied upon the decision of the Supreme Court in the case of Tribhovandas Purshottamdas Thakkar Vs.Ratilal Motilal Patel and others, AIR 1963 SC 372. He relied upon the observations of the Court to the effect that section 36 imposes only a fetter upon the power of the Trustee. The relevant portion of the decision of the Apex Court relied upon by Shri Tulzapurkar reads thus: "for the purpose of the present case, we do not deem it necessary to express any opinion on the question whether a sale in exercise of authority derived from the trustees, e.g. a covenant for sale under an English mortgage executed by the Trustees or a sale in terms of a consent decree attracts the application of section 36 of the Act. We have no doubt, however, that the Legislature did not intend to put any restriction upon the power of the Civil Court executing a decree for recovery of money due from the trust, by sale of the property of the Trust. The section imposes a fetter upon the power of the Trustees; it is not intended herein to confer upon the Charity Commissioner an overriding authority upon actions of the Civil Court in execution of decrees." -21- The question before the Apex Court was whether express ’sale’ in Clause (a) of section 36 would only mean transfer of property by the trustees for a price or will include a sale of the property by the trustees for a price or will include a sale of the property of a public trust in execution of a decree of the Civil Court