1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.3849 OF 2008 1. Vijay K. Mehta, 2. Dr.Amritlal C. Shah A-791, Bandra Reclamation, Bandra (W), Mumbai-400 050. ..Petitioners. V/s. 1. Charu K. Mehta 2. Rekha H. Sheth 3. Niket V.Mehta 4. Sushila V. Mehta A-791, Bandra Reclamation, Bandra (W), Mumbai-400 050. 5. Mithun H. Mehta 311-312 Chadda Crescent, Section-17, Vashi, Navi Mumbai-400 705. 6. Jatin V. Mehta C-203, Nirman Vihar, Rajmata Jijabai Road, Andheri (W), Mumbai-400 093. 7. Sandeep Rathi, 61, Alaknanda Road No.10, J.V.P.D. Scheme, Juhu, Mumbai - 400 049. 8. Sanjay Bhutada, C-6, Gautam Towers, Gokhale Road, Naupada, Thane (W). 9. Kishor K.Mehta, Usha Kiran, 18th Floor, 15 Carmichael Road, Mumbai - 400 026. 10. Rajiv K. Mehta, Usha Kiran, 23rd Floor, 2 15 Carmichael Road, Mumbai - 400 026. 11. Prashant K. Mehta, Usha Kiran, 18th Floor, 15 Carmichael Road, Mumbai - 400 026. 12. Prabodh K. Mehta 13. Rashmi K. Mehta 14. Chetan P. Mehta 15. Nanik Rupani 16. Vijay Choraria A-791, Bandra Reclamation, Bandra (W), Mumbai-400 050. 17. The Joint Charity Commissioner, Greater Mumbai Region, Mumbai. ..Respondents. AND WRIT PETITION NO.3850 OF 2008 1. Prabodh Mehta, Trustee, Lilavati Kirtilal Mehta Medical Trust, Public Trust, Registered under the provisions of the Bombay. Public Trust Act, 1950. And having its office at A-791, Bandra Reclamation, Bandra (W), Mumbai 400 050. And residing at 23, Usha Kiran, 11th floor, 15 Carmichael Road, Mumbai - 400 026. 2. Chetan Mehta, Trustee, Lilavati Kirtilal Mehta Medical Trust, Public Trust, Registered under the provisions of the Bombay Public Trust Act, 1950. And having its office at A-791, Bandra Reclamation, Bandra (W), Mumbai 400 050. And residing at 23, Usha Kiran, 11th floor, 15 Carmichael Road, Mumbai - 400 026. 3. Nanik Rupani, Trustee, 3 Lilavati Kirtilal Mehta Medical Trust, Public Trust, Registered under the provisions of the Bombay Public Trust Act, 1950. And having its office at A-791, Bandra Reclamation, Bandra (W), Mumbai 400 050. And residing at 5th Floor, Jehangir Towers, Setal Vad Lane, Opp. Jeevan Jyot Bldg. Off. Napean Sea Road, Mumbai - 400 026. ..Petitioners. V/s. 1. The State of Maharashtra through the office of the Government Pleader, High Court, Bombay. 2. The Joint Charity Commissioner, Greater Mumbai Region, Mumbai having its office at Dharmaday Aayakta Bhavan, 83, Annie Besant Road, Worli, Mumbai - 400 018. 3. Lilavati Kirtilal Mehta Medical Trust, a public trust, Registered under the provisions of the Bombay Public Trust Act, 1950. And having its office at A-791, Bandra Reclamation, Bandra (W), Mumbai 400 050. 4. Mrs. Charuben Mehta, Trustee, Lilavati Kirtilal Mehta Medical Trust, Public Trust, Registered under the provisions of the Bombay Public Trust Act, 1950. And having its office at A-791, Bandra Reclamation, Bandra (W), Mumbai 400 050. And residing at 15, Usha Kiran, 18th floor, 15 Carmichael Road, Mumbai - 400 026. 5. Mr.Kishor Mehta, 15, Usha Kiran, 18th floor, Carmichael Road, Mumbai - 400 026. 6. Mr.Rajiv Mehta, Usha Kiran, 23rd floor, 15 Carmichael Road, Mumbai - 400 026. 4 7. Mr.Prashant Mehta, 15, Usha Kiran, 18th floor, 15 Carmichael Road, Mumbai - 400 026. 8. Mrs. Rekhaben H. Sheth , Trustee, Lilavati Kirtilal Mehta Medical Trust, Public Trust, Registered under the provisions of the Bombay Public Trust Act, 1950. And having its office at A-791, Bandra Reclamation, Bandra (W), Mumbai 400 050. And residing at Keshwalla Co- Op. Hsg. Soc., Opp. Sripat Nagar, Garden View, 13th Floor, Napeansea Road, Mumbai-400 006. 9. Mr.Sandeep Rathi, 61, Alakhnanda Gulmohar Cross Road No.10, JVPD Scheme, Juhu, Mumbai - 400 049. 10. Mrs. Sushila Mehta, Trustee, Lilavati Kirtilal Mehta Medical Trust, Public Trust, Registered under the provisions of the Bombay. Public Trust Act, 1950. And having its office at A-791, Bandra Reclamation, Bandra (W), Mumbai 400 050. And residing at 91, Maker Tower "L" GT Somani Marg, Cuffe Parade, Mumbai - 400 050. 11. Mr.Mithun H. Mehta, 311/312, Chaddha Crescent, Sector 17, Vashi, Navi Mumbai-400 705. 12. Mr.Jatin Mehta, C-203, Nariman Vihar, Rajmata Jijabai Road, Pump House, Andheri(E), Mumbai-400 093. 13. Dr.Amrutlal C. Shah, Trustee, Lilavati Kirtilal Mehta Medical Trust, Public Trust, Registered under the provisions of the Bombay Public Trust Act, 1950. And having its office at A-791, Bandra Reclamation, Bandra (W), Mumbai 400 050. And residing at C/1/2 Lloyds Gardens, Appasahen Marathe 5 Marg,Prabhadevi, Mumbai-400 025. 14. Mr.Sanjay Bhutada, C-6, Gautam Towers, Gokhale Road, Naupada, Thane (W) - 400 602. 15. Mr.Niket Mehta, Trustee, Lilavati Kirtilal Mehta Medical Trust, Public Trust, Registered under the provisions of the Bombay Public Trust Act, 1950. And having its office at A-791, Bandra Reclamation, Bandra (W), Mumbai 400 050. And residing at 12th Floor, Lilavati Hospital & Research Centre, Bandra Reclamation, Bandra (W), Mumbai-400 050. 16. Mr. Vijay K. Mehta, Managing Trustee, Lilavati Kirtilal Mehta Medical Trust, Public Trust, Registered under the provisions of the Bombay Public Trust Act, 1950. And having its office at A-791, Bandra Reclamation, Bandra (W), Mumbai 400 050. And residing at 91, Maker Tower "L", Cuffee Parade, Mumbai - 400 005. 17. Rashmi Mehta, Trustee, Lilavati Kirtilal Mehta Medical Trust, Public Trust, Registered under the provisions of the Bombay Public Trust Act, 1950. And having its office at A-791, Bandra Reclamation, Bandra (W), Mumbai 400 050. And residing at 24, Usha Kiran, 12th floor, 15 Carmichael Road, Mumbai - 400 026. 18. Vijay Choraria, Trustee, Lilavati Kirtilal Mehta Medical Trust, Public Trust, Registered under the provisions of the Bombay Public Trust Act, 1950. And having its office at A-791, Bandra Reclamation, Bandra (W), Mumbai 400 050. And residing at Choraria House, 5, Pali Hill, Bandra (W), Mumbai - 400 051. ..Respondents. 6 Mr.D.D. Madon, senior Advocate with Mr.Sanjay Jain, Kunal Vajani & Abhinav Malhotra i/by M/s.Wadia Gandhy & Co. for the petitioner in W.P. No.3849 of 2008 & for respondent Nos.13 and 16 in W.P. No.3850 of 2008. Mr.Shrihari Aney, Senior Advocate with Mr.Prateek Saksaria, Mr.Manish Desai, Mr.Jayen Trivedi, Mr.Dhirendra Sinha & Mr.Thomas T. Karimapanal i/by Paras Kuhad & Associates for the petitioners in Writ Petition NO.3850 of 2008. Mr.Aspi Chinoy, senior Advocate with Mr.T.N. Tripathi i/by M/s.Tripathi & Associates for Respondent No.4 in W.P. No.3849/08 & for Respondent No.1 in W.P. 3850/08. Ms.Rajni Iyer, senior Advocate with Mr.Nooruddin Dhilla & Mr.Shane Sapeco i/by M/s.Hariani & Co. for respondent No.6 in W.P. No.3849/08 & for respondent No.10 in W.P. No.3850/08. Mr.Mahesh Jethmalani with Mr.Shane Sapeco i/by M/s. Hariani & Co. for respondent No.5 in W.P. No.3849/08 & for respondent No.9 in W.P. No.3850/08. Mr.S.U.Kamdar with S.C. Naidu, Siddhant Ingale and Saurab Kulkarni i/b. C.R. Naidu & Co. for respondent Nos.17 & 18 in W.P.3850/08. Mr.J.P. Sen with Mr.Pranav Badheka i/by M/s. Hariani & Co. for respondent No.7 in W.P. No.3849/08 & for respondent No.11 in W.P. No.11 in W.P. No.3850/08. Mr.Subhash Jha with Ms.Renu Singh & Ms.Rejashri Rane i/by Dinesh Tiwari for respondent No.15 in W.P. No.3849/08 & for respondent No.3 in W.P. No.3850/08. Mr.Sameer Patil, AGP for respondent Nos.1 and 2 in W.P. No.3850 of 2008. CORAM : J.P. DEVADHAR, J. DATED : 11TH JULY, 2008. JUDGMENT : JUDGMENT : JUDGMENT : 1. These two writ petitions are filed by the 7 trustees of Lilavati Kirtilal Mehta Medical Trust (‘Trust’ for short), which is duly registered under the Bombay Public Trust Act, 1950 (‘B.P.T. Act for short). Since both the petitions challenge the decision of the Joint Charity Commissioner (‘Jt. C.C.’ for short) dated 3-6-2008, both the petitions are heard together finally at the stage of admission and disposed of by this common judgment. 2. The impugned order dated 3-6-2008 is an interim order passed by the Jt. C.C. in an application filed by a permanent trustee of the Trust under Section 41-D of the B.P.T. Act. The said application was filed seeking removal of nine trustees of the Trust inter alia on the ground that the said trustees during the period from 2001 to 2006 had siphoned off the Trust funds running into several crores of rupees and further they have committed act of malfeasance, misfeasance, breach of Trust, gross negligence etc. which are detrimental to the interest of the Trust. After considering the allegations made in the complaint as also the reply filed by the said trustees, the Jt. C.C. on being prima facie satisfied, framed charges against the said nine trustees and by the impugned interim order directed that pending final decision on the application, the trustees shall not take any policy 8 decision and shall not enter into any financial transaction with regard to the Trust without the approval of the two Administrators, appointed by the Apex Court / this Court in an earlier proceedings for administering the day-to-day running of the Hospital & Research Institute. 3. Writ Petition No.3849 of 2008 is filed by two trustees against whom various charges are framed. These trustees challenge the interim order of Jt. C.C. dated 3-6-2008 mainly on the ground that the said order has been passed without giving reasonable opportunity of hearing to the petitioners. Writ Petition No.3850 of 2008 is filed by three trustees, who are neither parties to the proceedings before the Jt. C.C. nor there are any allegations made against them. Their grievance is that in gross violation of the principles of natural justice, the Jt. C.C. has restrained them from functioning as trustees. 4. The Trust was brought into existence under a Trust Deed dated 5-7-1978 settled by Shri Kirtilal Manilal Mehta (now deceased). The Trust runs a super-speciality hospital known as ‘Lilavati Hospital & Research Centre’ at Bandra, Mumbai. It appears that the trustees while running a 9 super-speciality hospital, have also acquired super-speciality in litigating amongst themselves as is evident from large number of cases filed in various Courts which are pending before the Apex Court, this Court, Bombay City Civil & Sessions Court and the Court of Additional Chief Metropolitan Magistrate, Mumbai. The inter-se dispute amongst the trustees is so bitter that the Apex Court in one of the proceedings considered it proper, in public interest, to appoint two Administrators to look after the day to day functioning of the Hospital run by the Trust. The bitter fight amongst the trustees of the Trust which commenced in the year 2005-2006 is apparently to gain control over the cash rich hospital. It may be noted that in the year 1997-98 the Trust income was of Rs.23.47 crores and expenditure was Rs.28.83 crores, whereas, in the year 2006-07 the Trust income was Rs.196.17 crores and expenditure was Rs.168.92 crores. It may also be noted that the Joint C.C. after framing the charges against the 9 trustees, declined to hand over the management of the Trust to Mrs.Charu Mehta - the applicant, because in the past she was also found to have indulged in activities which are detrimental to the interest of the Trust. It is unfortunate that these trustees, instead of establishing themselves to be worthy trustees of a 10 Public Charitable Trust which was established by the Settlor with a noble cause, are bitterly fighting to gain control over the renowned super-speciality Hospital. 5. The dispute in the present case commenced on 10-11-2006, when Mrs.Charu Mehta, one of the permanent trustees of the Trust filed an application under Section 41-D of the B.P.T. Act seeking removal of the nine trustees inter alia on the ground that during the period from 2001 to 2006, these trustees had committed various acts of malfeasance, misfeasance, breach of trust, gross negligence, misappropriation of Trust funds etc. After considering the allegations made in the application and the reply filed by the said trustees, the Jt. C.C. framed 8 charges against the nine trustees. During the course of hearing, a plea was raised as to whether it would be proper to decide the application without hearing all the trustees. By the impugned interim order dated 3-6-2008, the Jt. C.C. held that all the trustees need neither be made parties nor heard because the inquiry is restricted only in respect of nine trustees referred to in the 41-D application. However, in the operative part of the impugned interim order, the Jt. C.C. has restrained all the 11 trustees from taking any policy decision and enter into any financial transactions relating to the Trust, unless they take prior approval from the Administrators already appointed to supervise day to day running of the hospital. 6. Mr.Aney, learned senior Advocate appearing on behalf of the petitioners in W.P. No.3850 of 2008 submitted that the impugned order is ex-facie bad in law, because, firstly, the Jt. C.C. was aware of the fact that the three petitioners in Writ Petition No.3850 of 2008 were appointed as trustees and that they were in fact functioning as trustees. Having declined to make the petitioners as party to the proceedings and having declined to hear the petitioners on the ground that the inquiry is restricted in respect of nine trustees against whom charges have been framed, the Joint C.C. could not have passed the impugned order restraining the petitioner-trustees from functioning as trustees. Secondly, when the Apex Court as well as this Court had specifically ordered that the administrators appointed to look after the day to day running of the Hospital shall follow the direction given by the trustees, the Jt. C.C. who being a lower authority could not have reversed the said orders by directing that the trustees shall follow the directions given 12 by the two Administrators. Thirdly, under Section 41-D of the B.P.T. Act, the Jt. C.C. could appoint a fit person to perform the function of the Trust only when the charged trustees were suspended and as per the instrument of trust the remaining trustees could not function unless the vacancies created on account of suspension / removal are filled. In the present case, neither the charged trustees are suspended / removed nor the Joint C.C. has considered the question as to whether the trustees other than the charged trustees could function as trustees under the instrument of Trust. In the present case, the Trust Deed provides that minimum three trustees must be there to perform the functions of the Trust. As the three petitioner-trustees were admittedly functioning as trustees, the Joint C.C. could not have passed the impugned order without considering the claim of three petitioner-trustees. 7. Mr.Kamdar, learned counsel appearing on behalf of some of the Respondent - trustees while adopting the arguments of Mr.Aney, submitted that the impugned order suffers from non-application of mind because, by the impugned order the Joint C.C. has purported to restrain the trustees from functioning as trustees who were not parties to the 13 proceedings and against whom no allegations were made. Moreover, the impugned order which purports to nullify the order of the Apex Court as well as this Court is wholly unsustainable in law. The Apex Court had specifically ordered that the Administrators shall obey the directions of the Board of trustees, whereas, the Joint C.C. has ordered that the trustees shall obey the directions of the Administrators. The Joint C.C. being a subordinate authority could not have modified or nullified the order of the Apex Court / High Court. He submitted that assuming that such a course was necessary then the Joint C.C. ought to have applied to the Apex Court / High Court and sought appropriate modification of the orders. Mr.Kamdar further submitted that most of the charges levelled against the trustees before the Jt. C.C. are also directly and substantially raised in High Court Suit No.1224 of 2008 which is still pending and the Court had declined to grant reliefs in the said suit. Therefore, on the principles analogous to the principles of res-judicata, the Jt. C.C. could not have dealt with the very same allegations, which are subject matter of suit pending in the High Court. 8. Mr.Madon, learned Senior Advocate appearing on behalf of the two charged trustees who have filed 14 Writ Petition No.3849 of 2008 submitted that the impugned order suffers from patent illegality and the said order has been passed by totally ignoring the facts on record. He submitted that the charges of mismanagement or misappropriation of funds of the Trust levelled against the trustees is devoid of any substance, because, after the petitioners took over the affairs of the trust, the income of the trust has increased manifold. He submitted that Mrs.Charu Mehta - a permanent trustee has been initiating proceedings one after the other with ulterior motives against the trustees who are efficiently managing the affairs of the Trust. In all those cases filed by Mrs.Charu Mehta the Courts have declined to accept the allegations made by her against the managing trustees. He submitted that after framing the charges, the trustees ought to have been given an opportunity to deal with the charges before passing the impugned order. Referring to some of the charges framed against the trustees, Mr.Madon, sought to establish from the facts and figures on record, that the charges framed against the trustees are totally frivolous. He submitted that since the Joint C.C. has failed to give an opportunity to the trustees to deal with the charges framed against them, the impugned order is liable to be quashed and set aside. In this 15 connection, he relied upon a Judgment of this Court in the case of Asaram V/s. State of Maharashtra report in 2002(3) All M.R. 555. 9. Strong reliance was placed by the counsel for the petitioners on a decision of this Court in the case of Chembur Trombay Education Society & Others V/s. V.K.Marathe and others reported in 2002 (3) Bom. C.R. 161 which is approved by a Division Bench of this Court in the case of Ganesh M. Thawre V/s. Central Hindu Military Education Society reported in 2007 (5) Bom C.R. 680. In those cases, it is held that a trustee appointed under a Trust is entitled to function as a trustee from the date of the resolution and not from the date on which his appointment is approved under section 22 of the Act. Accordingly, Mr.Madon submitted that the impugned order which suffers from serious infirmities is liable to be quashed and set aside. 10. Mr.Chinoy, learned senior Advocate appearing on behalf of the Respondents, on the other hand, submitted that the charges framed against the trustees are so grave that the said trustees deserve to be suspended forthwith. However, the Jt. C.C. has taken a lenient view and held that till final decision is taken for removal of the charged 16 trustees, the Board of trustees shall not take any policy decision or enter into financial transactions without the prior approval of the administrators who are looking after the day to day running of the hospital. Mr.Chinoy referred to each of the charges framed by the Joint C.C. to demonstrate as how the trustees over the years mismanaged and misappropriated the Trust funds running into several crores of Rupees. He submitted that since the impugned order is an interim order and the Jt. C.C.. has already fixed the date for final disposal of the application, it is just and proper that the petitioners be directed to raise all those contentions before the Joint C.C. and no order be passed in these two Writ Petitions. 11. Dealing with the contention of the petitioners that the impugned order has been passed in gross violation of the principles of natural justice, Mr.Chinoy submitted that there is no merit in the above contention, because, the impugned order has been passed after hearing the concerned parties atleast on 10 occasions. Mr. Chinoy submitted that while the charges were grave, the reply filed by the trustees was totally vague. As the charges were not emphatically denied and there was only vague and casual reply, the Jt. C.C. was justified in 17 framing the charges against the trustees and till a final decision was taken for their removal / suspension, in the interest of the Trust, direct that the trustees shall not take any policy decision or enter into financial transactions relating to the Trust without the prior approval of the Administrators already appointed by the Apex Court in an earlier proceedings. This interim order is totally fair and need not be interfered with in exercise of writ jurisdiction. 12. Relying upon two unreported decisions of this Court, one by a learned Single Judge in the case of Rt. Revd. Baiju Fulji Gavit & Others V/s. Pujari, (Writ Petition No.3991/03 decided on 1-9-2003) and another, by a Division Bench of this Court in the case of Gulabsingh Dipa Chauhan V/s. Joint C.C., (Special C.A. No.1912 of 1976 decided on 18-12-1978), Mr.Chinoy submitted that in law only those trustees whose names are approved and recorded in Schedule I of the B.P.T. Act can be considered as trustees. The newly appointed trustees cannot be called as trustees in law unless their name is approved and entered in Schedule I of the B.P.T. Act. As the names of the three petitioner-trustees as well as two other trustees have not been approved and do not appear in Schedule I of the B.P.T. Act, 18 the Joint C.C. was justified in not treating them as trustees in law. 13. Mr.Chinoy further submitted that the fact that the change report regarding newly appointed trustees is pending for approval under Section 22 of the B.P.T. Act would not make them trustees in law. Therefore, when almost all the trustees whose name appear in Schedule I were charged with serious offences, the Jt. C.C. was justified in holding that till final decision could be taken for removal / suspension of the said trustees, it is necessary in public interest to direct that the decision of the trustees are subject to prior approval of the administrators appointed by the Apex Court. 14. Relying upon two decisions of the apex Court in the case of Church of North India V/s. Lavajibhai Ratanjibhai reported in AIR 2005 SC 2544 and also in the case of Managing Committee, Khalsa Middle School & Anr. V/s. Mohinder Kaur reported in 1993 Supp (4) SCC 26, Mr.Chinoy submitted that the B.P.T. Act inter alia provides for finality to the order passed by the Charity Commissioner under Section 22(3) of the B.P.T. Act. When the legislature in its wisdom has provided that the entries made in Schedule I are final and conclusive, 19 it is crystal clear that only those persons whose name appear in Schedule I are recognized as trustees in law. Therefore, a trustee appointed under the Trust may be factually performing duties as a trustee but in law he can be recognized as a trustee only when his name is approved after scrutiny and entered in Schedule I. In the present case, since almost all the trustees whose names appear in Schedule I are charged with serious offences like siphoning of crores of Rupees of the Trust, the Joint C.C. was justified in passing the impugned order without considering the claim of the trustees whose names do not appear in Schedule I. 15. Relying upon a decision of a learned Single Judge of this Court in the case of Hargovindas Shivlal V/s. M.J. Chaudhari and others reported in 2007 (2) Bom C.R. 343, Mr.Chinoy submitted that unless a change report is accepted by the Charity Commissioner and reflected in the Schedule I, the newly appointed trustees cannot be called as the current trustees. In the present case, admittedly the change report regarding the appointment of the petitioner-trustees is still pending and, therefore, these trustees cannot be considered as current trustees. Consequently, while passing the impugned order, the Joint C.C. was not required in law to 20 hear the trustees whose names do not appear in Schedule I. Mr.Chinoy submitted that entrusting the Administrators with a superior responsibility in addition to the responsibility imposed by the Courts, cannot be construed to mean that by the impugned order, the Joint C.C. has sought to nullify the order of the Apex Court / High Court. Accordingly, Mr.Chinoy submitted that there is no merit in the above petitions and the