Cyrus Rustam Patel vs Charity Commr.Maharashtra State .

2. The B.C. Batliwala Agiary Trust is registered under the Bombay Public Trusts Act, 1950 (hereinafter referred to as 'the Act'). Digitally signed by ASHA SUNDRIYAL The Trust, in its meeting dated 20-01-2003, decided to enter into an Date: 2017.10.13 16:09:22 IST Reason: agreement with M/s. Astral Enterprises. It was noted in the 2 minutes of the meeting that the tenants in the premises had, in principle, agreed to the development of the Trust property at Tardeo, on the condition that the interest of the tenants would be looked after and that the tenants would be provided flats in new buildings on ownership basis, and that the development would be completed in a time bound manner by the said developer.

3. The minutes of the Trustees meeting dated 20-01-2003 states that Shri Suresh Mehta, partner of M/s. Astral Enterprises, had been invited to the meeting. It was decided that in case there was any difficulty in carrying out the development agreement, it would be converted into an outright sale. The Trustee would have an exit option. It was decided that development would be on a time-bound basis. The registration charges of the deed would be borne by the developer, as well as the cost of construction. Trustees would have an exit option if trustees felt that it was not in the interest of the Trust to carry on with the joint venture development; the Trustees alone shall have the option to convert the joint venture arrangement into a sale, in that event M/s. Astral Enterprises would require paying a fixed pre-determined price to the Trust. The application 3 was filed under the provisions of Section 36 of the Act, for granting sanction to enter into joint venture cum sale agreement between the trust as well as the M/s. Astral Enterprises.

4. The aforesaid development agreement was with respect to “Fire Temple”, bearing Cadastral Survey No.727 of Malabar Hill Division, Mumbai admeasuring about 3012 sq. meters, situated at 160 Tardeo, Mumbai. On the said property stand a “Parsi Fire Temple” and certain other structures that are occupied by 21 occupants in the capacity of tenants. There was no further availability of F.S.I.

5. It was mentioned in the application filed under Section 36 of the Act that construction of the temple was done prior to 1940, it was old and in a dilapidated condition, and required extensive repairs. The Trust was getting a meager income from the building. It was in need of funds to meet the objectives of the trust; as such trustees decided to develop the property after prolonged discussions. As trust had no such funds as were required for carrying out the construction work, it was considered necessary to take help of the developer. M/s. Astral Enterprises was ready to provide the necessary services to the trust, with a proposal to 4 jointly develop the property. It transpires that agreement for joint venture development-cum-sale had been entered into and ultimately sale had been effected, for a sum of Rs.2, 95,00,000/-.

(iii) We direct the Office to place the Writ Petitions before the appropriate Benches for deciding the same in accordance with law.

32. As a matter of fact, the trust could not have entered into such negotiations with M/s. Astral Builders without public notice, which was admittedly not given in the instant case and, thus, the joint venture-cum-sale and lease for 999 years amounted to a sale. In such a manner and method, the application could not have been entertained at all, much less allowed, by the Joint Charity Commissioner.

35. The order passed by the Charity Commissioner as well as by the High Court is hereby set aside. The appeal is allowed with the costs of Rs.1,00,000/- to be deposited by the developer with the Supreme Court Advocates Bar Association Welfare Fund within six weeks from today.

SEPTEMBER 21, 2017.