Bombay High Court

Vijay K.Mehta vs Charu K.Mehta on 2 February, 2009

Bench: A.M. Khanwilkar

          IN THE HIGH COURT OF JUDICATURE AT BOMBAY

                CIVIL APPELLATE JURISDICTION

                WRIT PETITION NO.8127 OF 2008




                                                                
     1.Vijay K.Mehta,




                                        
     2.Sushila V.Mehta,

     3.Dr.Amritlal C.Shah,
       A-791, Bandra Reclamation,
       Bandra (West), Mumbai-400 050.         ...Petitioners




                                       
           Versus

     1.Charu K.Mehta,




                           
     2.Rekha H.Sheth,

     3.Niket V.Mehta,
                
       A-791, Bandra Reclamation,
       Bandra (West), Mumbai-400 050.

     4.Mithun H.Mehta,
               
       311-312 Chadda Crescent,
       Sector-17, Vashi,
       Navi Mumbai-400 705.

     5.Jatin V.Mehta,
       C-203, Nirman Vihar,
      


       Rajmata Jijabai Road,
       Andheri (W), Mumbai-400 093.
   



     6.Sandeep Rathi,
       61, Alaknanda, Road No.10,
       J.V.P.D. Scheme, Juhu,
       Mumbai - 400 049.





     7.Sanjay Bhutada,
       C-6, Gautam Towers,
       Gokhale Road, Naupada,
       Thane (W), Mumbai-400 602.





     8.Kishor K.Mehta,
       Usha Kiran, 18th floor,
       15, Carmichael Road,
       Mumbai - 400 026.




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      9.Rajiv K.Mehta,
        Usha Kiran, 23rd floor,
        15, Carmichael Road,




                                                                  
        Mumbai - 400 026.

     10.Prashant K.Mehta,




                                          
        Usha Kiran, 18th floor,
        15, Carmichael Road,
        Mumbai - 400 026.

     11.Prabodh K.Mehta




                                         
     12.Rashmi K.Mehta

     13.Chetan P.Mehta




                                 
     14.Nanik Rupani

     15.Vijay Choraria,
                  
        A-791, Bandra Reclamation,
        Bandra (West), Mumbai-400 050.

     16.The Joint Charity Commissioner,
                 
        Greater Mumbai Region,
        Mumbai.                                 ...Respondents

                              ......

      Mr.Iqbal Chagla, Sr.Counsel with Mr.Sanjay Jain,
      


      Mr.Kunal Vajani, Atul Daga and Mr.Rohan Dakshini
      i/b M/s.Wadia Ghandy & Co. for Petitioner.
   



      Mr.Mahesh Jethmalani with Mr.Raj Patel, Mr.Anushak
      Davar, Ms.Hetal Thakore i/b M/s.Thakore Jariwala &
      Associates for Respondent No.1.





      Mr.Janak Dwarkadas, Sr.Counsel with Ms.Jyoti                  Shah
      i/b M/s.Daru Shah & Co. for Respondent No.2.

      Mr.Pranav Badheka with Mr.Amey Nabar i/b Hariani &
      Co. for Respondent No.8.





      Ms.R.C.Nichani i/b Hariani & Co.       for Respondents 9
      & 10.

      Mr.Jay   Kansara   i/b Paras Kuhad &      Associates            for




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     Respondents 11 to 15.

     Mr.P.P.Kakade, A.G.P.          for Respondent No.16.
                                   ......




                                                                           
                                  CORAM:       A.M.KHANWILKAR, J.




                                                  
                                               FEBRUARY 2, 2009.

     ORDER :

1. This Writ Petition takes exception to the

decision of the Joint Charity Commissioner

(hereinafter referred to as 'the JCC' for the sake

of convenience), Greater Mumbai, Region Mumbai

dated 10th

October 2008 passed on Application

(Exhibit 2), whereby, pending enquiry of charges,

the five trustees (including the present three

Petitioners) have been suspended in exercise of

powers under Section 41D(3) of the Bombay Public

Trusts Act, 1950 (hereinafter referred to as 'the

Act'). This Petition has been finally heard at the

admission stage, by consent.

2. The moot question that needs to be

addressed in this Petition is: whether the

exercise of powers under Section 41D(3) of the Act

by the JCC can be said to be just and proper in the

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fact situation of the present case?

3. The background in which the present matter

arises is that the Respondent No.1 filed

Application before the JCC for initiating action

under Section 41D of the Act against nine trustees

of the Lilavati Kirtilal Mehta Medical Trust

(hereinafter referred to as 'the Trust') on certain

allegations elaborated in the said Application.

The said Application is registered as Application

No.17 of 2006. The Respondent No.1 claims to be a

permanent

trustee of the said Trust. The Trust is

running a super speciality hospital in the name of

"Lilavati Hospital" at Bandra, Mumbai and is a

well-known hospital in the Country. The hospital

has facility of 300 beds and out patients

department, casualty department, etc. It engages

nearly 1700 employees and 230 consultant Doctors

attached to the hospital. In the said Application

moved by the Respondent No.1, after allowing the

parties to exchange documents and pleadings, the

JCC by his order dated 3rd June 2008 on finding

prima facie material to indicate the complicity of

the said nine trustees proceeded to frame following

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eight charges :

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"C H A R G E S

1) The opponents No.1 to 9, trustees of

the trust advanced huge amounts more than Rs.15 crores to M/s.Mayfair Realtors Pvt.Ltd. & Vesta India Pvt.Ltd. for

procuring medical equipments during years 2001-02 to 2003-04 without taking proper care & despite failure by these companies to supply the equipments, did not take steps to recover the money & thus,

continuously neglected their duties & committed mis feasance & also dealt improperly with the trust property.

2) The opponents No.1 to 9, trustees of

the trust, gave donations regularly to the tune of Rs.6.36 crores from year 2003-04 to 2005-06 to Madhulaxmi Trust, without

verifying that the donations are utilised to fulfil objects of the trust and thus, continuously neglected the duties & committed mis feasance & also dealt

improperly with the trust property.

3) The opponents No.1 to 9, trustees of the trust & committed mis feasance & also dealt improperly with the trust property purchased a Honda Accord Car MH 02 MA 4343

for and in the name of Mr.Dushyant Mehta & thus dealt improperly with trust funds &

mis appropriated the trust money.

4) Opponent No.9, a trustee of the trust, utilised the trust funds to the tune of Rs.36,06,470/- during financial years

2003-04 to 2005-06 towards payments of his credit cards & thus received personal benefits from trust funds & thereby mis-appropriated the trust money & committed mal feasance.

5) The opponents No.1 to 9, trustees of the trust arranged meetings of the trustees as well as other meetings at Antewerp, Belgium & other foreign

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countries instead of India & spent huge amounts to the tune of Rs.58,40,456/- from year 2002-03 to August, 2006 & squandered the trust money & committed mis feasance & also dealt improperly with the trust

property.

6) The opponents No.1 to 9, trustees of

the trust have spent money from trust funds to meet travelling expenses of Mr.Suresh Motwani who has no concern with the trust, for his trips to Goa & Dubai & committed mis feasance & also dealt

improperly with the trust property.

7) The opponents No.1 to 9, trustees of the trust, advanced amount of Rs.2.75 crores to M/s.Albina Developers Pvt.Ltd.

without verifying its track record & without taking proper care & acted negligently in dealing with this

transaction & committed mis feasance & also dealt improperly property.

with the trust

8) The opponents No.1 to 9, trustees of the trust, allowed mis use of a trust account for the purpose of clandestine transaction in favour of Golden Sea Shell C.H. & thereby committed mal feasance."

4. Insofar as the relief claimed by the

Respondent No.1 in Application (Exhibit 2) to

suspend the trustees during the pendency of the

enquiry, the JCC by the same order proceeded to

hold that at the relevant time, he was not in a

position to identify a fit person to be appointed

to discharge the duties in place of the suspended

trustees, which order could be passed in exercise

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of provisions under Section 41D(4) of the Act.

Against the said decision, the two trustees against

whom charges were framed by the JCC filed Writ

Petition No.3849 of 2008. The three other trustees

against whom no allegations were made in the main

Application filed by Respondent No.1 or any charges

framed, filed separate Writ Petition being Writ

Petition No.3850 of 2008 questioning the

correctness of the decision of the JCC in his order

dated 3rd June 2008. Both these Petitions were

disposed of by the Single Judge of this Court on

11th July

2008. Insofar as the three trustees

against whom there were no allegations in the

Application or charges framed, the Court observed

that the order passed against them, which was

impugned in their Writ Petition was in gross

violation of the principles of natural justice. By

the said Judgement, the learned Single Judge was,

however, pleased to set-aside only the interim

order dated 3rd June 2008 and issued direction to

the JCC to pass fresh interim order in accordance

with law. Significantly, the relief as claimed by

the two trustees in Writ Petition No.3849 of 2008

to set-aside the order framing charge against them

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was not disturbed. The parties had moved the same

learned Single Judge of this Court for speaking to

minutes of the order passed earlier, which

application was disposed of on 15th July 2008. The

matter then proceeded before the JCC for passing

necessary interim order afresh.

5. At the same time, the Petitioners in Writ

Petition No.3849 of 2008 questioned the correctness

of the view taken by the learned Single Judge in

its Judgment dated 11th July 2008 and in turn, the

order

passed by the JCC framing charges by way of

Letters Patent Appeal No.328 of 2008.

6. The JCC instead of deciding the pending

Application (Exhibit 2) filed by the Respondent

No.1 for suspending the charged trustees in

exercise of powers under Section 41D(3) of the Act,

adjourned the matter by order dated 23rd July 2008.

Consequently, Writ Petition was filed challenging

order dated 23rd July 2008 passed below Exhibit 1

in Application No.17/2007 being Writ Petition

No.5732 of 2008. The said Writ Petition came to be

disposed of on 9th September 2008 inter alia

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directing the JCC to expeditiously decide

Application (Exhibit 2) filed by the Respondent

No.1 herein in accordance with law and not to pass

a mechanical order of suspension solely on the

ground that charges have already been framed

against the concerned trustees. All questions in

that behalf were left open. It is not necessary to

refer to the other issues dealt with in the said

decision.

7. Against this decision also, Letters Patent

Appeal has been carried by the two trustees against

whom charges have been framed by the JCC under

order dated 3rd June 2008. In the pending Letters

Patent Appeals, the Division Bench of this Court on

1st October 2008 passed following order:

"P.C. :

1. The learned counsel for the parties agree that the matter be taken up for disposal at the stage of admission.

Tentatively, this court is listing the matter at 20.10.2008 at 3.00 p.m.

2. In the meantime, the proceedings before the Joint Charity Commissioner in the matter will go on. We make it clear

that the Joint Charity Commissioner would not implement or give effect to the order which he may pass after concluding the hearing, if it is adverse to the

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appellant/trustees and the order passed by the learned single Judge (A.M.Khanwilkar, J) will continue to operate in the field as it sufficiently protects the interest of the trust."

8. In view of this order, the JCC proceeded

to consider the Application (Exhibit 2) in view of

the direction issued by the Single Judge in Writ

Petition No.5732 of 2008 decided on 9th September

2008. After granting opportunity to both sides to

file affidavits and further material, the JCC

proceeded to dispose of the said Application

(Exhibit

2) by his order dated 10th October 2008.

The JCC passed the following order:

"O R D E R

1) Pending disposal of charges, the

trustees, respondent No.1 (Smt.Rekhaben Seth), Respondent No.3 (Smt.Sushila

Mehta), Respondent No.6 (Dr.Amrutlal Shah), Respondent No.8 (Shri Niket Mehta) & respondent No.9 (Shri Vijay Mehta) of Lilavati Kirtilal Mehta Medical trust are put under suspension.

2) This order will not be implemented till further directions are received from Hon.High Court in Letters Patent Appeal No.328 of 2008 in Writ Petition No.3849/2008 with Letters Patent Appeal

no.330 of 2008 in Writ Petition No.5732/2008, pending there.

                3)   The   applicant (Ex.2)            is      accordingly





                                    :    12    :



                disposed of."




                                                                           
     9.         It      is this order which is subject                   matter

     of    challenge      in the present Writ petition at                      the




                                                   
     instance      of    three trustees out of five                 suspended

     trustees.       Here it may be clarified that                    although




                                                  
     charges    have been framed against nine trustees, as

four trustees have tendered resignation and were no

more associated with the Trust, the question of

suspending the said trustees did not arise. For

that reason,

Application ig the JCC proceeded

(Exhibit 2) only against five to consider

charged

trustees who continued to be on the Trust. The two

other suspended trustees besides the three

Petitioners herein have not chosen to challenge the

order of suspension. Whereas, the present Petition

has been filed only by the three suspended trustees

who were Respondent No.9, Respondent No.3 and

Respondent No.6 respectively in the proceedings

before the JCC.

10. To complete the narration of relevant

events, it may be appropriate to refer to two other

orders of this Court passed by the Division Bench

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in pending Letters Patent Appeals. The one passed

on 20th October 2008 and the other passed on 24th

October 2008, which are reproduced thus:

ORDER DATED 20TH OCTOBER 2008

"P.C.:

1. Heard the learned counsel for the parties.




                                         
              2.         A preliminary issue is raised
              by     the       respondents     regarding
              maintainability    of     these   appeals.

Sufficient time would be required for this

court to hear the matter as this court proposes to dispose of the appeals at the stage of admission itself. In the

meantime, the interim order passed by this court can continue to operate. We further make it clear that in place of trustees who have been suspended, no new trustees

would be appointed or nominated.

3. The learned counsel for the appellants submit that as far as the order of suspension is concerned, the appellants propose to independently challenge the

same. We make it clear that the pendency of these Letters Patent Appeals do not

preclude the appellants from challenging the order of suspension by which they are aggrieved and which is a fresh cause of action in the matter.

4. In view of the fact that the appellants propose to challenge the order of suspension, our interim order which has been continued would stand extinguished as soon as the order of suspension is challenged before the learned single Judge

and decision in the matter is taken.

5. Stand over to 24th November, 2008".

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ORDER DATED 24TH OCTOBER 2008

"P.C.:

                  1.         This application                is made for
                  speaking to minutes of the                 order dated
                  20th October, 2008.

2. We have heard the parties. In para 2 of the said order the last sentence namely, "We further make it clear that in place of trustees who have been suspended,

no new trustees shall be appointed or nominated." stands substituted by "Parties will maintain statusquo on the board of trustees of the trust."

3. Para 4 of the said order is not required and therefore, stands deleted."

11. The iglearned Counsel appearing for the

charged trustees against whom suspension order has

been passed by the JCC have criticized the order of

suspension on the argument that the charges framed

by the JCC are ex-facie untenable. If so, the

question of suspending the charged trustees on the

basis of such infirm charges would be

inappropriate. It was argued that there was no

material to substantiate the finding recorded by

the JCC that there was likelihood of further misuse

of powers or influencing witnesses and tampering

with the evidence. The said finding is based on

conjecture and surmises. If that opinion is to be

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discarded then there is no tangible material to

sustain the order of suspension. This argument is

on the premiss that the order of suspension during

the pendency of enquiry is a drastic order and

cannot be passed merely as a consequence of the

order framing charges. It was argued that there

was no possibility of any loss likely to be caused

to the Trust on account of any action of the

charged trustees. To buttress this argument,

amongst others, reliance was placed on

communication sent on the letterhead of M/s.Vesta

India Ltd., ig dated 1st October 2008, under the

signature of its authorised signatory Mr.Suresh

Motwani. According to the suspended trustees, the

said document was indicative of positive steps

being taken by the charged trustees for recovery of

the amount receivable by the Trust. It was

contended that in any case, there was enough

safeguards to check the activities of the charged

trustees. In that, the charges were founded on the

transactions effected between year 2001 to 2006 in

respect of which, the entire record was already in

custody of the JCC. There was no question of

tampering the said record. Besides, as the charge

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was founded on documents, the question of

influencing the witnesses was a misplaced

apprehension. It was then argued that the other

trustees including the rival camp would continue to

be associated in taking any decision for and on

behalf of the Trust. Moreover, the Supreme Court

appointed regime of Joint Administrators was also

in place. Besides, the earlier restriction imposed

by the JCC and as modified by this Court in its

order dated 9th September 2008 restraining the

charged trustees from taking any policy decision

and to

enter into any financial transaction with

regard to the Trust without prior approval of the

JCC till further orders was sufficient to protect

the interest of the Trust. It was contended that

there was neither possibility of charged Trustees

influencing the enquiry or causing any loss to the

Trust. In that case, there was absolutely no

necessity to suspend the charged trustees and the

enquiry can proceed even without suspension of the

said trustees. It was then contended that already

five trustees out of the nine charged trustees have

resigned. The Respondents 14 and 15 have been

restrained from acting as trustees. In such a

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situation, the Trust will not be able to function

especially in absence of Petitioner No.1 who for

all this period responsibly discharged his duties

and was successful in enhancing the income of the

Trust manifold. On the above arguments, the order

of suspending the Petitioners herein from acting as

Trustees during the pendency of the enquiry has

been challenged as inappropriate and unwarranted.

12. The question is: whether the order passed

by the JCC suspending the Petitioners herein can be

said to

be manifestly wrong, perverse and

untenable. To consider this aspect, we will have

to advert to the reasons recorded by the JCC for

recording his satisfaction to order suspension of

the Petitioners herein and two others during the

pendency of the enquiry in exercise of powers under

Section 41D(3) of the Act. The JCC has first

considered the decision of the Apex Court in the

case of Sri Digyadarsan Rajendra Ramdassjivaru v.

The State of Andhra Pradesh reported in 1969 (1)

SCC 844 and another unreported Judgment of Division

Bench of our High court in the case of Gulabsingh

Dipa Chavan & Ors. v. Joint Charity Commissioner,

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Maharashtra State, Bombay & Anr. (Special Civil

Application No.1912/1976) decided on 18th December

1978 and deduced the principles to be kept in mind

for exercising powers under Section 41D(3) of the

Act to suspend the charged trustees during the

pendency of the enquiry. It has then adverted to

the decision in the case of K.K.Ramamurthy Vs.

State of Kerala reported in 1972(II) L.L.J. 509,

which deals with the principle to be kept in mind

while suspending a civil servant against whom

disciplinary proceedings are initiated. Reference

is then

made to another decision in the case of

State of Orissa Vs. Bimal Kumar Mohanti reported

in (1994) 4 SCC 126.

                         126             Once again, this case                deals

     with    the     suspension of Government Officer                     during

     the    pendency       of   disciplinary enquiry.                  The      JCC
      


     after      culling     out the principles stated in                    these
   



     decisions,         proceeded to observe that many                   factors

     to    be     considered      for     suspension        of     Government

Servant during pendency of Departmental Enquiry may

be applicable for exercising powers under section

41D(3) of the Act to suspend the charged trustees

during the pendency of enquiry. The JCC has

adverted to the principle that the Court or the

: 19 :

Tribunal must consider each case on its own facts

and no general law could be laid. That suspension

is not a punishment, but is only one of forbidding

or disabling an employee to discharge the duties of

office or post held by him. That the suspension

must be a step-in-aid to the ultimate result of the

investigation or enquiry and lastly, that the

Authority should always keep in mind public

interest of the impact of the delinquent's

continuance in office while facing departmental

enquiry or trial of a criminal charge. The JCC has

then adverted ig to the decision of Sub-Divisional

Officer Vs. Shambhu Singh reported in 1969 (1) SCC

825, 825 which dealt with person who was not a

Government Servant but an elected representative.

Even so, the principle highlighted is that the

existence of power must be exercised when it is

absolutely essential for the discharge of the power

conferred and not merely that it is convenient to

have such a power. The JCC has then adverted to

two other decisions of the Supreme Court relied by

the contesting Respondents which expounds the

principles to be kept in mind by the Court while

granting interim relief. The JCC has noted that

: 20 :

the said principles cannot be applied for exercise

of powers under Section 41D(3) of the Act as the

authority is not granting any interim relief as

such in favour of any individual but is expected to

pass an order in the interest of the Trust for its

better management and to prevent further misuse of

the Trust affairs at the hands of the charged

trustees during the pendency of the enquiry and to

prevent the trustees from hampering the course of

investigation. In other words, the JCC first

proceeded to examine the principles that ought to

borne in mind to exercise powers under Section

41D(3) of the Act and noted that gravity or

seriousness of the charges, nature of evidence,

necessity to keep the charged trustees away from

the administration of Trust and from sphere of

influence by passing order of suspension and that

each case differs on facts.

13. The JCC then proceeded to examine other

points raised on behalf of the charged trustees

such as main Application is not maintainable, it is

barred by limitation, barred by principles of

res-judicata, etc. That the Applicant's son had

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filed two criminal complaints based on same

allegations against the Respondents which have been

dismissed by the Court, for which, principle of

double jeopardy would be attracted. That the names

of some of the trustees are not on record and

change reports are pending. That charges are

factually incorrect. The JCC has rejected each of

these objections on the finding that the same were

already addressed on the earlier occasion and were

not relevant for deciding the matter in issue for

exercising powers under Section 41D(3) of the Act

to suspend the charged trustees during the pendency

of the enquiry.

14. The JCC then adverted to the argument of

the charged trustees that in any case, it was not a

case of misfeasance or malfeasance but lapse of

lesser degree. To consider this argument, the JCC

proceeded to consider the charges already framed in

seriatim, which, in his opinion, were suggestive of

the gravity of charges. The JCC has adverted to

the arguments in respect of each of the said charge

and rejected the argument of the charged trustees.

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15. The JCC has then adverted to the argument

of the charged trustees that the hospital run by

the Trust has yearly turn over of hundreds of

crores of rupees and under the able charge of

Petitioner No.1 herein there was considerable rise

in the income and consequently in the profit of the

Trust. The argument of good work done by the

charged trustees and the charge amount is

comparatively meagre amount, has been rejected by

the JCC. He has held that lapses on the part of

trustees involves minor financial implication, can

be no justification. The JCC has also rejected the

argument that the acts of commission or omission

for which charges have been framed were essentially

error of judgment or a business mistake. Instead,

the JCC observed that a casual approach, omission

to take immediate steps to cure the defects, if

singular in number, can be excused but the repeated

acts occurring every year in one or other form,

which results in loss to the Trust will have to be

viewed differently. The JCC has referred to the

charges framed which prima facie evince the

approach and attitude of the charged trustees and

held that there is repetitive misuse of the Trust

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fund on different occasion by different means.

According to the JCC, these acts, leave

cumulatively, even individually, cannot be termed

as minor lapses. It went on to observe that the

magnitude of the charges is amplified, if they are

considered in totality.

16. The JCC then proceeded to examine the

argument that there was no likelihood of misuse of

the powers by the trustees. In that, the accounts

and other record is already submitted in his

Office.

Thus, there could be no tampering of this

evidence and that there was presence of other

trustees on record, completely excluding the

possibility of further misuse of powers. Even this

argument of the charged trustees did not appeal to

the JCC. While considering the said argument, the

apprehension expressed by the Applicant on the

basis of the events unfolding after passing of the

order by Court such as issuance of cheques which

however, was claimed as not delivered or

despatched. At the same time, the JCC was

conscious that the report of Shri Halbe, former

Judge of this Court, who was appointed as Joint

: 24 :

Administrator was not relevant to decide the

question in issue regarding suspension of the

charged trustees. The JCC has adverted to the

grievance made by the Applicants that payment of

Advocates' fees from Trust fund for fighting

personal litigation of the charged trustees but has

noted that that grievance will have to be

considered at the appropriate stage as was observed

in the order framing charge dated 3rd June 2008.

The JCC, however, has noted that the fact that the

cheques were prepared, was indisputable. The same

were

prepared, obviously to be delivered. He held

that the fact that the same were not delivered was

of little consequence. This is one of the factum

which has weighed with the JCC about the

possibility of further misuse.

17. The JCC has then considered the argument

that the suspension of the trustees would be

against the interest of the Trust and that, the

charged trustees were in fact the main pillars of

the Trust. This argument has been rejected on the

opinion that no body was indispensable and that

looking to the consequence which the charged

: 25 :

trustees are facing, others will learn lesson and

act with more care and diligence and in the

interest of the Trust.

18. After having analysed all these aspects,

the JCC proceeded to hold that allowing the charged

trustees to continue in the management during

enquiry, will have adverse effects. There is

likelihood of their taking further decisions for

their benefits, there may be repetition of past

errors and lapses. That some of the witnesses may

employees of the Trust and the hospital. That

they would be reluctant to come forward and give

evidence against the persons who are holding posts

as trustees. This is the satisfaction recorded by

the JCC to justify the necessity of placing the

charged trustees under suspension.

19. The JCC has then considered the subsequent

conduct reflected from the letter sent to the Heads

of the Department by the charged trustees in

response to the circular issued by Shri Halbe to

hold that the circumstances do not inspire

confidence in one's mind that further functioning

: 26 :

of the Trust would be smooth and would be in the

interest of Trust if continued in the hands of the

charged trustees. It has also observed that the

genuineness about the letter issued by Mr.Suresh

Motwani filed with Application (Exhibit 99) cannot

be brushed aside lightly.

20. The JCC then proceeded to consider the

argument advanced at the instance of Respondent

No.8 before him/Respondent No.3 herein who has

virtually blamed his father for the situation,

which argument was pressed to persuade the JCC that

he had no concern with the acts of commission and

omission committed by the Petitioners herein. This

argument has been rejected.

21. It is on the above basis, the JCC summed

up that considering the gravity of charges,

likelihood of further misuse of powers and

likelihood of influencing the witnesses and

tampering with the evidence, smooth enquiry and

smooth functioning of the Trust, it was necessary

to suspend the charged trustees during the pendency

of enquiry.

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22. On careful and close analysis of the order

passed by the JCC which is impugned in this

Petition, in my opinion, it is not a case where any

material argument of the charged trustees have been

overlooked and not adverted to. Whereas, all

aspects of the matter have been carefully

considered and answered. By no standards, the

order under Appeal can be said to be a mechanical

order. I have no hesitation in taking the view

that it is a well considered opinion and

satisfaction

recorded by the JCC keeping in mind

all relevant aspects of the matter. The JCC has

clearly recorded the basis on which satisfaction

has been reached that it was necessary to place the

charged trustees under suspension during the

pendency of the enquiry. The view taken by the JCC

cannot be said to be either perverse or manifestly

wrong. All relevant factors have been adverted to

and have been duly considered by the JCC.



     23.          Indubitably,       the power to be exercised by





     the    JCC    under     Section      41D(3) of the             Act      is     a

     discretionary         power.       Indeed, merely because                   the





                                      :    28   :



     power    exists, the JCC cannot mechanically exercise

     that    power.       In    the present         case,        every       point

     raised    on behalf of the charged trustees has                           been




                                                                              
     noted    and    considered by the JCC.                  Assuming          that




                                                     
     there    is some error here or there, that cannot                            be

     the    basis to interfere with such a well considered

     discretionary         order      passed       by      the      JCC        upon




                                                    
     recording      satisfaction          about the necessity to                  do

     so.     I have no hesitation in taking the view                           that




                                        
     the    discretion exercised by the JCC is replete                            of

     judicial       conscience        and      his      satisfaction              on

     relevant matters.
                      ig        The view taken by the JCC is not

     only    a possible view, but the only view that could

be taken in the fact situation of the present case.

24. Notably, it is not a case as if the

mistake committed by the JCC is incapable of

correction. The wrong done to the charged

trustees, if any, would be set right and their

rights and equities adjusted at the appropriate

stage in the main application (proceedings). If

the said application was to be rejected upon

discharge of the trustees of charges framed against

them, as a necessary corollary, the charged

: 29 :

trustees who have been suspended under the impugned

order, will have to be reinstated as trustees of

the Trust. Even if the decision of the JCC on the

main application was to be adverse, the wrong

caused to the charged trustees on account of

suspension during the pendency of the enquiry, if

any, would be set right or rights and equities

adjusted in Appeal to be preferred by them at the

conclusion of the proceedings. If such is the

situation, the Court ought to be loath in

exercising writ jurisdiction. It will be useful to

recall

the dictum of the Apex Court in the case of

Surya Dev Rai v. Ram Chander Rai & Ors. reported

in (2003) 6 SCC 675.

675 In Paragraph 39 of the said

decision, the Apex Court observed thus:

"If it intervenes in pending proceedings there is bound to be delay in termination of proceedings. If it does not intervene, the error of the moment may earn immunity from correction. The facts and

circumstances of a given case may make it more appropriate for the High Court to exercise self-restrain and not to intervene because the error of jurisdiction though committed is yet capable of being taken care of and

corrected at a later stage and the wrong done, if any, would be set right and rights and equities adjusted in appeal or revision preferred at the conclusion of

: 30 :

the proceedings. But there may be cases where "a stitch in time would save nine". At the end, we may sum up by saying that the power is there but the exercise is discretionary which will be governed

solely by the dictates of judicial conscience enriched by juridical experience and practical wisdom of the

judge."

(emphasis supplied)

25. The question is: whether the present case

falls in the excepted category. In my opinion, the

answer is an emphatic 'NO'. Indeed, the order of

suspension may result in deprivation of the

Petitioners to act as trustees during the pendency

of

the enquiry, but that is inevitable. More so,

in the backdrop of the finding and satisfaction

recorded by the JCC, which I am disinclined to

interfere with. Significantly, the Petitioners

have already carried the matter before the Division

Bench by way of Letters Patent Appeal questioning

the correctness of the order dated 3rd June 2008

framing charges against the nine trustees including

them. If the said Appeal were to succeed, it would

necessarily follow that the question of suspending

the Petitioners as trustees may not arise.

However, in the face of the charges already framed,

if that order were to be upheld even by the

: 31 :

Division Bench of this Court, keeping in mind the

gravity thereof and the possibility of enquiry or

investigation being influenced and of further loss

to be caused to the Trust due to likelihood of the

charged trustees taking further decisions for their

benefits, the question of allowing the Petitioners

to discharge their functions as trustees of the

Trust during the pendency of the enquiry cannot be

countenanced.

26. It has been rightly noted by the JCC with

reference

to the exposition of the Apex Court that

each case has to be considered on its own facts and

no general law can be laid down on the issue of

suspension of a charged trustee during the pendency

of the enquiry. The suspension would be

step-in-aid to the ultimate result of the

investigation or enquiry. In the context of the

proposed action to be eventually taken against the

charged trustees, it would be necessary to avoid

further injury or loss likely to be caused to the

Trust property/funds. By suspending the charged

trustees, whose complicity has been prima facie

noticed in respect of serious charges on the basis

: 32 :

of material already made available before framing

of charges, it would be in the general interest of

the Trust and its beneficiaries to place them under

suspension. In the case of Sri Digyadarsan

Rajendra Ramdassjivaru (supra), the suspension of a

Madadhipathi during the enquiry was one of the

issue and whether power to suspend is necessary and

reasonable part of the procedure was considered by

the Apex Court. While examining that aspect, the

Apex Court has noted that if such a person (the

charged trustee) was allowed to function during the

pendency

of an enquiry, the entire purpose of the

enquiry might be defeated. It opined that such

person during the pendency of enquiry may do away

with most of the evidence or tamper with the books

of account or otherwise commit acts of

misappropriation and defalcation in respect of the

properties of the Math, for which, it was essential

to make a provision for suspending him till the

enquiry concludes and an order is made either

exonerating him or directing his removal. The Apex

Court upheld the order of suspension of the charged

trustee in that case on the finding that the

enquiry pending against the Petitioner was in

: 33 :

respect of serious charges of misappropriation and

defalcation of trust funds and of leading an

immoral life which were being investigated.

Reference has been rightly made by the JCC to the

unreported decision of the Division Bench of our

High Court in the case of Gulabsing Dipa Chavan

(supra). The Division Bench has noted that Section

41D(3) clearly enables the Charity Commissioner to

place the trustees under suspension pending

disposal of the charges. The argument that hearing

was required to be given to the Petitioners before

order of suspension was passed has been rejected in

the following words:

"6. Mr.Dalvi then contended that the petitioners, who are the trustees and were

holding the office at the time of the passing of the impugned order, were not

served with any notice by the Joint Charity Commissioner. It was urged by the learned Counsel that the Joint Charity Commissioner was in error in passing the order without any notice to the petitioner

and thereby the principles of natural justice are violated. Mr.Dalvi, therefore, contends that the interim order passed by the Joint Charity Commissioner should be set aside. It is impossible to accept the contention of the learned

Counsel for more than one reason. Firstly, the Act nowhere makes a provision of issuance of a notice prior to the passing of the interim order of suspension

: 34 :

under sub-section (3) or of the appointment of a fit person to discharge duties under sub-section (4) of section 41D of the Act. Apart from that, it must be remembered that the Joint Charity

Commissioner exercised the powers of suspension only in the cases where he is satisfied that the trustee or the Board of

Trustees are mismanaging the affairs of the trust and causing loss to the interest of the trust. In cases of such a serious nature, if the Charity Commissioner issues notice prior to the passing of the order

under sub-sections (3) or (4) of sec.41D, then obviously the trustees who are mismanaging the trust would have an opportunity to do away with the trust property and the purpose of enquiry would

be defeated. In the case in hand, the allegations made against Jadhav are of such a serious nature that giving an

opportunity either to Jadhav or to other trustees who are alleged to be aiding and abetting Jadhav in his acts of misfeasance would really defeat the purpose of making

an order of suspension and appointing a fit person to discharge the duties. In our judgment, the Joint Charity Commissioner was justified in passing the order without issuing any notice to the petitioners. In this connection, it must

also be mentioned that on behalf of the Joint Charity Commissioner, a return has

been filed by Smt.Kelkar, the Superintendent in the office of the Charity Commissioner, and in the affidavit, Mrs.Kelkar specifically stated that the petitioners are not the present

trustees and their names do not appear in Schedule I under section 17 of the Bombay Public Trusts Act. Smt.Kelkar has specifically stated that the change report has not been made to the Charity Commissioner and as such the petitioners

are not recognized as trustees. If the petitioners are not recognized as trustees, then the grievance of Mr.Dalvi that there was no notice of the order

: 35 :

passed by the Joint Charity Commissioner loses its substance."

(emphasis supplied)

27. This decision would be relevant also to

reject the argument of Respondent No.8 (Respondent

No.3 herein) that he should be extricated from the

proposed action and more particularly suspension

during the pendency of the enquiry. As a matter of

fact, the said Respondent has not challenged the

order of suspension but that was the argument

advanced on his behalf even before the JCC which

has

been rightly rejected on the finding that

management was under the control of Petitioner No.1 the

herein and Respondent No.3 had converted himself to

the secondary position.

28. The charges "as framed" against the

Petitioners and other trustees are indicative of

the involvement of the concerned Trustees not only

for breach of duty, but their actions have been

actuated by malice or bad faith. If these charges

were to be eventually established, there is no

reason to doubt the satisfaction recorded by the

JCC that there is possibility of further loss to be

caused by the charged trustees and it was necessary

: 36 :

to keep them away from the trust management so as

to prevent any further loss to the Trust.

29. Significantly, the JCC has adverted to the

subsequent conduct of the charged trustees in

preparing fresh cheques immediately after the

restriction order was vacated. The JCC has rightly

observed that the fact that the said cheques were

not actually delivered, does not take the matter

any further. It nevertheless, is good reason to

infer that the charged trustees were waiting for

the opportune ig moment to make payment. In this

context, it was argued that payment which was to be

made was in respect of professional fees to be paid

to lawyers who were attending litigation for and on

behalf of the Trust. On the other hand, it was

argued by the Counsel for the Respondent No.1 that

the payment was not in respect of professional fees

to represent the Trust, but, in fact, was to handle

the personal litigation of the charged trustees and

which payment runs into "couple of crores" of

rupees and is not a legitimate spending. It is not

necessary for me to address the controversy as to

whether payment already made or to be made towards

: 37 :

professional fees is or was in fact towards

litigation handled for and on behalf of the Trust

or the personal litigation of the charged trustees.

Indeed, if it were to be found that all or any of

the litigation was nothing but personal litigation

of or against the charged trustees and they were

liable to defend themselves on their own and not

from the funds of the Trust, obviously, it will

have to be held that any such amount paid towards

that head would be unauthorised and illegitimate.

On that finding, the concerned charged trustees

would

become jointly and severally liable to make

good commensurate amount paid from the corpus of

the Trust. That aspect will have to be decided at

the appropriate stage, if raised in the pending

proceedings or arises in any other proceedings

initiated for that purpose. It was argued that the

professional fees though appear to be substantial

one, was necessitated on account of several

proceedings pending before different forums. In

that, about 22 main proceedings are pending before

the Supreme Court, 29 before the Bombay High Court,

6 Suits before the Bombay City Civil Court, 18

before the Charity Commissioner and 4 before the

: 38 :

Court of Chief Metropolitan Magistrate. At the

cost of repetition, I would observe that if it were

to be held that any amount paid or to be paid

towards professional fees was or is to defend the

Trust as such, the same would be permissible one;

whereas, if paid to defend the proceedings in

respect of any of the personal litigation of the

charged trustees that may be impermissible spending

from the Trust funds and will have to be recovered

from the charged trustees personally, jointly and

severally.

30. Be that as it may, no fault can be found

with the opinion recorded by the JCC that the

subsequent conduct of producing the letter

purportedly sent by Suresh Motwani filed along with

application (Exhibit 99), arguments regarding

genuineness thereof cannot be brushed aside

lightly. This observation is in the context of the

stand taken by the Applicant/Respondent No.1 herein

that the said document is a fabricated document for

more than one reason. Firstly, where, when and

between whom the alleged negotiations took place

and under whose instructions such negotiations were

: 39 :

held is not forthcoming. This objection is

significant in the context of the fact that

Mr.Suresh Motwani is admittedly a proclaimed

offender. If he is a proclaimed offender, it was

necessary to explain the circumstances in which the

discussion was held with him by the charged

trustees. What is relevant for our purpose is,

that the contents of the said letter would reveal

that some deliberations were held in relation to

the claim amount ascribable to charge No.1.

Suffice it to observe that if the argument of

Respondent

No.1 regarding genuineness of this

document is to be eventually accepted, it would

necessarily follow that the charged trustees have

made attempt of creating evidence to be used in

their defence to answer the charge already framed.

That cannot be countenanced. Further, if it is to

be held that this letter is a fabricated document,

the argument of the Petitioners that if the

arrangement referred to in the said communication

is to be acted upon, no loss would be caused to the

Trust, will have to be stated to be rejected.





     Assuming      that the arrangement provided for in                        the

     said    communication          were    to be acted          upon,       that





                                    :    40   :

would not necessarily lead to an inference that the

charged trustees are fully extricated of charge

No.1 for their acts of commission and omission

thereof. Those are matters to be answered in the

pending enquiry.

31. For the time being, the opinion recorded

by the JCC that there is likelihood of influencing

the witnesses and tampering with the evidence is

reinforced from at least abovesaid two subsequent

conduct of the charged trustees referred to by the

JCC

is a possible view. The JCC has also adverted

to the letter issued to the Heads of the Department

in response to the Circular of Shri Halbe.

According to the Petitioners, there was nothing

wrong in issuing such letter to the Heads of the

Department because the Joint Administrator was

appointed only to look after the management of the

hospital and the Research Centre and not to dabble

with the affairs of the management of the Trust as

such. This argument is an attempt to over simplify

the matter. The satisfaction recorded by the JCC

is that if the charged trustees were allowed to

preform as trustees, there was likelihood of

: 41 :

influencing the witnesses as they would not come

forward to depose against the trustees. It was

argued that the JCC has placed reliance on report

submitted by Shri Halbe which did not depict

correct facts and was biased. It was argued that

another Single Judge of this Court had occasion to

consider the question regarding improper conduct of

the said Joint Administrator and to replace him by

appointing another Joint Administrator in his

place. This argument is of no avail. I am in

agreement with the argument of the Respondent No.1

that the JCC ig in Paragraph 67 has made it amply

clear that criticism of the said reports submitted

by Shri Halbe were not relevant to decide the

question in issue.

32. Taking overall view of the matter as

aforesaid, the satisfaction recorded by the JCC in

the order impugned in this Writ Petition is a

possible view, for which reason, no interference in

exercise of writ jurisdiction is warranted.





     33.          Counsel      for    the      charged       trustees          had

     argued    that although charges have been framed, the





                                       :   42    :



     same     were      untenable.        This      argument         has      been

considered by the JCC in Paragraphs 44 to 56 and in

my view rightly rejected. It was suggested that

hearing of the present Petition ought to be

deferred till the decision of the Appeal Court on

the issue regarding correctness of the order

framing charges against the Petitioners is

rendered. This argument will have to be turned

down at least for two reasons. Firstly, the issue

regarding framing of charges and to pass order in

exercise of powers under Section 41D(3) of the Act

both are

separate matters. The fact that appeal

against the order framing charges is pending, does

not preclude one from considering the issue of

suspension of the charged trustees during the

pendency of the enquiry. That power flows from

Section 41D(3) of the Act. The Division Bench of

our High Court in the case of Gulabsingh Chavan

(supra) has observed that it is open to the Charity

Commissioner to "simultaneously" suspend the

trustee against whom charges are framed and that

too without issuing notice to such person. As a

matter of fact the suspension order ought to have

been passed simultaneously with the order of

: 43 :

framing charges against the concerned Trustees. In

any case, the orders passed by the Division Bench

in the pending appeals which are reproduced

hitherto, in no way, preclude the consideration of

the present Petition. It is for that reason, the

matter was proceeded and fully heard by consent.

34. Reverting to the argument that there are

enough safeguards and it was not necessary to place

the charged trustees under suspension during the

enquiry is concerned, it is noticed that this

argument has igalso been considered by the JCC and

rightly negatived. The JCC has recorded his

satisfaction on the basis of tangible factors that

having regard to the gravity of charges framed and

the likelihood of further misuse of powers and

likelihood of influencing the witnesses and

tampering with the evidence it would be necessary

for the purpose of smooth enquiry and smooth

functioning of the Trust to suspend the charged

trustees. No interference with that satisfaction

is warranted in exercise of writ jurisdiction.

35. Even the grievance of the Petitioners that

: 44 :

the Trust will not be in a position to meaningfully

function in absence of the charged trustees who are

the main pillars of the Trust has been considered

and rightly rejected by the JCC in Paragraphs 77

and 78 of the impugned Judgment. The view so taken

is the correct view that no one is indispensable

and when one goes out, somebody would take his

place and the functions of the Trust will continue.

     The    argument      also   overlooks         that       besides         the




                                     
     Petitioners,        there   are other trustees              who      would

     continue to discharge their duties as trustees.                           In

     that,    besides
                     ig    Respondent       No.1, there          are      other

     trustees      who    are capable of continuing                with       the
                   
     activity      of    the   Trust     which        aspect       has      been

     considered      in    Paragraph     84      in    the      context        of

     argument      of    order   to be passed          in     exercise         of
      


     powers      under    Section 41D(4) of the Act.                 The      JCC
   



     has    recorded      that   the Trust        Deed      provides          for

     minimum number of only three trustees.                     Besides the





     charged      trustees, there are some more trustees who

     are    competent to perform functions as trustees and

     they    can function and administer the Trust.                       I    am





     in    agreement      with the said view expressed by                     the

     JCC.     It    is not the case of the Petitioners                      that





                                    :   45   :



     excluding     the suspended and resigned trustees, the

     requirement       of minimum three trustees will not                      be

     fulfilled.




                                                                          
                                                  
     36.         Accordingly,       no case for interference                   in

     exercise      of     writ      jurisdiction            against           the

discretionary and well reasoned order passed by the

JCC is made out, for which reason, the Petition

should fail.




                                      
     37.         While    parting, I would once again clarify

     that     this
                      
                       decision     may     not      be     construed          as

expression of any opinion either way in relation to

the controversy of payment of amount towards

professional fees whether it results in entering

into any financial transaction or for that matter,

being impermissible payment made to handle the

personal litigation of the charged trustees. All

questions in that behalf are left open, to be

considered at appropriate stage, if raised in the

pending proceedings or would arise in any other

proceedings.





     38.         It    was   argued     by the       Counsel         for      the





                                    :    46   :



     Respondent        No.1   that     even payment        made       towards

professional fees to handle the personal litigation

of the charged trustees from the funds of the Trust

would amount to entering into financial transaction

and such transaction is in breach of restriction

placed by this Court in its decision dated 9th

September 2008 of taking prior approval of the JCC,

thereby, disentitling the Petitioners from any

relief, much less, in exercise of extra ordinary

jurisdiction in Writ Petition. As aforesaid, it is

unnecessary to burden this Order any further, as I

am not

examining the question as to whether the

payment of professional fees would result in

financial transaction and/or is impermissible. I

may also clarify that the enquiry pending before

the JCC will have to proceed on its own merits

uninfluenced by any observation made at this stage

either for framing of charges or to suspend the

charged trustees during pendency of the enquiry.

For, the charges and all aspects relevant thereto

will have to be eventually answered on the basis of

material that would come on record during the

enquiry on its own merits.

                                   :    47    :



     39.        For    the   reasons already recorded in                      the

     earlier    part    of   this Order, no            interference            is

     warranted in exercise of writ jurisdiction.                        Hence,




                                                                          
     dismissed with costs.

40. At this stage, Counsel for the Petitioners

submits that the operation of the suspension order

be stayed for a period of two weeks from today to

enable the Petitioners to carry the matter in

appeal. Counsel for the Respondent No.1 has

opposed this prayer on the argument that interim

protection granted by the Division Bench is already

operating in favour of the Petitioners. The

Counsel for the Respondent No.1 further submits

that in the event, the Letters Patent Appeals which

are already pending in this Court were to be

dismissed before two weeks, an anomalous situation