Vicky Dilip Mutha And Others vs The Panjarapol Sanstha, ...
2016 Latest Caselaw 2390 Bom

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                                                                  WP.6657.14.doc

                 IN THE HIGH COURT OF JUDICATURE OF BOMBAY




                                                                         
                            BENCH AT AURANGABAD

                        WRIT PETITION NO. 6657 OF 2014




                                                 
    1]     Vicky Dilip Mutha,
           Age : 35 Years, Occ. : Business & Agriculturist,
           R/o Deshmukhwadi, Sarjepura,




                                                
           Ahmednagar-1.

    2]     Pradip Mangilal Changediya,
           Age : 39 Years, Occ. : Business & Agriculturist,




                                     
           R/o At Post Sonai, Tal. Newsa,
           Dist. Ahmednagar.

    3]
                              
           Sau. Yevanta Pradip Changediya,
           Age : 33 Years, Occ. : Business & Agriculturist,
           R/o At Post Sonai, Tal. Newasa,
                             
           Dist. Ahmednagar.

    4]     Mrs. Aruna Dilip Mutha,
           Age : 56 Years, Occ. : Business & Agriculturist,
           R/o Deshmukhwadi, Sarjepura, Ahmednagar - 1.
      


    5]     Sunil Hastimal Mutha,
   



           Age : 51 Years, Occ. : Business & Agriculturist,
           R/o Burud Galli, Ahmednagar - 1.

    6]     Rohan Sunil Mutha,
           Age : 25 Years, Occ. : Business & Agriculturist,





           R/o Burud Galli, Ahmednagar.
                                                     ... Petitioners.

                    Versus





           The Panjarapol Sanstha,
           A duly Registered Public Trust,
           Having its Address : At Arangon Road,
           Ahmednagar, Tal & Dist. Ahmednagar.
           Through : Its authorised signatory & Trustee,
           Shri Satish Mohanlala Dugarwal,
           Age : 57 Years, Occ. : Business,
           R/o MSEB Colony, Maniknagar, Ahmednagar,
           Tal & Dist. Ahmednagar.
                                                    ... Respondents.




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                                                                               WP.6657.14.doc




                                                                                      
                                           ...
                       Mr. R. R. Mantri, Advocate for Petitioners.
                   Mr. A. P. Bhandari, Advocate for Respondent/Sole.




                                                              
                                           ...



                                                       CORAM : A. V. NIRGUDE &




                                                             
                                                               V. L. ACHLIYA, JJ.

RESERVED ON : 06th APRIL, 2016.

PRONOUNCED ON : 06th MAY, 2016.

JUDGMENT : (PER V. L. ACHLIYA, J.)

. Rule. Rule is made returnable forthwith. With consent

of parties, Petition is heard finally at the stage of admission.

2] By the present petition filed under Article 226 of the

Constitution of India the petitioner has claimed reliefs as follows :-

"B. Issue a writ of certiorari or any other appropriate writ and or direction and quash and set aside the order dt. 26.08.2011 passed below Exh.1, order dt. 27.06.2012 passed below Exh.12 and the order dt.04.03.2013 passed below Exh.24 and be further

pleased to allow the said applications.

C. Issue a writ or certiorari or any other appropriate writ and or directin and call for the record and proceedings of application no.35/2011, under Section 36 of Bombay Public Trust Act, pending on the file of the Ld. Joint Charity Commissioner, Pune, and on perusal of the same or otherwise quash and set aside the order dt. 24.06.2014 passed below Exh.-45, and be further pleased to open

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and finalise the tenders as per the notice dt. 30.04.2014 bearing

outward no.1527 to 1532 - Exh.42 and be further pleased to direct holding of proper enquiry and taking appropriate action in

accordance with the law against the trustees of the respondent no.1 and the valuer."

3] Before appreciating the submissions advanced it is

necessary to consider the brief facts leads to filing of present

petition. The respondent is a public trust duly registered under

referred to as "said Act").

the provision of the Maharashtra Public Trust Act, 1950 (hereinafter

It owns an agricultural land bearing

block no. 2985 at village Sonai, Tq. Newasa, District Ahmednagar

admeasuring 7 Hector, 63 R. There exist cattle shed, electric water

pump installed in the well situated in said land. In the meeting of

Managing Committee of the trust held on 20.08.2004 and

19.02.2005 it was resolved to sale the land for the reasons set out

in the resolution passed. Pursuant to the decision the bids were

invited by issuing public notice in newspapers. Petitioners have

participated in the process and offered the bid of Rs.1,11,99,999/-

(Rupees One Crore Eleven Lakhs Ninety Nine Thousand Nine

Hundred Ninety Nine Only). Since the bid of the petitioners was

found to be highest the Managing Committee decided to accept

the same subject to requisite permission under Section 36 of the

said Act. The resolution to this effect was passed in the meeting of

the Managing Committee of said trust held on 31.08.2009. Initially

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the petitioners have paid Rs.11,00,000/- (Rupees Eleven Lakhs) as

earnest amount and later on paid Rs.25,00,000/- (Rupees Twenty

Five Lakhs) to the respondent trust. On 13.05.2010, the

respondent trust filed application under section 36 of the said Act

before the Joint Charity Commissioner, Pune seeking permission to

sale the said land in favour of petitioners. The application was

registered as application no.35/2011. After hearing and perusing

an application the Joint Charity Commissioner was pleased to pass

an order to call fresh offers in the matter by taking note that

offer/bid was invited in 2008 and during the intervening period the

prices of the immovable property have increased. The petitioners

moved an application to recall the order dated 26.08.2011.

However, the Joint Charity Commissioner refused to entertain the

request and decided to proceed with the order to call the fresh bids

in the matter. Pursuant to the order passed by the Joint Charity

Commissioner the notices were published in newspapers inviting

tenders/bid in respect of said property. In all five bids were

received in response to the notice published in the newspaper

which includes the petitioners as one of the bidder. Petitioners

submitted their bid alongwith demand draft of Rs.30 Lakhs as bid

amount. The bids so invited were to be opened on 20.05.2014 in

presence of the persons who have submitted their offers. However

on that date the Joint Charity Commissioner was not available and

therefore opening of tender was postponed to 24.06.2014. On

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24.06.2014, the respondent moved an application vide Exh.45

stating therein, that the respondent has learn that in the Regional

Development Plan the part of the said land is shown reserved for

agricultural purpose and further stated that, in view of the

subsequent development the price of the land is more than

11,66,00,900/- (Rupees Eleven Crore Sixty Six Lakhs and Nine

Hundred) and if there is any bid matching to that amount same be

accepted otherwise fresh bid be called in the matter on the basis of

fresh valuation of the said land obtained by respondent. Learned

Joint Charity Commissioner pleased to allow the application moved

by the respondent vide order 24.06.2014. Being aggrieved by the

decision of Joint Charity Commissioner dated 26.08.2011 and

24.06.2014 the petitioners have preferred this writ petition,

challenging those decisions on the grounds set out in the petition.

4] We have heard the learned counsel appearing for

petitioners and the respondent and further perused the impugned

orders the report of valuation referred and relied during the course

of submissions. We have also considered the certain events which

occurred during the pendency of the petition and offers received

for said land. The offers received in sealed covered during the

hearing of the petition were opened before the Court.

5] Learned counsel for the petitioners assail the impugned

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orders passed by the Joint Charity Commissioner with contention

that the orders are arbitrary, perverse and illegal. He has argued

that while dealing with the application under Section 36 of the said

Act the Joint Charity Commissioner is expected to decide the

application for grant of permission for sale on the basis of the date

on which the offers are invited and delay in processing the

application can not be ground to call for the fresh bids. It is

contended that the orders passed to invite the fresh bids is purely

based on mere assumption and presumption on the part of

respondent and Joint Charity Commissioner without any concrete

material on record to form such opinion. He has submitted that the

petitioners parted with 36 Lakhs when the bids were initially

invited and offer was accepted by trust subject to permission by

Charity Commissioner. In the fresh bid invited the petitioners have

submitted demand draft of Rs.30 Lakhs. The learned Joint Charity

Commissioner has passed the order dated 24.06.2014 soley on the

basis of say of the respondent that now the value of property is

more than 11,66,00,000/-. He has further submitted during the

course of hearing of the petition this Court has directed the

respondent to bring the prospective buyer who is willing to offer 11

crores or at least more than 7 crores. However no such offer of

buyer willing the purchase property by paying price of Rs.7 crores

or 11 crores was produced before the Court. The bids which have

received though reflects that two offers of Rs. 8,21,00,000/- (Eight

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Crore Twenty One Lakhs) those persons have not submitted

demand draft of Rs.5,00,000/- each with their offer. Except one

person who has quoted price of Rs.1,25,00,000/- no other person

has fulfilled the condition of bid to enclosed the demand draft of

Rs.5,00,000/-. It is therefore contended that the stand of the

respondent that the price of the property is more than 11 crore is

imaginary and without any basis. He therefore urged to set aside

the impugned order and further direct the Joint Charity

Commissioner to open and finalise the tenders already received.

6] On the other hand, learned counsel for the respondent

supported the order passed by the Joint Charity Commissioner. He

has submitted that, while dealing with an application filed under

Section 36 of the said Act, the Joint Charity Commissioner has to

take into consideration the interest, benefit and protection of trust.

Therefore the interest of respondent trust is of paramount

consideration so far as deciding the application under Section 36 of

the said Act. The reasons recorded by the Joint Charity

commissioner while passing the impugned orders reflect that the

orders are passed in the interest, benefit and protection of the

trust. While passing the earlier order the Joint Charity

Commissioner has noted that the process was initiated in 2008 by

considering valuation of the property as then exist. When the

application came up for hearing the Joint Charity Commissioner felt

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that the period of more than 3 years has lapsed and in the

intervening period there was increase in prices of immovable

property therefore pass the order dated 26.08.2011 to call fresh

bid in the matter and rejected the application moved by petitioners

for recall of the order. Thereafter considering the fact that

respondent/applicant has produced the evidence in the form of

valuation report, showing the price of the land together with

structure as Rs.11,66,29,000/- the Joint Charity Commissioner

decided to allow the application to call fresh bids in the matter. He

has therefore submitted that there is absolutely no illegality and

perversity in the order passed by the Joint Charity Commissioner.

He has further submitted that, during the course of hearing of the

petition there are two offers received from the bidders, who have

offered Rs.8,21,00,000/- for the said property. He has therefore

submitted that stand taken by the respondent vide application

Exh.45 and order passed by Joint Charity Commissioner to initiate

fresh bid in the matter duly fortified in view of said offers.

7] We have carefully considered the submissions in

advanced and perused the impugned orders. The respondent is a

public trust and as from the name "Panjarpol Sanstha" suggest that

the trust has been formed to take care of the cows and progeny.

While exercising the power under Section 36 of the Maharashtra

Public Trust Act of 1950 the paramount consideration before the

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Charity Commissioner is the interest of the trust. While granting

such permission for sale the Charity Commissioner is expected to

take care and satisfy himself that the transaction for sale for which

the permission is sought is in the interest of the trust. He has to

consider whether there is a bonafide needs to sale such property

and same being sold in the interest of trust. Once the Charity

Commissioner is satisfied that alienation of property is necessary in

the interest of trust or for the benefit of the trust or for the

protection of the trust then the Charity Commissioner can grant

permission for alienation. It is not the job to be performed

mechanically. It is obligatory on the part of Charity Commissioner

to examine the matter and arrive to proper decision as to whether

alienation of the property is necessary and for the benefit of the

trust and beneficiaries. The section itself provides for complete

and effectual supervision and control of the Charity Commissioner

on the alienation of the trust property. Rule 24 of the Bombay

Public Trust Rules, 1951 provides for information to be provided to

the Charity Commissioner and also empowers the Charity

Commissioner to make such inquiry as he deems necessary. It also

empowers the charity commissioner to impose such condition and

give such directions as he may deem fit. Rule 24 specifically deals

with the manner in which the application under Section 36 to be

filed, particulars to be given and inquiry to be conducted. The

charity Commissioner is suppose to examine the proposed sale

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critically to see, whether the trust can be benefited on completion

of the transaction. If he is not satisfied he may refuse to accord

sanction. Thus the role of the Charity Commissioner in dealing

with application under Section 36 is not of silent spectator. On the

contrary, the Charity Commissioner is expected to play pro-active

role, while dealing such application as the provision together with

rule contemplates inquiry to be conducted on the part of Charity

Commissioner to satisfy himself that such alienation is in the

benefit, interest and protection of the trust and beneficiary of the

trust. He can arrive to conclusion that the price at which the

trustees have agreed to sale the property is not the price which

would secure the adequate benefit to the trust and he may reject

the agreement on that ground. The delay in deciding the

application can not be ground to overlook the benefit and interest

of the trust in alienation of the property. In this context, it is useful

to refer the decision of this Court in the case Madhukar

Sunderlal Sheth and other Vs. S. K. Laul and others.

Reported in 1992 (3) Bom.C.R. 253. In para 5 this Court has

observed as under :-

"5. The Charity Commissioner, under the Bombay Public Trusts Act is required to give his sanction bearing in mind the interest, benefit and protection of" the trust. He has to apply his mind, inter alia, to the price at which the property is to be sold under the agreement. The Charity Commissioner has the power,

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in a given case, to come to the conclusion that the price at which

the trustees have agreed to sell the property is not the price which would secure adequate benefit to the trust and he may reject the

agreement on that ground. Even the terms of the agreement of sale which the trustees may have entered into, are liable to be examined by the Charity Commissioner at the time when he

grants his sanction. Approval by the Charity Commissioner ensures reasonableness of the agreement of sale. These factors will also have to be borne in mind by the income tax authorities

while exercising their power under section 269UD. The discretionary power under that section cannot be exercised

arbitrarily. It will have to be exercised bearing in mind the purpose for which it is conferred. Hence the submission of the petitioner

that if there is delay on the part of the Charity Commissioner in granting sanction, and there is a rise in the property market, the purchaser of such a property will be at a disadvantage, loses its

force. The question of consideration has to be considered by the income-tax authorities in the context of the special circumstances

which accompany a sale by a public trust. The purchaser can also apply in accordance with law for an early sanction by the Charity Commissioner."

8] Having considered the challenges raised to the

impugned orders in the light of scope and powers of Joint Charity

Commissioner U/s 34 r/w Rule 24, we are of the view that the

impugned orders can not to said to be perverse, arbitrary and

illegal and to be interfered in exercise of writ jurisdiction under

Article 226 of the Constitution of India. The orders passed by the

Joint Charity Commissioner are in true spirit of Section 36 of said

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Act. While passing the first order the Charity Commissioner has

noted that the offers/tender were invited in 2008 and taken note

that in the intervening period the prices of the immovable

properties were increasing. He therefore directed to call the fresh

bid/offer. The process of opening the fresh bids was abandoned in

view of the fact brought to the notice of Charity Commissioner by

respondent, vide application dated 24.06.2014 (Exh.45) that it has

come to their notice that portion of the property admeasuring 1

hector 52 R is now shown in residential (R-Zone) in the

development plan prepared by the town planning department. In

order to ascertain the valuation on the basis of subsequent

development the respondent trust obtained the valuation report.

The valuer has valued the price of the land together with structure

as Rs.11,66,28,668/- as against offer of Rs.1,11,00,000/-. In this

background, the Ld. Joint Charity Commissioner has passed the

impugned order to call fresh bids. The Joint Charity Commissioner

observed that as the part of the property falls in residential zone

the valuation of the property must have increased. He therefore

arrived to the conclusion that the in the interest of the trust and

more particularly the trust itself claim the valuation of the property

more than 11 crores, it is necessary to consider the request made

in the application and allowed the application. Thus in the

background of the facts of the case and the order passed we do

not see any perversity, and illegality in the order passed . The

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orders passed are fully in consonance with the object of Section

36 of Bombay Public Trust Act.

9] During the pendency of the proceeding in order to

substantiate the contention raised by the respondent that the

value of the property is more than 11 crore the petitioner was

asked to bring the purchaser who is willing to offer more than 11

core or at least more than 7 crore. It appears that, in order to bring

such offer the trust has invited the bids in which seven bids were

received. Out of seven bids two bidders have offered Rs.

8,21,00,000/- for the said property. However, they have not

enclosed the demand draft and instead enclosed the cheque

amount towards earnest money. We are not supposed to deal with

those offers and decide the same. However the fact remains that

two bidders have offered Rs.8,21,00,000/- for the said property

which support the case of the respondent that the price of the

property is more than 7 crore. In view of this also, it is not

desirable for us to interfere with order passed by the Charity

Commissioner to invite fresh bids in the matter.

10] If we consider the scope of Section 36 then the

intended purchaser as that on petitioners have no much role to

play in such proceeding. It is basically the trust who has to satisfy

the Charity Commissioner that the alienation of the property is

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necessary and in the interest of the trust and further the price at

which the property to be sold is true and correct value of the

property. Petitioners can not seek a mandate against the Charity

Commissioner to grant permission in his favour. No doubt the

petitioners can avail the remedy which are available to them in law

against the respondent. However, the agreement of sale being

subject to mandatory permission under Section 36 of Trust Act,

petitioners can not seek mandate to execute sale in their favour;

the remedy such as returned of amount can be availed by them

against trust; if permission is refused or any other eventualities for

which the transaction couldn't be materialised. In view of the

order dated 24.06.2014 passed by Joint Charity Commissioner to

initiate process to call fresh bid and abandoned the process to

open the bids already received, which includes the bid received

from the petitioners, the petitioners can certainly apply for return

of demand draft of Rs. 30 lakhs submitted with their offer. In case

such request is made the Charity Commissioner can entertain such

request.

11] In view of discussion made in foregoing paras, we are

of the view that the petition filed is devoid of merit and substance

therein. The impugned orders passed by the Joint Charity

Commissioner do not call for interference in exercise of writ

jurisdiction under Article 226 of the Constitution of India. In the

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result we dismissed the petition with no order as to costs.

However, we grant liberty to petitioners to apply for return of the

demand draft of Rs. 30 lakhs in view of decision dated 24.06.2014

taken by the Joint Charity Commissioner. In case the respondent

decides to proceed with application seeking permission to sell the

land and if fresh bids are invited then the petitioners will be at

liberty to raise their offer to match the highest bid received in such

process.

    12]             Rule discharged in above terms.
                             
      

           [V. L. ACHLIYA]                        [A. V. NIRGUDE]
                JUDGE                                   JUDGE
   






    Tandale/-2016