M/S. Perfect Infra Through Its ... vs Dalmia Charity Trust And Ors
2017 Latest Caselaw 7603 Bom

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                 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                        CIVIL APPELLATE JURISDICTION

                           WRIT PETITION NO. 7667     OF 2017


            M/s. Perfect Infra                          ..      Petitioner
                  vs.
            Dalmia Charity Trust & Ors.                 ..      Respondents

                                           WITH
                           WRIT PETITION NO. 7679     OF 2017


            Dhirajlal Amichand Shah                     ..      Petitioner
                   vs.
            The State of Maharashtra & Ors.             ..      Respondents


            Mr. Sandesh Patil i/b. Mr. P. S. Gole for Petitioner in WP 7667 of
            2017 and for Respondent No. 3 in WP 7679 of 2017.
            Mr. Mr. Bhavesh Parmar i/b. Devmani Shukla for Petitioner in WP
            7679 of 2017.
            Mr. Bhavesh Parmar i/b. Devmani Shukla for Respondent No. 2 in
            WP 7667 of 2017.
            Ms Vaishali Nimbalkar - AGP for State in both matters.
            Mr. Pavan S. Patil i/b. Triyama Legal for Respondent No. 1 in WP
            7667 of 2017.


                                         CORAM : M. S. SONAK, J.

Date of Reserving the Judgment : 19 September 2017 Date of Pronouncing the Judgment : 27 September 2017

JUDGMENT :-

1] Rule in both the petitions. With the consent of and at the

request of the learned counsel for the parties, Rule is made

returnable forthwith.

            2]      In both these petitions the challenge is to the orders dated






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26th May 2017 and 2nd June 2017 made by the Charity

Commissioner in proceedings under Section 36 of the Maharashtra

Public Trusts Act 1950 (Trusts Act).

3] A very brief reference to some relevant facts may be

necessary for the order which is ultimately proposed to be made in

these matters.

4] The Dalmia Charity Trust (Trust) invited applications from the

interested bidders for sale of the Trust property (land and building)

'on as is where is basis' by advertisements in the dailies 'Asian

Age', 'Mumbai Lakshyadeep' and 'Jagruk Times'.. The reserve price

indicated was Rs.10.50 Crores. In this case, there is material on

record which indicates that the petitioner in writ petition No. 7667 of

2017 i.e. M/s. Perfect Infra, who was the sole bidder in response to

the aforesaid three advertisements, already had some agreements/

arrangements with the Trust in the matter of sale of the Trust

property. The dailies in which the advertisements were issued, had

hardly any respectable circulation. On the whole, the proceedings

under Section 36 of the Trusts Act, appeared to be an attempt to

confer some sort of legitimacy to the private agreements /

arrangements between M/s. Perfect Infra and the Trust for sale of

the Trust property.

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            5]      At the behest of one Amarjeet Kaur Anand and Chandrahas

Narayan Shetty, this Court, intervened in the matter, as is evident

from order dated 2nd March 2017 disposing of writ petition (stamp)

No. 34463 of 2016 and writ petition No. 917 of 2017, instituted by

the said two persons. This Court, in its order dated 2 nd March 2017

issued the following directions:-

"9. In so far as the contention urged on behalf of the Respondent No.2 - Trust and the Respondent No.3 developer as regards the locus-standi of the Petitioner in Writ Petition Stamp No.34463 of 2016. In my view, assuming that the Petitioner in the said Writ Petition has some interest adverse to the Petitioner that cannot come in his way from challenging the order passed by the Learned Joint Charity Commissioner when it is his case that he is also one of the prospective bidders for the property in question and that he is ready to offer a higher price. This Court cannot shut it's eyes when a fact which has a bearing upon the Trust getting the best value for it's property is brought to the notice of this Court. The issue is as regards giving proper opportunity to all the intending bidders and therefore the net has to be cast as wide as possible so that Respondent No.2 - Trust receives the best value for it's property. For the reasons aforestated, the impugned order dated 19.10.2016 cannot be sustained and would therefore have to be quashed and set aside and is accordingly quashed and set aside and the following directions are issued:-

I) The Respondent No.2-Trust to issue a fresh advertisement by publishing the same in the daily newspapers Loksatta (Marathi), Times of India (English) and in addition thereto in Mumbai Samachar (Gujarati) inviting offers for the plot of land in question after receipt of the offers place the offers in the instant application filed by them under Section 36(1) of the MPT Act. The Learned Joint Charity Commissioner may thereafter consider the offers and pass appropriate orders in accordance with law.

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II) The Respondent No.7 would be at liberty to seek refund of the amount deposited by it with the accrued interest. If the Respondent No.7 retains the amount with the Respondent No.2 - Trust, it would be doing so at it's costs and would not be entitled to any interest hereinafter and also cannot claim any equities on the said ground.

III) It would also be open for the Respondent No.7 to participate in the de-novo process which will be initiated pursuant to the instant order.

IV) The Respondent No.7, as well as the Petitioners would not offer less than Rs. 11 Crores for the plot of land in question.

10. With the aforesaid directions, the Writ Petitions are disposed of."

6] In compliance, the Trust, this time issued fresh notices dated

6th April 2017 in the dailies Loksatta, Times of India and Mumbai

Samachar. Again, only one bid was received from M/s. Perfect

Infra in an amount of Rs. 11 Crores, which amount, incidentally, M/s.

Perfect Infra, had already deposited in the earlier round. M/s.

Perfect Infra, despite the liberty granted by order dated 2 nd March

2017, failed to even to take back the said amount of Rs.11 Crores.

7] Before the Charity Commissioner could consider the sale to

M/s. Perfect Infra, one Dhirajlal Amichand Shah (Shah), the

petitioner in writ petition No. 7679 of 2017 applied for intervention.

In the application, Shah made the following statement:

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'...................since the intervenor is ready and willing to give the best possible price much higher than the reserve price of Rs.11 Crores fixed in the public notice or the price, if any, received from M/s. Perfect Infra.'

8] The notice inviting bids required the prospective bidder to

deposit 100% of the bid amount. However, Shah, along with his

application seeking leave to intervene and submit higher bid, failed

to make any deposit. Further, it is pertinent to note at this stage

itself, that Shah, in his application seeking intervention, did not

apply for any variation of terms and conditions, including in

particular, the term as regards the deposit of 100% of the bid

amount.

9] However, when the matter was taken up for consideration by

the Joint Charity Commissioner, Shah, made oral submissions to

the effect that the condition for 100% deposit of the bid amount was

too harsh and the same may be varied so as to permit deposit of

50% of the bid amount or the reserved price. At this stage, it

appears that Shah, also handed over a demand draft in an amount

of Rs.5.5 Crores, which corresponds to 50% of the reserve price.

10] The Joint Charity Commissioner, by the impugned order

dated 26th May 2017, has not only permitted Shah to intervene in

the proceedings, but further, proceeded to vary the condition of

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100% deposit to 50% deposit. The demand draft furnished by Shah

in an amount of Rs.5.5 Crores was accepted, but for reasons which

are far from clear, the same, was never encashed and is stated to

be now lying with the Joint Charity Commissioner's Office or the

Trust's Office.

11] On 2nd June 2017, the Charity Commissioner made a further

impugned order below Exhibit '1', which reads as follows:

"Order passed below Exh. 1 in Application No. 340/16 under Section 36 (1)(a) of the M.P.T. Act, 1959.

In the matter of Dalmia Charity Trust P.T.R. No. A-159(Bom)

The Trust is intending to sell its property in the light of directions of the Hon'ble High Court in Writ Petition (Stamp) No. 34463/16 and Writ Petition No. 917/2017. Accordingly, the proposed purchaser and the Advocate for the Trust are present before me. The proposed purchaser M/s. Perfect Infra has already deposited Rs.11 Crores on 13.4.2017. The Intervenor Dhirajlal Aminchand Shah and others deposited 5.50 Crores on today as proposed by the order passed by the Joint Charity Commissioner on 26.05.2017. Another intervenor C.M. Group is making request for time to deposit the initial amount of Rs.5.50 crores. The Trust shall co- operate the interveners for having inspection of the property.

The matter is adjourned till 23.6.2016 for necessary compliance.

Mumbai Dated: 2.6.2017"

12] Both the petitioners, i.e. M/s. Perfect Infra and Shah have

taken exception to the impugned orders dated 26th May 2017 and

2nd June 2017.

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            13]     Mr. Patil, learned counsel for M/s. Perfect Infra submits that

there was no justification in permitting Shah to intervene in the

matter, since, there was no explanation from Shah as to why no bid

was submitted within the prescribed time schedule and

accompanied by a mandatory deposit of 100% of the bid amount.

Mr. Patil submits that in any case, the application for intervention,

had not even applied for any variation of the deposit condition. In

the absence of any such prayer, and without afford of any

opportunity to M/s. Perfect Infra or the trust to defend the condition

for 100% deposit, the Charity Commissioner was not justified in

varying the condition. Mr. Patil submits that the impugned order may

be set aside and the sale deed of M/s. Perfect Infra be accepted.

14] Mr. Parmar, learned counsel for Shah submits that the order

permitting intervention is consistent with the decision of the Full

Bench of this Court in Sailesh Developers & Anr. vs. Joint

Charity Commissioner, Maharashtra & Ors.1. However, he

submits that the condition for deposit of 100%, being too harsh, is

required to be varied to permit deposit of only 10% of the bid

amount. He submits that the direction requiring Shah to deposit

even Rs.5.5 Crores is harsh and the Charity Commissioner, should

adjudicate the intervention applications without insisting upon any 1 2007 (3) Mh.L.J. 717

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deposit or in any case accepting deposit of 10% of the reserve

price. On these basis, Mr. Shah challenges the impugned orders

and submits that the reliefs applied for in writ petition No. 7679 of

2017 may be granted.

15] The reliefs applied for by Shah in writ petition No. 7679 of

2017, read thus :

"(a) Rule be issued;

(b) For a writ or an order in the nature of a writ of this Hon'ble Court quashing and setting aside the impugned order dated 26.5.2017 by declaring the same to be bad and illegal under the law to the limited extent of it directing the Petitioner to deposit Rs.5.50 crores within a period of 7 days.

(c) For a writ or an order in the nature of a writ of this Hon'ble Court directing the Hon'ble Charity Commissioner, Maharashtra State, Mumbai to immediately and forthwith return / hand over to the Petitioner the pay orders for an amount of Rs.5.50 crores deposited on 2.6.2017 by the Petitioner.

(d) For a writ or an order in the nature of a writ of this Hon'ble Court directing the Hon'ble Charity Commissioner, Maharashtra State, Mumbai to immediately and forthwith adjudicate upon the pending intervention applications without insisting upon deposit of any amount or by insisting upon deposit of a small percentage (may be 10%) of the base price of Rs.11 crores fixed by this Hon'ble Court for enabling maximum number of bidders / tenderer to participate in the bidding / tendering process."

16] In this case, although, the contentions of the petitioners in the

two petitions are opposed to one another and further, although,

there is really nothing to choose between the two petitioners, in the

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interests of the Trust property, some interference is warranted. In

this regard, it is necessary to recollect the observations made by the

Hon'ble Supreme Court in the case of Chenchu Rami Reddy &

Anr. vs. Government of Andhra Pradesh & Ors.2, which, apply in

matters of disposal of Trust properties and set out the role which is

expected to be played by the authorities, when it comes to dealing

with applications for disposal of Trust properties. The relevant

observations read thus :

"1. More often than not detriment to what belongs to 'many' collectively, does not cause pangs to 'any', for no one is personally hurt directly. That is why public officials and public minded citizens entrusts with the care of 'public property' have to show exemplary vigilance.

What is true of 'public property' is equally true of property belonging to religious or charitable institutions or endowments.....'

"10. We cannot conclude without observing that property of such institutions [religious or charitable institutions] or endowments must be jealously protected. It must be protected, for, a large segment of the community has beneficial interest in it (that is the raison d'etre of the [Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments] Act itself). The authorities exercising the powers under the Act must not only be most alert and vigilant in such matters but also show awareness of the ways of the present day world as also the ugly realities of the world of today. They cannot afford to take things at their face value or make a less than the closest-and-best- attention approach to guard against all pitfalls. The approving authority must be aware that in such matters the trustees, or persons authorised to sell by private negotiations, can, in a given case, enter into a secret or invisible underhand deal or understanding with the purchasers at the cost of the institution concerned. Those who are willing to purchase by private negotiations can also bid at a public auction. Why 2 (1986) 3 SCC 391

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would they feel shy or be deterred from bidding at a public auction? Why then permit sale by private negotiations which will not be visible to the public eye and may even give rise to public suspicion unless there are special reasons to justify doing so? And care must be taken to fix a reserve price after ascertaining the market value for the sake of safeguarding the interest of the endowment. With these words of caution we close the matter."

[Emphasis supplied]

17] The impugned order dated 26th May 2017 and the order dated

2nd June 2017, which is, in a sense, consequential to the order

dated 26th May 2017 are required to be set aside. This is for the

following reasons:-

(A) Shah, in his application for intervention had not even

applied for modification of the condition regards 100%

deposit. In the absence of any such relief, the Joint Charity

Commissioner was not justified in modifying this condition

significantly. There was no opportunity granted to any parties

to contest such modification;

(B) There is no finding recorded by the Joint Charity

Commissioner that the condition for deposit of 100% was

harsh and perhaps, the main reason why only one bid was

received, despite publication of advertisements in three

dailies as directed by this Court;

(C) Assuming that this condition was indeed harsh and

indeed the reason why no sufficient number of bids were

received, then, the Joint Charity Commissioner, after

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modification, was required to order fresh advertisements with

such modified condition, so as to attract greater number of

bids. This would have not only ensured transparency but

further, constituted compliance with the law laid down by the

Hon'ble Supreme Court in the case of Ramana Dayaram

Shetty vs. The International Airport Authority of India &

Ors.3

(D) The modification of the condition, virtually amounts to

change of rules of the game, after the game has already

commenced. This is ordinarily not permissible. In any case, in

such a situation, fresh bids were required to be invited, so

that, there would be a level playing field and possibly, more

bidders could submit their bids to purchase the Trust property.

(E) Modification of the condition, is virtually, in the nature of

concession to Shah, which concession, clearly Shah did not

deserve in the facts and circumstances of the case.

(F) The grant of such concessions to parties is not what is

expected of a Charity Commissioner or a Joint Charity

Commissioner in exercising powers under Section 36 of the

Trusts Act. In the exercise of such jurisdiction, the Charity

Commissioners or the Joint Charity Commissioners must

focus upon the welfare of the Trust and make efforts to

ensure that the Trust property, if at all, it has to be sold, 3 AIR 1979 SC 1628

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secures the best possible price.

(G) The circumstance in which Shah was permitted to give

a demand draft for only Rs.5.5 Crores when the reserve price

was Rs.11 Crores and further, the circumstance that even this

demand draft of Rs.5.5 Crores was never encashed, reflects

on the transparency of the process. This is additional reason

for setting aside the two orders.

18] Though, the impugned orders deserve to be set aside, in the

facts and circumstances of the present case no direction can be

issued for acceptance of the bid of M/s. Perfect Infra as was urged

by Mr. Patil, learned counsel for M/s. Perfect Infra. So also, this is

not a fit case to direct the Trust or the Charity Commissioner to

refund the amount of Rs.11 Crores to M/s. Perfect Infra along with

interest. At the highest, M/s. Perfect Infra, can be permitted to

withdraw the amount of Rs.11 Crores deposited by without insisting

upon any interests thereto.

19] As noted earlier, there is material on record which suggests

that M/s. Perfect Infra and the Trust have already entered into

certain agreements / arrangements for the purchase of the Trust

property. Obviously, such agreements or arrangements have no

legal efficacy whatsoever, in view of the salutary provisions of

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Section 36 of the Trusts Act. The entire objective of M/s. Perfect

Infra appears to be to confer some sort of legitimacy to such private

agreements / arrangements with the Trust and the proceedings

under Section 36 of the Trusts Act are sought to be subverted, in

furtherance of such objective.

20] Even before this Court, learned counsel for M/s. Perfect Infra

was seen taking instructions from the representative of the Trust

who was present in the Court. The representative of the Trust, was

seen yielding to the instructions of the representative of M/s.

Perfect Infra. All this, coupled with other material on record as

regards agreements / arrangements between M/s. Perfect Infra and

the Trust, did give an impression that the entire objective was to

facilitate the sale of the Trust property at a pre-arranged price of

Rs.11 Crores to M/s. Perfect Infra. All this is quite regrettable

though not uncommon in matters of this nature.

21] In such circumstances, there is no question of grant of any

relief to M/s. Perfect Infra that the Trust property be sold to M/s.

Perfect Infra for the pre-arranged price of Rs.11 Crores. There is

also no case made out for award of any interest in favour of M/s.

Perfect Infra. In fact, M/s. Perfect Infra, must be directed to bear

proportionate expenditure towards the advertisements, which the

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Trust, was required to issue for inviting bids for the sale of the Trust

property.

22] As noted earlier, there is really nothing to choose between

M/s. Perfect Infra and Shah. The entire objective of Shah appears

to be to frustrate the sale or, at least to create some situation

whereby, some bargain can be brought about. Shah, has in fact

abused the process by instituting intervention application without

compliance with the terms of the notice inviting bids. Admittedly,

Shah, neither deposited 100% of the bid amount nor, deposited any

amount. No doubt, Shah did furnish a demand draft of Rs.5.5

Crores, which is neither here nor there. There is no explanation

forthcoming why such Demand Draft was not encashed. Shah, did

not specify the bid amount but only made a vague statement that

he is willing to offer more than any amount which M/s. Perfect Infra

has offered. The conduct of Shah has to be examined in the light of

the Rulings of this Court in Pudhari Publications Pvt. Ltd. vs. Sri

Kikabhai Premchand Trust Settlement No.VI & Ors. 4 and Raj

Darshan Ventures vs. Joint Charity Commissioner & Ors.5

23] In Pudhari Publications Pvt. Ltd. (supra), learned Single

Judge of this Court (S.A. Bobde, as His Lordship then was) has

4 2005 (4) Mh.L.J. 1149 5 2011 (3) Mh.L.J. 531

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held that the petitioner's letter informing Charity Commissioner prior

to grant of permission that it will give the higher offer for the benefit

of Trust, does not constitute a specific offer an the petitioner has no

locus standi to challenge the permission.

24] In Raj Darshan Ventures (supra), the learned Single Judge of

this Court (A.S. Oka, J.) has held that though it is permissible for a

period to intervene before the Charity Commissioner, unless, such

party, deposits the earnest money, it does not acquire the locus

standi to challenge the order granting permission for sale of the

Trust property.

25] The Charity Commissioner and the Joint Charity

Commissioner, in dealing with the Trust applications under Section

36 of the Trusts Act, appear, to have ignored the purpose for

enactment of Section 36 of the Trusts Act as also, the law laid down

by the Full Bench of this Court in Sailesh Developers (supra). In

Sailesh Developers (supra) at paragraphs 28 to 30, the Full Bench

has observed thus :

"28. While exercising power either under clause (b) or clause (c), the Charity Commissioner can impose conditions having regard to the interest, benefit or protection of the trust.

Before passing an order of sanction or authorization, the Charity Commissioner has to be satisfied that the trust property is required to be alienated. Once the Charity Commissioner is satisfied that the alienation of the trust property is necessary in the interest of the trust or for the

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benefit of the trust or for the protection of the trust, it is very difficult to accept the submission that the power of the Charity Commissioner is restricted either to grant sanction to a particular proposal of the trustees or to reject it. It is the duty of the Charity Commissioner to ensure that the transaction of alienation is beneficial to the trust and its beneficiaries. He has to ensure that the property is alienated to a purchaser or buyer whose offer is the best in all respects. It is not necessary in every case that the Charity Commissioner has to ensure that property is sold by the trustees to the person offering highest price or consideration. What is the best offer in the interest of the trust will again depend on facts and circumstances of each case. In a given case, while alienating the trust property, the trustees may provide that as a part of consideration for alienation, the purchaser should construct a building on a part of the trust property for the use by the trustees for the objects of the trust. In such a case, it may be necessary to ascertain the reputation and capacity of the purchaser apart from the consideration offered. When the Charity Commissioner is satisfied that trust property needs to be alienated and when he finds that the offer received by the trustees may not be the best offer, he can always direct that bids be invited by a public notice. When a better offer is received in public bidding or auction, it is very difficult to say that the power of the Charity Commissioner is restricted and he cannot enjoin the trustees to sell or transfer the trust property to a third party who has given an offer which is the best in the interest of the trust. The Trustees approach the Charity Commissioner only when they are satisfied that there is a necessity to alienate the trust property. The trustees hold the property for the benefit of the beneficiaries and therefore once they express desire to alienate the property, it is obvious that Charity Commissioner can always impose condition while granting sanction that the property shall be sold or transferred to a person who has come with an offer which is the best offer in the interests of the trust. The section gives a power to the Charity Commissioner to impose conditions and the said conditions will include a requirement of selling or transferring or alienating the trust property to a purchaser who has offered the best deal having regard to the interest and benefit of the beneficiaries and the protection of the trust. The power to impose conditions cannot be a limited power when the law requires the Charity Commissioner to exercise the said power having regard to the interest, benefit and protection of the trust. Once the Charity

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Commissioner accepts the necessity of alienating the trust property, the trustees cannot insist that the property should be sold only to a person of their choice though the offer given by the person may not be the best offer. The property may be vesting in the trustees but the vesting is for the benefit of the beneficiaries. The Charity Commissioner has jurisdiction to ensure that the property is sold or transferred in such a manner that the maximum benefits are available to the beneficiaries of the Trust. Under Clause (b) of section 36 of the said Act, the Charity Commissioner has jurisdiction to decide whether it is in the interest of the trust that the property of the trust be sold or transferred. Once the learned Charity Commissioner is satisfied that the property is required to be transferred or sold in the interest of the Trust, the learned Charity Commissioner cannot remain silent spectator when he finds that the transaction proposed by the Trustees is not in the interest of the Trust or its beneficiaries. Once the necessity of sale or transfer is established, the Charity Commissioner can certainly ensure that best available offer is accepted, so that the transaction is for the benefit of the trust. If the trustees were to be the final authority to judge what is in the interest of the Trust, the legislature would not have enacted provision requiring prior sanction. While deciding which is the best offer, the learned Charity Commissioner is bound to take into consideration various factors which cannot be exhaustively listed. However, the paramount consideration is the interest, benefit and protection of the trust. It is obvious from the scheme of section 36 that legislature never intended that trustees could sell or transfer the trust property vesting in them as if it was their personal property. It is the duty of Charity Commissioner to ensure that the property should be alienated in such a manner that maximum benefits are accrued to the trust. The Charity Commissioner while considering an application under section 36(1) of the said Act of 1950, in a given case can opt for public auction or can invite bids.

Thus narrow interpretation sought to be given to the power of Charity Commissioner under clauses (a) and (b) of sub-section (1) of section 36 cannot be accepted. Thus the view taken in the case of A.R. Khan Construwell and Co. (supra) is the correct view. The case of Arunodaya Prefab is not correctly decided.

29. The second question referred to the Full Bench for

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decision is regarding locus standi of a person who appears before the Charity Commissioner and offers his bid to challenge the order passed by the Charity Commissioner. The trustees and persons having an interest in the Trust can always challenge the order. We have already held that the proceeding under section 36 of the said Act before the learned Charity Commissioner is a judicial proceeding. The Apex Court has held that a trust property is on par with a public property so far as its sale or transfer is concerned. It is, therefore, very difficult to say that such a person who appears before the Charity Commissioner and offers his bid has no locus standi to challenge the final order passed by the Charity Commissioner. Such a person will certainly have locus standi to file the petition under Articles 226 and 227 of The Constitution of India for challenging the final order passed under section 36 of the said Act. However, the scope of challenge will be naturally limited. Such a person will be in a position of a bidder challenging the auction or tender process of sale of a public property. The challenge by such a person to the order will be limited to the decision making process of the Charity Commissioner. In the case of A.R. Khan Construwell the Division Bench has rightly held that after the decision in the case of Arunodaya Prefab, the concept of locus standi has been expanded.

30. Hence, we answer the questions referred to our decision as under:

(i) The power vesting in the Charity Commissioner under section 36 of the Bombay Public Trusts Act, 1950 is not confined merely to grant or refusal of sanction to a particular sale transaction in respect of which sanction is sought under section 36 of the said Act. The power of the Charity Commissioner extends to inviting offers from the members of the public and directing the trustees to sell or transfer the trust property to a person whose bid or quotation is the best having regard to the interest, benefit or protection of the trust. Hence we declare that the decision of the Division Bench of this Court in the case of Jigna Construction Co. Mumbai v. State of Maharashtra and Ors. does not lay down correct law.

(ii) The party who comes forward and submits his offer directly before the Charity Commissioner and complies with other requirements as may be laid down by the Charity Commissioner in a pending application under section 36 of the said Act of 1950 has a locus standi to challenge the final order passed in a proceeding under section 36. However, the scope of the challenge will be

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limited as indicated in paragraph 29 above.

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

Reference answered accordingly.

26] In a matter of this nature, power to mould relief is recognized

by the Hon'ble Supreme Court in the case of Bhaskar L. Jadhav

& Ors. vs. Karamveer Kakasaheb Wagh Education Society &

Ors.6, at paragraphs 48 to 50, the Hon'ble Supreme Court has

observed thus:

"48. The next submission of learned counsel for the petitioners was that the High Court had overstepped its jurisdiction in requiring the JCC to virtually go in for a fresh auction. While we agree that the question before the High Court was very limited, namely, whether Respondent 1 ought to have been impleaded by the JCC in the second application for extension of time, we are of the view that on an overall consideration of the facts and circumstances of the case, the High Court was perhaps left with no option but to pass the order that it did and accept the alternative prayer of Respondent 1. We say this because, as noticed above, the trustees and the petitioners were colluding and it was not possible to entirely rule out the possibility that they would enter into yet another mutual arrangement to wipe out whatever interest Respondent 1 had in the trust land. Therefore, impleading Respondent 1 before the JCC could have been rendered into a mere formality. Additionally, the lack of bona fides of the trustees and the petitioners could not be overlooked by the High Court. Therefore, the safest course of action for the High Court was to require sale of the trust land through auction.

49. It appears to us that another factor that weighed with the High Court in this regard was the submission of the learned Assistant Government Pleader that the Charity

6 (2013) 11 SCC 531

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Commissioner had received an offer higher than that given by Respondent 1. Therefore, it is quite clear that due to the passage of time, mainly because of the flip-flop of the trustees and the petitioners, the value of the trust land had increased considerably. In these circumstances, it would be in the best interest of the Trust if the maximum price is available for the trust land from the open market. While this may or may not have been a consideration before the High Court, it is certainly one of the considerations before us for not interfering with the order passed by the High Court, even though it may have, in a loose sense, over-stepped its jurisdiction.

50. Section 36 of the Act clearly provides that the trustees may be allowed by the Charity Commissioner to dispose of immovable property of the trust with regard being had to the "interest, benefit or protection" of the Trust. It cannot be doubted that the interest of the Trust would be in getting the maximum for its immovable property."

27] Learned counsel for M/s. Perfect Infra and Shah, after

obtaining instructions from their respective clients made a statement

that in case fresh bids are invited, they will bid not less than Rs.15

Crores for the purchase of the Trust property. This statement is

accepted. In fact, M/s. Perfect Infra and Shah should not be

permitted to take part in the fresh bid process unless, they submit

bid of not less than Rs.15 Crores in respect of the Trust property.

This is a good reason to even increase the reserve price to Rs.15

Crores rather than retain the reserve price at Rs.11 Crores. In

respect of the fresh advertisement, which now will have to be

issued, Shah will also have to contribute to the advertisement costs

because Shah has also abused the process, by failure to make firm

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bids and by securing modification of the bid conditions, after the bid

process commenced.

28] Upon cumulative consideration of the facts and

circumstances as are borne out from the record, and applying the

principles laid down by the Hon'ble Supreme Court and this Court in

matters of disposal of Trust properties, these petitions are disposed

of with the following order :

a] The Charity Commissioner is directed to cause to

issue fresh advertisements in Loksatta, Times of India and

Mumbai Samachar inviting fresh bids for sale of Trust

property on 'as is where is basis'.

b] The Charity Commissioner and the Trust are directed to

indicate the reserve price in the present case at Rs.15 crores

and not merely Rs.11 crores as was done on the previous two

occasions;

c] The Charity Commissioner to consider whether the

condition for deposit of 100% of the reserve price needs to

be varied in the facts and circumstances of the present case;

d] If the Charity Commissioner is of the opinion that the

condition for deposit of 100% is indeed harsh and disables

several bidders from participating in the bidding process, the

Charity Commissioner may consider variation. However,

skc/dss JUDGMENT-WP7667-7679

under no circumstances, the Charity Commissioner will vary

or dilute this condition, so as to reduce the requirement of

deposit to less than 50% of the reserve price or the bid price,

whichever is greater;

e] M/s. Perfect Infra and Shah to deposit amount of Rs.2

Lakhs each towards advertisement expenses within a period

of four weeks from today with the Trust or the Charity

Commissioner. In case, the amount is not deposited, the said

amount will be deducted from out of the amount already

deposited by M/s. Perfect Infra and upon encashing the

demand draft submitted by Shah. The balance amounts to be

refunded to M/s. Perfect Infra and Shah but without liability of

paying any interest thereon.

f) Further, if, M/s. Perfect Infra and Shah do not within a

period of four weeks voluntarily deposit the amount of Rs.2

lakhs each, the Charity Commissioner should consider

whether these two parties should not be allowed to take part

in the further bidding process, in pursuance of fresh

advertisements to be published;

g) The Trust / Charity Commissioner, is at liberty to

refund, the sum of Rs.11 Crores, without any interest thereon

to M/s. Perfect Infra within a period of two weeks from the

date of deposit of Rs.2 Lakhs by M/s. Perfect Infra towards

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advertisement costs;

h) Similarly the Trust / Charity Commissioner is at liberty

to return demand draft of Rs.5.5 Crores to Shah, within a

period of two weeks from the date of deposit of Rs.2 Lakhs by

Shah towards advertisement expenses;

i) The Charity Commissioner to complete the proceedings

expeditiously, applying always, the principles laid down by

this Court as well as the Hon'ble Supreme Court in relation to

grant of permissions under Section 36 of the Trusts Act;

29] Rule is disposed of in both these petitions in the aforesaid

terms.

30] All concerned to act on basis of authenticated copy of this

order.

(M. S. SONAK, J.)

Chandka/Sherla