The duty of the Charity Commissioner to safeguard the interest, benefit, and protection of the trust property under Section 36 of the Bombay Public Trusts Act, 1950, and the requirement to ascertain the market value of trust property through public notice or auction to ensure maximum benefits for the trust.

JUDGMENT :

ARUN MISHRA, J.

1. This appeal has been preferred questioning the dismissal of the Writ Petition by the High Court, vide impugned Judgment and Order dated 04-02-2008, thereby declining to interfere in the order passed by the Joint Charity Commissioner on 03-07-2004 granting sanction to development cum sale transaction.

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

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

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

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

6. The Charity Commissioner had accorded the sanction under Section 36 of the Act. Though it was noted by the Charity Commissioner that no public notice had been published in the newspaper for inviting the offers, yet for non-publication of the same in newspapers, the applicant, gave an explanation by way of an affidavit, that public notice was not mandatory in all cases, before a grant of sanction.

7. Charity Commissioner has further observed that it was concerned only with according or refusing sanction to a particular sale which the trustees propose to make and that it was for the trustees to decide to whom they should sell the property, subject to the sanction of the Charity Commissioner. There was no necessity to invite others by way of public advert