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SUPREME COURT OF INDIA
Arun Mishra, Vineet Saran, JJ.
Shri Ambadevi Sanstha - Appellant
Versus
Joint Charity Commissioner - Respondent
Civil Appeal No.9936 of 2018 (@ Special Leave Petition [C] No.35049 of 2013)
Decided On : 05-09-2018
Section 36 of the Bombay Public Trusts Act, 1950 requires the Charity Commissioner to grant permission for the sale, exchange, gift, or lease of any immovable property belonging to a public trust. The Commissioner must consider the interest, benefit, and protection of the Trust and may impose conditions on the permission. The Commissioner also has the power to revoke the permission if it was obtained by fraud or misrepresentation. The Act aims to protect the properties of religious and charitable institutions and endowments. The Act also requires the fixing of a reserve price for the sale of such properties. The Act provides for the appointment of trustees and their duties towards the beneficiaries of the Trust.
Fact of the Case:
The appellant, a registered Public Trust, filed appeals against the judgments and orders of the High Court, which dismissed the writ petitions filed by the appellant and confirmed the order of the Joint Charity Commissioner regarding the sale of the Trust's properties. The Trust had been permitted to sell various properties, including land and houses, at a certain price per acre. The Trust objected to the sale, but the permission was granted. The Trust argued that the Commissioner did not act in accordance with Section 36 of the Bombay Public Trusts Act, 1950. The High Court dismissed the writ petitions. The appeals were filed against these decisions.
Finding of the Court:
The Court considered the duty of the Charity Commissioner under Section 36 of the Act of 1950 and observed that the Commissioner must consider the interest, benefit, and protection of the Trust. The Commissioner has the power to invite offers from the public and can direct the trustees to sell the property to the best bidder. The Court also cited precedents that emphasized the need for full application of mind while granting permission to sell, the importance of protecting the property of religious and charitable institutions, and the requirement to fix a reserve price. The Court held that the Commissioner failed to protect the interest of the Trust, did not fix a reserved price, and allowed the sale in a mechanical manner. The Court also noted that the Trust had accepted earnest money and finalized the transactions before obtaining permission. The Court set aside the judgments and orders and annulled the transactions.
Ratio Decidendi: The Charity Commissioner must consider the interest, benefit, and protection of the Trust when granting permission to sell Trust properties. The Commissioner should invite offers from the public and fix a reserve price. The sale should be free from suspicion and should be in the best interest of the Trust. Trustees cannot insist on selling the property only to a person of their choice if there is a better offer. The property should be sold to the best available offer.
Result: The Court set aside the judgments and orders and annulled the transactions. The Trust was directed not to sell the properties in the same manner in the future. The purchasers were ordered to restore possession of the properties within two months, and non-compliance would result in the authorities taking possession with the help of the police.
JUDGMENT
Arun Mishra, J. - The appellant-Shri Ambadevi Sanstha, a registered Public Trust under the Bombay Public Trusts Act, 1950 (hereinafter referred as the "Act of 1950"), has filed the instant appeals against the judgments and orders dated 3.5.2013 and 10.5.2013 passed by the High Court of Judicature at Bombay, dismissing the writ petitions filed by the appellant herein and confirming the order dated 8.10.1998 of the Joint Charity Commissioner with respect to sale of the properties of the Trust. The Trust had been permitted to execute sale deeds of field Survey No.270/A/1 of village Khar, Talegaon, admeasuring 11 acres and 28 gunthas and field Survey No.11 of Chandpur, admeasuring 4 acres and 8 gunthas to Mr. J.M. Karwa, field Survey No.202 of Khar, Talegaon, admeasuring 16 acres to Mr. Manish Jaikishore Karwa and 15 acres and 33 gunthas out of field Survey No.202 of Khar, Talegaon to Shri Ashish Jaikishore Karwa and 15 acres and 15 gunthas from Survey No.12 of Chandpur to Shri Girish Jaikishore Karwa at the rate of Rs. 7,651/- per acre.
2. The permission had also been granted by Joint Charity Commissioner to sell the immovable properties belonging to Trust i.e., House No.210, Plot No.228, Sheet No. 92-A, admeasuring 174.8 sq. meters situated in Ward No.15 in Bhaji Bazar Mohalla at Amravati for Rs. 3,11,000.
3. Permission had also been granted by the Joint Charity Commissioner to sell House No.998 in Ward No.59 Taluka Bedmaru, District Amravati for sum of Rs. 1,00,000/- (Rupees One Lakh Only).
4. The erstwhile Secretary of the old body of Trust had applied to the Joint Charity Commissioner for grant of permission to sell the properties of Trust. At least two persons had raised objections before the Joint Charity Commissioner that they were ready to purchase the land at a much higher price up to Rs. 25,000/- and Rs. 11,000/- per acre. The newly elected body of the Trust approached the Joint Charity Commissioner and 15 trustees stated that Trust does not want to sell the properties. Despite the objection, the Joint Charity Commissioner had granted permission to sell the properties. Aggrieved thereby, the writ petitions were filed before the High Court by the Trust. The High Court vide impugned judgments and orders has dismissed the writ petitions. Hence, the appeals have been preferred.
5. The Trust has raised the ground that Joint Charity Commissioner did not act as per intendment of Section 36 of the Act of 1950. The Joint Charity Commissioner has failed to observe that when the Trustees have stated on behalf of Trust that the properties should not be sold, the Joint Charity Commissioner ought not have passed the order directing sale of the properties. The principles governing exercise of power under Section 36 had not been adhered to. There was no necessity to sell the Trust properties. Apart from that, the permission for sale of properties for a meagre amount was not at all in the interest of the Trust. The objections were rejected by the Joint Charity Commissioner for no good reason. The High Court has also committed illegality in dismissing the writ petitions.
6. It was contended on behalf of respondents that permission was granted to sell properties in the interest of the Trust as the Trust was not having proper income. The land is situated at a distance of 25 kms from Amravati. Three out of four lands are situated about 5 kms away from the locality of Khar Talegaon. The Trust wanted to construct a hospital. The Trust was in dire need of money and had decided to invite tenders on 1.6.1994 by advertisement for the sale of land and only one offer from Mr. Naresh Laxmanrao Bhatkar was received for purchase of land admeasuring 15 acres 15 gunthas at Chandpur at the rate of Rs. 4,500/- per acre. However, the said offer was not accepted by the Trust in the meeting dated 9.8.1994. Thereafter, second advertisement was published in the local newspapers in November and December, 1994. Varying offers for land between Rs. 6,000/
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