The capacity of trustees to alienate trust property, the procedure for payment of compensation under the Land Acquisition Act, and the role of the Charity Commissioner in such proceedings.

Headnote:
LAND ACQUISITION - Compensation - Public Trust - Bombay Public Trusts Act, 1950 - Land Acquisition Act, 1894 - Sections 31, 32, 36, 56B - Interpretation - Trustees' capacity to alienate trust property - Procedure for payment of compensation - Deposit of compensation money in Court - Investment of compensation money - Role of Charity Commissioner.
Fact of the Case:

The case pertains to compensation proceedings under the Land Acquisition Act, 1894, with regard to lands belonging to a public trust, Shri Govardhandhari Devasthan, Kopargaon. The Special Land Acquisition Officer made an award under section 11 of the Act, determining compensation for the acquired lands. The trustees challenged the award, contending that the compensation was inadequate and that the deduction of one-third of the compensation for survey No. 31 was impermissible. The Charity Commissioner was issued a suo motu notice to consider the validity of the direction in the award regarding the compensation money.
Finding of the Court:

The court held that the compensation awarded for survey No. 238 was adequate, but the deduction of one-third of the compensation for survey No. 31 was impermissible. The court found that the trustees, being persons not competent to alienate the trust property, the compensation money should have been deposited with the civil Court under section 31(2) of the Land Acquisition Act to be dealt with under section 32 of the Act. The court also held that the direction in the award to credit the compensation money into the Government Treasury with a rider for payment of cash allowance to the trustees was contrary to law and given without notice to the Charity Commissioner.
Issues: 1. Whether the compensation awarded for survey No. 238 was adequate? 2. Whether the deduction of one-third of the compensation for survey No. 31 was permissible? 3. Whether the trustees had the capacity to alienate the trust property? 4. Whether the compensation money should have been deposited with the civil Court under section 31(2) of the Land Acquisition Act? 5. Whether the direction in the award to credit the compensation money into the Government Treasury with a rider for payment of cash allowance to the trustees was valid?
Ratio Decidendi: 1. The court held that the compensation awarded for survey No. 238 was adequate based on the evidence presented, particularly the sale-deed at Ex. 85 showing a comparable transaction. 2. The court held that the deduction of one-third of the compensation for survey No. 31 was impermissible, as the non-payment of one-third of the compensation and its deduction by the Special Land Acquisition Officer on the basis of restricted tenures was not justified. 3. The court held that the trustees, being governed by the provisions of the Bombay Public Trusts Act, 1950, did not possess unqualified power to alienate the trust property without the previous sanction of the Charity Commissioner. The court found that the trust created a sort of duplicate ownership, with the trustee's ownership being nominal rather than real. 4. The court held that in the case of trustees of a public trust governed by the provisions of the Bombay Public Trusts Act, 1950, they do not possess unqualified power to alienate the trust property and, on the other hand, it is made statutorily contingent upon the previous sanction being accorded by the Charity Commissioner upon such conditions as may be necessary for the protection and furtherance of the trust. 5. The court held that the direction in the award to credit the compensation money into the Government Treasury with a rider for payment of cash allowance to the trustees was contrary to law and given without notice to the Charity Commissioner. The court found that the Collector was bound to follow the procedure required by sections 31 and 32 of the Land Acquisition Act, which involved depositing the compensation money in the Court.
Final Decision: The court allowed the appeal in part, setting aside the deduction of one-third of the compensation for survey No. 31 and directing the payment of the full compensation amount along with interest to the trustees. The court also directed the trustees to invest the compensation money, with the previous sanction of the Charity Commissioner, for the purpose of acquiring a similar property or investing it in Government or public securities. The court quantified the counsel's fees at Rs. 700 payable by the Collector to the Charity Commissioner.

JUDGMENT - Masodkar B.A. J.-This appeal and the suo motu notice issued to the Charity Commissioner have reference to the compensation proceedings under the provisions of the Land Acquisition Act, 1894 with regard to the lands belonging to the public trust, being Shri Govardhandhari Devasthan, Kopargaon, bearing survey No. 238(13 acres) and survey No. 31(6 acres and 36 gunthas). Section 4 notification was issued on January 9, 1969. The Special Land Acquisition Officer, Ghod Project, Ahmednagar, made an award under section U of the Land Acquisition Act, under which compensation as against survey No. 238, being Rs. 72,152, was directed to be credited into the Government Treasury with a rider that proposal for payment of cash allowance be submitted to the Commissioner, Poona Division, Poona, through the Collector, Ahmednagar, by the Tahsildar, Kopargaon. Thus, he virtually seized the amount in favour of the Government and put the same in the custody of the Tahsildar for the purpose of permitting payment of cash allowance to the trustees. He determined the compensation for survey No. 31 at Rs. 25,392, being the two-third value of the market price. This determination under section II of the Land Acquisition Act, in this manner, was subjected to reference under section 18 of the Land Acquisition Act by the trustees and that reference was tried by the Civil Judge, Senior Division, Ahmednagar.

2. By the impugned judgment under appeal at the behest of the trustees, the learned trial Judge rejected the reference, firstly holding that the two-third market price paid for survey No. 31 was proper in view of the Government Resolutions with regard to restricted tenures. With regard to the compensation awarded in respect of the other land, it was found, on the basis of the evidence, that the compensation was adequate, the rate being Rs. 4,800 per acre. It does not appear that any notice as required by section 56B of the Bombay Public Trusts Act, 1950 was issued to the Charity Commissioner, nor does it appear that the direction with regard to the holding of the compensation money in favour of the Government was properly considered in the light of the law applicable to such matters.

3. When the appeal came up for hearing, because of the admitted position that the lands belonged to the public trust and that the original claimants and the appellants before us were the trustees thereof, we thought it fit to issue a suo motu notice under section 56B of the Bombay Public Trusts Act, 1950 to the Charity Commissioner. A faint submission was made on behalf of the Collector objecting to such issuance of the notice, but, as the decision in the present appeal would show, such an objection is without any merit. In fact, if the compensation is payable to the persons who are the trustees of the trust governed by the provisions of the Bombay Public Trusts Act, 1950, the Special Land Acquisition Officer could not have consigned the compensation money to the Government Treasury, nor could have conferred authority by giving a direction for the purpose of cash allowance payable upon the recommendation of the Tahsildar routed through the Collector. As we see, section 31 of the Land Acquisition Act enjoined that in such matters, he had to follow the procedure indicated by sub-section (2) of section 31 by deposit of the compensation with the Court competent to hear the reference under section 18 of the Land Acquisition Act. The appeal, admittedly, arise out of the proceedings under section 18 itself and we do not find any impediment in exercise of our jurisdiction in de, ling with the direction with regard to the converted property of the public trust as a result of the land acquisition. Only because as a result of the acquisition the corpus is transformed into cash compensation from that of the lands, it does not cease to be the trust property, nor does it cease to be governed by the provisions of the Bombay Public Trusts Act and the original instrument of trust. Thus

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Judicial Analysis