JUDGMENT:- A Division Bench of this Court (Coram Smt. Ranjana Desai and Abhay S. Oka, JJ.) found that there was a divergence of opinion between two Division Benches of this Court as regards powers of Charity Commissioner under section 36( 1) of The Bombay Public Trusts Act, 1950 (hereinafter referred to as the said Act of 1950). Therefore, a direction was issued to place the papers of these petitions before the Honorable the Chief Justice for passing appropriate direction in accordance with Rule 28 of the High Court, (O.S.) Rules for making a reference to larger Bench. The questions formulated by the Division Bench for a decision by a larger Bench read thus:

i) Whether the power vesting in the Charity Commissioner under section 36 of the Bombay Public Trusts Act, 1950 is confined to grant or refusal of sanction to a particular sale transaction which the trustees propose to make or it extends to compelling trustees to sell or transfer the property to another party who participates in the proceedings under section 36 and gives his offer?

ii) Whether the party who comes forward to submit his offer directly before the Charity Commissioner in a pending application under section 36 of the said Act of 1950 has locus standing to challenge the order passed in a proceeding under section 36?

2. The Division Bench referred to a decision of another Division Bench (Coram: A.P. Shah and Dr. D.Y. Chandrachud, JJ) in the case of (Jigna Construction Co., Mumbai Vs. State of Maharashtra and others) l, decided on 2nd December 2005. The relevant part of the decision of Division Bench reads thus :

“The proceeding under section 36 of the Act are not a lies between the parties to adjudicate contesting claims. The mandate of section 36 is that no transfer of the trust property shall be valid unless approved by the Charity Commissioner with previous sanction. The Charity Commissioner as per the scheme has to accord the sanction, having regard to the interest or benefit of the trust. The Charity Commissioner in these proceedings after inquiry has to record satisfaction in this behalf. Section 36 merely authorizes the Charity Commissioner to ascertain as to whether the trustees acted in the best interest of the trust. The petitioners since neither necessary nor proper party to the proceedings under section 36 cannot claim any entitlement to invoke Articles 226 and 227 of the Constitution of India to canvas their grievance against sanction accorded under Sub-section (1) of section 36 of the Act.

3. Another Division Bench of this Court (Coram: H.L.Gokhale and Mrs. R.S. Dalvi, JJ.) in Letters Patent Appeal No. 419 of 2004, 454 of 2004 and 448 of 2004 (Mr. A.R. Khan Construwell and Co. Vs. Youth Education and Welfare Society and others) 2, decided on 23rd September 2005 reportage in 2006(1) Bom.C.R 170 held thus:

“It is quite clear that the principle of locus standing has been expanded and any such parties, who want to give their offers in the interest of the trust, cannot be restrained from participating in the proceedings before the Charity Commissioner or later on by challenging his decision. The proposition in (Girdhar Nichani Vs. Rev. E.H. Lewellen) 1992 (Supp.) Bom.C.R. (N.B.) 817:1991 Mh.L.J. 891 (supra) by a Single Judge cannot be said to be a good one in the light of the approach adopted by the Apex Court in (Mehrwan Homi Irani Vs. Charity Commissioner, Bombay)4, 2001(4) Bom.C.R. (S.C.) 17:(2001)5 S.C.C. 305. Similarly, the proposals of uninvited offers can not be restricted only to ascertain the market price as held in Arunodaya earlier. It is clear from the judgment in Mehnvan Hami Irani that the Charity Commissioner can explore the possibility of having agreements with other parties on better terms.” RELEVANT PROVISIONS OF LAW:

4. The said Act of 1950 was brought into force on 31st May 1950. Prior to the enactment of the said Act of 1950, section 92 of the Code of Civil Procedure, 1908 was on the Statute book, which deals with alienation of immovable

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