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2008 Supreme(Bom) 982

2008(5) ALL MR 366
IN THE HIGH COURT OF JUDICATURE AT BOMBA Y
J.P. DEV ADHAR, J.
Vijay K. Mehta & Anr. - Appellants
Versus
Charu K. Mehta & Ors. - Respondents
Writ Petition No.3849 of 2008 AND Writ Petition No.3850 of 2008
Decided On: 11th July, 2008.

Advocates Appeared
1. Mr. D.D. MADON, Senior Advocate with Mr. SANJAY JAIN, KUNAL VAJANI & ABHINA V MALHOTRA, i/by M/s. Wadia Gandhy & Co., for the Petitioner in W.P. No.3849 of 2008 & for Respondent Nos.13 and 16 in W.P. No.3850 of 2008.
2. Mr. SHRIHARI ANEY, Senior Advocate with Mr. PRATEEK SAKSARIA, Mr. MANISH DESAI, Mr. JAYEN TRIVEDI, Mr. DHIRENDRA SINHA & Mr. THOMAS T. KARIMAPANAL, i/by Paras Kuhad & Associates for the Petitioners in Writ Petition No.3850 of 2008.
3. Mr. ASPI CHINOY, Senior Advocate with Mr. T. N. TRIPATHI, i/by M/s. Tripathi & Associates for Respondent No.4 in W.P. No.3849/08 & for Respondent No.1 in W.P. 3850/08.
4. Ms. RAINI IYER, Senior Advocate with Mr. NOORUDDIN DHILLA & Mr. SHANE SAPECO, i/by M/s. Hariani & Co., for Respondent No.6 in W.P. No.3849108 & for Respondent No. 10 in W.P. No.3850108.
5. Mr. MAHESH JETHMALANI with Mr. SHANE SAPECO, i/by M/s. Hariani & Co., for Respondent No.5 in W.P. No.3849/08 & for Respondent No.9 in W.P. No.3850108.
Mr. S. U. KAMDAR with S. C. NAIDU, SIDDHANT INGALE and SAURAB KULKARNI, i/by. C. R. Naidu & Co .. for Respondent Nos.17 & 18 in W.P.3850/08.
6. Mr. J. P. SEN with Mr. PRANA V BADHEKA, i/by M/s. Hariani & Co. for Respondent No.7 in W.P. No.3849/08 & for Respondent No.11 in W.P. No.11 in W.P. No.3850/08.
7. Mr. SUBHASH JHA with Ms. RENU SINGH & Ms. RAJASHRI RANE, i/by DINESH TIWARI for Respondent No.15 in W.P. No.3849/08 & for Respondent No.3 in W.P. No.3850/08.
8. Mr. SAMEER PATIL, AGP for Respondent Nos. l and 2 in W.P. No.3850 of 2008.

The main legal point established in the judgment is that trustees appointed by the Trust can function as trustees during the pendency of the change report and that restraining trustees from functioning without hearing them violates the principles of natural justice.

Headnote:

B.P.T. Act - Trustees - Section 41-D - Summary

Fact of the Case:

The case involves a dispute among the trustees of a Trust registered under the Bombay Public Trusts Act. The dispute arose when a permanent trustee filed an application seeking removal of nine trustees for alleged malfeasance, misfeasance, breach of trust, and negligence, leading to siphoning off Trust funds. The Joint Charity Commissioner framed charges against the nine trustees and issued an interim order restraining all trustees from taking policy decisions or financial transactions without approval from administrators appointed by the Court.

Finding of the Court:

The Court found that the interim order restraining all trustees, including those not charged, from functioning as trustees was a violation of natural justice. The Court quashed the interim order and directed the Joint Charity Commissioner to pass a fresh order in accordance with the law.

Issues: The main issue was whether restraining the remaining trustees from functioning as trustees without hearing them would be a violation of the principles of natural justice.

Ratio Decidendi: The Court held that the interim order was passed in gross violation of the principles of natural justice as the application was restricted to some trustees, and there were no allegations against the remaining trustees. The Court also emphasized that trustees appointed by the Trust could function as trustees during the pendency of the change report.

Final Decision: The Court quashed the interim order and directed the Joint Charity Commissioner to pass a fresh order in accordance with the law.

JUDGMENT:-

These two writ petitions are titled by the trustees of Lilavati Kirtilal Mehta Medical Trust ('Trust' for short), which is duly registered under the Bombay Public Trusts Act. 1950 ('B.P.T.' Act for short). Since both the petitions challenge the decision of the Joint Charity Commissioner ('Jt. C.C.' for short) dated 3-6-2008, both the petitions are heard together finally at the stage of admission and disposed of by this common judgment.

2. The impugned order dated 3-6-2008 is an interim order passed by the Jt. C.C. in an application filed by a permanent trustee of the Trust under Section 41-D of the B.P.T. Act. The said application was filed seeking removal of nine trustees of the Trust inter alia on the ground that the said trustees during the period from 2001 to 2006 had siphoned off the Trust funds running into several crares of rupees and further they have committed act of malfeasance, misfeasance, breach of Trust, gross negligence etc. which are detrimental to the interest of the Trust. After considering the allegations made in the complaint as also the reply filed by the said trustees, the Jt. C.C. on being prima facie satisfied, framed charges against the said nine trustees and by the impugned interim order directed that pending final decision on the application, the trustees shall not take any policy decision and shall not enter into any financial transaction with regard to the Trust without the approval of the two Administrators, appomted by the Apex Court I this Court in an earlier proceedings for administering the day-to-day running of the Hospital & Research Institute.

3. Writ Petition Nn.3849 of 2008 is filed by two trustees against whom various charges are framed. These trustees challenge the interim order of Jt. C.C. dated 3-6-2008 mainly on the ground that the said order has been passed without giving reasonable opportunity of hearing to the petitioners. Writ Petition No.38S0 of 2008 is filed by three trustees, who are neither parties to the proceedings before the Jt. C.C. nor there are any allegations made against them. Their grievance is that in gross violation of the principles of natural justice, the Jt. C.C. has restrained them from functioning as trustees.

4. The Trust was brought into existence under a Trust Deed dated 5-7-1978 settled by Shri. Kartilal Manilal Mehta (now deceased). The Trust runs a super-speciality hospital known as 'Lilavati Hospital & Research Centre' at Bandra, Mumbai. It appears that the trustees while running a super-speciality hospital, have also acquired super-speciality in litigating amongst themselves as is evident from large number of cases filed in various Courts which are pending before the Apex Court, this Court, Bombay City Civil & Sessions Court and the Court of Additional Chief Metropolitan Magistrate, Mumbai. The inter-se dispute amongst the trustees is so bitter that the Apex Court in one of the proceedings considered it proper, in public interest, to appoint two Administrators to look after the day to day functioning of the Hospital run by the Trust. The bitter fight amongst the trustees of the Trust which commenced in the year 2005-2006 is apparently to gain control over the cash rich hospital. It may be noted that In the year 199798 the Trust income was of Rs.23.47 crores and expenditure was Rs.28.83 crores, whereas, in the year 2006-07 the Trust Income was Rs.I96.17 crores and expenditure was Rs.168.92 crores. It may also be noted that the Joint c.c. after framing the charges against the 9 trustee, declined to hand over the management of the Trust to Mrs. Charu Mehta - the applicant, because in the past she was also found to have indulged in activities which are detrimental to the interest of the Trust. It is unfortunate that these trustees, instead of establishing themselves to be worthy trustees of a Public Charitable Trust which was established by the Settlor with a noble cause, are bitterly fighting to gain control over the renowned super-speciality H
















































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