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2012 (2) ALL MR 360
High Court of Judicature at Bombay
G.S. GODBOLE
Ms. Yafa Jacob Simon
Versus
The Joint Charity Commissioner & Others
WRIT PETITION NO.7233 OF 2011
Decided on : 07-12-2011
The offer was in respect of the same subject-matter namely the buildings of the Trust and school, it was expected that honest disclosure about the said offer and the reasons as to why the Trustees did not consider the said offer to be viable was required to be done in the application filed under Section 36 of the Act. There is no dispute that in the application as filed there is absolutely no disclosure about all the correspondence which had taken place between the Trustees and K. C. Foundation and the various events of interaction between the Trustees and representatives of K.C. Foundation. There is nothing to indicate that the Trustees had taken a conscious decision that offer of K.C. Foundation should be rejected. Even if the Trustees were to take such decision, it was their duty to disclose all these facts in the application before the Charity Commissioner. The Charity Commissioner is the custodian of the Trust properties and this vital fact ought to have been disclosed before the custodian. The building was beyond the repairs, offer for donation by KCF as irrelevant factor and that is the reason as to why the same was no disclosed. Whether the said factor is relevant factor or not is a matter which the Joint Charity Commissioner would have decided if the said facts had been disclosed. On account of complete non-disclosure of the said facts, Joint Charity Commissioner had no occasion to apply his mind to the said fact, and consequently, the impugned order does not consider the said aspect.
It is necessary to note that the Joint Charity Commissioner was also considering the application under Section 36(1)(c). Pressing need for demolition of the building and reconstruction of the building is one of the factors which was relevant under Section 36(l)(c) of the Act. If the Trustees were to disclose the correspondence between the Trust and K.C. Foundation and the fact that the Charity Commissioner had himself established a repair committee, those were relevant factors which would have been considered by the Joint Charity Commissioner before deciding whether to grant a permission to alienate property of the Trust or not. The Joint Charity Commissioner in his discretion would have applied his mind as quasi -judicial authority and would have discussed the merits and demerits of the plea as to whether the entire negotiations for donation from K.C. Foundation were relevant factors or not. On account of suppression of this fact by the Trustees, which were material, Joint Charity Commissioner who is custodian of the charities and property of the Trust has been deprived of the opportunity to consider such relevant facts.
Bombay Public Trusts Act, 1950 - Section 36 - Redevelopment of Trust property - Where tentative cost of repairs of 75 years old building of Trust and nature of construction was almost equivalent to cost of new construction therefore Trustees justified in concluding that property of Trust should be redeveloped.
Insofar as the first question as to whether it was necessary to demolish the buildings of the Trust and reconstruct them is concerned it is not in doubt that the buildings are more than 75 years old. It is also not in doubt that even according to the architects appointed by K.C. Foundation, the buildings required extensive repairs and restoration in the year 2001 itself. By the year 2009, the condition of the building had deteriorated further and it had become incumbent to ensure that either the buildings are extensively repaired or reconstructed. The tentative cost of the repairs. considering the age of the building and nature of construction was almost equivalent to the cost of new construction. For one reason or the other, the donation promised by K.C. Foundation had not been received. In such a situation, it cannot be held that the Trustees were not justified in coming to the conclusion that the property of the Trust should be redeveloped. The first point has to be therefore, answered in favour of the Trustees. Though the Joint Charity Commissioner has not passed a separate order on the application filed under Section 36(1)(c) of the Act, a perusal of the entire impugned order shows that there is some application of mind by the Joint Charity Commissioner to this controversy and, hence, it is difficult to accept that Joint Charity Commissioner has not applied his mind to Section 36(1)(c) of the Act. The Joint Charity Commissioner was conscious of the fact that deed of Trust did not permit the Trustees to alienate Trust property and there is reference to the application under Section 36(1)(c). In paragraph No. 13, the Charity Commissioner has held that permission to alienate the property can also be very well granted.
Bombay Public Trusts Act, 1950 - Section 36 - Reconstruction of Trust property - Where Trustees decided for reconstruction of 75 years old Trust property after its demolition therefore they should follow transparent procedure in inviting bids from prospective developers.
The choice of the newspapers which are not reputed newspapers having large circulation in Mumbai goes to the root of the entire matter and in Court’s opinion, it was not proper on the part of the Trustees to decide not to publish an advertisement in an English newspaper. It was also an imprudent act to choose the newspapers like ’Vritta Manas’ and Hindi ’Mumbai Sandhya’ for the purpose of publication of the advertisement.
Bombay Public Trusts Act, 1950 - Section 36 - Valuation of reconstruction of Trust property - Where entire basis of valuation done by valuer was improper and incorrect therefore Joint Charity Commissioner ought to have directed for fresh valuation to be done.
In the present case, noticing the choice of the newspapers in which advertisement was published, the Joint Charity Commissioner ought to have been put on an immediate guard and first question which the Joint Charity Commissioner ought to have asked and answered itself is whether this is a proper publication which would fetch the best possible choice. Unfortunately the Joint Charity Commissioner has not adverted to this factor at all. The Joint Charity Commissioner should have and ought to have directed the Trustees to publish a fresh notice in reputed English and Marathi newspapers which are having wide circulation in Mumbai like Maharashtra Times, Loksatta, Indian Express, Times of India etc. and ought to have invited bids for the disposal of the Trust property. Such a process would alone have resulted in finding out a correct price of the property of the Trust. Unfortunately, this exercise, which ought to have been done by the Joint Charity Commissioner, particularly when the Trustees had not published the advertisement in reputed newspaper, has not been done by the Joint Charity Commissioner.
1. On 18th November, 2011, I have issued a notice for final disposal broadly indicating the points of controversy arising out of the impugned order dated 6th May, 2010 passed by the learned Jt. Charity Commissioner. Today, additional Affidavit in Reply sworn by Respondent No.3 was tendered and the same is taken on record. Mr. Madon has submitted that he should be permitted to proceed with the arguments on the basis of denials. Since the Affidavit is tendered in Court, Mr. Madon is permitted to proceed on the basis of denials.
2. Accordingly, Mr.Madon commenced the submissions on behalf of Petitioners.
3. Mr. Madon has taken me through the impugned Judgment and Order dated 6th May, 2010. He drew my attention to the fact that in the Deed of Trust, there is no provision which empowers the trustees to alienate the trust property and, hence, it was necessary to file application under Section 36 (1)(c) of the Bombay Public Trusts Act, 1950. He has drawn my attention to the fact that the trustees had adopted a strange procedure wherein the trustees first filed application for obtaining sanction after completing the entire exercise of issuing advertisement through their Advocate in little known newspapers, receiving tenders, passing resolutions to appoint Respondent No.8 as developer and filing of application to get sanction. He invited my attention to the fact that thereafter, an application under Section 36(1) (c) was filed on 26th August, 2009 below Exhibit 28 in Application No.90 of 2009. Mr. Madon submitted that the application below Exhibit 28 has never been disposed off and has been kept pending.
4. He submitted that only on the basis of the averments made in the application and the Affidavit in support of the application, without any independent scrutiny of the truth of the said averments, the Charity Commissioner has mechanically granted sanction. He submitted that K. C. Foundation has offered donation of Rs.4.5 crores and that the Charity Commissioner had himself constituted a Repair Committee under aegis of Senior Advocate to decide the modality of receiving donations which were to be used for the purpose of carrying out repairs of the trust property. He invited my attention to the Minutes of Meeting chaired by the Charity Commissioner on 6th July, 2004 under which said decision had been taken. He pointed out that there was complete suppression of this meeting as also of the fact that the repair committee has been constituted. There was no mention about the offer of K.C. Foundation. All these were relevant factors and the same have been deliberately suppressed from the Joint Charity Commissioner.
5. Mr. Madon further pointed out that there was complete suppression about the fact that earlier a similar application No.31 of 2002 had been filed which was dismissed for non-prosecution. He submitted that the price which a particular trust property was likely to fetch is irrelevant for deciding as to whether authority under Section 36 (1)(c) of the Act shall be given or not. He submitted that order under Section 36(1)(c) cannot be passed only on the ground that the price which is being offered is adequate price. He pointed out the discussion in the impugned order about the application under Section 36(1)(c) and, hence, according to Mr. Madon, no order was passed authorizing the trustees to dispose off the property of the trust. He submitted that application below Exhibit 28 (record page 29 and 30) which sought authorization had not been disposed off and directly sanction was given under Section 36(1)(a) of the Act.
6. Mr. Madon has taken me through the Judgment of the Full Bench in the case of (2007) 3 BCR page 7,and particularly the observations in paragraphs 24 to 31 of the said Judgment and reiterated his submission that application under Section 36(1)(c) was never disposed off. He submitted that the Jt. Charity Commissioner was having a statutory duty to go into the question of capacity or ability of the develop
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