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High Court of Judicature at Bombay
MOHIT S. SHAH & N.M. JAMDAR, JJ.
Raunak Corporation & Others
Versus
Sanjay Manohar Kastur & Others
Letters Patent Appeal Nos.101 of 2012, 102 of 2012, 103 of 2012, 105 of 2012, 108 of 2012 in Writ Petition No. 1332 of 2012, 11070 of 2011, 11070 of 2011, 11070 of 2011, 1332 of 2012 with Civil Application No.143 of 2012, 144 of 2012, 145 of 2012, 152 of 2012, 154 of 2012 (For Stay)
Decided on : 18-10-2012
Propriety of an agreement for redevelopment-cum-sale of Trust property, with a particular developer without any public advertisement, depends upon facts and circumstances of each case. - The decision of the Charity Commissioner regarding need to issue public advertisement will depend on the facts and circumstances of each case. The Charity Commissioner must however take into consideration the object of the Act stressing the need for supervision and must rest his decision on cogent grounds. The decision cannot be arbitrary, should be guided by prudence and realities of the situation and should be reasoned one so that it is correctable by higher forums.
Bombay Public Trusts Act, 1950 - Section 36 - Alienation of Public Trust Property.
If Charity Commissioner, is prima facie assured that trustees are acting in interest of Trust then sanction by Charity Commissioner to proposal of trustees for alienation of Trust property justified. - Charitable Public Trusts are administered by trustees. In law the trustees are not the owners of the properties but guardians and custodians. It was long noticed that not all trustees acted bona fide. There were complaints of misuse by the trustees as regards funds and properties of the trusts. The Legislature stepped in enacted the Trust Act to regulate the activities of the trustees. That was in the year 1956. The object of Legislature of investing the Charity Commissioner with power to supervise the alienation of properties, has now become more relevant. The Legislature has not only conferred powers on the Charity Commissioner but more importantly has cast a duty on him to ensure that the trust properties are not misused.
To achieve the above object, the Trust Act contains elaborate mechanism to supervise actions of the trustees. Merely because the trustees assert that the action that they propose to take is in the interest of the trust, their word is not treated as final. The Charity Commissioner is empowered, albeit, duty bound to scrutinise and approve the proposal submitted by the trustees. One of the indicators of the bona fides is the manner in which trustees arrive at a decision to alienate the property. It reflects whether due care was taken to sub serve the interest of the Trust and the trustees are not acting in their private interest. If the trustees give widest possible publicity to their decision and call for the best offers, proceeding in transparent manner then the Charity Commissioner is prima facie assured that the trustees are acting in the interest of the Trust. If the trustees take decisions behind closed doors and arbitrarily select buyers/developers of their choice, the Charity Commissioner will have to be doubly cautious. Where the properties are of immense value, the trustees from the beginning narrow down their search with a tailor-made criteria, then that may raise a doubt and in such cases the Charity Commissioner will have to be on guard. Of course, there may be cases where expenses involved, nature of the property, absolute lack of prospective purchasers and such other cogent reasons, it may not be practicable or necessary to give widest possible publicity. However, in those cases also it is open for the Charity Commissioner to arrive at appropriate decision and satisfy himself that the reasons are genuine.
DEVELOPMENT CONTROL REGULATION FOR GREATER MUMBAI, 1991 - Regulation 33(7) - Bombay Public Trusts Act, 1950, Section 36 - Grant of sanction for redevelopment.
Where Charity Commissioner granted sanction to a developer by alienation of Trust property for redevelopment, without issuing any advertisement therefore order of Single Judge, remanding case and directing Commissioner to call for advertisement, justified.
N.M. Jamdar, J.
These Letters Patent Appeals arise from Writ petitions which were heard together and disposed of by a common judgment and order by the learned Single Judge on 29 March 2012.
2. The subject matter of the dispute is the property of a public trust. On an application made by the trustees under section 36 of the Bombay Public Trust Act, the Charity Commissioner granted sanction for development-cum-sale of the trust property to a developer. The learned Single Judge by the impugned order found that the sanction was not properly granted, and as there was no advertisement issued the matter needs to be remanded to the Charity Commissioner and an advertisement needs to be issued. The developer and trustees have filed these appeals challenging the judgment and order of the Single Judge.
3. The trust is called 'Late Rao Bahadur Anant Shivaji Desai Topiwala Charity'. It is in existence since the year 1926. The Trust was registered as a public Trust on 20 March 1956, after the Bombay Public Trust Act, 1956 was enacted. The settler of the trust was late Shri Narayanrao Anant Desai Topiwalla. He formed the Trust for promotion and benefit of his community-Kudaldeshkar Adya Gaud Brahmins. The Trust owns properties situated at C.T.S No.145-A, 1-A, 145-4, 145-B, C, D, E, F, G, bearing city survey No.1443 at Girgaon, Mumbai, admeasuring 3343.53 sq.metres. There are various tenements in the buildings which have been let out to individual tenants and most of the tenants belong to the abovementioned community. The premises are old and are in need of redevelopment. Since the property has tenants, redevelopment will be governed by Regulation No.33(7) of Development Control Regulation of Greater Mumbai(DCR) which confers certain benefits on the developer, and requires cooperation of tenants/occupants.
4. On 21 June 2011, the trustees made an application under section 36 of the Trust Act to the Charity Commissioner, Mumbai, for sanction for the proposal for redevelopment-cum-sale of the Trust property. The trustees annexed the scheme of the Trust showing it's objects. The scheme showed that the object of the Trust was to work for the benefit of the Kudaldeshkar Adya Gaud Brahmin Community (the Community) and to provide accommodation to the members of this Community. About 122 tenants reside in the Trust property, mostly belonging to the Community. The trustees stressed the need to redevelop the property since the buildings are more than 75 years old, and some portion has even collapsed. The Trust stated that the tenants desire the redevelopment be undertaken by a Maharashtrian developer as they are apprehensive that a non-Maharashtrian developer might cheat them. Accordingly they have searched for a suitable developer who is willing to take up the project. Out of responses received from four developers, they have found appellant-Raunak Corporation to be the suitable candidate for entrusting the work of redevelopment. Accordingly, the trustees, by their application sought permission from the Charity Commissioner to alienate the Trust property for development and sale in favour of Raunak Corporation. Admittedly there was no advertisement given in any newspaper inviting applications from prospective developers.
5. The application was filed on 21 June 2011. The application was heard by the Charity Commissioner on 2 August 2011 and 10 August 2011 and matter was closed for orders. The application was allowed by the Charity Commissioner by his order dated 2 September 2011. The operative portion of the order reads as under' –
(1) Application is allowed.
(2) Sanction is hereby accorded to the trustees of “The Late Rao Bahadur Anant Shivaji Desai Topiwalla Charity, Mumbai”, P.T.R. No.A/751/Mumbai for development cum sale of the trust property, viz. CTS No.145A, 1A, 145-4, 145B, C, D, E, F, G. bearing C.S No.1443 admeasuring 3999 sq.yards equivalent to 3343.57 sq.mtrs. or thereabout together with structures known as 'Kudaldeshkar Brahmin Niw
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