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2023 Supreme(Bom) 1458

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
N.J. JAMADAR, J.
Shree Khambhati Modh Vanik Samaj - Petitioner
Versus
The State of Maharashtra and Others - Respondents
Writ Petition No.13384 Of 2022
Decided On : 20-12-2023

Advocates Appeared:
For the Petitioner: Mr. Vishal Kanade a/w. Mr. Shashikant Chaudhari, Ms. Tanaya Patankar, Ms. Varsha Mishra, Ms. Snehal Chaudhari, Ms. Pranot Pawar and Ms. Preshita Parab i/b. Maharashtra Law Associates.
For the Respondents: Mr. C.D. Mali, Ms. Charmie Gandhi a/w. Mr. Chirag Unadkat, Mr. Shravan Giri, Ms. P.M. Bhansali a/w. Ms. Dharini Jain, Mr. Aditya Pimple and Mr. Sangharsh Jadhav i/b. Mr. Naresh Pai, Mr. Aseem Naphade a/w. Mr. Sulaiman Bhimani i/b. The Law Suits.

Headnote:

Intervention - Public Trust Act - 36(1)(a) - 36(5) - The court quashed the order allowing intervention by respondent Nos. 2 to 9 in Application No. CC/16/2021/Misc under section 36 of the Act, 1950. The court clarified that the consideration in the petition is confined to the legality and validity of the order allowing intervention and may not be construed as an expression of opinion on the merits of the application. The court rejected the applications for intervention and directed the Charity Commissioner to decide the same without being influenced by any of the observations, on its own merits and in accordance with the law.

Fact of the Case:

The petitioner is a public charitable trust seeking permission to appoint a new developer for the redevelopment of its property. The respondent Nos. 2 to 9, who are individual allottees of the flats allotted by the developer, sought to intervene in the application before the Charity Commissioner. The petitioner resisted the intervention and impleadment of respondent Nos. 2 to 9 by filing affidavits in reply.

Finding of the Court:

The court found that the respondent Nos. 2 to 9 did not fall within the description of 'person having interest in the trust' and their intervention in the proceeding under section 36 of the Public Trust Act, 1950 was legally impermissible. The court quashed the order allowing intervention and rejected the applications for intervention.

Issues: The main issue was whether the respondent Nos. 2 to 9 had the legal standing to intervene in the proceeding under section 36 of the Public Trust Act, 1950.

Ratio Decidendi: The court held that the mere fact that a person has an interest in the property of the trust does not necessarily entitle them to participate in the proceeding under section 36 of the Act, 1950. The court emphasized that the nature of the interest in the property of the trust is critical, and if such interest is adverse to or in conflict with the interest of the trust, the person cannot be said to have an interest in the trust. The court clarified that the consideration in the petition is confined to the legality and validity of the order allowing intervention and may not be construed as an expression of opinion on the merits of the application.

Final Decision: The petition was allowed, the impugned order was quashed and set aside, and the applications for intervention by respondent Nos. 2 to 9 were rejected. The court directed the Charity Commissioner to decide the application without being influenced by any of the observations, on its own merits and in accordance with the law.

JUDGMENT :

1. Rule. Rule made returnable forthwith. With the consent of the parties, heard finally at the stage of admission.

2. The challenge in this petition is to an order dated 6th September, 2022 passed by the learned Charity Commissioner on Applications (Exhibits 7, 10, 14, 17, 24 and 29) in Application No. CC/16/2021/Misc filed by respondent Nos. 2 to 9 seeking intervention in the said applications preferred by the petitioner/trust for grant of permission under section 36(1)(a) of the Maharashtra Public Trust Act, 1951 (the Trust Act, 1951), whereby the learned Charity Commissioner was persuaded to allow the intervention applications and direct the petitioner to add the interveners as respondents to the said application.

3. The background facts leading to this petition which assails seemingly an innocuous order of intervention deserves to be noted in a little detail to appreciate the legality, appropriate and correctness thereof, in a proper perspective.

    a) The petitioner is a public charitable trust registered under the Public Trust Act, 1950. The petitioner/trust owns a property “Samaj Darshan” situated at CTS No. 84B and 84C at Kandivali(w), Mumbai (the subject property). The petitioner/trust had resolved to redevelop the subject property.

b) An application No. 115 of 2014 was filed before the Charity Commissioner under section 36 of the Trust Act, 1950 seeking permission to redevelop the property and enter into a Development cum Sale Agreement with M/s. Bhakti Enterprises, the respondent No. 2. By an order dated 8th June, 2015, the learned Charity Commissioner was persuaded to accord sanction under section 36(1)(a) of the Act, 1950 to the trustees of the petitioner-trust to redevelop the trust property. It was, inter alia, noted that the decision of the trust to redevelop the trust property was justifiable. Pursuant thereto, the petitioner/trust and respondent No. 2 entered into a Development Agreement on 7th December, 2015.

c) Asserting that the respondent No. 2 committed breach of terms and conditions of the Development Agreement, the petitioner terminated the Development Agreement vide notice dated 15th July, 2017.

d) In the wake of the dispute, the petitioner instituted Commercial Arbitration Petition No. 147 of 2018. In the said petition by moving Commercial Arbitration Application No. 54 of 2018 the petitioner sought interim relief. In the said proceeding on 21st February, 2019 the consent terms were executed between the petitioner and respondent No. 2. Pursuant thereto, by an order dated 3rd April, 2019 Commercial Arbitration Petition No. 147 of 2018 came to be disposed, inter alia, on the following terms :-

I. The Court Receiver, High Court, Bombay as appointed as receiver of the suit project by an order dated 28 August 2018 stands discharged, subject to payment of cost as set out by the Court Receiver which shall be paid by the respondent within a period of two weeks of such intimation.

II. The Court Receiver shall accordingly hand over the suit project to the respondent within one week from today and place a report to that effect on the proceedings of this petition.

III. The discharge of the Court Receiver, however, is subject to the compliance of the other terms and conditions as agreed between the parties in the consent terms.

e) Asserting that the respondent No. 2 committed breach of the consent terms, the petitioner took out a Notice of Motion (L) No. 1824 of 2019 seeking to restore the Petition No. 147 of 2018 and a host of reliefs including appointment of a new developer in the place of respondent No.2 and appointment of Court Receiver.

f) Initially on 27th June, 2020 ad-interim relief was granted in the said Notice of Motion. By an order dated 26th November, 2020, this Court was persuaded to allow the petitioner to appoint a new developer for the development of the trust property. The Notice of Motion was thus made absolute in terms of prayer clause (a) to (d). Prayer clause (c) with which we are primarily conc

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