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2024 Supreme(Bom) 264

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
AMIT BORKAR, J.
Shree Brahmanath Devasthan Unchagaon, Through the Trustee Shri. Rajendra Shantaram Zurale – Petitioner
Versus
The Joint Charity Commissioner, Kolhapur – Respondent
Writ Petition No.3511 Of 2020
Decided On : 06-03-2024

Advocates Appeared:
For the Petitioner: Mr. Anil Anturkar, Sr. Adv. with Mr. Ranjit D. Shinde.
For the State/respondent: Mrs. V. R. Raje, AGP.

IMPORTANT POINT
The central legal point established in the judgment is that the Charity Commissioner must consider the interest, benefit, and protection of the trust when granting permission for property disposal, and transparent procedures, including conducting auction sales, are necessary to determine the fair market value of the property.

Headnote:

Public Trust - Permission to Sell Trust Property - Maharashtra Public Trust Act, 1950, Section 36(1) - Summary of Acts and Sections: The court discussed the relevant provisions of the Maharashtra Public Trusts Act, 1950 and the Maharashtra Public Trusts Rules, 1951, particularly focusing on Section 36 which imposes restrictions on the sale, mortgage, exchange, or lease of immovable properties of public trust. The court emphasized the need for the Charity Commissioner to consider the interest, benefit, and protection of the trust when granting permission for property disposal. It also highlighted the requirement for transparent procedures, including conducting auction sales, to determine the fair market value of the property.

Fact of the Case:

The petitioner sought permission to sell trust property, which was rejected by the Charity Commissioner based on the perceived market value and lack of earnest money deposit by the prospective purchaser. The petitioner challenged the order, arguing that the sale was necessary for the renovation of the temple and other trust purposes.

Finding of the Court:

The court set aside the impugned order, remanding the proceedings back to the Charity Commissioner for adjudication afresh. It directed the Commissioner to appoint a Competent Officer and an Architect or Structural Engineer to inspect the temple and decide on the need for renovation, and to follow transparent procedures for determining the fair market value of the property.

Issues: The key issues involved the rejection of the petitioner's application for permission to sell trust property, the consideration of the property's market value, and the necessity and benefit of the sale for the trust's purposes.

Ratio Decidendi: The court emphasized that the Charity Commissioner must consider the interest, benefit, and protection of the trust when granting permission for property disposal, and highlighted the need for transparent procedures, including conducting auction sales, to determine the fair market value of the property.

Final Decision: The impugned order was quashed and set aside, and the matter was remanded back to the Charity Commissioner for adjudication afresh. The petitioner was given the opportunity to amend the application, and the Commissioner was directed to appoint an inspection team to decide on the need for renovation and to pass a final order within three months.

JUDGMENT :

1. The challenge in this writ petition is to the order dated 5th August 2019 rejecting the petitioner's application for permission under section 36(1) of the Maharashtra Public Trust Act, 1950.

2. The petitioner initially applied under section 36(1) of the said Act before the respondent for permission to sell Gat No.351, measuring 42.5 Guntha at village Usgaon, Taluka Karveen District Kolhapur. The respondent rejected the application by order dated 5th February 2015. Aggrieved thereby, the petitioner approached this Court vide Writ Petition No.3035 of 2015. This Court, by an order dated 31st March 2016, remanded the proceedings back to the respondent for a decision afresh. Accordingly, respondent invited tenders by publishing them in the daily "Lokmat" and daily "Times of India". However, the respondent by an order dated 6th April 2017 rejected the application.

3. The petitioner, therefore, again filed Writ Petition No.8501 of 2017. This Court, by an order dated 22nd March 2019 directed the respondent to depute an official from his office to inspect the trust property and submit the report. Based on the order, the official of the respondent submitted such a report to the respondent. This Court, by an order dated 11th April 2019, set aside the order by granting liberty to the petitioner to file a fresh application. Accordingly, the petitioner filed Application No.10 of 2019. By the impugned order dated 5th August 2019, the respondent rejected the application seeking permission to sell trust property.

4. On perusal of the impugned order, it appears that the Charity Commissioner recorded a finding that the value of trust property as per government valuation was Rs.1,17,30,000/-. However, the Charity Commissioner based on the possibility of the trust property having the potential to be converted into a non-agricultural purpose formed an opinion that the property may fetch a value of Rs.10 lakh to 20 lakh per Guntha. With the result, the market value of the property may range from 4 crores to 6 crores and, therefore, the amount offered by the prospective purchaser is not in the interest of the trust. Moreover, it is observed that the prospective purchaser has not deposited an earnest amount with the trust. It is also observed that a person named Waigunde is a tenant in the property. It is observed that provisions of the Maharashtra Tenancy and Agricultural Lands Act, 1948 do not apply to the public trust. It is held that the acceptance of the amount from purchasers before the sale is an illegality that cannot be permitted. The petitioner has, therefore, challenged the order of the Charity Commissioner the present writ petition.

5. Mr. Anturkar, learned senior Advocate on behalf of the petitioner relying on Rules 6 and 24 of the Maharashtra Public Trust Rules, 1951 submitted that an object of the trust cannot be the sole factor while considering the need of trust to sell the trust property. The purpose mentioned in the application is for the renovation of the temple along with all other purposes and, therefore, the Charitable Commissioner could not have rejected the permission based on the factor of the imaginary market value of the property. According to him, the market value was arrived at based on the assumption and presumption of the Charity Commissioner. He submitted that the trust needs the sale of the property and, it is in the interest of the trust, therefore, immediate orders need to be passed.

6. Per contra, the learned AGP for the respondent supported the order by submitting that the Charity Commissioner has rightly rejected the permission by considering the interest of the trust. She submitted that the need pleaded by the petitioner is not in consonance with an object of the trust. In the absence of the constitution, no guidance was available with the Charity Commissioner to ascertain whether the sale was in the interest of the trust.

7. I have heard both sides and carefully scrutinized the materials on record. For

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