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IN THE HIGH COURT OF BOMBAY
Sandeep V. Marne, J.
Anr Group of Company - Appellant
Versus
The State of Maharashtra & Ors. - Respondents
Writ Petition (LODG.) No. 30379 of 2023
Decided On : 06-05-2024
BOMBAY PUBLIC TRUSTS ACT - SALE OF TRUST PROPERTY - Section 36 - The court analyzed the provisions of Section 36 of the Bombay Public Trusts Act, 1950, which governs the alienation of immovable property of public trusts. It emphasized that the Charity Commissioner must ensure that the sale is in the interest of the trust and its beneficiaries. The court found that the Joint Charity Commissioner failed to provide adequate reasoning for inviting fresh offers after a bidding process had already taken place, which undermined the trust's interests. The court concluded that the Petitioner’s offer, which matched the highest bid after the fresh invitation, should be accepted, thereby prioritizing the trust's financial benefit and the interests of the tenants.
Fact of the Case:
The Petitioner challenged the Joint Charity Commissioner's order directing the issuance of public notices for fresh offers to sell a trust property, despite the trust having already accepted the Petitioner's higher bid in a previous auction process. The trust, facing financial difficulties and structural issues with the property, had initiated the sale process in 2019 but delayed seeking necessary permissions until 2023.
Finding of the Court:
The court found that the Joint Charity Commissioner acted mechanically without applying proper reasoning when inviting fresh offers. It noted that the previous bidding process was valid and that the Petitioner had already matched the highest bid after the fresh invitation, thus ensuring the trust would receive the best possible price.
Issues: Whether the Joint Charity Commissioner had the authority to invite fresh offers after a bidding process had already concluded, and whether the Petitioner’s bid should be accepted given the circumstances.
Ratio Decidendi: The court held that the Charity Commissioner must ensure that the sale of trust property is in the best interest of the trust and its beneficiaries. It emphasized that the Commissioner should provide reasons for any decision to invite fresh bids, especially when a valid auction process has already occurred. The court concluded that the Petitioner’s offer, which matched the highest bid, should be accepted to protect the trust's interests.
Final Decision: The court partly allowed the writ petition, directing the Joint Charity Commissioner to sanction the sale of the trust property to the Petitioner at the price of Rs. 10 crores, refunding the earnest money deposited by the competing bidder.
JUDGMENT
Sandeep V. Marne, J. - Rule. Rule made returnable forthwith. With the consent of the learned counsel appearing for parties, taken up for final disposal.
2. By this petition, Petitioner is aggrieved by direction given by the Joint Charity Commissioner on 24 July 2023 directing issuance of public notices for inviting fresh offers in the newspapers for sale of property of Respondent No.2-Trust while deciding Trust's application seeking permission under Section 36 of the Bombay Public Trusts Act, 1950 (Trust Act) for sale of the same to Petitioner. Petition also challenges Notice dated 27 September 2023 issued by the Superintendent in the ofce of the Charity Commissioner inviting offers for sale of the trust property. Petitioner's grievance is that Respondent No.2-Trust has already implemented auction process by publishing advertisement in leading newspapers and that it received multiple offers, in which Petitioner was found to be the highest bidder. That therefore there was no occasion for the Charity Commissioner to once again direct issuance of notice for fresh offers in a casual manner. With this grievance, the Petitioner has fled the present petition.
3. Facts of the case, in brief, are that Respondent No.2 is a Public Trust registered under the provisions of the Maharashtra Public Trusts Act, 1950 and owns various immovable properties in Ratnagiri and Mumbai. Respondent No.2-Trust owns building named, 'Bhageshwar Bhuvan' bearing House No. 4822/2023, (197-B/197-C) F.P. No.80 TPS 2, Dilip Gupte Marg, Mahim (West), Mumbai-400 016 admeasuring 1355.56 sq.mtrs. The building consists of ground plus two storeyed structure consisting of 122 rooms. In the building, there are 106 tenants and 16 rooms are provided for residence of police staff. It is claimed in the petition that the Trust receives Rs.2,93,838/-annually towards rent, whereas the expenditure incurred by it towards taxes, repairs etc. is Rs.2,07,248/- and that additional expenditure of Rs.1,89,692/-was required to be incurred on salaries of staff in respect of the building. That thus the total expenditure incurred by the Trust in respect of the building is Rs.4,12,250/- per year against income of Rs.2,93,838/-.
4. Petitioner submits that in April 2015, Respondent No.2 obtained a structural report which indicated various kinds of external distress in the building as more particularly enumerated in para-6(a) of the petition and that therefore the Trustees decided to unanimously sell the said property by adopting Resolution dated 17 August 2019. Public notices were published on 9 September 2019 in two prominent newspapers of Mumbai City such as 'Maharashtra Times' (Marathi) and 'Times of India' (English). The Trust received four offers from (i) Vibrant Group- Rs.4,50,00,000/- (Rs.4 crores 50 lakhs), (ii) ANR Group of Companies (Petitioner), Rs.9,07,00,000/- (Rs. Nine crores Seven Lakhs only), (ii) Shagun Hospitality (Respondent No.5)-Rs.3,50,00,000/- (Rs. Three crores Fifty Lakhs only) and (iv) M/s. 4k Reality & Developers LLP -Rs.8 crores (Rs. Eight crores only). A Meeting was held with the bidders requesting them to increase their offers and M/s. 4K Reality & Developers LLP increased the offer from Rs.8 crores to Rs.8,25,00,000/-. After considering the offers, the Trustees finally passed a Resolution on 18 April 2019 accepting Petitioner's offer at Rs.9,07,00,000/-.
5. By letter dated 1 August 2019, the Trust authorised Petitioner to start the process of redevelopment of the building by appointing Architect, Engineer, Surveyor and other professional agencies to conduct survey and for obtaining various other premises from statutory authorities. Petitioner claims to have undertaken the said activities. That therefore was a brief hiatus in the redevelopment process on account of Covid-19 outbreak during the years 2020-21. On 21 November 2021, the Petitioner and Respondent No.2 entered into Memorandum of Understanding (MOU) under which Petitioner paid an amount of Rs.51,00,
AI
The Charity Commissioner has the authority to invite fresh offers for the sale of trust property, but must provide adequate reasoning for such actions, particularly when a valid bidding process has a....
The main legal point established in the judgment is the necessity for a transparent process in disposing of Trust property and the Charity Commissioner's role in verifying the genuine need for sellin....
The paramount consideration in permitting the alienation of trust property is the interest, benefit, and protection of the Trust, and the transparent utilization of the sale proceeds for the betterme....
The main legal point established in the judgment is the need for objective consideration of the trust's decision to sell property under section 36(1)(a) of the Maharashtra Public Trust Act, 1950, and....
Service Matter1 - It extends to inviting offers from the members of the public and directing the trustees to sell or transfer the trust property to a person whose bid or quotation is the best, having....
The central legal point established is that the Charity Commissioner must determine whether the sale of the trust property is necessary and in the interest of the trust before granting permission und....
The main legal point established in the judgment is the requirement for the respondent to justify and record satisfaction for high valuation based on comparable sale instances and material evidence w....
Trustees must ensure any alienation of trust property is justified by genuine necessity and conducted transparently, safeguarding the trust's interests.
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