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2024 Supreme(Online)(Bom) 7983
2024:BHC-OS:16107 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINATING SUMMONS NO. 1 OF 2022
1. A. H. WADIA TRUST )
A Public Chartiable Trust, registered under, ) the Bombay Public Trust Act, 1950, under ) Registration No : PTR. No. E-470 (Bom) ) Having its office at : ) 70, Dr.V.B. Gandhi Marg, Mumbai 400023 )
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2. JEHANGIR ADI WADIA )
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3. MUNCHERJI NUSSERWANJI MUNCHERJI )
CAMA )
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4. ADIL JEHANGIR WADIA )
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5. SHEROO JEHANGIR WADIA )
Plaintiffs No. 2 to 4, all Adults, of Mumbai, ) Indian Inhabitants, being the present Trustees ) of the Plaintiff No.1. A. H. Wadia Trustees ) Having their office at : )
70, Dr. V.B. Gandhi Marg, Mumbai 400 023. )... PLAINTIFFS VS.
THE CHARITY COMMISSIONER ) Office of the Charity Commissioner ) Maharashtra State, Mumbai, ) 3 rd Floor, 83 Annie Besant Road )
Worli, Mumbai 4000 018. )...DEFENDANT Mr.Pankaj Sawant Senior Advocate a/w Mr. Chaitanya Chavan, Mr. Manish Acharya, Mr. Amit Joshi i/b L R & Associates, Advocates for the Plaintiffs.
Mr. Mohit Jadhav, Additional Government Pleader for the State of Maharashtra.
CORAM : ABHAY AHUJA, J.
RESERVED ON : 14 th AUGUST 2024 PRONOUNCED ON : 9 th OCTOBER 2024
Trustees of a charitable trust possess the authority to develop their lands for fulfilling charitable objectives, as interpreted from the Trust Deed and relevant statutes.
Headnote:(A) Public Trusts Act, 1950 - Section 36 - Originating Summons filed by the trustees seeking court’s opinion on property management, including powers to develop land for charitable activities - Court held that trustees are empowered to undertake development activities singly or jointly as part of their duties outlined in the Trust Deed and to generate revenue for charitable purposes. (Paras 34-36)
(B) Trust Deed - Powers of trustees - Court interpreted the trust deed to include broad powers for the trustees to engage in development activities necessary for achieving charitable objectives, subject to compliance with relevant laws. (Paras 30-33)
Facts of the case:
The plaintiffs, trustees of a public charitable trust, seek court guidance on whether they can develop trust lands under notices issued by slum authorities without losing the lands. The trust has been actively engaged in charitable activities for over a century, financing medical and educational aid through property management and land sales.
Findings of Court:
Trustees' discretionary powers include development activities necessary to fulfill the trust’s charitable purposes, subject to relevant legal compliance. The court addressed concerns regarding the trustees’ lack of direct experience and allowed collaboration with competent partners for development.
Issues: The main questions addressed were whether the trustees possess the power to develop the trust's lands and engage in joint ventures for construction under current legal frameworks.
Ratio Decidendi: The court ruled in favor of the trustees, asserting their power derived from the Trust Deed allows for development activities to support the trust's charitable aims, particularly in response to encroachments and pressure from regulatory bodies, reaffirming the trustees’ responsibilities to manage trust assets prudently.
Result: Originating Summons is decreed in favor of the trustees regarding their authority to undertake development activities.
JUDGMENT :
1. When the matter is called out, none is present for the parties. However, since this matter has been listed for pronouncement, the order is being pronounced.
2. By this Originating Summons, the Plaintiffs No. 2 to 5 as the trustees of the Plaintiff Trust seek the opinion of this Court on a question regarding management of the Plaintiffs' property and have inter alia raised the following questions:
a) Whether the Defendant can be directed to dispose of expeditiously the Plaintiff Trust’s application under Section 36 of the Trust Act seeking sanction of Defendant for selling/alienating the Plaintiff Trust’s land covered under the said notices and public notice in favour of the Purchaser on an as is where is basis ?
b) Whether the Trustees of the Plaintiff Trust are empowered to undertake any development activities on its land covered under the said notices and the public notice by executing Slum Rehabilitation Scheme in accordance with the Slum Act and the said notices ?
c) If yes, since the Plaintiff Trust lacks requisite experience, skills and competence in developing property by demolishing slums, constructing building and providing infrastructure can it collaborate with a partner/joint venture collaborator possessing necessary competence, skills and experience in the field of development and construction for executing Slum Rehabilitation Scheme on the Plaintiffs’ lands covered under the said notices and the public notice in accordance with the Slum Act?
3. Plaintiff No.1 is a Public Trust (the "Plaintiff Trust") registered, under the provisions of the Maharashtra Public Trusts Act, 1950 (earlier known as the Bombay Public Trusts Act, 1950 ) (the “Public Trusts Act”). Plaintiffs No. 2 to 5 are the Trustees of Plaintiff Trust. It has been submitted that the Plaintiffs are the owners of vast lands (the 'Plaintiffs' lands') situate and lying in different places in Mumbai.
4. Mr. Sawant, learned Senior Counsel appearing for the Plaintiff Trust has submitted that the Plaintiff Trust is constituted pursuant to directions contained in the last Will and Testament (the “said Will”) dated 9th May 1882 of one Ardeseer Hormarjee Wadia (the “said Testator”) by which inter alia an obligation was cast on the Plaintiff Trust to undertake charitable activities as enunciated thereunder for betterment of the weaker and needy strata of the society. That this Court granted probate of the said Will on 23rd February, 1883. It has been submitted that the said Will not only acts as an instrument of incorporation of the Plaintiff Trust but also determines the object and scope of the Plaintiff Trust such that all the policy decisions of the Plaintiff Trust are required to be in consonance with the clauses of the said Will determining the functioning and manner of administration and management thereof.
5. The said Testator through the said Will distributed various immovable assets and properties to his legal heirs in the manner provided therein and directed the Trust to be formed in accordance with the said Will in order to apply the income of the said Testator's residuary estate to charitable purposes and to undertake the following charitable activities:
I. Establishment of dispensaries and sinking and building and repairing of wells
II. Giving aid from time to time to the poor, deserving, needy sections of society by undertaking such works of charitable nature in such parts of town ad island of Bombay.
III. Utilize any sum or sums out of corpus of the residuary estate of the said Testator for aforementioned charitable purposes.
6. It has been submitted that the Plaintiff Trust in accordance with the said Will has been carrying out philanthropies for more than a century. That in accordance with the provisions of the said Will the Plaintiff Trust disburses a large portion of its income towards providing medical and educational aid to the weaker sections of society irrespective of caste, creed and locality. That, the Plaintiffs, in accordance wi
