M/S. Raj Darshan Ventures v. the Joint Charity Commissioner and Ors.

Bombay HC6 Jan 2011WP/4273/2010

Case brief

AI extract

What is this about?

The High Court dismissed two writ petitions challenging permission granted by the Joint Charity Commissioner for a Public Charitable Trust to sell property via joint redevelopment. The Court held the petitioner vendor lacked locus standi due to non-compliance with EMD requirements and rejected other petitions as barred by laches after attending settlement meetings.

What did the court decide?

Both Writ Petitions 4273 of 2010 and 9440 of 2010 were rejected for want of locus standi and laches.

M/S. Raj Darshan Ventures Vs the Joint Charity… — Property and Title | Bombay HC (2011)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 4273 of 2010 WITH

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WRIT PETITION NO. 9440 OF 2010

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WP NO. 4273 OF 2010

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M/s. Raj Darshan Ventures. .. Petitioner Vs The Joint Charity Commissioner & Others. .. Respondents

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Shr R.Z. Moray i/by Shri Amit Sale for the Petitioner. Shri G.S. Godbole and Shri Snehal Shah and Ms Prachi Manekar i/by Vijay Dhingreja for Respondent No.2.

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Shri Nitin Thakkar, Sr. Advocate and Shri Satyen Vora and Shri Sahil Gandhi i/by M/s. Markand Gandhi & Co. for Respondent No.3. Shri R.M. Patne, AGP for Respondent No.1.

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WITH

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WP NO. 9440 OF 2010

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Smt. Malti Girish Thakkar & Others .. Petitioners Vs Joint Charity Commissioner & Others .. Respondents

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Shri A.A. Kumbhakoni, with Shri A.S. Khandeparkar, Shri Arun H. Mehta and Ms Ranjan Parikh i/by Akshar & Co. for the Petitioners. Shri R.M. Patne, AGP for Respondent No.1.

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CORAM : A.S.OKA, J.

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DATE ON WHICH THE SUBMISSIONS WERE HEARD : 21ST DECEMBER, 2010.

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DATE ON WHICH THE JUDGMENT IS PRONOUNCED : 6TH JANUARY, 2011.

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JUDGMENT :

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These two Writ Petitions were taken up for hearing together as the challenge therein is to the same order. As the daily board of this Court was very heavy from September, 2010 onwards, by consent of the learned counsel appearing for the parties, the Petitions were heard on some occasions after the Court hours.

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The challenge in these Petitions is to the judgment and order dated 17^th May, 2010 passed by the learned Joint Charity Commissioner, Mumbai. By the said judgment and order, an application made by a Public Charitable Trust ( the 2^nd Respondent in Writ Petition No. 4273 of 2010 ) under Section 36(1)(a) of the Bombay Public Trust Act, 1950 ( hereinafter referred to as “the said Act” ) has been allowed. By the impugned judgment and order, a permission has been granted to the 2^nd Respondent Trust to sell a property vesting in the said Trust to M/s. Gold Plaza Developers Private Limited (the 3^rd Respondent in Writ Petition No. 4273 of 2010 ). The Trust property has been permitted to be sold on the terms and

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conditions incorporated in the impugned judgment and order.

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The application under Section 36(1)(a) of the said Act was filed by the 2^nd Respondent on 3^rd May, 2010. In the said application, it was stated that the scheme for management of the said Trust was settled by this Court by an order dated 23^rd April, 1937. Reliance was placed on Clause 29 of the Trust Deed. In the application, it is stated that Cutchi Lohana Samast Mahajan in its meeting held on 26^th March, 2000 sanctioned the proposal for redevelopment of the Trust property being Cadestral Survey No. 126 of Mazgaon Division, admeasuring 4581.95 sq. meters consisting of structures and dwelling houses standing thereon and being occupied by about 225 tenants. In the said application, it was stated that the structures thereon have been occupied by 225 tenants and the income of the said property for the financial year ending with 31^st March, 2009 was Rs.3,18,461/ and the yearly expenses incurred on the said property were Rs.3,73,929/. Various details have been set out in the said application which, according to this Trust, show that there was necessity of alienating of the said property. Reliance is placed on the resolution passed in the meeting of the Board of Trustees held on 16^th April, 2010 by which the Trustees resolved to sell the said property by calling offers. According to the case of the Trust, a public notice was published in daily newspapers “Indian Express” and “Maharashtra Times” on 21^st April, 2010 calling for the offers. The Gold Plaza Developers Private Limited ( hereinafter referred to as “the Purchaser” ) submitted an offer by which the Purchaser

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offered to pay the sum of Rs.3,51,00,000/ ( Rupees Three Crores Fifty One Lacs Only ) to the Trust and also offered to allot in the newly constructed property 10 rooms having carpet area of 300 sq. ft. each, one office premises admeasuring 500 sq. ft. of carpet area and a wellequipped centrally Air Conditioned Auditorium having sitting capacity of about 600 persons. Apart from the offer from the said Purchaser, there were 5 other offers received. The public notice required deposit of a sum of Rs. 5,00,00,000/ ( Rupees Five Crores Only ) by way of Earnest Money Deposit(for short ‘EMD’) along with the offer. In the application made by the Trust, a prayer was made for grant of permission for sale of the said property to the Purchaser on the terms and conditions set out therein. By the impugned order, a permission was granted to sell the said property to the Purchaser. The Trustees of the said Trust executed a Deed of Conveyance dated 24^th May, 2010 by which the said property was conveyed to the Purchaser. The said Deed of Conveyance was lodged for registration on the same day.

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The Writ Petition No. 4273 of 2010 has been filed by M/s. Raj Darshan Ventures. The case made out in the said Petition is that the said Petitioner could not come across the advertisements published in the daily newspapers “Indian Express” and “Maharashtra Times” inviting the offers. It is stated that the said Petitioner became aware of the same on or about 14^th May, 2010. It is stated that on 15^th May, 2010, an application dated 14^th May, 2010 was filed by the Petitioner before the Learned Joint Charity

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Commissioner in the said application filed by the Trust. In the said application, it was stated by the Petitioner that the Petitioner was interested to purchase the said property and that the Petitioner was ready and willing to pay maximum amount of bid amount. It was stated that the Petitioner was willing to purchase the said property ‘by offering highest offer more than the offer given by the present purchaser’ in the application filed by the Trust. In the said application, the Petitioner requested for grant of time to deposit earnest money deposit. On 17^th May, 2010, the said application was rejected by the learned Joint Charity Commissioner by observing that the Petitioner has not complied with the mandatory condition of submitting Pay Order or Demand Draft in the sum of Rs.5 Crores. The said order was passed after calling upon the parties to the application under Section 36(1) (a) of the said Act to file reply. According to the Petitioner, on 17^th May, 2010 itself, an application was submitted by the Petitioner in the office of the learned Joint Charity Commissioner by which the Petitioner submitted an offer of payment of an amount along with the offer to make available to the Trust various premises in the developed property. It is contended that without considering the offer contained in the application dated 17^th May, 2010, the learned Joint Charity Commissioner has hurriedly passed the impugned order.

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The prayer in Writ Petition No. 4273 of 2010 which was initially made was of setting aside the impugned order. The Writ Petition was filed on 25^th May, 2010. Later on, the amendment was carried out by

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adding a prayer for declaring the Deed of Conveyance dated 24^th May, 2010 as nonest and having no validity.

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The Writ Petition No. 9440 of 2010 was filed on 30^th November, 2010. The Petitioners in the said Petition are 82 in number. The first two Petitioners claim to be the members of the Trust and rest of the Petitioners claim to be tenants of the Trust in respect of the premises in the property subject matter of sale. The challenge in the said Petition is also to the same impugned judgment and order. A prayer is also made for setting aside the Deed of Conveyance dated 24^th May, 2010.

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Learned counsel appearing for the Petitioner in Writ Petition No. 4273 of 2010 submitted that essentially the challenge in the petition is to the decision making process adopted by the learned Joint Charity Commissioner. The learned counsel appearing for the Petitioner relied upon a decision of the Full Bench of this Court in the case of Sailesh Developers and Another v. Joint Charity Commissioner, Maharashtra and Others ( 2007(3) Mh.L.J. 717 ). He also placed reliance on a decision of the Apex court in the case of Mehrwan Homi Irani & Anr. v. Charity Commissioner, Bombay & Ors. ( AIR 2001 SC 2350 ). He submitted that the learned Joint Charity Commissioner has not performed his duty. He submitted that there is no consideration of the basic issue as to whether the necessity of alienating the Trust property is established. He invited the attention of the Court to the objects of the scheme of the Trust settled by

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the Court way back in the year 1937. He submitted that as per the Clause 29 of the said Scheme, a prior sanction was required to be obtained from Cutchi Lohana Samast Mahajan. He pointed out that the Resolution was passed in the meeting dated 26^th March, 2000 of Cutchi Lohana Samast Mahajan. He submitted that the consent was granted in the said meeting to the Scheme of development of the Trust property on 7 conditions incorporated therein. He pointed out that the scheme sanctioned was of redevelopment of the Trust property and not of the sale of property. He submitted that the Resolution contemplates the joint development of the said property by the Trust and Developers with authority to the Trust to sell the surplus rooms to the vegetarian Hindus by giving first preference to the members of Cutchi Lohana Samast Mahajan Community. He submitted that apart from the fact that the application under Section 36(1)(a) of the said Act could not have been made on the basis of the said Resolution after a lapse of 10 years, the Resolution passed by the Trustees on 16^th April, 2010 is not consistent with the Resolution dated 26^th March, 2000. He submitted the Resolution dated 26^th March, 2000 is essentially for permitting the joint development of the Trust property which does not contemplate sale or transfer of the land. He submitted that the Resolution of the Board of Trustees contemplates sale of the land. He submitted that the effect of Clause 29 of the scheme of the Trust has not been considered by the learned Joint Charity Commissioner. The learned counsel submitted that on 17^th May, 2010, the Petitioner submitted a detailed offer to the learned Joint Charity Commissioner which is much better than the offer of

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the Purchasers. He submitted that a clear illegality was committed by the learned Joint Charity Commissioner by even not considering the offer. He submitted that the learned Joint Charity Commissioner hurriedly disposed of the application under Section 36 of the said Act in a span of only 14 days without holding any proper inquiry or without satisfying himself regarding necessity to alienate the Trust property. He submitted that the entire decision making process adopted by the learned Joint Charity Commissioner is bad in law. He pointed out that even the Deed of Conveyance was hurriedly executed within 7 days from the date of the impugned judgment and order. He submitted that even assuming that the case of existence of necessity was made out, no effort was made by the learned Joint Charity Commissioner to examine whether the consideration offered was adequate. He urged that the petitioner was ready and willing to offer its bid. He submitted that the impugned order deserves to be quashed and set aside. He submitted that the learned Joint Charity Commissioner, in any event, ought to have adopted the course suggested by the Apex Court in the case of Mehrwan Homi Irani (supra).

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The learned counsel appearing for the Petitioners in Writ Petition No. 9440 of 2010 submitted that the Petitioners are the beneficiaries of the Trust. He submitted that the Trustees could have themselves developed the Trust property. He submitted that what was contemplated was redevelopment of the Trust property, but the learned Joint Charity Commissioner has permitted the sale of the Trust property.

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He submitted that in the advertisement published by the Trustees, it is stated that there were 205 tenants in the property but in the Deed of Conveyance, it is stated that there were 225 tenants. He submitted that there is a misrepresentation by showing more number of tenants than the actual number of tenants in the property. He submitted that the Clauses 35 and 38 of the Scheme of the Trust have not been considered by the learned Joint Charity Commissioner which empower the Trustees to re develop the property. He pointed out that in terms of Clause 29 of the scheme of the Trust, the trustees of the said Trust did not obtain prior permission of the Cutchi Lohana Samast Mahajan. He pointed out that even assuming that in the year 2000 the permission was obtained, the same is a permission for joint development and the terms and conditions incorporated in the impugned order are totally contrary to the terms and conditions incorporated in the Resolution passed by the Cutchi Lohana Samast Mahajan. The learned counsel submitted that the Petitioner No. 79 had filed a caveat before the learned Joint Charity Commissioner but no notice of the proceedings was served to the said Petitioner. He pointed out that an application for modification of the Clause 29 of the scheme of the Trust is pending in the City Civil Court and, therefore, during the pendency of the said application, the permission could not have been granted by the learned Joint Charity Commissioner. He submitted that by selling adjoining Trust property, the Trust has received a sum of Rs.82 lacs apart from the large funds still available with the Trust. He submitted that the financial position of the Trust was very sound and, therefore, there was no

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reason to apply for permission to sell the Trust property. He submitted that the order impugned has been passed in undue haste.

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The learned counsel appearing for the 2^nd Respondent Trust pointed out that the Petitioner in the Writ Petition No. 4273 of 2010 is the competitor of the purchaser. He submitted that the Petitioner did not submit any bid on the basis of the public notice. He submitted that even along with the application dated 14^th May, 2010 submitted to the learned Joint Charity Commissioner, the Petitioner did not offer to pay EMD of Rs.5 Crores. He submitted that the alleged proposal dated 17^th May, 2010 addressed to the Trust was never submitted to the Trust and a copy of the said letter was submitted not before the learned Joint Charity Commissioner but in the inward Section of the office of the learned Joint Charity Commissioner. He pointed out that the order passed on the application dated 14^th May, 2010 was not challenged. He pointed out that there is no departure made from the Resolution dated 26^th March, 2000 while passing the Resolution dated 16^th April, 2010. He submitted that the interest of the beneficiaries has been completely protected by the learned Joint Charity Commissioner imposing appropriate terms and conditions. He submitted that there is no inconsistency between the resolutions and the terms and conditions incorporated in the Sale Deed. He submitted that apart from offering a large amount, number of premises including an Auditorium will be made available to the Trust by the purchaser to the Trust. He submitted that as of today, there are no vacant

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premises in possession of the Trust. He submitted that the Writ Petition No. 9440 of 2010 has been belatedly filed by the Petitioners who are in fact beneficiaries under the sale transaction inasmuch as they will get self contained premises in a newly constructed building on ownership basis. He submitted that the Petitioners were all along aware of the proceedings before the learned Joint Charity Commissioner and the Deed of Conveyance but the said Petitioners have belatedly approached this Court on 30^th November, 2010. He submitted that there is absolutely no explanation whatsoever for the delay.

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The learned counsel appearing for the Purchaser pointed out that the Petitioners in the Writ Petition No. 9440 of 2010 have participated in the meetings held after the execution of the Deed of Conveyance. He submitted that the Petition is completely malafide. He pointed out that he Petitioner in the Writ Petition No. 4273 of 2010 has no bona fides and he has not even offered to pay the EMD of Rs.5 Crores.

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The learned counsel appearing for the Petitioner in the Writ Petition No.4273 of 2010 submitted that the challenge is to the decision making process and most of the contentions raised by him have remain unanswered. The learned counsel appearing for the Petitioners in both the Writ Petitions have tendered the written submissions on record.

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I have given careful consideration to the submissions. Before dealing with the rival submissions, it will be necessary to advert to the law laid down by the Full Bench of this Court in the case of Sailesh Developers (supra). This Court has considered the scope of the powers under Section 36 of the said Act. The questions formulated, which were referred to the Full Bench, read thus:

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“i) Whether the power vesting in the Charity Commissioner under section 36 of the Bombay Public Trusts Act, 1950 is confined to grant or refusal of sanction to a particular sale transaction which the trustees propose to make or it extends to compelling trustees to sell or transfer the property to another party who participates in the proceedings under section 36 and gives his offer ?

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ii) Whether the party who comes forward to submit his offer directly before the Charity Commissioner in a pending application under section 36 of the said Act of 1950 has locus standi to challenge the order passed in a proceeding under section 36 ?”

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The Paragraph 28 of the said decision reads thus:

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“28. ........Before passing an order of sanction or authorisation, the Charity Commissioner has to be satisfied that the trust property is required to be alienated. Once the Charity Commissioner is satisfied that the alienation of the trust property is necessary in the interest of the trust or for the benefit of the trust or for the protection of the trust, it is very difficult to accept the submission that the power of the Charity Commissioner is restricted either to grant sanction to a particular proposal of the or to reject it. It is the duty of the Charity Commissioner to ensure that the transaction of alienation is beneficial to the trust and its beneficiaries. He has to ensure that the property is alienated to a purchaser or buyer whose offer is the best in all respects. It is not necessary in every case that the Charity Commissioner has to ensure that property is sold by the trustees to the person offering highest price or consideration. What is the best offer in the interest of the trust will again depend on facts and circumstances of each case. In a given case, while alienating the trust property, the trustees may provide that as a part of consideration for alienation, the purchaser should construct a building on a part of the trust property for the use by the trustees for the objects of the trust. In such a case, it may be necessary to ascertain the reputation and capacity of the purchaser apart from the consideration offered. When the Charity Commissioner is satisfied that trust property needs to be alienated and when he finds that the offer received by the trustees may not be the best offer, he can always direct that bids be invited by a public notice. When a better offer is received in public bidding or auction, it is very difficult to say that the power of the Charity Commissioner is restricted and he cannot enjoin the trustees to sell or transfer the trust property to a third party who has given an offer which is the best in the interest of the trust. The Trustees approach the Charity Commissioner only when they are satisfied that there is a necessity to alienate the trust property. The trustees hold the property for the benefit of the beneficiaries and therefore once they express desire to alienate the property, it is obvious that Charity Commissioner can always impose condition while granting sanction that the property shall be sold or transferred to a person who has come with an offer which is the best offer in the interests of the trust. The Section gives a power to the Charity Commissioner to impose conditions and

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the said conditions will include a requirement of selling or transferring or alienating the trust property to a purchaser who has offered the best deal having regard to the interest and benefit of the beneficiaries and the protection of the trust. The power to impose conditions cannot be a limited power when the law requires the Charity Commissioner to exercise the said power having regard to the interest, benefit and protection of the trust. Once the Charity Commissioner accepts the necessity of alienating the trust property, the trustees cannot insist that the property should be sold only to a person of their choice though the offer given by the person may not be the best offer. The property may be vesting in the trustees but the vesting is for the benefit of the beneficiaries. The Charity Commissioner has jurisdiction to ensure that the property is sold or transferred in such a manner that the maximum benefits are available to the beneficiaries of the Trust. Under Clause (b) of Section 36 of the said Act, the Charity Commissioner has jurisdiction to decide whether it is in the interest of the trust that the property of the trust be sold or transferred. Once the learned Charity Commissioner is satisfied that the property is required to be transferred or sold in the interest of the Trust, the learned Charity Commissioner cannot remain silent spectator when he finds that the transaction proposed by the Trustees is not in the interest of the Trust or its beneficiaries. Once the necessity of sale or transfer is established, the Charity Commissioner can certainly ensure that best available offer is accepted, so that the transaction is for the benefit of the trust. If the trustees were to be the final authority to judge what is in the interest of the Trust, the legislature would not have enacted provision requiring prior sanction. While deciding which is the best offer, the learned Charity Commissioner is bound to take into consideration various factors which cannot be exhaustively listed. However, the paramount consideration is the interest, benefit and protection of the trust. It is obvious from the scheme of Section 36 that legislature never intended that trustees could sell or transfer the trust property vesting in them as if it was their personal property. It is the duty of Charity Commissioner to ensure that the property should be alienated in such a manner that maximum benefits are accrued to the trust. The Charity Commissioner while considering an application under Section 36(1) of the said Act of

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1950, in a given case can opt for public auction or can invite bids. ”

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In paragraph 29 of its Judgment, the Full Bench observed thus:

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“29. The second question referred to the Full Bench for decision is regarding locus standi of a person who appears before the Charity Commissioner and offers his bid to challenge the order passed by the Charity Commissioner. The trustees and persons having an interest in the Trust can always challenge the order. We have already held that the proceeding under section 36 of the said Act before the learned Charity Commissioner is a judicial proceeding. The Apex Court has held that a trust property is on part with a public property so far as its sale or transfer is concerned. It is, therefore, very difficult to say that such a person who appears before the Charity Commissioner and offers his bid has no locus standi to challenge the final order passed by the Charity Commissioner. Such a person will certainly have locus standi to file the petition under Articles 226 and 227 of the Constitution of India for challenging the final order passed under section 36 of the said Act. However, the scope of challenge will be naturally limited. Such a person will be in a position of a bidder challenging the auction or tender process of sale of a public property. The challenge by such a person to the order will be limited to the decision making process of the Charity Commissioner...”

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The questions were answered by the Full Bench in Paragraph

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30 of the decision which reads thus:

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(i) The power vesting in the Charity Commissioner under section 36 of the Bombay Public Trusts Act, 1950 is not confined merely to grant or refusal of sanction to a particular sale transaction in respect of which sanction is sought under

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section 36 of the said Act. The power of the Charity Commissioner 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 regard to the interest, benefit or protection of the trust. Hence we declare that the decision of the Division Bench of this Court in the case of M/s. Jigna Construction Co. Mumbai vs. State of Maharashtra and others does not lay down correct law.

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(ii) The party who comes forwards and submits his offer directly before the Charity Commissioner and complies with other requirements as may be laid down by the Charity Commissioner in a pending application under section 36 of the said Act of 1950 has a locus standi to challenge the final order passed in a proceeding under section 36. However, the scope of the challenge will be limited as indicated in paragraph 29 above.

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(iii) We direct the Office to place the Writ Petitions before the appropriate Benches for deciding the same in accordance with law.”

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Considering the law laid down by the Full Bench, the controversy in these Writ Petitions will have to be considered. The 1st question will be as regards the locus of the petitioner in W.P No. 4273 of 2010. On the basis of the resolution passed by the Board of Trustees of the said trust, public notices were issued and were published on 21^st April 2010 in daily newspapers "Indian Express" and "Maharashtra Times". It cannot be disputed that the said two newspapers are having a wide circulation in the city of Mumbai. Admittedly, the said petitioner did not act upon the said advertisements and failed to submit any offer to the said Trust. The Resolution passed by the board of Trustees on 16^th April 2010 provides that

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the bidders will have to deposit the EMD in the sum of Rs.5,00,00,000/ (Rupees Five Crores only) along with the offer. The public notices published in the newspapers clearly incorporate the requirement of depositing the EMD of Rupees Five Crores by a demand draft or by a pay order along with the offer. A period of 10 days was granted to submit offers which expired on 1^st May 2010. The said Petitioner admittedly did not submit any offer. The petitioner made an application dated 14^th May 2010 addressed to the learned Joint Charity Commissioner. The relevant part of the said application reads thus:

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“I Jain Dilip C Partner of M/s. RAJ DARSHAN VENTURES hereby say as under :

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We are interested to purchase the property of above named trust.

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We had a meeting with trustees of the said trust and we have shown our interest to purchase the said property.

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We are ready to pay the maximum amount of bid amount.

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We hereby request you to grant us a period to deposit EMD.

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I am willing to purchase this property by offering highest offer more than the offer given by present purchaser in the present application.”

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Firstly, there was no specific offer made by the Petitioner. Secondly, the application/letter was not accompanied with the EMD and the Petitioner merely stated that time be granted to deposit the amount. Thirdly, the

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Petitioner did not specify the time within which said amount shall be deposited. The Joint Charity Commissioner rejected the said application by order dated 17^th May 2010 by observing that the application does not comply with the mandatory condition as regards the deposit of EMD. The petitioner is relying upon another letter dated 17^th May 2010 addressed to the said Trust. A copy of the said letter was endorsed to the learned Joint Charity Commissioner. The said letter is with reference to the advertisement dated 21^st April 2010 in the newspaper "The Indian Express". The said letter contains the offer of the Petitioner. There is nothing on record to show that the said letter reached the said Trust. Moreover, the said letter makes no reference to deposit of a sum of Rupees Five Crores. On the basis of such letter it was not necessary for the Joint Charity Commissioner to invite fresh offers especially when he found that the procedure adopted by the Trustees was fair and transparent. It must be stated here that on 17^th may 2010, the application under section 36 made by the Trust was before the learned Joint Charity Commissioner when the aforesaid order was passed by him on the application/letter dated 14^th May 2010. The aforesaid letter dated 17^th May 2010 was not tendered before the Learned Joint Charity Commissioner in the proceedings. There is an affidavit dated 15^th October 2010 filed by Mr.Sunil Sawant ,a Junior clerk in the office of the learned Joint Charity Commissioner in which it is stated that the said letter was received by the office of the learned Joint Charity Commissioner in the evening on 17^th May 2010 and was entered in the inward register on the next day.

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Thus, the Petitioner did not comply with the requirement of deposit of EMD. It is obvious that the condition of deposit of the said amount was incorporated to ensure that the bidder must show his bona fides. The said condition was imposed to ensure that only the bidders who are in sound financial condition should submit their offers. In the case of Sailesh Developers (supra), the Full Bench of this Court held that a party who directly comes before the Charity Commissioner and submits his offer after complying with the other requirements specified by the Charity Commissioner has a locus standi to challenge the final order passed in proceedings under section 36 of the said Act. The petitioner never complied with requirement of deposit of a sum of Rupees Five Crores. In the 1st application made by the Petitioner there is no specific offer made by the Petitioner. In the letter dated 17^th May 2010 addressed to the Trust, there is an offer. But, the Petitioner did not deposit the requisite amount. Moreover, the said letter appears to be submitted to the office of the learned Joint Charity Commissioner after the application under section 36 was decided by passing the impugned order. The letter was not filed before the learned Joint Charity Commissioner in the proceedings, but was tendered in the office in the evening and was inwarded on the next day. Moreover, a sum of Rs. 5 Crores was not deposited with the offer. Considering all these aspects, the Petitioner does not satisfy the criteria laid down by the Full Bench of this Court inasmuch as the petitioner did not submit any specific offer before the learned Joint Charity Commissioner before the final order was passed and failed to make compliance regarding condition relating to

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EMD. Thus, the petitioner has no locus standi to challenge the impugned order by invoking Writ Jurisdiction of this Court.

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However, the submissions made by the said petitioner on merits are required to be dealt with. The scheme of the said Trust was framed by this Court. The clause no.29 of the scheme reads thus:

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“29. The Trustees shall have power from time to time to transpose and vary any such securities into or for others of the same or like nature. The trustees shall be at liberty to sell and exchange after obtaining the sanction from the Cutchi Lohana Samast Mahajan all or any of the immovable property belonging to the trust. The trustees shall invest the net sale proceeds of any such immovable property after similar sanction in the purchase or lease for term exceeding ninety eight years, of immovable properties in the said area with or without hereditaments and premises standing thereon for the purpose and object of the trust.”

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The aforesaid clause requires the Trustees to obtain sanction

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of Lohana Samast Mahajan for transfer or sale of the trust property. The Trustees are required to invest the sale proceeds. The said Samaj passed resolution on 26^th of March 2000. The relevant part of the said resolution reads thus :

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“Shri Shambubhai Shivji Kariani, Honarary Secretary of Cutchi Lohana Samast Mahajan and one of the trustees of Shri Cutchi Lohana Nivasgriha Trust, Mazgaon stated that as per the wishes of all the trustees the following scheme for the building is proposed:

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“1. Those residents/occupants occupying less than

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225 sq. ft. carpet shall get at least 225 sq. ft. carpet area.

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Those residents/occupants occupying more than 225 sq. ft carpet area shall get the same amount of carpet area.

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Every room shall have a toilet and bathroom attached.

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Every tenant shall have the new premises on ownership basis.

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The tenants shall create their cooperative housing Society of the new building.

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The new societies shall bear the names of the original donors namely Sheth Virji Peraj Maskai and Sheth Shivji Raghavji so that their names are always maintained forever.

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After giving the rooms to the tenants the developer and the trust shall sell the surplus rooms only to vegetarian Hindus however the trust shall be bound to give first preference to the member of Shri Cutchi Lohana Community while selling the rooms.

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It was assured by the trustees that any other issues faced by the tenants, the trustees shall bring some satisfactory solution. After giving satisfactory replies to various questions all the present members of the Sabha unanimously approved the above proposed scheme of redevelopment of the property of Shri Cutchi Lohana Nivasgriha Trust situated at Mazgaon.”

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The Board of Trustees Passed resolution on 16th April 2010, the relevant part of which reads thus:

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“...The trustees also discussed that CUTCHI LOHANA SAMAST MAHAJAN has already sanctioned for the re development of trust property pursuant to the resolution done in their meeting on 26/3/2000. The

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copy of the said resolution was read out and tabled before board of trustees in the meeting. The trustees also read out clause no.29 on page 17 of the Scheme of the Trust which empowers them to sell/exchange the immovable properties belonging to the Trust and also read out other relevant clauses of the Scheme of the Trust.

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The trustees thereafter unanimously resolved that the said property be redeveloped from a builder of repute, capacity and experience in redevelopment of such old cessed structures and the trust to reserve a right to either get compensation in Kind in terms of portion of redevelopment property OR to get the consideration in CASH or a combination of both. The entire responsibility of convincing and managing tenants/occupants shall be on the head of the developer and the said property to be redeveloped and sold on “As is where is Basis”. The trustees further resolved to invite offers by giving public notice in two newspapers and giving time of 10 days to the prospective offerors to submit their offers. Trustees also resolved that the said redevelopment shall be subject to the permission of the Hon’ble Charity Commissioner u/s 36(1)(a)/(c) of the Bombay Public Trusts Act, 1950.”

¶109

As regards the offer received from the Purchaser, the terms thereof have been quoted in the impugned judgment and order. The relevant part of paragraphs 10 and 11 read thus :

¶110

“10. So far as the question of fair price is concerned, the trustees seem to have adopted a very transparent procedure. After publishing public notice in the newspapers, viz. ‘Indian Express’ (English) and ‘Maharashtra Times’ (Marathi) dated 21042010 (Exh. 7 & 6 respectively ) for redevelopment of the said property on ‘as is where is basis’. The trust received six offers from the prospective developers (Exhs. 8 to 12 ). All the offers were opened on 01052010 at

¶111

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¶113

11.30 a.m. where the representatives of all the offerers were present. The representatives of the offerers were asked to enhance their respective offers. However, the highest offer is of Gold Plaza Developers Pvt. Ltd. which was in the best interest of the trust and the same was accepted unanimously in the meeting of the trustees held on 01052010 (Exh.14), which is as under:

¶114

(i) Rs.3,51,00,000/ cash,

¶115

(ii) Ten rooms of 300 sq. ft. carpet each,

¶116

(iii) One office premises of 500 sq. ft. carpet,

¶117

(iv) Auditorium of about 600 persons capacity

¶118

(as per plan approved by MCGM) in the trust property.

¶119

The trustees thereafter accepted an earnest money deposit of Rs.51,99,000/ from the proposed developer.

¶120

According to the Government Approved Valuer Shri Pramod P. Dhage, the valuation of the property would be Rs.6,34,23,21570 (Exh.13 ). The applicants to satisfy themselves got the valuation of the highest offer accepted by the trustees of the property to be received in kind, i.e. Proposed auditorium and 10 rooms to be constructed by the proposed developer at the trust property from the Govt. Approved Valuer Shri Pramod P. Dhage (Exh.26). According to him, the total market value of the proposed auditorium and 10 residential rooms at the property works out to be Rs. 18.46 Crores. In addition to Rs.18.46 Crores worth of property, the proposed developer is also giving Rs.3.51 Crores in cash to the trust. In my opinion, against the backdrop of the fair market value given by the Government Approved Valuer, the proposed offer given by the developer to the trust is in the best interest of the trust as explained in the valuation report dated 352010 (Exh 26), which is quite reasonable. Hence, permission to alienate the property can also very well be granted.”

¶121

The aforesaid conditions have been incorporated in the Deed

¶122

of Conveyance instituted by the Trustees.

¶123

¶124

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¶125

As per the consent granted by the Cutchi Lohana Samast Mahajan, the residents/occupants occupying tenaments having area less than 225 sq. ft. of carpet area were required to be provided with carpet area of at least 225 sq. ft.. The consent provides that the residents/occupants occupying area of more than 225 sq. ft. of carpet area shall be given equivalent area in the newly constructed building. The tenaments shall be selfcontained and the same shall be allotted on ownership basis. The consent contemplates formation of a cooperative housing society by tenants. The consent also contemplates appointment of a developer. Thus, what is contemplated by the consent is that the tenaments shall be allotted to the existing tenants/occupants on ownership basis and a cooperative society shall be formed. The consent contemplates that after allotment of tenaments to the tenants/occupants, the surplus tenaments shall be sold by the Trust and the developer only to the vegetarian Hindus while giving preference to the members of the Cutchi Lohana community.

¶126

The purchaser has filed a reply in the Writ Petition No. 9440 of 2010. In the said reply, the purchaser has set out progress made by them for entering into settlement with the tenants/occupants. In clause (vii) of Paragraph 9 of the reply filed by the Purchaser in Writ Petition No.9440 of 2010, it is stated thus:

¶127

“(vii) The Tenants have after receiving No Objection from these Respondents came together and formed

¶128

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themselves into a Cooperative Housing Society and have nominated 10 persons to be the Promoters of such society. Thereafter an MOU was executed between the said promoters and the Respondent No.4 for the purposes of recording the commercial terms on which the Respondent No.4 would develop the said property which include.

¶131

(a) 405 sq. ft. carpet area and Rs.12,000/ per month rent to all tenants occupying less than 225 sq. ft. carpet area.

¶132

(b) 700 sq. ft. carpet area and Rs.15,000/ rent to all tenants occupying more than 225 sq. ft. carpet area.

¶133

¶134

(d) 5 Crores Corpus Fund

¶135

(e) 5000 sq. ft. for existing school. (f) 3000 sq. ft. community hall (g) Existing Temple to be reconstructed as per tenants requirement.

¶136

I crave leave to refer to and rely upon the said MOU when produced. The said MOU also contemplated execution of individual agreements for consent and alternative accommodation.”

¶137

Thus, the tenants/occupants are being given premises of area

¶138

more than what is contemplated in the resolution dated 26^th March, 2000. Moreover, in the redeveloped building, 10 rooms having carpet area of 300 sq. ft. each and one office premises having carpet area of 500 sq.ft. will be made available to the Trust. A centrally Air Conditioned Auditorium having sitting capacity of 600 persons will be made available by the Purchaser to the Trust. Thus, the Trust will get substantial premises in the

¶139

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developed property apart from the monetary consideration of Rs. 3,51,00,000/. Though the impugned order contemplates execution of the Sale Deed, the 10 rooms and office premises having total carpet area of 3,500 sq. ft. will be allotted to the Trust apart from the auditorium having sitting capacity of 600 persons. It is pertinent to note that as of today there are no vacant premises available in the said property for the use of the Trust. Moreover, the area allotted to the Trust will be available for sale by the Trust. That is how the impugned order refers to redevelopment by the Trust jointly with the Purchaser. As the Resolution dated 26^th March, 2000 contemplates formation of a cooperative society of the tenants/occupants and they will get premises on ownership basis, transfer of the property will have to be made in favour of the cooperative society in terms of the provisions of Maharashtra Ownership Flats Act, 1963. Therefore, the terms on which alienation is permitted under the impugned order are not contrary to the consent granted on 26^th March 2000.Moreover, the impugned order also directs that the entire cash consideration of Rs.3.51 Crores shall form part of the Corpus of the Trust and shall be invested. Only the interest accrued on the amount is permitted to be utilized for objects of the Trust.

¶141

The Trustees received six offers including the offer of the Purchaser. Amongst the said offers, the Purchaser’s offer was the best offer. Perusal of the impugned judgment and order shows that in Paragraph 9, the learned Joint Charity Commissioner has observed that the structures on the

¶142

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trust property are 70 years old and maintenance cost is much more than the rental income received from the tenants/occupants. The learned Joint Charity Commissioner has observed that the Trustees adopted a transparent procedure by giving a public notice in leading newspapers like Indian Express (English) and Maharashtra Times (Marathi) which are having large circulation in the City of Mumbai. The offers were opened on 1^st May, 2010 at 11.30 a.m., when the representatives of the offerers were present who were given an opportunity to enhance their respective offers. The learned Joint Charity Commissioner also considered the report of the Valuer to which a reference is already made. Thus, all relevant aspects have been considered by the learned Joint Charity Commissioner. Considering the fact that the cost of maintaining the property is more than the income derived from the property, the necessity is established notwithstanding the sound financial position of the Trust and income derived from alienation of the other property. The impugned order does not become bad only on the ground that the application made by the Trust was disposed of within few days.

¶144

As far as Writ Petition No. 9440 of 2010 is concerned, the same has been filed on 30^th November, 2010 i.e. nearly six months after execution of the conveyance. In the affidavit of the Trustees, it is pointed out that two of the petitioners have filed application under Subsection (2) of Section 36 of the said Act for revocation of the permission.

¶145

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¶146

In the affidavit in reply of the Purchaser, it is stated that on 8^th August, 2010, a meeting of the tenants/occupants in the property was held at Sir Eally Kadoori High School Hall, Mazgaon, which was attended by 200 tenants/occupants. It is alleged that the proposed redevelopment was discussed in the said meeting and all the Petitioners were present in the said meeting. Reliance is placed in the affidavit on meeting held on 2^nd October, 2010 arranged by Shri Shree Kutchi Lohana Nivas Griha Mitra Mandal which was negotiating with the Purchaser on behalf of the tenants/occupants. It is stated that in the said meeting apart from the Directors of the purchaser, the Petitioners were also present. It is stated that all terms were agreed to in the said meeting. The fact that the Petitioners were present in the said meetings has not been disputed in the rejoinder filed by Mr. Chetan Mohanlal Dawda on behalf of the Petitioners. It is not disclosed in the Petition that the Petitioners attended the meetings for discussing the redevelopment of the property by the Purchaser. There is absolutely no explanation for the delay in filing the Petition. Hence, the Petition at the instance of the said Petitioners cannot be entertained.

¶147

There is no merit in both the Writ Petitions and the same are

¶148

rejected.

M/S. Raj Darshan Ventures v. the Joint Charity Commissioner and Ors.

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M/S. Raj Darshan Ventures v. the Joint Charity Commissioner and Ors.

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