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IN THE HIGH COURT OF JUDICATURE OF BOMBAY
BENCH AT AURANGABAD
WRIT PETITION NO. 3523 OF 1990
Anna Dhuraji Patil,
age 45 years, occ.
agriculture, resident
of Malewadi, taluka
and district Jalna. - - Petitioner
versus
1. The State of Maharashtra.
2. Gomtidevi Mandir Trust
through its trustee
Mr. Ambadas s/o. Chandidas
Pujari, major, r/o.
Somthana, taluka and
district Jalna.
3. The Joint Charity Commissioner,
Maharashtra, Adalat Road,
Aurangabad. - - Respondents
Shri A. M. Nagarkar, Advocate holding for
Shri K. M. Nagarkar, Advocate for the petitioner.
Shri Padmakar Deshmukh, Advocate for the
Respondent No.2.
Shri K. S. Patil, Asstt. Govt. Pleader for the
respondents Nos.1 and 3.
CORAM: D. G. KARNIK, J.
Date : 15th September 2008
ORAL JUDGMENT :
1. Heard.
2. By this writ petition under Article 227 of
the Constitution of India, the petitioner challenges
the judgment and order dated 28-3-1990 passed by the
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Joint Charity Commissioner conditionally granting
application for extension of time fixed under his
previous order under section 36 of the Bombay Public
Trusts Act, 1950 (for short the Act).
3. The respondent no.1 is the State of
Maharashtra and respondent no.3 is the Joint Charity
Commissioner who are formal parties. Respondent No.2
who is the contesting party is a Trust registered
under the Act and is represented by its trustee.
4. On
30-9-1980, the respondent no.2 Trust made
an application under Section 36(1) (a) of the Act for
permission to sell three properties of the Trust
namely, survey No.119 admeasuring 4 acres 14 gunthas,
survey no.120 admeasuring 6 acres 30 gunthas and
survey no.121 admeasuring 22 acres 9 gunthas situate
at Somthana, taluka Badnapur, district Jalna. By an
order dated 15-2-1982, the Charity Commissioner,
Maharashtra State granted permission for sale of the
three properties subject to certain conditions. We
are not concerned in this petition with the
permission for sale of survey No.119 and survey
No.120 and the present petition relates only to the
permission for sale of survey No.121. By the order
dated 15-2-1982 the Charity Commissioner granted
permission to the Trust to sell 12 acres 9 gunthas of
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land out of survey no.121 to Anna Dhuraji Patil – the
petitioner herein, at the rate of Rs.7,000/- per acre
and further granted permission to sell 10 acres of
land out of survey no.121 to Ganesh Tulshiram Patil
and Vishnu Tulshiram Patil at the rate of Rs.7100/-
per acre. The Charity Commissioner further directed
that the sale deed should be executed within six
months or within such further time as may be extended
by him, if deemed fit.
5. The petitioner did not pay the consideration
of
Rs.85,575/- (calculated at the rate of Rs.7000/-
per acre for 12 acres 9 gunthas) for purcahse of the
part of survey No.121, within six months. However,
he made an application to the Joint Charity
Commissioner, Aurangabad to whom the powers of the
Charity Commissioner were delegated, for extension of
time for completion of the sale. Learned Joint
Charity Commissioner was of the opinion that in view
of the long period of about six years which had
elapsed between initial permission for sale granted
under section 36 of the Act and the application for
extension of time, the prices of the land would have
gone up substantially. He, therefore, thought that
it would not be appropriate to grant extension of
time without inviting fresh bids. Accordingly, the
Joint Charity Commissioner invited parties to offer
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fresh bids. It is, however, not clear from the
petition whether the fresh bids were invited from the
public or whether the present petitioner, and Ganesh
Tulshiram Patil and Vishnu Tulshiram Patil who had
agreed to purchase parts of survey No.121 were alone
permitted to bid. In the fresh bid, Ganesh Tulshiram
Patil offered price of Rs.15,000/- per acre but only
for 10 acres of land of S. No. 121.. The present
petitioner also offered to purchase 10 acres of land
out of S.No. 121 at the rate of Rs.15,500/- per
acre. By an order dated 28-1-1987, learned Joint
Charity
Commissioner granted permission to the Trust
to sell to Vishnu Tukaram Patil 5 acres of land on
the western side of survey No.121 at the rate of
Rs.15,500/- per acre. He also granted permission to
the Trust to sell to the petitioner 5 acres of land
of S.No.121 adjacent to and lying to the east of the
property to be sold to Vishnu Patil, at the rate of
Rs.15,500/- per acre. The Joint Charity Commissioner
further directed that execution and registration of
the sale deed shall be completed within seven days
after 28-2-1987.
6. Feeling aggrieved by order of the Joint
Charity Commissioner increasing the price to be paid,
and reducing the area of the land to be sold the
petitioner herein filed a writ petition bearing Writ
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Petition No. 385 of 1987 in this Court. In the said
writ petition, settlement was arrived at between the
parties and in view of the settlement, the Court
passed the following order –
. ORDER :
. In view of the settlement
between the petitioner and the
respondent no.3, the impugned order
passed by the respondent no.4 is set
aside with a direction to the said
respondent
ig to look into the matter
afresh.
. In this background the petition
is allowed.
. The impugned order set aside
and the matter remanded for fresh
orders after looking into the matter
before the respondent no.4 who should
dispose of the matter within the period
of three months.
. In these circumstances of the
case the parties are directed to bear
their respective costs.
After remand, the matter was heard by the Joint
Charity Commissioner, Aurangabad, who by his fresh
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order dated 28-3-1990 again granted permission to the
respondent no.2 Trust to sell to Vishnu Tulshiram
Patil 5 acres of land from western boundary of survey
no.121 at the rate of Rs.15,500/- per acre. He also
granted permission to the Trust to sell to the
petitioner 5 acres of land adjacent to and lying to
the eastern side of the land to be sold to Vishnu, at
the rate of Rs.15,500/- per acre. That order of the
Joint Charity Commissioner dated 28-3-1990 is
impugned in this writ petition.
7. Learned
ig Counsel for the petitioner submitted
that the Joint Charity Commissioner lost sight of the
fact that initially the Charity Commissioner, Bombay,
by his order dated 15-2-1982 had granted permission
to the Trust to sell the petitioner 12 acres 9
gunthas of land at the rate of Rs.7000/- per acre.
The application made to the Joint Charity
Commissioner, Aurangabad bearing Application No.9 of
1986 was not for a fresh permission to sell the land
but was only for extension of time fixed for
completion of the sale. The original order fixed
time of six months for completion of sale. As the
sale could not be completed within six months, the
petitioner had only prayed for the extension of time.
The Joint Charity Commissioner, therefore, could have
only extended the time or rejected the request. He
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could not have modified the conditions initially
imposed nor could he have increased price or reduced
the area to be purchased.
8. Per contra, learned Counsel for the
respondent no.2 submitted that in granting permission
for sale of the trust property, the Charity
Commissioner must look to the interest of the trust
and protect the interest of the ultimate
beneficiaries of the Trust. Ordinarily, while
granting permission under section 36 of the Act, time
limit is fixed for completion of the sale in order to
protect the interest of the Trust and the
beneficiaries of the Trust. It is always in the
interest of the Trust to get the entire consideration
strictly within the time fixed by the Charity
Commissioner. If the time for completion of the sale
is to be extended for any reason or event even beyond
the control of the parties, the Charity Commissioner
can and ought to consider whether the prices of the
property have gone up in the meanwhile. In order to
compensate the trust for the loss likely to be caused
by the delay, the Charity Commissioner, while
extending the time either award interest for the
delayed payment or increase the price or in an
appropriate case can even refuse to extend time for
sale. What order should be passed by the Charity
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Commissioner would depend on the facts and
circumstances of each case. In the present case, the
price of the property had gone up substantially. The
very fact that the petitioner himself made an offer
to purchase property at Rs.15,500/- per acre instead
of Rs.7000/- per acre initially fixed itself was the
proof that the prices had gone up. Therefore, the
Joint Charity Commissioner has not committed any
error in extending the time for completion of sale
subject to the payment of enhanced price.
9.
In Shailesh Developers and another vs. Joint
Charity Commissioner, Maharashtra and others reported
in 2007(3) Mh.L.J. 717, a Full Bench of this Court
has reviewed the law relating to the permission for
sale of the trust property to be granted under
section 36 of the Act. In para nos.28 of the
decision, the Full Bench has observed –
. While exercising power either
under clause (b) or clause (c), the
Charity Commissioner can impose
conditions having regard to the
interest, benefit or protection of the
trust. 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
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the power of the Charity Commissioner
is restricted either to grant sanction
to a particular proposal of the
trustees 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
the 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,
purchaser should construct a building
on a part of the trust property for the
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
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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
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
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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 the
Charity Commissioner to ensure that the
property should be alienated in such a
manner that maximum benefits are
accrued to the trust.
Commissioner while
The Charity
considering
application under section 36(1) of the
an
said Act of 1950, in a given case can
opt for public auction or can invite
bids.”
In relation to the locus of a person to challenge
the order passed by the Charity Commissioner, the
Full Bench in para 29 of its decision has observed :
. ” 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 par with
a public property so far as its sale
or transfer is concerned. It is,
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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. “
As held by the Full Bench, while granting permission
for sale of the trust property, the Charity
Commissioner must keep in mind the best interest of
the Trust as also the interest of the beneficiaries
of the trust
ig because the trustees though are the
legal owners, they hold the trust property for
benefit of the beneficiaries. They cannot sell the
property for their rhyme and permission for sale
cannot be granted unless the Charity Commissioner is
satisfied that there is necessity to sell the trust
property. Once the Charity Commissioner is satisfied
that alienation of the property is necessary in the
interest of the trust or for the benefit of the trust
or for the protection of the trust, the Charity
Commissioner can grant permission for alienation.
While granting permission to sell, the Charity
Commissioner must keep in mind interest of the trust
and the beneficiaries. When more than one person are
interested in purchasing the property, the Charity
Commissioner may be required to choose one of them.
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The Charity Commissioner while so doing, must also
take into account the interest of the trust and
beneficiaries. Charity Commissioner is entitled, may
be required, to impose conditions while granting
permission for sale, so as to protect the interest of
the trust and the beneficiaries. One of the
conditions which is usually imposed, and in my
opinion which ought to be imposed, is put a time
limit for completion of sale of the property and in
any event for payment of the consideration. It is
matter of common knowledge that the price of a
property goes up with the passage of time. It would,
therefore, be inappropriate to grant permission for
sale of the trust property without putting time
restriction for completion of the sale and in any
event for the payment of the consideration. It is
true that generally time for performance of a
contract for sale of immovable property is not be an
essence of the contract. However, that would not be
true if a condition is imposed by the Charity
Commissioner for completion of sale within a
specified time. Even in case of a private contract
it is open for the parties to agree and provide that
time for performance of any contract (including a
contract for sale of an immovable property) shall be
the essence. If so, unless the contrary is proved
the time fixed by the Charity Commissioner for
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completion of sale (and payment of consideration) at
the time of grant of permission for sale under
section 36 of the Act must be strictly adhered to and
would be the essence of the contract. This is
necessary to protect the interest of the trust and
the beneficiaries or else, the purchaser can delay
the purchase without payment of full consideration
and insist the trustees to complete the sale at a
later date at the old price, after the price have
gone up substantially. The reason for the delay by
purchaser in purchasing the property may not always
be material.
ig For, it would be easy for a shrewed
purchaser to invent some reason and thereby delay the
transaction and payment of full consideration after
initial payment of small earnest money. Though no
general rule can be laid down about the delay in
purchase, the Charity Commissioner would be wise in
being extremely cautious and slow in extending the
time for completion of sale fixed in his order of
permission of sale passed under section 36 of the
Act. If the delay is substantial, and the prices of
the property has gone up in the meanwhile, the
Charity Commissioner would be justified and perhaps
required to refuse to extend the time initially fixed
by him or increase the price. He would not commit
any error if he chooses to invite fresh bids as he
has done in the present case. If any of the
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conditions imposed by Charity Commissioner is
breached, then the sale made in breach of the
condition shall not be binding on the trust and the
beneficiaries.
10. Looked at from this angle, in my view, Joint
Charity Commissioner committed no error in taking
into consideration long lapse of time between the
initial permission and the date of application made
for extension of time or even date on which the order
on that application is passed. In view of the long
lapse
of time, in the present case the Joint Charity
Commissioner was justified in inviting fresh bids.
As stated earlier, the very fact that the fresh bids
raised price more than 100 per cent unequivocally
shows that the price had gone up in the meanwhile.
No error was committed by the Joint Charity
Commissioner in refusing to extend the time
unconditionally and also in restricting the area
agreed to be sold and increasing the price. The area
was reduced on account of the fact that the
petitioner and other co-bidder themselves had stated
that they were interested in purchasing the property
situate on the western side only not interested in
the area of the eastern side.
11. For the reasons mentioned above, the writ
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petition is dismissed. Rule is discharged. In the
facts and circumstances of the case, the parties
shall bear their own costs.
( D. G. KARNIK, J. )
pnk-wp352390
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