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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
WRIT PETITION NO.1801/2011
PETITIONER :- Datta S/o Vitthalrao Khalkonikar,
aged about 55 years, Occupation: Agriculturist,
r/o Shriniwas Colony,
Wardha.
...VERSUS...
RESPONDENTS :- 1. Shriram Mandir Deosthan Trust,
ig Wardha, through its President,
Shri Rajendra B. Lule, Advocate, Wardha,
In front of Indira Market,
Malgujaripura, Wardha.
2. Megh Reality & Developers Private Limited,
through its Director,
Shri Omprakash Premadatta Ahuja,
R/o Sneh Nagar, Wardha,
(At present Nagpur.)
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Shri S. V. Sohoni, learned counsel for the petitioner.
Smt. A. Joshi, learned counsel for the respondent No.1.
Senior Counsel Shri M. G. Bhangde with Shri V. V. Bhangde, learned
counsel for the respondent No.2.
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CORAM : R. M. SAVANT J.
RESERVED ON : 29.06.2011
PRONOUNCED ON : 08.07.2011
O R A L J U D G M E N T
1) Rule with the consent of the parties made returnable forthwith and
heard.
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2) The above petition filed under Articles 226 and 227 of the
Constitution of India takes exception to the order dated 15/02/2011
passed by the Joint Charity Commissioner, Nagpur, by which order the
application filed by the respondent No.1-Trust under Sec.36 (1) (a) of the
Bombay Public Trust Act was disposed of by granting permission to the
respondent No.1-Trust to sell the property in question to the respondent
No.2 herein.
3)
The questions which are arise for consideration in the above
petition as to whether the price offered by the respondent No.2 herein for
the property in question is the market price of the property? And whether
the order passed meets the requirements of Section 36 (1) (a) of the
Bombay Public Trust Act? (Hereinafter referred to for brevities sake as the
“said Act”).
4) The factual matrix involved in the above petition can be stated
thus –
The petitioner is the trustee of the respondent No.1-Trust and was
at the relevant time the Treasurer of the said Trust. The application under
Section 36 (1) (a) of the said Act is in respect of the sale of property
bearing Survey No.124 admeasuring 7 hectares and 70 ares, which would
be referred to hereinafter as the “said Trust property”, on the ground of
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augmenting the facilities for the devotees during the “Navratra Utsav”.
The respondent No.1-Trust was desirous of constructing Sabha Mandap
(Hall), which could be used for generating income by letting it out on
rent. Since funds were required for construction of the hall, the
respondent No.1-Trust in it’s meeting dated 05/02/2008 resolved to sell
the said Trust property by issuing an advertisement in the newspapers.
Accordingly advertisements were issued on 15/02/2008 and 17/02/2008
in the local newspapers. In terms of the said advertisement, the last date
for submitting the tenders was 02/03/2008. It appears that pursuant to
the said advertisement, three offers were received amongst which the
offer of the respondent No.2 was Rs.4,01,100/- per acre, whereas the
offers given by the two other bidders were much lower at Rs.2,01,000/-
per acre and Rs.1,30,000/- per acre. Since the offers received were not to
the satisfaction of the respondent No.1-Trust, in the meeting dated
03/03/2008, it was decided to again issue a fresh advertisement in the
local newspapers so as to get better offers. Accordingly, advertisement was
issued in the various local newspapers. As per the said advertisement, the
last date for submitting the offers was 13/03/2008. In terms of the said
advertisement, the petitioner and the other two bidders gave their revised
offers on 13/03/2008. The respondent No.2 gave a revised offer of
Rs.6,02,500/- per acre which was the highest. After negotiations, the
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respondent No.2 increased its offer to Rs.6,10,000/- per acre and,
therefore, the total offer of the respondent No.2 for the said Trust
property was in the sum of Rs.1,16,01,590/-. The respondent No.1-Trust
accordingly accepted the said offer and entered into an agreement and
applied to the learned Joint Charity Commissioner for according sanction
to the sale of the said Trust property to the respondent No.2 with whom it
had entered into an agreement. The learned Joint Charity Commissioner
in turn directed the respondent No.1-Trust to invite objections in respect
of the said proposed sale to the respondent No.2. Accordingly, the
respondent No.1-Trust issued a notice in a local newspaper inviting
objections. The petitioner accordingly submitted his objection. It was the
contention of the petitioner that the price offered by the respondent No.2
was much lower than the market price prevailing for the land in question.
The petitioner also offered a price of Rs.17,00,000/- per acre by filing his
affidavit. In response to the said affidavit filed by the petitioner, the
respondent No.1 filed its additional affidavit on 06/12/2010.
5) The learned Joint Charity Commissioner considered the application
filed under Section 36 (1) (a) of the said Act seeking sanction for sale of
the said Trust property to the respondent No.2 herein and by the
impugned order dated 15/02/2011 disposed of the said application and
thereby accorded sanction to the sale of the said Trust property to the
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respondent No.2 herein. The gist of the reasoning of the learned Charity
Commissioner can be found in paragraph-23, which for the sake of
convenience is reproduced herein under.
“23. The learned Advocate Shri Chorghade explains that, the
factory of the proposed purchaser situates near the trust land.
The trust land may come in the area of operation for
development of industrial area. The proposed purchaser is a
businessman and, therefore, wants to invest accordingly, putting
in view, the future prospectus.
This statement on behalf of the proposed purchaser is not
countered at Bar.”
6) In so far as the objection of the petitioner is concerned, the learned
Joint Charity Commissioner observed that the offer of the petitioner of
purchasing the land at Rs.17,00,000/- per acre was an afterthought and
without any support and, therefore, cannot be accepted. The learned Joint
Charity Commissioner also observed in the order that the price fetched is
maximum and the proposal is in the interest of the Trust. As indicated
above, it is this order, which is impugned in the present petition.
7) Before proceeding to consider the rival contentions, it would be
apposite to refer to the affidavit in reply filed by the respondent No.2 and
the rejoinder filed by the petitioner in the above petition.
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Affidavit in reply :
i) In the affidavit in reply dated 07/06/2011 filed on behalf of
the respondent No.2 herein i.e. the proposed purchaser, it has been in
terms stated that the respondent No.2 offered the price that it has offered
for the reason that the respondent No.2 is an Associate Company of one
M/s. Uttam Galva Metallics Limited and is engaged in the activity of
purchasing land for M/s. Uttam Galva Metallics Ltd. It has further been
stated in the said affidavit that M/s. Uttam Galva Metallics Ltd. and the
respondent No.2 have already purchased the surrounding lands
(approximately 250 plus acres) for starting steel manufacturing unit of
M/s. Uttam Galva Metallics Ltd. It has further been stated that the project
cost of M/s. Uttam Galva Metallics Ltd. is Rs.1500 Crores and that the
parent company has taken loan approximately of Rs.1200 Crores from
consortium of various banks wherein the State Bank of India is the lead
bank. It has further been stated that the construction on the site has been
started in July, 2008 and was completed in the 2010.
ii) In so far as the objection of the petitioner was concerned, it
has been averred that the Joint Charity Commissioner was only required
to see whether the price offered by the respondent No.2 on the date when
the tenders were invited was as per the market value or not. It has
further been averred that the reason given by the Joint Charity
Commissioner for not considering the petitioner’s offer is correct as
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nothing was brought to his notice by the petitioner to show his bona fides
in respect of the said offer.
Affidavit in rejoinder :
i) The petitioner has filed an affidavit in rejoinder dated
16/06/2011 wherein it is contended that the proposed sale in favour of
the respondent No.2 has not been carried out in a transparent manner. It
is averred that the respondent No.2 seeks to rely on the offer made by him
in the first round of advertisement i.e. pursuant to the advertisement
issued on 15/02/2008 and 17/02/2008, whereas in fact the revised offer,
pursuant to the advertisement issued in March, 2008, has been
purportedly accepted. This according to the petitioner is a circumstance,
which does not inspire confidence in the whole decision making process.
ii) It has further been averred that though the respondent No.2
claims that it was purchasing the property for its Associate Company M/s.
Uttam Galva Metallics Ltd., no document was produced before the Joint
Charity Commissioner to show the connection between the petitioner and
the said M/s. Uttam Galva Metallics Ltd.
iii) The petitioner to the said affidavit in rejoinder has annexed
six sale deeds entered into by the said M/s. Uttam Galva Metallics Ltd.
with six land holders of adjoining lands in the same village wherein the
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said Trust property is situated wherein the said M/s. Uttam Galva
Metallics Ltd. has agreed to purchase the land at rate of Rs.16,79,000/-
per acre. The copies of sale deeds as well a tabular statement are
annexed. It further averred in the said rejoinder that from the sale deeds
dated 30/01/2010, it can be seen that the price offered by the respondent
No.2 was much lower than the market price.
Submissions on behalf of the petitioner :
i)
The learned counsel for the petitioner submitted that the
learned Joint Charity Commissioner has not taken into consideration the
relevant facts and has decided the application on facts which have no
bearing whilst considering an application under Section 36 (1) (a) of the
said Act.
ii) In the teeth of the offer made by the petitioner at
Rs.17,00,000/- per acre, the learned Joint Charity Commissioner ought to
have given the petitioner a chance to pay the amount in terms of the said
offer.
iii) The learned Joint Charity Commissioner has not adjudicated
upon, whether the price offered by the respondent No.2 was the market
price. The learned Joint Charity Commissioner erred in basing his order
upon the fact that the proposed purchaser, who is a businessman, is
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having his factory near the Trust land when there was no such document
produced before him in that regard.
iv) In the teeth of the sale deeds executed by the said M/s.
Uttam Galva Metallics Ltd. with the land owners of the adjoining lands,
which sale deeds are dated 30/01/2010, the price offered by the
respondent No.2, as can be seen, is 1/3rd of the price offered by the said
M/s. Uttam Galva Metallics Ltd. to the said land holders, which is near
about Rs.17,00,000/- per acre.
Submissions on behalf of the respondent No.2 :
i) It is submitted on behalf of the respondent No.2 by the
learned Senior Counsel Shri Bhangade that the petitioner being a trustee
and having not attended the meetings in which the decision was taken to
sell the said Trust property to the respondent No.2 it is now not open for
the petitioner to challenge the sale of the said Trust property to the
respondent No.2.
ii) Though, numerous meetings were held from time to time,
the petitioner for the reasons best known to him did not attend the said
meetings and did not take any exception to the decision of the respondent
No.1-Trust to sell the land to the petitioner and, therefore, the petitioner
is now estopped from questioning the sale to the respondent No.2.
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iii) In a proceeding under Section 36 (1) (a) of the said Act the
learned Charity Commissioner was only required to consider whether the
sale is in the interest of the Trust and whether the price offered for the
property in question is the market price on the date of the sale.
iv) The sale deeds which are now sought to be relied upon by
the petitioner are of January, 2010, whereas the advertisement pursuant
to which the offer was made by the respondent No.2 was issued in March
2008 and, therefore, the price mentioned in the sale deeds now produced
by the petitioner cannot be taken into consideration as an indication of
the market price which was prevailing in the year 2008.
v) The petitioner has not shown his bona fides by not
depositing 25% of the amount of the offer, which he had made and,
therefore, the learned Joint Charity Commissioner was right in coming to
a conclusion that the offer of the petitioner was an afterthought and that
no steps have been taken by the petitioner to show his bona fides. For the
said purpose the learned senior counsel for the respondent No.2 relied
upon a judgment of a learned Single Judge of this Court reported in 2011
(3) Mh.L.J. 31 in the matter of Raj Darshan Ventures vs. Joint Charity
Commissioner and others.
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Consideration :
Having heard the learned counsel for the petitioner and the learned
senior counsel for the respondent No.2, I have given my anxious
consideration to the rival contentions.
i) In the instant case, as the impugned order discloses what
has weighed with the learned Joint Charity Commissioner is the fact that
the proposed purchaser is a businessman, who has got his factory by the
side of the said Trust property, which is the subject matter of the sale.
Without there being any material produced by the respondent No.2 in
that regard. In so far as whether the price offered by the respondent No.2
is the market price or not the learned Joint Charity Commissioner has
merely in one line observed that the price offered by the respondent No.2
is maximum and that the proposal is in the interest of the Trust.
ii) As regards the sale of trust property and the powers of the
learned Joint Charity Commissioner under Section 36, the Full Bench
judgment of this Court reported in 2007 (4) All MR 100 in the case of
Shailesh Developers and Ors. vs. Joint Charity Commissioner
Maharashtra and Ors. has held that the power of the Charity
Commissioner is not restricted either to grant sanction to a particular
proposal of the trustees or to reject, it is the duty of the Charity
Commissioner to ensure that the transaction of alienation is beneficial to
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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 the facts and circumstances of each case.
iii) It is in the said context that the instant matter would have to
be considered, it is required to be noted that in the first round of
tendering the offer made by the respondent No.2 was to the extent of Rs.
4,01,100/- per acre. Thereafter within 15 days of the fresh tenders being
invited, the respondent No.2 hiked his offer to Rs.6,02,500/- per acre and
in negotiations to Rs.6,10,000/- per acre. Obviously, the respondent No.2
was aware that the price offered by him of Rs.4,01,100/- per acre in
February, 2008 was not the market price at the relevant time. The learned
Joint Charity Commissioner, therefore, ought to have considered the said
aspect from all its angles especially when there was an objection by the
petitioner that the price offered was not the market price. However, the
learned Joint Charity Commissioner, it seems, has mechanically accepted
the price offered as the maximum price and has accorded sanction to the
sale in favour of the respondent No.2. The factor which has weighed with
the learned Joint Charity Commissioner, as can be seen from the
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paragraph No.24 of the impugned order, is not a relevant factor, which
was required to be taken into consideration whilst considering an
application under Section 36 of the said Act.
iv) It is pertinent to note that the petitioner in his affidavit in
rejoinder in the above proceedings has annexed six sale deeds disclosing
that the said M/s. Uttam Galva Metallics Ltd. has purchased lands from
six adjoining land holders at the rate of Rs.16,79,400/- to Rs.17,79,600/-
per acre on 30th January, 2010. Though the said sale deeds were not
before the learned Joint Charity Commissioner, this Court in its writ
jurisdiction cannot shut its eyes to the said sale deeds. Admittedly, the
petitioner claims to have purchased the land on behalf of the said M/s.
Uttam Galva Metallics Ltd. that the offer of the petitioner at Rs.6,10,000/-
per acre is of the year 2008. There cannot be such a high amount of
appreciation within a period of two years and that also of land in a rural
area, the only irresistible conclusion that can be drawn is that the price
offered by the petitioner in the year 2008 cannot be said to be the market
price and, therefore, the said Trust property cannot be said to have
fetched the best market price.
v) The contention of the learned counsel for the petitioner that
the price as on 06/03/2008 would have to be taken into consideration
and in the absence of any better offer received in spite of the two attempts
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being made by the respondent No.1-Trust, the order of the learned Joint
Charity Commissioner according sanction cannot be faulted with, in my
view cannot be accepted. In the teeth of the said six sale deeds which the
said M/s. Uttam Galva Metallics Ltd. has itself entered into with the
adjoining land holders, the said submission of the learned counsel for the
petitioner cannot be countenanced. The fact that the petitioner has not
shown his bona fides by not depositing 25% of the amount whilst
objecting to the proposed sale in favour of the respondent No.2 and has
also not deposited the amount as directed by this Court in the above
petition by order dated 25/04/2011, cannot be a ground to deny reliefs to
the petitioner more so, in the teeth of the sale deeds, which have now
been produced by the petitioner on record. It is trite that the transaction
in question is to be in the best interest of the trust which encompasses
within itself the aspect of the property fetching the market value. The
reliance placed by the learned senior counsel for the respondent No.2 on
the judgment of a learned Single Judge of this Court in Raj Darshan
Ventures vs. Joint Charity Commissioner and others reported in 2011
(3) Mh.L.J. 531, in my view, is misplaced. The petitioner in the said case
had not made any specific offer and secondly the application/letter was
not accompanied by the EMD and the petitioner had merely stated that
time to be granted to deposit the amount.
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vi) In my view, in view of the six sale deeds annexed by the
petitioner to his affidavit in rejoinder, the scenario changes dramatically,
since the party on behalf of whom the petitioner is purported to be acting
i.e. M/s.Uttam Galva Metallics Ltd. has itself purchased the lands from the
adjoining land holders though in January 2010 for prices ranging from Rs.
16,79,400/- per acre to Rs.16,79,600/- per acre. In my view, the said
factor would be a relevant factor to consider whilst arriving at a
conclusion whether the price offered by the respondent No.2 was the
market price for the property in question. In that view of the matter, the
impugned order would have to be set aside and is accordingly set aside
and the matter would have to be relegated back to the learned Joint
Charity Commissioner for a de novo consideration in the light of the said
six sale deeds produced by the petitioner.
vii) On remand, the learned Joint Charity Commissioner to
decide the application filed by the respondent No.1 within a period of
three months of the first appearance of the parties. The parties to appear
before the learned Joint Charity Commissioner on 25th July, 2011 at 3.00
p.m. The learned Joint Charity Commissioner thereafter to fix the
schedule as per his convenience.
viii) Needless to state that the learned Joint Charity
Commissioner would decide the application on its own merits and in
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accordance with law, uninfluenced by the observations made in the
instant order but keeping in mind the well settled principles applicable
whilst deciding an application under Sec.36 of the said Act.
8) Rule is accordingly made absolute in the aforesaid terms, with
parties to bear their respective costs.
JUDGE
KHUNTE
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