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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
CIVIL APPLICATION NO.4905 OF 2008
IN
FIRST APPEAL NO.2667 OF 2007
Lilavati Kirtilal Mehta Medical Trust and another ..Applicants.
Vs.
Charu K. Mehta and others ..Respondents.
....
Mr. Iqbal Chagla, Senior Advocate with Mr. Snehal Shah, Mr. Sanjay
Jain, Mr. Kunal Vajani, Mr. Atul Daga and Mr. Rohan Deshmukh i/b
M/s. Wadia Ghandy & Co. for the Applicantas.
Mr. Navroz Seervai, Senior Advocate with Mr. Raj Patel and Mr. T.N.
Tripathi i/b T.N. Tripathi & Co. for Respondent No.1.
Mr. R. A. Dada, Senior Advocate with Mr. Prateek Sakseria with Ms.
Jyoti Shah i/b M/s. Dhru Shah & Co. for Respondent No.2.
Mr. Pranav Badhekar with Ms. Aziza Khatri and Mr. Shane Sapeco i/b
Hariani & Co. for Respondent Nos.10 and 12.
Mr. Janak Dwarkadas, Senior Advocate Mr. Prateek Sakseria, Mr.
Manish Desai with Mr. Dhirendra Sinha i/b M/s. Paras Kuhad &
Associates for Respondents 13 and 15.
Mr. Rajesh Behere for the Joint Administrator.
....
CORAM: DR. D.Y. CHANDRACHUD, J.
17th December, 2008.
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ORAL JUDGMENT :
1. The Civil Application has been taken out in the pending
First Appeal by the First and Tenth Defendants. The reliefs that have
been sought are (i) the discontinuance of the joint administrators; or in
the alternative (ii) the discharge of Mr. A.A. Halbe, who is one of the
Joint Administrators; and (iii) the appointment of any one among four
named individuals as a Joint Administrator in place of Mr. A.A. Halbe.
2.
On 26th March, 2007 the Supreme Court appointed Dr.
Narendra Trivedi, Vice President of the Lilawati Hospital and Dr. K
Ramamurthy, a senior consultant to be in charge of the Hospital for
the day to day running of the Hospital and the Research Institute. The
order of the Supreme Court was pending the disposal of a suit
instituted by the Plaintiff before the City Civil Court inter alia to
challenge her removal from the Board of Trustees. The order of the
Supreme Court records that the disputes between the parties were
liable to impede the running of the Hospital which was under the
management of the Trust. The Supreme Court observed thus :
“After hearing the arguments on both sides, we find that
there are serious disputes between the parties which::: Downloaded on – 09/06/2013 14:09:12 :::
3ultimately may cause serious difficulties in the running of
the hospital, which is under the management of the Trust.
In view of the present circumstances, as a temporary
measure, we direct that Dr. Narendra Trivedi, Vice-
President of the Leelavati Hospital and Dr. K. Ramamurthy,
Senior Consultant in that hospital, shall be in-charge of the
hospital of the day to day running of the Hospital and
Research Institute. There two Administrators will take alldecisions relating to the administration of the hospital.
They shall give a report to the Board of Trustees every two
weeks and any directions by the Board of Trustees are to
be issued to these two Administrators only in the form ofresolutions and not individual instructions by any Trustee. A
copy of the report of resolution shall also be furnished to theappellant and if she is in any way aggrieved by the
directions issued by the Board, she would be at liberty to
seek appropriate direction from the City Civil Court, Mumbaiwhere the suit is pending.”
The two Administrators were appointed to look after the day to day
running of the Hospital and the Research Institute. The
Administrators were to furnish a report to the Board of Trustees.
Directions by the Board of Trustees were to be issued to the two
Administrators in the form of resolutions. A copy of each resolution
was to be furnished to the Plaintiff and liberty was reserved to her,
should she be aggrieved, to seek appropriate directions from the City
Civil Court. There can be no manner of doubt from the order of 26th
March, 2007 that the appointment of Administrators was for the
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purpose of looking after the administration of the Hospital. There was
evidently a dispute in regard to the administration of the Trust.
Under the terms of appointment, the Administrators were not to be
concerned with the administration of the Trust. The order of the
Supreme Court therefore contemplates that directions would be
issued to the Administrators by the Trustees and these directions
were to be in the form of a resolution of the Board of Trustees.
3.
On 20th August, 2007 Dr. K. Ramamurthy, one of the Joint
Administrators, came to be replaced by Mr. A.A. Halbe, a Former
Judge of this Court since he had expressed his inability to function as
an Administrator on grounds of health. The suit was dismissed by the
City Civil Court on 24th September, 2007. On 28th September, 2007
the Supreme Court issued directions to the effect that the Joint
Administrators should continue for a period of ten weeks subject to
any interim order or final order that may be passed in the appeal or in
collateral proceedings. This order was clarified on 26th October,
2007 to the effect that these directions had been passed without
prejudice to the rights of the parties and the order would not
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tantamount to the continuance of the services of the Administrators if
they were not required.
4. A First Appeal against the dismissal of the suit was lodged
before this Court. A Civil Application was taken out for interim relief.
On 15th February, 2008 the application for interim orders was
disposed of by a Learned Single Judge. The Learned Single Judge
observed that on a plain reading of the order passed by the Supreme
Court appointing the Joint Administrators, it is evident that the
appointment of the Administrators was in order to ensure that
disputes between the Trustees do not cause any difficulties in the
running of the Hospital. The Learned Single Judge was of the view
that even as of date there were serious disputes between the
Trustees and two separate groups were fighting a bitter battle not
merely before this Court, but before the authorities constituted under
the Bombay Public Trusts Act, 1950. The Learned Single Judge was
of the view that the circumstances which existed when the Supreme
Court passed the order appointing the Joint Administrators continued
to exist even as of date. In the circumstances, until the disposal of
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the appeal the interim arrangement which had been made under the
order of the Supreme Court was directed to continue to operate.
5. At this stage it may be necessary to note that one of the
two Joint Administrators, Mr. A.A. Halbe had submitted several
reports both before this Court and before the Charity Commissioner in
proceedings under the Bombay Public Trusts Act, 1950. An
application was moved before the Supreme Court viz. Interim
Application 5 of 2008 seeking the removal of Mr. A.A. Halbe on the
ground that his conduct showed that he was colluding with the Plaintiff
to the suit before the City Civil Court. In his judgment dated 15th
February, 2008 the Learned Single Judge observed that since an
application for the removal of Mr. Halbe was pending before the
Supreme Court, it would not be proper to deal with the submissions
that had been urged in regard to the role which had been played by
the Joint Administrator. This aspect of the mater was dealt with in
the following observations contained in paragraph 33 of the judgment
of Mr. Justice A.S. Oka :
“In so far as reports submitted by Mr. Justice A.A. Halbe
(Retired) are concerned, it must be stated that an::: Downloaded on – 09/06/2013 14:09:12 :::
7application made by the contesting defendants for removing
him as a Joint Administrator is pending before the ApexCourt. Therefore, it will not be proper to deal with the
submissions made by the counsel appearing for thedefendants as regards the role played by the said Joint
Administrator. Considering nature of the allegations made
by the contesting defendants against the said Joint
Administrator, I have not taken into consideration reportssubmitted by the said Joint Administrator.”
6. A Special Leave Petition was filed before the Supreme
Court against the order of the Learned Single Judge dated 15th
February, 2008. The Special Leave Petition was heard together with
I.A. 5 of 2008 in which, as already noted, the relief that was sought
was the removal of Mr. A.A. Halbe. On 14th July, 2008 the Supreme
Court, while disposing of the Special Leave Petition and the I.A.,
observed that since the order of the Learned Single Judge of this
Court was an interim discretionary order, the Supreme Court was not
proposing to interfere with the order. The Supreme Court observed
that Counsel appearing for the Petitioner before the Court had made a
reference to the reports submitted by one of the Administrators
according to which there were serious irregularities in the matter of
administration. On this aspect, the Supreme Court observed thus :
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“The parties on either side are at liberty to bring it to the
notice of the High Court regarding these developments andtake appropriate steps for redressal of the grievance and
the High Court will be at liberty to pass appropriate ordersin this matter. We clarify that in passing appropriate orders,
the High Court need not be carried away because the
administrators were appointed by this Court and the High
Court may be at liberty to pass appropriate ordersconsidering the claim of all parties concerned.” (emphasis
supplied).
The hearing of the appeal was expedited. The Civil Application has
been instituted on 15th September, 2008, after the order of the
Supreme Court and the relief that has been sought, as already noted
earlier, is the removal of the Joint Administrators or, in the alternate,
the removal of Mr. A.A. Halbe.
7. During the course of the hearing, Senior Counsel appearing
on behalf of the Applicants did not press the wider relief that has been
sought in the Civil Application for the removal of the Administrators.
In fact, even before the concession was made, this Court had
indicated to the learned counsel that it was not inclined to vacate the
direction in regard to the regime of the Administrators. The
circumstances which weighed in the appointment of Administrators,
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pending the disposal of the suit, continued to exist as observed in the
order of the Learned Single Judge of this Court dated 15th February,
2008. During the course of the hearing of the Civil Application the
relief that has been pressed is the removal of Mr. A.A. Halbe as a
Joint Administrator and for the appointment of any other administrator
in his place. Counsel submitted that either a single administrator may
be appointed or another Joint Administrator may be appointed in
substitution of Mr. Halbe. The principal ground on which the removal
of Mr. A.A. Halbe has been sought is that, the Joint Administrator has
colluded with the Plaintiff and has failed to discharge his duties
impartially. Learned Senior Counsel submitted that the Joint
Administrators came to be appointed by the Supreme Court in order
to look after the day to day administration of the Hospital and the
Research Institute. The Joint Administrators, by the terms of their
appointment, were not to be concerned with the administration or
management of the Trust since disputes in regard to the Trust were
pending before diverse authorities inter alia under the Bombay Public
Trusts Act, 1950. Yet, the submission goes, Mr. Halbe overreached
the bounds of his authority by submitting successive reports to this
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Court and to the Charity Commissioner on matters which did not fall
within his domain. A chart was submitted for the purposes of
establishing before this Court that the reports submitted unilaterally by
Mr. Halbe were on every occasion timed to coincide with the
hearings either before this Court or before the Charity Commissioner.
It was urged that the Joint Administrator had aligned himself with one
of the litigating parties in disputes relating to the Trust, namely the
Plaintiff, and on every occasion the submission of reports – not jointly
as envisaged in the order of the Supreme Court but unilaterally by Mr.
Halbe – was intended to influence and prejudice the outcome of a
particular proceeding. This submission is sought to be buttressed by
referring to the conduct of the Administrator. Firstly, a reference was
made to the reports of the Administrator where he had sought to
question certain payments though as a matter of fact in his joint report
together with the other Administrator, he had sanctioned the very
same payments as being in order. Secondly, a reference was made
to the fact that in a suit instituted on the Original Side of this Court by
Shri Rajiv K. Mehta (the son of the Plaintiff) on 7th March, 2008 a
disclosure was made of a report which was to be submitted by Mr.
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Halbe to this Court on 10th March, 2008. In sum and substance, the
submission that has been urged is that as a Joint Administrator
appointed in pursuance of the orders passed by the Supreme Court,
Mr. Halbe was expected to discharge his duties impartially. However,
the conduct of the Administrator, shows that he has failed to
discharge that function with objectivity and impartiality and that he has
been colluding with one of the litigating parties viz. the Plaintiff to the
suit.
8. On the other hand, it has been urged on behalf of the
Original Plaintiff that (i) The application for the removal of Mr. A.A.
Halbe was not maintainable before this Court, having regard to the
circumstance that the appointment of the Joint Administrators was
continued in the interim order dated 15th February, 2008 and since the
Supreme Court had declined to interfere with the interim order; (ii)
The Application before the Court was submitted by the Trust and by
one of the Trustees who had been suspended and against whom
serious charges have been framed by the Charity Commissioner on a
prima facie case being made out involving large sums of the Trust.
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The role of an Administrator, it was urged, must be distinguished from
the role of a Judge or an Arbitrator and there was absolutely no
reason why an Administrator must be required to discharge his duties
in the same manner as would a Judge in his judicial capacity. These
submissions now fall for consideration.
Maintainability
9.
The first aspect of the matter is whether the application
seeking the removal of Mr. A.A. Halbe as Administrator is
maintainable, having regard to the order of the Learned Single Judge
dated 15th February, 2008 and the order of the Supreme Court dated
14th July, 2008. The Joint Administrators were appointed by the
Supreme Court on 26th March, 2007 pending the disposal of the suit.
Upon the disposal of the suit, the Supreme Court continued their
appointment for a stipulated period clarifying that this would be
subject to such orders as may be passed by this Court in the appeal
or in collateral proceedings. When the application for the grant of
interlocutory relief came up before a Learned Single Judge of this
Court during the pendency of the first appeal, this Court was of the
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view that the circumstances which warranted the appointment of the
Administrators during the pendency of the suit continued to subsist
inasmuch as the disputes amongst the Trustees had not ceased to
exist.
Evidently, before the Learned Single Judge, a reference was made to
the reports that were filed in diverse proceedings by Mr. A.A. Halbe
and to the role that was being played by him. That role according to
the Applicants was not either impartial or fair. The Learned Single
Judge declined to take into consideration the reports of Mr. Halbe or
the role that was being played by him, having regard to the
circumstance that by then an interim application had already been
filed before the Supreme Court seeking the removal of Mr. Halbe.
Paragraph 33 of the order of this Court dated 15th February, 2008
makes it abundantly clear that the Learned Single Judge was of the
view that it would not be proper to deal with the submissions made by
counsel appearing for the Defendants as regards the role played by
Mr. Halbe since an application for his removal was pending before the
Supreme Court. The order of the Supreme Court of 14th July, 2008
disposed of both the Special Leave Petition against the order of the
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Learned Single Judge continuing the mechanism of the Joint
Administrators as well as the Interim Application for the removal of Mr.
Halbe. The Supreme Court observed that while it was not interfering
with an interim discretionary order passed by the High Court, the
submission before the Supreme Court was that one of the
Administrators had submitted reports according to which there were
serious irregularities in the administration of the Trust. The Supreme
Court expressly clarified that parties on either side would be at liberty
to bring this to the notice of the High Court and to take appropriate
steps for the redressal of their grievances. The High Court, the
Supreme Court observed, would be at liberty to pass appropriate
orders “in this matter”. The expression “this matter” cannot, as the
Plaintiff seeks be construed to exclude the grievance of the Applicants
in regard to the conduct of Mr. A.A. Halbe. Significantly, the Supreme
Court clarified that in passing appropriate orders “the High Court will
not be carried away because the Administrators were appointed by
this Court”. The Supreme Court granted liberty to this Court to pass
appropriate orders considering the claim of all the parties concerned.
The observations of the Supreme Court to the effect that the High
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Court should not be carried away because the Administrators were
appointed by the Supreme Court is a matter of utmost significance.
This assumes significance in the background of the fact that the
Learned Single Judge of this Court had in the order dated 15th
February, 2008 expressed a reservation in regard to adjudicating
upon the role played by Mr. Halbe and upon expressing any view on
the reports submitted by him having regard to the fact that an
application for his removal was pending before the Supreme Court. It
is in this background, that the observations of the Supreme Court
would have to be interpreted. The order of the Supreme Court left it
open to the parties to bring their grievances for the consideration of
this Court. This would include the grievance in regard to the conduct
of Mr. Halbe. The application for the removal of Mr. Halbe on the
ground that he has failed to discharge his duties impartially is
therefore maintainable before this Court. The submission that was
urged on behalf of the Plaintiff is that what the Supreme Court kept
open in its observations is the grievances of the parties which may
be brought to the notice of this Court at the final hearing of the appeal.
Such an interpretation cannot be accepted. When the parties were
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granted liberty to move this Court for appropriate orders, that would
enable the parties to seek both interlocutory orders as well as final
orders in the appeal.
The conduct of the Joint Administrator
10. The basic question which must be addressed in these
proceedings is as to whether there is any merit in the submission that
Mr. A.A. Halbe failed to discharge his duties impartially and with the
objectivity that was to be expected from the appointment of a retired
Judge of this Court as one of two Joint Administrators.
11. The order passed by the Supreme Court on 26th March,
2007 defines the role of the Administrators and the scope of their
authority. The Administrators were placed incharge of the Hospital
and were to look after the day to day running of the Hospital and the
Research Institute. The two Administrators were directed to take all
decisions relating to the administration of the Hospital. The Supreme
Court observed that the Administrators were to give a report to the
Board of Trustees every two weeks and any directions by the Board
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of Trustees would have to be issued to the two Administrators in the
form of resolutions. The order of the Supreme Court therefore clearly
contemplates that there was a Trust in relation to which there were
serious disputes and these disputes were causing difficulties in the
running of the Hospital. The appointment of the Administrators was for
the purpose of looking after the day to day management of the
Hospital. The Administrators had no role to play either in the
administration of the Trust or in the conduct of the litigation between
the parties, relating to the Trust. Both the Administrators were
expected to speak with one voice, because it is evident from the
order of the Supreme Court that they were to submit a report –
meaning thereby one report – to the Board of Trustees every two
weeks. On their part, the Board of Trustees was expected to speak
with one voice in the form of a resolution which was to be issued to
the Administrators. The order passed by the Supreme Court did not
contemplate the Administrators, least of all one of them, intervening
in pending disputes between the Trustees relating to the affairs of the
Trust. These disputes in regard to the affairs of the Trust were
pending before diverse authorities inter alia constituted under the
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Bombay Public Trusts Act, 1950. Those would be adjudicated upon.
12. The record before the Court reveals that Mr. Halbe
unilaterally assumed to himself the authority to address reports to
diverse authorities and to this Court in matters which fall within the
domain of the administration and the management of the Trust. On
16th September, 2007 Mr. Halbe submitted his own individual
communication, styled as a report, to the Chairman and members of
the Trust. Mr. Halbe, as the report would show, commented upon
disputes relating to the Trust and proceeded to make a detailed
analysis of the Trust deed. It would be unnecessary to replicate
every one of the observations in the report. As an illustration it would
be material to refer to paragraphs 5, 6 and 7 of the report which
reads as follows :
“5) Mr. Kishor Kiritilal Mehta, Smt. Charu Kishor
Mehta and Rekha Haresh Sheth were appointed as
permanent trustees, i.e. for the life time. The permanent
trustees have powers to appoint new additional trustees,who could be permanent trustee or trustee for 5 years term.
At the expiry of 5 years, the permanent trustees were
further authorized to appoint other trustees for the same
period. The total period of the appointed trustees was for 3
terms, viz. 15 years. Regarding Governing Body and
Advisory Body referred in paras 18 and 19 of the deed they
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will be referred to at appropriate time.
6) The other important provisions that the Settler
Kirtilal Manilal Mehta was also vested with the power to
appoint not more than 5 trustees for 5 years and after his
death, Vijay Kirtilal Mehta (eldest son), as he is living, will
have the power to appoint not less than 5 trustees on the
board. However, Kirtilal desired that majority of the trustees
shall as far as possible be from the family members of
Kirtilal or from branches of such family members for Settler
Kirtilal Mehta.
7) Taking the overall view of the various paragraphs
of the trust deed, one thing is manifestly clear that the
trustees shall deal with the property only within ambits and
purposes of the trust and that seems to be very consistent
with the provisions of Bombay Public Trust Act, 1950.
Under Section 36-A of the Act, it is clearly provided that the
trustees of every public trust shall administer the affairs of
the trust and apply the funds and property thereof for the
purposes and objects of the trust in accordance with terms
of the trust, usage of the institution and lawful directions
that the Charity Commissioner or Court may issue. The
trustees shall exercise the same care as man of ordinary
prudence, when dealing with such affairs, funds or
properties, as if they were his own. The trustees are
entitled to exercise powers only for the prudent and
beneficial management of the trust. Every trustee is jointly
and severally liable for the acts of all the trustees on the
board. Sub-section 3 of Section 36-A further provides as
follows : “No trustee shall borrow monies by way of
mortgage or otherwise for the purpose of or on behalf of the
trust of which he is the trustee, except with the previous
sanction of the Charity Commissioner and subject to such
conditions and limits as may be imposed by him in the
interest or protection of the trust”. Sub-section 4 mandates
“that no trustee shall borrow money for his own use from
any property of the public trust of which he is the trustee”.
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These provisions have laid down the parameters of the
powers and duties enjoined upon the trustees. Trustees
hold the property in the trust not as the owner of the
property but all the same he has to deal with the trust
property with such care and prudence as he would exercise
in case of his personal property.”
Mr. Halbe referred to Application 1 of 2007 which is pending before
the Charity Commissioner and stated that the facts of the case would
need to be scrutinized “in this legal background”. He proceeded to
state that certain appointments which were made as Trustees were
illegal and invalid. In paragraph 30 of his report Mr. Halbe stated that
the facts which he had extracted are “the written facts in pleadings to
be adjudicated upon by the competent authority”.
13. A second report was submitted by Mr. Halbe to this Court in
Writ Petition 1201 of 2007. Significantly, the report that was
submitted to this Court on 16th October, 2007 was a reproduction of
the earlier report dated 16th September, 2007 submitted to the
Trustees. Mr. Halbe, however, deleted the concluding paragraph
which clarified that what had been stated in the report was culled out
from pleadings. Mr. Halbe had stated thus in paragraph 30 of his
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earlier report :
“30) I am sending this communication with a view to alert
trust against the impending actions, which may placatetrustees into vortex of civil as well criminal actions. None of
the above facts are extracted from imagination and guess
work. They are the written facts in pleadings to be
adjudicated upon by the competent authority. This shouldbe treated as the timely advise for the board to meet the
situation created by the proceedings in the Court.”
(emphasis supplied).
This paragraph was deleted in the report that was submitted before
this Court on 16th October, 2007. This aspect of the mater must
assume significance, having regard to what has transpired thereafter.
But at this stage it would be necessary to note that the tenor, the
language and the content of the report that was submitted on 16th
October, 2007 would lead to an inference that what was set out in the
report of the Administrator was a statement of facts which have been
investigated and found to be true. It was the bounden duty of Mr.
Halbe as the Administrator to point out to this Court that what he had
culled out were allegations from pleadings – something which he had
said in his earlier report to the Board of Trustees but which he chose
to delete while submitting the subsequent report to this Court.
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14. A third report was addressed by Mr. Halbe to the Judges of
this Court on 25th October, 2007. The First Appeal before this Court
against the dismissal of the suit by the City Civil Court was lodged on
25th October, 2007. The report of Mr. Halbe was filed on the very
same day. In fact, it has been stated by counsel appearing for the
Applicants that the papers and proceedings in the First Appeal were
not even served on the Applicants on 25th October, 2007. The report
of Mr. Halbe refers to the “appeal against (Short Cause Suit No.1997
of 2006 of the City Civil Court”. The report was submitted on the very
same day as the filing of the appeal. The attention of the Court has
been drawn to the fact that the same report was submitted before the
Supreme Court 1. During the course of the proceedings there was an
exchange of correspondence between Mr. Halbe and Crawford
Bayley & Company which was acting for the Board of Trustees of the
Trust. In his letter dated 22nd October, 2007 Mr. Halbe seems to
have confused his role as an Administrator, with the role of an
arbitrator. Mr. Halbe proceeded to refer to Writ Petition 1201 of 2007
that was instituted by the Plaintiff before this Court as “my writ
1 Volume 5 page 687.
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petition” 2. Mr. Halbe stated that he was within his rights “to approach
parties” and justified his contacting the Plaintiff to the suit. In his
report dated 25th October, 2007 Mr. Halbe referred to a notice of 4th
September, 2007 addressed by the advocate who was appearing on
behalf of the Plaintiff and stated that the entries in the accounts upon
which the notice was based were said to be documented which he
had no reasons to disbelieve.
15.
In a unilateral report dated 2nd January, 2008 submitted
again to the Judges of this Court Mr. Halbe referred to the complaint
of the Plaintiff that her room had been “bugged” and that the trust
meetings were being secretly photographed. While stating that he
was unable to offer comments on the complaint. Mr. Halbe stated
that all “said and done”, the Plaintiff “has been prevented from
interacting with any member of the staff under board resolution”.
16. At this stage it would be necessary to note that a joint report
in terms of the order passed by the Supreme Court on 26th March,
2007 was submitted by the Administrators on 4th December, 2007. In
2 Para 4 of the letter dated 26th October, 2007 (Vol V page 681)
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their report the Administrators observed that the working of the
Hospital was satisfactory. Annexed to the joint report is a statement
showing payments made between 20th November, 2007 to 3rd
December, 2007 and among them are payments made to the
advocates, Wadia Ghandy and Company. This statement forms part
of the report and evidently from the observation that the working of
the Hospital was satisfactory, Mr. Halbe found no reason to hold that
the payments were not warranted. Despite this, in a report dated 2nd
January, 2008 submitted by Mr. Halbe the very same payments which
form a part of the joint report were sought to be criticized. In a report
dated 5th February, 2008 again addressed by Mr. Halbe to the
Judges of this Court he made a grievance to the fact that some
company “by the name of Hospet & Company” has been appointed to
handle the day to day and policy matters of the Hospital without notice
to the Administrator. In his report Mr. Halbe stated that this was
derogatory to the appointment of the Administrators by the Supreme
Court and the Trustees had by-passed the jurisdiction that has been
conferred upon the Administrators. The attention of the Court has,
however, been drawn to the fact that the payment of professional
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fees to the same entity in the amount of Rs.4,57,470/- had, as a
matter of fact, been certified by Mr. Halbe under his own signature 3.
17. On behalf of the Applicants a detailed chart has been
submitted before this Court to establish that almost every one of the
reports was submitted before this Court or before the Charity
Commissioner so as to coincide with a hearing that was to take place
in a proceeding between the parties. The chart does in fact establish
the allegation. Fairly, in the submissions which were urged on behalf
of the Plaintiff, no attempt has been made at all to displace the
allegation or the correctness of the chart.
18. That leads to more serious aspect of the conduct of
Mr.Halbe. On 10th March, 2008 Mr. Halbe submitted a report
addressed to the Judges of this Court. The report adverted to his
earlier reports in which he had furnished details of the background of
the Trust and the pending applications that have been filed under the
Bombay Public Trusts Act, 1950. Several allegations have been
made in the report in regard to the siphoning of the funds of the Trust.
3 Volume VII page 1078.
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On 7th March, 2008 a plaint was affirmed in this Court in a suit
instituted by Shri Rajiv K. Mehta, the son of the Plaintiff for the
recovery of monies alleged to have been siphoned away. The
allegation of the Applicants is that to the plaint which was verified and
affirmed on 7th March, 2008 was annexed a copy of the 5th report
which was issued only on 10th March, 2008.
19.
The allegation against the Administrator being that he had
disclosed a report which was placed before this Court on 10th March,
2008 to one of the litigating parties even prior thereto and which
formed a part of the record of the suit which was affirmed on 7th
March, 2008 prima facie appeared to be of a serious nature. An
Administrator who is appointed by the Court to discharge certain
duties under the order of the Court is not a party to the lis since he is
not expected to have an interest in the subject matter of the
proceedings. Nonetheless in the interest of fairness, it was
considered appropriate by this Court to issue directions on 26th
November, 2008 recording the allegations of fact and the submission
that the Joint Administrator had been acting in concert with the
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Original Plaintiff. This Court observed that the allegation was of a
serious nature and therefore before a conclusion could be arrived at
one way or the other by the Court, it was only appropriate and fair that
an opportunity should be given to the Joint Administrator to file an
affidavit explaining the circumstances in which the report dated 10th
March, 2008 came to be filed in proceedings before the Court in the
suit on 7th March, 2008.
20.
Mr. Halbe has filed two affidavits and has entered
appearance through counsel. A copy of the paper book was served
on counsel at his request. Learned Counsel appearing for Mr. Halbe
has participated in the proceedings and has been heard.
21. In his affidavit dated 1st December, 2008 Mr. Halbe states
thus:
“I state that neither the draft nor formal copy of my
representation to the High Court dated 10/3/2008 existedon 7/3/2008 and there is no question of acting in concert
with original Plaintiff, Mrs. C.K. Mehta in First Appeal
No.2667 of 2007. The representation of 10/3/2008 was
forwarded to the Prothonotary and Sr. Master on the same
day and so were the copies to the parties.”
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22. During the course of the hearing of these proceedings the
papers and proceedings of Suit No.1224 of 2008 were called for.
Certain uncontroverted facts have emerged before the Court. The
plaint was affirmed on 7th March, 2008 and the suit was lodged
thereafter on 11th March, 2008. In the Plaint as originally filed there
is a handwritten addition of paragraph 31A which makes a reference
to the report of Mr. Halbe. Exhibit Z-2 to the Plaint as originally filed
(corresponding to Exhibit N-2 of the plaint now on the record) is the
report of Mr. Halbe dated 10th March, 2008. Exhibit N-2 of the plaint
contains the signature of the Court Associate, and the date 7th
March, 2008 below it. The endorsement of the Court Associate as
been made in accordance with the provisions contained in the High
Court Original Sides Rules viz. Rules 198 and 209. The record of this
Court therefore indicates that the report of Mr. Halbe dated 10th
March, 2008 came to be included, as part of a plaint which was
affirmed before this Court on 7th March, 2008. The report bears an
endorsement in the writing of the Administrator of being addressed to
the Original Plaintiff Smt. C.K. Mehta. Mr. Halbe states on affidavit
that not even the draft or a formal copy of his representation dated
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30
10th March, 2008 were in existence on 7th March, 2008. The
Applicants have produced before the Court a receipt issued by the
stenographer of the Administrator originally dated 4th March, 2008;
thereafter corrected as 8th March, 2008 “for secretarial assistance in
preparation of report submitted to the High Court, Bombay in First
Appeal 2667, 2670, 2671 and 2672 all of 2007 and preparing copies
and dispatch”. The receipt of the stenographer which is annexed to
the affidavit of the Second Applicant dated 4th December, 2008 lends
credence to the submission of the Applicants that the affidavit filed by
the Administrator before this Court on 1st December, 2008 is
manifestly incorrect. In the Affidavit the Administrator has stated that
neither the draft nor a formal copy of his representation to this Court
dated 10th March, 2008 existed on 7th March, 2008. This is patently
contrary to the record that has emerged before the Court.
23. During the course of the proceedings counsel appearing
for the Administrator stated before the Court that the order that was
passed by this Court on 26th November, 2008 was served on the
Administrator on 1st December, 2008. The attention of the learned
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counsel was, however, drawn to the fact that the stamp paper on
which the affidavit was engrossed was purchased in the name of Mr.
Halbe on 28th November, 2008. Mr. Halbe filed a second affidavit
before this Court in which he had the following explanation to offer of
the previous affidavit that was filed in these proceedings:
“In that regard, I have to state that my son Suhas –
Chartered Accountant has been aware of the above
proceedings about my removal since last couple of days.
As the Head of MNC, he is required often to meet
Advocates. He learnt about the order of 28.11.2008 when
he was in the High Court in the early part of the day. Hetherefore obtained the simple copy and informed me that I
have to file affidavit on 2.12.2008. I asked him to purchase
general stamp of Rs.100/- immediately. He purchased
stamp from nearby stamp vendor T.D. Jadhav at Vikhroli,
where his office is located. The stamp paper is issued byGeneral stamp office, Mumbai on 21.11.2008 to stamp
vendor and it is purchased by me on 28.11.2008. In order
not to miss date, I prepared the affidavit on 1.12.2008 and
got it filed before the Court on 2.12.2008.”
24. Judgments and orders of this Court are converted in the
electronic form and loaded on the Internet. The Court maintains
records of the uploading of the orders of the Court. Orders of the
Court are uploaded immediately after they are signed. The relevant
register in this regard has been produced for the perusal of the
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learned counsel and it clearly shows that the order of this Court was,
as a matter of fact uploaded on the Internet and was made available
only on 29th November, 2008. The explanation of the Administrator
that his son had obtained a simple copy of the order on 28th
November, 2008 is therefore manifestly untrue. Counsel for the
Administrator urges that this is unrelated to his conduct as an
Administrator. The fact remains that the Administrator has furnished
an explanation on affidavit to this Court which is palpably untrue.
Defining norms for behaviour
25. Assumption of judicial office brings with it a way of life that
is associated with values which many in the world outside may find
onerous. But judicial office commands the dignity which it holds
precisely for that reason. The values which a judge must follow in
personal life and in the performance of duties are defining features of
that office. Chief amongst them is integrity. A judge’s sense of
integrity is not relative to the prevailing morals in society. That is why
a fall in ethical standards in the world around can furnish no
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justification for a judge to seek recourse to expediency. Absolute
integrity is the standard which judges must observe. Any lesser
standard is unacceptable. Constitutional legitimacy is founded on the
independence of the judge. Democratic legitimacy is founded on the
credibility of the judge. For that sense of credibility to sustain, society
is entitled to demand from judges a standard of absolute integrity.
The insulation of the office, the carefully crafted constitutional
judicial independence.
provisions and the traditions of the Bench contribute to protecting
A judge in office dons robes, but the
obligation which a judge assumes to be impartial and fair as a public
person does not cease on the day that the robes are laid down.
Judges after they lay down office are equally subject to the rigours of
a way of life that by reason of its austerity commands the respect of
society. Upon laying down office, judges are in fact deprived of the
familiar safety of the isolation which protects the judge from the rough
and tumble of life. But however difficult, the norm of absolute
integrity must continue to be the standard which every individual who
is or has been a judge must follow. That is indeed one, if not the
principle reason, why judging is not for the faint hearted. Judging and
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the underlying values of being objective, fair and honest to one’s
conscience is what sanctifies the path, every moment of our lives.
Cease to be fair and honest and you cease to have a conscience.
Above all, it is the conscience that a Judge answers.
26. The Administrator in the present case is a Former Judge
of this Court. Counsel appearing for the Plaintiff urges that the role of
an Administrator cannot be equated with the role of an Arbitrator or a
Judge. An Administrator does not decide a lis nor does he deliver a
judgment or an award. But equally there can be no dispute about the
fundamental position that when a retired Judge of the Court is
appointed as an Administrator, he or she is appointed by virtue of the
credentials of independence, impartiality and integrity which is
associated with the office of a Judge of the High Court which was
held at one time. When parties litigate over the control of institutions
such as public trusts, the interests of the body which they are
intended to subserve are liable to be sacrificed at the altar of an
internecine dispute. An Administrator is appointed under an order of
the Court because of the objectivity and impartiality with which he is
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35
expected to discharge his duties particularly when he happens to be a
Former Judge of the High Court. Therefore, the submission which
has been urged on behalf of the Plaintiff that an Administrator cannot
be impartial as a Judge cannot warrant scrutiny.
27. The material which has been placed on the record clearly
establishes that the Administrator has transgressed the bounds of his
authority defined by the terms of the order under which he came to be
appointed. The order passed by the Supreme Court on 26th March,
2007 required the Administrator to act as a Joint Administrator with
Dr. Trivedi. As a Joint Administrator he was appointed to look after the
day to day management of the Hospital. The Administrator had no
role to play in regard to the pending litigation between the Trustees of
the Trust which controls the Hospital. Unfortunately, Mr. Halbe
transgressed the limits of his authority by submitting reports not jointly
with Dr. Trivedi as envisaged in the order of the Supreme Court, but
unilaterally in litigation involving the Trustees. The timing and content
of the reports indicates that the object of the submission of the reports
was to influence the outcome of proceedings between the Trustees.
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This is unfortunate because the disputes between the Trustees had to
be resolved not by the instrumentality of one of the Joint
Administrators but by recourse to proceedings in a duly constituted
forum. The Administrator has failed to discharge his duties with
impartiality and a degree of objectivity. The contents of the affidavits
filed by him in these proceedings are belied by the record.
28.
It is with a degree of anguish that this Court has had to
advert to the circumstances bearing on the conduct of Mr. Halbe as
Joint Administrator. Anguished as I was with the facts as they have
emerged from the record before the Court, I considered it appropriate
to inquire with the learned counsel appearing on behalf of the
Administrator as to whether, without the Court being required to go
into the allegations that have been levelled against him, he would
seek to demit his office with the dignity that is to be expected from
a person in his position. Learned Counsel repeatedly stated before
the Court that the Administrator would desire that he should be cross
examined in these proceedings and that he should be impleaded as a
party. The Administrator has been given an adequate and fair
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opportunity to place before the Court his side of the picture. Since
despite a fair opportunity he has persisted in his desire to continue as
an Administrator, the hearing of the Civil Application has proceeded
on merits, and the judgment has ensued.
29. Counsel appearing on behalf of the Plaintiff urged that this
Court ought not to exercise its jurisdiction on an application which
has been moved by a suspended trustee again whom charges have
been framed by the Charity Commissioner. The submission cannot
be accepted. The framing of charges, as was submitted on behalf of
the Applicants is subject to a Letters Patent Appeal which is pending
before a Division Bench of this Court. But, that apart, once this Court
has come to the conclusion that the Administrator has failed to
discharge his duties impartially and has entered upon the arena of
conflict by siding with one of the parties to the dispute, relief cannot
be denied merely because charges have been framed against one of
the Applicants by the Charity Commissioner. The framing of those
charges would not deprive the litigating parties of the basic assurance
that the Administrator must be impartial and fair. Our jurisprudence
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38
does not deprive a party to a dispute of the right to receive fair
treatment merely because charges against him are under
investigation. Insofar as the question of conduct is concerned, Mr.
Seervai, learned Senior Counsel has fairly disassociated himself from
supporting certain acts which are attributable to the conduct of the
litigation. An advocate practicing before this Court since July 1983
has filed an affidavit in these proceedings relating to Suit No.1224 of
2008 filed in this Court by the Eleventh Respondent. It appears from
the affidavit that after the plaint was lodged before this Court, a new
plaint was redrafted with material changes and the earlier plaint which
had been filed was surreptitiously removed from the records of the
Court. That any party to a proceeding before this Court can be
audacious enough to spirit away papers in a proceeding which has
been lodged in the Court and to substitute a new plaint for an earlier
plaint which has been lodged – all without the leave of the Court – is a
matter for grave concern. This is therefore not a case where the
Court can decline relief on the ground of the conduct of one party. A
case has been made for the removal of Mr. A.A. Halbe, the Joint
Administrator and the grant of relief would have to follow.
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30. For the aforesaid reasons Mr. A.A. Halbe will have to be
removed as one of the Joint Administrators. There shall accordingly
be an order in these terms. At the same time the affairs of the
Hospital cannot be allowed to deteriorate in the face of the internal
disputes between the Trustees. The circumstances which led to the
appointment of the Administrators pending the disposal of the suit
continue to subsist, as observed in the order of this Court dated 15th
February, 2008. In these circumstances, it will be appropriate for this
Court to direct the appointment of a substitute Joint Administrator
instead and in place of Mr. A.A. Halbe. The Hon’ble Mr. Justice
S.P. Kurdukar, Former Judge of the Supreme Court of India has
consented to act as a Joint Administrator and shall accordingly stand
appointed as a Joint Administrator instead and in place of Mr. A.A.
Halbe. The appointment shall be on the same terms and conditions.
The Civil Application is accordingly disposed of.
31. Mr.Seervai applies for a stay of the order removing Mr.A.A.
Halbe. The stay cannot be granted. In view of the reasons that have
led to the removal of the Joint Administrator, the same Joint
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Administrator cannot be permitted to continue. Moreover, by this
order, the regime of the Joint Administrators has not been disturbed
and a former Judge of the Supreme Court has been appointed in
place of the earlier Joint Administrator. Parties cannot have any
preference in regard to a particular name. In the circumstances, stay
is refused.
*****
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