LexCYRUS RUSTOM PATEL versus THE CHARITY COMMISSIONER MAHARASHTRA, STATE & ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
[2017] 9 s·.c.R. 277 ·
CYRUS RUSTOM PATEL
v.
THE CHARITY COMMISSIONER MAHARASHTRA,
STATE & ORS.
(Civil Appeal No. 1745 of 20 I 0)
SEPTEMBER2l,2017
[ARUN MISHRA AND
MOHAN M. SHANTANAGOUDAR, JJ;J
Trusts and Charities: ·
Bombay Public Trusts Act, 1950 - s. 36 - Alienation of
immovable property of public trust - On facts, a Trust property
admeasuring about 3012 sq mtrs wherein stood a Parsi Fire Temple
and other structures with 21 tenants - Joint venture agreement for
development-cum-sale between Trust and the developer for_ a sum
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of Rs. 2,95,00,0001- - Accord of sanction to development-cum-sale. D
tr_ansaction by Joint Charity Commis.l'ioner uls. 36 - Uphelc!.bJ! ,the
High Court ~ On appeal, held: Joini<:;ha;·ity Commissioner -ivas
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required to consider the interest, bei1efit and protection of the trust
- Charity Commissioner totally abdicated its diit)\ and failed to ai::t
as per 'the mandate of s. 36 - Trustee as well as Joint Commissioner
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failed to act in the interest, benefi{and to protect the Trust - Order
is wholly perverse - Such a huge area in a prestigious locality could
hot have -bee11 sold for a paltry sum of Rs.2,95,00,000/- and that
too by a private negotiations - No effort made to ascertain the
market value - No urgency to throw away the valuable property of
the tr~st, which was derogatory to its interest - Requireinent _of F ·
publishing a publip notice in a newspaper, cOuld not have b_een
waived _:___ Inviting an offer by public noiice would haye disclosed _
actual 1-Yoi:th of property _:___ Order passed by the Charity
_ Commissioner as well as High Court set aside - Trust to reP.ay the
amount of Rs.2,95,00,0001- to the developer - Imposition of cost of G
Rs.J,00,0001- on the developer - Costs.
Allowing the appeal, the Court
HELD: 1.1 It is apparent from the provisions of Section
36 of the Bombay Public Trusts Act, 1950 that sale, exchange or
277
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278
SUPREME COURT REPORTS
[2017] 9 S.C.R.
A gift of an} immovable property or lease, extending beyond ten
years in the case of agricultural land, or for a period exceeding
three years in the case of non-agricultural land or a building,
belonging to a public trust shall not be valid without previous
sanction of the Charity Commissioner. The power to grant
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sanction has to be exercised by the Charity Commissioner, taking
into consideration three classic requirements i.e. "the interest,
benefit, and protection" of the Trust. The expression that sanction
may be accorded subject to such conditions as Charity
Commissioner may think fit under section 3l(l)(b) and Section
36(l)(c). The Charity Commissioner has to be objectively satisfied
that property should be disposed of in the interest of public trust;
in doing so, he has right to impose such conditions as he may
think fit, taking into account the said triple classic requirements.
It is also open to the Charity Commissioner, in exercise of power
of Section 36(2), to revoke the sanction, on the ground that the
D sanction had been obtained by fraud or misrepresentation or those
material facts have been suppressed while obtaining sanction.
[Paras 22-23)(294-F-H;. 295-A, BJ
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1.2 In the instant case, the Joint Charity Commissioner
was required to consider the interest and benefit of the Trust.
The Charity Commissioner totally abdicated its duty, and failed
to act as per the mandate of Section 36. The observations made
by the Commissioner in its Order clearly reflect that Charity
Commissioner failed to exercise the duties enjoined upon to
protect trust under Section 36. It has not considered the interest,
benefit, and protection of the trust at all. The order is wholly
perverse. There is the sale made in the form of Joint Venture
development cum sell agreement and lease was for 999 years.
Right from the beginning, it was to be a joint venture agreement
coupled with a sale option, as apparent from the minutes of the
meeting of the trust. The trustees had been acting in collusion
with developer even before resolution had been passed.
G Negotiations were going on with the developer. [Para 24](295-
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1.3 This is a prestigious locality, where one would cherish
to own a property. Judicial notice is taken of the fact, that such a
huge area could not have been sold for a paltry sum of
CYRUS RVSTOM PATEL v. THE CHARITY COMMISSIONER
279
MAHARASHTRA, STATE & ORS.
Rs.2,95,00,000/-. Trustees, asExcerpt shown. Read the full judgment & AI analysis in Lexace.