REKHABEN H. SHETH versus CHARU K. MEHTA & SONS.

Citation: [2010] 9 S.C.R. 216 · Decided: 29-07-2010 · Supreme Court of India · Bench: ALTAMAS KABIR · Disposal: Dismissed

Judgment (excerpt)

A 
B 
[2010] 9 S.C.R. 216 
REKHABEN H. SHETH 
v. 
CHARU K. MEHTA & SONS. 
(SLP (C) No. 35164 of 2009) 
JULY 29, 2010 
[ALTAMAS KABIR AND A.K. PATNAIK, JJ.) 
Contempt of Court - Application by Trustee of a Trust 
against petitioner and respondent nos. 2-5 for their removal 
C from trusteeship of the Trust - Order of High Court restraining 
petitioner and respondent nos. 2-5 from taking any policy 
decision and entering into financial transaction without prior 
approval of Joint Charity Commissioner - Issuance of cheque 
to professionals by petitioner and respondent nos. 2-5 without 
D prior sanction of Joint Charity Commissioner - Contempt 
Petition - Show cause notice to petitioner and respondent 
nos. 2-5 by High Court - On appeal, held: Funds of the Trust 
were utilized to a considerable extent not for the purpose of 
Trust but for defending Trustees against allegations brought 
E against them by Trustee - Thus, order of High Court does not 
call for interference - Bombay Public Trust Act, 1950 - s. 41 
D. 
The respondent no.1 permanent trustee of a Medical 
Trust filed an application against the petitioner and the 
F respondent nos. 2-5 for their removal from Trusteeship 
of the Trust on the ground of malfeasance, misfeasance, 
misappropriation of trust funds and breach of trust. The 
Joint Charity Commissioner restrained the petitioner and 
the respondent nos. 2-5 from taking any policy decision 
G and entering into financial transactions with regard to the 
Trust without the prior approval of the Joint 
Administrators. The High Court modified the said order 
to the extent that the prior approval was to be taken from 
H 
216 
REKHABEN H. SHETH v. CHARU K. MEHTA & 
217 
SONS. 
the Joint Charity Commissioner and not the 
A 
Administrators. It is alleged that the petitioner and the 
respondent nos. 2 - 5 had withdrawn huge amounts from 
the Trust funds and had issued cheques in favour of 
solicitors and advocates appearing for them in the 
litigations pending before the various courts, including 
B 
the proceedings before the Joint Charity Commissioner. 
The respondent no. 1 filed Contempt Petition. The Single 
Judge of High Court held that the payments made to 
advocates would constitute financial transactions with 
regard to the Trust and, therefore, prior approval of the c 
Joint Charity Commissioner was required to be obtained 
before such payments were made to the advocates. It 
issued notice to show cause on the Contempt Petition to 
the petitioner and the respondent nos. 2-5. Hence, the 
Special Leave Petitions. 
Dismissing the Special Leave Petitions, the Court 
HELD: 1.1 There is no reason to interfere with the 
order of the Single Judge of High Court issuing notice 
D 
on the contempt petition filed by the respondent no.1. It 
E 
was observed that the respondent no.1 had raised 
serious objections in the main application about the 
payment of advocate's fees from Trust funds for fighting 
personal litigations of the Trustees. The judge took 
sufficient care to indicate that except for cognizance of 
F 
the allegations made against the petitioner and the 
respondent nos.2 to 5, cognizance against the other 
Trustees had not been taken as the material against them 
were insufficient to frame charges. However, liberty was 
also given that when sufficient material in support of the 
G 
allegations was placed on record, it could take 
cognizance of such complaint. A chart has been filed on 
behalf of the petitioner, respondent nos.2 to 5 and the 
other Trustees to show the amounts which had been 
H 
218 
SUPREME COURT REPORTS 
[2010] 9 S.C.R. 
A paid to the counsel amounting to approximately Rs.3% 
crores. Although, an attempt was made by to justify such 
expenditure, the submissions cannot be accepted since 
as observed by the Single Judge of the High Court, most 
of the said funds were spent by the petitioner, the 
s respondent nos.2 to 5 and the other Trustees for 
defending themselves in respect of the various cases 
which had been brought against them by the respondent 
no.1. [Para 15] [224-G-H; 225-A-E] 
1.2 It cannot be said that payments made to lawyers 
C advocates and solicitors does not amount to Contempt 
in the special facts of the instant case. The fact that the 
funds of the Trust were being utilized to a considerable 
extent, not for the purposes of the Trust but for defending 
the Trustees against the allegations brought against them 
D by the respondent no.1 cannot be ignored. These are 
prima

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