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Hamumiya Bachumiya and ors. Vs. Mehmhusen Gulam Husen and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtGujarat High Court
Decided On
Judge
Reported in(1978)19GLR661
AppellantHamumiya Bachumiya and ors.
RespondentMehmhusen Gulam Husen and ors.
Cases ReferredHanooman Prasad v. Mt. Babootee
Excerpt:
- - 17.000/- remaining unutilised, and especially as the trust had got other open pieces of land besides the disputed land, which could very well be sold, if necessary, instead of the disputed land. the fundamental approach of the charity commissioner was that in a city like baroda which was fast developing, the market value of the land was not likely to dwindle down in the near future but on the contrary (here was every possibility of appreciation of the market price and, therefore, the trust land should not be allowed to be sold away to the tenant in this manner. 9007-if deposited in bank, the sale was clearly in the interest of the trust. ='(c) if the charity commissioner is satisfied that in the interest of any public trust any immovable property thereof should be disposed of. (4).....j.b. mehta, j.1. the petitioners trustees of a registered public trust known as jabangirpura masjid, baroda, have filed this petition challenging the appellate order of the revenue tribunal which has set aside the charity commissioner's order and has accordingly sanctioned the proposed sale. respondents nos. 1 and 2, trustees, have been joined along with respondent no. 3 tenant in whose favour the sanction is granted. respondents nos. 4 and 5 are the charity commissioner and the revenue tribunal. an application under section 36 of the bombay public trusts act, 1950 hereinafter referred to as the act' had been made by the trustees for sale of the trust land admeasuring 97 sq.yds. in baroda belonging to the trust which was rented out to respondent no. 3 on a monthly rent of rs. 5/- since.....
Judgment:

J.B. Mehta, J.

1. The petitioners trustees of a registered public trust known as Jabangirpura Masjid, Baroda, have filed this petition challenging the appellate order of the Revenue Tribunal which has set aside the Charity Commissioner's order and has accordingly sanctioned the proposed sale. Respondents Nos. 1 and 2, trustees, have been joined along with respondent No. 3 tenant in whose favour the sanction is granted. Respondents Nos. 4 and 5 are the Charity Commissioner and the Revenue Tribunal. An application under Section 36 of the Bombay Public Trusts Act, 1950 hereinafter referred to as the Act' had been made by the trustees for sale of the trust land admeasuring 97 sq.yds. in Baroda belonging to the trust which was rented out to respondent No. 3 on a monthly rent of Rs. 5/- since many years. In the application it was alleged that the tenant has agreed to purchase the said land fur Rs. 15000/- and that the trustees intended to utilise the sale proceeds for construction of a building on the land of the (rust S. No. 19. It was further alleged that under these circumstances it was in the interest of the trust to sell this land to the tenant and, therefore, sanction was claimed of the Charity Commissioner under Section 36 of the Act. No valuation report of the expert as required by the relevant Rule 24 was annexed but a Panchnama of the Panch valuation was annexed which went to the extent of stating that even for vacant possession this property would fetch Rs. 10.000/-. The applicant had also filed a copy of the resolution dated August 19, 1970 passed by the general meeting of the Moholla Panch and a copy of the Bauakhat dated August 23, 1970. As some complaint had been filed from Moholla people opposing this sale, the trustees were directed by the Charity Commissioner even to give a public advertisement inviting leaders for the proposed sale of property. In the advertisement the trustees stated that the property was in possession of a tenant and it fetched a rent of Rs. 5/- and it is within the road line of the Municipal Corporation. Till last date for submitting offers, no offer had been received. Meanwhile one Amirmiya Azammiya, a plumber, who was beneficiary of the trust had by his letter dated March 17, 1971 offered to give a loan of Rs. 10,000/- without interest to the trust for construction on the open plot of other land belonging to the trust, if the trust needed money. Thereafter on April 6, 1971, the four petitioners-trustees withdrew their consent for the proposed sale and prayed that the application for permission be rejected. They had painted out that this sale was opposed by the Moholla. residents who were beineficiaries and if such sale was permitted, there were other trust properties which were let out on nominal rent would be considerably affected. They relied on the plumber's offer of the loan of Rs. 10,000/-. They also relied on the fact that there would be endless disputes amongst the Moholla people. Respondent No. I trustee, however, opposed this withdrawal and insisted on permission being granted as it was in the interest of the trust. Finally the petitioners produced the resolution passed by the trustees to withdraw this proceeding and even they terminated the authority which was previously given to respondent No. 1 to proceed with the application for permission. Even the Moholla residents' resolution of October 10, 1971, was produced opposing such a sale. The earlier pending suit for eviction of respondent No. 3 tenant had been dismissed by the Court on February 21, 1962. The suit had been filed on the pround-that a new building was to be constructed on the land let out to the defendant. An appeal against the said decree had been dismissed for non-prosecution by the District Court by the order dated January 18, 1963, where it was in terms stated that the trustees had given a statement. Ex. II. for having arrived at a settlement with the tenant and so they did not want to prosecute that appeal. At that time also there was a difference in the trustees and one of the trustee had offered to resign. That Purshis, Ex. II, had stated that the defendant-tenant was willing to pay the price of Rs. 10,000/- on the persuasion of two eminent persons and the Panch had resolved to sale that property on August 5, 1962. The difference between the trustees had been mentioned and it was stated that the Charity Commissioner had been moved for permission but as he could dispose of the permission application after this appeal was disposed of, this appeal was not prosecuted. Mr. Christie stated that the Charity Commissioner even at that time had refused sanction and, therefore, this fresh application was made on October 13, 1970 as opponent No. 3 agreed to pay the price of Rs. 15.000/-

2. The Charity Commissioner took into account that the trustees and the Moholla Jamat were not prepared to sell this property obviously because earlier they were under the wrong impression that the tenant could not be evicted, and because for construction purposes even now a loan was forthcoming and the trust had a cash of Rs. 17.000/- remaining unutilised, and especially as the trust had got other open pieces of land besides the disputed land, which could very well be sold, if necessary, instead of the disputed land. In order to avoid perpetuation of disputes between the members of the lamat, an overall view had been-taken that this sale was not in the interest of the trust. The fundamental approach of the Charity Commissioner was that in a city like Baroda which was fast developing, the market value of the land was not likely to dwindle down in the near future but on the contrary (here was every possibility of appreciation of the market price and, therefore, the trust land should not be allowed to be sold away to the tenant in this manner. He, therefore, did not hold that the sale was in the interest of the trust and accordingly refused permission by the order dated January 31, 1972. In appeal filed by respondent No. 1 trustee, the Revenue Tribunal, in the impugned order at Annex. C dated October 6, 1972 took the view that the Charity Commissioner was not coming to a finding as to whether the proposed alienation was not fair and done in any way adversely affecting the interest of the trust but he proceeded in the light of the objections received and he was led away by the majority of the trustees withdrawing the application. In view of this wrong approach, the Tribunal held that as this was a tenanted land fetching only Rs. 5/- per month and as the Panchnama report disclosed that even with vacant possession the price would be only Rs. 10.000/- as the public advertisement also did not bring any willing purchaser and the trust had spent away its balance of Rs. 17,000/- in other construction incurring a debt of Rs. 3000/- and as it found that the offer of loan was not bona fide and the trust could not undertake any litigation with the tenant for recovery of possession of the property and the sale proceeds of Rs. 15000 would bring yearly interest of Rs. 9007-if deposited in Bank, the sale was clearly in the interest of the trust. Merely because the trustees withdrew the consent of the Jamat opposed on such considerations, sanction for such sale which was in the interest of the trust, could not be refused. Therefore, the Revenue Tribunal has set aside the order of the Charity Commissioner and has sanctioned the proposed sale. That is why the petitioners trustees have filed the present petition challenging the order of the Revenue Tribunal.

3. Section 36(1) of the Act provides as under:

(1) Notwithstanding anything contained in the instrument of trust-

(a) no sale, exchange or gift or any immovable property, and

(b) no lease for a period exceeding ten years in the case of agricultural land or for a period exceeding three years in the case of non-agricultural land or building belonging to a public trust, shall be valid without the previous sanction of the Charity Commissioner Sanction may be accorded subject to such condition as the Charity Commissioner may think fit

(c) if the Charity Commissioner is satisfied that in the interest of any public trust any immovable property thereof should be disposed of. he may, on application, authorise any trustee to dispose of such property subject to such conditions as he may think fit to impose, regard being had to the interest or benefit or protection of the trust.

(2) The Charity Commissioner may revoke the sanction given under Clause (a) or Clause (b) of Sub-section (1) on the ground that such sanction was obtained by fraud or misrepresentation made to him or by concealing from the Charity Commissioner, facts material for the purpose of giving sanction; and direct the trustee to take such steps within a period of one hundred and eighty days from the date of revocation (or such further period not exceeding is the aggregate one year as the Charity Commissioner may from time to time determine) as may be specified in the direction for the recovery of the property.

(3) No sanction shall be revoked under this section unless the person in whose favour such sanction has been made has been given a reasonable opportunity to show cause why the sanction should not be revoked.

(4) If in the opinion of the Charity Commissioner, the trustee has failed to take effective steps within the period specified in Sub-section (2), or it is not possible to recover the property with reasonable effort or expense, the Charity Commissioner may assess any advantage received by the trustee and direct him to pay compensation to the trust equivalent to the advantage so assessed. Section 80 provides that save as expressly provided in this Act, no. Civil Court shall have jurisdiction to decide or deal with any question which is by or under thig Act to be decided or dealt with by any officer authority under this Act, or in respect of which the decision or order of such officer or authority both has been made final and conclusive. 50. In any case-

(i) where it is alleged that there is a breach of public trust.

(ii) where a direction is required to recover possession of a property belonging to a public trust or the proceeds thereof or for an account of such property or proceeds from any person including a person holding adversely to the public trust, or

(iii) where the direction of the court is deemed necessary for the administration of any public trust. the Charity Commissioner after making such enquiry as he thinks necessary or two or more persons having an interest in the trust and having obtained the consent in writing of the Charity Commissioner as provided in Section 51 may institute a suit whether contentious or not in the court within the local limits of whose, jurisdiction the whole part of the subject matter of the trust is situate, to obtain a decree for any of the following reliefs:

(a) an order for the recovery of the possession of such properly or proceed thereof,

(b) the removal of any trustee or manager,

(c) the appointment of a new trustee or manager,

(d) vesting any property in a trustee,

(e) a direction for making accounts and making certain inquiries.

(f) a declaration as to what proportion of the trust property or of the interest therein, shall be allocated to any particular object of the trust,

(g) a direction authorising the whole or any part of the trust property to be sold, mortgaged or exchanged.

(h) the settlement of a scheme or variations or alterations in a scheme already settled, or,

(i) granting such further or other relief as the nature of the cane require:

Provided that no suit claiming any of the reliefs specified in this section shall be instituted in respect of any public trust except in conformity with the provisions thereof:

Provided further that the Charity Commissioner may, instead of instituting a suit, make an application to the Court for a variation or alteration in a scheme already settled.

Even though the wider question was sought to be urged that under Section 36, the Charity Commissioner can act notwithstanding anything contained in the instrument of trust, Section 36 only provides a bar or prohibition that no sale etc. shall be valid without the sanction of the Charity Commissioner. Therefore, if there was a prohibition as in the cases of such religious trust the trustees themselves could not sell a property and insuch a case the Charity Commissioner also could not grant sanction for such sale. Section 80 had barred a Civil suit for matters which could be dealt with-by the authorities under the Act. Therefore, it was vehemently argued that the only remedy in such cases was to proceed by a special suit under Section 50 (f) where the Court along could give a directly authorising the whole or any part of the property to be let, sold or mortgaged and Court alone would have such a power to permit a sale even when there was an express prohibition. The Trustees or the Charity Commissioner by themselves could not avoid any express prohibition without recourse to this special suit remedy. It is not necessary to go into this wider question in the present matter.

4. The second question which was raised by Mr. Patel that the trustees have now withdrawn their consent by withdrawing the earlier resolution as well as the resolution authorising, respondent No. 1 to proceed with this application and nothing remained before the Charity Commissioner to grant sandion. He also argued that respondent No. 1 was a minority trustee and the trustees were to act in a body as per the majority rule and, therefore, in any event, respondent No. 1 could never file an appeal before the Revenue Tribunal and the whole appeal was incompetent. The Jamat itself having withdrawn the earlier resolution and having opposed this sale the Charity Commissioner or the Revenue Tribunal had no jurisdiction whatever. These contentions of Mr. Patel are completely out of place in such a public oriented litigation. In Thenappa Chattier v. Kuruppan Chhletier : [1968]2SCR897 , Their Lordships pointed out that in India the Crown is the Constitutional protector of all infants and as the deity occupies in law the position of an infant, the Shebeits who represented the deity were entitled to seek assistants of the Court in case of mismanagement or fraud or mal administration on the part of Sheibeits and to have a proper scheme for the management framed for the administration of the private trust. Therefore, in charities court, as constitutional protector of all charities, is the sole guardian of the paramount interest of the charities and its jurisdiction is analogous to one as a protector of the infant. Under the scheme of the Act Section 80 has taken away the jurisdiction of the Court in matters where the authorities are prescribed in the Act for dealing with those questions. Therefore, the Charity Commissioner having been conferred with this jurisdiction of sanction of sale of immoveable properties of a public trust and this jurisdiction having been conferred, notwithstanding anything contained in the instrument of the trust, the Charity Commissioner would have to exercise its jurisdiction by making an inquisitorial enquiry so that public interests of such public trust are properly served. The trustees or the members of the Jamat may be fighting between themselves and personal interest-of this trustee or the prominent members of the Jamat could never be allowed to have any place in the matter of alienations of such public trust properties where the Crown or now this Charity Commissioner or the Court under Section 80 have been invested with this jurisdiction as protector of the charities. Even under Rule 24 which provides for application under Section 36 for sanction of alienation, it is not specified as to who has to apply. Rule 24(1) provides as under:

24. Application under Section 36 for sanction for alienation.

(1) Every application for sanction of an alienation shall contain information inter alia on the following points:

(i) whether the instrument of trust contains any direction as to alienation of immovable property.

(ii) what is the necessity for the proposed alienation.

(iii) how the proposed alienation is in the interest of the public trust; and

(iv) in the case of a proposed lease, the terms of the past leases, if any.

Such application shall be accompanied, as far as practicable by a valuation report of an expert.

(2) The Charity Commissioner, before according or refusing sanction, may make such enquiry as he may deem necessity.

(3) In according sanction the Charity Commissioner may impose such conditions or give such direction as he may deem fit.

(4) The decision of the Charity Commissioner under Sub-section (i) of Section 36 shall be published in a local newspaper having circulation in the area where the property is situated and also on the notice boards of the offices of the Charity Commissioner and the Deputy or Assistant Charity Commissioner, as the case may be, of the region in which the property is situate, in the manner sufficient to give information about the material particulars regarding the number of the application for sanction, the name of the public trust, the description of the property for alienation of which sanction is accorded and the price at which it is proposed to be sold or mortgaged or the rent at which and the period for which it is proposed to be leased and the substance of such decision.

Thus an application for sanction would have to be considered by the Charity Commissioner by considering the paramount interest of the trust and not on the fleeting interest of the trustees or of the beneficiaries. That is why in Lallubhai v. Drigbhushanlalji 8. G.L.R. 42, this Court took the view that having regard to the scheme of the Public Trust Act and the relevant provisions thereunder as also the object of the Act the Charity Commissioner sitting in appeal under Section 70 had no power or jurisdiction to pass an order in accordance with the agreement between the parties to the appeal or even a concession made by the party to the appeal. It was in terms laid down that the provisions of Order 23 Rule 3 of the Civil Procedure Code which provides for the passing of a decree by the Court in accordance with the lawful agreement or compromise could not be made applicable to such proceedings before the Charity Commissioner in appeal under Section 70 of the Act. Even in Shah Hiralal Virchand v. Patel Vithalbhai Vaghjibhai 2 G.L.R. 548, a Division Bench had held that the provisions of Order 41 Rule 17 C.P.C. regarding dismissal of an appeal for default could not apply to proceeding before the Charity Commissioner because such decision of the Charity Commissioner must be one given on merits. Therefore, the whole scheme of this law, specially enacted for making better provision in the administration of public religious trust in the State of Bombay, is to give such Us the character of a public oriented litigation where the Charity Commissioner and the Court which act under this Act have to act as protector of the public charities. In such litigation on the analogy of adversary litigation the principles properly applicable to such private litigation could never have any prevailing operations as that would defeat the very public purpose underlying such enquiries. Therefore, there is no substance in any of the contentions raised by Mr. Patel that the Charity Commissioner or the Revenue Tribunal had no jurisdiction merely because the trustees were withdrawing their consent or because only one trustee had filed an appeal.

5. The guidelines which have to be followed for sanctioning such alienation of properties of a religious trust by its trustees are also very well settled. In Shridhar v. Jagannathji Temple : AIR1976SC1860 proceeding on the settled principle that the power of the trustees of such religious trust to alienate property of the religious endowment was analogous to that of a manager for an infant as defined by the Judicial committee in Hanooman Prasad v. Mt. Babootee (1856) 6 Moors I.A. 393 P.C., it was held that such trustees had no power to alienate a debutter property except in case of need or for the benefit of the estate. A trustee was not entitled to sell property for the purpose of investing the price of its so as to bring income larger than that derived from the property itself. Nor could he except for legal necessity grant a permanent lease of debutter property, though he may create proper derivative tenures and estates comfortable to usage. Three main decisions of the Privy Council had been referred to pointing out that for such permanent alienation unavoidable necessity had to be made out, because otherwise the debutter estate shall be deprived of the chance which it would have, if the rent were variable, of deriving benefit from the enhancement in value in the future of the lands leased. Apart from unavoidable necessity power was available only for the purpose of the benefit of the estate which as explained at page 1866 as per the judicial interpretation was to be exercised in circumstances which justify alienation by the manager for an infant heir or by trustees of religious endowment, which even though could not clearly defined, would include preservation of the estate from extinction, its defence against hostile litigation, its protection from inundation and similar circumstances. In the present case, both the Charity Commissioner and the Tribunal rightly held that there was no question of any such compelling unavoidable necessity for the alienation and the ground on which santion was sought was only on the ground of benefit of the estate. As per the aforesaid settled legal position, this ground was completely misunderstood by the Revenue Tribunal, when it characterised the approach of the Charity Commissioner as misconceived. It was the Charity Commissioner who had adopted the right approach that such religious trust properties could not be easily sold away on such grounds as the, trust in such fast developing city, like Baroda where the prices were continuously rising would be deprived of the benefit of enhancement infuture in value of the lands leased to. that tenant. The Revenue Tribunal proceeded on a thoroughly extraneous-and irrelevant consideration that if this property was sold and the price invested in fixed deposit in a bank, the interest income would be much larger than derived by leasing this property to the tenant. This consideration was interms found to be irrelevant in the aforesaid Shridhar's case by referring to the decision in Hanooman Prasad at page 1865. The trustees had rightly pointed out that if such a ground would be accepted all the trust properties would be sold away because most of them were fetching low rent and thereby the trust would be permanently deprived of the benefit of rise in prices in future of the lands situated in such fast developing city like Baroda. The Tribunal ignored the salutary aspect that this was land of the mosque and according to the principles of Islam, trustees were not to earn interest, i.e. the mosque properties were intended to be built upon so that by constructing shops, income would be brought for the benefit of the trust. In fact, construction on other land was done. Merely because that man did not give this offer of loan when the trust had sufficient moneys for construction for the other building, the offer could not be turned down as not bona fide.

6. The Revenue Tribunal only relied on the solitary circumstance that the tenant was paying rent of Rs. 5/- and as earlier litigation had been disposed of by withdrawing the appeal, the tenant would not be evicted and so if he paid price of Rs. 15000 it was in the interest of the trust to sell the property. This proposition of the Tribunal completely ignores the salutary guidelines on which the properties of religious endowment can be sold. The petitioners trustees were right that they were under misconception in passing resolution for selling away the property, because even under the Rent Act Section 13(1) categorically provides a ground for eviction where the premises were land and the said Sands were reasonably and bona fide required by the landlord for erection of a new building. The earlier suit may have failed because the trust may not have moneys for construction. That does not mean that permaisntly the trust was debarred from filing a suit for eviction again against such a tenant, when the premises consisted of open piece of land and the Act did provide for eviction if the land was reasonably and bona fide required by the trust for erection of a new building. The trust was actually constructing on the other plot and if this tenant had vacated, the suit land could have been equally utilised for construction over this plot. Therefore, the Revenue Tribunal was under complete misconception in holding that the tenant could not have been evicted.

7. Even at this stage Mr. Patel had made a generous offer to this tenant that if he would permit construction by the trust which had now cash of Rs. 70,000/-, they would give him adequate space at rent which would be fixed on failure of agreement between the parties by the court and even during the period that the building was under construction, he would be accommodated on the neighbouring vacant plot of the trust. The respondent-tenant was, however unwilling to accept any such offer. Whatever His consideration may be, the fact remains that the public trust properties could never be alienated merely on the ground that the tenant is paying rent of Rs. 5/- and by assuming that hi cannot be evicted against plain statutory language of Section 13(1)(i).

8. The Tribunal also failed to consider that the application Under Rule 24 envisages proper valuation report of an expert so that the Charity Commissioner would have prima fade material as to the proper valuation of the property. The Revenue Tribunal believed this requirement being duly complied with merely because a Panchnama tried to state that even with vacant possession the property would fetch only Rs. 10,000/-. The Tribunal ignores the fact that even in 1962 litigation the tenant had offered Rs. 10,000/- price still, the Charity Commissioner had after withdrawal of the appeal refused to grant sanction. The trustees should have been careful enough to take any expert report if they would to arrive at any bona fide agreement with the tenant. No such precaution was exercised by the trutees. The respondents' Advocate tried to urge that the requirement of Rule 24(1) was to be complied with as far as practicable. It is surprising to contend that in a city like Baroda, no expert was available for valuation of the land. Thereafter even when the Tribunal tried to give public notice the very fact was set out in the notice that the land was given to a tenant fetching Rs. 5/- rent; that it was falling within the roadline of the Municipal corporation, which would have amply disclosed that the advertisement, clearly scared away the intending purchasers and no prudent man would have disposed of such a tenanted land if he really wanted to sell his property for constructing on some other property of his. The Charity Commissioner rightly pointed out that there being five open pieces of land with this trust, if it really wanted to construct from the proceeds of other any prudent man would have always sold vacant plot rather than such & tenanted plot by giving this type of advertisemem. Therefore, there was no enquiry worth the name so as to fetch even proper price by selling away the property of the trust which would serve the purpose to providing moneys for construction of one property from the proceeds of the other. Therefore, all these considerations which were taken into consideration by the Revenue Tribunal were in complete ingerence of the relevant guideline for permanent alienation of such religious endowment properties and without adopting any of the procedural safeguards.

9. The Charity Commissioner, had, however, kept in mind this salutary guidelines and had refused permission of sale of this land only on this ground that the tenant himself wanted to purchase this property by paying price of Rs. 15000/-. The Charity Commissioner rightly took into account the fact that the trustees were not properly advised and their misconception being cleared, they had rightly opposed this sale along with the other members of the Jamat. These considerations were not irrelevant as assumed by the Revenue Tribunal when we keep in mind the salient fact that this property of the religious trust could not be sold except for unavoidable necessity of-for the benefit of the estate as interpreted in the narrow sense as laid down by the judicial decisions. No such wide guidelines could ever be laid down for such sales as has been done by the Revenue Tribunal that the sales could be permitted if the Charity Commissioner comes to a definite finding that the proposed alienation is fair and does not adversely affect the interest of the trust. The whole approach of the Revenue Tribunal is patently erroneous. In that view of the matter the Charity Commissioner having rightly refused to sanction this sale, this petition must be allowed by setting aside the impugned order of the Revenue Tribunal and by restoring the order of the Charity Commissioner refusing the sanction for the proposed sale. Rule is accordingly made absolute with no order as to costs. The costs of the Charity Commissioner shall come out of the estate.


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