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Religious Fund Vs. Numazar Dorab Mehta and Ors. - Court Judgment

LegalCrystal Citation
CourtKolkata High Court
Decided On
Judge
AppellantReligious Fund
RespondentNumazar Dorab Mehta and Ors.
Excerpt:
.....higher offer price for the building even after a period of more than nine years after the said sale. sale of a property by private negotiation is not ipso facto invalid. the validity of such sale will have to be considered in the light of the facts and circumstances of the particular case. the petitioner is the lone dissenter with no support from any member of the pars.community. there was no explanation offered for not approaching the court soon thereafter or within a reasonable time. the petitioner also did not pray for publication of the gist of the prayers.the petitioner was aware of the developments for all these years but did not feel it necessary to raise any objection. the sale which the petitioner did not feel it to be unfair in december, 2007 after four years suddenly he.....
Judgment:

GA No.2991 of 2011 ACR No.5 of 2007 IN THE HIGH COURT AT CALCUTTA Ordinary Original Civil Jurisdiction ORIGINAL SIDE CALCUTTA ZOROASTRIAN COMMUNITY'S RELIGIOUS FUND -VersusNUMAZAR DORAB MEHTA & ORS.Appearance: Mr.P.C.Sen, Sr.Adv.Mr.Satarup Banerjee, Adv.Mr.Rudraman Bhattacharyya, Adv.Mr.Ranajit Roy, Adv.Mr.Sourish Banerjee, Adv...for the petitioner.

Mr.Ranjan Deb, Sr.Adv.Ms.Manju Bhuteria, Adv.Mr.Ravi Asopa, Adv...for the respondent.

Mr.Jishnu Saha, Sr.Adv...for Hooghly Investments LTD.BEFORE: The Hon'ble JUSTICE SOUMEN SEN Date : 2nd September, 2016.

The Court: The petitioner belongs to Zoroastrian Community.

The petitioner in this application has prayed for recalling of an order dated 17th December, 2007 confirming the sale of premises No.26, Prafulla Sarkar Street (earlier known as Sooterkin Street).Calcutta in favour of Hooghly Investments Limited.

The petitioner alleged that the said sale was confirmed in favour of Hooghly Investments Limited (hereinafter referred to as HIL) by practising fraud on Court.

Mr.P.C.

Sen, learned Senior Counsel appearing on behalf of the petitioner submits that if the orders passed in this proceedings and the earlier proceedings are scrutinised it would appear that the trust, by misleading the Court that the property is incapable of fetching a price of Rs.5 crores, obtained an order without even referring to the earlier orders by which the trust was directed to sell the property by public advertisement.

It is submitted that the petitioner as part of the Zoroastrian Community was under the supreme belief and confidence that the property would not be sold at least below a sum of Rs.5 crores being the valuation made of the property and harbouring on such belief did not take any steps until the petitioner became aware of the order dated 17th December, 2007 only in September, 2011.

This came as a rude-shock to the petitioner.

The petitioner in order to undo the mischief done by the trustees filed this application for recalling of the order dated 17th December, 2007.

The learned Senior Counsel has referred to the following three decisions in support of the proposition that fraud unravels everything and there is no limitation to an action being initiated once a fraud is committed on the Court : 1989 Supp(2) SCC356(R.

Venugopala Naidu & ORS.versus Venkatarayulu Naidu Charities & Ors.).(2000).SCC581(United India Insurance Co.LTD.versus Rajendra Singh & Ors.) paragraph 10 and (2010) 3 CHN597(Cal) (Mohan Lall Seal & ORS.versus Kanak Lall Seal & Ors.) paragraphs 40 and 41.

The learned senior Counsel relying on the said decision submitted that in equity no length of time will run to protect or screen fraud.

The petitioners would contend that the trustees corruptly exercised their power for personal benefits.

Per contra, Mr.Ranjab Deb, learned Senior Counsel appearing on behalf of the trustees questions the bona fide of the applicant and submits that there is no explanation offered for not filing the application soon after the property was sold in favour of Hooghly Investments Limited.

The learned Senior Counsel has referred to the annual reports for the year 2006-07 and 2007-08 and submits that the trustees in the annual reports have clearly stated the reason for the sale of the property at Rs.3.90 crores and there has been material disclosure of all facts that are necessary to be disclosed in this regard.

The petitioner being a part of Zoroastrian Community is deemed to have knowledge of the sale at least on 24th May, 2008 when the annual report was circulated at the annual general meeting of the Calcutta Zoroastrian Communities Religious and Charity Fund.

It is submitted that the petitioner is not alleging non-service of any of the notices or non-disclosure of sale at Rs.3.90 crores or vagueness of notice.

The annual report discloses sufficient details with reasons for sale of the property at such price.

The petitioner never questioned the justification of sale at the relevant time.

The petitioner accordingly cannot complain at this stage that the sale is required to be set aside for inadequate consideration.

The learned Senior Counsel has made a distinction between a cause of action founded on fraud on Court and fraud on a party.

The learned Senior Counsel has referred to the pleadings made in the petition alleging fraud and submits that the particulars of the fraud would not show that any fraud on Court has been committed as it is restricted only to an allegation of fraud on the petitioner.

It is submitted by referring to the order dated 18th September, 2006 that the petitioner was permitted to enter into private negotiations also for ascertaining if the property could fetc.a better price.

The learned Senior Counsel has also referred to the subsequent orders and submits that since after two publications in newspapers the offers received were inadequate and in the meantime, the trustees had received an offer of Rs.3.90 crores which is close to Rs.4 crores as was the expectation of the trustees, the matter was mentioned before the learned Single Judge and the learned Single Judge on consideration of the materials on record thought it fit to confirm sale in favour of Hooghly Investments Limited.

It is submitted that all orders prior to the order dated 17th December, 2007 were being considered by the learned Single Judge before confirming the sale and accordingly the allegation of fraud on Court is unfounded and unmeritorious.

It is submitted that it is a sponsored litigation at the instance of an Advocate who had been earlier entrusted by the trustees to conduct various litigations on behalf of the trust and subsequently removed from the panel.

The certified copies on which reliance has been placed as date of knowledge of the order were all obtained by the said Advocate who also belongs to PaRs.Community.

The dispute relates to sale of an immovable property at the Sooterkin Street.

It was a four-storied brick built dwelling house with land measuring 4 cottah 0 chittack 38 sq.ft.

The suit premises was purchased on 16th March, 1981.

The property was purchased principally for the benefit of the PaRs.Community with the object of providing members of the community with housing and since then the property is being utilised particularly by the PaRs.Community for housing of PaRs.citizen, community hall and other activities.

At the relevant time there were seven flats, two rooMs.two shops and one hall in the suit premises.

Out of the above only one room and one shop were under occupation and the rest were vacant and under lock and key.

In the application filed by the trustees under the Charitable and Religious Trust Act, 1920 being ACR No.7 of 2006 it was stated that the said area in which the said premises is situated has become a total commercial area with commercial establishments replacing residential areas.

The said area has not only become extremely noisy but also has become extremely congested.

This is precisely the reason why the occupants of the said flats had decided to vacate the premises and move to alternative accommodation.

Since the property had remained virtually unused and vacant and was not serving any useful purpose or benefit to the PaRs.Community and/or bodies of the said trust inasmuch as having regard to the growing demand amongst the PaRs.Community, particularly the senior citizens to find a suitable accommodation in an area which is more conducive to their better living, the trustees, in a meeting held on 4th July, 2006 decided to sell the said property and to utilise the sale proceeds for purchasing a property in a congenial environment.

It was with that object the petitioner filed an application being ACR No.7 of 2006 in respect of the aforesaid property.

In the said application from time to time various orders were passed.

It appears that on 7th August, 2006 an order was passed directing the trustees to cause advertisements with short cause title in “The Statesman” and the matter was made returnable on 28th August, 2006.

On 18th September, 2006 the Court after taking into consideration the valuation of the property which was assessed at Rs.5 crores and the offers received from two entities out of which one Pujit Commercial appears to have given offer of Rs.3 crores, declined to accept the said offer.

Subsequently, by an order dated 14th February, 2007, in view of the inadequacy of the price and having regard to the submissions made on behalf of the trustees that they are not getting suitable offers the application was dismissed for non-prosecution with liberty to file a fresh application as and when better offers are received.

This has resulted in a fresh application being made being ACR No.5 of 2007 for which the order dated 17th December, 2007 was passed.

Initially, on 5th December, 2007 on the basis of a submission made on behalf of the trustees that an advertisement would be necessary with a view to having better offeRs.directions were passed for advertisement once in “The Statesman” and once in Bengali newspaper namely, “Dainik Statesman” and the matter was made returnable one week after the Christmas vacation.

Subsequently, on 12th December, 2007 before the returnable date, on the basis of the submission made on behalf of the trustees and considering the offers already received by the trustees, the Court observed that no further advertisement would be necessary and hence the order dated 6th December, 2007 was recalled with liberty to the trustees to move further application again on the following Monday.

Thereafter on 17th December, 2007 the learned Single Judge on consideration of the offers that were made available to the court confirmed the sale in favour of the Hooghly Investment Limited at a sum of Rs.3.90 crORS.Mr.P.C.Sen, learned Senior Counsel, initially submitted that the original record of the court would not show that in fact, on such date any order was passed.

The said submission proceeded on the assumption that the matter did not appear in the daily cause list and there could be interpolation of the Court record as the petitioner apprehends some unfair means adopted by the petitioner in connection with the matter.

Since the charge was quite serious, this court directed production of the original minute books.

The parties were given liberty to inspect the original minute books as well.

The original minute books shows that the ordeRs.in fact, were passed on those days and they were duly minuted.

Accordingly, the apprehension expressed by the petitioner that there could have been manipulation of the court records and any unfair means was adopted is, however, without any substance.

The court would expect that before making any such allegation, it is the duty of the petitioner to be more discreet and make proper enquiry.

In the petition the petitioner has failed to explain the delay in filing the present application.

The sale was confirmed on 17th December, 2007.

The present application was filed on 22nd December, 2011.

The fraud alleged in paragraph 28 of the petition relates to the petitioner and not on the court.

In a plea of fraud it is essential that the means used should be successful in deceiving.

There can be no fraud without an intention to deceive.

There has to be an active concealment of a material fact.

There cannot be any doubt that fraud vitiates everything, even judgements and orders of the Court.

Although Mr.Sen has relied upon the decision of the Hon’ble Supreme Court in R.

Venugopala (supra) which relates to public charitable trusts in my view, the said judgement has no manner of application in the instant case.

In R Venugopala (supra) suit was filed for removal of trustee on ground of fraudulent sale of trust property.

It was held that sale by private negotiations, in absence of special reasons not to be permitted.

In the instant case twice advertisements wee made but the offers received did not exceed Rs.3 crores.

The trustees on the third occasion approached the court with a higher offer received during private negotiations and the learned Judge although initially directed advertisements to be published, however, later on being satisfied with the price offered recalled the earlier order of advertisement and confirmed the sale at Rs.3.90 crores.

The expectation of the trustees to receive Rs.4 crores appears to be unrealistic having regard to the earlier attempts made for sale of the property which did not fetc.more than Rs.3 crores.

The Court also permitted the trustees to negotiate for sale of the properties.

The earlier negotiations did not produce the desired result as would appear from the orders passed in the earlier proceedings.

The trustees on both the occasions withdrew the petition with liberty to file afresh.

The judgement is an authority for what it decides and not what can be logically deduced from the said judgement.

The facts are required to be assessed in light of the order passed in the earlier proceedings in order to ascertain whether there has been a perpetration of fraud on court.

This court has repeatedly asked the learned Senior Counsel appearing on behalf of the petitioner to show any averment in the petition that he was unaware of the sale in the year 2007 or 2008 or that he did not receive any notice of the annual general meeting for all these years or if there were any material suppression in the notices and/or in the reports.

The petitioner has failed to demonstrate that he was not served with the notices of any of the said meeting.

If a petitioner espouses the cause of Zoroastrian Community and is devoted to the cause of the community, one would expect the petitioner to raise objection in the meeting on 24th May, 2008 or soon thereafter since in the annual report, the trustees have fairly and candidly disclosed all particulars regarding the sale of the said property at a figure of Rs.3.90 crores with justification.

The attendance sheet also records the name of the petitioner.

It is obvious that even upon initially optimistically valuing the said premises at Rs.5 crores the said price could not be fetched.

The applicant has also not come up with any better offer or produce anyone who is willing to buy at a price exceeding Rs.3.90 crores.

There is no available higher offer price for the building even after a period of more than nine years after the said sale.

Sale of a property by private negotiation is not ipso facto invalid.

The validity of such sale will have to be considered in the light of the facts and circumstances of the particular case.

The petitioner is the lone dissenter with no support from any member of the PaRs.Community.

There was no explanation offered for not approaching the court soon thereafter or within a reasonable time.

The petitioner also did not pray for publication of the gist of the prayeRs.The petitioner was aware of the developments for all these years but did not feel it necessary to raise any objection.

The sale which the petitioner did not feel it to be unfair in December, 2007 after four years suddenly he resurrected to become the spokes-person of the PaRs.Community with no support from the community to question the sale at Rs.3.90 crores.

This only shows that in December, 2007 he agreed that the property is incapable of fetching a higher price than Rs.3.90 crores.

It is not material who has obtained the certified copy of the orders and facilitated the filing of this petition as, in my view, if it were a fraud on Court, those facts are inconsequential.

The petitioner as member of the PaRs.Community feels aggrieved by the sale of the property at Rs.3.90 crores.

It does not appear from the orders disclosed in the proceeding that the Trial Court was not aware of the earlier ordeRs.The Trial Court has consciously recalled its earlier order of advertisement and thereafter in the presence of the intending purchasers confirmed the sale.

The trustees had, in fact, served notices upon the four intending purchasers from whom offers were received out of which two turned up and participated in the Court sale.

HIL during auction improved its bid from the initial Rs.3.55 crores to Rs.3.90 crores.

This Court acting, as a co-ordinate bench, cannot question the wisdom and/or propriety of the order passed by a co-ordinate bench recalling its earlier order directing advertisement almost after eight yeaRs.The said order has attained its finality.

The learned Judge was available till 16th August, 2012 forenoon.

Curiously, the petitioner did not feel it necessary to move the application for recalling of the order before His Lordship’s retirement.

The petition was filed on December 22, 2011.

The petitioner do not say that any better price received against any of the previous advertisements published was suppressed by the trustees.

The petitioner made no attempt to move the application before His Lordship.

There are something more than it meets the eyes.

The petition was ostensibly filed for the purpose of PaRs.Community.

However, it has turned out to be settling personal score with the trustees.

The conduct of the petitioner does not inspire confidence of the Court as to his credibility.

Moreover, by the passage of time, the purchasers have invested substantial amount and altered their position.

The petiton is also barred by limitation.

Accordingly, this application being GA No.2991 of 2011 is hopelessly barred by the laws of limitation and the same is hereby dismissed without, however, any order as to costs.

Urgent photostat certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.

(SOUMEN SEN, J.) As./sd .


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