Madhya Pradesh High Court
Parsi Zoroastrian Anjuman Mhow ... vs The Sub Divisional Officer/ The ... on 18 July, 2018
HIGH COURT OF MADHYA PRADESH, BENCH AT INDORE
W P No. 23231 / 2017
PARSI ZOROASTRIAN ANJUMAN, MHOW VS. SDO INDORE / THE
REGISTRAR PUBLIC TRUST & ANOTHER
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INDORE, Dated : 18/07/2018
Mr. A. K. Chitale, learned senior counsel appearing with
Mr. Rishi Tiwari , Advocate for the petitioner.
Mr. Vivek Patwa, learned counsel for the respondent -
State.
Mr. Rohinton T. Thanewala, learned counsel for the respondent No.2.
The petitioner before this Court - Parsi Zoroastrian Anjuman, Mhow, a Trust, registered under the M.P. Public Trust Act, 1951, has filed this present writ petition being aggrieved by the order passed by the Registrar, Public Trust, dated 10/11/2017 by which he has declined the permission in respect of sale of trust property. On 2/3/2015 the petitioner submitted an application u/S. 14 of the M.P. Public Trust Act, 1951 and the same has been rejected by the Registrar.
Mr. A. K. Chitale, learned senior counsel has argued before this Court that five properties in respect of which the Managing Committee has decided to dispose of, are in a very bad shape / condition. The properties and their description, as provided in the Writ Petition, is as under :
S.No Property Description Occupation Status Condition 1 366 Two storey building plus Lying vacant. Partially in Dilapidated and Plowden small cottage and small possession of a tenant against not fit for Road, open land whom an eviction suit has occupation.
Mhow been pending since 2013.
under threat of encroachment
2 401 Two Storey building Lying vacant for over 15 Dilapidated and
Gopalji years. Under threat of not fit for
Marg, encroachment. occupation.
Mhow
3 102 Triangular open land The open land is sandwiched Garages are in
Simrole and two garages between other private dilapidated
Road, admeasuring 2317.2 properties on two sides. condition.
Mhow Sq.ft.
HIGH COURT OF MADHYA PRADESH, BENCH AT INDORE W P No. 23231 / 2017 PARSI ZOROASTRIAN ANJUMAN, MHOW VS. SDO INDORE / THE REGISTRAR PUBLIC TRUST & ANOTHER
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4 13/14 Two Storey building Partially in possession of an
Main with adjoining shop and absentee tenant who has
Street garage. locked the premises and left
Mhow Mhow. Partially in possession
of an absentee tenant against
whom an eviction suit is
pending since 1999.
Partially in possession of non-
Parsi commercial tenants who
will never surrender the
premises.
5 319/320 Two storey building First floor vacant, Ground Require repairs.
Main floor in possession of two non-
Street parsi commercial tenants who
Mhow will never surrender the
premises.
Contention of the learned senior counsel for the petitioner is that the application has been rejected with total non-
application of mind ignoring the statutory provision as contained u/S. 14 of the MP Public Trust Act. It has been stated that the trust property is of no use to the Trust and therefore, it is in the interest of public trust that the properties are sold and the amount is invested for fulfillment of the objects of the trust.
Learned counsel for the petitioner has placed reliance upon the judgment delivered by this Court in the case of Bhaiyalal and others Vs. State of MP and others reported in 2005 (3) MPLJ 275 and his contention is that the permission by the Registrar for sale of immovable property cannot be refused unless such transaction would be prejudicial to the interest of the public trust. Reliance has also been placed upon the judgment delivered by this Court in the case of Narayan Dharmshala Punyarth Trust, Gwalior Vs. Registrar, Public Trust, Gwalior reported in [2010 (4) MPLJ 384] and again it has been argued that in the light of the aforesaid judgment, for betterment of the trust, property can be sold.
HIGH COURT OF MADHYA PRADESH, BENCH AT INDORE W P No. 23231 / 2017 PARSI ZOROASTRIAN ANJUMAN, MHOW VS. SDO INDORE / THE REGISTRAR PUBLIC TRUST & ANOTHER
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This Court has carefully gone through the aforesaid judgments and it is true that for betterment of trust, trust property can be sold.
On the other hand, Mr. Thanewala, learned counsel for the respondent No.2 has argued before this Court that it is a calculated attempt of certain members of the Trust to destroy the Parsi heritage and the properties which are more than 100 years old are being sold. It has been stated that the properties in question were donated by the Parsis and it is the duty of the trust to preserve those properties which include historical buildings and the trustees wants to dispose of the properties and to siphon the funds for other purposes which are not in the interest of the trust. It has also been stated that the Registrar, keeping in view the trust deed and the object of the trust was justified in rejecting the application. He has placed reliance upon the judgment delivered by the apex Court in the case of Cyrus Rustom Patel Vs. The Charity Commissioner, Maharashtra, State & Ors., (Civil Appeal No. 1745 of 2010, decided on 21/09/2017) and his contention is that in the light of the aforesaid judgment, the properties cannot be sold for peanuts and the trust as well as the State Government is under an obligation to ensure that the trust property is maintained and kept alive for generations to come.
The Hon'ble Supreme Court in the case of Cyrus Rustom Patel (supra), in paragraphs 27 and 28 has held as under :
27. A full Bench of High Court of Bombay considered the whole gamut of the powers of the Charity Commissioner to act in the interest, for the benefit, and to protect the trust property under the provisions of Section 36 have been considered in Sailesh Developers (supra); it observed:
27. While exercising powers under Section 36 of the said Act of HIGH COURT OF MADHYA PRADESH, BENCH AT INDORE W P No. 23231 / 2017 PARSI ZOROASTRIAN ANJUMAN, MHOW VS. SDO INDORE / THE REGISTRAR PUBLIC TRUST & ANOTHER
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1950, the Charity Commissioner has to safeguard the interests of the trust as well as the interests of beneficiaries. The learned Single Judge in the case of Arunodaya Prefab (supra) has held thus:
It may not be open for the Charity Commissioner to consider the offers of third parties except only to the extent that they might disclose to him what might be the market value of the land only for the limited purposes of ascertaining the market value of the land. The said view was rightly criticised before us by pointing out that if Charity Commissioner was to invite offers only for the purpose of ascertaining the market value of the property no genuine buyer or purchaser will come forward and offer a genuinely competitive price. It was submitted that no genuine buyer would be interested in coming forward with the offer if his offer is to be considered only for a limited purpose of finding out as to what the market value was on the relevant date. If offers are invited only for this purpose, there is every possibility that the offers will not be bonafide and genuine.
28. While exercising power either under Clause (b) or Clause
(c), the Charity Commissioner can impose conditions having regard to the interest, benefit or protection of the trust.
Before passing an order of sanction or authorization, the Charity Commissioner has to be satisfied that the trust property is required to be alienated. Once the Charity Commissioner is satisfied that the alienation of the trust property is necessary and in the interest of the trust or for the benefit of the trust or for the protection of the trust it is very difficult to accept the submission that the power of the Charity Commissioner is restricted either to grant sanction to a particular proposal of the trustees or to reject it. It is the duty of the Charity Commissioner to ensure that the transaction of alienation is beneficial to the trust and its beneficiaries. He has to ensure that the property is alienated to a purchaser or buyer whose offer is the best in all respects. It is not necessary in every case that the Charity Commissioner has to ensure that property is sold by the trustees to the person offering highest price or consideration. What is the best offer in the interest of the trust will again depend on facts and circumstances of each case? In a given case, while alienating the trust property, the trustees may provide that as a part of the consideration for alienation, the purchaser should construct a building on a part of the trust property for the use by the trustees for the objects of the trust. In such a case, it may be necessary to ascertain the reputation and capacity of the purchaser apart from the consideration offered. When the charity Commissioner is satisfied that trust property needs to be alienated and when he finds that the offer received by the trustees may not be the best offer, he can always direct that bids be invited by a public notice. When a better offer is received in public bidding or auction, it is very difficult to say that the power of the Charity Commissioner is HIGH COURT OF MADHYA PRADESH, BENCH AT INDORE W P No. 23231 / 2017 PARSI ZOROASTRIAN ANJUMAN, MHOW VS. SDO INDORE / THE REGISTRAR PUBLIC TRUST & ANOTHER
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restricted and he cannot enjoin the trustees to sell or transfer the trust property to a third party who has given an offer which is the best in the interest of the trust. The Trustees approach the Charity Commissioner only when they are satisfied that there is a necessity to alienate the trust property. The trustees hold the property for the benefit of the beneficiaries and therefore once they express desire to alienate the property, it is obvious that Charity Commissioner can always impose condition while granting sanction that the property shall be sold or transferred to a person who has come with an offer which is the best offer in the interest of the trust. The Section gives a power to the Charity Commissioner to impose conditions and the said conditions will include a requirement of selling or transferring or alienating the trust property to a purchaser who has offered the best deal having regard to the interest and benefit of the beneficiaries and the protection of the trust. The power to impose conditions cannot be a limited power when the law requires Charity Commissioner to exercise the said power having regard to the interest, benefit, and protection of the trust. Once the Charity Commissioner accepts the necessity of alienating the trust property, the trustees cannot insist that the property should be sold only to a person of their choice, though the offer given by the person may not be the best offer. The property may be vested in the trustees, but the vesting is for the benefit of the beneficiaries. The Charity Commissioner has jurisdiction to ensure that the property is sold or transferred in such a manner that the maximum benefits are available to the beneficiaries of the trust. Under clause (b) of Section 36 of the said act, the Charity Commissioner has jurisdiction to decide whether it is in the interest of the trust that the property of the trust be sold or transferred. Once the learned Charity Commissioner is to be satisfied that the property is required to be transferred or sold in the interest of the Trust, the learned Charity Commissioner cannot remain a silent spectator when he finds that the transaction proposed by the Trustees is not in the interest of the Trust or its beneficiaries. Once the necessity of sale or transfer is established, the Charity Commissioner can certainly ensure that best available offer is accepted, so that the transaction is for the benefit of the trust. If the trustees were to be the final authority to judge as to what is in the interest of the Trust, the legislature would not have enacted provision requiring prior sanction. While deciding which is the best offer, the learned Charity Commissioner is bound to take into consideration various factors, which cannot be exhaustively listed. However, the paramount consideration is the interest, benefit, and protection of the trust. It is obvious from the scheme of Section 36 that the legislature never intended that trustees could sell or transfer the trust property vesting in them as if it was their personal property. It is the duty of Charity Commissioner to ensure that the property should be alienated in such a manner that maximum benefits are accrued to the trust. The Charity Commissioner, while considering an application under Section 36 (1) of the said Act of 1950, in a HIGH COURT OF MADHYA PRADESH, BENCH AT INDORE W P No. 23231 / 2017 PARSI ZOROASTRIAN ANJUMAN, MHOW VS. SDO INDORE / THE REGISTRAR PUBLIC TRUST & ANOTHER
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given case, can opt for public auction or can invite bids.
30. Hence, we answer the questions referred to our decision as under:
(i) The power vesting in the Charity Commissioner under Section 36 of the Bombay Public Trusts Act 1950 is not confined merely to grant or refusal sanction to a particular sale transaction in respect of which sanction is sought under Section 36 of the said Act. The power of the Charity Commissioner extends to inviting offers from the members of the public and directing the trustees to sell or transfer the trust property to a person whose bid or quotation is the best, having regard to the interest, benefit, and protection of the trust. Hence we declare that the decision of the Division Bench of this Court in the case of Jigna Construction Co.
Mumbai v. State of Maharashtra and Ors. does not lay down correct law.
(ii) The party, who comes forward and submits his offer directly before the Charity Commissioner and complies with other requirements as may be laid down by the Charity Commissioner in a pending application under Section 36 of the said Act of 1950 has a locus standi to challenge the final order passed in a proceeding under Section 36. However, the scope of the challenge will be limited as indicated in paragraph 29 above.
(iii) We direct the Office to place the Writ Petitions before the appropriate Benches for deciding the same in accordance with law.
28. As discussed, this Court has directed a number of times that sale of trust property, which is like public property, if at all necessary, is not permissible by way of private negotiations; could be done only in exceptional circumstances, for reasons to be recorded. There was no exceptional circumstance, no urgency to throw away the valuable property of the trust, which was derogatory to its interest and would have defeated the very object of the creation of the trust for the preservation and protection of religion and Parsi culture.
This Court has carefully gone through the trust deed as well as the bye-laws which are on record. The properties in question, undisputedly, are old buildings and as informed, they are more than 100 years old. The Registrar Public Trust has taken note of all the factors and in order to ensure that the interest of the Trust is protected, has passed the impugned order. Sale of the property of those Parsies who have donated it to the HIGH COURT OF MADHYA PRADESH, BENCH AT INDORE W P No. 23231 / 2017 PARSI ZOROASTRIAN ANJUMAN, MHOW VS. SDO INDORE / THE REGISTRAR PUBLIC TRUST & ANOTHER
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trust can never be said to be in the interest of trust. In all fairness, the trust should made all possible endeavour to repair the buildings which are trust properties and to ensure that the rich cultural heritage of the Parsies which is still alive in the township of Mhow, is not destroyed by selling it to builders and to other persons at throw away price and, therefore, this Court is of the considered opinion that the Registrar, Public Trust was certainly justified in rejecting the application filed by the Trust. No case for interference is made out in the matter. The present Writ Petition is dismissed.
(S. C. SHARMA) JUDGE KR Digitally signed by Kamal Rathor Date: 2018.07.19 16:23:43 +05'30'