Andhra HC (Pre-Telangana)
Employees Association, Rep. By Its ... vs Sri Chenna Keshava Swamy Temple, Rep. By ... on 16 March, 1993
Equivalent citations: 1993(2)ALT48
Author: P. Venkatarama Reddi
Bench: P. Venkatarama Reddi
JUDGMENT A. Lakshmana Rao, J.
1. In view of the considerable importance of the following two questions raised in this appeal, a Division Bench of this Court deemed it appropriate to refer them to a Full Bench, by an order of reference dated October 5, 1989:
"One of the principal questions raised in this appeal is that the Civil Court has no jurisdiction to entertain the suit in view of the express bar contained in Section 105 of the A.P. Charitable and Hindu Religious Institutions and Endowments Act, 1966.........
In the instant case, the suit is for setting aside a sale conducted pursuant to the sanction given by the Commissioner and the Government under Section 74 of the A.P. Charitable & Hindu Religious Institutions & Endowments Act, 1966 without challenging the said orders.
The second question is whether the sale is void or a mere irregularity which can be cured by providing some compensation as suggested by the learned Single Judge, who referred the case to the Division Bench."
2. For the purpose of answering these two questions, it would be necessary to refer to the relevant facts of the case and the provisions of the Andhra Pradesh Charitable & Hindu Religious Institutions & Endowments Act, 1966 (for short 'the Act').
3. The appellant is the 1st defendant and the respondents 1 to 8 herein are the plaintiffs in O.S. No. 76 of 1983 on the file of the Subordinate Judge, Bapatla. Respondents 9, 10 and 11 are the defendants 2, 3 and 4 respectively. The appellant is an Association of employees registered under the Societies Registration Act bearing Registration No. 9 of 1979. It submitted an application to the Assistant Commissioner, Endowments, Guntur, in November 1979 offering to purchase Ac.5-60 cents of land in Survey No. 9, Nidubrole, Guntur District at Rs. 20,000/- per acre. This land belongs to and vests in Sri Chenna Kesavaswamy Temple, Nidubrole (Respondent No. 1). At that time, the land was in possession of the Archakas and they had expressed their willingness for the sale of the land. The respondent No. 9 who was the Manager (Executive Officer) of the temple at that time also proposed for the sale of the land. The Assistant Commissioner recommended to the Commissioner of Endowments (respondent No. 10) for the sale of the land. The Commissioner sent back the recommendation to the Assistant Commissioner stating that he had already agreed for acquisition of the very same land by the Social Welfare Department for providing house sites to the members of the weaker sections. On enquiry by the Assistant Commissioner the Director of Social Welfare informed him that the acquisition proceedings were dropped. The Assistant Commissioner in turn intimated the same to the Commissioner. He issued a notification under Section 74(1)(b) of the Act calling for objections and suggestions for the sale of the land. It was published in the Andhra Pradesh Gazette dated November 22, 1979. Thereafter, the Commissioner had requested the State Government (respondent No. 11) through the letter dated December 17, 1979 for according permission under the proviso to Section 74(1)(c) of the Act to sell the land to the appellant-Association at Rs. 20,000/- per acre otherwise than by public auction. The State Government accorded permission in G.O.Rt.No. 295 Revenue (Endowment III) Department, dated March 3, 1980 for the sale of the land measuring Ac.5-60 cents in favour of the appellant-Association at Rs. 20,000/-per acre by way of private negotiations. The Commissioner issued orders dated March 18, 1980 directing the Manager of the Temple (respondent No. 9) to execute the sale deed in favour of the appellant-Association. Accordingly, he executed the sale deed January 28, 1981 (Ex.A-18) in favour of the appellant-Association in respect of Ac.5-60 cents, for a total consideration of Rs. 1,12,000/-. At the time the property was sold, there was no trust board for the temple and it was constituted on February 18,1982 with the respondents 2 to 8 herein as the trustees.
4. The trustees filed the suit on September 26,1982 for the cancellation of the sale deed dated January 28, 1981 executed by the Manager of the temple (respondent No. 9) and for consequential relief of delivery of possession of the suit land to the temple. Originally, the suit was filed only against the appellant-Association and respondent No. 9. However, the appellant-Association, which is the 1st defendant, filed I.A.No. 1112 of 1984 for impleading the Commissioner of Endowments as defendant No. 3. This application was ordered on October 16,1984. It also filed I.A. No. 1559 of 1984 for impleading the State Government as defendant No. 4. This application was ordered on March 23, 1985.
5. The Commissioner of Endowments filed a written statement stating that he was not aware at the time of recommending the sale of the property that the then Manager was also one of the members of the 1st defendant-Association (appellant) and it was for the Manager to prove that the sale was necessary and for the benefit of the institution. The relevant portion of the written statement is as under:
"To determine the question whether the sale which is being questioned now in the suit is fradulent or not, this defendant is not a necessary party. If the information furnished by concerned Manager and Assistant Commissioner is incorrect and fradulent necessarily the recommendation of the Commissioner based on those reports is erroneous. Merely because this defendant recommended the sale, it does not mean that the sale is not fradulent and that it cannot be questioned. 1st defendant and 2nd defendant cannot escape their liability to prove that the sale is completely genuine by saying that as this defendant sanctioned the sale, the sale cannot be questioned or that this defendant is liable because of that sanction. If the Honourable Court after trial comes to the conclusion that the sale is fradulent and not conducted according to law, then necessarily the suit will have to be decreed. If the Court finds that the sale is true not motivated by any personal considerations and for the benefit of the institution, then the suit will have to be dismissed. In either case, as already submitted, this defendant is not a necessary party to the suit."
6. On behalf of the State Government, which was impleaded as the 4th defendant in the suit, a written statement was filed. It was averred therein that the Commissioner of Endowments reported that the land was not useful for cultivation and that it was fetching only a rent of 28 bags of paddy per annum. The land was stated to be in possession of the Archakas and they were willing for the sale of the land. The Commissioner reported that if the land was sold to the Employees Association at Rs. 20,000/- per acre, a sum of Rs. 1,12,000/- would be realised towards the cost of the land and by way of interest on that amount a sum of about Rs. 11,000/- per year would be realised. Thus, the transaction was stated to be beneficial to and in the interest of the institution. Accordingly, the State Government accorded permission for the sale of Ac.5-60 cents of land in favour of the Employees Association at Rs. 20,000/- per acre by way of private negotiations. The relevant portion of the written statement is as follows:
"In this particular case, this defendant was not aware at the time of sanctioning the sale that 2nd defendant also was one of the purchasers.
The deity is the owner of the property. If the Trust Board complains the sale is tainted with various infirmities it is for the department and for tine alienees to prove contra, for which this defendant need not be made a party to the suit as there is nothing which this defendant can plead or do which can throw light on the matter. If the Honourable Court after trial comes to the conclusion that the sale is fradulent and not conducted according to law, then necessarily the suit will have to be decreed. If the Court finds that the sale is true not motivated by any personal consideration and for the benefit of the institution, then the suit will have to be dismissed. In either case, as already submitted, this defendant is not a necessary party to the suit."
7. In all, the following eleven issues including two additional issues were framed in the suit:
1. Whether the sale deed dated January 28, 1981 was brought about by misrepresentation?
2. Whether consideration for the sale is grossly low?
3. Whether the permission of the Government is obtained by fraud and misrepresentation?
4. Whether the plaintiff is entitled to question the order of the Government sanctioning the sale in this Court?
5. Whether the plaintiffs are estopped from questioning the sale of the land in question?
6. Whether the sale is liable to be set aside?
7. Whether the suit is not maintainable?
8. Whether the plaintiff is entitled for possession?
9. To what relief?
7(a) The following additional issue was framed on October 29, 1984:
"Whether D-3 is a necessary party to the suit"?
7(b) The following additional issue was framed on April 23, 1985:
"Whether DA is a necessary party to the suit"?
Oral and documentary evidence was adduced on behalf of the plaintiffs and the defendants. The learned Subordinate Judge decree the suit against the defendants 1 and 2 holding that defendants 3 and 4 were not necessary parties to the suit. The learned Subordinate Judge held that the sale deed was brought about by misrepresentation and the permission of the State Government was obtained by fraud and misrepresentation. The learned Judge was of the view that the plaintiffs were entitled to question in the suit the order of the State Government according permission for the sale of the property in favour of the Employees-Association by private negotiations and that the consideration for the sale was grossly low. Holding that the plaintiffs were not estopped from questioning the sale, the learned Judge decreed the suit by his judgment dated September 14, 1987.
8. When this appeal came up for disposal before a learned Judge of this Court, he directed it to be posted before a Division Bench for the following reasons:
"I have heard both the learned counsel at length. I am satisfied that though there is some illegality in the process of obtaining a sale deed, I find it difficult to hold that the proceedings according sanction are nullity. Hence, I thought that payment of compensation would meet the ends of justice. The defendants already took possession and expended some amount both for improving the land and also for fighting litigation against encroachers. However, the trustees have come forward for the first time that the land would fetch Rs. 50,00,000/-. Hence, I think that it would be just and proper that this appeal is heard by a Division Bench in view of the special features of the case and hardship involved to the purchasers."
Thus, the matter came up before a Division Bench, which formulated the aforementioned two questions and referred them to the Full Bench. The first sentence in the last paragraph of the reference order reads as under:
"Both questions are of considerable importance and we deem it appropriate to refer the case to a Full Bench."
As the Division Bench has formulated only two questions to be answered by the Full Bench and as it would be neither expedient not proper to go into the other points, that arise for consideration in this first appeal, we have decided to answer the aforesaid two questions and send back the case to the Division Bench for disposal on the other points.
9. Relevant provisions of the Act:-
Section 2(18):- 'Person having interest' includes-
(a) ...........
(b) in the case of a charitable institution or endowment or a religious institution other than a math or a religious endowment, a person who is entitled to attend at or is in the habit of attending the performance of service, charity or worship connected with the institution or endowment or who is entitled to partake or is in the habit of partaking in the benefit of any charity or the distribution of gift thereat;
(c) ............
Section 2(28):- 'trustee' means any person whether known as mathadhipathi, mohant, dharmakarta, mutawalli, muntazim, or by any other name, in whom either alone or in association with any other person, the administration and management of a charitable or religious institution or endowment are vested; and includes a Board of Trustees.
Section 8:- Powers and functions of Commissioner:-
(1) Subject to the other provisions of this Act, the administration of all charitable and Hindu religious institutions and endowments shall be under the general superintendence and control of the Commissioner and such superintendence and control shall include the power to pass any order which may be deemed necessary to ensure that such institutions and endowments are properly administered and their income is duly appropriated for the purposes for which they were founded or exist.
(2) Without prejudice to the generality of the foregoing provisions, the Commissioner shall exercise the powers conferred on him and perform the functions entrusted to him by or under this Act in respect of such institutions or endowments in the State as are included in the lists published under Clause (a) and Clause (d) of Section 6.
Section 14. Vesting of all properties in the institution of endowment:- All properties belonging to, or given or endowed to a charitable or religious institution of endowment shall, vest in the charitable or religious institution or endowment, as the case may be.
Section 21. Powers of the trustee:-(1) The trustee of every charitable or religious institution or endowment shall administer its affairs, manage its properties and apply its funds in accordance with the terms of the trust usage of the institution or endowment and all lawful directions which a competent authority may issue in respect thereof and as carefully as a man of ordinary prudence would deal with such affairs, funds and properties if they were his own.
(2) A trustee shall, subject to the provisions of this Act, be entitled to exercise all powers incidental to the prudent and beneficial administration of the charitable or religious institution or endowment and to the performance of the functions entrusted to him...............
(5) The trustee of a religious institution or endowment shall have power, subject to such conditions as the Commissioner may by general or special order impose to fix fees for the performance of archana or any service or ritual or ceremony connected with such institution or endowment.
Section 22. Duties of the trustees-
(1)............
(2) ..................
(3) The trustee of every charitable or religious institution or endowment shall obey all lawful orders issued under the provisions of this Act by the Government, Commissioner, Deputy Commissioner, or Assistant Commissioner, as the case may be.
Section 27. Appointment and duties of Executive Officer:-
(1) ...........
(2) ...........
(3) ..........
(4)(a) The Executive Officer appointed under this section shall be under the administrative control of the trustee of the institution or endowment and shall be responsible for carrying out all lawful directions issued by such trustee, from time to time.
(b) The Executive Officer shall, subject to such restrictions as may be imposed by the Government-
(i) be responsible for the proper maintenance and custody of all the records, accounts and other documents and of all the jewels, valuables, moneys, funds and other properties of the institution or endowment;
(ii) arrange for the proper collection of income and for the incurring of expenditure;
(iii) sue or be sued by the name of the institution or endowment in all legal proceedings:
Provided that any legal proceeding pending immediately before the commencement of this Act by or against an institution or endowment in which any person other than an Executive Officer is suing or being sued shall not be affected;
(iv) lodge all moneys received by the institution or endowment in any scheduled bank and be entitled to sign all orders or cheques against such moneys;
(v) have power in cases of emergency, to direct the execution of any work or the doing of any act which is provided for in the budget for the year or the immediate execution or the doing of which is, in his opinion, necessary for the preservation of the properties of the institution or endowment or for the service or safety of the pilgrims resorting thereto and to direct that the expenses of executing such work or the doing of such act shall be paid from the funds of the institution or endowment.
Provided that the Executive Officer shall report forthwith to the trustee any action taken by him under this item and the reasons therefor.
(c) The Executive Officer shall, with the prior approval of the trustee, institute any legal proceedings in the name of the institution or endowment, or defend any such legal proceedings.
(d) Where there is no Executive Officer, in respect of any charitable or religious institution or endowment, the trustee or the Chairman of the Board of Trustees, as the case may be, of the institution or endowment shall exercise of the powers, perform the functions and discharge the duties of an Executive Officer.
...............
Section 35. Power of Executive Officer not to implement orders or resolution of the trustee or the Board of Trustees in certain cases:-
(1) Where an Executive Officer considers that an order or resolution passed by a trustee or the Board of Trustees-
(a) has not been passed in accordance with law; or
(b) is in excess or abuse of the powers conferred on the trustee or the Board of Trustees by or under the Act, or by any other law; or
(c) if implemented is likely to cause financial loss to the institution or endowment, danger to human life, health or safety, or is likely to lead to a riot or breach of peace; or
(d) is not beneficial to the institution of endowment; the Executive Officer may, without implementing such order or resolution, place the matter before the turstee or Board of Trustees along with a note pointing out the objections to the order or resolution and request the trustee or the Board of Trustees to reconsider the order or resolution.
(2) The Executive Officer shall forthwith submit a report of the action taken by him under Sub-section (1) to the Commissioner, Deputy Commissioner or Assistant Commissioner, as the case may be.
........
Section 74. Alienation of immovable property:- (1)(a) Any gift, sale, exchange or mortgage of any immovable property belonging to or given or endowed for the purpose of any charitable or religious institution or endowment shall be null and void unless any such transaction, not being a gift, is effected with the prior sanction of the Commissioner.
(b) The Commissioner may, after publishing in the Andhra Pradesh Gazette the particulars relating to the proposed transaction and inviting any objections and suggestions, if any, received from the trustee or other person having interest, accord such sanction where he considers that the transaction is-
(i) necessary or beneficial to the institution, or endowment;
(ii) consistent with the objects of the institution or endowment; and
(iii) the consideration therefor is reasonable and proper.
(c) Every sale of any such immovable property sanctioned by the Commissioner under Clause (b) shall be effected by public auction in the prescribed manner subject to the confirmation by the Commissioner within a period prescribed.
Provided that the Government may, in the interest of the institution or endowment and for reasons to be recorded therefor in writing, permit the sale of such immovable property, otherwise than by public auction.
(d) Every lease of any immovable property belonging to, or given or endowed for the purpose of any charitable or religious institution or endowment subsisting on the date of the commencement of this Act, shall, subject to the provisions of Clause (e), continue to be in force till the expiration of its period on the same terms and conditions as on that date.
Section 105. Notification, orders, etc., under the Act not to be questioned jn Court of law:- Save as otherwise expressly provided in this Act, no notification or certificate issued, order passed, decision made, proceedings or action taken, or other things done under the provisions of this Act by the Government, the Commissioner, a Deputy Commissioner or an Assistant Commissioner shall be liable to be questioned in any court of law.
10 Relevant Rules:-
26(i) Rule under Section 74 read with Section 107 of the Act Rules relating to Notice of Sale, exchange, mortgage of immovable property of the Institution or Endowment.
1. (1) Notice of any sale, exchange or mortgage of any immovable property belonging to, or given or endowed for the purposes of any charitable or religious institution or endowment shall contain the following particulars, namely:-
(a) nature of the proposed transaction.
(b) correct description of the property relating to the proposed transaction with the information regarding the survey number, extent and boundaries and ward number and door number also, in the case of property within the limits of a municipality or any other local body.
(c) the revenue assessed on the property relating to the proposed transaction by way of land revenue, cess, quit-rent, ground-rent, property tax and the like;
(d) any encumbrances to which the property relating to the proposed transaction is subject;
(e) in the case of mortgage, the amount for which the property is proposed to be mortgaged;
(f) in the case of sale, the probable price or the rental, as the case may be, that is expected.
(2) The notice shall specify a reasonable time, being not less than thirty days from the date of the issue of the notice, within which objections and suggestions may be sent. It shall also specify the date on which an inquiry, if any, is proposed to be held to consider the said objections and suggestions. A copy of the notice shall either be served in person, or sent by registered post with acknowledgement due to the trustee or trustees of the religious or charitable institution or endowment concerned, and where the property belongs to a specific endowment, such notice shall also be sent to the trustee or trustees of the religious or charitable institution or endowment or math to which the specific endowment is attached. Refusal to receive the notice shall be deemed to be sufficient notice.
2. A copy of the notice shall be published by notification in the Andhra Pradesh Gazette and also in the following manner:-
(i) by affixture on the notice board of the office of the Commissioner, the Deputy Commissioner or Assistant Commissioner, as the case may be, having jurisdiction over the area in which the math or the charitable or religious institution or endowment concerned is situate;
(ii) by affixture on the notice board or the front door of the math or the charitable or religious institution or endowment concerned;
(iii) by affixture on the notice board of the municipal office or the village chavadi and if there is no village chavadi in some other public place in the village in which the math or religious or charitable institution or endowment concerned is situate;
(iv) by affixture in any other conspicuous place in the locality which may be selected by the Commissioner in his discretion; and
(v) by publication in the daily newspaper in the language of the locality where the math or charitable or religious institution or endowment concerned and the village or villages in which the property concerned is situate and such publication shall be deemed to be sufficient intimation to persons having interest:
Provided that the Commissioner may dispense with the publication in the daily newspapers in cases where the cost of the publication will not be commensurate with the value of the transaction; Provided further that the Commissioner shall have a power with due regard to the financial condition of the institution to order recovery of the cost of publication from funds of the institution concerned.
11. The relief sought for in the suit is as follows: (a) for cancellation of the sale deed dated January 28, 1981 executed by the 2nd defendant representing the 1st plaintiff for the land in favour of the 1st defendant.
(b) for consequential relief of delivery of possession of the suit land to the plaintiffs from the 1st defendant.
(c) for costs of the suit; and
(d) for such other reliefs as the Honourable Court deems fit and proper to grant.
12. It is submitted by Mr. R. Venugopal Reddy, the learned senior counsel appearing for the appellant that the civil court has no jurisdiction to entertain the suit in view of the provisions of Section 105 of the Act. Relying on the provisions of Section 74 of the Act, the learned counsel contends that the sale of the land of the temple is consequential to the sanction granted by the Commissioner of Endowments and the permission accorded by the State Government for the sale otherwise than by public auction and if those orders are not challenged, the suit for cancellation of sale deed is not maintainable. The relief sought for in the suit clearly indicates that the orders of the Commissioner and the State Government are not under challenge and the suit has been dismissed against both of them. Therefore, it is emphasised by the learned counsel for the appellant that the Court has no jurisdiction to cancel a sale deed unless the orders passed by the Commissioner and the State Government are set aside. On the other hand, it is submitted by Mr. T. Veerabhadraiah and Mr. M. Chandrasekhara Rao, the learned counsel appearing for the contesting respondents that no relief need be sought for in respect of void orders passed by the Commissioner and the State Government and the bar of suit in Section 105 of the Act does not operate in respect of orders passed in violation of the mandatory provisions of Section 74 and the rules made thereunder.
13. Section 105 provides that no order passed, decision made, action taken or other things done under the provisions of the Act by the Government, Commissioner, Deputy Commissioner or Assistant Commissioner shall be liable to be questioned in any court of law save as otherwise expressly provided in the Act. The only section under which a suit can be filed under the Act is Section 78. The present suit is not one such suit filed under Section 78. Therefore, we have to consider having regard to the provisions of Section 74 and 105 whether the present civil suit is maintainable.
14. The earliest decision on the subject of exclusion of civil court's jurisdiction is the one rendered by the Privy Council in Secretary of State v. Mask & Co., AIR 1940 P.C. 105, where the learned members of the Judicial Committee enunciated the salient principle in the following terms:
"It is settled law that the exclusion of the jurisdiction of the Civil Courts is not to be readily inferred, but that such exclusion must either be explicitly expressed or clearly implied. It is also well settled that even if jurisdiction is so excluded, the Civil Courts have jurisdiction to examine into cases where the provisions of the Act have not been complied with, or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure."
15. In a case arising under the Andhra Inams (Abolition and Conversion into Ryotwari) Act, 1956, a Division Bench of this Court in Peda Govindayya v. Subba Rao, 1969 (2) ALT 336 examined the following provisions of Section 14 of that Act and explained their scope and ambit:
"No suit or other proceeding shall be instituted in any Civil Court to set aside or modify any decision of the Tahsildar, the Revenue Court, or the Collector under this Act, except where such decision is obtained by misrepresentation, fraud or collusion of the parties."
Having noticed that the proceedings under the Inams Abolition Act are summary in nature and that the decisions of the revenue authorities under the Act are binding on the civil court, the learned Judges held that it was certainly not the intention of the legislature to bar the jurisdiction of the Civil Courts in deciding questions of title to the property notwithstanding the grant of patta by the Revenue authorities under the Act. The learned Judges observed:
"On a scrutiny of the provisions of the Inams Abolition Act, it is clear to our mind that the enquiries contemplated and the remedies provided for the aggrieved party are not as efficacious and adequate as those contemplated before the ordinary courts of the land. In such a case, the bar of jurisdiction of the Civil Courts cannot be readily implied. Turning to the language of Section 14 of the Act, it has to be noted that suits of a specified nature only are barred, namely, suits which involve a direct attack on the decisions of the revenue tribunal, that is to say, suits for setting aside or modifying the orders of the revenue authorities under the Act, subject to the exceptions stated in the case of misrepresentation, fraud or collusion. If the object of the suit is not directly to set aside the order of the revenue authorities, it is always open to a Civil Court to consider all questions in a suit praying for reliefs which cannot be granted by the Revenue Authorities."
16. However, another Division Bench of this Court struck a different note in the judgment dated April 1, 1976 in A.S. No. 71 of 1973. This is also a case arising under the provisions of the Inams (Abolition and Conversion into Ryotwari) Act. The suit was filed for the recovery of possession of the plaint schedule properties. The question was whether the suit was maintainable in view of the provisions of Section 14 of the Act. There was already an enquiry under the provisions of the Inams Abolition Act, in which it was held that the grant was not to an institution but to an individual. A patta was granted to the defendants in the suit. In view of the decision rendered by the authorities under the Inams Abolition Act, which became final, it was held that the civil suit was not maintainable. Repelling the argument of the learned counsel for the appellant that Section 14 prohibited only suits to set aside the decisions of the revenue authorities under the Act and it did not bar the suits for recovery of possession, the learned Judges observed:
"We do not think that a suit which is barred by Section 14 may nonetheless be brought if the plaintiff resorts to a trick of pleading or camouflages the real relief which he seeks."
Referring to the earlier decision in Peda Govindayya v. Subba Rao, 1969 (2) ALT 336, it was pointed out that on the facts of that case, the jurisdiction of the Civil Court was not ousted as the question in that suit was whether a certain land i.e., a tamarind tope was an institution or not and not whether the land was held by an institution or not. Some of the observations made in that decision have been pointed out to be not correct in view of the decisions of the Supreme Court.
17. Whether a suit filed by the erstwhile landlord for redemption of mortgage and for possession of land situated in an estate which was later taken over by the Government under the Tamil Nadu Estates (Abolition and Conversion into Ryotwari) Act, 1948 was maintainable in a Civil Court when the application of the plaintiff for grant of ryotwari patta was pending enquiry under Section 15 of the Estates Abolition Act, was the question that fell for consideration before a Full Bench of this Court in S. Venkata Ramaiah v. K. Venkata Swamy, . On a consideration of various decisions that death with the question relating to the exclusion of the jurisdiction of the Civil Courts, the learned Judges held:
"The principles a relating to the exclusion of the jurisdiction of Civil Courts by statutory Tribunals are fairly well settled. The exclusion of the jurisdiction of a Civil Court from entertaining a suit of a civil nature may be expressed or implied. Where a special Tribunal is created by an Act of Legislature for the purpose of determining the rights created by the statute and finality is given to the orders of the Tribunal the jurisdiction of the Civil Court must be considered to be excluded with regard to those matters. But where the subject matter of the suit falls outside the exclusive jurisdiction of the Special Tribunal or where the relief sought in the suit is one which the Special Tribunal is incapable of granting, the jurisdiction of the Civil Court is not ousted merely because the question which has to be incidentally but necessarily decided is a question within the competence of the Special Tribunal."
However, the learned counsel for the appellant sought to rely on the following observation of the learned Judges:
"In our view, a suit for a relief which the Settlement Officer cannot grant is not barred merely because it incidentally involves the adjudication of questions within the competence of the Settlement Officer and the Estates Abolition Tribunal. If, however, the relief claimed in the suit is a mere camouflage for obtaining a determination of the rights which are required to be decided by the Settlement Officer and the Estates Abolition Tribunal the suit must be held to be barred. As we said earlier the plaint must determine the forum. But the defendant may show that the plaint is a mere camouflage to circumvent the jurisdiction of the Special Tribunal."
18. It is vehemently urged by Mr. R. Venugopal Reddy, the learned counsel for the appellant that the trustees are trying to circumvent the orders passed by the authorities under the Act which cannot be questioned in a Civil Court by a trick of pleading and that the relief claimed in the plaint as to the validity of the sale deed is nothing but a camouflage to circumvent the provisions of Section 105 of the Act. We will examine this contention after going through some of the relevant decisions relating to exclusion of jurisdiction of the Civil Courts.
19. In Raleigh Investment Co., Ltd. v. Governor General in Council, AIR 1947 P.C. 78, the question for consideration was whether the jurisdiction of the Civil Court was excluded by Section 226 of the Government of India Act, 1935 and Section 67 of the Indian Income Tax Act in entertaining a suit filed for recovery of money paid under protest pursuant to an order of assessment made under the Income Tax Act. Section 67 of the Indian Income Tax Act provided that no suit shall be brought in any Civil Court to set aside or modify any assessment made under the Act. The Judicial Committee considered the scope of the section and came to the conclusion that the suit in substance was the one to modify the assessment and therefore it was barred. An argument was advanced that the assessment cannot be said to be one under the Act if effect was given to an ultravires provision in making the order of assessment. The words "under the Act" were construed as an activity of an Assessing Officer acting as such and the activity which took into consideration an ultravires provision did not take the matter out of those words. It was explained that if this were not so, all questions of the correctness of the assessment under the Income Tax Act could be brought before the Court. The Income Tax Act having a suitable and adequate machinery jurisdiction to question the assessment otherwise than by that machinery was therefore held barred.
20. In State of Kerala v. N. Ramaswami Iyer and Sons, , the Supreme Court accepted the observations made by the Privy Council in Secretary of State v. Mask and Co., AIR 1940 P.C. 105 (Same as No. 1) in the follwoing terms:
"It is true that even if the jurisdiction of the Civil Court is excluded, where the provisions of the statute have not been compled with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure, the Civil Courts have jurisdiction to examine those cases."
The correctness of the principle laid down in Raleigh Investment Co., Ltd. v. Governor General in Council (4 supra) was examined by a Constitution Bench of the Supreme Court in K.S. Venkataraman and Co. (P) Ltd. v. State of Madras, . K. Subba Rao, J., as he then was, speaking for the majority, observed:
"The legal position that emerges from the discussion may be summarized thus: If a statute imposes a liability and creates and effective machinery for deciding questions of law or fact arising in regard to that liability, it may, by necessary implication, bar the maintainability of a civil suit in respect of the said liability. A statute may also confer exclusive jurisdiction on the authorities constituting the said machinery to decide finally a jurisdictional fact thereby excluding by necessary implication the jurisdiction of a Civil Court in that regard. But, an authority created by a statute cannot question the vires of that statute or any of the provisions thereof whereunder it functions. It must act under the Act and not outside it. If it acts on the basis of a provision of the statute, which is ultra vires, to that extent it would be acting outside the Act. In that event, a suit to question the validity of such an order made outside the Act would certainly lie in a Civil Court."
21. In a case arising under the Punjab Municipal Act, 1911 relating to imposition of tax under the Act and a suit brought for refund of the tax recovered, a Bench consisting of three learned Judges of the Supreme Court stated the law on the subject relating to the exclusion of the jurisidction of the Civil Court in Firm Seth Radha Kishan v. Ludhiana Municipality, as under:
"Under Section 9 of the Code of Civil Procedure the Court shall have jurisdiction to try all suits of civil nature excepting suits of which cognizance is either expressly or impliedly barred. A statute, therefore, expressly or by necessary implication, can bar the jurisdiction of Civil Courts in respect of a particular matter. The mere conferment of special jurisdiction on a tribunal in respect of the said matter does not in itself exclude the jurisdiction of Civil Courts. The statute may specifically provide for ousting the jurisdiction of Civil Courts; even if there was no such specific exclusion, if it creates a liability not existing before and gives a special and particular remedy for the aggrieved party, the remedy provided by it must be followed. The same principle would apply if the statute had provided for the particular forum in which the remedy could be had. Even in such cases, the Civil Court's jurisdiction is not completely ousted. A suit in a Civil Court will always lie to question the order of a tribunal created by a statute, even if its order is, expressly or by necessary implication, made final, if the said tribunal abuses its power or does not act under the Act but in violation of its provisions."
22. Again, a similar question came up for consideration before another Constitution Bench of the Supreme Court in a matter arising out of a suit filed by an assessee to recover the sales tax illegally collected from it. Section 18-A of the Madras General Sales Tax Act, 1939 provides that no suit or other proceeding shall, except as expressly provided in the Act, be instituted in any Court to set aside or modify any assessment made under the Act. Explaining the meaning of the words "any assessment made under this Act" while considering the question relating to the jurisdiction of the Civil Court to entertain a suit, the learned Judges observed in Firm of Illuri Subbayya Chetty and Sons v. State of Andhra Pradesh, AIR 1964 SC 332:
"The expression "any assessment made under this Act" is, in our opinion, wide enough to cover all assessments made by the appropriate authorities under this Act whether the said assessments are correct or not. It is the activity of the assessing officer acting as such officer which is intended to be protected and as soon as it is shown that exercising his jurisdiction and authority under this Act, an assessing officer has made an order of assessment, that clearly falls within the scope of Section 18-A. The fact that the order passed by the assessing authority may in fact be incorrect or wrong does not affect the poisition that in law, the said order has been passed by an appropriate authority and the assessment made by it must be treated as made under this Act."
The learned Judges had noticed the precaution taken by the Legislature in safeguarding the rights of the citizens by providing for adequate alternative remedies:
"In this connection, it is necessary to emphasise that while providing for a bar to suits in ordinary Civil Courts in respect of matters covered by Section 18-A, the legislature has taken the precaution of safeguarding the citizens' rights by providing for adequate alternative remedies........
It is in the light of these elaborate alternative remedies provided by the Act that the scope and effect of Section 18-A must be judged. Thus considered, there can be no doubt that where an order of assessment has been made by an appropriate authority under the provisions of this Act, any challenge to its correctness and any attempt either to have it set aside or modified must be made before the appellate of the revisional forum prescribed by the relevant provisions of the Act."
23. In Addanki Tiruvenkata Thata Desika Charyulu v. State of Andhra Pradesh, the scope and ambit of Section 9(4)(c) of the Madras Estates Land (Third Amendment) Act, 1936 fell for consideration:
"Section 9(4)(c):- The decision of the Tribunal under this Sub-section shall be final and not be liable to be questioned in any Court of Law."
While holding that to the extent of the question stated in Section 9(1), the jurisdiction of the Settlement Officer and of the Tribunal are exclusive and that the Civil Courts are barred from trying or retrying the same question, the learned Judges observed:
"We should, however, hasten to add that this exclusion of jurisdiction would be subject to two limitations. First is the reservation made by Lord Thankerton in Secretary of State v. Mask and Co., 67 Ind. App. 222 at p.236: (AIR 1940 PC 105 at P.110)........"
The learned Judges quoted with approval, the following passage from the decision of the Supreme Court in Firm of Illuri Subbayya Chetty v. State of Andhra Pradesh (9 supra):
"Non-compliance with the provisions of the statute to which reference is made by the Privy Council must, we think, be non-compliance with such fundamental provisions of the statute as would make the entire proceedings before the appropriate authority illegal and without jurisdiction. Similarly, if an appropriate authority has acted in violation of the fundamental principles or judicial procedure, that may also tend to make the proceedings illegal and void and this infirmity may affect the validity of the order passed by the authority in question. It is cases of this character where the defect or the infirmity in the order goes to the root of the order and makes it in law invalid and void that these observations may perhaps be invoked in support of the plea that the Civil Court can exercise its jurisdiction notwithstanding a provision to the contrary contained in the relevant statute."
Later on, the learned Judges referred the following observation of Lord Esher in The Queen v. The Commissioner for Special Purposes of the Income Tax, (1888) 21 OBD 313:
"When an inferior court or tribunal or body, which has to exercise the power of deciding facts, is first established by Act of Parliament, the legislature has to consider what powers it will give that tribunal or body. It may in effect say that, if a certain state of facts exists and is shown to such tribunal or body before it proceeds to do certain things, it shall have jurisdiction to do such things, but not otherwise. There it is not for them conclusively to decide whether that state of facts exists, and, if they exercise the jurisdiction without its existence, what they do may be questioned, and it will be held that they have acted without jurisdiction. But there is another state of things which may exist. The legislature may intrust the tribunal or body with a jurisdiction, which includes the jurisdiction to determine whether the preliminary state of facts exists as well as the jurisdiction, on finding that it does exist, to proceed further or do something more. When the legislature are establishing such a tribunal or body with limited jurisdiction, they also have to consider, whatever jurisdiction they give them, whether there shall be any appeal from their decision, for otherwise there will be none. In the second of the two cases I have mentioned, it is an erroneous application of the formula to say that the tribunal cannot give themselves jurisdiction by wrongly deciding certain facts to exist, because the legislature gave them jurisdiction to determine all the facts, incluidng the existence of the preliminary facts on which the further exercise of their jurisdiction depends, and if they were given jurisdiction so to decide, without any appeal being given, there is no appeal from such exercise of their jurisdiction."
Then, the learned Judges held:
"It is manifest that the answer to the question as to whether any particular case falls under the first or the second of the above categories would . depend on the purpose of the statute and its general scheme, taken in conjunction with the scope of the enquiry entrusted to the tribunal set up and other relevant factors."
24. A special bench consisting of seven learned Judges of the Supreme Court had an occasion to consider the scope and effect of Section 20 of the Bombay Sales Tax Act, 1946 which provided that no assessment made and no order passed under the Act or the rules made thereunder by the Commissioner or any person appointed under Section 3 to assist him, shall be called in question in any Civil Court and save as provided in Sections 21 and 22, no appeal or application for revision shall lie against any such assessment or order. Referring to the various decisions of the Supreme Court and other Courts, the learned Judges held in Kamala Mills Limited v. State of Bombay, :
"it seems to us plain that the words used in this Section are so wide that even erroneous orders of assessment made would be entitled to claim its protection against the institution of a civil suit."
Referring to the decision of the Privy Council in Secretary of State v. Mask and Co., (6 supra), the learned Judges observed:
"In every case the question about the exclusion of the jurisdiction of Civil Courts either expressly or by necessary implication must be considered in the light of the words used in the statutory provision on which the plea is rested, the scheme of the relevant provisions, their object and their purpose."
As to the exclusion of the jurisdiction of the Civil Court, the learned Judges stated:
"Whenever it is urged before a Civil Court that its jurisdiction is excluded either expressly or by necessary implication to entertain claims of a civil nature, the Court naturally feels inclined to consider whether the remedy afforded by an alternative provision prescribed by a special statute is sufficient or adequate. In cases where the exclusion of the Civil Courts' jurisdiction is expressly provided for, the consideration as to the scheme of the statute in question and the adequacy or the sufficiency of the remedies provided for by it may be relevant but cannot be decisive. But where exclusion is pleaded as a matter of necessary implication, such considerations would be very important, and in conceivable circumstances, might even become decisive. If it appears that a statute creates a special right or a liability and provides for the determination of the right and liability to be dealt with by tribunals specially constituted in that behalf, and it further lays down that all questions about the said right and liability shall be determined by the tribunals so constituted, it becomes pertinent to enquire whether remedies normally associated with actions in Civil Courts are prescribed by the said statute or not."
25. On a close scrutiny of the principles laid down in the decisions referred to above, a Constitution Bench of the Supreme Court in Dhulabhai v. State of Madhya Pradesh, formulated seven principles that can be applied in deciding whether the jurisdiction of the Civil Court in entertaining the suit had been excluded or not under the provisions of a particular enactment. It is a case arising under the Madhya Bharat Sales Tax Act, 1950:
"(1) Where the statute gives a finality to the orders of the special tribunals the Civil Court's jurisdiction must be held to be excluded if there is adequate remedy to do what the Civil Courts would normally do in a suit. Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure.
(2) Where there is an express bar of the jurisdiction of the Court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the Civil Court.
Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. In the latter case, it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all questions about the said right and liability shall be determined by the tribunals so constituted, and whether remedies normally associated with actions in Civil Courts are prescribed by the said statute or not.
(3) Challenge to the provisions of the particular Act as ultra vires cannot be brought before Tribunals constituted under that Act. Even the High Court cannot go into that question on a revision or reference from the decision of the Tribunals.
(4) When a provision is already declared unconstitutional or the constitutionality of any provision is to be challenged, a suit is open. A writ of certiorari may include a direction for refund if the claim is clearly within the time prescribed by the Limitation Act but it is not a compulsory remedy to replace a suit.
(5) Where the particular Act contains no machinery for refund of tax collected in excess of constitutional limits or illegally collected a suit lies.
(6) Questions of the correctness of the assessment apart from its constitutionality are for the decision of the authorities and a civil suit does not lie if the orders of the authorities are declared to be final or there is an express prohibition in the particular Act. In either case the scheme of the particular Act must be examined because it is a relevant enquiry.
(7) An exclusion of the jurisdiction of the Civil Court is not readily to be inferred unless the conditions above set down apply."
26. In a case arising under the Tamil Nadu Estates (Abolition and Conversion into Ryotwari) Act, 1948, a Bench of two learned Judges of the Supreme Court in State of Tamil Nadu v. Ramalinga Samigal Madam, went into the question whether civil Court jurisdiction to determine the nature of the lands in respect whereof a Ryot had sought a Ryotwari Patta under Section 7 of the Act, was ousted or barred under Section 64-C of the Act. Section 64-C to the extent it is relevant reads as follows:
"64-C. Finality of orders passed under this Act:- (1) Any order passed by the Government or other authority under this Act in respect of matters to be determined for the purpose of this Act shall, subject only to any appeal or revision provided by or under this Act, be final.
(2) No such order shall be liable to be questioned in any Court of law."
The contention advanced before the learned Judges was that in an inquiry under Section 11, a Settlement Officer had the jurisdiction to go into the nature or character of the land and decide whether the applicant was a ryot or not and whether the land was ryoti land or not. The argument proceeded that such a decision was given finality under Section 64-C and it cannot be questioned in a Court of law. Rejecting the contention and holding that a civil suit was maintainable, the learned Judges observed:
".....it is true that Section 64-C of the Act gives finality to the orders passed by the Government or other authorities in respect of the matters to be determined by them under the Act and Sub-section (2) thereof provides that no such orders shall be called in question in any Court of law. Even so, such a provision by itself is not, having regard to the two propositions quoted above from Dhulabhai's case (supra), decisive on the point of ouster of the Civil Court's jurisdiction and several other aspects like the scheme of the Act, adequacy and sufficiency of remedies provided by it etc., will have to be considered to ascertain the precise intendment of the Legislature. Further, having regard to the vital difference indicated above, in between the two sets of provisions dealing with grant of ryotwari pattas to landholders on the one hand and ryots on the other different considerations may arise while deciding the issue of the ouster of Civil Court's jurisdiction to adjudicate upon the true nature or character of the concerned land. Approaching the question from this angle it will be seen in the first place that Section 64-C itself in terms provides that the finality to the orders passed by the authorities in respect of the matters to be determined by them under the Act is "for the purposes of this Act" and not generally nor for any other purpose......The expression "for the purposes of this Act" has been designedly used in the section which cannot be ignored but must be given cogent meaning and on a plain reading of the section which uses such expression it is clear that any order passed by the Settlement Officer either granting or refusing to grant a ryotwari patta to a ryot under Section 11 of the Act must be regarded as having been passed to achieve the purposes of the Act, namely, revenue purposes, that is to say for fastening the liability on him to pay the assessment or other dues and to facilitate the recovery of such revenue from him by the Government; and therefore any decision impliedly rendered on the aspect of nature or character of the land on that occasion will have to be regarded as incidental to and merely for the purpose of passing the order of granting or refusing to grant the patta and for no other purpose."
The conclusion of the learned Judges was thus expressed:
"A summary decision of this type in an inquiry conducted for revenue purposes cannot be regarded as final or conclusive so as to constitute a bar to a Civil Court's jurisdiction adjudicating upon the same issue arising in a suit for injunction filed by a ryot on the basis of title and/or long and uninterrupted possession...................
In other words, since the Settlement Officer has no power to do what Civil Court would normally do in a suit it is difficult to imply ouster of Civil Court's jurisdiction simply because finality has been accorded to the Settlement Officer's order under Section 64-C of the Act."
27. In Sadhan Chandra Pal v. Kshetra Mohan Saha, a Division Bench of the Calcutta High Court held in a case arising under the Bengal Public Demands Recovery Act, 1913, that even if jurisdiction of Civil Courts is excluded, they have jurisdiction to entertain a suit where the provisions of the Act have not been applied or the statutory tribunal has not acted in confirmity with the fundamental principles of judicial procedure. In a case arising under the Madras Hindu Religious and Charitable Endowments Act, 1951, a learned Judge of the Madras High Court in Ramayya Nandiar v. Sri Swaminathaswami Devasthanam, 1960 (II) MLJ 376 held that where the Commissioner of Endowments had not followed the procedure prescribed under the Act before according sanction for the sale of immovable property of a religious institution, it will be competent for the Civil Court to entertain a suit questioning the validity of the sale transaction as the order passed by the Commissioner will be without jurisdiction and as such void.
28. In the light of the principles enunciated in the various decisions referred to above, let us examine the statutory provisions of the Act to ascertain the scheme, object and purpose of the Act. The object of the Act is to protect the property of charitable and Hindu religious institutions and endowments and ensure their proper administration and governance. Section 74 contains specific words that any sale of immovable property belonging to any religious or charitable institution shall be null and void unless such sale is effected with the prior sanction of the Commissioner. Sub-section (1) of Section 74 itself prescribes the procedure that has to be followed by the Commissioner in according sanction for the sale of the immovable property. It provides that the Commissioner has to publish in the Andhra Pradesh Gazette the particulars relating to the proposed sale and invite objections or suggestions from the trustee or other person having interest in the religious or charitable institution or endowment. On a consideration of those objections or suggestions as the case may be, the Commissioner has to take a decision whether to accord sanction or not for the sale of the property, having regard to the criteria laid down in the section viz., whether such sale is necessary or beneficial to the institution, whether the sale is consistent with the objects of the institution and whether the consideration fetched therefor is reasonable and proper. Clause (c) of Sub-section (1) of Section 74 in mandatory terms provides that every sale of immovable property sanctioned by the Commissioner shall be effected by public auction. This is subject to the exception that in the interest of the institution and for reasons to be recorded therefor in writing, the State Government may permit the sale of such property otherwise than by public auction. Section 105 provides that no order passed, decision made or proceedings or action taken under the provisions of the Act by the Government or the Commissioner of Endowments, shall be liable to be questioned in any court of law. The order passed or the decision made in the instant case is the one which can be said to have been passed or made under Section 74 of the Act.
29. Thus, it is manifest from the provisions of the Act that any sale of immovable property belonging to a religious institution or endowment shall be null and void unless such sale is effected with the prior sanction of the Commissioner. When the Act itself prescribes the procedure to be followed by the Commissioner in according sanction for the sale of the property, it is needless to mention that the decision whether sanction shall be accorded or not shall be taken only by following the prescribed procedure. As pointed out by the Supreme Court in Ramchandra Keshav Adke v. Govind Joti Chavare and Ors., "Where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all and other methods of performance are necessarily forbidden."
The procedural safeguards incorporated in the section are intended to ensure that the power conferred on the Commissioner and the State Government is exercised objectively and properly, and solely in the interest and for the benefit of the institution or endowment. In other words, the object of the safeguards is to avoid arbitrary decision in the alienation of immovable property belonging to the charitable and Hindu religious institutions and endowments. Therefore the scheme and object of the Act unerringly lead to the conclusion that the safeguards contained in Section 74 are intended to be mandatory and not directory.
30. The rules made under Section 74 read with Section 107 of the Act provide that notice of any sale of any immovable property shall specify a reasonable time being not less than thirty days from the date of the issue of the notice within which objections and suggestions may be sent. It shall also specify the date on which an inquiry, if any, is proposed to be held to consider the said objections and suggestions. A copy of the notice shall be published by notification in the Andhra Pradesh Gazette and also by publication in the daily newspaper in the language of the locality where the religious institution of endowment concerned and the village in which the property is situate. The Commissioner no doubt has power to dispense with the publication in the daily newspaper in case where the cost of the publication will not be commensurate with the value of the transaction. In the present case, notice was published by notification in the Andhra Pradesh Gazette dated November 22, 1979. According to this notification, the last date for submitting objections and /or suggestions is also November 22, 1979. Thus, no real opportunity was given to file objections. Admittedly, a copy of the notice was not published in the daily newspapers. The sale consideration in this case is Rs. 1,12,000/-. Therefore, it cannot be stated that the cost of the publication will not be commensurate with the value of the transaction. There is, thus, a flagrant violation of the mandatory provisions of the Act and Rules made thereunder. Inviting objections and suggestions from the trustee and Other persons having interest in the religious institution or endowment is a significant requirement which is intended to be followed by the Commissioner for the purpose of ascertaining the views of the persons having interest in the institution or endowment. This important safeguard has been violated. In his letter dated December 17, 1979 (Ex.B-30) addressed to the Secretary to Government, Revenue Department, the Commissioner has sought the permission of the State Government to sell the land to the Employees-Association at Rs. 20,000/- per acre otherwise than by public auction. In that letter it has been stated that a notice has been published in the Andhra Pradesh Gazette dated November 22, 1979 and that no objections or suggestions have been received. It has also been mentioned that if the land is sold to the Employees-Association at Rs. 20,000/- per acre, a sum of Rs. 11,000/- will be realised towards interest and the transaction is therefore beneficial and in the interest of the institution. It has not been mentioned in this letter as to why the sale of the property shall not be effected by public auction in accordance with the mandatory provisions of Section 74(1)(c) and how it is in the interest of the institution if the sale is effected otherwise than by public auction. The State Government accorded permission in G.O.Rt.No. 295, dated March 3, 1980 (Ex.A-16) for the sale of the property at the rate of Rs. 20,000/- per acre to the Employees Association by way of private negotiations. No reasons whatsoever were assigned for permitting the sale of the property otherwise than by public auction.
31. Construing the provisions of Section 74 of the Act in C. Rami Reddy v. Government of Andhra Pradesh, the Supreme Court deprecated the sale of the land belonging to the religious institution or endowment by private negotiation instead of public auction, in the following terms:
"We cannot conclude without observing that property of such institutions or endowments must be jealously protected. It must be protected, for, a large segment of the community has beneficial interest in it (that is the raison d'etre of the Act itself). The authorities exercising the powers under the Act must not only be most alert and vigilant in such matters but also show awareness of the ways of the present day world as also the ugly realities of the world of today. They cannot afford to take things at their face value or make a less than the closest-and-best-attention approach to guard against all pitfalls. The approving authority must be aware that in such matters the trustees, or persons authorised to sell by private negotiations, can, in a given case, enter into a secret or invisible underhand deal or understanding with the purchasers at the cost of the concerned institution. Those who are willing to purchase by private negotiations can also bid at a public auction. Why would they feel shy or be deterred from bidding at a public auction? Why then permit sale by private negotiations which will not be visible to the public eye and may even give rise to public suspicion unless there are special reasons to justify doing so? And care must be taken to fix a reserve price after ascertaining the market value for the sake of safeguarding the interest of the endowment."
Regarding the scope and ambit of the pre-conditions in Section 74 to be complied with by the authorities in exercising the power thereunder, it was pointed out:
"......ex-facie there is no compliance with the pre-conditions engrafted in the relevant provision in as much as the order in question, far from recording the satisfaction that it is in the interest of the institution to sell the lands otherwise than by public auction, (which is the normal mode prescribed by the legislature) does not even reveal awareness (1) as regards the necessity for being so satisfied and (2) as regards the mandatory obligation imposed by the statute to record the reasons for forming such an opinion in the order itself.
Whether there is compliance: Now what is there to show that the authority which passed the impugned order was even aware of the essential pre-conditions envisioned by the Statute? Nothing. On the other hand, it is clear that if the concerned authority had even stolen a casual glance at the relevant statutory provision it could not have failed to say, what it was bound to say, if it was so satisfied, that the departure from the prescribed mode of selling by public auction was in the interest of the 'Math'. Nor could it have failed to record its reasons in support of this conclusion, for, the statute in so many words, casts an obligation on the concerned authority to record such reasons in the order itself.
The inference is therefore irresistible that the competent authority had failed to direct its mind to the requirements of law before passing the impugned order. It was argued that the impugned order reveals that the competent authority had 'read' the two communications (dated 16-4-1981 and 1-12-1981) emanating from the Commissioner of Endowments Department, and the reasons mentioned therein must be deemed to have been approved by the competent authority. We are not impressed by the submission. The reports do not advert to the pre-conditions enjoined by the statute. The Commissioner cannot and did not tell the state Government 'What' it should do and 'How' it should do it in order to discharge its statutory function of forming the opinion as to whether departure from the normal mode of sale by public auction was called for in the interest of the institution. Or as to what guidelines or tests the competent authority should apply for forming its opinion. There is therefore no substance in this apology offered on behalf of the State Government. This much is more than sufficient to reverse the High Court and to hold that the impugned order deserves to be quashed (1) as it suffers from the vice of non-application of mind to essential matters and (2) as there is no compliance with the relevant statutory provision."
This view of the Supreme Court has been reiterated in R. Venngopala Naidu and Ors. v. Venkatarayulu Naidu Charities and Ors., .
32. The present case is covered on all fours by the dictum of the Supreme Court. The letter dated December 17, 1979 of the Joint Commissioner and the order dated March 3, 1980 passed by the State Government are extracted hereunder:
Letter dated December 17, 1979 of the Joint Commissioner:
"Sub:- Endowments - Religious - Guntur District, Ponnur Town - Sri Chennakesava Swamy temple - Sale of Land to Employees Association by private negotiations permission Under Section 74(1) of the Act 17 of 1966-Reg.
Ref:- 1. Rc.No. A4/964/78, dt.22-1-79 of the A.C., Endts., Guntur.
2. This Office Notice No. M2/7085/79, dt.18-8-1979.
In the reference 1st cited the Assistant Commissioner Endowments, Guntur submitted proposals to sell away Ac.5-60 cents in S.No. 9 to Employees Association @ Rs. 20,000/- per acre. This land is not useful for cultivation and the annual demand is only 28 bags of paddy. This land is under possession of Archakas. The Archakas are willing for the said sale. In the year 1977 consent has been given for acquisition of this land by Revenue Department at market value providing house sites. But, the Revenue Department has not taken any action for acquisition of this land. The Sub-Collector, Tenali informed that the land of S.No. 9 is not notified for acquisition for providing house sites. In view of this in the reference 2nd cited a notice has been issued under Section 74(1) of the Act calling for objections for sale of the land. The Collector, Guntur has also been informed this fact.- The notice has been published in the A.P. Gazette No. 46, dt.22-11-1979. No objections and suggestions have been received. If this land is sold to Employees Association @ Rs. 20,000/- per acre a sum of Rs. 11,000/- will be realised towards interest and the transaction is beneficial and in the interest of the institution. The Secretary of the Association is willing to purchase the land at the above rate.
In view of the circumstances explained above, the Government may be pleased to issue permission under Section 74(1)(c) of the Act 17 of 1966 to sell away the land Ac.5-60 cents in D.No. 9 to Employees Association @ Rs. 20,000/- per acre otherwise than by public auction." Order dated March 3, 1980 passed by the State Government:-
"In the circumstances reported by the Commissioner, Endowments Department, in his letter read above, the Government, in exercise of the powers conferred by proviso to Section 74(1)(c) of the Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1966 (Act 17 of 1966) permit the sale of land measuring Ac.5-60 cents in S.No. 9 of Nidubrolu villate belonging to Sri Chennakesava Swamy Temple, Nidubrolu, Ponnur Taluk in favour of the employees Association, Ponnur at Rs. 20,000/- per acre by way of private negotiations.
2. The Commissioner, Endowments Department is requested to ensure that the sale proceeds are safely invested in regular income yielding sources."
The above said order of the State Government demonstrably indicates that the State Government failed to apply its mind to the essential requirements and that there was non-cumpliance with the relevant mandatory statutory provisions.
33. Under the Act, no remedy is provided to question the validity of the order passed by the State Government. On the other hand, Section 105 says that either the order passed or the decision made by the State Government under the Act shall not be called in question in any court of law.
34. In State of Tamil Nadu v. Ramalinga, the expression used in Section 64-C of the Tamil Nadu Estates (Abolition and Conversion into Ryotwari) Act, 1948 that "no such order shall be liable to be questioned in any court of law" is identical to the wording in Section 105 of the Act. In that case, the Supreme Court proceeded on the basis of a concession made by the learned counsel for the appellants therein that there was nothing in the Act which expressly barred the Civil Court's jurisdiction but such exclusion had to be inferred by clear implication in view of Section 64-C which accorded finality to any order that was passed by the Government or other authority under the Act. Even if Section 105 is construed as a provision which operates as an express bar of the jurisdiction of the Civil Court, an examination of the scheme of the Act to find out the adequacy or the sufficiency of the remedies provided under the Act, will be a relevant though not a decisive consideration to sustain the jurisdiction of the Civil Court. As we have already pointed out, no remedy whatsoever is provided against an order made or decision taken by the State Government in directing sale of the property otherwise than by public auction. Where a decision is taken by the Commissioner of Endowments that the property of a religious institution shall be sold and on the basis of the proposal made by him, the State Government accords permission for the sale of the property otherwise than by public auction, obviously, even the decision taken by the Commissioner sanctioning the sale of the property, cannot be questioned before the State Government. Thus, no remedy, whatsoever, is provided under the Act for challenging the validity of the action taken by either the Commissioner or the State Government. The object of the Act is to protect the properties of the charitable and Hindu religious institutions and endowments and to provide for better management of those properties by ensuring proper administration and governance of the institutions and endowments. In Rami Reddy's case (14 supra), the Supreme Court observed that the property of the religious and charitable institutions or endowments must be jealously protected as a large segment of the community has beneficial interest in it and that "the authorities exercising the powers under the Act must not only be most alert and vigilant in such matters but also show awareness of the ways of the present day world as also the ugly realities of the world of today." If the authorities pass orders or take decisions as in the instant case, disregarding the mandatory statutory provisions, such orders or decisions cannot be said to have been passed or taken under the provisions of the Act. It could not have been the intention of the Legislature to protect such orders and decisions which fall outside the provisions of the Act, by not providing any remedy under the Act, and totally excluding the jurisdiction of the Civil Courts, in respect of such orders and decisions. We would like to add that we are not concerned here merely with a decision that could be characterised as an erroneous decision on merits, but with a case of non-compliance with the pre-conditions, for the exercise of power of sanctioning of sale.
35. It is next contended by Mr. R. Venugopal Reddy, the learned Counsel for the appellant that the suit filed by the trustees in the present case seeking the only relief of cancellation of sale deed dated January 28, 1981 without calling in question the validity of the orders passed by the Commissioner of Endowments and the State Government is not maintainable. In otherwords, the thrust of the argument is that when the sanction accorded by the Commissioner of Endowments and the permission granted by the State Government for the sale of the property otherwise than by public auction have become final, the sale of the property effected consequent to those orders cannot be cancelled, unless the aforesaid orders are specifically challenged and set aside. It is vehemently urged that the plaintiffs have resorted to a trick of pleading and the relief claimed by them is a mere camouflage for questioning the orders passed by the Commissioner and the State Government. On the other hand, it is submitted by Mr. T. Veerabhadraiah, the learned counsel appearing for the present Manager of the Temple and Mr. M. Chandrasekhara Rao, the learned counsel appearing for the trustees that the orders passed by the Commissioner of Endowments and the State Government are void and in respect of void orders, no relief need be sought for, for setting aside those orders. According to the learned counsel, what is contemplated under Section 74 of the Act is alienation of immovable property belonging to a charitable or Hindu religious institution or endowment and any alienation effected without compliance with the pre-conditions contained in the section will be null and void. When a sale is not beneficial to the institution or endowment and it has been effected contrary to the provisions of the Act, the persons interested in the institution or the endowment can question the sale. When once a sale is questioned, it is for the defendants to prove how the sale is in accordance with the provisions of the Act. If any such question is raised, the Court can go into and decide whether the provisions of the Act have been complied with or not and whether the orders passed by the authorities according sanction or permission, as the case may be, for the sale of the property are valid or not. It is vehemently urged by the learned counsel for the respondents that the orders passed by the Commissioner of Endowments and the State Government under Section 74 according sanction and permission respectively to sell the property otherwise than by public auction are only the steps-in-aid taken under the provisions of Section 74 for the sale of the property and the final act by which the plaintiffs can be said to have been aggrieved is only the sale of the property. In a suit filed for cancellation of the sale deed, it is contended, that it is not at all necessary to implead either the Commissioner of Endowments or the State Government or for that matter even the Manager of the Temple who executed the sale deed as defendants. If the validity of the sale deed is questioned on the ground of fraud and misrepresentation apart from the ground of contravention of the provisions of Section 74 of the Act, it is for the purchaser to prove how the sale is legal and valid. It was averred in the plaint as follows:
"Plaintiffs further submit that the sale of the suit land in favour of the 1st defendant is vitiated by fraud, collusion and illegality. 2nd defendant colluded with the 1st defendant and the defendants played fraud on the 1st plaintiff by selling the suit land at a grossly inadequate price. He obtained the consent of the Archakas, as is learnt by plaintiffs, by exercising undue influence over them. The details of the fraud are given below:-
(a) The sale consideration is absurdly low. Market value of the suit land, even in 1979, is not less than 6 lakhs of rupees, whereas the suit land was sold in 1981 for Rs. 1,12,000/- the low price by itself is strong proof of fraud.
(b) The vendees under the trnasaction are the Managers of the 1st plaintiff institution and the 2nd defendant himself is one of the transferees under the sale.
(c) There was no apparent reason for selling the suit land by private sale, instead of public auction, which certainly would have brought a far better price for the suit land.
(g) Plaintiffs submit that the collusion between the defendants is patent inasmuch as most of the members of the Executive Committee of 1st defendant are the Managers of the 1st plaintiff at one time or another and the 2nd defendant is one of the transferees under the sale."
36. After the filing of the suit the 1st defendant who is the appellant herein, filed I.A. No. 1112 of 1984 for impleading the Commissioner of Endowments as party-defendant to the suit. It also filed I.A. No. 1559 of 1984 for bringing the State Government on record as defendant No. 4. These applications were ordered on October 16, 1984 and October 23, 1985 respectively. Thereafter, they filed the written statements. Both of them have categorically stated that if the court comes to the conclusion that the sale is fraudulent and not conducted according to law, the suit will have to be decreed and that it is for the concerned Manager of the temple to prove that the sale is necessary and for the benefit of the temple. Both of them have taken the stand that they are not necessary parties to the suit. The learned Subordinate Judge framed the following issues 7(a) and 7(b):
7(a): Whether D-3 is a necessary party to the suit?
7(b): Whether D-4 is a necessary party to the suit?
Holding that the defendants 3 and 4 are not necessary parties and that no relief was claimed against them in the suit, it was dismissed against both of them.
37. In support of the contention that the plaintiffs could have even filed a simple suit for recovery of possession of the suit land without seeking cancellation of the sale deed which was null and void under Section 74 of the Act, the learned counsel for the plaintiffs-respondents have relied on the decision of the Privy Council in T.P. Petherpermal Chetty v. R. Muniandi Servai and Ors., 35 Indian Appeals 98, the relevant portion of which is as follows:
"As to the point raised on the Indian Limitation Act, 1877, their Lordships are of opinion that the conveyance of June 11, 1895, being an inoperative instrument, as, in effect, it has been found to be, does not bar the plaintiff's right to recover possession of his land, and that it is unnecessary for him to have it set aside as a preliminary to his obtaining the relief he claims."
38. In a matter arising under the Court Fees Act, 1870, a learned Judge of this Court held in Srimathi Mokhamatla Kondamma and Anr. v. Srimathi Mokhamatla Venkatalakshmi Devi, 1956 An.W.R. 1033 that as in the case of a reversioner, it is open to the junior widow to ignore the adoption by a senior widow as a nullity and file a suit for possession after the death of the senior widow. A junior widow, the learned Judge observed, is entitled to ignore the adoption and file a suit for recovery of her half share against the senior widow. If the junior widow is not bound under substantive law to sue for a declaration that the adoption is invalid, in order to obtain the relief of partition and separate possession, it does not matter whether the alleged adopted son is impleaded or not as a party or that an unnecessary relief for declaration is sought for in the plaint. It is not necessary for the junior widow to seek relief either for setting aside the adoption in order to obtain the relief of partition and separate possession or for a declaration that the alleged adoption is not true and valid. In a matter arising under the Madras Court Fees Act, 1870, a Division Bench of the Madras High Court held in Sahul Hamed Rowther v. K.C.P. Mohideen Pichai, 1948 (I) M.L.J. 270 that-
" Where a plaintiff alleged that a sale deed executed by him in favour of the defendant was sham and nominal and prays for a declaration to that effect and an injunction restraining the defendant from interfering with the plaintiff's possession it is not necessary for the plaintiff to pray for cancellation of the deed."
The following observation made by the Supreme Court in Mahadeo Prasad Singh and Anr. v. Ram Lochan and Ors., is pertinent:
"Once we come to the conclusion that the sale in question was totally null and void, the alternative contention of the appellants with regard to the suit being barred by Section 47 of the Code of Civil Procedure, does not survive.
This is not a case of an irregular or voidable sale which continues to subsist so long as it is not set aside, but of a sale which was entirely without jurisdiction. It was non est in the eye of law. Such a nullity does not from its very nature, need setting aside."
39. In Rami Reddy's case (14 supra), it was specifically held by the Supreme Court that the following two pre-conditions were engrafted in Section 74 of the Act in the interest of the institution or endowment:
(1) That the State Government must be satisfied that it is in the interest of the institution or endowment to permit the sale of these lands otherwise than by public auction.
(2) That reasons for reaching this satisfaction must be recorded in the order.
40. The facts of the present case clearly reveal that the State Government failed to apply its mind before passing the impugned order and to record its reasons for granting permission. So also, the Commissioner of Endowments acted in contravention of the provisions of Section 74 and the Rules made thereunder in according sanction for the sale of the property. Sub-section (1) of Section 74 itself provides that any sale effected without prior sanction of the Commissioner is null and void. If the sanction accorded by the Commissioner is not in accordance with law, it can be said that there is no sanction at all in the eye of law. If there is no sanction, the sale will be null and void. Therefore, when the orders passed by the Commissioner of Endowments and the State Government are null and void, it is not at all necessary to seek a relief for setting aside such orders. They sought for the relief of cancellation of the sale deed dated January 28, 1981 and for consequential relief of delivery of possession of the suit land. If the plaintiffs succeed in proving that the orders passed by the authorities are void, and consequently the sale also is null and void, there is no legal bar for entertaining the suit and disposing it of on merits in accordance with law. In the present case, the plaintiffs themselves have sought the relief of cancellation of sale deed specifically. Therefore, it is not necessary to deal with the contention that where the sale itself is null and void, it is not even necessary for the plaintiffs to leek the relief of cancellation of the sale deed and they can straight away file a suit for delivery of possession.
41. In those circumstances, the dismissal of the suit against the defendants 3 and 4 will not come in the way of the court granting the relief prayed for in the suit.
42. We do not find any force in the contention of the learned counsel for the appellant that the plaintiffs have resorted to a trick of pleading and the relief claimed in the suit is a mere camouflage. Therefore, we hold that the suit filed by the respondents herein without seeking relief for setting aside the orders passed by the Commissioner of Endowments and the State Government is maintainable.
43. In view of the foregoing discussion, we hold that the Civil Court is competent to entertain the suit and the provisions of Section 105 of the Act do not operate as a bar. The suit filed for the cancellation of the sale deed dated January 28, 1981 and for recovery of possession of the suit schedule land without seeking a specific relief for setting aside the orders passed by the Commissioner of Endowments and the State Government directing the sale of the property otherwise than by public auction is maintainable.
44. Sub-section (1) of Section 74 itself provides that any sale of immovable property belonging to any Hindu religious institution shall be null and void unless such sale is effected with the prior sanction of the Commissioner. The procedure to be followed and the pre-conditions to be fulfilled by the Commissioner and the Government before according sanction and permission respectively are also incorporated in the section itself. If the Commissioner and the Government accord sanction and permission respectively without following the mandatory requirements of law, then, they cannot be considered to be a sanction and a permission in the eye of law. In such an event, the sale transaction shall be held to have been effected without the prior sanction of the Commissioner and without the requisite permission of the Government for sale of the property otherwise than by public auction. Therefore, the sale will become null and void. In the foregoing discussion, we have given reasons why the sanction accorded by the Commissioner for the sale of the property and the permission granted by the Government for the sale of the property otherwise than by public auction shall be held to be violative of the mandatory statutory provisions. The Supreme Court has Categorically laid down in Rami Reddy's case (14 supra) that the pre-conditions engrafted to the provisions of Clause (c) of Sub-section (1) of Section 74, namely, the necessity of being satisfied that it is in the interest of the institution to sell the lands otherwise than by public auction and recording of the reasons for forming such an opinion, are mandatory and shall be complied with. Non-compliance with those conditions on the part of the State Government amounts to non-application of mind to essential matters and non-compliance with the relevant mandatory statutory provisions. As we have already mentioned, in the present case, the State Government has neither recorded its reasons nor applied its mind to the essential matters in directing sale of the property otherwise than by public auction. In those circumstances, the sale of the temple property becomes null and void and is not a mere irregularity "which can be cured by providing some compensation".
45. The questions referred to the Full Bench are answered accordingly.
46. It is, however, submitted by Mr. R. Venugopal Reddy, the learned senior counsel appearing for the appellant that the suit was filed about three years and seven months after the State Government had passed the orders and more than one year after the Board of Trustees was constituted, and therefore, the suit was barred by limitation. He has been emphatic that there is no collusion, fraud or misrepresentation whatsoever in the sale of the property and that the finding recorded by the learned Subordinate Judge to the contrary is illegal, improper and unjustified. He further urged that the appellant had been asserting its right, title and interest in the property ever since it purchased it, to the knowledge of the contesting respondents herein and they acquiesced in the enjoyment of the property by the appellant and therefore they are estopped from questioning the validity of the sale transaction. This contention is sought to be supported by the following circumstances: Prior to the filing of the suit, about 600 persons encroached upon the land and raised huts. The appellant filed a suit for mandatory injunction against the encroachers and got them evicted from the land after removal of the huts. The appellant obtained possession of the land. Thereafter, it applied for approval of the lay out and it was approved by the Ponnur Municipality. It is further stated that the Ponnur Municipality got a school building constructed in 90 cents of the, suit schedule land and neither the trustees nor the manager of the temple raised any objection for it, or asserted right of ownership. The manager of the temple sought the permission of the Assistant Commissioner for filing the suit questioning the validity of the sale deed and the Assistant Commissioner refused the permission. Prior to the filing of the suit, the manager of the temple had withdrawn the interest on the sale consideration paid by the appellant and paid it to the Archakas. We cannot go into these contentions in this reference. It is for the learned Judge who hears the appeal on merits to go into those contentions.
47. The matter is directed to be posted before the Division Bench hearing the First Appeals, for disposal on merits.
48. The reference is accordingly answered.