Bombay High Court
Shri Avinash S/O Kishorchand Jaiswal ... vs Shri Rammandir Deostha, Pavnar Through ... on 27 April, 2020
Author: Amit B. Borkar
Bench: B.P. Dharmadhikari, R.K. Deshpande, Amit B. Borkar
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
WRIT PETITION NO.3483 OF 2015
1. Shri Avinash Kishorchand Jaiswal,
Aged 58 years,
Occupation - Business,
R/o Yashwant Colony, Mohni Nagar,
Nagpur Road, Wardha.
2. Smt. Pratibha Avinash Jaiswal,
Aged 46 years,
Occupation - Household,
R/o Yashwant Colony,
Mohni Nagar,
Nagpur Road, Wardha. ... Petitioners
Versus
1. Shri Rammandi Deosthan, Pavnar,
Wardha, through Secretary
Mohan S/o Purushottam Kelkar,
Aged 59 years,
Occupation - Business,
R/o Kapda Line, Socialist Square,
Wardha.
2. Sudhakar S/o Gajanan Deshpande (dead),
R/o In front of Matru Seva Sangh,
Wardha.
3. Sanjay Ratiramji Satdeve,
Aged 36 years,
Occupation - Business,
R/o Sable Plot, Dhantoli,
Wardha.
4. Vinayak Moreshwar Deshpande,
Aged 63 years,
Occupation - Pensioner,
R/o Badhe Square, Sawarkar Marg,
Wardha.
::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 :::
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5. Mohan S/o Purushottam Kelkar,
Aged 59 years,
Occupation - Business,
R/o Kapda Line, Socialist Square,
Wardha.
6. Trimbak S/o Uddhavrao Deshmukh,
Aged 86 years,
Occupation - Pensioner,
R/o Office of Vishwa Hindu Parishad,
Dhantoli, Nagpur.
7. Laxman S/o Madhavrao Deshmukh,
Aged 84 years,
Occupation - Nil,
C/o Adv. H.L. Deshmukh,
Sudampuri, Wardha.
8. Joint Charity Commissioner, Nagpur,
Civil Lines, Nagpur. ... Respondents
Shri Anand Jaiswal, Senior Advocate, assisted by
Smt. Radhika Bajaj, Advocate for Petitioners.
Shri S.D. Abhyankar, Advocate for Respondent No.1.
Shri R.M. Bhangde, Advocate for Respondent Nos.3 and 4.
Shri S.Y. Deopujari, Advocate for Respondent No.8.
CORAM : B.P. DHARMADHIKARI, C.J.,
R.K. DESHPANDE & AMIT B. BORKAR, JJ.
DATE OF RESERVING THE JUDGMENT : 2nd MARCH, 2020
DATE OF PRONOUNCING THE JUDGMENT : 27th APRIL, 2020
JUDGMENT (PER : AMIT B. BORKAR, J.) :
1. In the proceedings of Application No.02 of 2009, the learned Joint Charity Commissioner, Nagpur, accorded his sanction on 25-10-2011 under Section 36(1)(a) of the ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 3 wp3483.15.odt Maharashtra Public Trusts Act, 1950 ("the said Act") for sale of the land Survey No.302, admeasuring 15.19 acres ("the property in question"), belonging to Shri Ram Mandir Deosthan, Pavnar, Wardha, in favour of the petitioner No.1- Avinash Kishorchand Jaiswal, who was the highest bidder, for total consideration of Rs.11,05,000/-. This was subject to the decision in Special Civil Suit No.24 of 2009, said to have been filed by M/s. Ramdeobaba Developers and Builders, Arvi, for specific performance of the property in question.
2. The respondent No.2- Sudhakar Gajanan Deshpande, since dead, and the respondent No.3- Sanjay Ratiramji Satdeve, claiming to be the trustees, filed an application under Section 36(2) of the said Act for revocation of sanction, in the month of September, 2014. During the pendency of this application, the registered sale-deed was executed by the respondent No.1- Trust on 12-1-2015 in favour of the petitioners. On 20-2-2015, Application No.1 of 2014 was filed for dismissal of the application under Section 36(2) of the said Act on the ground that the Joint Charity Commissioner has no jurisdiction to pass an order of revocation of sanction after execution of the registered sale-deed. The learned Charity ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 4 wp3483.15.odt Commissioner rejected the said application on 16-5-2015 holding that the sale-deed was executed pending the application for revocation and hence it was hit by the doctrine of lis pendens. The purchasers are, therefore, before this Court in this writ petition.
3. In support of the contention that the Joint Charity Commissioner ceases to have any jurisdiction to exercise the power of revocation of sanction under Section 36(2) of the said Act after execution of the sale-deed, strong reliance is placed upon the decision of the Division Bench of this Court in the case of Shri Mahadeo Deosthan, Wadali and others v. Joint Charity Commissioner, Nagpur and others, reported in 1989 Mh.L.J. 269. The learned Single Judge, after hearing the parties, raised a doubt about the correctness of the view taken by the Division Bench in the said decision and has, therefore, referred the following question for the decision of the larger Bench :
Whether the power of revocation under Section 36(2) of the Maharashtra Public Trusts Act, 1950 on the ground of such sanction was obtained by fraud or misrepresentation or by concealing material ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 5 wp3483.15.odt facts can be exercised even after execution of the sale deed on the basis of such sanction under Section 36(1)(a) of the said Act?
Since there is a doubt expressed in respect of the correctness of the decision of the Division Bench in the case of Shri Mahadeo Deosthan, cited supra, we would like to see the facts involved in the said decision and the law laid down therein, as under :
4. In the case of Shri Mahadeo Deosthan, an application was made on 13-2-1984 under Section 36 of the said Act for grant of sanction to transfer 10 acres of land belonging to the Trust. On 11-5-1984, the sanction was accorded and thereafter on 26-7-1984, a registered sale-deed was executed in favour of the petitioner No.6 in the said decision. Some of the trustees filed an application under Section 36(2) of the said Act for revocation of the sanction. The question of maintainability of this application was raised on the ground that after execution of the sale-deed, the sanction accorded is exhausted and the Joint Charity Commissioner has no jurisdiction to entertain and decide such application.::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 :::
6 wp3483.15.odt 4.1. It is held in this decision that the intention of the Legislature under Section 36(2) of the said Act is to restrict the exercise of power of revocation till the sanction accorded under Section 36(1) of the said Act is exhausted by executing the registered sale-deed. The reasons are three-fold - (i) that the sanction granted under Section 36(1) of the said Act merges into a sale-deed and the property loses its character as a Trust property, (ii) that the property may change hands at several times and if the sanction is to be revoked at any time even after the execution of the sale-deed, a chaotic situation is likely to be created, and (iii) that under Section 36(3) of the said Act, the purchaser may not get an opportunity to show why the sanction should not be revoked.
5. In the order of reference, the learned Single Judge expressed a doubt about the correctness of the view. It is held that Section 36 of the said Act not only empowers the Charity Commissioner to grant sanction to alienate the property, but it equally empowers recovery of the property if it is found that the sanction granted for alienation was obtained by fraud or misrepresentation or by concealing the material facts. If it is not possible to recover the property with reasonable effort or ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 7 wp3483.15.odt expense, the provision empowers the Charity Commissioner to grant compensation to be paid by the trustee so responsible to the Trust property. It holds that the operation of Section 36 of the said Act does not appear to be restricted to cover the situations only till the property is alienated on the basis of the sanction granted, but it also intends to cover the contingencies that may arise on revocation of the sanction even after the property is alienated. In such a situation, a direction can be issued to recover the property.
6. In order to consider the correctness of the view taken by the Division Bench in Shri Mahadeo Deosthan's case and to answer the question of law referred to us for decision, we will have to first-of-all consider the object and purpose of the said Act, the duties, functions and powers of the Charity Commissioner specified under the said Act as under :
6.1. The Maharashtra Public Trusts Act, i.e. the erstwhile Bombay Public Trusts Act, 1950, was brought into force on 31-5-1950. Prior to it, Section 92 of the Code of Civil Procedure dealing with the alienation of immovable property of a trust was in force. The object of the said Act, as it reveals ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 8 wp3483.15.odt from the preamble, is to regulate and make better provisions of the administration of the public, religious and charitable trusts within the State of Maharashtra. The Charity Commissioner is appointed by the notification issued under Section 3 of the said Act in the Official Gazette having very wide powers and duties conferred primarily in Section 69 under Chapter VIII and other provisions of the Act. It is the power of general superintendence of the administration of the public trusts for carrying out the purposes of the said Act. Along with the Charity Commissioner, several other officers, like Joint Charity Commissioner, Deputy Charity Commissioner and Assistant Charity Commissioner, are appointed as the watchdogs for effective control and supervision of the public trusts, including the activities of irregularities, malpractices and misconduct in the functioning of the public trusts. The Charity Commissioner is in the position of parens patriae in respect of the property of a public trust, and the essential functions are to see that the property belonging to a public trust is utilized for the interest and benefit of the trust and that it is protected from unlawful wastage.::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 :::
9 wp3483.15.odt 6.2. Section 69 of the said Act deals with the duties, functions and powers of the Charity Commissioner, and clauses
(g), (l), (m) and (p) therein being relevant are reproduced below :
"69. For the purposes of this Act, the following shall be the duties to be performed and powers to be exercised by the Charity Commissioner, namely:-- ...
(g) power to sanction a sale, mortage, exchange, gift or lease of immovable property belonging to a public trust under section 36; ...
(l) power to file suit under section 50; (m) power to give or refuse consent to the institution of a suit under section 51; ... (p) to exercise such powers and perform such other
duties and functions as may be prescribed."
6.3. Section 36 of the said Act dealing with alienation of immovable property of public trust and conferring power upon the Charity Commissioner to sanction a sale of immovable property belonging to a public trust, runs as under : ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 :::
10 wp3483.15.odt "36. (1) Notwithstanding anything contained in the instrument of trust--
(a) no sale, exchange or gift of any immovable property, and
(b) no lease for a period exceeding ten years in the case of agricultural land or for a period exceeding three years in the case of non-agricultural land or a building, belonging to a public trust, shall be valid without the previous sanction of the Charity Commissioner.
Sanction may be accorded subject to such condition as the Charity Commissioner may think fit to impose, regard being had to the interest, benefit or protection of the trust;
(c) if the Charity Commissioner is satisfied that in the interest of any public trust any immovable property thereof should be disposed of, he may, on application, authorise any trustee to dispose of such property subject to such conditions as he may think fit to impose, regard being had to the interest or benefit or protection of the trust.
1. These provisos were [Provided that, the Charity Commissioner may, 1 added by Mah. 55 of 2917, s. 6. w.e.f.
10-10-2017. before the transaction for which previous sanction is given under clause (a), (b) or (c) is completed, ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 11 wp3483.15.odt modify the conditions imposed thereunder, as he deems fit:
Provided further that, if such condition is of 1time-limit for execution of any contract or conveyance, then application for modification of such condition shall be made before the expiry of such stipulated time.].
2. Sub-section (1A) was inserted by Mah. 55 of [(1A)The Charity Commissioner shall not sanction 2 2017, s. 6(b).
any lease for a period exceeding thirty years under this Act.].
(2) The Charity Commissioner may revoke the sanction given under clause (a) or clause (b) of sub-section (1) on the ground that such sanction was obtained by fraud or mis-representation made to him or by concealing from the Charity Commissioner, facts material for the purpose of giving sanction; and direct the trustee to take such steps within a period of one hundred and eighty days from the date of revocation (or such further period not exceeding in the aggregate one year as the Charity Commissioner may from time to time determine) as may be specified in the direction for the recovery of the property.
3. This proviso was added 3 [Provided that, no sanction shall be revoked by Mah. 55 of 2017, s. 6(c).
under this section after the execution of the ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 12 wp3483.15.odt conveyance except on the ground that such sanction was obtained by fraud practiced upon the Charity Commissioner before the grant of such sanction.].
(3) No sanction shall be revoked under this section unless the person in whose favour such sanction has been made has been given a reasonable opportunity to show-cause why the sanction should not be revoked.
(4) If, in the opinion of the Charity Commissioner, the trustee has failed to take effective steps within the period specified in sub-section (2), or it is not possible to recover the property with reasonable effort or expense, the Charity Commissioner may assess any advantage received by the trustee and direct him to pay compensation to the trust equivalent to the advantage so assessed.
4. Sub-section (5) was added by Mah. 55 of 2017, [(5) 4 Notwithstanding anything contained in s. 6(d).
sub-section (1), in exceptional and extraordinary situations where the absence of previous sanction contemplated under sub-section (1) results in hardship to the trust, a large body of persons or a bona fide purchaser for value, the Charity Commissioner may grant ex-post-facto sanction to the transfer of the trust property, effected by the trustees prior to the date of commencement of the ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 13 wp3483.15.odt Maharashtra Public Trusts (Second Amendment) Act, 2017, if he is satisfied that,--
(a) there was an emergent situation which warranted such transfer,
(b) there was compelling necessity for the said transfer,
(c) the transfer was necessary in the interest of trust,
(d) the property was transferred for consideration which was not less than prevalent market value of the property so transferred, to be certified by the expert,
(e) there was reasonable effort on the part of trustees to secure the best price.
(f) the trustees actions, during the course of the entire transaction, were bonafide and they have not derived any benefit, either pecuniary or otherwise, out of the said transaction, and
(g) the transfer was effected by executing a registered instrument, if a document is required to be registered under the law for the time being force.] ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 14 wp3483.15.odt
5. This Explanation was added by Mah. 4 of 2018, 5 [Explanation.-- For the purposes of s. 2(b) w.e.f. 21-5-2018.
sub-section (5), the term "the Charity Commissioner"
shall mean only the Charity Commissioner appointed under section 3.]"
6.4. Section 50 of the said Act deals with the suit by or against or relating to public trusts or trustees or others. This provision, to the extent it is relevant, is reproduced below :
"50. In any case,--
...
6. This clause was substituted by Mah. 55 of [(ii) where a direction or decree is required to 6 2017, s. 13(a).
recover the possession of or to follow a property belonging or alleged to be belonging to a public trust or the proceeds thereof or for an account of such property or proceeds from a trustee, ex-trustee, alienee or any other person but not a person holding adversely to the public trust, trespasser, licensee or tenant,] ...
(iv) for any declaration or injunction in favour of or against a public trust or trustee or trustees or beneficiary thereof, the Charity Commissioner after making such enquiry as he thinks necessary, or two or more persons having an interest in case the suit is under ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 15 wp3483.15.odt sub-clauses (i) to (iii), or one or more such persons in case the suit is under sub-clause (iv) having obtained the consent in writing of the Charity Commissioner as provided in section 51 may institute a suit whether contentious or not in the Court within the local limits of whose jurisdiction the whole or part of the subject-matter of the trust is situate, to obtain a decree for any of the following reliefs :--
(a) the order for the recovery of the possession of such property or proceeds thereof; ...
(f) an order directing the trustees or others to pay to the trust the loss caused to the same by their breach of trust, negligence, misapplication, misconduct or wilful default; ...
(p) declaring or denying any right in favour of or against a public trust or trustee or trustees or beneficiary thereof and issuing injunctions in appropriate cases; or ...
Provided that, no suit claiming any of the reliefs specified in this section shall be instituted in respect of any public trust, except in conformity with the provisions thereof;
...
7. This Explanation was added by Mah.55 [Explanation.-- In this section, "Court" means, 7 of 2017, s. 13(c) in the Greater Mumbai, the City Civil Court and ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 16 wp3483.15.odt elsewhere, the District Court.]."
6.5. Section 51 of the said Act deals with the consent of the Charity Commissioner for institution of suit, and it runs as under :
"51. (1) If the persons having an interestin any public trust intend to file a suit of the nature specified in section 50, they shall apply to the Charity Commissioner in writing for his consent. If the Charity Commissioner after hearing the parties and making such enquiries (if any) as he thinks fit is satisfied that there is a prima facie case, he may within a period of six months from the date on which the application is made, grant or refuse his consent to the institution of such suit. The order of the Charity Commissioner refusing his consent shall be in writing and shall state the reasons for the refusal.
8. This sub-section was substituted by Mah. 55 8 [(2) If the Charity Commissioner refused his consent of 2017, s.15(a).
to the institution of the suit under sub-section (1), the persons applying for such consent may file an appeal to the Court, as if such order was an order passed by the District Court from which an appeal lies, within sixty days from the date of the said order, which shall otherwise be final.] (3) In every suit filed by persons having interest in any trust under section 50, the Charity Commissioner ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 17 wp3483.15.odt shall be a necessary party."
7. First-of-all, we would like to see the entire scheme of Section 36 of the said Act, as we understand, and it is briefly stated as under :
(A) It is a complete code in respect of the transfer of an immovable property belonging to a public trust.
(B) Section 36(1)(c) empowers any trustee of a public trust to make an application to the Charity Commissioner for grant of sanction to dispose of any immovable property of such trust.
(C) If the Charity Commissioner is satisfied that in the interest of any public trust any immovable property needs to be disposed of, he may, under Section 36(1)(a), authorize any trustee to dispose of such property, subject to such conditions as he may think fit to impose, having regard to the interest or benefit or protection of the trust.
(D) Though the requirement is of obtaining previous sanction of the Charity Commissioner for sale or alienation of any immovable property of a public trust, by way of an amendment made on 10-10-2017, the provision of sub-section (5) is introduced empowering the Charity Commissioner, in exceptional and ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 18 wp3483.15.odt extraordinary situations, to grant ex post facto sanction to the transfer of the trust property, effected by the trustees prior to the date of amendment was introduced, provided the Charity Commissioner is satisfied about the existence of the conditions in clauses (a) to (g) under sub-section (5) of Section 36 of the said Act.
(E) The provision of Section 36(2) further empowers the Charity Commissioner to pass an order revoking the sanction upon recording the finding that such sanction was obtained by fraud or by misrepresentation made to him or by concealing from him, the facts material for the purpose of giving sanction.
(F) Upon passing an order of revocation of sanction, the provision of Section 36(2) further empowers the Charity Commissioner to direct the trustee to take such steps within a period of one hundred and eighty days from the date of revocation or such further period not exceeding in the aggregate one year as the Charity Commissioner may from time to time determine as may be specified in the direction for the recovery of the property.
(G) The amendment introduced on 10-10-2017 added proviso below Section 36(2) by the Maharashtra Act No.55 of 2017 empowers the Charity ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 19 wp3483.15.odt Commissioner to revoke such sanction obtained by fraud practised upon him, before the grant of such sanction.
(H) The provision of Section 36(4) takes into consideration the contingency where the Charity Commissioner finds that the trustee has failed to take effective steps within the period specified in the order of revocation of sanction or that it is not possible to recover the property with reasonable effort or expense, and empowers the Charity Commissioner to assess any advantage received by the trustee and to direct him to pay compensation to the trust equivalent to the advantage so assessed.
8. In our view, the requirement of obtaining previous sanction of the Charity Commissioner under Section 36(1)(a) of the said Act to sell or alienate the immovable property belonging to a public trust is mandatory and the power can be exercised only on the application made under Section 36(1)(c) by a trust or the trustees, seeking authorization to dispose of such property. Any sale or alienation of an immovable property of the public trust without such sanction is null and void. While deciding such application, the Charity Commissioner has to have regard to the interest, benefit and the protection of the trust. The power cannot be exercised suo motu or on his own ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 20 wp3483.15.odt by the Charity Commissioner. The power to grant sanction includes power to refuse sanction on the ground that it is not in the interest and benefit of the trust and that the property needs to be protected.
9. There is no requirement of making an application for revocation of sanction under Section 36(2) of the said Act, like one under Section 36(1)(c), and hence the power can be exercised either on the application so made or suo motu or on his own by the Charity Commissioner. However, it is subject to the satisfaction in respect of three things - (i) that such sanction was obtained by fraud or misrepresentation made to him or by concealing from him, the facts material for the purpose of giving sanction, (ii) that such sanction was obtained by fraud practised upon the Charity Commissioner before grant of such sanction, and (iii) that the person in whose favour such sanction was granted is given a reasonable opportunity to show cause why the sanction should not be revoked. The power to revoke sanction includes the power to refuse revocation of sanction on the ground that there is a failure to satisfy the required conditions (i) and (ii) above or that the Charity Commissioner has no jurisdiction to revoke the sanction on the ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 21 wp3483.15.odt grounds other than those mentioned in Section 36(2) of the said Act.
10. Our attention is invited to several decisions of the Apex Court on the question of effect of the order which is vitiated by fraud, misrepresentation or concealment of material facts. We may not refer to all such decisions, except two. In the decision of the Apex Court in the case of Gowrishankar and another v. Joshi Amba Shankar Family Trust and others, reported in (1996) 3 SCC 310, the question considered was for grant of permission to sell the trust property. It was held in Para 17 that the trustees obtained the permission to sell the property to the purchasers practising fraud upon the Court. Such an order by the first court or by the highest court has to be treated as a nullity by every court, whether superior or inferior, and it can be challenged in any Court even in collateral proceedings. It was further held that the question whether the purchasers purchased the property bona fide subsequent to the permission so granted without notice of the appellants' offer is immaterial. In another decision of the Apex Court in the case of Meghmala and others v. G. Narasimha Reddy and others, reported in (2010) 7 SCC 383, it is held in Para 36 that even in judicial ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 22 wp3483.15.odt proceedings, once fraud is proved, all advantages gained by playing fraud can be taken away and that the every Court has an inherent power to recall its own order obtained by fraud as the order so obtained is non est.
11. In our view, the two aspects of Section 36(2), viz.,
(i) that the sanction was obtained by misrepresentation, and
(ii) that the concealment of facts material for giving sanction, are the facets of fruad. In terms of the aforesaid law laid down, we are of the view that the revocation of sanction on any or all such grounds, as are mentioned under Section 36(2) of the said Act, would render the order of sanction as null and void, meaning thereby that no such order granting sanction under Section 36(1)(a) was ever passed and all advantages gained by playing fraud can be taken away.
12. The order of revocation of sanction passed under Section 36(2) of the said Act obviously affects the civil rights of the persons in whose favour such order was passed. Hence, it cannot be exercised unless a reasonable opportunity to show cause under Section 36(3) of the said Act is provided to him as to why the sanction granted should not be revoked. In our ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 23 wp3483.15.odt view, "the person" under Section 36(3) means a person who was a party to the proceedings under Section 36(1)(a) of the said Act and/or a person in whose favour the order of sanction was passed. It does not include a person - (i) who was not the party to the proceedings under Section 36(1)(a) and/or (ii) in whose favour such sanction was not granted, and (iii) who is the purchaser of the trust property from the person in whose favour the sanction was accorded for sale or alienation.
13. The Charity Commissioner is not denuded of his jurisdiction under Section 36(2) of the said Act on the ground that the sanction granted has been acted upon or exhausted and the trust is divested of the ownership of the property by executing a sale-deed or that the sanction granted has merged in the sale-deed executed before the sanction is revoked or that the property has lost its character as the trust property. We express our complete disagreement with the contrary view expressed by the Division Benches of this Court in the cases of Shri Mahadeo Deosthan, cited supra, and Dr. Sam Sarosh Bhacca and others v. P.V. Kakde, Joint Charity Commissioner, and others, reported in (1994) 96 Bom.LR 714. We concur with the view expressed by the learned Single Judge in the ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 24 wp3483.15.odt order of reference. After referring to the provision of Section 36(4) of the said Act dealing with the situation where no steps are taken within a reasonable period with reasonable effort or expense, it is held by the learned Single Judge that the operation of Section 36 of the said Act is not restricted to cover the situations only till the property is alienated on the basis of the sanction granted, but it also intends to cover the contingencies that may arise on revocation of sanction to alienate even after the property has been alienated. We also concur with the view that unless such jurisdiction is available with the Charity Commissioner under Section 36 of the said Act, it is not possible for him to direct steps to be taken to recover the trust property alienated or to pass an order of payment of compensation. To take a contrary view, would render the said provision otiose.
14. The intention behind introducing Section 36(2) of the said Act empowering the revocation of sanction is clear that it is enacted for the benefit and protection of the trust property. The disposal of the public trust property on the basis of the order of sanction obtained by fraud or misrepresentation and concealment of facts material for giving sanction is to be ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 25 wp3483.15.odt recalled. Hence, merely because a sale-deed is effected or the multiple sale-deeds are effected pursuant to the sanction obtained under Section 36(1)(a) of the said Act, that would not take away the jurisdiction of the Charity Commissioner for revocation of such sanction. Otherwise, the very purpose of the provision would be defeated. The Charity Commissioner, who is in the position of parens patriae, cannot be allowed to be a mute spectator, particularly when he has become the engine of fraud. However, the proviso below Section 36(2), introduced on 10-10-2017, restricts the power of the Charity Commissioner to consider the question of revocation of sanction on the ground that such sanction was obtained by fraud practised upon him before the grant of such sanction.
15. The power of revocation of sanction cannot be confused or equated with the power to declare the sale-deed executed on the basis of the sanction which is revoked, as null and void. Similarly, the power to direct the trustees to take steps to recover the trust property also cannot be confused or equated with the power to direct recovery of the trust property. There is a definite distinction in it. We are of the view that if the sale-deed is executed and the possession of the trust ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 26 wp3483.15.odt property is delivered, the Charity Commissioner has no jurisdiction under Section 36(2) of the said Act either -
(i) to declare the sale-deed in respect of the public trust property. as null and void, or to set it aside, whether executed before or after initiation of proceedings or revocation of sanction, and (ii) to direct recovery of property of the public trust either before or after execution of the sale-deed. These are also not the automatic consequences in law to necessarily follow, upon passing of an order under Section 36(2) of the said Act. These are the steps to be taken after the sanction is revoked. We are, therefore, of the view that the order of revocation of sanction and the direction to take steps to recover the property only provide cause of action to seek a declaration from the Court of competent jurisdiction that the sale-deed executed on the basis of such sanction is null and void or to set it aside and to pass a decree for recovery of possession of the suit property.
16. Normally, the doctrine of merger applies to the judicial or quasi judicial order passed by the appellate or revisional Court or authority in a challenge to such order passed by the lower Court or the authority. It does not apply to a registered ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 27 wp3483.15.odt sale-deed executed on the basis of the order of sanction which is revoked. Be that as it may, the doctrine of merger, res judicata, estoppel, etc., have an exception, and that is of the fraud, misrepresentation and concealment of material facts. This is clear from the law laid down by the Apex Court in Paras 38 and 39 of the decision of the Apex Court in the case of A.V. Papayya Sastry and others v. Government of A.P. and others, reported in (2007) 4 SCC 221, which are reproduced below :
"38. The matter can be looked at from a different angle as well. Suppose, a case is decided by a competent Court of Law after hearing the parties and an order is passed in favour of the plaintiff applicant which is upheld by all the courts including the final Court. Let us also think of a case where this Court does not dismiss Special Leave Petition but after granting leave decides the appeal finally by recording reasons. Such an order can truly be said to be a judgment to which Article 141 of the Constitution applies. Likewise, the doctrine of merger also gets attracted. All orders passed by the courts/authorities below, therefore, merge in the judgment of this Court and after such judgment, it is not open to any party to the judgment to approach any court or authority to review, recall or reconsider the order."::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 :::
28 wp3483.15.odt "39. The above principle, however, is subject to exception of fraud. Once it is established that the order was obtained by a successful party by practising or playing fraud, it is vitiated. Such order cannot be held legal, valid or in consonance with law. It is non-existent and non est and cannot be allowed to stand. This is the fundamental principle of law and needs no further elaboration. Therefore, it has been said that a judgment, decree or order obtained by fraud has to be treated as a nullity, whether by the court of first instance or by the final court. And it has to be treated as non est by every Court, superior or inferior."
In view of the aforesaid law laid down, once it is found that the order granting sanction to sell or alienate an immovable property of a public trust is vitiated on any one or all the grounds mentioned under Section 36(2) of the said Act, it will be treated as nullity, having no existence in law. If the order is nullity, then the principle of merger would not be attracted.
17. We now proceed to deal with the contention that once the sale-deed is executed on the basis of the sanction granted ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 29 wp3483.15.odt under Section 36(1)(a) of the said Act, the only remedy available to the aggrieved person is to file a civil suit under Section 50 of the said Act and it is only the Civil Court which has exclusive jurisdiction to declare the sale-deed as null and void and pass a decree for recovery of the public trust property which is sold. The reliance is placed upon the decision of the Division Bench of this Court in the case of Dr. Sam Sarosh, cited supra, wherein it is held in Para 11 that the remedies provided under Sections 50, 51 and 52-A are not dependent upon revocation of sanction accorded by the Charity Commissioner under Section 36(1) of the said Act and these are the independent remedies.
18. In order to deal with the aforesaid contention, the provision of Section 80 of the said Act regarding bar of jurisdiction of the Civil Court needs to be seen and it is reproduced below :
"80. Save as expressly provided in this Act, no Civil Court shall have jurisdiction to decide or deal with any question which is by or under this Act to be decided or dealt with by any officer or authority under this Act, [and in respect of] which the decision or ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 30 wp3483.15.odt order of such officer or authority has been made final and conclusive."
The provision of Section 80 creates a bar of jurisdiction of the Civil Court to decide or deal with any question which is by or under the Act is required to be decided or dealt with by any officer or authority under the Act and in respect of which, the decision or the order of such officer or authority has been made final and conclusive. The provision begins with the expression "Save as expressly provided in this Act", which is indicative of the extent of the jurisdiction to be exercised by the Civil Court. In our view, two things are significant under Section 80, and those are - (i) that the Civil Court exercises the jurisdiction only to the extent and in the manner provided for it under the said Act, and (ii) that it ceases to have any jurisdiction over the matters which are required to be decided or dealt with by any officer or authority under the Act, which has been made final and conclusive. Circumstances in which the ouster of the jurisdiction of a civil court can be presumed are explained by the Hon'ble Apex Court in Dhulabhai v. State of Madhya Pradesh, reported in AIR 1969 SC 78 and Bata Shoe Co. Ltd. v. City of Jabalpur Corporation, reported in 1997(2) SCC 472. The principles laid down there hold good ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 31 wp3483.15.odt and clinch the controversy here in the light of scheme in Section 80 of the Act. Earlier benches were not required to look into these principles.
19. In the decision of the Division Bench of this Court in the case of Charity Commissioner, Maharashtra State, Bombay v. Shantidevi Lalchand Chhaganlal Foundation Trust By Trustees Lalchand Chhaganlal Jain and others, reported in 1989 Mh.L.J. 1048, the question considered was whether the City Civil Court at Bombay is having jurisdiction to sanction development agreement and lease-deed under the provisions of Section 50 of the said Act. While dealing with this question and considering the provisions of Sections 36 and 50 of the said Act, it is held in Para 18 that Section 36 of the said Act as applicable to the State of Maharashtra is a complete code by itself and though the order of the Charity Commissioner is not made expressly final, no appeal or revision having been provided against such order, the same is in fact final and conclusive. It is held that by virtue of the provisions of Section 80 of the said Act, once the matter falls within the provisions of Section 36, the Civil Court will have no jurisdiction to deal and decide the subject-matter. It is held that the Charity Commissioner under ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 32 wp3483.15.odt the provisions of Section 36 has the exclusive jurisdiction to deal with the matters provided therein and clause (iii) or Clauses (i) and (q) of Section 50 will not give jurisdiction to the Civil Court to sanction sale, exchange or fit of any immovable property belonging to a public trust. There is no dispute raised in respect of the correctness of this view and we concur with it.
20. In the case of Bomi Jal Mistry and others v. Joint Charity Commissioner, Maharashtra and others, reported in 2002(5) Mh.L.J. 660, the Division Bench of this Court has culled out the ratio of the aforesaid decision as laying down a law that though Section 50 would empower the Civil Court to authorize the trustees to alienate the immovable property of the public trust that, however, would not empower the Civil Court to grant sanction to the proposed transaction, for that can be granted only by the Charity Commissioner in exercise of powers under Section 36(1)(a)(b) of the Act. It is clarified that the said decision is not an authority on the proposition that the Charity Commissioner cannot grant authorization at all making the provision of Section 36(1)(c ) of the said Act virtually otiose. There is no challenge to the correctness of this view and we concur with it.
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21. Section 69(g)(l)(m) and (p) read with Sections 36, 50 and 51 of the said Act confers a jurisdiction upon the Charity Commissioner to decide or deal with the immovable property belonging to a public trust and pass orders - (i) to grant or refuse to grant sanction to sell or alienate the property under Section 36(1)(a), (ii) to revoke or refuse to revoke the sanction under Section 36(2), (iii) to direct the trustees to recover the property under Section 36(2), (iv) to assess the compensation under Section 36(4) for failure to recover the property against the trustees, and (v) to grant consent in writing under Section 50 to file a suit, as provided under Section 51, to recover even the property alleged to be belonging to a public trust and obtain a decree in conformity with the provisions thereof. In our view, it is the exclusive jurisdiction of the Charity Commissioner to decide or deal with all these matters and the ordinary jurisdiction of the Civil Court under Section 9 of the Code of Civil Procedure is completely barred by virtue of Section 80 of the said Act.
22. It is not possible for us to agree with the view that the remedies provided under Sections 50, 51 and 52-A are not ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 34 wp3483.15.odt dependent upon the revocation of the sanction accorded by the Charity Commissioner under Section 36(1)(a) of the said Act. We have already taken a view that the order passed under Section 36(2) provides cause of action to file a suit in accordance with the provisions of Sections 50 and 51 of the said Act. In our view, therefore, the remedies provided under Sections 50 and 51 are dependent upon the order passed under Section 36(2) of the said Act in respect of the sale or alienation of an immovable property of a public trust on the basis of fraud practised upon the Charity Commissioner, before grant of such sanction. These remedies can be availed in the mode and manner prescribed under the said Act. Apart from this, in the two decisions, referred to above, in the cases of Shantidevi Lalchand Chhaganlal Foundation Trust and Bomi Jal Mistry, a view is taken that Section 50 would not empower the Civil Court to authorize to alienate an immovable property of a public trust and it is the exclusive jurisdiction of the Civil Court under Section 36(1)(a) of the said Act, to which finality and conclusiveness is attached. On the same ground or analogy, in our view, the jurisdiction of the Civil Court under Section 50 to entertain and decide any dispute covered by Section 36(2) of the said Act is completely barred.
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23. Lastly, we come to the contention that the rights of the subsequent successive purchasers of the property belonging to a public trust sold by a registered sale-deed on the basis of the order of sanction under Section 36(1)(a) are affected. It is also urged that the sanctity of the sale transactions on the basis of the sanction granted has been lost, if the sale-deed is to be set aside at any time without notice to the subsequent purchasers and this will create a chaotic situation.
24. We have already held that the subsequent purchasers have no right to claim hearing or an opportunity to show cause in respect of the proceedings under Section 36(2) of the said Act. Obviously, their rights or defences available in law are not concluded by the order passed under Section 36(2) of the said Act by the Charity Commissioner. It is open for them to raise all such defences as are available in law to protect their possession; in a suit under Section 50 of the said Act, if filed for grant of declaration that the sale-deed is rendered null and void and seeking a decree for recovery of the property, to which they have necessarily to be joined as party-respondents. If such suit is not filed within a stipulated period or it is dismissed on ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 36 wp3483.15.odt merits, they succeed in protecting their possession and ownership over it. In that event, it is open for the Charity Commissioner to invoke his jurisdiction under Section 36(4) of the said Act to assess any advantage received by the trustee arising out of such sale and to direct him to pay the compensation to the trust equivalent to the advantage so assessed. If the suit is decreed in favour of the trust, the subsequent purchasers cannot complain that they were not permitted to raise the defences available to them in law or that they were not heard in the matter, the adjudication of which has affected their civil rights.
25. On a conjoint reading of Sections 36, 50 and 80 of the said Act, the Scheme appears as follows :
(i) The first part of Section 36(2) of the said Act confers power upon the Charity Commissioner to revoke the order of sanction on the ground of fraud, misrepresentation or concealment of material facts.
(ii) The latter part of Section 36(2) confers power upon the Charity Commissioner to pass an order of directing the trustees to take steps to recover the property of a public trust, within a period of 180 days ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 37 wp3483.15.odt or himself filing suit under Section 50 of the said Act, for recovery of the property.
(iii) Once the directions under the latter part of Section 36(2) are issued, the Charity Commissioner himself or the trustee is required to file a suit under Section 50 in accordance with law to give full effect to it and get the property recovered, which is sold in pursuance of the order of sanction under Section 36(1) of the said Act.
(iv) If after granting an opportunity of hearing to all concerned, the Civil Court comes to the conclusion that it is not possible to recover the property, then by virtue of power conferred under sub-section (4) of Section 36 of the said Act, the Charity Commissioner is required to assess any advantage received by the trustee and direct him to pay compensation to the trust equivalent to the advantage so assessed.
(v) The jurisdiction of the Civil Court under Section 50 of the said Act to entertain, try and decide the suit in respect of the subject-matter which is required to be dealt with and decided under Section 36 by any officer or authority under the said Act, is completely barred under Section 80 therein. ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 :::
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26. In view of the aforesaid position of law, we answer the question referred to us as under :
(I) The power of revocation of sanction under Section 36(2) of the Maharashtra Public Trusts Act, 1950 on the ground that such sanction was obtained by fraud or misrepresentation or by concealing the facts, material for the purpose of giving sanction can be exercised even after the execution of a sale-deed or the multiple sale-deeds on the basis of the sanction granted under Section 36(1)(a) of the said Act.
(II) We overrule the two decisions - (i) Shri Mahadeo Deosthan, Wadali and others v. Joint Charity Commissioner, Nagpur and others, reported in 1989 Mh.L.J. 269, and (ii) Dr. Sam Sarosh Bhacca and others v. P.V. Kakde, Joint Charity Commissioner and others, reported in (1994) 96 Bom.LR 714, delivered by different Division Benches of this Court and all other decisions delivered by different Single Benches of this Court, including the cases of - (i) Fatmabai B. Bachooali v. State of Maharashtra and others, reported in 1991 (1) Bom.C.R. 1, (ii) Arole Construction Pvt.
Ltd. v. Shaikh Sadullah Shahabuddin Peerzade and others, reported in 2014 (4) Bom.C.R. 289, and
(iii) Shri Motilal Girdharilal Sharma and others v. Shri Dattatray Bandu Jagtap and others, reported in 2006(2) ALL MR 121, following the view taken in Shri Mahadeo Deosthan's case, cited supra. (III) Having answered the reference, we make it expressly clear that we have not examined the issue of remedies and defences available to the bona fide purchasers for valuable consideration without notice after the order of sanction is revoked under ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 ::: 39 wp3483.15.odt Section 36(2) of the said Act was passed and we leave it open to be agitated in appropriate proceedings. (IV) We direct the Registry to place the matter before the appropriate Bench for disposal in accordance with law.
(B.P. DHARMADHIKARI, C.J.) (R.K. DESHPANDE, J.) (AMIT B. BORKAR, J.) ::: Uploaded on - 27/04/2020 ::: Downloaded on - 28/04/2020 05:30:00 :::