The Court held that the Charity Commissioner must rigorously evaluate the necessity and benefits of alienating trust property, ensure fair market valuation, and adopt transparent procedures such as public advertisement and competitive bidding to safeguard the trust’s interests (Paras 24–31).

The Court quashed the order dated 8th July 2024 and the conveyance deed dated 6th September 2024, remanding the matter back to the Joint Charity Commissioner for fresh adjudication, ensuring a transparent and fair assessment of the trust’s property sale.

Acts and Sections Discussed:

• Constitution of India, Article 227 – Supervisory Jurisdiction of High Court

• Maharashtra Public Trusts Act, 1950, Section 36(1)(a) – Prior Sanction for Sale of Trust Property

• Maharashtra Public Trusts Rules, 1951, Rule 24 – Procedure for Sanction of Alienation of Property

Subjects:

Supervisory Jurisdiction – Trust Property – Alienation – Market Valuation – Transparency – Fair Market Value – Charity Commissioner – Fiduciary Obligation – Public Trust – Encumbrances

Nature of Litigation: Writ Petition filed under Article 227 of the Constitution of India challenging the order passed by Joint Charity Commissioner, Maharashtra State, granting permission to sell trust properties.

Petitioner’s Claim and Remedy Sought: The petitioner, a former trustee, sought annulment of the impugned order dated 8th July 2024 and cancellation of the conveyance deed dated 6th September 2024, contending lack of fair valuation and procedural irregularities.

Reason for Filing the Case: The petitioner alleged that the valuation of the trust property was drastically reduced without proper justification, and the sale was approved without following due process, potentially undermining the trust’s long-term interests.

Previous Decisions: The Joint Charity Commissioner had sanctioned the sale of the trust’s property for Rs.75,05,00,000/- and directed the deposit of proceeds in a fixed deposit for the trust’s benefit.

Issues:

a) Whether the sale of the trust property was necessitated by genuine and urgent requirements. b) Whether the market valuation of the property was conducted with due diligence and accuracy. c) Whether the Charity Commissioner ensured transparency and competitive bidding in the sale process.

d) Whether the alienation of the trust property aligned with the trust’s objectives and long-term welfare.

Submissions/Arguments:

• Petitioner: Claimed undervaluation of the property, lack of proper market assessment, and failure to meet tender eligibility criteria. Argued that the sale violated the trust’s fiduciary obligations and lacked transparency.

• Respondent No.8: Justified the sale by citing the property’s marshy terrain and encroachments, asserting the sale’s necessity for the trust’s financial health and proper utilization of proceeds.

• Trust’s Representatives: Supported the sale, citing financial distress and adherence to the statutory process for property disposal.