Case Note & Summary
The appeal arose from the rejection of a temporary injunction application by the trial court in a suit filed by a charitable trust against the Nagpur Improvement Trust. The plaintiff trust was allotted a plot in Nagpur for construction of a Dharmashala with ancillary commercial structures to serve patients and their relatives visiting the Government Medical College and Hospital. A registered lease was executed in 1996, valid until 2013, and the trust constructed a Dharmashala building, shops, and garages. Over the years, certain constructions were regularized by NIT upon payment of extra premium. In 2009, NIT issued a show-cause notice alleging commercial exploitation, including letting out ground-floor rooms to a private hospital and shops on rent, contrary to the charitable purpose. The trust replied that the use fell within Development Control Regulations, 2000, and that NIT had earlier sanctioned commercial use. A second show-cause notice followed in December 2010, and ultimately NIT cancelled the allotment and ordered re-entry on 30.09.2010. The trust filed a suit for declaration, permanent injunction, and damages, challenging the cancellation as illegal and mala fide, and sought temporary injunction. The trial court rejected the injunction application on 20.01.2011. On appeal, the High Court heard the parties, admitted the appeal, and took it up for final disposal with consent. The judgment records detailed submissions of the appellants, including that the hospital use was part of charitable purpose, the constructions were regularized, and the inspection report was unreliable. The respondents raised preliminary objections regarding maintainability under Sections 114 and 115 of the Nagpur Improvement Trust Act, 1936, and alleged continuous commercial exploitation in breach of lease conditions. The High Court did not deliver a final decision on merits in this order, merely admitting the appeal and setting it down for final hearing.
Issue of Consideration
APPEAL AGAINST ORDER NO.26 2011
Final Decision
Appeal admitted and taken up for final disposal with consent of parties.
Case Details
2011 LawText (BOM) (05) 49
Appeal Against Order No. 26/2011
Shri S.P. Dharmadhikari, Sr. Adv. with Shri A.G. Gharote for appellants; Shri S.K. Mishra for respondent Nos.1 to 3
R.B. Shreeram Religious & Charitable Trust, Shri Narayandasji Saraf, Shri Ramkisanji Saraf, Shri Murlidharji Saraf, Shri Manoj Saraf, Shri Vinod Saraf
The Nagpur Improvement Trust, The Chairman, Nagpur Improvement Trust, Dr. Sanjay Mukherjee, Shri Sudhakar Kohle, CPH - Center Point Hospital, Medical Research Institute Pvt. Ltd.
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Nature of Litigation
Civil suit for declaration, permanent injunction, and damages challenging cancellation of lease and re-entry order by Nagpur Improvement Trust.
Remedy Sought
Plaintiffs sought temporary injunction to restrain enforcement of order dated 30.09.2010 cancelling allotment of plot.
Filing Reason
The plaintiffs filed suit after NIT cancelled lease alleging commercial exploitation in breach of charitable purpose; they claimed the constructions were regularized.
Previous Decisions
The trial court rejected the application for temporary injunction on 20.01.2011, leading to the appeal.
Issues
Whether the trial court rightly rejected temporary injunction pending suit?
Whether the suit is maintainable in view of Sections 114 and 115 of the Nagpur Improvement Trust Act, 1936?
Whether there was breach of lease conditions by the plaintiff trust?
Whether the order of cancellation dated 30.09.2010 was illegal and mala fide?
Submissions/Arguments
Appellants argued that the hospital operating on the ground floor was on leave and licence basis and part of charitable purpose; Development Control Regulations M(7)(2) covered such use, and no breach occurred.
Appellants contended that NIT had earlier regularized excess constructions and charged premium, and the show-cause notices were based on an inspection report prepared behind their back without considering earlier regularization.
Appellants submitted that revised plans for regularization had been submitted to planning authority (NMC) but were held up due to NIT objection.
Respondents raised preliminary objection that the suit is barred under Sections 114 and 115 of the Nagpur Improvement Trust Act, 1936.
Respondents alleged that 32 ground-floor rooms were let out to a private hospital at a rent of Rs.1,00,000 per month, amounting to commercial exploitation in violation of lease conditions and charitable object.
Judgment Excerpts
The Trust was allotted an open site by the N.I.T. opposite to the Government Medical College and Hospital at Nagpur for charitable purpose, namely for construction of Dharmashala with ancillary and related partly commercial structures to be constructed.
The appellants filed their reply on 23.12.2009 and stated that the N.I.T. itself had sanctioned commercial use by regularizing commercial structures.
In the written statement filed by the N.I.T. preliminary objections about maintainability of the suit due to bar under Sections 114 and 115 of the N.I.T. Act were raised.
Procedural History
Plaintiffs filed Special Civil Suit No.1186/2010 for declaration, permanent injunction, and damages. Along with suit, they filed Exh.5 for temporary injunction. Trial court rejected injunction on 20.01.2011. Plaintiffs filed Appeal Against Order No.26/2011 before Bombay High Court. High Court admitted appeal and took up for final disposal.
Acts & Sections
- Nagpur Improvement Trust Act, 1936: 114, 115, 19
- Development Control Regulations, 2000: M(7)(2)
- Bombay Public Trust Act, 1950:
- Companies Act, 1956:
