Case Note & Summary
The case involves two writ petitions filed under Article 226 of the Constitution of India challenging an order dated 08-05-2000 passed by the Charity Commissioner under Section 36 of the Bombay Public Trust Act, 1950. The Charity Commissioner granted sanction for the sale of trust property in favour of respondent No.3, Messrs Shah Jhaveri and Associates. The petitioners, trustees of Vallabhdas Karsandas Natha Trust, a public charitable trust, sought to quash the order. The core legal issue was whether, in view of Clause 6 of the Lease Deed dated 01-09-1975, the permission of the Charity Commissioner under Section 36(1) of the Act is a mere formality. The factual background involves a lease deed executed between the trust and the lessee, which contained a clause granting the lessee an option to purchase the property. The Charity Commissioner, after considering the matter, granted sanction for the sale. The petitioners argued that the Charity Commissioner failed to exercise his discretion properly and that the clause in the lease deed did not bind the Commissioner. The respondents contended that the clause made the sanction a formality. The Court analyzed the provisions of Section 36(1) and held that the Charity Commissioner has a statutory duty to independently assess whether the alienation is necessary, expedient, or beneficial to the trust. A contractual clause cannot override this statutory discretion. The Court dismissed both petitions, upholding the Charity Commissioner's order.
Headnote
A) Trust Law - Alienation of Trust Property - Section 36(1) Bombay Public Trust Act, 1950 - Charity Commissioner's Discretion - The issue was whether a clause in a lease deed making the lessee entitled to purchase the property makes the Charity Commissioner's sanction under Section 36(1) a mere formality. The Court held that the Charity Commissioner has to independently consider whether the proposed sale is necessary, expedient, or beneficial to the trust, and a contractual clause cannot oust the statutory discretion. (Paras 2, 10-12)
Issue of Consideration
Whether in view of Clause 6 of the Lease Deed dated 01-09-1975, the permission of the Charity Commissioner under Section 36(1) of the Bombay Public Trust Act, 1950 is a mere formality and that the Charity Commissioner has to grant such permission for the asking.
Final Decision
Both writ petitions dismissed. Order dated 08-05-2000 of the Charity Commissioner upheld.
Law Points
- Section 36(1) Bombay Public Trust Act
- 1950
- Charity Commissioner's discretion
- alienation of trust property
- lease deed clause
- public trust
- formality
Case Details
2011 LawText (BOM) (09) 35
Writ Petition No.1429 of 2000 with Appellate Side Writ Petition No.3585 of 2000
Snehal Shah with Kaushal Tamhane and Rashid Khan i/by Narayanan and Narayanan for petitioners in WP(OS) 1429/2000 and respondent No.1 in WP(AS) 3585/2000; Gauri K. Jadhav for petitioner in WP 3585/2000 and respondent No.4 in WP 1429/2000; K.R.Belosey for respondent-State; N.P.Pandit with Kamlesh Rajwani and Tanmai Salekar i/by M/s.Shah and Sanghavi for respondent No.3 in WP 1429/2000 and respondent No.5 in WP 3585/2000
Trustees of Vallabhdas Karsandas Natha Trust (in WP 1429/2000); Jamnadas L. Thakkar (in WP 3585/2000)
State of Maharashtra, Charity Commissioner, Messrs Shah Jhaveri and Associates, Jamnadas L. Thakkar (in WP 1429/2000); Vallabhdas Karsandas Natha Trust through its Trustees, Shah Jhaveri and Associates, Charity Commissioner (in WP 3585/2000)
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Nature of Litigation
Writ petitions under Article 226 challenging order of Charity Commissioner granting sanction for sale of trust property.
Remedy Sought
Quashing of order dated 08-05-2000 passed by Charity Commissioner under Section 36 of Bombay Public Trust Act, 1950.
Filing Reason
Petitioners contended that Charity Commissioner failed to properly exercise discretion and that Clause 6 of Lease Deed made permission a mere formality.
Previous Decisions
Charity Commissioner granted sanction for sale of property in favour of respondent No.3 on 08-05-2000.
Issues
Whether Clause 6 of the Lease Deed dated 01-09-1975 makes the permission of the Charity Commissioner under Section 36(1) of the Bombay Public Trust Act, 1950 a mere formality.
Whether the Charity Commissioner has to grant such permission for the asking.
Submissions/Arguments
Petitioners argued that the Charity Commissioner failed to exercise his discretion and that the clause in the lease deed does not bind the Commissioner.
Respondents contended that the clause in the lease deed makes the sanction a formality and the Commissioner must grant it.
Ratio Decidendi
The Charity Commissioner, while exercising powers under Section 36(1) of the Bombay Public Trust Act, 1950, has to independently consider whether the proposed alienation is necessary, expedient, or beneficial to the trust. A contractual clause in a lease deed cannot oust the statutory discretion of the Charity Commissioner, and the permission under Section 36(1) is not a mere formality.
Judgment Excerpts
The question poised in the above petitions is whether in view of Clause 6 of the Lease Deed dated 01091975, the permission of the Charity Commissioner under Section 36(1) of the Bombay Public Trust Act, 1950 is a mere formality and that the Charity Commissioner has to grant such permission for the asking.
Procedural History
The Charity Commissioner passed order dated 08-05-2000 granting sanction for sale of trust property under Section 36 of the Bombay Public Trust Act, 1950. Two writ petitions were filed under Article 226 of the Constitution of India challenging the said order. The petitions were heard together and disposed of by this common judgment.
Acts & Sections
- Bombay Public Trust Act, 1950: Section 36, Section 36(1)
- Constitution of India: Article 226
