Case Note & Summary
The writ petition challenged the order dated 6th May 2010 passed by the Joint Charity Commissioner granting sanction under Section 36(1)(a) of the Bombay Public Trusts Act, 1950, for alienation and redevelopment of the Sir Elly Kadoorie School Trust property. The petitioners, including a nominated trustee, alleged procedural irregularities, suppression of material facts, and lack of independent scrutiny. They contended that the trust deed did not empower alienation, thereby requiring an application under Section 36(1)(c) which was never disposed of, and that the Joint Charity Commissioner mechanically granted sanction without independent verification. The petitioners highlighted that the trustees suppressed the fact of a meeting on 6th July 2004 where a Repair Committee was constituted and ignored a donation offer of Rs. 4.5 crores from K.C. Foundation. They also argued that the tender process was flawed, advertisements were published in obscure newspapers, and the development rights were hastily assigned from Respondent No. 8 to Respondent No. 9 without assessing their capacity. The respondents countered that the school building was over 125 years old, in a dilapidated condition, and required urgent repairs, and that the trust had no funds. The court heard submissions, and the available text ends during the arguments of the respondents' counsel. The final decision, ratio decidendi, and operative directions of the court are not included in the provided judgment excerpt.
Headnote
A) Charity Law - Alienation of Trust Property - Requirement to Seek Sanction Under Section 36(1)(c) - Bombay Public Trusts Act, 1950, Sections 36(1)(c), 36(1)(a) - The trust deed did not empower alienation, necessitating an application under Section 36(1)(c). The trustees filed such an application (Exhibit 28) but it was never disposed of, and the Joint Charity Commissioner directly granted sanction under Section 36(1)(a). The petitioners contended that this omission vitiated the order. The court noted these submissions. (Paras 3-6)
B) Charity Law - Scope of Inquiry by Charity Commissioner - Duty to Independently Scrutinize - Bombay Public Trusts Act, 1950, Section 36 - The petitioners argued that the Charity Commissioner mechanically granted sanction based solely on averments without independent verification, failed to consider the offer from K.C. Foundation and the constitution of a Repair Committee, and did not assess the developer's capacity. The court observed these as relevant factors. (Paras 4-6)
C) Charity Law - Transparency in Tender Process - Validity of Newspaper Advertisements - Bombay Public Trusts Act, 1950 - The petitioners challenged the adequacy of the tender notice published in obscure newspapers and pointed to a predetermined plan to select Respondent No. 8. The court considered the circulation figures and the order directing prosecution of trustees. (Paras 7-8)
D) Charity Law - Assignment of Development Rights - Verification of Developer Capacity - Bombay Public Trusts Act, 1950 - The petitioners highlighted that immediately after the sanction, the rights were assigned by Respondent No. 8 to Respondent No. 9 without the Charity Commissioner verifying the capacity of either. The court noted the letter dated 2nd September 2009 and the subsequent assignment. (Paras 6, 8-9)
Issue of Consideration
Whether the Joint Charity Commissioner's order dated 6th May 2010 granting sanction under Section 36(1)(a) of the Bombay Public Trusts Act, 1950, for alienation of trust property was valid, given the non-disposal of the application under Section 36(1)(c), suppression of material facts, and lack of independent scrutiny.
Law Points
- requirements under Section 36(1)(c) for alienation of trust property
- necessity of independent scrutiny by Charity Commissioner
- duty to consider alternative offers and capacity of developer
- principle that price alone is insufficient for sanction
- requirement of transparency in tender process
- suppression of material facts vitiates order
Case Details
2011 LawText (BOM) (12) 35
Writ Petition No. 7233 of 2011
D.D. Madon, Meenakshi Iyer, Ramesh Vidyanathan for petitioners; Praveen Samdani, Birendra Saraf, Pallavi Dedhia for Respondent Nos. 2-7; P.S. Cardozo for Respondent No. 1; Aspi Chinoy, C.S. Kapadia for Respondent Nos. 8 and 9
Ms. Yafa Jacob Simon and Mr. Rajiv Ranjan Mishra
Joint Charity Commissioner, Maharashtra State; Sir Elly Kadoorie School Trust; Mr. Ezeriel R. Penkar; Mr. David Moses Talegaonkar; Mr. Ezra Moses Talegaonkar; Mr. Joshua Jacob Awaskar; Mr. Jashuva Nathan Nagavkar; Shreepad Infratrade Private Limited; Siddharth Greenacres Private Limited
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Nature of Litigation
Writ petition under Articles 226 and 227 of the Constitution challenging the order of the Joint Charity Commissioner granting sanction under Section 36(1)(a) of the Bombay Public Trusts Act for redevelopment of trust property.
Remedy Sought
Petitioners sought to quash the impugned order dated 6th May 2010 and dismiss the application under Section 36(1)(a); alternatively, remand the matter with directions to invite bids transparently.
Filing Reason
The petitioners alleged that the trustees bypassed the requirement of Section 36(1)(c), suppressed material facts regarding an alternative donation offer and a Repair Committee, and obtained sanction without independent scrutiny, in a hurried manner to favour a particular developer.
Previous Decisions
The Joint Charity Commissioner passed the impugned order on 6th May 2010. A similar application No. 31 of 2002 had been earlier dismissed for non-prosecution. A meeting on 6th July 2004 had constituted a Repair Committee.
Issues
Whether the Joint Charity Commissioner could grant sanction under Section 36(1)(a) without disposing of the pending application under Section 36(1)(c).
Whether there was suppression of material facts, including the offer from K.C. Foundation and the constitution of a Repair Committee.
Whether the tender process was transparent and whether the developer had the requisite capacity.
Whether the rights of Anglo Jewish Association to nominate trustees were bypassed.
Submissions/Arguments
Petitioners contended that the trust deed did not empower alienation, necessitating sanction under Section 36(1)(c), but the application was never disposed of; the Charity Commissioner mechanically granted sanction under Section 36(1)(a) without independent scrutiny.
Petitioners argued that the trustees suppressed the fact of a meeting chaired by the Charity Commissioner on 6th July 2004 which constituted a Repair Committee and the offer of Rs. 4.5 crores from K.C. Foundation; the advertisement was published in obscure newspapers, indicating a predetermined plan.
Petitioners pointed out that immediately after the sanction, the development rights were assigned by Respondent No. 8 to Respondent No. 9 without verification of their capacity, and that the Anglo Jewish Association's right to nominate trustees was bypassed.
Respondents contended that the school building was over 125 years old, required urgent repairs, and the trust had no funds; the sanction was validly granted.
Judgment Excerpts
the trustees had adopted a strange procedure wherein the trustees first filed application for obtaining sanction after completing the entire exercise of issuing advertisement through their Advocate in little known newspapers, receiving tenders, passing resolutions to appoint Respondent No.8 as developer and filing of application to get sanction.
the Jt. Charity Commissioner was having a statutory duty to go into the question of capacity or ability of the developer which has not been gone into at all.
Procedural History
On 18th November 2011, the court issued notice for final disposal. The matter was heard on various dates with affidavits filed. The judgment was delivered on 7th December 2011, but the available text ends during the submissions of the respondents' counsel.
Acts & Sections
- Bombay Public Trusts Act, 1950: 36(1)(c), 36(1)(a)
- Mumbai Municipal Corporation Act, 1888: 354
- Constitution of India: 226, 227
