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Bhaskar Laxman Jadhav & Ors. Versus Karamveer Kakasaheb Wagh Education Society & Ors.

2012 (12) TMI 993 - SUPREME COURT

Whether respondent No.1 should be impleaded as a party in the proceedings before the Charity Commissioner in an application filed by a trust for sanction to sell off some land belonging to it? - PETITON FOR SPECIAL LEAVE TO APPEAL NO. 30469 OF 2009 - Dated:- 11-12-2012 - Swatanter Kumar, & Madan B. Lokur JJ. J U D G M E N T Madan B. Lokur, J. 1. The facts of this case are a little elaborate, spanning as they do more than a decade and a half. However, the issue raised is somewhat narrow and i .....

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nd in which respondent No. 1 was the highest bidder. 3. While upholding the decision of the High Court, we feel that it may have over-stepped in giving the direction that it did. But, we are of the opinion that the learned judges had no option but to mould the relief and give the direction that it did in the best interest of the trust, in keeping with the provisions of Section 36 of the Bombay Public Trust Act, 1950. Consequently, there is no reason to interfere with the direction of the High Co .....

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ed to be sold is hereinafter referred to as the Trust land . 6. Pursuant to the resolution, the trustees issued a public notice in the newspaper Rambhoomi inviting offers for purchase of the Trust land. In response, they received four offers, the highest being that of the petitioners for ₹ 2.5 lakhs per acre totaling ₹ 22.5 lakhs. 7. The petitioners offer was accepted by the trustees and on 18th February 1995 they entered into an agreement for the sale/purchase of the Trust land for .....

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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 Commis .....

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ion 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) No sanction shall be revoked under this section unless the person in .....

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the advantage so assessed. 9. On 6th February 1998 the Joint Charity Commissioner (for short the JCC ) Mumbai granted the sanction prayed for by the trustees, subject to all laws applicable to the transaction and on terms and conditions that were to follow. 10. On 19th June 1998 the sanction granted by the JCC was partially modified and a condition imposed that the sale shall be executed within a period of one year from the date of the order that is 19th June 1998. However, for one reason or ano .....

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ber 2001 to extend the time for completing the transaction. 12. Although it is not very clear, but it appears that thereafter something seems to have gone wrong between the parties because in January 2002 the trustees moved an application before the JCC for revised permission since the petitioners had not complied with the terms of the agreement. The trustees therefore planned to sell the Trust land as per the sanction but apparently to persons other than the petitioners. This application was co .....

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tions of the agreement entered into between the parties. 14. Eventually, both the applications (for extension of time and for revised sanction) were heard by the JCC who passed an order on 2nd May 2003 rejecting them. This order was not challenged by any of the parties and it has attained finality. 15. At this stage, it may be noted that according to respondent No. 1 the order dated 2nd May 2003 is an important order and it has been suppressed by the petitioners in this petition. 16. Even after .....

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ension of time from the JCC for executing the transaction with the petitioners. Accordingly, they moved an application on 20th July 2005 for extension of time. This was the second application for extension of time. The petitioners were not parties before the JCC in this application nor were they heard on this application. 18. By an order dated 24th July 2006 the JCC rejected the second application filed by the trustees for extension of time. 19. Pursuant to the rejection, the trustees issued a p .....

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did the trustees bring it to the notice of the High Court that respondent No.1 had given the highest bid for purchase of the Trust land pursuant to the public notice issued in Day View . 21. On 28th August 2008 the petitioners and the trustees entered into a compromise as a result of which it was agreed that the order dated 24th July 2006 be set aside and the second application for extension of time be remanded to the JCC for a fresh hearing on merits. It was also agreed that the petitioners wou .....

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he compromise order dated 28th August 2008 the JCC impleaded the petitioners as parties to the second application for extension of time. 23. When respondent No.1 learnt of the pendency of the proceedings before the JCC, it moved an application before the JCC for impleadment. In fact, other interested purchasers also moved applications for impleadment. The JCC heard all the applications and by an order dated 29th November 2008 rejected them. 24. Feeling aggrieved by the rejection of its impleadme .....

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d. 25. After hearing all the parties, the High Court passed the impugned order on 24th April 2009 in which it was noted, inter alia, that the Charity Commissioner had received another offer for the Trust land higher than the offer of respondent No.1. The Assistant Government Pleader accordingly submitted that the matter be remanded to the Charity Commissioner to decide in whose favour the Trust land should be sold, depending on the highest bid. 26. On deliberations of the submissions made by the .....

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that the High Court had effectively over-stepped its jurisdiction while deciding W.P. No.7863 of 2008. It was submitted that the issue before the High Court was rather limited, namely, whether respondent No.1 should be impleaded before the JCC in the second application for extension of time. Apart from adjudicating on the correctness or otherwise of the decision rendered by the JCC rejecting the impleadment application, the High Court effectively rejected the second application for extension of .....

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ng the JCC to hear the second application for extension of time. It was submitted that this was clearly impermissible. 30. It was finally submitted that under these circumstances the impugned order could not be sustained and the only relief that could have been granted by the High Court to respondent No.1 was to implead it in the second application for extension of time and to direct the JCC to decide the application at the earliest. 31. Contesting these submissions, learned counsel for responde .....

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bserve the larger interest of the charitable trust. In achieving this, necessary and appropriate orders can be passed for the ultimate benefit of the trust. In support of this submission learned counsel for respondent No.1 relied on Chenchu Rami Reddy v. Government of Andhra Pradesh, 1986 (3) SCC 391, R. Venugopala Naidu v. Venkatarayulu Naidu Charities, 1989 Suppl. (2) SCC 356 and Mehrwan Homi Irani v. Charity Commissioner Bombay, 2001 (5) SCC 305. 33. Finally it was submitted by learned counse .....

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e trust expects the highest amount possible for the sale of its land and that appropriate orders may be passed in this regard. Conduct of the petitioners and trustees: 35. The facts of the case show that the trustees and the petitioners have been indulging in a flip-flop and in a sense taking advantage of the absence of any clear-cut statutory measures to prevent an abuse of the process of law. 36. The trustees and the petitioners entered into a total of three agreements from time to time. The t .....

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the trustees were not voluntarily selling the Trust land and secondly, given the circumstances, the sale transaction was not for the benefit and in the interest of the Trust. This order has attained finality, not having been challenged by anybody. It is this order that has been suppressed by the petitioners from this Court. We propose to refer to this a little later. 38. While considering the second application for extension of time on 24th July 2006 the JCC observed that the trustees are chang .....

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e trustees received offers including the highest bid by respondent No.1 the petitioners filed a writ petition in the High Court challenging the order rejecting the second application for extension of time. It seems rather odd that respondent No.1 was not impleaded in the writ petition either by the petitioners or at the instance of the trustees. The fact that third party interests were in existence was definitely known to the trustees, if not to the petitioners, and this should have been brought .....

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desired. 43. While it may be that no time limit is prescribed for seeking extension of time to complete the transaction for sale of the Trust land, yet the conduct of the parties certainly requires consideration. While so considering, we are of the view that the petitioners and the trustees were trying to take advantage of, if not exploit, the situation and the absence of any adverse consequences under the Act for not complying with the terms of the sanction originally granted. Suppression of fa .....

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leave to appeal should not be granted to the petitioners. 45. Learned counsel for the petitioners submitted that no material facts have been withheld from this Court. It was submitted that while the order dated 2nd May 2003 was undoubtedly not filed, its existence was not material in view of subsequent developments that had taken place. We cannot agree. 46. It is not for a litigant to decide what fact is material for adjudicating a case and what is not material. It is the obligation of a litiga .....

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itigants eschewing inaccurate, untrue or misleading statements, otherwise leave granted to an appellant may be revoked. It was observed as follows: It is of utmost importance that in making material statements and setting forth grounds in applications for special leave, care must be taken not to make any statements which are inaccurate, untrue or misleading. In dealing with applications for special leave, the Court naturally takes statements of fact and grounds of fact contained in the petitions .....

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d. It was held that if a litigant does not come to the Court with clean hands, he is not entitled to be heard and indeed, such a person is not entitled to any relief from any judicial forum. It was said: The principle that a person who does not come to the court with clean hands is not entitled to be heard on the merits of his grievance and, in any case, such person is not entitled to any relief is applicable not only to the petitions filed under Articles 32, 226 and 136 of the Constitution but .....

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ssant, in the order dated 24th July 2006 does not serve the requirement of disclosure. It is not for the Court to look into every word of the pleadings, documents and annexures to fish out a fact. It is for the litigant to come up-front and clean with all material facts and then, on the basis of the submissions made by learned counsel, leave it to the Court to determine whether or not a particular fact is relevant for arriving at a decision. Unfortunately, the petitioners have not done this and .....

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f the facts and circumstances of the case, the High Court was perhaps left with no option but to pass the order that it did and accept the alternative prayer of respondent No. 1. We say this because, as noticed above, the trustees and the petitioners were colluding and it was not possible to entirely rule out the possibility that they would enter into yet another mutual arrangement to wipe out whatever interest respondent No.1 had in the Trust land. Therefore, impleading respondent No.1 before t .....

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that given by respondent No.1. Therefore, it is quite clear that due to the passage of time, mainly because of the flip-flop of the trustees and the petitioners, the value of the Trust land had increased considerably. In these circumstances, it would be in the best interest of the trust if the maximum price is available for the Trust land from the open market. While this may or may not have been a consideration before the High Court, it is certainly one of the considerations before us for not in .....

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frowned upon private negotiations for the alienation of trust property and encouraged public auction in such a case. It was held as follows:- We cannot conclude without observing that property of such institutions [religious or charitable institutions] or endowments must be jealously protected. It must be protected, for, a large segment of the community has beneficial interest in it (that is the raison d'etre of the [Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments] .....

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ations, can, in a given case, enter into a secret or invisible underhand deal or understanding with the purchasers at the cost of the concerned institution. Those who are willing to purchase by private negotiations can also bid at a public auction. Why would they feel shy or be deterred from bidding at a public auction? Why then permit sale by private negotiations which will not be visible to the public eye and may even give rise to public suspicion unless there are special reasons to justify do .....

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ound of locus standi. We would have normally remanded the case for decision on merits but in the facts and circumstances of this case we are satisfied that the value of the property which the trust got was not the market value….. …….. We direct that the properties in question may be sold by public auction by giving wide publicity regarding the date, time and place of public auction. The offer of ₹ 10 lakhs made in this Court will be treated as minimum bid of the person .....

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e a fresh advertisement for leasing out the trust property and formulate and impose just and proper conditions so that it may serve the best interests of the Trust. The observations of this Court and directions given are as follows:- In the best interests of the Trust and its objects, we feel it appropriate that Respondents 2 to 4 should explore the further possibility of having agreements with better terms. The objects of the Trust should be accomplished in the best of its interests. Leasing ou .....

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issioner may himself formulate and impose just and proper conditions so that it may serve the best interests of the Trust. We direct that the Charity Commissioner shall take a decision at the earliest. 56. Following the consistent view taken by this Court as well as the language of Section 36 of the Act, we have no hesitation in concluding that the only course available to the High Court was to mould the relief and direct the Charity Commissioner to have a re-look at all bids received pursuant t .....

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