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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

PETITON FOR SPECIAL LEAVE TO APPEAL NO. 30469 OF 2009

Bhaskar Laxman Jadhav & Ors.       …..Petitioner(s)

Versus

Karamveer Kakasaheb Wagh  Education Society & Ors.                            …..Respondent(s)

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 is, in a sense, limited to the  

question whether the High Court over-stepped its jurisdiction  

in issuing the directions that it did.  

2. The  issue  before  the  High  Court  was  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  

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belonging to it. The High Court obliquely decided the issue  

by directing the Charity Commissioner to go ahead with the  

advertised auction of the trust land 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 Court.  

4. We are also  of  the  opinion that  the petitioners  have  

suppressed a material fact from us and, therefore, special  

leave to appeal ought not to be granted to the petitioners.

Facts:

5. On  29th November,  1994  the  trustees  of  the  Shri  

Vyankatesh  Mandir  Trust  at  Panchavati,  Nasik  resolved to  

sell 9 (nine) acres of agricultural land belonging to the Trust  

in Survey No. 275 situated at Aurangabad Road, Panchavati,  

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Nasik  by  calling  tenders  from  the  public  at  large.  For  

convenience  the  land  resolved  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  Rs.2.5  

lakhs per acre totaling Rs.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 a total consideration  

of Rs.22.5 lakhs.

8. As required by Section 36 of the Bombay Public Trust  

Act,  1950  (for  short  the  Act)  the  trustees  moved  an  

application  on  5th February  1996  before  the  Charity  

Commissioner for sanction to sell the Trust land in terms of  

the agreement dated 18th February 1995. Section 36 of the  

Act reads as follows:

“36.  Alienation  of  immovable  property  of  public  trust  :(1)  Notwithstanding  anything  contained in the instrument of trust –

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(a)  no  sale,  exchange or  gift  of  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 Commissioner is satisfied that in  the  interest  of  any  public  trust  any  immovable  property thereof should be disposed of,  he may,  on application, authorise any trustee to dispose of  such  property  subject  to  such  conditions  as  he  may think fit to impose, regard being had to the  interest or benefit or protection of the trust.

(2)  The  Charity  Commissioner  may  revoke  the  sanction given under clause (a)  or  clause (b)  of  sub-section (1) on the ground that such sanction  was obtained by fraud or misrepresentation 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 whose favour such sanction  

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has  been  made  has  been  given  a  reasonable  opportunity  to  show  cause  why  the  sanction  should not be revoked.

(4) If, in the opinion of the Charity Commissioner,  the trustee has failed to take effective steps within  the period specified in sub-section (2), or it is not  possible to recover the property with reasonable  effort or expense, the Charity Commissioner may  assess any advantage received by the trustee and  direct  him  to  pay  compensation  to  the  trust  equivalent to 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  

another,  the  petitioners  and  the  trustees  were  unable  to  

complete the sale transaction within this time.

11. Much  later,  on  30th June  2001  the  trustees  and  the  

petitioners  mutually  agreed  to  extend  the  time  for  

completing formalities for execution of the transaction.  They  

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also agreed that the sale price of the Trust land would now  

be increased to         Rs.75 lakhs.  This  was the  second  

agreement between the parties. Consequent upon this, the  

trustees  moved  an  application  before  the  JCC  on  13th  

September  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 contested by the  

petitioners.

13. During the pendency of the application for extension of  

time moved by the trustees on 13th September 2001 and the  

application for revised permission moved by the trustees in  

January 2002 the differences between the trustees and the  

petitioners could not to be resolved with the result that on  

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16th April  2002  the  trustees  sought  to  withdraw  the  

application dated 13th September 2001 for extension of time  

since the petitioners had not complied with the terms and  

conditions  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 the order dated 2nd May 2003 it seems that  

the  trustees  and  the  petitioners  continued  to  have  

discussions and eventually on 15th August 2004 they entered  

into a third agreement. By the third agreement, they agreed  

to extend the time for completing formalities for executing  

the transaction originally entered into between them. They  

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also mutually agreed to increase the sale price of the Trust  

land to Rs. 125 lakhs.

17. Pursuant  to  the  third  agreement  the  trustees  once  

again decided to seek extension 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 public  

notice in “Day View” on 19th February 2007 for sale of the  

Trust land.  In response to the public notice, respondent No.1  

gave the highest bid on 23rd February 2007 at Rs.43 lakhs  

per acre.

20. Significantly, on 26th February 2007 the petitioners filed  

W.P. No.1502 of 2007 in the High Court challenging the order  

dated 24th July 2006 passed by the JCC rejecting the second  

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application  for  extension  of  time.  In  this  Writ  Petition,  

respondent No.1 was not made a party by the petitioners nor  

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  would  be  joined  as  parties  in  the  proceedings  

before  the  JCC  and  that  the  application  be  decided  as  

expeditiously  as  possible  but  not  later  than three months  

beyond the date of  presentation of  the order  of  the High  

Court. On the basis of this compromise between the parties  

(and without the knowledge of respondent No.1), minutes of  

order were drawn up and the High Court passed an order  

taking the minutes on record. An order was then passed by  

the High Court in terms of the minutes.

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22. Pursuant  to  the  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 impleadment  

application, respondent No.1 preferred W.P. No.7863 of 2008  

on  2nd December  2008  in  the  High  Court  challenging  the  

order  passed  by  the  JCC.  The  trustees  as  well  as  the  

petitioners were arrayed as respondents. It was prayed that  

the order dated 29th November 2008 passed by the JCC be  

quashed and respondent No.1 be impleaded as a necessary  

party  in  the  proceedings  before  the  JCC.   The alternative  

prayer was that the JCC be directed to consider the bid of  

respondent No.1 for sale of the Trust land.

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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  

parties,  the  High  Court  remanded  the  entire  matter  for  

consideration by the Charity  Commissioner  to  decide who  

should  be  the  purchaser  for  the  Trust  land.  The  Charity  

Commissioner  was  directed  to  consider  all  bids  received  

pursuant  to  the  public  notice  dated  19th February  2007  

including the bids given by the petitioners and respondent  

No.1.

27. It is under these circumstances that the petitioners are  

now before us.   

Submissions:

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28. The  broad  submission  of  learned  counsel  for  the  

petitioners  was  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  

time.  

29. It was submitted that the High Court went much further  

than  necessary  in  requiring  the  JCC  to  consider  all  bids  

received by the trustees pursuant to the public notice dated  

19th February  2007.   The  right  of  the  petitioners  to  seek  

specific  performance  of  the  third  agreement  entered  into  

between them and the trustees  on 15th August  2004 was  

thereby scuttled.  To make matters worse, the High Court  

virtually set aside an order passed by the co-ordinate Bench  

in W.P. No.1502 of 2007 directing the JCC to hear the second  

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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  

respondent No.1 submitted that the petitioners were guilty  

of  suppression  of  material  facts  inasmuch  as  it  was  not  

brought to the notice of this Court that the JCC had earlier  

rejected the first application for extension of time on 2nd May  

2003  which  had  attained  finality.   Since  this  fact  is  not  

disclosed, this Court will not grant special leave to appeal.

32. It was also submitted that since Shri Vyankatesh Mandir  

Trust is a charitable trust, it was expected of the High Court  

(as also this  Court)  to  subserve 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  

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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  counsel  for  

respondent  No.1  that  the  Charity  Commissioner  had  

received an offer higher than given by respondent No.1 and  

therefore  the  High  Court  was  right  in  directing  that  

appropriate steps be taken to receive the highest amount  

possible by sale of the Trust land.  In this regard, the High  

Court had acted in the best interest of the charitable trust  

(and that is how it should be) and therefore we should not  

interfere with the impugned order.

34. Learned counsel  for  the trustees only submitted that  

the 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:

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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 trustees moved  

two applications for extension of time to complete the sale  

transaction with the petitioners. The trustees even sought to  

withdraw their first application for extension of time and to  

seek a revised sanction from the JCC to sell the Trust land to  

a  third  party  apparently  because  they  fell  out  with  the  

petitioners.

37. Given  this  flip-flop,  the  JCC  rightly  rejected  the  first  

application for extension of time on 2nd May 2003. He gave  

two  significant  reasons  for  doing  so,  namely,  that  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  

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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 “changing track from time to time and for the reasons  

best  known  to  them  are  bowing  before  the  proposed  

purchasers”.  The JCC doubted the bona fides of the trustees  

and in fact observed that there is obviously something fishy  

and suspicious in the matter. Accordingly, the JCC rejected  

their second application for extension of time.

39. After the second application for extension of time was  

rejected,  the  trustees  issued  a  public  notice  on  19th  

February, 2007 for sale of the Trust land.

40. Soon  after  the  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  

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definitely known to the trustees, if not to the petitioners, and  

this  should  have  been  brought  to  the  notice  of  the  High  

Court.  

41. In this background, the compromise effected between  

the trustees and the petitioners in the High Court on 28th  

August  2008  appears  rather  suspicious.  To  this  extent,  

learned counsel for respondent No.1 may be correct in his  

submission that the order dated 28th August 2008 passed by  

the High Court was collusively obtained by the parties.

42. These facts clearly indicate to us that all through, the  

conduct of the trustees and the petitioners leaves much to  

be 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  

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not  complying  with  the  terms  of  the  sanction  originally  

granted.

Suppression of fact:

44. While dealing with the conduct of the parties, we may  

also notice the submission of learned counsel for respondent  

No.1  to  the  effect  that  the  petitioners  are  guilty  of  

suppression of a material fact from this Court, namely, the  

rejection  on  2nd May  2003  of  the  first  application  for  

extension  of  time  filed  by  the  trustees  and  the  finality  

attached to it. These facts have not been clearly disclosed to  

this Court by the petitioners. It was submitted that in view of  

the  suppression,  special  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.   

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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 litigant to disclose all the facts of a case and  

leave  the  decision  making  to  the  Court.  True,  there  is  a  

mention of the order dated 2nd May 2003 in the order dated  

24th July  2006 passed by the JCC,  but  that  is  not  enough  

disclosure.  The  petitioners  have  not  clearly  disclosed  the  

facts and circumstances in which the order dated 2nd May  

2003 was passed or that it has attained finality.

47. We may only refer to two cases on this subject. In Hari  

Narain v. Badri Das, AIR 1963 SC 1558  stress was laid  

on  litigants  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  at  their  face  value  and  it  would be unfair to betray the confidence of the Court by  making statements  which are untrue and misleading.  That is why we have come to the conclusion that in the  present  case,  special  leave  granted  to  the  appellant  

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ought  to  be  revoked.  Accordingly,  special  leave  is  revoked and the appeal is dismissed. The appellant will  pay the costs of the respondent.”

48. More  recently,  in Ramjas  Foundation  v.  Union  of  

India, (2010) 14 SCC 38 the case law on the subject was  

discussed. 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  also  to  the  cases  instituted  in  others courts and judicial forums. The object underlying  the principle is that every court is not only entitled but  is  duty  bound  to  protect  itself  from  unscrupulous  litigants who do not have any respect for truth and who  try  to  pollute  the  stream  of  justice  by  resorting  to  falsehood or by making misstatement or by suppressing  facts  which  have  a  bearing  on  adjudication  of  the  issue(s) arising in the case.”

49. A mere reference to the order dated 2nd May 2003, en  

passant, 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  

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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 must suffer the consequence thereof.

Validity of the High Court order:

50. The  next  submission  of  learned  counsel  for  the  

petitioners  was  that  the  High  Court  had  over-stepped  its  

jurisdiction in requiring the JCC to virtually go in for a fresh  

auction. While we agree that the question before the High  

Court  was very limited,  namely,  whether  respondent  No.1  

ought  to  have  been  impleaded  by  the  JCC  in  the  second  

application for extension of time, we are of the view that on  

an overall  consideration of 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  

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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 the JCC could  

have been rendered into a mere formality. Additionally, the  

lack of  bona fides  of the trustees and the petitioners could  

not be overlooked by the High Court.  Therefore, the safest  

course of action for the High Court was to require sale of the  

Trust land through auction.

51. It appears to us that another factor that weighed with  

the  High  Court  in  this  regard  was  the  submission  of  the  

learned  Assistant  Government  Pleader  that  the  Charity  

Commissioner had received an offer higher than 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  

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not interfering with the order passed by the High Court, even  

though  it  may  have,  in  a  loose  sense,  over-stepped  its  

jurisdiction.

52. Section 36 of the Act clearly provides that the trustees  

may be allowed by the Charity Commissioner to dispose of  

immoveable property of the trust with  regard being had to  

the “interest, benefit or protection” of the trust. It cannot be  

doubted that the interest of the trust would be in getting the  

maximum for its immoveable property.   

53. In  Chenchu  Rami  Reddy  this  Court  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] Act itself). The authorities  exercising the powers under the Act must not only be  most alert and vigilant in such matters but also show  awareness of the ways of the present day world as also  the ugly realities  of  the world of  today.  They cannot  afford to take things at their face value or make a less  than the closest-and-best-attention approach to guard  

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against  all  pitfalls.  The  approving  authority  must  be  aware  that  in  such  matters  the  trustees,  or  persons  authorised  to  sell  by  private  negotiations,  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 doing so? And  care  must  be  taken  to  fix  a  reserve  price  after  ascertaining  the  market  value  for  the  sake  of  safeguarding the interest of the endowment.”  

54. Similarly, in R. Venugopala Naidu this Court followed  

the law laid down in  Chenchu Rami Reddy  and actually  

went a bit further and gave a direction for sale of the trust  

property by public auction. It was held as follows:-

“The subordinate court and the High Court did not  go into the merits of the case as the petitioners were  non-suited  on  the  ground  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  Rs  10  lakhs  made  in  this  Court  will  be  treated as minimum bid of the person who has given  the offer and deposited 10 per cent of the amount in  

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this  Court.  It  will  also  be  open  to  the  respondents/purchasers  to  participate  in  the  auction  and  compete  with  others  for  purchasing  the  properties.”

55. In Mehrwan Homi Irani it was categorically held that  

the  Charity  Commissioner,  while  granting  sanction  under  

Section 36 of the Act, must explore the possibility of getting  

the best price for the trust properties. In keeping with this,  

the  Charity  Commissioner  was  directed  to  issue  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 out of  a major portion of the land for other purposes may not  be  in  the  best  interests  of  the  Trust.  The  Charity  Commissioner while granting permission under Section  36 of the Bombay Public Trusts Act could have explored  these  possibilities.  Therefore,  we  are  constrained  to  remit the matter to the Charity Commissioner to take a  fresh  decision  in  the  matter.  There  could  be  fresh  advertisements  inviting  fresh  proposals  and  the  proposal  of  the  5th  respondent  could  also  be  considered.  The  Charity  Commissioner  may  himself  formulate and impose just and proper conditions so that  

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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  

to the public notice dated 10th February 2007.   

Remaining contentions:

57. We are not impressed with the submission of learned  

counsel for the petitioners that the right of the petitioners to  

obtain  specific  performance  of  the  agreements  with  the  

trustees  has  now  been  obliterated.  As  far  as  the  first  

agreement  is  concerned,  permission  was  granted  to  the  

petitioners  to  purchase  the  Trust  land  subject  to  certain  

conditions and within a certain time frame. Those conditions  

were  not  met.   As  far  as  the  other  two  agreements  are  

concerned, the JCC did not grant sanction to the trustees to  

act on them.  It seems to us, prima facie, that the petitioners  

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could not have sought specific performance of any of these  

agreements, but we do not express any final opinion on this  

since the issue is not directly before us.

58. We are also not impressed by the contention of learned  

counsel for the petitioners that by the impugned order, the  

High Court has effectively set aside its earlier order dated  

28th August  2008  passed  by  a  coordinate  Bench.  The  

circumstances under which the earlier order was passed and  

the  significant  developments  that  took  place  thereafter  

changed the circumstances and made it necessary for the  

High Court  to  pass a different  order.   It  is  not  as if  both  

orders  were  passed  by  the  High  Court  under  similar  

circumstances.   The  circumstances  had  changed  and  the  

view of the High Court on the changed circumstances could  

also be different.

Conclusion:

59. For the reasons mentioned above, we decline to grant  

special leave to appeal to the petitioners for suppression of a  

material fact and direct the Charity Commissioner to have a  

fresh look at the sale of the Trust land, subject matter of this  

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petition, in accordance with the directions of the High Court.  

However, we leave it open to the Charity Commissioner to  

permit all the parties before it to submit fresh offers for the  

Trust land and if deemed necessary, a fresh public notice for  

sale of the Trust land may be issued. On the basis of the bid  

given by respondent No.1 as disclosed to us in Court,  we  

make it  clear that the price for the sale of the Trust land  

shall not be less than Rs.3.87 crore.   

60. The  petitioners  will  pay  costs  of  Rs.15,000/-  to  the  

Charity Commissioner within six weeks from today.

61. The petition is disposed of accordingly.

……….…………………….. J.   (Swatanter Kumar)

….….…………………….. J.   (Madan B. Lokur)

New Delhi; December 11, 2012

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