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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No. 4375 OF 2017 (ARISING OUT OF SLP (C) No.30666/2015)

Dinshaw Rusi Mehta & Anr.        ….Appellant(s)

VERSUS

The State of Maharashtra & Ors.     …Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.

1) Leave granted.

2) This appeal is filed against the final judgment

and  order  dated  30.04.2015  passed  by  the  High

Court of Bombay in Writ Petition (c) No. 938 of 2013

whereby the High Court rejected the petition filed by

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the appellants herein for quashing and setting aside

the judgment/order dated 06.08.2011 passed by the

Charity Commissioner-respondent No.2 herein vide

which  the  Charity  Commissioner  has  granted

permission to the respondents under Section 36 of

the  Bombay  Public  Trusts  Act  1950  on  the

conditions stipulated therein.

3) We  herein  set  out  the  facts,  in  brief,  to

appreciate the issues involved in this appeal.

4) There is one public and charitable Trust called

"Parsi Lying-in Hospital" (hereinafter referred to as

“PLIH”)  having  its  office  at  A.K.Naik  Marg,  Fort

Mumbai.  The  Trust  is  registered  under  the

provisions  of  the  Bombay  Public  Trusts

Act,1950-now  substituted  by  the  Maharashtra

Public  Trusts  Act  (hereinafter  referred  to  as  "The

Act”).

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5) The PLIH owned a land admeasuring 1,294 sq.

yards together with garden of 624 sq. yards on C.S.

Nos. 741 and 742, Flora Fountain at Mumbai. The

Secretary of State for India in Council had allotted

this  land  to  PLIH for  a  period  of  99  years  by

executing Indenture of Lease. The land was allotted

for setting up a charitable Hospital in Bombay. In

accordance with the terms of the grant,  the  PLIH

constructed  charitable  Hospital  on  the  land  and

continued its activities for few years after making it

an operational.  

6) On 01.02.1924,  PLIH resolved to transfer the

said Hospital to another Public Trust called "Parsi

Punchayet  Funds  and  Properties,  Bombay"  also

known  as  "Bombay  Parsi  Punchayet"  (hereinafter

referred to  as  "BPP”).  The transfer  resolved was

approved  by  the  Bombay  High  Court  vide  order

dated  01.02.1924  in  Suit  No.126  of  1924.  The

Government  of  Bombay  vide  their  resolution

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No.5628 dated 01.04.1924 granted sanction to the

transfer  and accordingly executed a lease deed in

favour  of  BPP in  relation  to  the  aforementioned

land.  

7) Insofar as the Management of the Hospital was

concerned, one Managing Committee of  PLIH used

to look after its day-to-day management. It may be

mentioned that some Trustees of BPP  also used to

be  on  the  Board  of  Trustees  of  PLIH as  their

Trustees.  

8) The  Hospital  continued  its  activities  for  few

years and then remained closed for a long time for

various reasons. The Trust through their Trustees

then decided to re-start the Hospital in collaboration

with  others,  who  are  expert  in  running  and

managing the Hospital.  

9) With this objective in forefront, the Managing

Committee  of  PLIH on  22.03.2011 entered  into  a

lease agreement with one company called Krimson

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Health  Ventures  Private  Limited  (for  short  called

“KHPL”).  In  terms  of  this  agreement,  KHPL was

permitted  to  renovate/rebuild  one  super  specialty

hospital  at  their  cost  on  the  leased  land.  The

agreement contained several terms and conditions

on which the project was to be accomplished. It is,

however, not necessary to set out the details of the

agreement  which  has  no  bearing  over  the  issue

involved in the appeal.

10) The  Trustees  of  PLIH then  applied  to  the

Charity Commissioner of Bombay under the Act for

grant  of  approval  to  the  aforementioned  scheme/

agreement.  By  order  dated  08.07.2011,  the

Assistant Charity Commissioner granted approval to

the Scheme/agreement. By another judgment/order

dated  06.08.2011,  the  Charity  Commissioner

accorded approval to the PLIH for execution of lease

deed  in  favour  of  KHPL to  enable  it  to  start  the

work.

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11) This  grant  of  approval,  as  mentioned  above,

gave rise to litigation. One group of the Trustees of

BPP filed  a  writ  petition  in  the  High  Court  of

Bombay,  out  of  which  this  appeal  arises,

challenging the legality and validity of the Scheme

and  the  approval  granted  by  the  Charity

Commissioner  for  the  use  of  land/hospital.  The

challenge was founded on grounds inter alia with a

prayer  to  declare  the  scheme/agreement  and  the

order  of  Charity  Commissioner/Assistant

Commissioner  as  being  bad  in  law  as  the  same,

according  to  the  writ  petitioners,  was  not  in  the

larger interest of the Trust.

12) By impugned order dated 30.04.2015, the High

Court  disposed of  the  writ  petition and,  in effect,

upheld the scheme and the orders of the Assistant

Commissioner/Commissioner.  

13) It is against this order of the High Court, the

writ petitioners (one group of Trustees) felt aggrieved

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and carried the matter to this Court in this appeal

by special leave. In the meantime, the term of one

Trustee (writ petitioner) expired. He is, therefore, no

longer on the Board of Trustees of PLIH.

14) Heard  Mr.  Shyam  Divan,  learned  senior

counsel for the appellants and Mr. C.U. Singh, Mr.

Dushyant Dave and Mr. K. Radhakrishnan, learned

senior counsel for the respondents.

15)  Learned  senior  counsel  appearing  for  the

respective parties argued several  legal  and factual

points trying to justify their stand taken in the writ

petition  including  making allegations  and counter

allegations  by  highlighting  the  conduct  of  rival

groups of the Trustees and tried to show as to how

these groups pursued their stand and caused injury

and loss to the Trust, Trustees and its beneficiaries.

16) On the other hand, an attempt was made by

another  group  of  the  Trustees  to  show  that  the

scheme/agreement  was  conceived  in  the  best

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interest of the Trust and was rightly upheld by the

Charity Commissioner and the High Court.  

17)  Having  heard  the  learned  Counsel  for  the

parties at length and on perusal of the record of the

case, we are of the opinion that it is not necessary

for this Court to decide any of the points urged by

the  learned  counsel  on  account  of  certain

subsequent  events  which  took  place  during  the

pendency  of  this  litigation.  In  our  opinion,  the

subsequent  events  brought  to  our  notice  have  a

direct bearing over the controversy involved in this

case and hence they deserve to be taken note of for

deciding the appeal.

18)  During the pendency of the litigation,  KHPL-

respondent  No.  18  herein,  in  whose  favour  the

transfer of land was made by BBP/PLIH for setting

up a new hospital informed the BBP/PLIH vide their

letter dated 03.11.2015 and 17.11.2011 that KHPL

is  now no more interested in continuing with the

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project for the reasons mentioned in their letters. By

these  letters,  KHPL terminated  the  agreement.

These letters were replied by  BPP/PILH vide letter

dated 22.12.2011.

19) Be that  as it  may,  in our opinion,  when the

scheme/agreement  impugned  in  this  litigation

stands terminated and is not being given effect to by

the parties (may be for any reason with which we

are not presently concerned in this litigation) or in

other  words  when  the  scheme/agreement  cannot

now be given effect to due to parties’ own volition,

there  does  not  arise  any  need  for  this  Court  to

decide its legality or correctness on merits.  

20) When  the  impugned  scheme/agreement  no

longer subsists and not alive, there is no occasion to

decide  its  legality  and  correctness  on  legal  side

because any decision, even if rendered, would be of

no avail to the parties.  

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21) It is for this reason, we decline to examine the

points urged in this appeal and express no opinion.

Indeed, in such circumstances, in our opinion, the

writ  petition  out  of  which  this  appeal  arises  has

rendered infructuous for all practical purposes.  

22) In the light of foregoing discussion and further

having  regard  to  the  nature  of  controversy  and

lastly,  keeping  in  view  the  manner  in  which  the

parties prosecuted this litigation against each other,

we  are  inclined  to  dispose  of  this  appeal  with

observations and certain directions mentioned infra

which we consider are apposite in the facts of the

case.

23)  First,  the  scheme/agreement  in  question

would not be given effect to by the parties in the

light  of  respondent  No.  18  (KHPL)’s two  letters

dated 03.11.2015 and 17.11.2011;

24)  Second, the BPP and PLIH would be at liberty

to enter into any other arrangement, scheme etc. in

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relation to the land/hospital in question, if they so

consider it to be just and proper and in the interest

of the Trusts/beneficiaries with any person, body,

Corporate,  organization,  firm  etc.  If  the  Trust(s)

resolves to do so, then it will be given effect to after

ensuring  all  necessary  compliances/formalities/

requirements contained in the Trust Deed and the

Act and after obtaining necessary approval from the

Charity Commissioner as required under the Act;

25)  Third,  we  have  not  expressed  any  opinion

regarding issue of the termination of the agreement

made by  respondent No. 18 - KHPL qua BPP/PLIH

and vice versa because it was not the subject matter

of this litigation.  

26) We,  therefore,  leave  the  parties  to  get  their

rights decided against each other arising out of the

agreement,  if  any,  in  appropriate  forum  in

accordance with law;  and

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27) Fourth, the Trustees will take all decisions in

relation to the affairs of the Trust keeping in view

the  directions  of  the  author  of  the  Trust  after

ensuring compliance of the provisions of the Act and

after  obtaining  due  approval  of  the  competent

authority from time to time;

28) Before  parting,  we  consider  it  apposite  to

observe that a Trust is an obligation arising out of

confidence  reposed in  the  Trustee(s)  that  he/they

would discharge it  faithfully  for  the benefit  of  the

Trust and its beneficiaries.  

29) When  the  Trustee  accepts  the  confidence  so

reposed in him, it becomes his duty to do everything

in  compliance  with  the  author's  wish  and  to  do

nothing  that  may  amount  to  betrayal  of  the

confidence so reposed on him.  

30) In other words, it is the duty of every Trustee

whether jointly or/and severally to fulfill the object

and  the  purpose  of  the  Trust  and  obey  the

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directions of  the author  of  the Trust  given at  the

time of its creation. This is his moral as well as legal

duty recognized under the Act.  

31) We  have  noticed  from  the  record  that  the

Trustees who belong to Parsi community enjoy high

status in the society and are persons of eminence in

their  respective  fields.  There should,  therefore,  be

no reason as to why any trustee should try to cause

any harm to the interest of the Trust(s) or for that

matter  should  act  prejudicially  and  against  the

interest of the Trust.

32) There may be difference of views when issues

relating  to  the  affairs  of  the  Trust  are  debated

amongst  the  Trustees  but  what  should  be  the

uppermost behind everyone's viewpoint is "interest

of the Trust and the beneficiaries"  while projecting

everyone's viewpoint. That would be, in our opinion,

his  real  selfless  service  to  the  Trust  and  its

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beneficiaries. It will bring good for the Trust and its

beneficiaries.

33) We hope that the Trustees would keep in mind

these observations while discharging individual and

collective  duties  and  every  Trustee  would  ensure

that  the  Trust  is  able  to  do charity  in  letter  and

spirit  for  the  good of  humanity-Indeed that  being

the only wish of the creator/author while forming

the Trust.  

34)  Learned  counsel  for  the  respondents  by

referring to order dated 13.10.2015 passed by this

Court   lastly  urged  that  heavy  cost  should  be

imposed on the appellants (writ petitioners) because

they  dragged  the  Trust  and  the  Trustees  in  this

fruitless litigation which caused loss and injury to

the Trust.  

35) However,  keeping  in  view  our  observations

made supra and the fact that we have declined to

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examine  the  issues  on  merits,  we  refrain  from

imposing any cost on any party to the appeal.  

36) With these observations/directions, the appeal

stands disposed of finally.

               ………...................................J.

[R.K. AGRAWAL]             

                                               …...……..................................J. [ABHAY MANOHAR SAPRE]

New Delhi, March 22, 2017  

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