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REPORTABLE

  IN THE SUPREME COURT OF INDIA CIVIL  APPELLATE JURISDICTION

  CIVIL APPEAL NO. 2981 OF 2016 (Arising out of S.L.P.(C) No.35188 of 2012)

DATTATRAYA BABURAO WALAWALKAR AND OTHERS Appellant(s)

       Versus

SIDDHIVINAYAK CONSTRUCTION PRIVATE LIMITED AND OTHERS

Respondent(s)

W I T H

   CIVIL APPEAL NO. 2983 OF 2016 (Arising out of S.L.P.(C) No.36789 of 2012)

RAUNAK CORPORATION  Appellant(s) Versus

SIDDHIVINAYAK CONSTRUCTION PRIVATE LIMITED  Respondent(s)  AND OTHERS

  CIVIL APPEAL NO. 2984 OF 2016 (Arising out of S.L.P.(C) No.36790 of 2012)

RAUNAK CORPORATION Appellant(s) Versus

SANJAY MANOHAR KASTUR AND OTHERS Respondent(s)

     CIVIL APPEAL NO. 2985 OF 2016 (Arising out of S.L.P.(C) No.38155 of 2012)

VIKAS MOTIRAM DESAI AND OTHERS Appellant(s) Versus

SIDDHIVINAYAK CONSTRUCTION PRIVATE LIMITED Respondent(s) AND OTHERS

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   CIVIL APPEAL NO. 2986 OF 2016 (Arising out of S.L.P.(C) No.38297 of 2012)

VIKAS MOTIRAM DESAI AND OTHERS Appellant(s) Versus

SANJAY MANOHAR KASTUR AND OTHERS Respondent(s)

J U D G M E N T

R.F.NARIMAN,J.

1. We  have  heard learned counsel for the parties.

2. These appeals are against a final judgment of the High Court  of  Judicature  at  Bombay  dated  18th October,  2012  by  which  the  Division  Bench  of  the  Bombay  High  Court  dismissed  the  letters  patent appeal being LPA No. 103 of 2012 in Writ Petition No. 11070  of 2011.

3. We are concerned here with Trust property admeasuring 3343.53  sq.meters in the Girgaun area of Mumbai.  Under the Bombay Public  Trust Act, 1950, the Charity Commissioner’s sanction has first to  be obtained before the trust property can be sold and for reasons  given under the statute.  The present Trustees of the Late Rao  Bahadur Anant Shivaji Desai Topiwalla Charity had resolved to sell  the aforesaid property inasmuch as they found that it was largely

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tenanted  and  very  meager  rents  were  obtained.   The  protection  afforded  to  the  tenants  under  the  Bombay  Rent  Act  and  the  consequent rent that was being paid therefore, formed the necessity  that was felt by the trustees to sell the aforesaid property.  The  said sale was mooted by the trustees under the Development Control  Regulation 33(7) under which re-development of cessed  buildings in  the Island City of Bombay can be undertaken, provided they are  constructed prior to 1940, at F.S.I. i.e. Floor Space Index at 3  being given as incentive to rehabilitate the existing tenants on  the gross plot area.  Appendix III, which has to be read with  Regulation 33(7), specifically stipulates in paragraph 1(a), that  the new building may be permitted to be constructed in pursuance of  an  irrevocable  written  consent  by  not  less  than  70%  of  the  occupiers of the old building.

4. The said trustees, after obtaining a valuation report, which  they produced before the Charity Commissioner, therefore resolved  to sell the aforesaid property to M/s. Raunak Corporation.

5. The Charity Commissioner, by his order dated 2nd September,  2011, granted permission to sell the aforesaid trust property in  favour of Raunak Corporation for a monetory consideration of Rs.6  crores along with developed area of 4000 sq.ft. built up to be  given to the trust, free of cost, and a minimum of 460 sq.ft.  usable carpet area to each occupier including flower beds etc.,  free of cost, in terms of the Memorandum of understanding dated 23rd

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May, 2011.  The ultimate order of the Charity Commissioner reads  thus :-

“1. Application is allowed. 2. Sanction is hereby accorded to the trustees of  “The Late Rao Bahadur Anand Shivaji Desai Topiwalla  Charity,  Mumbai”,  P.T.R.  No.  A/751/Mumbai  for  development cum sale of the trust property, viz. CTS  No. 145A, 1A, 145-4, 145B, C, D, E, F, G, bearing C.S.  No.  1443  admeasuring  3999  sq.  yards  equivalent  to  3343.57 meters. Or thereabout together with structures  known as 'Kudaldeshkar Brahmin Niwas', in favour of  M/s Raunak Corporation, a registered partnership firm  at Laxmi Narayan Residency, Unnathi Garadens III, Opp.  Ma Niketan, Pokhran Road, No. 2, Thane (West) – 400  610 for the monetary consideration of Rs.6,00,00,000/-  (rupees six crores only) along with developed area of  4000 sq.ft. Built up to be given to the trust, free of  cost,  and  minimum  460  sq.  ft.  useable  carpet  area  including flower beds, niches and service ducts to the  tenants, free of cost, in terms of the Memorandum of  Understanding  dated  23.5.2011  and  on  the  following  additional terms and conditions :-

a. The deed for development cum sale of the   trust property is to be executed within a period  of six months from the date of this order. b. All expenses for stamp duty and registration  charges and other incidental expenses shall be   borne by the developer. c. The  amount  of  monetary  consideration  of   Rs.6.00 crores shall form part of the corpus of  trust, which shall remain invested in any of the  Nationalized Banks/Approved Securities in long   term deposits and should not be withdrawn   without prior permission  of  this  Authority.    Trustees shall be at liberty to use only the   interest amount, which will be accrued on a sum  invested towards accomplishment of the objects  of the trust. d. This permission shall be subject to all the  relevant  laws  and  rules  applicable  to  the   development cum sale transaction and property  all well. e. Trustees of the trust to report the change  under  section  22  after  completion  of  the  

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development cum  sale  transaction  to  the   concerned Assistant/Deputy  Charity   Commissioner, Greater Mumbai Region.”  

6. In a writ petition filed by Sidhivinayak Construction Private  Limited and others, inter alia, against the trust/trustees and the  said Raunak Corporation, the learned single Judge of the Bombay  High  Court  set  aside  the  Charity  Commissioner’s  order  and  ultimately moulded the reliefs by stating as under:

“33. The  need  for  alienation  by  redevelopment  and  ultimate  sale  of  the  properties  of  the  trust  is  established.  I am therefore inclined to set aside the  impugned order partly to the extent it grants sanction  to alienate the property in favour of the Respondent  No.9  and  remand  the  application  back.   The  Charity  Commissioner  shall  thereafter  direct  the  trustees  to  publish  an  advertisement  in  reputed  newspapers  like  Times of India, Maharashtra Times, Indian Express and  Loksatta and invite bids from the developers for the  redevelopment and sale of the property of the trust.  The bid submitted by the Respondent No.9 which has been  accepted  by  the  Charity  Commissioner  should  form  the  reserve price.  Thus, the advertisement will indicate  that any bidder who desires to bid must fulfill the  following minimum criteria :

a. Monetary consideration of Rs.6 crores to the  trust;

b. Developed area of 4000 sq. ft. built up (3418  sq. ft. carpet area) to be given free of costs to the  trust;

c. usable  carpet  area  of  460  sq.  ft.  to  individual  tenants  including  flower  bed,  niches  and  service ducts.

d. Corpus  fund  for  the  tenant  society  of  such  sum, as may be determined by the Charity Commissioner.

e. 24  Bank  Guarantees  of  Rs.50  lakhs  each  as  offered by Respondent No.9.

f. Additional  consideration  of  Rs.one  crore  to  the trust in case FSI is enhanced from 2.5 to 3.”

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The  learned  Single  Judge  then  directed  that  sanction for alienation of the trust property shall be  granted in favour of the highest bidder.”

7. A letters patent appeal filed before the Division Bench of the  Bombay High Court led to the impugned judgment dated 18th October,  2012 by which the judgment and order of the learned single Judge  was upheld.  That is how the present special leave petitions are  before this Court.

8. Leave granted.

9. After hearing learned counsel for the parties for some time,  this Court by its order dated 5th February, 2016 stated as under :-

“Without prejudice to the contentions available to  the parties, Shivaji Desai Topiwala, Charity, Bombay- Trust  is  directed  to  issue  a  fresh  advertisement  regarding  the  re-development  of  the  properties  as  directed by the learned Single Judge at paragraph 33 of  the judgment dated 29th March, 2012 in Writ Petition No.  11070 of 2011 with the required modifications that sub  para (a) will be read as “7 crores”, sub para (e) will  be read as “24 Bank Guarantees” and sub para (f) will  stand deleted.

The advertisement shall be issued within a period  of one week from today indicating time of two weeks.  After  processing  the  applications,  report  shall  be  filed within one week thereafter.

Post on 08.03.2016.”

10. Pursuant to the said order of this Court, an advertisement was  issued on 12th February, 2016 in four daily Newspapers.  In response  thereto, initially 9 persons came forward, but ultimately, on or  before the time stipulated in the advertisement, only two offers

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were received by the Trust – one from Ramee Construction Private  Limited  and  the  other  from  the  same  developer  -  M/s  Raunak  Corporation. In a report of the Trustees of the said Trust given to  this  Court,  paragraph  9  set  out  the  relevant  merits  of  the  aforesaid two offers/bids as follows :

Sl. No.

     DESCRIPTION RAMEE  CONSTRUCTIONS  PRIVATE LIMITED      

MESSRS.  RAUNAK  CORPORATION

1. Monetary consideration  payable to the Trust

    Rs.7 crores Rs. 8 crores and  one  

2. Constructed area to be  allotted to the Trust,  free of cost

    4,921.3 sq.ft. 5,040 sq.ft.

3. Constructed/Rehabilita ted area to be offered  to  the  tenants/  occupants,  free  of  cost

    67,332.16 sq.ft. (Excluding  parking  area)

69,166.53 dq.ft.  (Parking will be  made  available  to  the  tenants  as  per  D.C.  Regulations)

4. Monthly  rent  per  sq.foot  offered  to  tenants/occupants  for  availing  of  transit  accommodation  during  the  period  of  redevelopment

Rs.55/- per sq.foot of  carpet area computed @  460  sq.ft.  For  residential tenants

Rs.155/-  per  sq.  foot  of carpet area for non- residential tenants

Rentals  offered  at rates ranging  from Rs.17,500/-  per tenement to  Rs.25,000/-  per  tenement  based  on the areas of  the  existing  tenements.

Rs.100/-  per  sq.foot  of  carpet area for  non-residential  tenants

Also offered to  pay  higher  rentals  if  the  prevailing rates  at the relevant  time are higher;

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alternatively,  have  also  offered  to  provide  transit  accommodation.   

5. Frequency of increases  in  monthly  rent  together  with  the  percentage  of  such  increase

     10% annually 10%  every  11  months

6. Brokerage 1 month's rent 1 month's rent 7. Transportation/  

Shifting Charges Rs.15,000/- Rs.20,000/-

8. Corpus fund to be paid  to  the  tenants/occupants

Rs.7 crores and 90 lacs Rs. 8 crores and  one

9. Amount  of  Bank  Guarantee offered  

Rs.12 crores Rs.12 crores

10. Schedule  for  release  of Bank Guarantee

No schedule furnished

Bank  Guarantee  to  be  furnished  within  11  months from Development  Agreement

Schedule  depicting  phase  wise release of  Bank  Guarantees  furnished.

Bank  Guarantee  to be furnished  upon receipt of  IOD  i.e.  municipal  sanctions

11. Period of validity of  Bank Guarantee

Renewable  upto  completion

Initially for 3  years  and  renewable  upto  possession  

12. Background

Projects  of  2  lakh  sq.feet  or  more  completed in the last  5  (five)  years  together  with  copies  of  Occupation  certificates.

Copies  of  Occupation  Certificates  furnished  in  respect  of  2  commercial buildings in  Mumbai  and  1  Hotel  Building in Pune

Copies  of  Occupation  Certificates  furnished  in  respect  of  51  residential  buildings  in  Thane,  Kandivli  and  Kalyan  aggregating  to

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approx.  21.93  lacs sq.ft.   

11. We have been informed today by learned senior counsel, Mr.  Sanjiv  Sen  appearing  on  behalf  of  Ramee  Constructions  Private  Limited, that his clients have been instructed to go up to Rs.8.20  crores in place of the Rs.7 crore offer made by it.  He, however,  has, on instructions, increased the offer of Rs.7 crores to Rs.10  crores today.       

12. The reason that this Court passed its order dated 5th February,  2016 was only to ascertain as to whether the offer of Rs.6 crores  made by M/s Raunak Corporation was indeed a fair offer at the time  it was made.  Having regard to the fact that 9 persons initially  came forward but they all petered out and ultimately left only  Raunak Corporation and Ramee Constructions Private Limited in the  fray, the fact that Ramee Constructions Private Limited was the  only other bidder which offered a sum of Rs.7 crores about 5 years  after the said offer of Raunak Corporation of Rs.6 crores (which  improved its offer to Rs.7 crores before the Division Bench of the  Bombay High Court) shows that the offer made by Raunak Corporation  appears to be a reasonable one.  We must also remember that the  sale-cum-development  agreement  has  been  entered  into  under  Regulation 33(7) of the Development Control Regulations for Greater  Mumbai, 1991, and  has necessarily to fulfil one condition without  which the sale-cum-development agreement cannot go forward at all –

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it has to contain a minimum of 70% irrevocable written consent of  the occupiers of the old structure.  We have been informed that out  of 105 tenancies of the Trust, 65 consents have been obtained, and  another 11 consents have also been obtained which, however, have  subsequently been revoked. If we were to add these 11 to 65, as  consents  once  given  are  irrevocable,  the  mathematics  of  the  situation would yield a figure of roughly 74% of the occupiers of  the old building.

13. We find that the initial offer itself was a fair offer in the  facts  and  circumstances  stated  above.   However,  we  record  the  statement made by Mr. C.U.Singh, learned senior counsel, that his  client was willing to up that offer from Rs.8 crores that had been  offered  by  him  before  this  Court  to  8.25  crores,  all  other  conditions mentioned in paragraph 9 of the report of the Trustees  remaining the same.  In the facts and circumstances of these cases,  we find that it would be for the benefit of the Trust if the said  offer  is  accepted  by  the  Trustees,  which  acceptance  has,  on  instructions,  been  given  by  Shri  C.A.  Sundaram,  learned  senior  counsel appearing on their behalf.  We, therefore, deem it fit to  allow the present appeals in the aforesaid terms and set aside the  order of the Division Bench of the Bombay High Court.

14. The appeals are, accordingly, disposed of as above with no  orders as to costs.

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15. The application for impleadment is allowed. 16. Pending applications, if any, stand disposed of.

            ........................J.                        (KURIAN JOSEPH)

                 ........................J.                     (ROHINTON FALI NARIMAN)

New Delhi, March 15, 2016

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ITEM NO.61               COURT NO.11               SECTION IX                S U P R E M E  C O U R T  O F  I N D I A                        RECORD OF PROCEEDINGS Petition(s) for Special Leave to Appeal (C)  No(s).  35188/2012 (Arising out of impugned final judgment and order dated  18/10/2012  in LPA No. 103/2012 18/10/2012 in WP No. 11070/2011 passed by the  High Court Of Bombay) DATTATRAYA BABURAO WALAWALKAR & ORS.               Petitioner(s)                                 VERSUS SIDDHIVINAYAK CONSTRUCTION P.LTD.& ORS.            Respondent(s) (with appln. (s) for exemption from filing c/c of the impugned  judgment) (For final disposal) WITH SLP(C) No. 36789/2012 (With appln.(s) for impleadment and Interim Relief and Office  Report) SLP(C) No. 36790/2012 (With appln.(s) for impleadment and Interim Relief and Office  Report) SLP(C) No. 38155/2012 (With appln.(s) for impleadment and Interim Relief and Office  Report) SLP(C) No. 38297/2012 (With appln.(s) for impleadment and appln.(s) for modification of  court's order and Office Report)   Date : 15/03/2016 These petitions were called on for hearing today. CORAM :           HON'BLE MR. JUSTICE KURIAN JOSEPH          HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN For Petitioner(s)                      Ms. Abha R. Sharma,Adv.                       

Mr. C.U. Singh, Sr.Adv.  Mr. Santosh Paul, Adv.  Mr. Arvind Gupta, Adv.  Mr. Vishwas M. Kulkarni, Adv.  Mr. Raghav Shekhar, Adv.

                    Ms. Arti Singh,Adv.

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                       Mr. C.A. Sundaram, Sr.Adv.

Mr. Mahesh Agarwal, Adv.  Mr. Ankur Saigal, Adv.  Mr. Rishabh Parikh, Adv.  Mr. E. C. Agrawala,Adv.

For Respondent(s)                      Mr. Gaurav Agrawal,Adv.                      Ms. Arti Singh,Adv.                                            Mr. Shivaji M. Jadhav,Adv.

Mr. Prashant G. Karande, Adv.  Mr. Anshuman Animesh, Adv.

State of Maharashtra Mr. Rajshri Ashutosh Dubey, Adv.  Mr. Nishant R. Katneshwarkar, Adv.

For applicant  Mr. Sanjiv Sen, Sr.Adv. Ramee Construction  Mr. Sumit Goel, Adv.

Ms. Sanjana Rama Chandran,Adv.  Ms. Akaanksha Mehra, Adv.  

         UPON hearing the counsel the Court made the following                              O R D E R

Leave granted. The  appeals  are  disposed  of  with  no  orders  as  to  

costs in terms of the signed reportable judgment. The application for impleadment is allowed. Pending applications, if any, stand disposed of.

 [RENU DIWAN]     [SUKHBIR PAUL KAUR]   COURT MASTER             A.R.-CUM-P.S.

(Signed reportable judgment is placed on the file)