Judgment:
Karnik D.G., J.
1. Heard.
2. By this writ petition under Article 227 of the Constitution of India, the petitioner challenges the judgment and order dated 28-3-1990 passed by the Joint Charity Commissioner conditionally granting application for extension of time fixed under his previous order under Section 36 of the Bombay Public Trusts Act, 1950 (for short the Act).
3. The respondent No. 1 is the State of Maharashtra and respondent No. 3 is the Joint Charity Commissioner who are formal parties. Respondent No. 2 who is the contesting party is a Trust registered under the Act and is represented by its trustee.
4. On 30-9-1980, the respondent No. 2 Trust made an application under Section 36(1)(a) of the Act for permission to sell three properties of the Trust namely, Survey No. 119 admeasuring 4 acres 14 gunthas, Survey No. 120 admeasuring 6 acres 30 gunthas and Survey No. 121 admeasuring 22 acres 9 gunthas situate at Somthana, Taluka Badnapur, district Jalna. By an order dated 15-2-1982, the Charity Commissioner, Maharashtra State granted permission for sale of the three properties subject to certain conditions. We are not concerned in this petition with the permission for sale of Survey No. 119 and Survey No. 120 and the present petition relates only to the permission for sale of Survey No. 121. By the order dated 15-2-1982 the Charity Commissioner granted permission to the Trust to sell 12 acres 9 gunthas of land out of Survey No. 121 to Anna Dhuraji Patil -- the petitioner herein, at the rate of Rs. 7,000/- per acre and further granted permission to sell 10 acres of land out of Survey No. 121 to Ganesh Tulshiram Patil and Vishnu Tulshiram Patil at the rate of Rs. 7100/- per acre. The Charity Commissioner further directed that the sale deed should be executed within six months or within such further time as may be extended by him, if deemed fit.
5. The petitioner did not pay the consideration of Rs. 85,575/ - (calculated at the rate of Rs. 7000/- per acre for 12 acres 9 gunthas) for purchase of the part of Survey No. 121, within six months. However, he made an application to the Joint Charity Commissioner, Aurangabad to whom the powers of the Charity Commissioner were delegated, for extension of time for completion of the sale. Learned Joint Charity Commissioner was of the opinion that in view of the long period of about six years which had elapsed between initial permission for sale granted under Section 36 of the Act and the application for extension of time, the prices of the land would have gone up substantially. He, therefore, thought that it would not be appropriate to grant extension of time without inviting fresh bids. Accordingly, the Joint Charity Commissioner invited parties to offer fresh bids. It is, however, not clear from the petition whether the fresh bids were invited from the public or whether the present petitioner, and Ganesh Tulshiram Patil and Vishnu Tulshiram Patil who had agreed to purchase parts of Survey No. 121 were alone permitted to bid. In the fresh bid, Ganesh Tulshiram Patil offered price of Rs. 15,000/-per acre but only for 10 acres of land of Survey No. 121. The present petitioner also offered to purchase 10 acres of land out of Survey No. 121 at the rate of Rs. 15,500/-per acre. By an order dated 28-1-1987, learned Joint Charity Commissioner granted permission to the Trust to sell to Vishnu Tukaram Paul 5 acres of land on the western side of Survey No. 121 at the rate of Rs. 15,500/- per acre. He also granted permission to the Trust to sell to the petitioner 5 acres of land of Survey No. 121 adjacent to and lying to the east of the property to be sold to Vishnu Patil, at the rate of Rs. 15,500/ -- per acre. The Joint Charity Commissioner further directed that execution and registration of the sale deed shall be completed within seven days after 28-2-1987.
6. Feeling aggrieved by order of the Joint Charity Commissioner increasing the price to be paid, and reducing the area of the land to be sold the petitioner herein filed a writ petition bearing Writ Petition No. 385 of 1987 in this Court. In the said writ petition, settlement was arrived at between the parties and in view of the settlement, the Court passed the following order
ORDER
In view of the settlement between the petitioner and the respondent No. 3, the impugned order passed by the respondent No. 4 is set aside with a direction to the said respondent to look into the matter afresh. In this background the petition is allowed. The impugned order set aside and the matter remanded for fresh orders after looking into the matter before the respondent No. 4 who should dispose of the matter within the period of three months. In these circumstances of the case the parties are directed to bear their respective costs. After remand, the matter was heard by the Joint Charity Commissioner, Aurangabad, who by his fresh order dated 28-3-1990 again granted permission to the respondent No. 2 Trust to sell to Vishnu Tulshiram Patil 5 acres of land from western boundary of Survey No. 121 at the rate of Rs. 15,500/- per acre. He also granted permission to the Trust to sell to the petitioner 5 acres of land adjacent to and lying to the eastern side of the land to be sold to Vishnu, at the rate of Rs. 15,500/ - per acre. That order of the Joint Charity Commissioner dated 28-3-1990 is impugned in this writ petition.
7. Learned Counsel for the petitioner submitted that the Joint Charity Commissioner lost sight of the fact that initially the Charity Commissioner, Bombay, by his order dated 15-2-1982 had granted permission to the Trust to sell the petitioner 12 acres 9 gunthas of land at the rate of Rs. 7000/- per acre. The application made to the Joint Charity Commissioner, Aurangabad bearing Application No. 9 of 1986 was not for a fresh permission to sell the land but was only for extension of time fixed for completion of the sale. The original order fixed time of six months for completion of sale. As the sale could not be completed within six months, the petitioner had only prayed for the extension of time. The Joint Charity Commissioner, therefore, could have only extended the time or rejected the request. He could not have modified the conditions initially imposed nor could he have increased price or reduced the area to be purchased.
8. Per contra, learned Counsel for the respondent No. 2 submitted that in granting permission for sale of the trust property, the Charity Commissioner must look to the interest of the trust and protect the interest of the ultimate beneficiaries of the Trust. Ordinarily, while granting permission under Section 36 of the Act, time limit is fixed for completion of the sale in order to protect the interest of the Trust and the beneficiaries of the Trust. It is always in the interest of the Trust to get the entire consideration strictly within the time fixed by the Charity Commissioner. If the time for completion of the sale is to be extended for any reason or event even beyond the control of the parties, the Charity Commissioner can and ought to consider whether the prices of the property have gone up in the meanwhile. In order to compensate the trust for the loss likely to be caused by the delay, the Charity Commissioner, while extending the time either award interest for the delayed payment or increase the price or in an appropriate case can even refuse to extend time for sale. What order should be passed by the Charity Commissioner would depend on the facts and circumstances of each case. In the present case, the price of the property had gone up substantially. The very fact that the petitioner himself made an offer to purchase property at Rs. 15,500/- per acre instead of Rs. 7000/ - per acre initially fixed itself was the proof that the prices had gone up. Therefore, the Joint Charity Commissioner has not committed any error in extending the time for completion of sale subject to the payment of enhanced price.
9. In Shailesh Developers and Anr. v. Joint Charity Commissioner Maharashtra and Ors. reported in 2007 (3) Bom. C.R. 7 (F.B.): 2007 (3) Mh. L.J. 717, a Full Bench of this Court has reviewed the law relating to the permission for sale of the trust property to be granted under Section 36 of the Act. In para No. 28 of the decision, the Full Bench has observed While exercising power either under Clause(b) or Clause(c), the Charity Commissioner can impose conditions having regard to the interest, benefit or protection of the trust. Before passing an order of sanction or authorisation, the Charity Commissioner has to be satisfied that the trust property is required to be alienated. Once the Charity Commissioner is satisfied that the alienation of the trust property is necessary in the interest of the trust or for the benefit of the trust or for the protection of the trust, it is very difficult to accept the submission that the power of the Charity Commissioner is restricted either to grant sanction to a particular proposal of the trustees or to reject it. It is the duty of the Charity Commissioner to ensure that the transaction of alienation is beneficial to the trust and its beneficiaries. He has to ensure that the property is alienated to a purchaser or buyer whose offer is the best in all respects. It is not necessary in every case that the Charity Commissioner has to ensure that the property is sold by the trustees to the person offering highest price or consideration. What is the best offer in the interest of the trust will again depend on facts and circumstances of each case. In a given case, while alienating the trust property, the trustees may provide that as a part of consideration for alienation, the purchaser should construct a building on a part of the trust property for the use by the trustees for the objects of the trust. In such a case, it may be necessary to ascertain the reputation and capacity of the purchaser apart from the consideration offered. When the Charity Commissioner is satisfied that trust property needs to be alienated and when he finds that the offer received by the trustees may not be the best offer, he can always direct that bids be invited by a public notice. When a better offer is received in public bidding or auction, it is very difficult to say that die power of the Charity Commissioner is restricted and he cannot enjoin the trustees to sell or transfer the trust property to a third party who has given an offer which is the best in the interest of me trust. The Trustees approach the Charity Commissioner only when they are satisfied that there is a necessity to alienate the trust property. The trustees hold the property for the benefit of the beneficiaries and there fore once they express desire to alienate the property, it is obvious mat Charity Commissioner can always impose condition while granting sanction that the property shall be sold or transferred to a person who has come with an offer which is the best offer in the interests of the trust. The section gives a power to die Charity Commissioner to impose conditions and die said conditions will include a requirement of selling or transferring or alienating the trust property to a purchaser who has offered die best deal having regard to die interest and benefit of die beneficiaries and die protection of the trust. The power to impose conditions cannot be a limited power when the law requires die Charity Commissioner to exercise die said power having regard to die interest, benefit and protection of the trust. Once the Charity Commissioner accepts the necessity of alienating me trust property, die trustees cannot insist that die property should be sold only to a person of their choice though die offer given by die person may not be die best offer. The property may be vesting in die trustees but die vesting is for die benefit of die beneficiaries. The Charity Commissioner has jurisdiction to ensure that the property is sold or transferred in such a manner that the maximum benefits are available to the beneficiaries of the Trust. Under Clause (b) of Section 36 of the said Act, the Charity Commissioner has jurisdiction to decide whether it is in the interest of the trust that the property of the trust be sold or transferred. Once the learned Charity Commissioner is satisfied that the property is required to be transferred or sold in the interest of the Trust the learned Charity Commissioner cannot remain silent spectator when he finds that the transaction proposed by the Trustees is not in the interest of the Trust or its beneficiaries. Once the necessity of sale or transfer is established, the Charity Commissioner can certainly ensure that best available offer is accepted, so that the transaction is for the benefit of the trust. If the trustees were to be the final authority to judge what is in the interest of the Trust, the legislature would not have enacted provision requiring prior sanction. While deciding which is the best offer, the learned Charity Commissioner is bound to take into consideration various factors which cannot be exhaustively listed. However, the paramount consideration is the interest, benefit and protection of the trust. It is obvious from the scheme of Section 36 that legislature never intended that trustees could sell or transfer the trust property vesting in them as if it was their personal property. It is the duty of the Charity Commissioner to ensure that the property should be alienated in such a manner that maximum benefits are accrued to the trust. The Charity Commissioner while considering an application under Section 36(1) of the said Act of 1950, in a given case can opt for public auction or can invite bids. In relation to the locus of a person to challenge the order passed by the Charity Commissioner, the Full Bench in para 29 of its decision has observed:
The second question referred to the Full Bench for decision is regarding locus standi of a person who appears before the Charity Commissioner and offers his bid to challenge the order passed by the Charity Commissioner. The trustees and persons having an interest in the Trust can always challenge the order. We have already held that the proceeding under Section 36 of the said Act before the learned Charity Commissioner is a judicial proceeding. The Apex Court has held that a trust property is on par with a public property so far as its sale or transfer is concerned. It is, therefore, very difficult to say that such a person who appears before the Charity Commissioner and offers his bid has no locus standi to challenge the final order passed by the Charity Commissioner. Such a person will certainly have locus standi to file the petition under Articles 226 and 227 of the Constitution of India for challenging the final order passed under Section 36 of the said Act.
As held by the Full Bench, while granting permission for sale of the trust property, the Charity Commissioner must keep in mind the best interest of the Trust as also the interest of the beneficiaries of the trust because the trustees though are the legal owners, they hold the trust property for benefit of the beneficiaries. They cannot sell the property for their rhyme and permission for sale cannot be granted unless the Charity Commissioner is satisfied that there is necessity to sell the trust property. Once the Charity Commissioner is satisfied that alienation of the property is necessary in the interest of the trust or for the benefit of the trust or for the protection of the trust, the Charity Commissioner can grant permission for alienation. While granting permission to sell, the Charity Commissioner must keep in mind interest of the trust and the beneficiaries. When more than one person are interested in purchasing the property, the Charity Commissioner may be required to choose one of them. The Charity Commissioner while so doing, must also take into account the interest of the trust and beneficiaries. Charity Commissioner is entitled, may be required, to impose conditions while granting permission for sale, so as to protect the interest of the trust and the beneficiaries. One of the conditions which is usually imposed, and in my opinion which ought to be imposed, is put a time limit for completion of sale of the property and in any event for payment of the consideration. It is matter of common knowledge that the price of a property goes up with the passage of time. It would, therefore, be inappropriate to grant permission for sale of the trust property without putting time restriction for completion of the sale and in any event for the payment of the consideration. It is true that generally time for performance of a contract for sale of immovable property is not be an essence of the contract. However, that would not be true if a condition is imposed by the Charity Commissioner for completion of sale within a specified time. Even in case of a private contract it is open for the parties to agree and provide that time for performance of any contract (including a contract for sale of an immovable property) shall be the essence. If so, unless the contrary is proved the time fixed by the Charity Commissioner for completion of sale (and payment of consideration) at the time of grant of permission for sale under Section 36 of the Act must be strictly adhered to and would be the essence of the contract. This is necessary to protect the interest of the trust and the beneficiaries or else, the purchaser can delay the purchase without payment of full consideration and insist the trustees to complete the sale at a later date at the old price, after the price have gone up substantially. The reason for the delay by purchaser in purchasing the property may not always be material. For, it would be easy for a shrewed purchaser to invent some reason and thereby delay the transaction and payment of full consideration after initial payment of small earnest money. Though no general rule can be laid down about the delay in purchase, the Charity Commissioner would be wise in being extremely cautious and slow in extending the time for completion of sale fixed in his order of permission of sale passed under Section 36 of the Act. If the delay is substantial, and the prices of the property has gone up in the meanwhile, the Charity Commissioner would be justified and perhaps required to refuse to extend the time initially fixed by him or increase the price. He would not commit any error if he chooses to invite fresh bids as he has done in the present case. If any of the conditions imposed by Charity Commissioner is breached, then the sale made in breach of the condition shall not be binding on the trust and the beneficiaries.
10. Looked at from this angle, in my view, Joint Charity Commissioner committed no error in taking into consideration long lapse of time between the initial permission and the date of application made for extension of time or even date on which the order on that application is passed. In view of the long lapse of time, in the present case the Joint Charity Commissioner was justified in inviting fresh bids. As stated earlier, the very fact that the fresh bids raised price more than 100 per cent unequivocally shows that the price had gone up in the meanwhile. No error was committed by the Joint Charity Commissioner in refusing to extend the time unconditionally and also in restricting the area agreed to be sold and increasing the price. The area was reduced on account of the fact that the petitioner and other co-bidder themselves had stated that they were interested in purchasing the property situate on the western side only not interested in the area of the eastern side.
11. For the reasons mentioned above, the writ petition is dismissed. Rule is discharged. In the facts and circumstances of the case, the parties shall bear their own costs.