NEELA ASSOCIATES AND ORS Vs. STATE OF GUJARAT AND ORS
LAWS(GJH)-2014-3-227
HIGH COURT OF GUJARAT
Decided on March 06,2014

Neela Associates And Ors Appellant
VERSUS
State Of Gujarat And Ors Respondents

JUDGEMENT

- (1.) THE present LPA is filed by the appellantsoriginal petitioners, who are three in number, viz. (1) Neela Associates, through its partner Shri Indrakant Girdharlal Shah, (2) Pavan Edifice Pvt. Ltd., through its Director Shri Harshad H.Shah and (3) Arcadia Developers, through its partner Shri Bharatkumar Navnitbhai Parikh, being aggrieved by judgment and order dated 02.07.2013 passed by the learned Single Judge in SCA No.10520 of 2013, whereby the learned Single Judge was pleased to dispose of the petition, observing as under: - "2. In the above view of availability of efficacious alternative remedy, I am not inclined to exercise extraordinary jurisdiction under Article 226 of Constitution of India and keeping it open for the petitioners to raise all the available legal and permissible contentions taken in this petition before the appropriate forum in accordance with law."
(2.) THE matter was heard on 08.07.2013 and the Court passed the following order in CA No.6820 of 2013 in LPA No.852 of 2013: - "Heard learned advocate Mr.Amit M. Panchal appearing with Ms.Shivani Rajpurohit for the applicants/ appellants - original petitioners. The learned advocate for the applicants submitted that the Joint Charity Commissioner has granted 60 days time to file appeal against his order in one of the matters, but the said request made by the applicants/ appellantsoriginal petitioners was not considered. The learned advocate for the applicants submitted that the order was passed on 25.04.2013 and consent letters of the persons who were to act as trustees were obtained well in advance. Not only that even the letter -heads of the trust having names of those trustees printed were available on 26.04.201 3 . This i s suggestive of the fact that either these trustees knew in advance about the order and in anticipation they got everything ready which goes to indicate that the Joint Charity Commissioner, for the reasons known to him did not grant time to the applicants/ appellants original petitioners for filing the appeal. 2. RULE. NOTICE as to interim relief returnable on 15.07.2013. Ad interim relief in terms of paras 6(B)(i) and (ii). Direct service is permitted TODAY. 2.1 On the same day, i.e. 08.07.2013, the Court passed the following order in LPA: - "Heard learned advocate Mr.Amit M. Panchal appearing with Ms.Shivani Rajpurohit for the appellants - original petitioners. The learned advocate invited attention of the Court to section 2(10)(d), 50 -A and 72 of the Bombay Public Trusts Act, 1950. Besides, the learned advocate invited attention of the Court to the relevant documents including pages 136 -Z -30, 143 and 146. The matter requires consideration. ADMIT." 2.2 On 09.07.2013, the matter was mentioned in morning and permission was sought to move a Note for Speaking to Minutes and a request was made to suitably modify order dated 08.07.2013. It was prayed that the phrase, i.e., "said request made by the applicants/ appellants - original petitioners was not considered", be substituted by the phrase, "Original petitioners were never given an opportunity to initiate proceedings and apply to the Court under section 72 as aggrieved persons". Besides, the portion, i.e. "for the reasons known to him did not grant time to the applicants/ appellants -original petitioners for filing the appeal" was sought to be deleted. The Court allowed the Note for Speaking to Minutes by the aforesaid substitution and deletion of the aforesaid portion. 2.3 Civil Application No.7242 of 2013 came to be filed, which came up for consideration on 18.07.2013 and the Court (Coram: Hon'ble Mr.Justice Jayant Patel and Hon'ble Mr.Justice Z.K.Saiyed) passed a detailed order, relevant part of which reads as under: - "6. In our view, it prima facie appears that the direction issued vide order dated 08.07.2013 in Civil Application No.6820 of 2013 deserves to be modified at this stage to the extent that the new trustees may be allowed to continue to hold the office and the aspect as to whether new trustees should be removed from the office or any person other than new trustees or old trustees should be allowed to resume the management of the Trust, can be decided by the Regular Bench taking up the Letters Patent Appeal. Hence, the following order: - The ad -interim -order dated 08.07.2013 is clarified to the extent that so far as suspension of the Scheme is concerned, the same shall stand modified to the extent that the new trustees shall be permitted to continue with the management of the Trust but with the further rider that they shall not take any policy decision or shall not take any further action for implementation of the new Scheme which is the subject matter of the petition before the learned Single Judge as well as before the Division Bench in the Letters Patent Appeal. The other aspects may be decided by the Regular Bench. For consideration of other aspects, matter is adjourned to 25.07.2013. 2.4 The matter came up for consideration before this Court on 25.07.2013 and the Court passed the following order: - "After the matter is heard form some time, i.e. Civil Application No.7242 of 2013, it is deemed proper that Letters Patent Appeal No.852 of 2013 be fixed for final hearing at the earliest. On the request of learned advocates for the parties, Registry is directed to list this Letters Patent Appeal with all other relevant matters i.e. civil applications on 1st August, 2013 peremptorily. In view of the fact that Letters Patent Appeal is ordered to be listed for final hearing on 1st August, 2013, at the request of learned advocates, the order passed in this Civil Application No.7242 of 2013 on 18th July, 2013 is ordered to continue with the consent of outgoing trustees. So far as contention raised by appellants in Civil Application No.7242 of 2013 in Civil Application No. 6820 of 2013 in Letters Patent Appeal No. 852 of 2013 in Special Civil Application No.10520 of 2013 recorded in paragraph No.5 of the order of 18th July, 2013 is kept open. 2.5 At this juncture, it will be appropriate to reproduce para -5 of order dated 18.07.2013 in CA No.7242 of 2013. Para -5 reads as under: - "5. Whereas, Mr. Panchal, learned counsel appearing for the original appellant has submitted that his client is not desirous to continue old trustees or new trustees, but he is desirous to see that the management of the Trust is given to a person who will take appropriate care in the interest of the property and objects of the Trust. Therefore, he has submitted that the matter may be examined accordingly." 2.6 Shri K.J.Mehta Kshay Nivaran Hospital and two others original respondent Nos.4, 11 and 19 filed Civil Application No.7708 of 2013 praying that: - "27. (B) To revoke /recall order dated 08.07.2013 passed by the Hon'ble Court in L.P.A. No.852 of 2013 in S.C.A. No.10520 of 2013 admitting the said L.P.A. in view of the fact that the first proceedings of SCA No.10520 of 2013 is itself a petition under Art.227 of the Constitution of India challenging the order of subordinate authority directly in the High Court which requires serious adjudication of disputed questions of facts and against the order dismissing such petition, L.P.A. is not maintainable for the reasons stated in the Memo of Civil Application and in the interest of justice;" 2.7 This Civil Application came up for consideration on 25.07.2013 and the Court passed the following order: - "In view of the order passed in Letters Patent Appeal No.852 of 2013, learned senior advocate, Mr.B.B.Naik, appearing for the applicants doe s not press this applicatio n . Application i s disposed of accordingly. Liberty is reserved in favour of the applicants to revive the application in the event the Letters Patent Appeal is not heard in reasonable time." 2.8 The matter was heard from time to time and during the course of hearing, on 23.08.2013, the Court passed the following order: - "1. During the course of argument, learned senior advocate, Mr.B.B.Naik, brought to the notice of the Court that the property of K.J.Mehta T.B. Hospital Trust was mortgaged with State Bank of India and in this regard, he invited the attention of the Court to page Nos.283 of the paper book. Interestingly, page No.283, is a certificate issued by State Bank of India of Manusar Branch, 115 -116, ELS Tower, GIDC Manusar, Tal. Savli, District: Baroda. This Certificate is dated 15.7.2013 and the contents of the Certificate are as under: "TO WHOMSOEVER IT MAY CONCERN This is to certify that M/s.K.J.Mehta T.B. Hospital is enjoying overdraft facilities. We had received advice from K.J.Mehta T.B. Hospital dtd. 24.4.2013 for settling overdraft account with our Manjusar Branch. On 27.4.2013, we have received fund through RTGS (Real Time Gross Settlement) and settled the overdraft account of K.J.Mehta T.B. Hospital. This certificate is issued as per the request". 2. It will be worth noting here that the judgment and order of the Charity Commissioner is dated 25th April, 2013. 3. The learned senior advocate also invited the attention of the Court to page No.284, which is also Certificate issued by Union Bank of India, Karelibaug Branch, Shop No.1 to 4, Shrusti Avenue, Opp. Amrapali Complex, Karelibaug, Baroda -390018. This certificate is also incidentally of the same date i.e. 15.7.2013 and the contents of the Certificate are as under: "TO WHOM SO EVER IT MAY CONCERN This is to certify that M/s. K J Mehta TB Hospital Trust is having current account with us. They had given us request for RTGS transaction of Rs.1,50,00,000/ - (Rs.One Crore Fifty Lacs Only) on 25.4.2013 after business hours. The transaction was executed on 27.4.2013. They have done above mentioned transaction by cheque No.51021661, dated 25.4.2013". 4. A copy of "Deed of Mortgage without possession" is also made available for perusal. The "deed of Mortgage without possession" is executed by State Bank of India through its Branch office at "Industrial Finance Branch, Marble Arch, Racecourse Road, Vadodara". 5. In light of these documents, this Court deems it necessary that these Banks should be before this Court to explain not only the contents of these documents but also the details of the transaction/s as the same will have a direct bearing on the subject matter of the matter. 6. Learned senior advocate also invited the attention of the Court to one another important aspect that, there was an attempt for amalgamation of "K.J.Mehta TB Hospital Trust" with "Sumandeep Vidhyapith", Waghodia, District: Vadodara. It is pointed out that there was an MoU for amalgamation but than Charity Commissioner did not grant necessary approval and therefore, amalgamation could not take place. There is yet another important fact is coming on record and that is about mortgage of the property of "K.J.Mehta TB Hospital Trust". The property of "K.J.Mehta TB Hospital Trust" consists of land granted by the erstwhile Ruler of State of Bhavnagar and the State Government. The land was granted on lease, if that is so, whether that land could have been mortgaged with the Bank for obtaining any overdraft or loan facility? 7. None of the learned advocates for the parties has objected to the Banks / Branches being impleaded as parties. 8. Registry is directed to issue Notice to aforesaid three Banks / Branches at the address stated herein above returnable on 29th August, 2013. 9. Newly added Banks / Branches to furnish the details of the transaction referred to in page No.283 and 284 and the "mortgage deed without possession", on the returnable date. 10. Learned senior advocate, Mr.N.D.Nanavati, appearing for respondent Nos.26 to 30 states that he will instruct his clients to produce (i) the Bank accounts and other relevant material regarding (ii) the change in the Trust on the next date of hearing. 11. At the request of learned advocate, Mr.Panchal, direct service is permitted TODAY, to be effected by the appellants." 2.9 Hearing of the matter got adjourned from time to time on one ground or the other. 2.10 In the course of hearing of the matter, the Court passed the following order on 31.01.2014: - "1. As the order passed by In -Charge Joint Charity Commissioner, Saurashtra and Kutch Department, Rajkot dated 25.4.2013 is under consideration of this Court and this Court is, prima -facie, of the opinion that certain aspects of the lapses on the part of the In - Charge Joint Charity Commissioner are required to be answered. The learned advocate Mr.Upadhyay was asked to clarify the same. 2. Learned advocate, Mr.Upadhyay, submitted that they can be answered by Mr.C.J.Patel who has passed that order as In -charge Joint Charity Commissioner on 25.4.2013. In view of that, it is necessary to implead Mr.C.J.Patel as party respondent so that he is able to give reply to the same. Learned advocate for the appellant to implead Mr.C.J.Patel as party respondent in his personal capacity. 3. Notice to newly added respondent returnable on 6th February, 2014. Direct service is permitted. Amendment shall be carried out during the course of the day. 4. Learned advocate, Mr.Upadhyay for the Joint Charity Commissioner for respondent No.3 in LPA No.852 of 2013 shall make available for perusal the record pertaining to K.J.Mehta Kshay Nivaran Hospital Trust particularly, the PTR i.e. Public Trust Register as one of the dispute is that, notices required under Section 50A of the Bombay Public Trust Act, 1950 were issued to Trustees whose names appeared in the PTR. In view of the provision to the effect that the Charity Commissioner can come to a conclusion that a scheme is required to be framed in the given matter but that conclusion is to be reached only after giving Trustees of such Trust due opportunity of being heard." 2.11 The newly added respondent Mr.C.J.Patel, the then In -charge Joint Charity Commissioner remained present before the Court on 06.02.2014 and learned Senior Advocate Mr.S.I.Nanavati with learned Advocate Mr.Sanjeev Dave sought time to file reply to the averments made in the LPA alleging lapses on the part of the In -charge Joint Charity Commissioner. The request was granted and the matter was adjourned to 10.02.2014. 2.12 Finally, the arguments concluded on 20.02.2014 and the matter was ordered to be listed for dictation of judgment on 21.02.2014. 2.13 The dictation could not be taken up on account of other matters requiring urgent attention of the Court. The matter is now taken up for dictation of judgment.
(3.) THE controversy involved in the matter revolves around Section 50A of the Bombay Public Trusts Act ("the Act" for short). Section 50A was read, reread and reread for umpteen number of times by almost every learned Senior Advocate appearing in the matter, be it for the appellants, be it for respondents, be it for the new Trustees, be it for outgoing Trustees, be it for the Charity Commissioner, Gujarat State or be it for the Incharge Joint Charity Commissioner, who passed the order impugned dated 25.04.2013. In this regard, it will be appropriate to reproduce Section 50A. Section 50A reads as under: - "50A. (1) Notwithstanding anything contained in section. 50, where the Charity Commissioner has reason to believe that, in the interest of the proper management or administration of a public trust, a scheme should be settled for it, or where two or more persons having interest in a public trust make an application to him in writing in the prescribed manner that, in the interest of the proper management or administration of a public trust, a scheme should be settled for it, the Charity Commissioner may, if, after giving the trustees of such trust due opportunity to be heard, he is satisfied that it is necessary or expedient so to do, frame a scheme for the management or administration of such public trust. (2) XXX XXX XXX. [(2A) A scheme under this section may provide for the number of trustees, the mode of appointment of trustees including the appointment of the first trustees, vesting of the trust property in the trustees so appointed, mode of filling any vacancy of a trustee the remuneration of a trustee or manager of the public trust and where necessary, a clarification of the objects of the public trust.]. (3) The Charity Commissioner may, at any time, after hearing the trustees, modify the scheme framed by him under subsection (1) or subsection (2). (4) The scheme framed under subsection (1) or subsection (2) or modified under subsection (3) shall, subject to the decision of the competent court under section 72, have effect as a scheme settled or altered, as the case may be, under a decree of a Court under section 50.]" 3.1 At this juncture, it will be appropriate to refer to Section 72 of the Act. Section 72 of the Act reads as under: - "72. (1) Any person aggrieved by the decision of the Charity Commissioner under section 40, 41 (41C and 43 (2) (a) and (c) (50A) (70 or 70 A) or on the questions (whether a trust exists and whether such trust is a public a trust) or 91 whether any property is the property of such trust may, within sixty days from the date of the decision, apply to the court to set aside the said decision. (1A) XXX XXX XXX. (2) XXX XXX XXX. (3) Pending the disposal of an application under subsection (2) all proceedings for surcharge shall be stayed if the person aggrieved makes out a prima facie case for a stay order. (4) An appeal shall lie to the High Court, against the decision of the court under subsection (2) as if such decision was a decree from which an appeal ordinarily lies. [Explanation -In this section, the expression "decision" shall include a scheme framed or modified under section 50 A.]" 3.2 At this juncture, it will be appropriate to refer to Section 2(8) of the Act, which defines, 'manager'. The said Clause -(8) reads as under: - (8) "Manager" means any person (other than a trustee) who for the time being either alone or in association with some other person or persons administers the trust property of any public trust and includes - (a) in the case of a math, the head of such math, (b) in the case of a wakf, a mutawalli of such wakf, (c) in the case of the society registered under the Societies Registration Act, 1860, its governing body, whether or not the property of the society is vested in a trustee." 3.3 Definition of the, 'person having interest' is contained in Section 2(10) of the Act, which reads as under: - "(10) "Person having interest" includes (a) in the case of a temple, person who is entitled to attend at or is in the habit of attending the performance of worship or service in the temple, or who is entitled to partake or is in the habit of partaking in the distribution of gifts thereof, (b) in the case of a math, a disciple of the math or a person of the religious persuasion to which the math belongs, (c) in the case of wakf, a person who is entitled to receive any pecuniary or other benefit from the wakf and includes a person who has right to worship or to perform any religious rite in a mosque, idgah, imambara, dargah, maqbara or other religious institution connected with the wakf or to participate in any religious or charitable institution under the wakf, (d) in the case of a society registered under the Societies Registration Act, 1860, any member of such society, and (e) in the case of a society registered under the Societies Registration Act, 1860, any member of such society, and (e) in the case of any other public trust, any trustee or beneficiary;" 3.4 Definition of 'Public Trust' is contained in Section 2(13) of the Act, which reads as under: - "(13) "Public Trust" means an express or constructive trust for either a public, religious or charitable purpose or both and includes a temple, a math, a wakf, church, synagogue, agiary or other place of public religious worship, [a dharmada] or any other religious or charitable endowment and a society formed either for a religious or charitable purpose or for both and registered under the Societies Registration Act, 1860." The matter is heavily contested by newly appointed Trustees and the outgoing Trustees.;


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