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Thursday, December 13, 2012

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 belonging to it. = 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 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. - 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 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.


                                                                  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
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,  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 –


           (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  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 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 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 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  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.
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.
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:
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 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 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:
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 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  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 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.
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  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 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 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 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  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 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 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
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 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