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Tuesday, March 28, 2017

for quashing and setting aside the judgment/order dated 06.08.2011 passed by the Charity Commissioner-respondent No.2 herein vide which the Charity Commissioner has granted permission to the respondents under Section 36 of the Bombay Public Trusts Act 1950 on the conditions stipulated therein.- In the light of foregoing discussion and further having regard to the nature of controversy and lastly, keeping in view the manner in which the parties prosecuted this litigation against each other, we are inclined to dispose of this appeal with observations and certain directions mentioned infra which we consider are apposite in the facts of the case. 23) First, the scheme/agreement in question would not be given effect to by the parties in the light of respondent No. 18 (KHPL)’s two letters dated 03.11.2015 and 17.11.2011; 24) Second, the BPP and PLIH would be at liberty to enter into any other arrangement, scheme etc. in relation to the land/hospital in question, if they so consider it to be just and proper and in the interest of the Trusts/beneficiaries with any person, body, Corporate, organization, firm etc. If the Trust(s) resolves to do so, then it will be given effect to after ensuring all necessary compliances/formalities/ requirements contained in the Trust Deed and the Act and after obtaining necessary approval from the Charity Commissioner as required under the Act; 25) Third, we have not expressed any opinion regarding issue of the termination of the agreement made by respondent No. 18 - KHPL qua BPP/PLIH and vice versa because it was not the subject matter of this litigation. 26) We, therefore, leave the parties to get their rights decided against each other arising out of the agreement, if any, in appropriate forum in accordance with law; and 27) Fourth, the Trustees will take all decisions in relation to the affairs of the Trust keeping in view the directions of the author of the Trust after ensuring compliance of the provisions of the Act and after obtaining due approval of the competent authority from time to time;- a Trust is an obligation arising out of confidence reposed in the Trustee(s) that he/they would discharge it faithfully for the benefit of the Trust and its beneficiaries.When the Trustee accepts the confidence so reposed in him, it becomes his duty to do everything in compliance with the author's wish and to do nothing that may amount to betrayal of the confidence so reposed on him. In other words, it is the duty of every Trustee whether jointly or/and severally to fulfill the object and the purpose of the Trust and obey the directions of the author of the Trust given at the time of its creation. This is his moral as well as legal duty recognized under the Act.We have noticed from the record that the Trustees who belong to Parsi community enjoy high status in the society and are persons of eminence in their respective fields. There should, therefore, be no reason as to why any trustee should try to cause any harm to the interest of the Trust(s) or for that matter should act prejudicially and against the interest of the Trust.There may be difference of views when issues relating to the affairs of the Trust are debated amongst the Trustees but what should be the uppermost behind everyone's viewpoint is "interest of the Trust and the beneficiaries" while projecting everyone's viewpoint. That would be, in our opinion, his real selfless service to the Trust and its beneficiaries. It will bring good for the Trust and its beneficiaries.We hope that the Trustees would keep in mind these observations while discharging individual and collective duties and every Trustee would ensure that the Trust is able to do charity in letter and spirit for the good of humanity-Indeed that being the only wish of the creator/author while forming the Trust.


REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION


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


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

                             VERSUS

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


                               J U D G M E N T

Abhay Manohar Sapre, J.
1)    Leave granted.
2)    This appeal is filed  against  the  final  judgment  and  order  dated
30.04.2015 passed by the High Court of Bombay in Writ Petition (c)  No.  938
of  2013  whereby  the  High  Court  rejected  the  petition  filed  by  the
appellants herein for quashing and setting aside  the  judgment/order  dated
06.08.2011 passed by the Charity Commissioner-respondent  No.2  herein  vide
which the Charity Commissioner has granted  permission  to  the  respondents
under Section 36 of the Bombay Public Trusts  Act  1950  on  the  conditions
stipulated therein.
3)    We herein set out the  facts,  in  brief,  to  appreciate  the  issues
involved in this appeal.
4)    There is one  public  and  charitable  Trust  called  "Parsi  Lying-in
Hospital" (hereinafter referred to as “PLIH”) having its office at  A.K.Naik
Marg, Fort Mumbai. The Trust is  registered  under  the  provisions  of  the
Bombay Public Trusts Act,1950-now  substituted  by  the  Maharashtra  Public
Trusts Act (hereinafter referred to as "The Act”).

5)    The PLIH owned a  land  admeasuring  1,294  sq.  yards  together  with
garden of 624 sq. yards on C.S. Nos. 741 and 742, Flora Fountain at  Mumbai.
The Secretary of State for India in Council had allotted this land  to  PLIH
for a period of 99 years by executing  Indenture  of  Lease.  The  land  was
allotted for setting up a charitable Hospital in Bombay. In accordance  with
the terms of the grant, the PLIH  constructed  charitable  Hospital  on  the
land and  continued  its  activities  for  few  years  after  making  it  an
operational.
6)    On 01.02.1924, PLIH resolved to transfer the said Hospital to  another
Public Trust called "Parsi Punchayet  Funds  and  Properties,  Bombay"  also
known as "Bombay Parsi Punchayet" (hereinafter referred to  as  "BPP”).  The
transfer resolved was approved by the Bombay High  Court  vide  order  dated
01.02.1924 in Suit No.126 of 1924.  The  Government  of  Bombay  vide  their
resolution No.5628 dated 01.04.1924 granted sanction  to  the  transfer  and
accordingly executed a lease deed in  favour  of  BPP  in  relation  to  the
aforementioned land.
7)    Insofar as the Management of the Hospital was concerned, one  Managing
Committee of PLIH used to look after its day-to-day management.  It  may  be
mentioned that some Trustees of BPP   also  used  to  be  on  the  Board  of
Trustees of PLIH as their Trustees.
8)    The Hospital continued its activities for few years and then  remained
closed for a  long  time  for  various  reasons.  The  Trust  through  their
Trustees then  decided  to  re-start  the  Hospital  in  collaboration  with
others, who are expert in running and managing the Hospital.
9)    With this objective in forefront, the Managing Committee  of  PLIH  on
22.03.2011 entered into a lease agreement with one  company  called  Krimson
Health Ventures Private Limited (for short called “KHPL”). In terms of  this
agreement, KHPL  was  permitted  to  renovate/rebuild  one  super  specialty
hospital at their cost on the leased land. The agreement  contained  several
terms and conditions on which the project was to  be  accomplished.  It  is,
however, not necessary to set out the details of the agreement which has  no
bearing over the issue involved in the appeal.
10)   The Trustees of PLIH then  applied  to  the  Charity  Commissioner  of
Bombay under the Act for grant of approval  to  the  aforementioned  scheme/
agreement. By order dated 08.07.2011,  the  Assistant  Charity  Commissioner
granted approval to the Scheme/agreement. By  another  judgment/order  dated
06.08.2011, the Charity Commissioner  accorded  approval  to  the  PLIH  for
execution of lease deed in favour of KHPL to enable it to start the work.
11)   This grant of approval, as mentioned above, gave rise  to  litigation.
One group of the Trustees of BPP filed a writ petition in the High Court  of
Bombay, out of which  this  appeal  arises,  challenging  the  legality  and
validity of the Scheme and the approval granted by the Charity  Commissioner
for the use of land/hospital. The challenge was  founded  on  grounds  inter
alia with a prayer to declare the scheme/agreement and the order of  Charity
Commissioner/Assistant Commissioner  as  being  bad  in  law  as  the  same,
according to the writ petitioners, was not in the  larger  interest  of  the
Trust.
12)   By impugned order dated 30.04.2015, the High  Court  disposed  of  the
writ petition and, in effect, upheld  the  scheme  and  the  orders  of  the
Assistant Commissioner/Commissioner.
13)   It is against this order of the High Court, the writ petitioners  (one
group of Trustees) felt aggrieved and carried the matter to  this  Court  in
this appeal by special leave. In the  meantime,  the  term  of  one  Trustee
(writ petitioner) expired. He is, therefore,  no  longer  on  the  Board  of
Trustees of PLIH.
14)   Heard Mr. Shyam Divan, learned senior counsel for the  appellants  and
Mr. C.U. Singh, Mr. Dushyant Dave and Mr. K. Radhakrishnan,  learned  senior
counsel for the respondents.
15)    Learned senior counsel appearing for the  respective  parties  argued
several legal and factual points trying to justify their stand taken in  the
writ petition  including  making  allegations  and  counter  allegations  by
highlighting the conduct of rival groups of the Trustees and tried  to  show
as to how these groups pursued their stand and caused  injury  and  loss  to
the Trust, Trustees and its beneficiaries.
16)   On the other hand, an  attempt  was  made  by  another  group  of  the
Trustees to show  that  the  scheme/agreement  was  conceived  in  the  best
interest of the Trust and was rightly upheld  by  the  Charity  Commissioner
and the High Court.
17)    Having heard the learned Counsel for the parties  at  length  and  on
perusal of the record of the case, we are of the  opinion  that  it  is  not
necessary for this Court to decide any of the points urged  by  the  learned
counsel on account of certain subsequent events which took place during  the
pendency of this litigation. In our opinion, the subsequent  events  brought
to our notice have a direct bearing over the controversy  involved  in  this
case and hence they deserve to be taken note of for deciding the appeal.
18)    During the pendency  of  the  litigation,  KHPL-  respondent  No.  18
herein, in whose favour the transfer  of  land  was  made  by  BBP/PLIH  for
setting up a new hospital informed the  BBP/PLIH  vide  their  letter  dated
03.11.2015 and 17.11.2011 that KHPL is now no more interested in  continuing
with the project for the  reasons  mentioned  in  their  letters.  By  these
letters, KHPL terminated  the  agreement.  These  letters  were  replied  by
BPP/PILH vide letter dated 22.12.2011.
19)   Be that as it may, in our opinion, when the scheme/agreement  impugned
in this litigation stands terminated and is not being  given  effect  to  by
the parties (may  be  for  any  reason  with  which  we  are  not  presently
concerned in this litigation) or in other words  when  the  scheme/agreement
cannot now be given effect to due to parties’ own volition, there  does  not
arise any need for this Court to  decide  its  legality  or  correctness  on
merits.
20)   When the impugned scheme/agreement no longer subsists and  not  alive,
there is no occasion to decide its legality and correctness  on  legal  side
because any decision, even  if  rendered,  would  be  of  no  avail  to  the
parties.
21)   It is for this reason, we decline to examine the points urged in  this
appeal and express  no  opinion.  Indeed,  in  such  circumstances,  in  our
opinion, the writ petition out of which  this  appeal  arises  has  rendered
infructuous for all practical purposes.
22)   In the light of foregoing discussion and further having regard to  the
nature of controversy and lastly, keeping in view the manner  in  which  the
parties prosecuted this litigation against each other, we  are  inclined  to
dispose of this appeal with observations and  certain  directions  mentioned
infra which we consider are apposite in the facts of the case.
23)    First, the scheme/agreement in question would not be given effect  to
by the parties in the light of respondent No. 18 (KHPL)’s two letters  dated
03.11.2015 and 17.11.2011;
24)    Second, the BPP and PLIH would be at liberty to enter into any  other
arrangement, scheme etc. in relation to the land/hospital  in  question,  if
they so consider it to be just  and  proper  and  in  the  interest  of  the
Trusts/beneficiaries with any person, body,  Corporate,  organization,  firm
etc. If the Trust(s) resolves to do so, then it  will  be  given  effect  to
after   ensuring   all   necessary   compliances/formalities/   requirements
contained in the Trust Deed  and  the  Act  and  after  obtaining  necessary
approval from the Charity Commissioner as required under the Act;
25)    Third, we have not expressed  any  opinion  regarding  issue  of  the
termination of the agreement made by  respondent No. 18 - KHPL qua  BPP/PLIH
and vice versa because it was not the subject matter of this litigation.
26)   We, therefore, leave the parties to get their rights  decided  against
each other arising out of the agreement, if any,  in  appropriate  forum  in
accordance with law;  and
27)   Fourth, the Trustees will  take  all  decisions  in  relation  to  the
affairs of the Trust keeping in view the directions of  the  author  of  the
Trust after ensuring compliance of the  provisions  of  the  Act  and  after
obtaining due approval of the competent authority from time to time;
28)   Before parting, we consider it apposite to observe that a Trust is  an
obligation arising out of confidence reposed in the Trustee(s) that  he/they
would discharge  it  faithfully  for  the  benefit  of  the  Trust  and  its
beneficiaries.
29)   When the Trustee accepts the confidence so reposed in him, it  becomes
his duty to do everything in compliance with the author's  wish  and  to  do
nothing that may amount to betrayal of the confidence so reposed on him.
30)   In other words, it is  the  duty  of  every  Trustee  whether  jointly
or/and severally to fulfill the object and the  purpose  of  the  Trust  and
obey the directions of the author of the Trust given  at  the  time  of  its
creation. This is his moral as well as legal duty recognized under the  Act.

31)   We have noticed from the record that the Trustees who belong to  Parsi
community enjoy high status in the society and are persons  of  eminence  in
their respective fields. There should, therefore, be no  reason  as  to  why
any trustee should try to cause any harm to the interest of the Trust(s)  or
for that matter should act prejudicially and against  the  interest  of  the
Trust.
32)   There may be difference of views when issues relating to  the  affairs
of the Trust are debated  amongst  the  Trustees  but  what  should  be  the
uppermost behind everyone's viewpoint is "interest  of  the  Trust  and  the
beneficiaries" while projecting everyone's viewpoint. That would be, in  our
opinion, his real selfless service to the Trust and  its  beneficiaries.  It
will bring good for the Trust and its beneficiaries.
33)   We hope that the Trustees would keep in mind these observations  while
discharging individual and collective duties and every Trustee would  ensure
that the Trust is able to do charity in letter and spirit for  the  good  of
humanity-Indeed that  being  the  only  wish  of  the  creator/author  while
forming the Trust.
34)    Learned counsel for the  respondents  by  referring  to  order  dated
13.10.2015 passed by this Court  lastly urged  that  heavy  cost  should  be
imposed on the appellants (writ petitioners) because they dragged the  Trust
and the Trustees in this fruitless litigation which caused loss  and  injury
to the Trust.
35)   However, keeping in view our observations  made  supra  and  the  fact
that we have declined to examine the  issues  on  merits,  we  refrain  from
imposing any cost on any party to the appeal.
36)   With these observations/directions,  the  appeal  stands  disposed  of
finally.

                       ………...................................J.
                                  [R.K. AGRAWAL]




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


      New Delhi,
      March 22, 2017
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