DINSHAW RUSI MEHTA AND ANR. Vs. STATE OF MAHARASTRA AND ORS.
Supreme Court of India (Division Bench (DB)- Two Judge)
Appeal (Civil), 4375 of 2017, Judgment Date: Mar 22, 2017
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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