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of <h1>Supreme Court restores District Court's decision in property sale case with charity trust approval</h1> <h3>TRIBHOVANDAS PURSHOTTAMDAS THAKKAR Versus RATILAL MOTILAL PATEL</h3> The Supreme Court allowed the appeal, setting aside the High Court's order and restoring the District Court's decision. It held that the sale of mortgaged ... - Issues Involved:1. Validity of the sale of mortgaged property belonging to a public trust without the sanction of the Charity Commissioner under Section 36 of the Bombay Public Trusts Act.2. Compliance with Order 21 Rule 89 of the Code of Civil Procedure for setting aside the sale of the mortgaged property.3. Judicial propriety and the binding nature of precedents in the context of the judgment delivered by a Single Judge of the High Court.Issue-wise Detailed Analysis:1. Validity of the Sale of Mortgaged Property without Charity Commissioner's Sanction:The primary issue was whether the sale of the mortgaged property belonging to a public trust, executed without the prior sanction of the Charity Commissioner, was valid under Section 36 of the Bombay Public Trusts Act. Section 36(a) of the Act states that no sale, mortgage, exchange, or gift of any immovable property belonging to a public trust shall be valid without the previous sanction of the Charity Commissioner.The High Court of Gujarat, through Raju, J., held that the sale of the mortgaged property without such sanction was invalid. However, the Supreme Court disagreed with this view, stating that the transactions contemplated under Section 36(a) are voluntary transactions made by the trustees. The Court clarified that the term 'sale' in this context does not include a court-ordered sale in execution of a decree. The Supreme Court emphasized that the section imposes a restriction on the powers of the trustees but does not confer overriding authority on the Charity Commissioner over actions of the Civil Court executing a decree.2. Compliance with Order 21 Rule 89 of the Code of Civil Procedure:The second issue was whether the trustees complied with the requirements of Order 21 Rule 89 of the Code of Civil Procedure, which allows for setting aside a sale of immovable property in execution of a decree. The rule requires the applicant to deposit in court a sum equal to five percent of the purchase money for payment to the auction purchaser and the amount specified in the proclamation of sale for payment to the decree-holder.In this case, the trustees deposited Rs. 250 for payment to the auction purchaser and Rs. 63 for payment to the decree-holder. However, the mortgagee's claim was not satisfied by this deposit. The Supreme Court held that the trustees failed to fulfill the second condition of depositing the amount specified in the proclamation of sale. The Court rejected the argument that the mortgagee's agreement to abandon the execution proceeding was equivalent to payment to the decree-holder. The Court emphasized that Rule 89 is intended to allow the judgment-debtor to satisfy the claim of the decree-holder and compensate the auction purchaser, not to defeat the claim of the auction purchaser.3. Judicial Propriety and Binding Nature of Precedents:The judgment also addressed the issue of judicial propriety and the binding nature of precedents. Raju, J., had expressed the view that he was not bound to follow precedents set by Single Judges or Division Benches of the High Court, or even by Full Benches if the Full Bench judgment was given on a reference made by a Single Judge or Division Bench. He argued that such judgments had 'no existence in law.'The Supreme Court strongly disagreed with this view, stating that such observations subvert the accepted notions about the force of precedents in the judicial system. The Court emphasized that precedents enunciating rules of law form the foundation of the administration of justice and that a Single Judge is ordinarily bound to accept judgments of courts of coordinate jurisdiction and higher authority. The Court highlighted the importance of uniformity and certainty in the law and criticized the notion that a Single Judge could ignore binding precedents.The Supreme Court reiterated that judicial propriety and decorum require a Single Judge to refer matters to a Division Bench or the Chief Justice if he believes that an earlier decision needs reconsideration. The Court emphasized that ignoring precedents undermines the utility of the law and creates uncertainty.Conclusion:The appeal was allowed, and the order passed by the High Court was set aside, restoring the order of the District Court. The Supreme Court's judgment underscored the importance of adhering to statutory requirements for setting aside sales in execution of decrees and maintaining judicial propriety by following binding precedents. The Court clarified the scope of Section 36 of the Bombay Public Trusts Act and reinforced the procedural requirements under Order 21 Rule 89 of the Code of Civil Procedure.
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