2011 (6) TMI 936 - HC - Indian Laws

Court overturns Commissioner's orders on Transferable Development Rights, deeming them immovable property. Reconsideration directed under Section 36.

Sadoday Builders Private Ltd. Versus Jt. Charity Commissioner, Nagpur and others

The court set aside two orders by the Joint Charity Commissioner regarding the sale of Transferable Development Rights (TDR). It was held that TDR ... Writ petition under Articles 226 and 227 - rejected the proposed sale of Transferable Development Rights (TDR) - sale of TDR which is moveable property - permission of the Charity Commissioner is not required u/s 036(1)(c) of the Bombay Public Trusts Act, 1950 - HELD THAT:- The Division Bench has held that since TDR is a benefit arising from the land, the same would be immoveable property and therefore, an agreement for use of TDR can be specifically enforced. The said dictum of the Division Bench is later on followed by a learned single Judge of this court in the matter of Jitendra Bhimshi Shah ..vs.. Mulji Narpar Dedhia HUF and Pranay Investment and ors [2009 (3) TMI 1072 - BOMBAY HIGH COURT]. The learned judge relying upon the judgment of the Division Bench in Chheda Housing Development Corporation [2007 (2) TMI 664 - BOMBAY HIGH COURT] has held that the TDR being an immovable property, all the incidents of immovable property would be attached to such an agreement to use TDR. In view of the judgments of this court, in my view, the order of the Charity Commissioner that no permission under Section 36 is required as TDR is a movable property cannot be sustained and therefore, the application filed by the respondent no.2 - Trust u/s 036 of the said Act would have to be considered on the touch stone of the said Section 036 and also on the touch stone of the principles applicable to such a sale by a Trust. In my view, therefore, the order dated 3/8/2009 is also required to be set aside and the objections of the petitioners would have to be considered de novo, in the context of the fact that the permission is now required and that the said applications would have to be considered by the Joint Charity Commissioner on the touch-stone of Section 036 of the Act. Hence, both the impugned orders dated 3/8/2009 and 12/7/2010 would have to be set aside and the directions are issued. Issues:Challenge to two orders passed by the Joint Charity Commissioner regarding the sale of Transferable Development Rights (TDR) and the requirement of permission under Section 36 of the Bombay Public Trusts Act, 1950.Analysis:1. The petitioners challenged two orders passed by the Joint Charity Commissioner regarding the sale of TDR. The first order rejected the objections raised by the petitioners against the proposed sale of TDR to respondent no.3. The objections were rejected on grounds of being belated, respondent's higher offer, and lack of deposited amount by petitioners. The second order disposed of the application by respondent no.2, stating that no permission is needed for TDR sale as it is movable property under Section 36(1)(c) of the Act.2. The main issue was whether TDR could be considered movable property. The Division Bench's judgment in a previous case concluded that TDR, being a benefit arising from land, qualifies as immovable property. This ruling was further supported by a single Judge's decision, affirming that TDR is immovable property. Consequently, the Charity Commissioner's decision that no permission was required due to TDR being movable property was deemed incorrect.3. Regarding the first order rejecting petitioners' objections, since permission under Section 36 was now deemed necessary, the objections needed reconsideration. The rejection of objections without considering the necessity of permission was unjust. Thus, both impugned orders were set aside, and directions were issued for the revival of respondent no.2's application and a fresh consideration of objections in light of Section 36.4. The court directed the Joint Charity Commissioner to hear and decide the application within two months, with parties to appear on a specified date. The rule was made absolute, each party bearing its own costs, and the record was to be transmitted promptly for action. Steno copy of the order was to be provided to the involved parties for compliance.