Supreme Court directs fresh decision on Trust property lease agreements, emphasizes Trust's interests.

Mehrwan Homi Irani & Anr. Versus Charity Commissioner, Bombay and Ors.

Mehrwan Homi Irani & Anr. Versus Charity Commissioner, Bombay and Ors. - AIR 2001 SC 2350 Issues:
Challenge to order passed by Charity Commissioner under Bombay Public Trusts Act, 1950 regarding leasing of Trust property.

Analysis:
The case involved a Trust created by philanthropic members of the Parsi community to establish a Sanatorium for the sick and convalescent. The Trust faced financial difficulties due to lack of income from its properties, making it challenging to maintain the Sanatorium. The Trustees sought permission from the Charity Commissioner to lease out a portion of Trust property to a respondent for 99 years to generate income for the Trust. The appellants intervened, arguing that the Trustees lacked the power to execute long-term leases and that leasing the property would defeat the Trust's purpose. They also claimed that better proposals could be obtained from other parties.

The Charity Commissioner granted permission for the lease, which was challenged by the appellants in a Writ Petition before the Bombay High Court. The High Court upheld the Charity Commissioner's decision, stating that leasing the property was necessary to fulfill the Trust's objectives and that no better proposals were substantiated by the appellants. On appeal to the Supreme Court, the issue revolved around whether the agreements with the respondent were in the best interests of the Trust and whether other proposals should be considered.

The Supreme Court observed that the lease agreements lacked clarity on how the property would be used by the respondent and that there might be better offers from other parties. To ensure the Trust's best interests, the Court remitted the matter to the Charity Commissioner for a fresh decision. The Commissioner was directed to explore other proposals, including that of the respondent, and impose conditions to serve the Trust's interests. The Court allowed the appeal, modifying the orders of the High Court and the Charity Commissioner, without imposing costs.

In conclusion, the Supreme Court emphasized the importance of securing the Trust's objectives and directed a reevaluation of leasing decisions to safeguard the Trust's interests effectively.