TaxTMI 
TaxTMI 
2012 (12) TMI 993
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.... may have over-stepped in giving the direction that it did. But, we are of the opinion that the learned judges had no option but to mould the relief and give the direction that it did in the best interest of the trust, in keeping with the provisions of Section 36 of the Bombay Public Trust Act, 1950. Consequently, there is no reason to interfere with the direction of the High Court. 4. We are also of the opinion that the petitioners have suppressed a material fact from us and, therefore, special leave to appeal ought not to be granted to the petitioners. Facts: 5. On 29th November, 1994 the trustees of the Shri Vyankatesh Mandir Trust at Panchavati, Nasik resolved to sell 9 (nine) acres of agricultural land belonging to the Trust in Survey No. 275 situated at Aurangabad Road, Panchavati, Nasik by calling tenders from the public at large. For convenience the land resolved to be sold is hereinafter referred to as the 'Trust land'. 6. Pursuant to the resolution, the trustees issued a public notice in the newspaper "Rambhoomi" inviting offers for purchase of the Trust land. In response, they received four offers, the highest being that of the petitioners for Rs. 2.5 lakhs per acre ....
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.... take effective steps within the period specified in sub-section (2), or it is not possible to recover the property with reasonable effort or expense, the Charity Commissioner may assess any advantage received by the trustee and direct him to pay compensation to the trust equivalent to the advantage so assessed." 9. On 6th February 1998 the Joint Charity Commissioner (for short 'the JCC') Mumbai granted the sanction prayed for by the trustees, subject to all laws applicable to the transaction and on terms and conditions that were to follow. 10. On 19th June 1998 the sanction granted by the JCC was partially modified and a condition imposed that the sale shall be executed within a period of one year from the date of the order that is 19th June 1998. However, for one reason or another, the petitioners and the trustees were unable to complete the sale transaction within this time. 11. Much later, on 30th June 2001 the trustees and the petitioners mutually agreed to extend the time for completing formalities for execution of the transaction. They also agreed that the sale price of the Trust land would now be increased to Rs. 75 lakhs. This was the second agreement between the partie....
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.... application. 18. By an order dated 24th July 2006 the JCC rejected the second application filed by the trustees for extension of time. 19. Pursuant to the rejection, the trustees issued a public notice in "Day View" on 19th February 2007 for sale of the Trust land. In response to the public notice, respondent No.1 gave the highest bid on 23rd February 2007 at Rs. 43 lakhs per acre. 20. Significantly, on 26th February 2007 the petitioners filed W.P. No.1502 of 2007 in the High Court challenging the order dated 24th July 2006 passed by the JCC rejecting the second application for extension of time. In this Writ Petition, respondent No.1 was not made a party by the petitioners nor did the trustees bring it to the notice of the High Court that respondent No.1 had given the highest bid for purchase of the Trust land pursuant to the public notice issued in "Day View". 21. On 28th August 2008 the petitioners and the trustees entered into a compromise as a result of which it was agreed that the order dated 24th July 2006 be set aside and the second application for extension of time be remanded to the JCC for a fresh hearing on merits. It was also agreed that the petitioners would be j....
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....are now before us. Submissions: 28. The broad submission of learned counsel for the petitioners was that the High Court had effectively over-stepped its jurisdiction while deciding W.P. No.7863 of 2008. It was submitted that the issue before the High Court was rather limited, namely, whether respondent No.1 should be impleaded before the JCC in the second application for extension of time. Apart from adjudicating on the correctness or otherwise of the decision rendered by the JCC rejecting the impleadment application, the High Court effectively rejected the second application for extension of time. 29. It was submitted that the High Court went much further than necessary in requiring the JCC to consider all bids received by the trustees pursuant to the public notice dated 19th February 2007. The right of the petitioners to seek specific performance of the third agreement entered into between them and the trustees on 15th August 2004 was thereby scuttled. To make matters worse, the High Court virtually set aside an order passed by the co-ordinate Bench in W.P. No.1502 of 2007 directing the JCC to hear the second application for extension of time. It was submitted that this was cl....
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....ime. The trustees moved two applications for extension of time to complete the sale transaction with the petitioners. The trustees even sought to withdraw their first application for extension of time and to seek a revised sanction from the JCC to sell the Trust land to a third party apparently because they fell out with the petitioners. 37. Given this flip-flop, the JCC rightly rejected the first application for extension of time on 2nd May 2003. He gave two significant reasons for doing so, namely, that the trustees were not voluntarily selling the Trust land and secondly, given the circumstances, the sale transaction was not for the benefit and in the interest of the Trust. This order has attained finality, not having been challenged by anybody. It is this order that has been suppressed by the petitioners from this Court. We propose to refer to this a little later. 38. While considering the second application for extension of time on 24th July 2006 the JCC observed that the trustees are "changing track from time to time and for the reasons best known to them are bowing before the proposed purchasers". The JCC doubted the bona fides of the trustees and in fact observed that the....
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....for the petitioners submitted that no material facts have been withheld from this Court. It was submitted that while the order dated 2nd May 2003 was undoubtedly not filed, its existence was not material in view of subsequent developments that had taken place. We cannot agree. 46. It is not for a litigant to decide what fact is material for adjudicating a case and what is not material. It is the obligation of a litigant to disclose all the facts of a case and leave the decision making to the Court. True, there is a mention of the order dated 2nd May 2003 in the order dated 24th July 2006 passed by the JCC, but that is not enough disclosure. The petitioners have not clearly disclosed the facts and circumstances in which the order dated 2nd May 2003 was passed or that it has attained finality. 47. We may only refer to two cases on this subject. In Hari Narain v. Badri Das, AIR 1963 SC 1558 stress was laid on litigants eschewing inaccurate, untrue or misleading statements, otherwise leave granted to an appellant may be revoked. It was observed as follows: "It is of utmost importance that in making material statements and setting forth grounds in applications for special leave, care....
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....tepped its jurisdiction in requiring the JCC to virtually go in for a fresh auction. While we agree that the question before the High Court was very limited, namely, whether respondent No.1 ought to have been impleaded by the JCC in the second application for extension of time, we are of the view that on an overall consideration of the facts and circumstances of the case, the High Court was perhaps left with no option but to pass the order that it did and accept the alternative prayer of respondent No. 1. We say this because, as noticed above, the trustees and the petitioners were colluding and it was not possible to entirely rule out the possibility that they would enter into yet another mutual arrangement to wipe out whatever interest respondent No.1 had in the Trust land. Therefore, impleading respondent No.1 before the JCC could have been rendered into a mere formality. Additionally, the lack of bona fides of the trustees and the petitioners could not be overlooked by the High Court. Therefore, the safest course of action for the High Court was to require sale of the Trust land through auction. 51. It appears to us that another factor that weighed with the High Court in this r....
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....ey feel shy or be deterred from bidding at a public auction? Why then permit sale by private negotiations which will not be visible to the public eye and may even give rise to public suspicion unless there are special reasons to justify doing so? And care must be taken to fix a reserve price after ascertaining the market value for the sake of safeguarding the interest of the endowment." 54. Similarly, in R. Venugopala Naidu this Court followed the law laid down in Chenchu Rami Reddy and actually went a bit further and gave a direction for sale of the trust property by public auction. It was held as follows:- "The subordinate court and the High Court did not go into the merits of the case as the petitioners were non-suited on the ground of locus standi. We would have normally remanded the case for decision on merits but in the facts and circumstances of this case we are satisfied that the value of the property which the trust got was not the market value..... ........ We direct that the properties in question may be sold by public auction by giving wide publicity regarding the date, time and place of public auction. The offer of Rs. 10 lakhs made in this Court will be treated as ....