AMBADEVI SANSTHA & ORS.versusJOINT CHARITY COMMISSIONER & ORS.

484                      [2018]REPORTS
               SUPREME COURT   11 S.C.R. 484              [2018] 11 S.C.R.


A                   SHRI AMBADEVI SANSTHA & ORS.
                                       v.
                JOINT CHARITY COMMISSIONER & ORS.
                        (Civil Appeal No. 9936 of 2018)
B                           SEPTEMBER 25, 2018
               [ARUN MISHRA AND VINEET SARAN, JJ.]
            Bombay Public Trusts Act, 1950:
            s.36 – Sale of Trust property – Power of Charity Commissioner
C     – Application seeking permission to sell Trust property, after
      accepting earnest money – Objections by two persons stating that
      they were ready to purchase the property at much higher price –
      Objection also by newly elected body of Trust stating that it did not
      intend to sell the properties – Despite the objections, Charity
D     Commissioner granted permission to sell – Writ petition – Dismissed
      by High Court – On appeal, held: While disposing of Trust property,
      Charity Commissioner has to consider interest, benefit and protection
      of Trust – Action of Trust seeking permission to sell after accepting
      earnest money was improper, illegal and impermissible – Prior
      sanction was necessary to create any right in the properties – Such
E     illegal transaction could not have been sanctioned – It was
      impermissible and violative of intendment of the provisions contained
      in s.36.
            Allowing the appeals, the Court
F            HELD: 1. The Charity Commissioner has to be objectively
      satisfied that there is necessity to dispose of the property in the
      interest of public Trust. Three classic requirements have to be
      considered by the Charity Commissioner i.e., the interest, benefit
      and protection of Trust. Sale should be free from suspicion and
      reserved price should be fixed after ascertaining the market value.
G
      In case the Charity Commissioner accepts the necessity of
      alienating the trust property, the trustees cannot insist that the
      property should be sold only to a person of their choice, though
      the offer given by the person may not be the best offer. The

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                                      484
   SHRI AMBADEVI SANSTHA & ORS. v. JOINT CHARITY                     485
              COMMISSIONER & ORS.

property may be vested in the trustees, but the vesting is for the   A
benefit of the beneficiaries. Best available offer should be
accepted in the case of sale.[Paras 9, 11 and 13] [490-H; 491-A;
492-A; 494-D-E]
     Cyrus Rustom Patel v. Charity Commissioner
     Maharashtra 2017 (13) SCALE 44 : [2017] 9 SCR                   B
     277 ; Chenchu Rami Reddy v. Govt. of Andhra Pradesh,
     (1986) 3 SCC 391 : [1986] 1 SCR 989 ; R. Venugopala
     Naidu v. Venkatarayulu Naidu Chairities (1989) 2 Suppl.
     SCC 356 : [1989] 1 Suppl. SCR 760 ; Bhaskar Laxman
     Jadhav v. Karamveer Kakasaheb Wagh Education                    C
     Society (2013) 11 SCC 531 : [2012] 11 SCR 767 –
     relied on.
      2. The action of the Trust seeking permission to sell after
accepting the earnest money was wholly improper and
impermissible. The transactions could not have been finalised        D
nor possession could have been handed over before filing
application to Joint Charity Commissioner under Section 36 of
the Act of 1950. Prior sanction was necessary to create any right
in the properties. [Para 16] [495-B]
      3. It was not open to the Joint Charity Commissioner to        E
permit the sale on the ground of receipt of earnest money in
illegal manner. Before permission to sell, no such agreement
could have been entered into. The same indicated predisposition
of Trust to sell it in illegal manner. The valuation report from
Talathi was based on ipse dixit indicated the value of the land as
Rs.8,000/- per acre. The offer could not have been accepted in       F
view of the available higher offers. The Joint Charity
Commissioner has failed to protect the interest of the Trust.
[Para 16] [495-E-F]
      4. Mere statement by the Trust that earnest money was
                                                                     G
received from prospective purchasers of house in the year 1990,
thus, it should be sold to them, could not be said to be a legally
permissible approach. It was not legally permissible to receive
earnest money or to create any interest without grant of prior
permission to sale. Thus, no equitable consideration could have
                                                                     H
486           SUPREME COURT REPORTS                     [2018] 11 S.C.R.


A     arisen in favour of purchasers by the payment of earnest money
      in the year 1990. This kind of illegal transaction could not have
      been sanctioned by the Joint Charity Commissioner. It was wholly
      impermissible and violative of intendment of the provisions
      contained under Section 36 of the Act of 1950. [Paras 17 and
      18][495-G-H; 496-B]
B
            5. The offers were invited for land in 1994 and the
      applications were filed in the year 1997-98 for grant of permission
      to sell the properties of the Trust. The prices of 1994, thus,
      could not have been considered to be the value as on the date
C     the permission was applied for. Apart from that, no serious efforts
      were made by the Joint Charity Commissioner to ascertain the
      value of the properties in the years 1990, 1994 or 1998. No effort
      was made to ascertain the valuation of the house and no reserved
      price was fixed, thus, the sale of the properties was wholly
      impermissible. The Joint Charity Commissioner has also
D     observed that it was not for him to consider the effect of enormous
      delay in approaching for grant of permission. No such delayed
      application could have been entertained to validate illegal
      transaction. The Joint Charity Commissioner has failed to
      consider the interest, benefit and the protection of the property
E     of the Trust. The permission to sale with respect to agricultural
      lands as well as the house was granted illegally. [Paras 16 and
      19][495-C-D; 496-C-D]

            6. When there was a dispute between old and new body,
      the Joint Charity Commissioner was required to be on the guard
F     and in view of the objection raised by 15 Trustees by presenting
      themselves before the Joint Charity Commissioner that Trust
      properties should not be sold, the Joint Charity Commissioner
      could have waited and should have ascertained the genuineness
      of the objection and need for sale of properties and whether sale
      was in the interest of Trust. [Para 20] [496-G-H]
G
             7. The Trust is directed not to fritter away with the
      properties in the manner in which it has been done. In future
      also, let the properties of the Trust and its legacy be protected
      and guarded and it should not be sold away in the manner as has
      been done in the present case. [Para 21] [496-H; 497-A]
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   SHRI AMBADEVI SANSTHA & ORS. v. JOINT CHARITY                         487
              COMMISSIONER & ORS.

       8. It was contended on behalf of purchasers that they have        A
made the land cultivable by spending the amount and have levelled
it also. As a matter of fact, under an illegal sale, they have enjoyed
the properties for more than two decades. It was wholly
impermissible and they have earned more than the value of the
land as in the Land Acquisition Act, the compensation is granted
                                                                         B
in the absence of exemplar sale evidence on the basis of usufruct
of 10 years. They have enjoyed the properties for more than two
decades, thus there is absolutely no equity in their favour and
they are not entitled to retain the possession of the same.
[Para 22] [497-B-C]
                                                                         C
                        Case Law Reference

[2017] 9 SCR 277                 relied on              Para 9

[1986] 1 SCR 989                 relied on              Para 10
                                                                         D
[1989] 1 Suppl. SCR 760          relied on              Para 11

[2012] 11 SCR 767                relied on              Para 12

      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9936
of 2018.                                                                 E

      From the Judgment and Order dated 03.05.2013 of the High Court
of Judicature at Bombay, Nagpur Bench, Nagpur in Writ Petition
No. 867 of 1999

                                 WITH                                    F

      Civil Appeal Nos.9937 and 9938 of 2018.

      R. Basant, Ms. Meenakshi Arora, Sr. Advs. Rishabh Sancheti,
Ms. Padma Priya, Anup Gilda, Anchit Bhandari, P. V. Saravana Raja,
                                                                         G
Ms. Bansuri Swaraj, Siddhesh Kotwal, Raghunatha Sethupathy, Gagan
Narang, Ms. Aashiya Ghose, Nirnimesh Dube, Shashibhushan P.
Adgaonkar, Satyajit A. Desai, Ms. Anagha S. Desai, Advs. for the
appearing parties.

                                                                         H
488            SUPREME COURT REPORTS                         [2018] 11 S.C.R.


A           The Judgment of the Court was delivered by
             ARUN MISHRA, J. 1. The appellant-Shri Ambadevi Sanstha,
      a registered Public Trust under the Bombay Public Trusts Act, 1950
      (hereinafter referred as the “Act of 1950”), has filed the instant appeals
      against the judgments and orders dated 3.5.2013 and 10.5.2013 passed
B     by the High Court of Judicature at Bombay, dismissing the writ petitions
      filed by the appellant herein and confirming the order dated 8.10.1998 of
      the Joint Charity Commissioner with respect to sale of the properties of
      the Trust. The Trust had been permitted to execute sale deeds of field
      Survey No.270/A/1 of village Khar, Talegaon, admeasuring 11 acres
      and 28 gunthas and field Survey No.11 of Chandpur, admeasuring 4
C
      acres and 8 gunthas to Mr. J.M. Karwa, field Survey No.202 of Khar,
      Talegaon, admeasuring 16 acres to Mr. Manish Jaikishore Karwa and
      15 acres and 33 gunthas out of field Survey No.202 of Khar, Talegaon to
      Shri Ashish Jaikishore Karwa and 15 acres and 15 gunthas from Survey
      No.12 of Chandpur to Shri Girish Jaikishore Karwa at the rate of
D     Rs.7,651/- per acre.
            2. The permission had also been granted by Joint Charity
      Commissioner to sell the immovable properties belonging to Trust i.e.,
      House No.210, Plot No.228, Sheet No. 92-A, admeasuring 174.8 sq.
      meters situated in Ward No.15 in Bhaji Bazar Mohalla at Amravati for
E     Rs.3,11,000.
             3. Permission had also been granted by the Joint Charity
      Commissioner to sell House No.998 in Ward No.59 Taluka Bedmaru,
      District Amravati for sum of Rs.1,00,000/- (Rupees One Lakh Only).
             4. The erstwhile Secretary of the old body of Trust had applied to
F     the Joint Charity Commissioner for grant of permission to sell the
      properties of Trust. At least two persons had raised objections before
      the Joint Charity Commissioner that they were ready to purchase the
      land at a much higher price up to Rs.25,000/- and Rs.11,000/- per acre.
      The newly elected body of the Trust approached the Joint Charity
G     Commissioner and 15 trustees stated that Trust does not want to sell the
      properties. Despite the objection, the Joint Charity Commissioner had
      granted permission to sell the properties. Aggrieved thereby, the writ
      petitions were filed before the High Court by the Trust. The High Court
      vide impugned judgments and orders has dismissed the writ petitions.
      Hence, the appeals have been preferred.
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   SHRI AMBADEVI SANSTHA & ORS. v. JOINT CHARITY                                 489
       COMMISSIONER & ORS. [ARUN MISHRA, J.]

       5. The Trust has raised the ground that Joint Charity Commissioner        A
did not act as per intendment of Section 36 of the Act of 1950. The Joint
Charity Commissioner has failed to observe that when the Trustees have
stated on behalf of Trust that the properties should not be sold, the Joint
Charity Commissioner ought not have passed the order directing sale of
the properties. The principles governing exercise of power under Section
                                                                                 B
36 had not been adhered to. There was no necessity to sell the Trust
properties. Apart from that, the permission for sale of properties for a
meagre amount was not at all in the interest of the Trust. The objections
were rejected by the Joint Charity Commissioner for no good reason.
The High Court has also committed illegality in dismissing the writ petitions.
       6. It was contended on behalf of respondents that permission was          C
granted to sell properties in the interest of the Trust as the Trust was not
having proper income. The land is situated at a distance of 25 kms from
Amravati. Three out of four lands are situated about 5 kms away from
the locality of Khar Talegaon. The Trust wanted to construct a hospital.
The Trust was in dire need of money and had decided to invite tenders            D
on 1.6.1994 by advertisement for the sale of land and only one offer
from Mr. Naresh Laxmanrao Bhatkar was received for purchase of
land admeasuring 15 acres 15 gunthas at Chandpur at the rate of
Rs.4,500/- per acre. However, the said offer was not accepted by the
Trust in the meeting dated 9.8.1994. Thereafter, second advertisement
was published in the local newspapers in November and December,                  E
1994. Varying offers for land between Rs.6,000/- to Rs.9,000/- per acre
were received. Late Mr. Jaikishore Karwa submitted offer of
Rs.7,651/- per acre for purchase of the entire land of the Trust i.e., 63
acres 4 gunthas, whereas the offer of Mr. M.K. Lakde was for
Rs.9,000/- per acre for certain piece of land i.e., 11 acres 28 gunthas.         F
The offer of Late Mr. Jaikishore Karwa, husband of respondent no.2-
Smt. Tarabai, was accepted. The entire land was sold as indicated by
Mr. Jaikishore Karwa in the names of several persons. The Trust in its
meeting dated 13.3.1995 passed a resolution and accepted earnest money
also.
                                                                                 G
       7. It was further contended on behalf of respondents that the
price offered was proper and valuation report was called from Talathi
with respect to the land in question. Talathi had indicated that the market
value of the land was Rs.8,000/- per acre at Khar Talegaon and
Rs.5,000/- per acre at Chandpur, at the time of issuance of advertisement
                                                                                 H
490            SUPREME COURT REPORTS                          [2018] 11 S.C.R.


A     in the year 1994. The Joint Charity Commissioner has considered the
      valuation report of the Talathi and the offer made by Mr. Jaikishore
      Karwa was found to be proper.
             8. It was contended by the respondents that Joint Charity
      Commissioner did not grant permission in a mechanical way. Two
B     objectors namely Mr. Vinod Tank and Mr. Vijay Jaiswal had submitted
      their higher offers before the Joint Charity Commissioner during the
      pendency of the application. Mr. Vinod Tank had neither participated in
      the tender process. It was not proper for him to submit a higher offer
      once the earnest money had been paid. The offer of Mr. Vinod Tank
      was rightly rejected. Similarly, the offer made by Mr. Narayan prasad
C     Jaiswal and Mr. Shankarlal Jaiswal of Rs.25,000/- per acre after 2 ½
      years from the date of acceptance of earnest money by the Trusts, was
      also rightly rejected. The Joint Charity Commissioner did not allow the
      objection raised by 15 newly added trustees as there was a dispute
      between old and the new trustees. The land was sold by the previous
D     body of the Trust, as such the objection raised by the new body was
      rightly rejected. The Trust, in fact, had not passed any resolution dated
      27.9.2018 before the decision was rendered by the Joint Charity
      Commissioner, not to sell the properties. Resolution dated 27.9.1998
      was not submitted before the Joint Charity Commissioner. The Trustees
      did not pray before the Joint Charity Commissioner to withdraw the
E     application filed for grant of permission to sell the properties. The Trust
      did not file the aforesaid resolution dated 27.09.1998 even before the
      High Court. No meeting was held on the aforesaid date. It was also
      contended on behalf of respondents that Trust has filed false and
      fabricated affidavit dated 18.11.1997, which was not filed by the Trust
F     before the Joint Charity Commissioner. The objectors Mr. Vinod Tank
      and others have not approached the High Court against the order of
      Joint Charity Commissioner. In other appeals also, it was contended
      that order of Joint Charity Commissioner was appropriate and in
      accordance with law.
G           9. This Court has considered the duty of a Charity Commissioner
      under Section 36 of the Act of 1950 in the recent decision in Cyrus
      Rustom Patel v. Charity Commissioner Maharashtra, (2017) 13
      SCALE 44. This Court has observed that three classic requirements
      have to be considered by the Charity Commissioner i.e., the interest,

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   SHRI AMBADEVI SANSTHA & ORS. v. JOINT CHARITY                               491
       COMMISSIONER & ORS. [ARUN MISHRA, J.]

benefit and protection of Trust. The Charity Commissioner has to be            A
objectively satisfied that there is necessity to dispose of the property in
the interest of public Trust. The power of Charity Commissioner extends
to inviting offers from members of public and can also direct the trustees
to sell or transfer the trust property to a person whose bid or quotation is
the best.
                                                                               B
       10. In Chenchu Rami Reddy v. Govt. of Andhra Pradesh,
(1986) 3 SCC 391, it was observed that there has to be full application
of mind while granting permission to sell by the competent authority and
the disposal of public property should normally be done by public auction.
The public-minded citizens have to show exemplary vigilance and the
property of religious and charitable institutions or endowment must be         C
jealously protected. Property should be sold by public auction after fixing
reserve price. This Court observed:
      “10. We cannot conclude without observing that property of such
      institutions or endowments must be jealously protected. It must
      be protected, for, a large segment of the community has beneficial       D
      interest in it (that is the raison d’etre of the Act itself). The
      authorities exercising the powers under the Act must not only be
      most alert and vigilant in such matters but also show awareness
      of the ways of the present day world as also the ugly realities of
      the world of today. They cannot afford to take things at their face      E
      value or make a less than the closest-and-best-attention approach
      to guard against all pitfalls. The approving authority must be aware
      that in such matters the trustees, or persons authorized to sell by
      private negotiations, can, in a given case, enter into a secret or
      invisible underhand deal or understanding with the purchasers at
      the cost of the concerned institution. Those who are willing to          F
      purchase by private negotiations can also bid at a public auction.
      Why would they 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      G
      care must be taken to fix a reserve price after ascertaining the
      market value for the sake of safeguarding the interest of the
      endowment. With these words of caution we close the matter.”
                                                     (emphasis supplied)
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492             SUPREME COURT REPORTS                          [2018] 11 S.C.R.


A            11. In R. Venugopala Naidu v. Venkatarayulu Naidu Chairities,
      1989 Supp (2) SCC 356, this Court has reiterated that sale should be
      free from suspicion and reserved price should be fixed after ascertaining
      the market value. This Court has observed:
            “13. The subordinate court and the High Court did not go into the
B           merits of the case as the appellants 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. Two persons namely S.M. Mohamed
            Yaaseen ad S.N.M. Ubayadully have filed affidavit offering Rs.
C           9 lakhs and Rs. 10 lakhs respectively for these properties. In
            support of their bona fides they have deposited 10 per cent of the
            offer in this Court. This Court in Chenchu Ram Reddy v.
            Government of Andhra Pradesh, (1986) 3 SCC 391, has held that
            the property of religious and charitable endowments or institutions
D           must be jealously protected because a large segment of the
            community has beneficial interest therein. Sale by private
            negotiations which is not visible to the public eye and may even
            give rise to public suspicion should not, therefore, be permitted
            unless there are special reasons to justify the same. It has further
            been held that care must be taken to fix the reserve price after
E           ascertaining the market value for safeguarding the interest of the
            endowment.”
              12. In Bhaskar Laxman Jadhav v. Karamveer Kakasaheb
      Wagh Education Society, (2013) 11 SCC 531, this Court took note of
      the fact that Trustees and petitioners had been indulging in a flip-flop
F     and taking advantage of the absence of any clear-cut statutory measures
      designed to prevent abuse of the process of law. The Charity
      Commissioner was justified in rejecting the application for permission to
      sell for two reasons, firstly since the Trustees were not voluntarily selling
      the Trust land and secondly, in the given circumstances, the sale transaction
G     was not for the benefit and in the interest of the Trust. It was further
      observed that lack of bonafide of trustees could not have been overlooked
      by the High Court. Due to passage of time, the value of the Trust land
      had increased considerably and it was necessary to have made efforts
      for obtaining maximum price from the open market. This Court observed:

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   SHRI AMBADEVI SANSTHA & ORS. v. JOINT CHARITY                              493
       COMMISSIONER & ORS. [ARUN MISHRA, J.]

      “53. In Mehrwan Homi Irani v. Charity Commr., (2001) 5 SCC              A
      305, it was categorically held that the Charity Commissioner, while
      granting sanction under Section 36 of the Act, must explore the
      possibility of getting the best price for the trust properties. In
      keeping with this, the Charity Commissioner was directed to issue
      a fresh advertisement for leasing out the trust property and
                                                                              B
      “formulate and impose just and proper conditions so that it may
      serve the best interests of the Trust.” The observations of this
      Court and directions given are as follows:
      “9.... In the best interests of the Trust and its objects, we feel it
      appropriate that Respondents 2 to 4 should explore the further
      possibility of having agreements with better terms. The objects of      C
      the Trust should be accomplished in the best of its interests.
      Leasing out of a major portion of the land for other purposes may
      not be in the best interests of the Trust. The Charity Commissioner
      while granting permission under Section 36 of the Bombay Public
      Trusts Act could have explored these possibilities. Therefore, we       D
      are constrained to remit the matter to the Charity Commissioner
      to take a fresh decision in the matter. There could be fresh
      advertisements inviting fresh proposals and the proposal of the
      5th respondent could also be considered. The Charity
      Commissioner may himself formulate and impose just and proper
      conditions so that it may serve the best interests of the Trust. We     E
      direct that the Charity Commissioner shall take a decision at the
      earliest.”
       13. In Cyrus Rustom Patel (supra), the Court observed that
previous sanction of the Charity Commissioner has to be obtained for
sale of the Trust property:                                                   F

      “24. It is apparent from the provisions of Section 36 that sale,
      exchange or gift of any immovable property or lease, extending
      beyond ten years in the case of agricultural land, or for a period
      exceeding three years in the case of non-agricultural land or a
      building, belonging to a public trust shall not be valid without        G
      previous sanction of the Charity Commissioner.
      25. The power to grant sanction has to be exercised by the Charity
      Commissioner, taking into consideration three classic requirements

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494            SUPREME COURT REPORTS                          [2018] 11 S.C.R.


A           i.e. “the interest, benefit, and protection” of the Trust. The
            expression that sanction may be accorded subject to such conditions
            as Charity Commissioner may think fit under Section 31(1)(b)
            and Section 36(1)(c). The Charity Commissioner has to be
            objectively satisfied that property should be disposed of in the
            interest of public trust; in doing so, he has right to impose such
B
            conditions as he may think fit, taking into account aforesaid triple
            classic requirements. It is also open to the Charity Commissioner,
            in exercise of power of Section 36(2) of the Act, to revoke the
            sanction, given under clauses (a) and (b) of Section 36 of the Act,
            on the ground that the sanction had been obtained by fraud or
C           misrepresentation or those material facts have been suppressed
            while obtaining sanction. The intendment of the revocation provision
            is also to sub-serve the interest, benefit, and protection of the
            Trust and its property.”

                                                           (emphasis supplied)
D
              The Court has also observed that the trustees hold the property
      for the benefit of the beneficiaries. In case the Charity Commissioner
      accepts the necessity of alienating the trust property, the trustees cannot
      insist that the property should be sold only to a person of their choice,
      though the offer given by the person may not be the best offer. The
E     property may be vested in the trustees, but the vesting is for the benefit
      of the beneficiaries. Best available offer should be accepted in the case
      of sale.

            14. When we consider the order passed by the Joint Charity
      Commissioner on 8.10.1998 in the instant case, several applications were
F
      decided by common order. The Joint Charity Commissioner noted that
      objection was raised by 15 newly elected Trustees not to sell the
      properties. It was incumbent upon the Joint Charity Commissioner to
      ascertain the proper valuation of the properties. In the case of time
      barred transaction, it was held that it was not for the Joint Charity
G     Commissioner to reject the offer on the ground that transaction had
      become time barred, but it was for the Civil Court to consider the said
      aspect for transaction entered into in 1990 and 1994 for which the
      applications for grant of permission were filed in 1997/1998.


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   SHRI AMBADEVI SANSTHA & ORS. v. JOINT CHARITY                                 495
       COMMISSIONER & ORS. [ARUN MISHRA, J.]

       15. The reserved price of various properties was also not fixed in        A
the instant matter and the Joint Charity Commissioner has failed to
consider what was the actual price as on the date of grant of permission
and when transactions were entered into. The permission to sell the
properties had been granted in mechanical manner ignoring illegality of
transactions. The action of the Trust seeking permission to sell after
                                                                                 B
accepting the earnest money was wholly improper and impermissible.
The transactions could not have been finalised nor possession could have
been handed over before filing application to Joint Charity Commissioner
under Section 36 of the Act of 1950. Prior sanction was necessary to
create any right in the properties.
       16. The offers were invited for land in 1994 and the applications         C
were filed in the year 1997-98 for grant of permission to sell the properties
of the Trust. The prices of 1994, thus, could not have been considered
to be the value as on the date the permission was applied for. Apart
from that, no serious efforts were made by the Joint Charity
Commissioner to ascertain the value of the properties in the years 1990,         D
1994 or 1998. After the advertisement inviting offer was issued in respect
to lands, it is apparent that the offer of Mr. M.K. Lakde was for
Rs.9,000/- per acre for a part of land, nonetheless it was much more
than the value accepted by the Joint Charity Commissioner. Merely on
the ground that Trust had accepted the earnest money from Mr. Jaikishore
Karwa of Rs.21,000/-, no equity was created in his favour to purchase            E
the property. It was not open to the Joint Charity Commissioner to permit
the sale on the ground of receipt of earnest money in illegal manner.
Before permission to sell no such agreement could have been entered
into. The same indicated predisposition of Trust to sell it in illegal manner.
The valuation report from Talathi was based on ipse dixit indicated the          F
value of the land as Rs.8,000/- per acre. The offer could not have been
accepted in view of the available higher offers. The Joint Charity
Commissioner has failed to protect the interest of the Trust.
       17. Mere statement by the Trust that earnest money was received
from prospective purchasers of house in the year 1990, thus, it should be
sold to them, could not be said to be a legally permissible approach. It         G
was not legally permissible to receive earnest money or to create any
interest without grant of prior permission to sale. Thus, no equitable
consideration could have arisen in favour of purchasers by the payment
of earnest money of Rs.1,60,000/- in the year 1990.
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496             SUPREME COURT REPORTS                           [2018] 11 S.C.R.


A             18. The Joint Charity Commissioner had also observed in its order
      that if the request of Trust to sell the land to prospective purchaser was
      rejected, the Trust was likely to be forced to face litigation at the instance
      of the prospective purchasers as they claimed to be in possession of the
      land for which they have paid the earnest money. This kind of illegal
      transaction could not have been sanctioned by the Joint Charity
B
      Commissioner. It was wholly impermissible and violative of intendment
      of the provisions contained under Section 36 of the Act of 1950.
             19. No effort was made to ascertain the valuation of the house
      and no reserved price was fixed, thus, the sale of the properties was
      wholly impermissible. The Joint Charity Commissioner has also observed
C     that it was not for him to consider the effect of enormous delay in
      approaching for grant of permission. No such delayed application could
      have been entertained to validate illegal transaction. The Joint Charity
      Commissioner has failed to consider the interest, benefit and the protection
      of the property of the Trust. The permission to sale with respect to
D     agricultural lands as well as the house was granted illegally.
             20. In view of the above, it is not necessary to go into the question
      that newly elected body of the Trust had opposed the sale of the Trust
      properties by old trustees. When there was such a dispute between old
      and new body, the Joint Charity Commissioner was required to be on the
E     guard and in view of the objection raised by 15 Trustees by presenting
      themselves before the Joint Charity Commissioner that Trust properties
      should not be sold as recorded by the Joint Charity Commissioner could
      have waited and should have ascertained the genuineness of the objection
      and need for sale of properties and whether sale was in the interest of
      Trust. The High Court had also recorded that the resolution was passed
F     on 27.9.1998 not to proceed with sale. Though, it was disputed that it
      was not actually passed. Be that as it may. Fact remains that Trustees
      themselves presented before the Joint Charity Commissioner before
      arguments were heard and, in the circumstances, it was not at all proper
      or justified to sell the properties of the Trust. No necessity for sale of
G     the properties was made out. Thus, the sale of the Trust properties was
      wholly uncalled for.
              21. In view of the above, we direct the Trust not to fritter away
      with the properties in the manner in which it has been done. In future
      also, let the properties of the Trust and its legacy be protected and guarded
H
   SHRI AMBADEVI SANSTHA & ORS. v. JOINT CHARITY                              497
       COMMISSIONER & ORS. [ARUN MISHRA, J.]

and it should not be sold away in the manner as has been done in the          A
present case. We allow the civil appeals and set aside the judgments
and orders passed by the High Court and that of the Joint Charity
Commissioner. Transactions of sale are annulled.
       22. It was contended on behalf of purchasers that they have made
the land cultivable by spending the amount and have levelled it also. As      B
a matter of fact, under an illegal sale, they have enjoyed the properties
for more than two decades. It was wholly impermissible and they have
earned more than the value of the land as in the Land Acquisition Act,
the compensation is granted in the absence of exemplar sale evidence
on the basis of usufruct of 10 years. They have enjoyed the properties
for more than two decades, thus there is absolutely no equity in their        C
favour and they are not entitled to retain the possession of the same.
Let the possession be restored forthwith within a period of two months,
failing which we direct the concerned authority to take the possession of
land and houses with the help of police authorities. Let compliance of
order be reported to this Court within 10 weeks.                              D


Kalpana K. Tripathy                                        Appeals allowed.



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