DATTATRAYA BABURAO WALAWALKAR AND OTHERSversusSIDDHIVINAYAK CONSTRUCTION PRIVATE LIMITED AND OTHERS

                         (2016] 2 S.C.R. 905



  DATTATRAYA BABURAO WALAWALKAR AND OTHERS                                A
                                  v.
SIDDHIVINAYAK CONSTRUCTION PRIVATE LIMITED AND
                   OTHERS
                    Civil Appeal No. 2981 of2016                          B
                          MARCH 15, 2016
[KURIAN JOSEPH AND ROHINTON FALi NARIMAN, JJ.]
       Trust & Charities:
       Bombay Public Trust Act, 1950 - Development Control                C
Regulations for Greater Mumbai, 1991-Reg33(7) - Trust property
- Sale of. by trustees - Sale-cum-development agreement -
Conditions to be fi1/filled - Trust property largely tenanted and on
very meagre rents - Order by Charity Commissioner permitting to
sell the trust property in favour of, 'R' Corpn-developer for a
monetary consideration of Rs. 6 crores - Order passed by the              D
Commissioner set aside by the courts below - In appeal before this
Court, the Trust directed to issue a fresh advertisement regarding
the re-development of the properties - Initially 9 persons came
 forward, but ultimately offers received from 'R' Construction Co.
and the developer - Held: Condition of containing a minimum of            E
 70% irrevocable written consent of the occupiers of the old structure
was to be fuljil/ed - Out of 105 tenancies of the trust, 65 consents
were obtained - Another lJ consents were obtained which were
subsequently revoked - On addition of lJ to 65 as consents once
given are irrevocable, it would yield to around 74% of the occupiers
of the old building - Initial offer itself was a fair offer - Developer   F
 is willing to up the offer from Rs.8 crores to 8.25 crores and the
 same has been accepted by the Trust - Thus, the order of the Division
 Bench of the High Court set aside.
      Disposing of the appeals, the Court
                                                                          G
     HELD: 1.1 Having regard to the fact that 9 persons initially
came forward but they all petered out and ultimately left only R
Corpn. and R Constructions Pvt. Ltd. in the fray, the fact that R
Constructions Pvt. Ltd. was the only other bidder which offered
a sum.ofRs.7 crores about 5 years after the said offer ofR Corpn.
of Rs.6 crores (which improved its offer to Rs.7 crorcs before            H
                              905
906           SUPREME COURT REPORTS                        [2016] 2 S.C.R.


A     the Division Bench of the High Court) shows that the offer made
      by R Corpn. appears to be a reasonable one. The sale-cum-
      development agreement has been entered into under Regulation
      33(7) of the Development Control Regulations for Greater
      Mumbai, 1991, and has necessarily to fulfil one condition without
      which the sale-cum-development agreeme.nt cannot go forward
 B
      at all-it has to contain a minimum of 70% irrevocable written
      consent of the occupiers of the old structure. Out of 105 tenancies
      of the Trust, 65 consents have been obtained, and another 11
      consents have also been obtained which, however, have
      subsequently beeu revoked. If these 11 to 65 were added as
 c    consents once given are irrevocable, the mathematics of the
      situation would yield a figure of roughly 74% of the occupiers of
      the old building. [Para 12] [912-H; 913-A]
            1.2 The initial offer itself was a fair offer in the facts and
      circumstances. The statement made by the counsel is recorded
 D    that his client was willing to up that offer from Rs.8 crores that
      had been offered by him before this Court to Rs. 8.25 crores, all
      other conditions of the report of the trustees remaining the same.
      In the facts and circumstances of these cases, it would be for the
      benefit of the Trust if the said offer is accepted by the Trustees
      and the same has been accepted. Therefore, the order of the
 E    Division Bench of the High Court is set aside. [Para 13] [913-B-
      C]
            CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2981
      of2016.
                                      WITH
 F          C. A. Nos. 2983, 2984, 2985 & 2986 of 2016
            From the Judgment and Order dated 18. l 0.2012 in Letters Patent
      Appeal No. 103 of2012 in Writ Petition No. 11070 of201 I passed by
      the High Court of Judicature at Rombay.
            C. U Singh, C.A. Sundaram, Sanjiv Sen, Sr. Advs., Ms. Abba R.
 G    Sharma, Santosh Paul, Arvind Gupta, Vishwas M. Kulkarni, Raghav
      Shekhar, Ms.Arti Singh, Mahesh Agarwal,Ankur Saigal, Rishab Parikh,
      E.C. Agrawala, Gaurav Agrawal, Shivaji M. Jadhav, Prashant G. Karande,
      Anshuman Animesh, Rajshri Ashutosh Dubey, Nishant R.
      Katneshwarkar, Sumit Goel, .Ms. Sanjana Rama Chandran, Ms.
 H    Akaanksha Mehra, Advs. for the appearing parties.
          . DATTATRAYA BABURAO WALAWALKAR v.                                    907
          SIDDHIVINAYAK CONSTRUCTION PVT. LTD.

       The Judgment of the Court was delivered by                                A
       R. F. NARIMAN, J. I. We have heard learned counsel for the
parties.
      2. These appeals are· against a final judgment of the High Court of
Judicature at Bombay dated 18th October, 20 I 2 by which the Division
Bench of the Bombay High Court dismissed the letters patent appeal                B
being LPA No. I 03of2012 in Writ Petition No. 1I070 of 201 I.
        3. We are concerned here with Trust property ad measuring
 3343.53 sq.meters in the Girgaun area of Mumbai. Under the Bombay
 Public Trust Act, 1950, the Chfirity Commissioner's sanction has first to
 be obtained before the trustproperty can be sold and for reasons given c
  under the statute. The present Trustees of the Late Rao Bahadur Anant
  Shivaji Desai Topiwalla Charity had resolved to sell the aforesaid property
  inasmuch as they found that it was largely tenanted and very meager
. rents were obtained. The protection afforded to the tenants under the
  Bombay Rent Act and the consequent rent that was being paid therefore, D
  formed the necessity that was felt by the trustees to sell the aforesaid
 property. The said sale was mooted by the trustees under the
  Development Control Regulation 33(7) under which re-development of
  cessed buildings in the Island City of Bombay can be undertaken, provided
 they are constructed prior to 1940, at F.S.I. i.e. Floor Space Index at 3
  being given as incentive to rehabilitate the existing tenants on the gross E
  plot area. Appendix Ill, which has .to be read with Regulation 33(7),
  specifically stipulates in paragraph l(a), that the new building may be
  permitted to be constructed in pursuance of an irrevocable written consent
  by not less than 70% of the occupiers of the old building.                .. . . .
       4. The said trustees, after obtaining a valuation report, which. they      F
produced before the Charity Commissioner, therefore resolved to sell
the aforesaid property to M/s,,Raunak Corporation.
       5. The Charity Commissioner, by his order dated 2nd September,
2011, granted permission to sell the aforesaid trust property in favourof
Raunak Corporation for a monetary consideration of Rs.6 crores along              G
with developed area of 4000 sq.ft. built up to be given to the trust, free
of cost, and a minimum of 460 sq.ft. usable carpet area to each occupier
including flower beds etc., free ofcost, in terms of the Memorandum of
understanding dated 23rd May, 2011. The ultimate order of the Charity
Commissioner reads thus:-
                                                                                  H
908      SUPREME COURT REPORTS                          [2016] 2 S.C.R.



A     "I. Application is allowed.
      2. Sanction is hereby accorded to the trustees of ·The Late Rao
      Bahadur Anand Shivaji Desai Topiwalla Charity, Mumbai", P.T.R.
      No. N75 I /Mumbai for development cum sale of the trust property,
      viz. CTS No. 145A, IA, 145-4, 145B, C, D, E, F, G, bearing C.S.
B     No. I 443 admeasuring 3999 sq. yards equivalent to 3343.57 meters.
      Or thereabout together with structures known as 'Kudaldeshkar
      Brahmin Niwas', in favour of Mis Raunak Corporation, a
      registered partnership firm at Laxmi Narayan Residency, Unnathi
      Garadens Ill, Opp. Ma Niketan, Pokhran Road, No. 2, Thane
      (West)-400 6 I 0 forthe monetary consideration ofRs.6,00,00,000/
 c    - (rupees six crores only) along with developed area of 4000 sq.ft.
      Built up to be given to the trust, free of cost. and minimum 460 sq.
      ft. useable carpet area including flower bed>, niches and service
      ducts to the tenants, free ofcost, in terms of the Memorandum of
      Understanding dated 23.5.2011 and on the following additional
 D    terms and conditions:-
         a. The deed for development cum sale of the trust property is
         to be executed within a period of six months from the date of
         this order.
         b. All expenses for stamp duty and registration charges and
 E       other incidental expenses shall be borne by the developer.
         c. The amount of monetary consideration of Rs.6.00 crores
         shall form part of the corpus oftrust, which shall remain invested
         in any of the Nationalized Banks/Approved Securities in long
         term deposits and should not be withdrawn without prior
 F       permission of this Authority. Trustees shall be at liberty to use
         only the interest amount, which will be accrued on a sum
         invested towards accomplishment of the objects of the trust.
          d. This permission shall be subject to all the relevant laws and
          rules applicable to the development cum sale transaction and
 G        property all wel I.
          e. Trustees of the trust to report the change under section 22
          after completion of the development cum sale transaction to
          the concerned Assistant/Deputy Charity Commissioner, Greater
          Mumbai Region."
 H
     DATTATRAYA BABURAO WALAWALKAR v. SIDDHJVINAYAK                              909
           CONSTRUCTION PVT. LTD. [R.F.NARIMAN, J.]


       6. In a writ petition filed by Sidhivinayak Construction Private          A
Limited and others, inter alia, against the trust/trustees and the said Raunak
Corporation, the learned single Judge of the Bombay High Court set
aside the Charity Commissioner's order and ultimately moulded the reliefs
by stating as under:
       "33. The need for alienation by redevelopment and ultimate sale           B
       of the properties of the trust is established. I am therefore inclined
        to set aside the impugned order partly to the extent it grants
        sanction to alienate the property in favourofthe Respondent No.9
        and remand the application back. The Charity Commissioner shall
        thereafter direct the trustees to publish an advertisement in reputed
        newspapers like Times of India, Maharashtra Times, Indian                 C
        Express and Loksatta and invite bids from the developers for the
        redevelopment and sale of the property of the trust. The bid
        submitted by the Respondent No.9 which has been accepted by
        the Charity Commissioner should form the reserve price. Thus,
        the advertisement will indicate that any bidder who desires to bid        D
        must fulfill the following minimum criteria:
       a. Monetary consideration ofRs.6 crores to the trust;
       b. Developed area of 4000 sq. ft. built up (3418 sq. ft. carpet
       area) to be given free of costs to the trust;
       c. usable carpet area of 460 sq. ft. to individual tenants including       E
       flower bed, niches and service ducts.
       d. Corpus fund for the tenant society of such sum, as may be
       determined by the Charity Commissioner.
       e. 24 Bank Guarantees of Rs.SO lakhs each as offered by                    F
       Respondent No.9.
       f. Additional consideration of Rs.one crore to the trust in case
       FSI is enhanced from 2.5 to 3."
       The learned Single Judge then directed that sanction for alienation
of the trust property shall be granted in favour of the highest bidder."          G
       7. A letters patent appeal filed before the Division Bench of the
Bombay High Court led to the impugned judgment dated 1gth October,
2012 by which the judgment and order of the learned single Judge was
upheld. That is how the present special leave petitions are before·this
Court.                                                                            H
910             SUPREME COURT REPORTS                             (2016] 2 S.C.R.



A             8. Leave granted.
      -     9. After hearing learned counsel for the parties for some time, this
      Court by its order dated 5th February, 2016 stated as under:-
      "Without prejudice to the contentions available to the parties, Shivaji
      Desai Topiwala, Charity, Bombay-Trust is directed to issue a fresh
 B    advertisement regarding the re-development of the properties as directed
      by the learned Single Judge at paragraph 33 of the judgment dated 29th
      March, 2012 in Writ Petition No. I lU70 of 2011 with the required
      modifications that sub para (a) will be read as "'7 crores", sub para (e)
      will be read as "24 Bank Guarantees" and sub para (f) will stand deleted.
 c    The advertisement shall be issued within a period of one week from
      today indicating time of two weeks. After processing the applications,
      report shall be filed within one week thereafter.
      Post on 08.03.2016."
           I 0. Pursuant to the said order of this Court, an advertisement was
 D
    issued on 12th February, 2016 in four daily Newspapers. In response
    thereto, initially 9 persons came forward, but ultimately, on or before the
  - time stipulated in the advertisement, only two offers were received by
    the Trust- one from Ramee Construction Private Limited and the other
    from the same developer - Mis Raunak Corporation. In a report of the
 E Trustees of the said Trust given to this Court, paragraph 9 set out the
    relevant merits of the aforesaid two offers/bids as follows:

         S.No      DESCRIPTION           RAMEE          MESSRS RAUNAK
                                         CONSTRUCTION CORPORATION
                                         PRIVATE UMITEI
 F
         I.     Monetary consideration     Rs.7 crores        R& 8 crores an:! one
                pay.ibleto the Trust

         2.     Constm:ted area to be      4,921.3 sq.ft.     5,040 sq.ft.
                allotted to the Trust,
                free of cost
 G       3.     Construe ted/Reha bili tat 67,332.16 sq.ft.   69,166.53 dq.ft.
                ed area to be offered to (Excluding parking   (Parking will be
                the tenants/ occupants, area)                 made available to
                free of cost                                  the tenants as per
                                                              D.C. Regulations)

 H
     DATTATRAYA BABURAO WALAWALKAR v. SIDDHIVINAYAK                           911
           CONSTRUCTION PVT. LTD. [R.F.NARIMAN, J.]


                                                                               A
4.     Monthly rent per Rs.55/- per sq. foot     Rentals offered at rates
       sq.foot offered to of carpet area         ranging from Rs.17,500/-
       tenants/occupants computed @ 460          per      tenement      lo
       for availing of sq.ft. For                Rs.25,000/- per tenement
       transit            residential tenants    based on the areas of the
       accommodation                             existing tenen1ents.
                                                                               B
       during the period Rs. I 55/- per sq.
       of redevelopment foot of carpet area      Rs. I 00/- per sq.foot of
                          for non-residential    carpet area for non-
                          tenants                residential tenants

                                                 Also offered to pay
                                                 higher rentals if the         c
                                                 prevailing rates at the
                                                 relevant time are higher;
                                                 alternatively, have also
                                                 offered to provide transit
                                                 accommodation.
5.     Frequency        of        I0% annually   10% every .11 months          D
       increases        Ill
       monthly        rent
       togctl1er with the
       percentage of such
       increase
6.     Brokerage              I month 1s rent    l montll's rent               E

7.     Transportation/        Rs. 15 ,000/-      Rs.20,000/-
       Shifting Charges
8.     Corpus fund to be Rs. 7 crores and 90     Rs. 8 crores and one
       paid      to    the lacs
       tenants/occupants                                                       F
9.      Amount of Bank Rs.12 crores              Rs. 12 crores
        Guarantee offered
10.     Schedtde     for No         schedule Schedule depicting phase
        release of Bank furnished            }Vise release of Bank
        Guarantee                            Guarantees furnished.             G
                         Bank Guarantee to
                         be furnished within Bank Guarantee to be
                         II months from furnished upon receipt of
                         Development         lQD     i.e.   municipal
                         Agreement           sanctions

                                                                               H
912            SUPREME COURT REPORTS                                  [2016] 2 S.C.R.


A
         11.   Pe1iod of validity Renewable upto                 Initially for 3 years
               of Bank            completion                     and renewable upto
               Guarantee                                         possession
         12.   Background          Copies of Occupation          Copies of Occupation
                                   Certificates fi.1rnished in   Certificates furnished
 B             Projects of 2 lakh respect of2 commercial         in respect of 51
               sq.feet or more     buildings in Mumbai           residential buildings
               completed in the and I Hotel Building in          in Thane, Kandivli
               last 5 (five) years Pune                          and Kalyan
               together with                                     aggregating to
               copies of                                         approx. 21.93 lacs
 c             Occupation                                        sq.ft.
               certificates.


             11. We have been informed today by learned senior counsel, Mr.
      Sanjiv Sen appearing on behalf ofRarnee Constructions Private Limited,
      that his clients have been instructed to go up to Rs.8.20 crores in place
 D
      of the Rs.7 crore offer made by it. He, however, has, on instructions,
      increased the offer of Rs. 7 crores to Rs. I 0 crores today.
          12. The reason that this Court passed its order dated 5th February,
   2016 was only to ascertain as to whether the offer of Rs.6 crores made
   by Mis Raunak Corporation was indeed a fair offer at the time it was
 E
   made. Having regard to the fact that 9 persons initially came forward
   but they all petered out and ultimately left only Raunak Corporation and
   Ramee Constructions Private Limited in the fray, the fact that Ramee
   Constructions Private Limited was the only other bidder which offered
   a sum of Rs.7 crores about 5 years after the said offer of Raunak
 F Corporation of Rs.6 crores (which improved its offer to Rs.7 crores
   before the Division Bench of the Bombay High Court) shows that the
   offer made by Raunak Corporation appears to be a reasonable one. We
   must also remember that the sale-cum-development agreement has been
   entered into under Regulation 33(7) of the Development Control
   Regulations for Greater Mumbai, 1991, and has necessarily to fulfil one
 G
   condition without which the sale-cum-development agreement cannot
   go forward at all - it has to contain a minimum of 70% irrevocable
   written consent of the occupiers of the old structure. We have been
   informed that out of I 05 tenancies of the Trust, 65 consents have been
   obtained, and another 11 consents have also been obtained which, however,
 H have subsequently been revoked. Jfwe were to add these 11 to 65, as
     DATTATRAYA BABU RAO WALAWALKAR v. SIDDH!VINAYAK                             913
           CONSTRUCTION PVT. LTD. [R.F.NARIMAN, J.]


consents once given are irrevocable, the mathematics of the situation             A
would yield a figure ofroughly 74% of the occupiers of the old building.
       13. We find that the initial offer itself was a fair offer in the facts
and circumstances stated above. However, we record the statement
made by Mr. C.U.Singh, learned senior counsel, that his client was willing
to up that offer from Rs.8 crores that had been offered by him before             B
this Court to 8.25 crores, all other conditions mentioned in paragraph 9
of the report of the Trustees remaining the same. In the facts and
circumstances of these cases, we find that it would be forthe benefit of
the Trust ifthe said offer is accepted by the Trustees, which acceptance
has, on instructions, been give1i 'by Shri C.A. Sundaram, learned senior
counsel appearing on their behalf. We, therefore, deem it fit to allow the
                                                                                  c
present appeals in the aforesaid terms and set aside the order of the
Division Bench of the Bombay High Court.
      14. The appeals are, accordingly, disposed of as above with no
orders as to costs.
                                                                                  D
       15. The application for impleadment is allowed.
       16. Pending applications, if any, stand disposed of.
Nidhi Jain                                                Appeals disposed of