PARSI ZOROASTRIAN ANJUMAN, MHOWversusTHE SUB DIVISIONAL OFFICER/THE REGISTRAR OF PUBLIC TRUSTS & ANR.

                          [2022] 1 S.C.R. 405                               405


           PARSI ZOROASTRIAN ANJUMAN, MHOW                                  A
                                   v.
    THE SUB DIVISIONAL OFFICER/THE REGISTRAR OF
                PUBLIC TRUSTS & ANR.
                    (Civil Appeal No. 490 of 2022)                          B

                         JANUARY 28, 2022
      [UDAY UMESH LALIT, S. RAVINDRA BHAT AND
               BELA M. TRIVEDI, JJ.]
                                                                            C
       M.P. Public Trusts Act, 1951 – s.14 – Sale etc. of property
belonging to a public trust –Power conferred on the Registrar of
public trusts u/s.14 to grant or withhold sanction – Ambit and scope
– Held: From a reading of s.14(1) and (2), it is clear that the grant
or refusal of sanction by the Registrar have to be based on either
“the directions in the instrument of trust”, or “any direction given        D
under this (i.e., M.P. Public Trusts Act) or any other law by any
court” – The discretion is relatable to directions in the trust document,
or any provision of the Act, or any other law as ordered (or directed)
by any court – The Registrar, is not empowered to read into it her
own notions of what is beneficial and what is prejudicial to the            E
trust – The refusal has to be specific to the requirement of law,
wherever such law clearly stipulates so, or any specific provision
of the trust document – A plain look at rr.9(1) and (2) of the M.P.
Trust Rules would show that the conditions mentioned in those rules,
are in conformity with the framework of s.14 – However, if r.9(3)
were to be read independently, it can be construed as conferring            F
additional power to impose conditions – Such a reading would lead
to r.9(3) being rendered ultra vires – However, a proper and
harmonious reading of r.9(3) would be that the Registrar, in a given
case may impose conditions, if the instrument of public trust, or any
law, relating to public trusts, results in a court direction to such        G
effect – In the absence of these objective factors, the Registrarcannot
unilaterally impose conditions which in her, or his opinion would
inure to the interest of the public trust – M.P. Trust Rules, 1962 – r.9
– Trusts and Charities – Public Trust.

                                                                            H
                                  405
406            SUPREME COURT REPORTS                         [2022] 1 S.C.R.


A            Trusts and Charities – Public trust – Regulation – Public
      control– Objective – Held: The aim of public control is to ensure
      that the trust is administered efficiently and smoothly – The state
      interest is that far, and no more; it cannot mean that the state can
      dictate what decisions can or cannot be taken – In the specific
      context of alienation of properties, depending on the nature of the
B
      oversight, the state’s interest is to ensure that valuable assets of
      public trusts are not frittered away – Any organization which is
      self-governed, cannot be subjected to overarching state control –
      As long as its decisions are well informed, and grounded on relevant
      considerations, the interests of the trust are those defined by its
C     members – Any measure of public control enacted through express
      stipulations in law, should not be expanded to such an extent that
      the right to freedom of association, under Art.19(1)(c), is reduced
      to an empty husk, bereft of meaningful exercise of choice–
      Constitution of India – Art.19(1)(c).
D            M.P. Public Trusts Act, 1951 – s.14 – Powers conferred on
      the Registrar, u/s.14 – Nature of – Difference from powers conferred
      u/s.36 of the Bombay Public Trust Act – Held: There is a marked
      difference in the nature of the powers under the two enactments –
      The Bombay law confers a wider supervisory role; however, such a
      wide power is not available to the Registrar, under the M.P Public
E     Trusts Act – s.36 of the Bombay Public Trust Act, confers decidedly
      wider powers on the Commissioner (including imposition of “such
      conditions as he may think fit to impose, regard being had to the
      interest or benefit or protection of the trust”) than the kind of powers
      conferred on the Registrar, u/s.14 of the M.P. Public Trusts Act –
F     Bombay Public Trust Act, 1950.
            Cyrus Rustom Patel v. Charity Commissioner (2018) 14
            SCC 761 : [2017] 9 SCR 277 (8); Chenchu Rami Reddy
            & Anr. v. Govt. of Andhra Pradesh & Ors. (1986) 3
            SCC 391 : [1986] 1 SCR 989; Bhaskar Laxman Jadhav
G           & Ors. v. Karamveer Kakasaheb Wagh (2013) 11 SCC
            531 : [2012] 11 SCR 767; and Mehrwan Homi Irani &
            Anr. v. Charity Commissioner Bombay and Ors. (2001)
            5 SCC 305 – referred to.


H
     PARSI ZOROASTRIAN ANJUMAN, MHOW v. THE SUB DIVISIONAL                   407
              OFFICER/THE REGISTRAR OF PUBLIC TRUSTS


                             Case Law Reference                              A
[2017] 9 SCR 277                      referred to             Para 8
[1986] 1 SCR 989                      referred to             Para 17
[2012] 11 SCR 767                     referred to             Para 17
(2001) 5 SCC 305                      referred to             Para 17        B
          CIVIL APPELLATE JURISDICTION: Civil Appeal No. 490 of
2022.
     From the Judgment and Order dated 29.09.2018 of the High Court
of Madhya Pradesh, Bench at Indore in W.A. No.1325 of 2018
                                                                             C
      A. K. Chitale, Sr. Adv., Kartik Chitale, Rahul Tripathi, Ms.
Vaishnavi Paliwal, Niraj Sharma, Advs. for the Appellant.
      Huzefa Ahmadi, Sr. Adv., Ninad Laud, Iva MS D’Costa, Sahil
Tagotra, Ms. Anshula Grover, Advs. for the Respondents.
          The Order of the Court was passed by                               D

          S. RAVINDRA BHAT, J.
        1. Leave granted. This appeal by special leave is directed against
the judgment of a Division Bench of the Madhya Pradesh High Court at
Indore, dismissing an appeal1. The judgment confirmed an order of the        E
learned Single Judge, who in turn, had affirmed the rejection of the
application filed by the appellant, Parsi Zoroastrian Anjuman, Mhow
(hereafter referred to as “the trust”), seeking sanction for the disposal
of its trust property.
       2. The appellant was registered as a public trust on 29.01.1973       F
under the provisions of the Madhya Pradesh Public Trusts Act, 1951
(hereafter “the Act”). The trust’s membership was made up exclusively
of members of the Parsi community at Mhow. On 15.05.2011, at the
behest of the trust and on its application, a revisited final scheme in
relation to the trust was approved by the District Judge, Mhow2. The
revisited scheme contained the following clause:                             G
          “The Managing Committee members, after getting from a
          majority of the General Body Members and a specific

1
    Dated 29.09.2018 in W.A. 1325/2018.
2
    Order dated 15.05.2011 in Case No.3/2010                                 H
408                SUPREME COURT REPORTS                         [2022] 1 S.C.R.


A               concurrence of the FPZAI members, shall be entitled to
                liquidate the assets and immovable properties of the Anjuman
                which have taken vacant and utilize the proceeds of the objects
                of the Trust, including the upkeep of the consecrated holy
                fire from the Mhow Agiari and the maintenance of a priest to
                look after it as also for the benefit of the Parsi and Irani
B
                Zoroastrian community, always giving preferences to those
                connected with Mhow and after ensuring that event he last
                Zoroastrian left in Mhow is duly cared for, if poor or needy.”
             3. In a meeting held on 14.12.2014, the members of the trust’s
      Managing Committee unanimously agreed that five of its immovable
C     properties should be sold. This decision was consented to by the individual
      members of the Managing Committee which included representatives
      of the Parsi Zoroastrian Anjuman community, i.e., the apex body of the
      Parsi community in the country. As a follow-up, the proposal was placed
      before a general meeting of all members of the trust on 19.01.2015 in
D     which a majority of members supported the Managing Committee’s
      decision to sell the five items of property. The trust had circulated what
      was termed as a “Vision Document” which listed the existing income,
      expenditure, and the likely projection in the event the properties were
      sold and the proposed use for which the funds received from such
      transaction were to be utilized.
E
              4. As was required of it, the trust applied under Section 14 of the
      Act to the Registrar of Public Trusts for previous sanction for the sale of
      the five said properties. The application languished before the Registrar,
      for a while. Resultantly, the trust approached the M.P. High Court by
      filing a writ petition3. This petition was disposed of by an order4 requiring
F     the Registrar to take a decision preferably within 45 days. The trust
      approached the Registrar on 17.07.2017 with a request to dispose of its
      pending application; it filed relevant documents and a more detailed
      application in which it was contended inter alia that:
                “7(c) The sale proceeds generated through the proposed sale
G               will be invested only in scheme approved and permissible for
                charitable trusts. Such investment will generate sufficient
                income for achieving the objectives of the applicant Trust by

      3
          W.P. 2903/2017.
      4
H         Dated 10.07.2017.
 PARSI ZOROASTRIAN ANJUMAN, MHOW v. THE SUB DIVISIONAL                         409
OFFICER/THE REGISTRAR OF PUBLIC TRUSTS [S. RAVINDRA BHAT, J.]


      assisting those members who are in need of medical,                      A
      educational and other financial assistance.”
       5. The trust contends that the copy of the Vision Document (which
was circulated to its members and formed the basis of majority opinion
confirming the sale) was also filed with the Registrar. The Registrar
notified Ms. Pervin Rumi Jehangir, the second respondent (hereafter            B
referred to as “Ms. Jehangir”), asking her to respond to the trust’s
application seeking previous sanction - apparently in view of her previous
objection to the proposal. Accordingly, detailed objections were filed by
Ms. Jehangir which was provided to the trust. The trust in turn filed its
written submissions. It was pointed out that the details of the status of
the properties proposed to be sold were given - most of them were in a         C
dilapidated condition or required extensive repairs. The trust also pointed
out that the properties would be sold after due and proper valuation and
would be under the supervision of the Court. It was furthermore urged
by the trust that the tenants occupying the premises were paying nominal
rent and that its expenditure had increased to 26 lakhs per annum. Its         D
income was not adequate to meet the continuously mounting expenditure.
       6. The Registrar, by her order dated 10.11.2017, rejected the trust’s
application for previous sanction under Section 14(1), and noticed that
the trust had previously sold other properties. The Registrar reasoned as
follows:
                                                                               E
       “……if property is continued to be sold for meeting expenses
       of the Trust, then the entire property would be exhaustive in
       that condition. No such plan has been submitted on behalf of
       the Trust from the Trust property remains secured and expenses
       of the Trust are also met. Information has also been given by
       the Trust that Trust expenses are about Rs.26 lacs per annum.           F
       In my opinion, it is necessary and proper to take expert
       opinion as to what measures can be taken to limit the expenses
       of the Trust and augment income of the Trust. For this purpose,
       services of some chartered accountant may also be taken.
       Trust property has become dilapidated. In this regard, no solid         G
       evidence has been produced either. For maintenance and
       security of the property also, it is necessary to take appropriate
       measures.
      Trust properties are located at extremely important places of
      Mhow Town which have lot of value. It is necessary to take
      measures for safety of the property while properly running               H
410                SUPREME COURT REPORTS                        [2022] 1 S.C.R.


A               activities of the Trust. In my opinion, there would be adverse
                effect from permission to sell the property on interest of the
                Trust, Therefore, the application for sale of property by the
                Trust is rejected after consideration……..”
             7. The trust approached the Indore Bench of the M.P. High Court
B     alleging that the rejection of its application for previous sanction was
      unjustified. It contended that the sale was mooted to augment its income
      and that it was preceded by a proper Vision Document which outlined
      the income likely to be garnered by the sale and the expenditure to be
      borne by the trust. The trust highlighted that the Vision Document clearly
      showed that the interest accruing from the investment (made with the
C
      expected proceeds of the sale) would be used for the purpose of charity
      and the expenses of the trust. A copy of the Vision Document was also
      filed along with the writ petition.
             8. Ms. Jehangir was arrayed as the second respondent; she
      resisted the trust’s petition. The learned Single Judge of the High Court,
D
      by his order5 noticed the judgment of this Court reported as Cyrus Rustom
      Patel v. Charity Commissioner 6 and upheld the Registrar’s order
      rejecting the application under Section 14. The learned Single Judge
      reasoned that the record disclosed that the property sought to be sold
      were all old and that they had been donated by the members of the Parsi
E     community. The learned Single Judge observed that:
                “in all fairness, the Trust should have made all possible
                endeavor to repair the buildings which are Trust properties
                and to ensure that the rich cultural heritage of the Parsis
                which is still alive in the township of Mhow, is not destroyed
F               by selling it to builders and to other persons at throwaway
                price and therefore, this Court is of the considered opinion
                that the Registrar, Public Trust was certainly justified in
                rejecting the application filed by the Trust. No case for
                interference is made out in the matter. The present Writ Petition
                is dismissed.”
G
                The trust appealed, unavailingly, to the Division Bench.


      5
          Dated 18.07.2018 in W.P. 23231/2017.
      6
H         (2018) 14 SCC 761.
 PARSI ZOROASTRIAN ANJUMAN, MHOW v. THE SUB DIVISIONAL                         411
OFFICER/THE REGISTRAR OF PUBLIC TRUSTS [S. RAVINDRA BHAT, J.]


      Contentions of parties                                                   A
       9. It was argued on behalf of the trust by Mr. A.K. Chitale, learned
senior counsel, that the High Court failed to consider that the power of
the Registrar to accept or reject the application was limited. Learned
counsel highlighted that unlike Section 36 of the Bombay Public Trusts
Act, which conferred intrusive and pervasive supervisory powers upon           B
the Registrar in regard to applications seeking approval for transfer or
alienation of immovable property of public trusts, Section 14 of the Act,
in the present instance, conferred extremely limited powers.
        10. Mr. Chitale, submitted that Section 14(1) subordinates and
conditions the grant or withholding of approval to “the directions in the      C
interest of Trust” or any direction given under “this or any other law
by any Court”. Necessarily, this meant that the grant or withholding of
approval had to relate to stipulations in the Trust Deed or instruments
creating it or had to be embodied in any enacted law, and in accordance
with directions by a Court. In the absence of any restrictive condition or
external limiting factors located in a statute, the Registrar could not have   D
validly withheld the sanction. Elaborating further on this, it was submitted
that although Section 14(2) confers a slightly larger power of withholding
sanction for any transaction, it is not unguided and should be based on an
assessment of the materials (placed before the Registrar) that the
transfer is prejudicial to its interest.                                       E
       11. Learned senior counsel emphasised that unlike Section 14, the
Bombay Trusts Act, by Section 36 grants independent powers to the
Charity Commissioner to impose conditions which were thought
appropriate “regard being had to the interest, benefit or protection
of the Trust”. Learned senior counsel submitted that the materials placed      F
on record showed that firstly in the past too, properties had been sold to
augment the trust’s income generating capacity. Secondly, of the 15
immovable properties owned by the trust, only 5 were proposed to be
sold. The trust’s application was clearly based upon a carefully thought-
out plan whereby the likely consideration expected to be received was
proposed to be invested in securities. This would have resulted in income      G
of 83 lakhs – considerably more than the existing annual income level
of 20 lakhs (as was the case when the application was made). The
Vision Document showed how this larger income was to be used for
increased spending on charity, education, aid to senior citizens,
maintenance of the trust’s buildings and increasing the salaries of its        H
412             SUPREME COURT REPORTS                            [2022] 1 S.C.R.


A     employees as also the increased expenditure towards fulfilling religious
      obligations created in the trust deed. Furthermore, the proposal by the
      trust and the resolution of the general meeting clearly was to have the
      properties duly valued and sell them to the highest bidder by inviting
      sealed tenders. It was argued that this process was transparent and
      could not have given rise to any apprehension that the sale was not for
B
      the benefit, let alone that it was prejudicial to the trust’s interests.
             12. It was contended that the second respondent’s objection with
      respect to the proposed sale being at the behest of a few members of
      the Managing Committee was baseless. Learned counsel sought to
      highlight that the second respondent’s father was the President of the
C     trust and during his tenure, sale of immovable properties had been carried
      out on previous occasions. Therefore, it could not be said that the trust
      had taken an unusual or novel step, and it could not be accused of frittering
      away its properties.
             13. Mr. Huzefa Ahmadi, learned senior counsel appearing for the
D     second respondent urged this court not to interfere with the findings
      recorded by the High Court. It was urged firstly that the Division Bench
      affirmed the learned Single Judge’s reasoning which is unexceptionable.
      Mr. Ahmadi urged that this court rarely interferes with concurrent findings
      in the exercise of its discretionary jurisdiction under Article 136. He
E     highlighted that though leave was granted, nevertheless, the Court’s
      residual discretion in confirming the concurring opinion has been
      recognized on previous occasions.
             14. Mr. Ahmadi next urged that the Registrar’s determination that
      the trust’s application for transfer of five immovable properties was
F     prejudicial to its interest was based upon an independent and objective
      consideration of the materials placed before her. It was highlighted that
      although Section 14 does not expressly outline the requirements which a
      trust has to fulfil while seeking sanction, Rule 9 of the M.P. Trust Rules,
      1962 contemplates three relevant considerations that were to be taken
      into account - namely whether the trust deed contains a stipulation with
G     respect to alienation of immovable property; the necessity for the proposed
      alienation; and whether the proposed alienation is in the interest of the
      trust.
            15. It was further highlighted that by virtue of Rule 9(2), the
      Registrar is empowered to make necessary enquiry and by Rule 9(3),
H     the Registrar may impose conditions “as he may deem fit”, if (s)he is
     PARSI ZOROASTRIAN ANJUMAN, MHOW v. THE SUB DIVISIONAL                      413
    OFFICER/THE REGISTRAR OF PUBLIC TRUSTS [S. RAVINDRA BHAT, J.]


of the opinion that grant of sanction to the proposed alienation without        A
imposing such conditions, will be prejudicial to the interest of the public
trust. In the present instance, learned senior counsel stated that the
Registrar was not satisfied with the proposal as it contained vague or
little details with regard to how the property was to be sold, its likely
valuation, and details of how the investments would be made of the
                                                                                B
consideration received through such sale. Furthermore, the Registrar
was of the opinion that the trust could take other measures to augment
its income and ensure that its properties were maintained properly without
transferring any of them.
       16. Mr. Ahmadi further submitted that even though the wording
of Section 14 does not facially confer the kind of power which is given         C
to the Bombay Charity Commissioner under the Bombay Public Trusts
Act, nevertheless, Rule 9(3) clothes the Registrar with sufficient discretion
to act in the best interest of a trust and make sure that no decision
prejudicial to its interest is taken.
       17. Learned senior counsel relied upon the decision of this Court        D
in Cyrus (supra). He also cited other judgments Chenchu Rami Reddy
& Anr. v. Govt. of Andhra Pradesh & Ors.7; Bhaskar Laxman Jadhav
& Ors. v. Karamveer Kakasaheb Wagh8; and Mehrwan Homi Irani
& Anr. v. Charity Commissioner Bombay and Ors.9 to highlight that
the best interests of a public trust are always paramount and are at the        E
forefront of the concern of statutory authorities and courts. He highlighted
that this is even more so when a proposal for long term alienation such
as long-term lease or sale of trust property is involved. All these relevant
considerations were kept in mind by the Registrar in her rejection order.
It was submitted that as a consequence, the impugned order does not
call for any interference by this court.                                        F

        Provisions
      18. “Public trust” is defined by Section 2 (4) of the M.P. Public
Trusts Act as follows:
        “public trust” means an express or constructive trust for a             G
        public, religious or charitable purposes and includes a temple,
        a math, a mosque, a church, a wakf or any other religious or
7
  (1986) 3 SCC 391.
8
  (2013) 11 SCC 531.
9
  (2001) 5 SCC 305.                                                             H
414            SUPREME COURT REPORTS                           [2022] 1 S.C.R.


A           charitable endowment and a society formed for a religious
            or charitable purpose;
            19. By Section 4, every public trust has to apply for registration,
      when it comes into existence. Section 14, which is relevant for the present
      purpose, reads as follows:
B           “14. Previous sanction of Registrar, in cases of sale, etc., of
            property belonging to a public trust. (1) Subject to the directions
            in the instrument of trust or any direction given under this or
            any other law by any Court,-
            (a) no sale, mortgage, exchange of gift of any immovable
C           property; and
            (b) no lease for a period exceeding seven years in the case of
            agricultural land or for a period exceeding three years in the
            case of non-agricultural land or building; belonging to a
            public trust, shall be valid without the previous sanction of
D           the Registrar.
            (2) The Registrar shall not refuse his sanction in respect of
            any transaction specified in sub-section (1) unless such
            transaction will, in his opinion, be prejudicial to the interests
            of the public trust.”
E
            Rule 9 of the M.P Trust Rules, 1962 reads as follows:
            “9. Applications under Section 14 for sanction of alienations.–
            (1) Every application for sanction of an alienation shall
            contain information inter alia on the following points,-
F           (i) whether the instrument of trust contains any directions as
            to alienation of immovable property;
            (ii) what is the necessity for the proposed alienation;
            (iii) how the proposed alienation is in the interest of the public
G           trust; and
            (iv) in the case of a proposed lease, the terms of the past
            leases, if any.
            Such application shall be accompanied by a valuation report
            of an expert.
H
 PARSI ZOROASTRIAN ANJUMAN, MHOW v. THE SUB DIVISIONAL                        415
OFFICER/THE REGISTRAR OF PUBLIC TRUSTS [S. RAVINDRA BHAT, J.]


      (2) The Registrar, before according or refusing sanction, may           A
      make such inquiry as he may deem necessary’
      (3) In according sanction, the Registrar may impose such
      conditions, as he may deem fit, if he is of the opinion that the
      grant of sanction to the proposed alienation without imposing
      such conditions will be prejudicial to the interests of the public      B
      trust.”
      Analysis and conclusions
       20. As can be seen by Section 14 (1), previous sanction of the
Registrar of public trusts is a precondition, for the (a) “sale, mortgage,    C
exchange of gift of any immovable property” or (b) “lease for a
period exceeding seven years in the case of agricultural land or
for a period exceeding three years in the case of non-agricultural
land or building.” If Section 14 (1) had stopped there, the embargo on
alienation of the types enumerated in the provision (sale, gift, exchange,
mortgage etc., or long-term lease(s) of agricultural or non-agricultural      D
properties) i.e., obtaining previous sanction, could well have meant that
the Registrar’s role was conceivably intrusive. However, the provisions
of Section 14 (1) and the power conferred on the Registrar under it, are
controlled by Section 14 (2) which states that the Registrar “shall not
refuse his sanction” unless in his opinion the alienation, or transfer is
                                                                              E
prejudicial to the interests of the public trust. The clear reference in
Section 14 (2) is to the power exercisable under Section 14 (1). The
controlling expression in Section 14 (1) significantly, is that previous
sanction in respect of the two situations (i.e., alluded in clauses (a) and
(b)) is “subject to the directions in the instrument of trust or any
direction given under this or any other law by any Court.” This               F
controlling or, rather opening words, clearly indicate that the grant or
refusal of sanction by the Registrar have to be based on either “the
directions in the instrument of trust”, or “any direction given under
this (i.e., M.P. Public Trusts Act) or any other law by any court”.
The discretion thus, is relatable to directions in the trust document, or
                                                                              G
any provision of the Act, or any other law as ordered (or directed) by
any court. Therefore, the Registrar, is not empowered to read into it her
own notions of what is beneficial and what is prejudicial to the trust. The
refusal has to be specific to the requirement of law, wherever such law
clearly stipulates so, or any specific provision of the trust document.
                                                                              H
416             SUPREME COURT REPORTS                            [2022] 1 S.C.R.


A            21. On behalf of the second respondent, considerable emphasis
      was placed on Rule 9, especially Rule 9 (3), to say that the Registrar can
      – in addition to the stipulations which condition grant of previous sanction
      – also: “impose such conditions, as he may deem fit, if he is of the
      opinion that the grant of sanction to the proposed alienation without
      imposing such conditions will be prejudicial to the interests of the
B
      public trust”. If one recollects that the power to impose conditions is
      absent in the main provision of the parent enactment, i.e., Section 14 (1)
      or (2), clearly, sub-rule (3) goes beyond enacted law. A plain look at
      Rules 9 (1) and (2) would show that the conditions mentioned in those
      rules, are in conformity with the framework of Section 14. However, if
C     Rule 9 (3) were to be read independently, it can be construed as conferring
      additional power to impose conditions. Such a reading would lead to
      Rule 9 (3) being rendered ultra vires. However, a proper and harmonious
      reading of Rule 9 (3) would be that the Registrar, in a given case may
      impose conditions, if the instrument of public trust, or any law, relating to
      public trusts, results in a court direction to such effect. In the absence of
D
      these objective factors, the Registrar, in this court’s opinion, cannot
      unilaterally impose conditions which in her, or his opinion would inure to
      the interest of the public trust.
            22. It is now necessary to discuss the case-law cited on behalf of
      the parties. In Chenchu Rami Reddy (supra) Section 74 (1) (c) of the
E     Andhra Pradesh Charitable and Hindu Religious Endowments Act, 1966
      obliged that public trust property had to be put to auction by the
      Commissioner (of trusts). In that case, the property of the trust was
      sought to be sold by private negotiation, despite an offer of three times
      more consideration, by another party. The Commissioner had approved
F     such private sale. This court set aside the sale, holding inter alia, that:
            “property of such institutions or endowments must be
            jealously protected. It must be protected, for, a large segment
            of the community has beneficial interest in it (that is the raison
            d’etre of the Act itself). The authorities exercising the powers
G           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 value or make
            a less than the closest-and-best-attention approach to guard
            against all pitfalls. The approving authority must be aware
H           that in such matters the trustees, or persons authorised to sell
 PARSI ZOROASTRIAN ANJUMAN, MHOW v. THE SUB DIVISIONAL                        417
OFFICER/THE REGISTRAR OF PUBLIC TRUSTS [S. RAVINDRA BHAT, J.]


       by private negotiations, can, in a given case, enter into a            A
       secret or invisible under-hand deal or understanding with
       the purchasers at the cost of the concerned institution. Those
       who are willing to 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
                                                                              B
       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.
       With these words of caution we close the matter.”                      C
       23. Section 36 of the Bombay Public Trust Act, 1950, inter alia,
stipulates that:
       “(c) if the Charity Commissioner is satisfied that in the interest
       of any public trust any immovable property thereof should be
       disposed of, he may, on application, authorise any trustee to          D
       dispose of such property subject to such conditions as he
       may think fit to impose, regard being had to the interest or
       benefit or protection of the trust.”
       In the decision in Mehrwan Homi Irani (supra), the nature of
this power, of imposing conditions having regard to the interest or benefit
                                                                              E
or protection of the public trust, was emphasized:
       “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 the Trust should be accomplished in the best of its interests.
       Leasing out of a major portion of the land for other purposes          F
       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 are constrained to remit the matter
       to the Charity Commissioner to take a fresh decision in the            G
       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 direct that the
       Charity Commissioner shall take a decision at the earliest.”           H
418            SUPREME COURT REPORTS                          [2022] 1 S.C.R.


A           24. In Bhaskar Laxman Jadhav (supra) approval to sell trust
      property was sought, in 1994. The trustees prevaricated; on different
      occasions, extension to carry out the sale was sought. Ultimately, in
      2006, the property was sought to be sold. However, the approval
      application was rejected. This was impugned before the High Court,
      which in its order, required the Commissioner to re-examine the matter
B
      afresh, and also take into consideration altered circumstances, i.e., the
      passage of time had led to a considerable increase in the value of the
      property. This court endorsed the view of the High Court.
              25. In Cyrus Rustom Patel (supra), again, the applicability of
      Section 36 of the Bombay Public Trust Act was in issue. This court set
C     aside a sale, after observing that the Commissioner neither ascertained
      the value of the property, nor made any attempt to secure the best price
      for it. Further, the Commissioner did not attempt to explore if other
      conditions could be imposed on the proposed developer or purchaser. It
      was observed that:
D           “23. The power to grant sanction has to be exercised by the
            Charity Commissioner, taking into consideration three classic
            requirements 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
E           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 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
F           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
            misrepresentation or those material facts have been
            suppressed while obtaining sanction. The intendment of the
G           revocation provision is also to sub-serve the interest, benefit,
            and protection of the Trust and its property.
            24. In the instant case, the Joint Charity Commissioner was
            required to consider the interest and benefit of the Trust. We
            are compelled to observe that Joint Charity Commissioner has
H           totally abdicated its duty, and failed to act as per the mandate
 PARSI ZOROASTRIAN ANJUMAN, MHOW v. THE SUB DIVISIONAL                          419
OFFICER/THE REGISTRAR OF PUBLIC TRUSTS [S. RAVINDRA BHAT, J.]


      of Section 36. The observations made by Joint Charity                     A
      Commissioner in its Order clearly reflect that Charity
      Commissioner has failed to exercise the duties enjoined upon
      to protect trust under Section 36 of the Act. It has not
      considered the interest, benefit, and protection of the trust at
      all. The order is wholly perverse. Joint Commissioner
                                                                                B
      abdicated its responsibilities, in as much as it observed that it
      was the outlook of the Trust as to whom it wanted to sell the
      property, and as certain development was to be made; as such
      market value of the property was not a relevant consideration.
      There is the sale made in the form of Joint Venture development
      cum sell agreement and lease was for 999 years. Right from                C
      the beginning, it was to be a joint venture agreement coupled
      with a sale option, as apparent from the minutes of the meeting
      of the trust. The trustees had been acting in collusion with
      developer even before resolution had been passed.
      Negotiations were going on with M/s. Astral Enterprises-
                                                                                D
      developer.”
       26. It is apparent that these decisions of the court were in the
context of Section 36 of the Bombay Public Trust Act, which confers
decidedly wider powers on the Commissioner (including imposition of
“such conditions as he may think fit to impose, regard being had to
the interest or benefit or protection of the trust”) than the kind of           E
powers conferred on the Registrar, under Section 14 of the M.P. Public
Trusts Act. Under the latter enactment, the Registrar’s power to grant
or withhold sanction is guided by the stipulations in the trust instrument,
or under a law, as directed by a court. There is, consequently, a marked
difference in the nature of the powers under the two enactments. The            F
Bombay law confers a wider supervisory role; however, such a wide
power is not available to the Registrar, under the M.P Public Trusts Act.
       27. Public control of charities (whether social or religious) has
been recognized in our country for over a century. In the context of
religious endowments, such public control is essential, for the simple          G
reason that in its absence, there is likelihood of diversion of monies and
properties accumulated through public donation and gifts. The role of
the designated state official (commissioner, or registrar, etc.) is to ensure
that accounts are properly maintained; monies are expended in
accordance with the aims and objects of the endowments; the proper
                                                                                H
420             SUPREME COURT REPORTS                             [2022] 1 S.C.R.


A     rituals are conducted, etc. Such regulation does not mean that the state
      is allowed to appropriate monies which rightly belong to the endowment.
      In the case of public charities and trusts, slightly different considerations
      prevail. The aim of public control is to ensure that the trust is administered
      efficiently and smoothly. The state interest is that far, and no more; it
      cannot mean that the state can dictate what decisions can or cannot
B
      be taken. In the specific context of alienation of properties, depending
      on the nature of the oversight, the state’s interest is to ensure that valuable
      assets of public trusts are not frittered away. It is for this reason, that
      provisions like Section 36 clearly enunciate a principle that the
      Commissioner can impose such conditions as may be appropriate.
C     However, the statute in the present case (the M.P. Public Trusts Act)
      does not contain such a power to impose conditions; the only
      considerations that weigh with the officer (Registrar) are the stipulations
      in law, or in the instrument of public interest. Other than these
      considerations, the principle of autonomy and democratic decision-making
      cannot be undermined. Any organization which is self-governed, cannot
D
      be subjected to overarching state control. As long as its decisions are
      well informed, and grounded on relevant considerations, the interests of
      the trust are those defined by its members. Any measure of public control
      enacted through express stipulations in law, should not be expanded to
      such an extent that the right to freedom of association, under Article 19
E     (1) (c), is reduced to an empty husk, bereft of meaningful exercise of
      choice.
             28. In the facts of the present case, the record shows that the
      decision to sell the properties was a consequence of a two layered
      process, where all members participated and decided to dispose of the
F     property. The decision was based on a realistic assessment of the trust’s
      existing and future liabilities, the obligations towards charity, aid to senior
      citizens, education, medical aid, and religious ceremonies, imposed by
      the trust instrument. Furthermore, the proposed spending from the returns
      earned through the investment made from the consideration arising from
      sale, were also outlined and clearly disclosed. Most crucially, the
G
      properties were valued, and proposed to be sold by public tender.
      Disregarding all this disclosed transparency, the Registrar, on the basis
      of her subjective notion of what constituted best interests of the trust,
      could not have rejected the application, as she did. The High Court, in
      this court’s opinion fell into error, in endorsing that rejection.
H
  PARSI ZOROASTRIAN ANJUMAN, MHOW v. THE SUB DIVISIONAL                       421
 OFFICER/THE REGISTRAR OF PUBLIC TRUSTS [S. RAVINDRA BHAT, J.]


       29. Before parting, this court is of the opinion that the trust may    A
proceed to implement its decision, but subject to fresh valuation of each
of the properties, which is proposed to be sold. This valuation should be
disclosed to the Registrar, who can facilitate the implementation of the
decision to sell to the highest bidder, through public tender.
      30. The impugned judgment and the decision of the Registrar are         B
hereby set aside. The appeal succeeds, in terms indicated in the preceding
paragraph, and is allowed. There shall be no order on costs.


Devika Gujral                                               Appeal allowed.
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