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Shri Ambadevi Sanstha & Ors. v. Joint Charity Commissioner & Ors.

Civil Appeal · 2018 INSC 873Decided 25 Sept 2018
Civil Appeal No. 9936 of 2018
Justice Arun Mishra · Justice Vineet Saran

Background

Shri Ambadevi Sanstha, a registered public trust, challenged orders of the Joint Charity Commissioner permitting the sale of several parcels of trust agricultural land and two houses at prices the trust considered far too low, even though higher competing offers (and later objections from a newly elected body of 15 trustees who wanted the sale stopped) were on record. The Bombay High Court dismissed the trust's writ petitions and upheld the Commissioner's permission to sell, prompting the trust's appeals to the Supreme Court.

Decision Breakdown

The Supreme Court found that the Joint Charity Commissioner had acted illegally under Section 36 of the Bombay Public Trusts Act by sanctioning the sales: no genuine effort was made to ascertain the true market value of the properties, a higher competing offer (Rs. 9,000/acre) was ignored in favour of a lower one, earnest money had been improperly accepted from a purchaser before permission to sell was even granted, and the Commissioner disregarded the trustees' own objections and resolution against the sale. The Court held there was no demonstrated necessity for the trust to sell its properties at all, and that allowing an illegal transaction to stand would harm the trust's long-term interest. It allowed the appeals, set aside both the High Court's and the Commissioner's orders, annulled the sale transactions, and, rejecting the purchasers' claim of equity from decades of possession and improvements, directed that possession of the land and houses be restored to the trust within two months, by police action if necessary.

Lesson Learnt

Charity commissioners and other authorities overseeing trust property cannot rubber-stamp a sale at below-market value or against the trustees' own wishes; courts will annul such sales and order restoration of the property even after purchasers have held and improved it for many years, because no amount of time cures an illegally granted permission.

Official source (sci.gov.in)View Judgment (PDF)

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