Wednesday, 27 December 2017

SUPREME COURT JUDGEMENT APPLICABLE TO ALL RELIGIONS: DONATION AND APPROPRIATION


The case was related to a development cum sale transaction of the B.C. Batliwala Agiary Trust (Parsee Temple) by an agreement with M/s. Astral Enterprises. Though the case was related to Parsee trust, the ratio of the judgement is equally applicable to Hindu, Muslim, Christian, etc religious trusts getting huge donations from their followers as well as outsiders.

By a development agreement made by the Trustees of of B.C.Batliwala Agiari Trust, the temple (Agiary) would be renovated and 33% of the built-up area would be given out of balance F.S.I.  In addition, a sum of Rs.2,95,00,000/- as sale consideration was received by the Trustees from the Developers. The appellant Cyrus Rustom Patel filed writ application in the High Court of Bombay.  The High Court dismissed the same, mainly, on the ground of delay, as petitioner was aware of the transaction w.e.f. the year 2003.  The High Court has observed that offer made by another deloper in respect of sale transaction of an amount of Rs.55 crores was not proper.  It was to acquire property rights on a freehold basis and not in the form where the setback line runs through the Sanctum Sanctorum.  The High Court opined that offer may have been tempting, but could not be said to be genuine. HC also taken into account of the delay in filing the Writ Petition.

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The Supreme Court has mentioned in the judgement that, it had directed a number of times in its judgements that sale of trust property, which is like public property, if at all necessary, is not permissible by way of private negotiations; could be done only in exceptional circumstances, for reasons to be recorded.  There was no exceptional circumstance, no urgency to throw away the valuable property of the trust, which was derogatory to its interest and would have defeated the very object of the creation of the trust for the preservation and protection of religion and Parsi culture. The joint venture development was not an intended transaction; sale option was mentioned dubiously in the agreement; same indicated that transaction was not bonafide. It was a cloak or a device adopted by the Trust so as to sell the property, and the transaction could not be said to be in the interest and benefit of the trust at all.  Apart from that, there was a clause for sale, and lease of 999 years would also tantamount to a sale, and admittedly sale option had been exercised.

The Supreme Court further stated that the High Court had also failed to consider the various aspects, and had rejected the petition mainly on the basis of the delay, that was not very material in the facts, as no development had taken place. When such a prime and valuable public property was involved, the aforesaid delay could not be said to be fatal in the facts and circumstances of the case. The High Court has also not looked into the market value of the property and has dismissed the writ application on untenable and flimsy grounds. The Supreme Court also stated that considering the value of the property and the arguments made on behalf of the trustees, they were of the view that the trustees were not up to the task of protecting the interest of the trust, and clearly colluded with the developer while entering into such an agreement for development-cum-sale. Stating this, the order passed by the Charity Commissioner as well as by the High Court were set aside.  The appeal was allowed by imposing cost Rs.1,00,000/- to be deposited by the developer with the Supreme Court Advocates Bar Association Welfare Fund. (Ref:- Supreme court Jud g m e n t dated 21-9-2017 CIVIL APPEAL NO.1745 of 2010). 
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