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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

NAGPUR BENCH, NAGPUR

WRIT PETITION NO.3483 OF 2015

1. Shri Avinash Kishorchand Jaiswal,

Aged 58 years,
Occupation – Business,
R/o Yashwant Colony, Mohni Nagar,
Nagpur Road, Wardha.

2. Smt. Pratibha Avinash Jaiswal,

Aged 46 years,
Occupation – Household,
R/o Yashwant Colony,
Mohni Nagar,
Nagpur Road, Wardha. … Petitioners

Versus

1. Shri Rammandi Deosthan, Pavnar,

Wardha, through Secretary
Mohan S/o Purushottam Kelkar,
Aged 59 years,
Occupation – Business,
R/o Kapda Line, Socialist Square,
Wardha.

2. Sudhakar S/o Gajanan Deshpande (dead),

R/o In front of Matru Seva Sangh,
Wardha.

3. Sanjay Ratiramji Satdeve,

Aged 36 years,
Occupation – Business,
R/o Sable Plot, Dhantoli,
Wardha.

4. Vinayak Moreshwar Deshpande,

Aged 63 years,
Occupation – Pensioner,
R/o Badhe Square, Sawarkar Marg,
Wardha.

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5. Mohan S/o Purushottam Kelkar,

Aged 59 years,
Occupation – Business,
R/o Kapda Line, Socialist Square,
Wardha.

6. Trimbak S/o Uddhavrao Deshmukh,

Aged 86 years,
Occupation – Pensioner,
R/o Office of Vishwa Hindu Parishad,
Dhantoli, Nagpur.

7. Laxman S/o Madhavrao Deshmukh,

Aged 84 years,
Occupation – Nil,
C/o Adv. H.L. Deshmukh,
Sudampuri, Wardha.

8. Joint Charity Commissioner, Nagpur,

Civil Lines, Nagpur. … Respondents

Shri Anand Jaiswal, Senior Advocate, assisted by

Smt. Radhika Bajaj, Advocate for Petitioners.
Shri S.D. Abhyankar, Advocate for Respondent No.1.
Shri R.M. Bhangde, Advocate for Respondent Nos.3 and 4.
Shri S.Y. Deopujari, Advocate for Respondent No.8.

CORAM : B.P. DHARMADHIKARI, C.J.,

R.K. DESHPANDE & AMIT B. BORKAR, JJ.

DATE OF RESERVING THE JUDGMENT : 2nd MARCH, 2020

DATE OF PRONOUNCING THE JUDGMENT : 27th APRIL, 2020

JUDGMENT (PER : AMIT B. BORKAR, J.) :

1. In the proceedings of Application No.02 of 2009, the

learned Joint Charity Commissioner, Nagpur, accorded his

sanction on 25-10-2011 under Section 36(1)(a) of the

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Maharashtra Public Trusts Act, 1950 (“the said Act”) for sale of

the land Survey No.302, admeasuring 15.19 acres

(“the property in question”), belonging to Shri Ram Mandir

Deosthan, Pavnar, Wardha, in favour of the petitioner No.1-

Avinash Kishorchand Jaiswal, who was the highest bidder, for

total consideration of Rs.11,05,000/-. This was subject to the

decision in Special Civil Suit No.24 of 2009, said to have been

filed by M/s. Ramdeobaba Developers and Builders, Arvi, for

specific performance of the property in question.

2. The respondent No.2- Sudhakar Gajanan Deshpande,

since dead, and the respondent No.3- Sanjay Ratiramji Satdeve,

claiming to be the trustees, filed an application under

Section 36(2) of the said Act for revocation of sanction, in the

month of September, 2014. During the pendency of this

application, the registered sale-deed was executed by the

respondent No.1- Trust on 12-1-2015 in favour of the

petitioners. On 20-2-2015, Application No.1 of 2014 was filed

for dismissal of the application under Section 36(2) of the said

Act on the ground that the Joint Charity Commissioner has no

jurisdiction to pass an order of revocation of sanction after

execution of the registered sale-deed. The learned Charity

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Commissioner rejected the said application on 16-5-2015

holding that the sale-deed was executed pending the

application for revocation and hence it was hit by the doctrine

of lis pendens. The purchasers are, therefore, before this Court

in this writ petition.

3. In support of the contention that the Joint Charity

Commissioner ceases to have any jurisdiction to exercise the

power of revocation of sanction under Section 36(2) of the said

Act after execution of the sale-deed, strong reliance is placed

upon the decision of the Division Bench of this Court in the case

of Shri Mahadeo Deosthan, Wadali and others v. Joint Charity

Commissioner, Nagpur and others, reported in

1989 Mh.L.J. 269. The learned Single Judge, after hearing the

parties, raised a doubt about the correctness of the view taken

by the Division Bench in the said decision and has, therefore,

referred the following question for the decision of the larger

Bench :

Whether the power of revocation under

Section 36(2) of the Maharashtra Public Trusts Act,
1950 on the ground of such sanction was obtained by
fraud or misrepresentation or by concealing material

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facts can be exercised even after execution of the sale

deed on the basis of such sanction under Section
36(1)(a) of the said Act?

Since there is a doubt expressed in respect of the

correctness of the decision of the Division Bench in the case of

Shri Mahadeo Deosthan, cited supra, we would like to see the

facts involved in the said decision and the law laid down

therein, as under :

4. In the case of Shri Mahadeo Deosthan, an application

was made on 13-2-1984 under Section 36 of the said Act for

grant of sanction to transfer 10 acres of land belonging to the

Trust. On 11-5-1984, the sanction was accorded and thereafter

on 26-7-1984, a registered sale-deed was executed in favour of

the petitioner No.6 in the said decision. Some of the trustees

filed an application under Section 36(2) of the said Act for

revocation of the sanction. The question of maintainability of

this application was raised on the ground that after execution of

the sale-deed, the sanction accorded is exhausted and the Joint

Charity Commissioner has no jurisdiction to entertain and

decide such application.

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4.1. It is held in this decision that the intention of the

Legislature under Section 36(2) of the said Act is to restrict the

exercise of power of revocation till the sanction accorded under

Section 36(1) of the said Act is exhausted by executing the

registered sale-deed. The reasons are three-fold - (i) that the

sanction granted under Section 36(1) of the said Act merges

into a sale-deed and the property loses its character as a Trust

property, (ii) that the property may change hands at several

times and if the sanction is to be revoked at any time even after

the execution of the sale-deed, a chaotic situation is likely to be

created, and (iii) that under Section 36(3) of the said Act, the

purchaser may not get an opportunity to show why the sanction

should not be revoked.

5. In the order of reference, the learned Single Judge

expressed a doubt about the correctness of the view. It is held

that Section 36 of the said Act not only empowers the Charity

Commissioner to grant sanction to alienate the property, but it

equally empowers recovery of the property if it is found that the

sanction granted for alienation was obtained by fraud or

misrepresentation or by concealing the material facts. If it is

not possible to recover the property with reasonable effort or

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expense, the provision empowers the Charity Commissioner to

grant compensation to be paid by the trustee so responsible to

the Trust property. It holds that the operation of Section 36 of

the said Act does not appear to be restricted to cover the

situations only till the property is alienated on the basis of the

sanction granted, but it also intends to cover the contingencies

that may arise on revocation of the sanction even after the

property is alienated. In such a situation, a direction can be

issued to recover the property.

6. In order to consider the correctness of the view taken

by the Division Bench in Shri Mahadeo Deosthan’s case and to

answer the question of law referred to us for decision, we will

have to first-of-all consider the object and purpose of the said

Act, the duties, functions and powers of the Charity

Commissioner specified under the said Act as under :

6.1. The Maharashtra Public Trusts Act, i.e. the erstwhile

Bombay Public Trusts Act, 1950, was brought into force on

31-5-1950. Prior to it, Section 92 of the Code of Civil

Procedure dealing with the alienation of immovable property of

a trust was in force. The object of the said Act, as it reveals

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from the preamble, is to regulate and make better provisions of

the administration of the public, religious and charitable trusts

within the State of Maharashtra. The Charity Commissioner is

appointed by the notification issued under Section 3 of the said

Act in the Official Gazette having very wide powers and duties

conferred primarily in Section 69 under Chapter VIII and other

provisions of the Act. It is the power of general

superintendence of the administration of the public trusts for

carrying out the purposes of the said Act. Along with the

Charity Commissioner, several other officers, like Joint Charity

Commissioner, Deputy Charity Commissioner and Assistant

Charity Commissioner, are appointed as the watchdogs for

effective control and supervision of the public trusts, including

the activities of irregularities, malpractices and misconduct in

the functioning of the public trusts. The Charity Commissioner

is in the position of parens patriae in respect of the property of

a public trust, and the essential functions are to see that the

property belonging to a public trust is utilized for the interest

and benefit of the trust and that it is protected from unlawful

wastage.

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6.2. Section 69 of the said Act deals with the duties,

functions and powers of the Charity Commissioner, and clauses

(g), (l), (m) and (p) therein being relevant are reproduced

below :

“69. For the purposes of this Act, the following shall

be the duties to be performed and powers to be
exercised by the Charity Commissioner, namely:--
…
(g) power to sanction a sale, mortage, exchange,
gift or lease of immovable property belonging to a
public trust under section 36;
…
(l) power to file suit under section 50;

(m) power to give or refuse consent to the

institution of a suit under section 51;
…
(p) to exercise such powers and perform such other
duties and functions as may be prescribed.”

6.3. Section 36 of the said Act dealing with alienation of

immovable property of public trust and conferring power upon

the Charity Commissioner to sanction a sale of immovable

property belonging to a public trust, runs as under :

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“36. (1) Notwithstanding anything contained in the

instrument of trust--

(a) no sale, exchange or gift of any immovable

property, and

(b) no lease for a period exceeding 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 be valid without the

previous sanction of the Charity Commissioner.
Sanction may be accorded subject to such condition
as the Charity Commissioner may think fit to impose,
regard being had to the interest, benefit or protection
of the trust;

(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 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.

1. These provisos were [Provided that, the Charity Commissioner may,

1
added by Mah. 55 of
2917, s. 6. w.e.f.
10-10-2017. before the transaction for which previous sanction is
given under clause (a), (b) or (c) is completed,

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modify the conditions imposed thereunder, as he

deems fit:

Provided further that, if such condition is of

1time-limit for execution of any contract or
conveyance, then application for modification of such
condition shall be made before the expiry of such
stipulated time.].

2. Sub-section (1A) was

inserted by Mah. 55 of
[(1A)The Charity Commissioner shall not sanction
2

2017, s. 6(b).
any lease for a period exceeding thirty years under
this Act.].

(2) The Charity Commissioner may revoke the

sanction given under clause (a) or clause (b) of
sub-section (1) on the ground that such sanction was
obtained by fraud or mis-representation made to him
or by concealing from the Charity Commissioner,
facts material for the purpose of giving sanction; and
direct the trustee to take such steps within a period of
one hundred and eighty days from the date of
revocation (or such further period not exceeding in
the aggregate one year as the Charity Commissioner
may from time to time determine) as may be
specified in the direction for the recovery of the
property.

3. This proviso was added

3
[Provided that, no sanction shall be revoked
by Mah. 55 of 2017, s. 6(c).
under this section after the execution of the

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conveyance except on the ground that such

sanction was obtained by fraud practiced upon the
Charity Commissioner before the grant of such
sanction.].

(3) No sanction shall be revoked under this section

unless the person in whose favour such sanction has
been made has been given a reasonable opportunity
to show-cause why the sanction should not be
revoked.

(4) If, in the opinion of the Charity Commissioner,

the trustee has failed to take effective steps within the
period specified in sub-section (2), or it is not possible
to recover the property with reasonable effort or
expense, the Charity Commissioner may assess any
advantage received by the trustee and direct him to
pay compensation to the trust equivalent to the
advantage so assessed.

4. Sub-section (5) was

added by Mah. 55 of 2017,
[(5)
4
Notwithstanding anything contained in
s. 6(d).
sub-section (1), in exceptional and extraordinary
situations where the absence of previous sanction
contemplated under sub-section (1) results in
hardship to the trust, a large body of persons or a
bona fide purchaser for value, the Charity
Commissioner may grant ex-post-facto sanction to the
transfer of the trust property, effected by the trustees
prior to the date of commencement of the

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Maharashtra Public Trusts (Second Amendment) Act,

2017, if he is satisfied that,--

(a) there was an emergent situation which

warranted such transfer,

(b) there was compelling necessity for the said

transfer,

(c) the transfer was necessary in the interest of

trust,

(d) the property was transferred for consideration

which was not less than prevalent market value of
the property so transferred, to be certified by the
expert,

(e) there was reasonable effort on the part of

trustees to secure the best price.

(f) the trustees actions, during the course of the

entire transaction, were bonafide and they have
not derived any benefit, either pecuniary or
otherwise, out of the said transaction, and

(g) the transfer was effected by executing a

registered instrument, if a document is required to
be registered under the law for the time being
force.]

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5. This Explanation was

added by Mah. 4 of 2018,
5
[Explanation.-- For the purposes of
s. 2(b) w.e.f. 21-5-2018.
sub-section (5), the term “the Charity Commissioner”
shall mean only the Charity Commissioner appointed
under section 3.]”

6.4. Section 50 of the said Act deals with the suit by or

against or relating to public trusts or trustees or others. This

provision, to the extent it is relevant, is reproduced below :

“50. In any case,--

…
6. This clause was
substituted by Mah. 55 of
[(ii) where a direction or decree is required to
6

2017, s. 13(a).
recover the possession of or to follow a property
belonging or alleged to be belonging to a public
trust or the proceeds thereof or for an account of
such property or proceeds from a trustee,
ex-trustee, alienee or any other person but not a
person holding adversely to the public trust,
trespasser, licensee or tenant,]
…
(iv) for any declaration or injunction in favour
of or against a public trust or trustee or trustees or
beneficiary thereof,

the Charity Commissioner after making such enquiry

as he thinks necessary, or two or more persons
having an interest in case the suit is under

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sub-clauses (i) to (iii), or one or more such persons

in case the suit is under sub-clause (iv) having
obtained the consent in writing of the Charity
Commissioner as provided in section 51 may institute
a suit whether contentious or not in the Court within
the local limits of whose jurisdiction the whole or
part of the subject-matter of the trust is situate, to
obtain a decree for any of the following reliefs :--

(a) the order for the recovery of the possession

of such property or proceeds thereof;
…
(f) an order directing the trustees or others to
pay to the trust the loss caused to the same by
their breach of trust, negligence, misapplication,
misconduct or wilful default;
…
(p) declaring or denying any right in favour of
or against a public trust or trustee or trustees or
beneficiary thereof and issuing injunctions in
appropriate cases; or
…
Provided that, no suit claiming any of the
reliefs specified in this section shall be instituted in
respect of any public trust, except in conformity with
the provisions thereof;
…
7. This Explanation
was added by Mah.55
[Explanation.-- In this section, “Court” means,
7

of 2017, s. 13(c)
in the Greater Mumbai, the City Civil Court and

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elsewhere, the District Court.].”

6.5. Section 51 of the said Act deals with the consent of the

Charity Commissioner for institution of suit, and it runs as

under :

“51. (1) If the persons having an interestin any

public trust intend to file a suit of the nature specified
in section 50, they shall apply to the Charity
Commissioner in writing for his consent. If the
Charity Commissioner after hearing the parties and
making such enquiries (if any) as he thinks fit is
satisfied that there is a prima facie case, he may within
a period of six months from the date on which the
application is made, grant or refuse his consent to the
institution of such suit. The order of the Charity
Commissioner refusing his consent shall be in writing
and shall state the reasons for the refusal.

8. This sub-section was

substituted by Mah. 55
8
[(2) If the Charity Commissioner refused his consent
of 2017, s.15(a).
to the institution of the suit under sub-section (1), the
persons applying for such consent may file an appeal
to the Court, as if such order was an order passed by
the District Court from which an appeal lies, within
sixty days from the date of the said order, which shall
otherwise be final.]

(3) In every suit filed by persons having interest in

any trust under section 50, the Charity Commissioner

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shall be a necessary party.”

7. First-of-all, we would like to see the entire scheme of

Section 36 of the said Act, as we understand, and it is briefly

stated as under :

(A) It is a complete code in respect of the transfer of

an immovable property belonging to a public trust.

(B) Section 36(1)(c) empowers any trustee of a

public trust to make an application to the Charity
Commissioner for grant of sanction to dispose of any
immovable property of such trust.

(C) If the Charity Commissioner is satisfied that in

the interest of any public trust any immovable property
needs to be disposed of, he may, under
Section 36(1)(a), authorize any trustee to dispose of
such property, subject to such conditions as he may
think fit to impose, having regard to the interest or
benefit or protection of the trust.

(D) Though the requirement is of obtaining previous

sanction of the Charity Commissioner for sale or
alienation of any immovable property of a public trust,
by way of an amendment made on 10-10-2017, the
provision of sub-section (5) is introduced empowering
the Charity Commissioner, in exceptional and

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extraordinary situations, to grant ex post facto sanction

to the transfer of the trust property, effected by the
trustees prior to the date of amendment was
introduced, provided the Charity Commissioner is
satisfied about the existence of the conditions in
clauses (a) to (g) under sub-section (5) of Section 36
of the said Act.

(E) The provision of Section 36(2) further empowers

the Charity Commissioner to pass an order revoking
the sanction upon recording the finding that such
sanction was obtained by fraud or by
misrepresentation made to him or by concealing from
him, the facts material for the purpose of giving
sanction.

(F) Upon passing an order of revocation of sanction,

the provision of Section 36(2) further empowers the
Charity Commissioner to direct the trustee to take such
steps within a period of one hundred and eighty days
from the date of revocation or such further period not
exceeding in the aggregate one year as the Charity
Commissioner may from time to time determine as
may be specified in the direction for the recovery of
the property.

(G) The amendment introduced on 10-10-2017

added proviso below Section 36(2) by the Maharashtra
Act No.55 of 2017 empowers the Charity

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Commissioner to revoke such sanction obtained by

fraud practised upon him, before the grant of such
sanction.

(H) The provision of Section 36(4) takes into

consideration the contingency where the Charity
Commissioner finds that the trustee has failed to take
effective steps within the period specified in the order
of revocation of sanction or that it is not possible to
recover the property with reasonable effort or expense,
and empowers the Charity Commissioner to assess any
advantage received by the trustee and to direct him to
pay compensation to the trust equivalent to the
advantage so assessed.

8. In our view, the requirement of obtaining previous

sanction of the Charity Commissioner under Section 36(1)(a) of

the said Act to sell or alienate the immovable property

belonging to a public trust is mandatory and the power can be

exercised only on the application made under Section 36(1)(c)

by a trust or the trustees, seeking authorization to dispose of

such property. Any sale or alienation of an immovable property

of the public trust without such sanction is null and void. While

deciding such application, the Charity Commissioner has to

have regard to the interest, benefit and the protection of the

trust. The power cannot be exercised suo motu or on his own

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by the Charity Commissioner. The power to grant sanction

includes power to refuse sanction on the ground that it is not in

the interest and benefit of the trust and that the property needs

to be protected.

9. There is no requirement of making an application for

revocation of sanction under Section 36(2) of the said Act, like

one under Section 36(1)(c), and hence the power can be

exercised either on the application so made or suo motu or on

his own by the Charity Commissioner. However, it is subject to

the satisfaction in respect of three things - (i) that such sanction

was obtained by fraud or misrepresentation made to him or by

concealing from him, the facts material for the purpose of

giving sanction, (ii) that such sanction was obtained by fraud

practised upon the Charity Commissioner before grant of such

sanction, and (iii) that the person in whose favour such

sanction was granted is given a reasonable opportunity to show

cause why the sanction should not be revoked. The power to

revoke sanction includes the power to refuse revocation of

sanction on the ground that there is a failure to satisfy the

required conditions (i) and (ii) above or that the Charity

Commissioner has no jurisdiction to revoke the sanction on the

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grounds other than those mentioned in Section 36(2) of the

said Act.

10. Our attention is invited to several decisions of the Apex

Court on the question of effect of the order which is vitiated by

fraud, misrepresentation or concealment of material facts. We

may not refer to all such decisions, except two. In the decision

of the Apex Court in the case of Gowrishankar and another v.

Joshi Amba Shankar Family Trust and others, reported in

(1996) 3 SCC 310, the question considered was for grant of

permission to sell the trust property. It was held in Para 17 that

the trustees obtained the permission to sell the property to the

purchasers practising fraud upon the Court. Such an order by

the first court or by the highest court has to be treated as a

nullity by every court, whether superior or inferior, and it can

be challenged in any Court even in collateral proceedings. It

was further held that the question whether the purchasers

purchased the property bona fide subsequent to the permission

so granted without notice of the appellants’ offer is immaterial.

In another decision of the Apex Court in the case of Meghmala

and others v. G. Narasimha Reddy and others, reported in

(2010) 7 SCC 383, it is held in Para 36 that even in judicial

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proceedings, once fraud is proved, all advantages gained by

playing fraud can be taken away and that the every Court has

an inherent power to recall its own order obtained by fraud as

the order so obtained is non est.

11. In our view, the two aspects of Section 36(2), viz.,

(i) that the sanction was obtained by misrepresentation, and

(ii) that the concealment of facts material for giving sanction,

are the facets of fruad. In terms of the aforesaid law laid down,

we are of the view that the revocation of sanction on any or all

such grounds, as are mentioned under Section 36(2) of the said

Act, would render the order of sanction as null and void,

meaning thereby that no such order granting sanction under

Section 36(1)(a) was ever passed and all advantages gained by

playing fraud can be taken away.

12. The order of revocation of sanction passed under

Section 36(2) of the said Act obviously affects the civil rights of

the persons in whose favour such order was passed. Hence, it

cannot be exercised unless a reasonable opportunity to show

cause under Section 36(3) of the said Act is provided to him as

to why the sanction granted should not be revoked. In our

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view, “the person” under Section 36(3) means a person who

was a party to the proceedings under Section 36(1)(a) of the

said Act and/or a person in whose favour the order of sanction

was passed. It does not include a person - (i) who was not the

party to the proceedings under Section 36(1)(a) and/or (ii) in

whose favour such sanction was not granted, and (iii) who is

the purchaser of the trust property from the person in whose

favour the sanction was accorded for sale or alienation.

13. The Charity Commissioner is not denuded of his

jurisdiction under Section 36(2) of the said Act on the ground

that the sanction granted has been acted upon or exhausted and

the trust is divested of the ownership of the property by

executing a sale-deed or that the sanction granted has merged

in the sale-deed executed before the sanction is revoked or that

the property has lost its character as the trust property. We

express our complete disagreement with the contrary view

expressed by the Division Benches of this Court in the cases of

Shri Mahadeo Deosthan, cited supra, and Dr. Sam Sarosh

Bhacca and others v. P.V. Kakde, Joint Charity Commissioner,

and others, reported in (1994) 96 Bom.LR 714. We concur

with the view expressed by the learned Single Judge in the

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order of reference. After referring to the provision of

Section 36(4) of the said Act dealing with the situation where

no steps are taken within a reasonable period with reasonable

effort or expense, it is held by the learned Single Judge that the

operation of Section 36 of the said Act is not restricted to cover

the situations only till the property is alienated on the basis of

the sanction granted, but it also intends to cover the

contingencies that may arise on revocation of sanction to

alienate even after the property has been alienated. We also

concur with the view that unless such jurisdiction is available

with the Charity Commissioner under Section 36 of the said

Act, it is not possible for him to direct steps to be taken to

recover the trust property alienated or to pass an order of

payment of compensation. To take a contrary view, would

render the said provision otiose.

14. The intention behind introducing Section 36(2) of the

said Act empowering the revocation of sanction is clear that it is

enacted for the benefit and protection of the trust property.

The disposal of the public trust property on the basis of the

order of sanction obtained by fraud or misrepresentation and

concealment of facts material for giving sanction is to be

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recalled. Hence, merely because a sale-deed is effected or the

multiple sale-deeds are effected pursuant to the sanction

obtained under Section 36(1)(a) of the said Act, that would not

take away the jurisdiction of the Charity Commissioner for

revocation of such sanction. Otherwise, the very purpose of the

provision would be defeated. The Charity Commissioner, who

is in the position of parens patriae, cannot be allowed to be a

mute spectator, particularly when he has become the engine of

fraud. However, the proviso below Section 36(2), introduced

on 10-10-2017, restricts the power of the Charity Commissioner

to consider the question of revocation of sanction on the ground

that such sanction was obtained by fraud practised upon him

before the grant of such sanction.

15. The power of revocation of sanction cannot be

confused or equated with the power to declare the sale-deed

executed on the basis of the sanction which is revoked, as null

and void. Similarly, the power to direct the trustees to take

steps to recover the trust property also cannot be confused or

equated with the power to direct recovery of the trust property.

There is a definite distinction in it. We are of the view that if

the sale-deed is executed and the possession of the trust

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property is delivered, the Charity Commissioner has no

jurisdiction under Section 36(2) of the said Act either –

(i) to declare the sale-deed in respect of the public trust

property. as null and void, or to set it aside, whether executed

before or after initiation of proceedings or revocation of

sanction, and (ii) to direct recovery of property of the public

trust either before or after execution of the sale-deed. These

are also not the automatic consequences in law to necessarily

follow, upon passing of an order under Section 36(2) of the

said Act. These are the steps to be taken after the sanction is

revoked. We are, therefore, of the view that the order of

revocation of sanction and the direction to take steps to recover

the property only provide cause of action to seek a declaration

from the Court of competent jurisdiction that the sale-deed

executed on the basis of such sanction is null and void or to set

it aside and to pass a decree for recovery of possession of the

suit property.

16. Normally, the doctrine of merger applies to the judicial

or quasi judicial order passed by the appellate or revisional

Court or authority in a challenge to such order passed by the

lower Court or the authority. It does not apply to a registered

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sale-deed executed on the basis of the order of sanction which

is revoked. Be that as it may, the doctrine of merger,

res judicata, estoppel, etc., have an exception, and that is of the

fraud, misrepresentation and concealment of material facts.

This is clear from the law laid down by the Apex Court in

Paras 38 and 39 of the decision of the Apex Court in the case of

A.V. Papayya Sastry and others v. Government of A.P. and

others, reported in (2007) 4 SCC 221, which are reproduced

below :

“38. The matter can be looked at from a different

angle as well. Suppose, a case is decided by a
competent Court of Law after hearing the parties and
an order is passed in favour of the plaintiff applicant
which is upheld by all the courts including the final
Court. Let us also think of a case where this Court
does not dismiss Special Leave Petition but after
granting leave decides the appeal finally by recording
reasons. Such an order can truly be said to be a
judgment to which Article 141 of the Constitution
applies. Likewise, the doctrine of merger also gets
attracted. All orders passed by the courts/authorities
below, therefore, merge in the judgment of this Court
and after such judgment, it is not open to any party to
the judgment to approach any court or authority to
review, recall or reconsider the order.”

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“39. The above principle, however, is subject to

exception of fraud. Once it is established that the
order was obtained by a successful party by practising
or playing fraud, it is vitiated. Such order cannot be
held legal, valid or in consonance with law. It is
non-existent and non est and cannot be allowed to
stand. This is the fundamental principle of law and
needs no further elaboration. Therefore, it has been
said that a judgment, decree or order obtained by
fraud has to be treated as a nullity, whether by the
court of first instance or by the final court. And it has
to be treated as non est by every Court, superior or
inferior.”

In view of the aforesaid law laid down, once it is found

that the order granting sanction to sell or alienate an

immovable property of a public trust is vitiated on any one or

all the grounds mentioned under Section 36(2) of the said Act,

it will be treated as nullity, having no existence in law. If the

order is nullity, then the principle of merger would not be

attracted.

17. We now proceed to deal with the contention that once

the sale-deed is executed on the basis of the sanction granted

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under Section 36(1)(a) of the said Act, the only remedy

available to the aggrieved person is to file a civil suit under

Section 50 of the said Act and it is only the Civil Court which

has exclusive jurisdiction to declare the sale-deed as null and

void and pass a decree for recovery of the public trust property

which is sold. The reliance is placed upon the decision of the

Division Bench of this Court in the case of Dr. Sam Sarosh, cited

supra, wherein it is held in Para 11 that the remedies provided

under Sections 50, 51 and 52-A are not dependent upon

revocation of sanction accorded by the Charity Commissioner

under Section 36(1) of the said Act and these are the

independent remedies.

18. In order to deal with the aforesaid contention, the

provision of Section 80 of the said Act regarding bar of

jurisdiction of the Civil Court needs to be seen and it is

reproduced below :

“80. Save as expressly provided in this Act, no

Civil Court shall have jurisdiction to decide or deal
with any question which is by or under this Act to be
decided or dealt with by any officer or authority under
this Act, [and in respect of] which the decision or

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order of such officer or authority has been made final

and conclusive.”

The provision of Section 80 creates a bar of jurisdiction

of the Civil Court to decide or deal with any question which is

by or under the Act is required to be decided or dealt with by

any officer or authority under the Act and in respect of which,

the decision or the order of such officer or authority has been

made final and conclusive. The provision begins with the

expression “Save as expressly provided in this Act”, which is

indicative of the extent of the jurisdiction to be exercised by the

Civil Court. In our view, two things are significant under

Section 80, and those are - (i) that the Civil Court exercises the

jurisdiction only to the extent and in the manner provided for it

under the said Act, and (ii) that it ceases to have any

jurisdiction over the matters which are required to be decided

or dealt with by any officer or authority under the Act, which

has been made final and conclusive. Circumstances in which

the ouster of the jurisdiction of a civil court can be presumed

are explained by the Hon’ble Apex Court in Dhulabhai v. State

of Madhya Pradesh, reported in AIR 1969 SC 78 and Bata Shoe

Co. Ltd. v. City of Jabalpur Corporation, reported in

1997(2) SCC 472. The principles laid down there hold good

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and clinch the controversy here in the light of scheme in

Section 80 of the Act. Earlier benches were not required to look

into these principles.

19. In the decision of the Division Bench of this Court in

the case of Charity Commissioner, Maharashtra State, Bombay

v. Shantidevi Lalchand Chhaganlal Foundation Trust By

Trustees Lalchand Chhaganlal Jain and others, reported in

1989 Mh.L.J. 1048, the question considered was whether the

City Civil Court at Bombay is having jurisdiction to sanction

development agreement and lease-deed under the provisions of

Section 50 of the said Act. While dealing with this question and

considering the provisions of Sections 36 and 50 of the said Act,

it is held in Para 18 that Section 36 of the said Act as applicable

to the State of Maharashtra is a complete code by itself and

though the order of the Charity Commissioner is not made

expressly final, no appeal or revision having been provided

against such order, the same is in fact final and conclusive. It is

held that by virtue of the provisions of Section 80 of the said

Act, once the matter falls within the provisions of Section 36,

the Civil Court will have no jurisdiction to deal and decide the

subject-matter. It is held that the Charity Commissioner under

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the provisions of Section 36 has the exclusive jurisdiction to

deal with the matters provided therein and clause (iii) or

Clauses (i) and (q) of Section 50 will not give jurisdiction to the

Civil Court to sanction sale, exchange or fit of any immovable

property belonging to a public trust. There is no dispute raised

in respect of the correctness of this view and we concur with it.

20. In the case of Bomi Jal Mistry and others v. Joint

Charity Commissioner, Maharashtra and others, reported in

2002(5) Mh.L.J. 660, the Division Bench of this Court has

culled out the ratio of the aforesaid decision as laying down a

law that though Section 50 would empower the Civil Court to

authorize the trustees to alienate the immovable property of the

public trust that, however, would not empower the Civil Court

to grant sanction to the proposed transaction, for that can be

granted only by the Charity Commissioner in exercise of powers

under Section 36(1)(a)(b) of the Act. It is clarified that the said

decision is not an authority on the proposition that the Charity

Commissioner cannot grant authorization at all making the

provision of Section 36(1)(c ) of the said Act virtually otiose.

There is no challenge to the correctness of this view and we

concur with it.

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21. Section 69(g)(l)(m) and (p) read with Sections 36, 50

and 51 of the said Act confers a jurisdiction upon the Charity

Commissioner to decide or deal with the immovable property

belonging to a public trust and pass orders - (i) to grant or

refuse to grant sanction to sell or alienate the property under

Section 36(1)(a), (ii) to revoke or refuse to revoke the sanction

under Section 36(2), (iii) to direct the trustees to recover the

property under Section 36(2), (iv) to assess the compensation

under Section 36(4) for failure to recover the property against

the trustees, and (v) to grant consent in writing under Section

50 to file a suit, as provided under Section 51, to recover even

the property alleged to be belonging to a public trust and obtain

a decree in conformity with the provisions thereof. In our view,

it is the exclusive jurisdiction of the Charity Commissioner to

decide or deal with all these matters and the ordinary

jurisdiction of the Civil Court under Section 9 of the Code of

Civil Procedure is completely barred by virtue of Section 80 of

the said Act.

22. It is not possible for us to agree with the view that the

remedies provided under Sections 50, 51 and 52-A are not

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dependent upon the revocation of the sanction accorded by the

Charity Commissioner under Section 36(1)(a) of the said Act.

We have already taken a view that the order passed under

Section 36(2) provides cause of action to file a suit in

accordance with the provisions of Sections 50 and 51 of the

said Act. In our view, therefore, the remedies provided under

Sections 50 and 51 are dependent upon the order passed under

Section 36(2) of the said Act in respect of the sale or alienation

of an immovable property of a public trust on the basis of fraud

practised upon the Charity Commissioner, before grant of such

sanction. These remedies can be availed in the mode and

manner prescribed under the said Act. Apart from this, in the

two decisions, referred to above, in the cases of Shantidevi

Lalchand Chhaganlal Foundation Trust and Bomi Jal Mistry, a

view is taken that Section 50 would not empower the Civil

Court to authorize to alienate an immovable property of a

public trust and it is the exclusive jurisdiction of the Civil Court

under Section 36(1)(a) of the said Act, to which finality and

conclusiveness is attached. On the same ground or analogy, in

our view, the jurisdiction of the Civil Court under Section 50 to

entertain and decide any dispute covered by Section 36(2) of

the said Act is completely barred.

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23. Lastly, we come to the contention that the rights of the

subsequent successive purchasers of the property belonging to a

public trust sold by a registered sale-deed on the basis of the

order of sanction under Section 36(1)(a) are affected. It is also

urged that the sanctity of the sale transactions on the basis of

the sanction granted has been lost, if the sale-deed is to be set

aside at any time without notice to the subsequent purchasers

and this will create a chaotic situation.

24. We have already held that the subsequent purchasers

have no right to claim hearing or an opportunity to show cause

in respect of the proceedings under Section 36(2) of the said

Act. Obviously, their rights or defences available in law are not

concluded by the order passed under Section 36(2) of the said

Act by the Charity Commissioner. It is open for them to raise

all such defences as are available in law to protect their

possession; in a suit under Section 50 of the said Act, if filed for

grant of declaration that the sale-deed is rendered null and void

and seeking a decree for recovery of the property, to which they

have necessarily to be joined as party-respondents. If such suit

is not filed within a stipulated period or it is dismissed on

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merits, they succeed in protecting their possession and

ownership over it. In that event, it is open for the Charity

Commissioner to invoke his jurisdiction under Section 36(4) of

the said Act to assess any advantage received by the trustee

arising out of such sale and to direct him to pay the

compensation to the trust equivalent to the advantage so

assessed. If the suit is decreed in favour of the trust, the

subsequent purchasers cannot complain that they were not

permitted to raise the defences available to them in law or that

they were not heard in the matter, the adjudication of which

has affected their civil rights.

25. On a conjoint reading of Sections 36, 50 and 80 of the

said Act, the Scheme appears as follows :

(i) The first part of Section 36(2) of the said Act

confers power upon the Charity Commissioner to
revoke the order of sanction on the ground of fraud,
misrepresentation or concealment of material facts.

(ii) The latter part of Section 36(2) confers power

upon the Charity Commissioner to pass an order of
directing the trustees to take steps to recover the
property of a public trust, within a period of 180 days

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or himself filing suit under Section 50 of the said Act,

for recovery of the property.

(iii) Once the directions under the latter part of

Section 36(2) are issued, the Charity Commissioner
himself or the trustee is required to file a suit under
Section 50 in accordance with law to give full effect to
it and get the property recovered, which is sold in
pursuance of the order of sanction under Section 36(1)
of the said Act.

(iv) If after granting an opportunity of hearing to all

concerned, the Civil Court comes to the conclusion
that it is not possible to recover the property, then by
virtue of power conferred under sub-section (4) of
Section 36 of the said Act, the Charity Commissioner is
required to assess any advantage received by the
trustee and direct him to pay compensation to the trust
equivalent to the advantage so assessed.

(v) The jurisdiction of the Civil Court under

Section 50 of the said Act to entertain, try and decide
the suit in respect of the subject-matter which is
required to be dealt with and decided under
Section 36 by any officer or authority under the said
Act, is completely barred under Section 80 therein.

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26. In view of the aforesaid position of law, we answer the

question referred to us as under :

(I) The power of revocation of sanction under

Section 36(2) of the Maharashtra Public Trusts Act,
1950 on the ground that such sanction was obtained
by fraud or misrepresentation or by concealing the
facts, material for the purpose of giving sanction can
be exercised even after the execution of a sale-deed or
the multiple sale-deeds on the basis of the sanction
granted under Section 36(1)(a) of the said Act.

(II) We overrule the two decisions - (i) Shri

Mahadeo Deosthan, Wadali and others v. Joint Charity
Commissioner, Nagpur and others, reported in
1989 Mh.L.J. 269, and (ii) Dr. Sam Sarosh Bhacca and
others v. P.V. Kakde, Joint Charity Commissioner and
others, reported in (1994) 96 Bom.LR 714, delivered
by different Division Benches of this Court and all
other decisions delivered by different Single Benches
of this Court, including the cases of - (i) Fatmabai B.
Bachooali v. State of Maharashtra and others, reported
in 1991 (1) Bom.C.R. 1, (ii) Arole Construction Pvt.
Ltd. v. Shaikh Sadullah Shahabuddin Peerzade and
others, reported in 2014 (4) Bom.C.R. 289, and
(iii) Shri Motilal Girdharilal Sharma and others v.
Shri Dattatray Bandu Jagtap and others, reported in
2006(2) ALL MR 121, following the view taken in
Shri Mahadeo Deosthan’s case, cited supra.

(III) Having answered the reference, we make it

expressly clear that we have not examined the issue of
remedies and defences available to the bona fide
purchasers for valuable consideration without notice
after the order of sanction is revoked under

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Section 36(2) of the said Act was passed and we leave

it open to be agitated in appropriate proceedings.

(IV) We direct the Registry to place the matter before

the appropriate Bench for disposal in accordance with
law.

(B.P. DHARMADHIKARI, C.J.)

(R.K. DESHPANDE, J.)

(AMIT B. BORKAR, J.)

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