Dattatraya Baburao Walawalkar & Ors. Vs. Siddhivinayak Construction P.Ltd.& Ors, on 18th March, 2016 – Supreme Court of India Judgement

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REPORTABLE

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 2981 OF 2016
(Arising out of S.L.P.(C) No.35188 of 2012)

DATTATRAYA BABURAO WALAWALKAR AND OTHERS …Appellant(s)

Versus

SIDDHIVINAYAK CONSTRUCTION PRIVATE LIMITED
AND OTHERS …Respondent(s)

W I T H

CIVIL APPEAL NO. 2983 OF 2016
(Arising out of S.L.P.(C) No.36789 of 2012)

RAUNAK CORPORATION Appellant(s)

Versus

SIDDHIVINAYAK CONSTRUCTION PRIVATE LIMITED
AND OTHERS Respondent(s)

CIVIL APPEAL NO. 2984 OF 2016

(Arising out of S.L.P.(C) No.36790 of 2012)

RAUNAK CORPORATION Appellant(s)

Versus

SANJAY MANOHAR KASTUR AND OTHERS Respondent(s)
CIVIL APPEAL NO. 2985 OF 2016
(Arising out of S.L.P.(C) No.38155 of 2012)

VIKAS MOTIRAM DESAI AND OTHERS Appellant(s)

Versus

SIDDHIVINAYAK CONSTRUCTION PRIVATE LIMITED
AND OTHERS Respondent(s)

CIVIL APPEAL NO. 2986 OF 2016
(Arising out of S.L.P.(C) No.38297 of 2012)

VIKAS MOTIRAM DESAI AND OTHERS Appellant(s)

Versus

SANJAY MANOHAR KASTUR AND OTHERS Respondent(s)
J U D G M E N T

R.F.NARIMAN,J.

1.We have heard learned counsel for the parties.

2.These appeals are against a final judgment of the High Court of
Judicature at Bombay dated 18th October, 2012 by which the Division Bench
of the Bombay High Court dismissed the letters patent appeal being LPA No.
103 of 2012 in Writ Petition No. 11070 of 2011.

3.We are concerned here with Trust property admeasuring 3343.53
sq.meters in the Girgaun area of Mumbai. Under the Bombay Public Trust
Act, 1950, the Charity Commissioner’s sanction has first to be obtained
before the trust property can be sold and for reasons given under the
statute. The present Trustees of the Late Rao Bahadur Anant Shivaji Desai
Topiwalla Charity had resolved to sell the aforesaid property inasmuch as
they found that it was largely tenanted and very meager rents were
obtained. The protection afforded to the tenants under the Bombay Rent Act
and the consequent rent that was being paid therefore, formed the necessity
that was felt by the trustees to sell the aforesaid property. The said
sale was mooted by the trustees under the Development Control Regulation
33(7) under which re-development of cessed buildings in the Island City of
Bombay can be undertaken, provided they are constructed prior to 1940, at
F.S.I. i.e. Floor Space Index at 3 being given as incentive to rehabilitate
the existing tenants on the gross plot area. Appendix III, which has to be
read with Regulation 33(7), specifically stipulates in paragraph 1(a), that
the new building may be permitted to be constructed in pursuance of an
irrevocable written consent by not less than 70% of the occupiers of the
old building.

4.The said trustees, after obtaining a valuation report, which they
produced before the Charity Commissioner, therefore resolved to sell the
aforesaid property to M/s. Raunak Corporation.

5.The Charity Commissioner, by his order dated 2nd September, 2011,
granted permission to sell the aforesaid trust property in favour of Raunak
Corporation for a monetory consideration of Rs.6 crores along with
developed area of 4000 sq.ft. built up to be given to the trust, free of
cost, and a minimum of 460 sq.ft. usable carpet area to each occupier
including flower beds etc., free of cost, in terms of the Memorandum of
understanding dated 23rd May, 2011. The ultimate order of the Charity
Commissioner reads thus :-
“1. Application is allowed.

2.Sanction is hereby accorded to the trustees of “The Late Rao Bahadur
Anand Shivaji Desai Topiwalla Charity, Mumbai”, P.T.R. No. A/751/Mumbai for
development cum sale of the trust property, viz. CTS No. 145A, 1A, 145-4,
145B, C, D, E, F, G, bearing C.S. No. 1443 admeasuring 3999 sq. yards
equivalent to 3343.57 meters. Or thereabout together with structures known
as ‘Kudaldeshkar Brahmin Niwas’, in favour of M/s Raunak Corporation, a
registered partnership firm at Laxmi Narayan Residency, Unnathi Garadens
III, Opp. Ma Niketan, Pokhran Road, No. 2, Thane (West) – 400 610 for the
monetary consideration of Rs.6,00,00,000/- (rupees six crores only) along
with developed area of 4000 sq.ft. Built up to be given to the trust, free
of cost, and minimum 460 sq. ft. useable carpet area including flower beds,
niches and service ducts to the tenants, free of cost, in terms of the
Memorandum of Understanding dated 23.5.2011 and on the following additional
terms and conditions :-

a. The deed for development cum sale of the trust property is
to be executed within a period of six months from the date of this
order.

b.All expenses for stamp duty and registration charges and
other incidental expenses shall be borne by the developer.

c.The amount of monetary consideration of Rs.6.00 crores
shall form part of the corpus of trust, which shall remain invested in any
of the Nationalized Banks/Approved Securities in long term deposits
and should not be withdrawn without prior permission of this
Authority. Trustees shall be at liberty to use only the interest
amount, which will be accrued on a sum invested towards
accomplishment of the objects of the trust.

d.This permission shall be subject to all the relevant laws
and rules applicable to the development cum sale transaction and
property all well.

e.Trustees of the trust to report the change under section 22
after completion of the development cum sale transaction to the
concerned Assistant/Deputy Charity Commissioner, Greater Mumbai
Region.”

6.In a writ petition filed by Sidhivinayak Construction Private Limited
and others, inter alia, against the trust/trustees and the said Raunak
Corporation, the learned single Judge of the Bombay High Court set aside
the Charity Commissioner’s order and ultimately moulded the reliefs by
stating as under:
“33. The need for alienation by redevelopment and ultimate sale of the
properties of the trust is established. I am therefore inclined to set
aside the impugned order partly to the extent it grants sanction to
alienate the property in favour of the Respondent No.9 and remand the
application back. The Charity Commissioner shall thereafter direct the
trustees to publish an advertisement in reputed newspapers like Times of
India, Maharashtra Times, Indian Express and Loksatta and invite bids from
the developers for the redevelopment and sale of the property of the trust.
The bid submitted by the Respondent No.9 which has been accepted by the
Charity Commissioner should form the reserve price. Thus, the
advertisement will indicate that any bidder who desires to bid must fulfill
the following minimum criteria :

a.Monetary consideration of Rs.6 crores to the trust;

b.Developed area of 4000 sq. ft. built up (3418 sq. ft. carpet
area) to be given free of costs to the trust;

c.usable carpet area of 460 sq. ft. to individual tenants
including flower bed, niches and service ducts.

d.Corpus fund for the tenant society of such sum, as may be
determined by the Charity Commissioner.

e.24 Bank Guarantees of Rs.50 lakhs each as offered by Respondent
No.9.

f.Additional consideration of Rs.one crore to the trust in case
FSI is enhanced from 2.5 to 3.”

The learned Single Judge then directed that sanction for alienation
of the trust property shall be granted in favour of the highest bidder.”

7. A letters patent appeal filed before the Division Bench of the Bombay
High Court led to the impugned judgment dated 18th October, 2012 by which
the judgment and order of the learned single Judge was upheld. That is how
the present special leave petitions are before this Court.

8.Leave granted.

9.After hearing learned counsel for the parties for some time, this
Court by its order dated 5th February, 2016 stated as under :-
“Without prejudice to the contentions available to the parties,
Shivaji Desai Topiwala, Charity, Bombay-Trust is directed to issue a fresh
advertisement regarding the re-development of the properties as directed by
the learned Single Judge at paragraph 33 of the judgment dated 29th March,
2012 in Writ Petition No. 11070 of 2011 with the required modifications
that sub para (a) will be read as “7 crores”, sub para (e) will be read as
“24 Bank Guarantees” and sub para (f) will stand deleted.

The advertisement shall be issued within a period of one week
from today indicating time of two weeks. After processing the
applications, report shall be filed within one week thereafter.

Post on 08.03.2016.”

10.Pursuant to the said order of this Court, an advertisement was issued
on 12th February, 2016 in four daily Newspapers. In response thereto,
initially 9 persons came forward, but ultimately, on or before the time
stipulated in the advertisement, only two offers were received by the Trust
– one from Ramee Construction Private Limited and the other from the same
developer – M/s Raunak Corporation. In a report of the Trustees of the said
Trust given to this Court, paragraph 9 set out the relevant merits of the
aforesaid two offers/bids as follows :

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11. We have been informed today by learned senior counsel, Mr. Sanjiv Sen
appearing on behalf of Ramee Constructions Private Limited, that his
clients have been instructed to go up to Rs.8.20 crores in place of the
Rs.7 crore offer made by it. He, however, has, on instructions, increased
the offer of Rs.7 crores to Rs.10 crores today.

12. The reason that this Court passed its order dated 5th February, 2016
was only to ascertain as to whether the offer of Rs.6 crores made by M/s
Raunak Corporation was indeed a fair offer at the time it was made. Having
regard to the fact that 9 persons initially came forward but they all
petered out and ultimately left only Raunak Corporation and Ramee
Constructions Private Limited in the fray, the fact that Ramee
Constructions Private Limited was the only other bidder which offered a sum
of Rs.7 crores about 5 years after the said offer of Raunak Corporation of
Rs.6 crores (which improved its offer to Rs.7 crores before the Division
Bench of the Bombay High Court) shows that the offer made by Raunak
Corporation appears to be a reasonable one. We must also remember that the
sale-cum-development agreement has been entered into under Regulation 33(7)
of the Development Control Regulations for Greater Mumbai, 1991, and has
necessarily to fulfil one condition without which the sale-cum-development
agreement cannot go forward at all – it has to contain a minimum of 70%
irrevocable written consent of the occupiers of the old structure. We have
been informed that out of 105 tenancies of the Trust, 65 consents have been
obtained, and another 11 consents have also been obtained which, however,
have subsequently been revoked. If we were to add these 11 to 65, as
consents once given are irrevocable, the mathematics of the situation would
yield a figure of roughly 74% of the occupiers of the old building.

13. We find that the initial offer itself was a fair offer in the facts
and circumstances stated above. However, we record the statement made by
Mr. C.U.Singh, learned senior counsel, that his client was willing to up
that offer from Rs.8 crores that had been offered by him before this Court
to 8.25 crores, all other conditions mentioned in paragraph 9 of the report
of the Trustees remaining the same. In the facts and circumstances of
these cases, we find that it would be for the benefit of the Trust if the
said offer is accepted by the Trustees, which acceptance has, on
instructions, been given by Shri C.A. Sundaram, learned senior counsel
appearing on their behalf. We, therefore, deem it fit to allow the present
appeals in the aforesaid terms and set aside the order of the Division
Bench of the Bombay High Court.

14. The appeals are, accordingly, disposed of as above with no orders as
to costs.
15. The application for impleadment is allowed.
16. Pending applications, if any, stand disposed of.
……………………J.
(KURIAN JOSEPH)

……………………J.
(ROHINTON FALI NARIMAN)

New Delhi,
March 15, 2016
ITEM NO.61 COURT NO.11 SECTION IX

S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS

Petition(s) for Special Leave to Appeal (C) No(s). 35188/2012

(Arising out of impugned final judgment and order dated 18/10/2012 in LPA
No. 103/2012 18/10/2012 in WP No. 11070/2011 passed by the High Court Of
Bombay)

DATTATRAYA BABURAO WALAWALKAR & ORS. Petitioner(s)

VERSUS

SIDDHIVINAYAK CONSTRUCTION P.LTD.& ORS. Respondent(s)

(with appln. (s) for exemption from filing c/c of the impugned judgment)
(For final disposal)

WITH
SLP(C) No. 36789/2012
(With appln.(s) for impleadment and Interim Relief and Office Report)

SLP(C) No. 36790/2012
(With appln.(s) for impleadment and Interim Relief and Office Report)

SLP(C) No. 38155/2012
(With appln.(s) for impleadment and Interim Relief and Office Report)

SLP(C) No. 38297/2012
(With appln.(s) for impleadment and appln.(s) for modification of court’s
order and Office Report)

Date : 15/03/2016 These petitions were called on for hearing today.

CORAM :
HON’BLE MR. JUSTICE KURIAN JOSEPH
HON’BLE MR. JUSTICE ROHINTON FALI NARIMAN

For Petitioner(s)
Ms. Abha R. Sharma,Adv.

Mr. C.U. Singh, Sr.Adv.
Mr. Santosh Paul, Adv.
Mr. Arvind Gupta, Adv.
Mr. Vishwas M. Kulkarni, Adv.
Mr. Raghav Shekhar, Adv.
Ms. Arti Singh,Adv.

Mr. C.A. Sundaram, Sr.Adv.
Mr. Mahesh Agarwal, Adv.
Mr. Ankur Saigal, Adv.
Mr. Rishabh Parikh, Adv.
Mr. E. C. Agrawala,Adv.
For Respondent(s)
Mr. Gaurav Agrawal,Adv.

Ms. Arti Singh,Adv.

Mr. Shivaji M. Jadhav,Adv.
Mr. Prashant G. Karande, Adv.
Mr. Anshuman Animesh, Adv.

State of Maharashtra Mr. Rajshri Ashutosh Dubey, Adv.
Mr. Nishant R. Katneshwarkar, Adv.

For applicant Mr. Sanjiv Sen, Sr.Adv.
Ramee Construction Mr. Sumit Goel, Adv.
Ms. Sanjana Rama Chandran,Adv.
Ms. Akaanksha Mehra, Adv.

UPON hearing the counsel the Court made the following
O R D E R

Leave granted.
The appeals are disposed of with no orders as to costs in terms
of the signed reportable judgment.
The application for impleadment is allowed.
Pending applications, if any, stand disposed of.
[RENU DIWAN] [SUKHBIR PAUL KAUR]
COURT MASTER A.R.-CUM-P.S.
(Signed reportable judgment is placed on the file)

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See Also: Case Brief -Dattatraya Baburao Walawalkar & Ors. Vs. Siddhivinayak Construction P.Ltd.& Ors