Maharashtra Public Trust Act, 1950 – Tender – In 2015, a tender notice was issued by the first respondent-registered charitable trust inviting bids for the development of the property – Bids were tendered by the appellant and the second respondent – There were various rounds of litigation between the first respondent, second respondent, third respondent-Joint Charity Commissioner and the appellant regarding the bids offered – In 2021, the appellant filed an intervention application in the writ proceedings, alleging collusion between the first and second respondent for the sale of the said property – Appellant offered an amount of Rs. 75 lakhs for the property – However, appellant did not abide by its offer despite various opportunities given by the High Court – Thereafter, second respondent made an offer of Rs.80 lakhs and accordingly, the High Court directed to complete the transaction with the second respondent – Before the Supreme Court, the appellant submitted that he was ready with Rs. 75 lakhs and High Court should have granted further extension of time – On 18.03.2021, the appellant was directed to deposit Rs.1 crore in the High Court to his bona fides and the same was complied with – It was contended by the second respondent that all along, it was second respondent who has participated in the process of auction sale and the appellant had failed to avail of the opportunities which were granted by the High Court – It was urged that having regard to the principles of law which have evolved by the judgments of the Supreme Court, it would be necessary to reject the offer which is now made by the appellant and to award the property to the second respondent – Held: At the present time, the appellant has deposited an amount of Rs. 1 crore before the High Court – To accept the bid of the second respondent in the amount of Rs. 80 lakhs will deprive the trust of the opportunity of realising the full market value – The decision of the High Court to award the sale in favour of the second respondent would cause serious jeopardy to the interests of the public charitable trust – The manner in which the second respondent has increased his offer in driblets (from Rs.50 lakhs to Rs.75 lakhs and thereafter, to Rs.80 lakhs) leads to a reasonable inference that the true value of the property was not realized – The appropriate direction would be to require the third respondent to conduct the auction process by inviting fresh bids after a proper valuation – Accordingly, directions issued.
Allowing the appeal, the Court
HELD: 1. The offer which was made by the second respondent initially was in the amount of Rs 50 lakhs. It was only after the appellant had indicated before the High Court that an amount of Rs 75 lakhs would be offered and failed to do so, that the second respondent stated before the High Court that he was willing to match the offer of the appellant and to go beyond it by an amount of Rs 5 lakhs. At the present time, the appellant has deposited an amount of Rs 1 crore before the High Court. To accept the bid of the second respondent in the amount of Rs 80 lakhs will deprive the trust of the opportunity of realising the full market value. In this view of the matter, this Court is of the view that the submission which has been urged on behalf of the appellant is worthy of acceptance. This Court is unable to subscribe to the submission of the second respondent for the simple reason that the course of dealings would indicate that even the second respondent has progressively enhanced its offers from Rs 50 lakhs to Rs 75 lakhs and, thereafter, to Rs 80 lakhs. Before this Court, now it has been indicated that the second respondent would be willing to match the offer of the appellant of Rs 1 crore. There has undoubtedly been a default on the part of the appellant before the High Court. But the decision of the High Court to award the sale in favour of the second respondent would cause serious jeopardy to the interests of the public charitable trust. The manner in which the second respondent has increased his offer in driblets leads to a reasonable inference that the true value of the property has not been realized. Hence, the order of the High Court to dismiss the petition cannot be sustained. This Court is of the view that the appropriate direction would be to require the third respondent to conduct the auction process by inviting fresh bids after a proper valuation and to issue further consequential directions for the submission of a report in the proceedings before the Bombay High Court. Accordingly, the following directions are issued: (i) The third respondent shall obtain a fresh valuation report for the property, and shall fix an upset price which shall not, in any circumstances, be less than the amount of Rs 1 crore. The upset price shall be based on the valuation, subject to the minimum of Rs 1 crore; (ii) The third respondent shall invite fresh bids by publishing an advertisement in at least two widely circulated local newspapers for the sale of the property; (iii) Both the appellant and the second respondent shall be at liberty to submit their fresh bids, which shall be considered by the third respondent together with all other bids which are received; (iv) The third respondent shall, upon the bids so received, submit a report to the High Court, which shall consider the report while passing such final directions as are necessary in the writ petition; (v) Consequently, the impugned order of the High Court dated 26 February 2021 dismissing the petition shall stand set aside. The writ petition, being Writ Petition No 3894 of 2019, shall hence stand restored to the file of the High Court. The High Court shall upon the receipt of the report of the third respondent take an appropriate view and decide upon the merits of the petition in respect of which all the rights and contentions of the parties on all aspects are kept open; and (vi) The amount of Rs 1 crore which has been deposited with the Bombay High Court by the appellant, shall be invested in a Fixed Deposit of a nationalized bank to be renewed periodically during the pendency of the writ petition and shall abide by such further directions as may be issued by the High Court. In the event that the appellant desires to bid for the property at the auction, it would be open to him to move a Civil Application before the High Court to adjust the amount of Rs 1 crore deposited in pursuance of the order of this Court towards the bid. [Para 18][500-C-H; 501-A-G]
Cyrus Rustom Patel v Charity Commissioner (2018) 14 SCC 761 : [2017] 9 SCR 277 – relied on.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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