Dattatraya Baburao Walawalkar and Others v. Siddhivinayak Construction Private Limited and Others
R. F. NARIMAN, J. I. 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, 20 I 2 by which the Division
Bench of the Bombay High Court dismissed the letters patent appeal
being LPA No. I 03of2012 in Writ Petition No. 1I070 of 201 I.
3. We are concerned here with Trust property ad measuring
3343.53 sq.meters in the Girgaun area of Mumbai. Under the Bombay
Public Trust Act, 1950, the Chfirity Commissioner's sanction has first to
be obtained before the trustproperty 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 Ill, which has .to be read with Regulation 33(7),
specifically stipulates in paragraph l(a), that the new building may be
permitted to be constructed in pursuance of an irrevocable written consent
907
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 favourof
Raunak Corporation for a monetary 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 ofcost, in terms of the Memorandum of
understanding dated 23rd May, 2011. The ultimate order of the Charity
Commissioner reads thus:-
908
"I. 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. N75 I /Mumbai for development cum sale of the trust property,
viz. CTS No. 145A, IA, 145-4, 145B, C, D, E, F, G, bearing C.S.
No. I 443 admeasuring 3999 sq. yards equivalent to 3343.57 meters.
Or thereabout together with structures known as 'Kudaldeshkar
Brahmin Niwas', in favour of Mis Raunak Corporation, a
registered partnership firm at Laxmi Narayan Residency, Unnathi
Garadens Ill, Opp. Ma Niketan, Pokhran Road, No. 2, Thane
(West)-400 6 I 0 forthe monetary consideration ofRs.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 bed>, niches and service
ducts to the tenants, free ofcost, 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 wel I.
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."
DATTATRAYA BABURAO WALAWALKAR v. SIDDHJVINAYAK 909
CONSTRUCTION PVT. LTD. [R.F.NARIMAN, J.]
6. In a writ petition filed by Sidhivinayak Construction Private A
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 B
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 favourofthe 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 C
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 D
must fulfill the following minimum criteria:
a. Monetary consideration ofRs.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.SO lakhs each as offered by F
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." G
7. A letters patent appeal filed before the Division Bench of the
Bombay High Court led to the impugned judgment dated 1 gth 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. H
910 SUPREME COURT REPORTS (2016] 2 S.C.R.
A 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. I lU70 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."
I 0. 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 - Mis 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:
S.No DESCRIPTION RAMEE MESSRS RAUNAK
CONSTRUCTION CORPORATION
PRIVATE UMITEI
I. Monetary consideration Rs.7 crores R& 8 crores an:! one
pay.ibleto the Trust
2. Constm:ted area to be 4,921.3 sq.ft. 5,040 sq.ft.
allotted to the Trust,
free of cost
3. Construe ted/Reha bili tat 67,332.16 sq.ft. 69,166.53 dq.ft.
ed area to be offered to (Excluding parking (Parking will be
the tenants/ occupants, area) made available to
free of cost the tenants as per
D.C. Regulations)
DATTATRAYA BABURAO WALAWALKAR v. SIDDHIVINAYAK 911
CONSTRUCTION PVT. LTD. [R.F.NARIMAN, J.]
4. Monthly rent per Rs.55/-per sq. foot Rentals offered at rates
sq.foot offered to of carpet area ranging from Rs.17,500/-
tenants/occupants computed @ 460 per tenement lo
for availing of sq.ft. For Rs.25,000/-per tenement
transit residential tenants based on the areas of the
accommodation existing tenen1ents.
during the period Rs. I 55/-per sq. B
of redevelopment foot of carpet area Rs. I 00/- per sq.foot of
for non-residential carpet area for non-
tenants residential tenants
Also offered to pay
higher rentals if the c
prevailing rates at the
relevant time are higher;
alternatively, have also
offered to provide transit
accommodation.
5. Frequency of I 0% annually 1 0% every .11 months D
increases Ill
monthly rent
togctl1er with the
percentage of such
increase
6. Brokerage I month
1
s rent l montll's rent E
7. Transportation/ Rs. 15 ,000/- Rs.20,000/-
Shifting Charges
8. Corpus fund to be Rs. 7 crores and 90 Rs. 8 crores and one
paid to the lacs
tenants/occupants F
9. Amount of Bank Rs.12 crores Rs. 12 crores
Guarantee offered
10. Schedtde for No schedule Schedule depicting phase
release of Bank furnished }Vise release of Bank
Guarantee Guarantees furnished.
Bank Guarantee to G
be furnished within Bank Guarantee to be
II months from furnished upon receipt of
Development lQD i.e. municipal
Agreement sanctions
912
11. Pe1iod of validity Renewable upto Initially for 3 years
of Bank completion and renewable upto
Guarantee possession
12. Background Copies of Occupation Copies of Occupation
Certificates fi.1rnished in Certificates furnished
Projects of 2 lakh respect of2 commercial in respect of 51
sq.feet or more buildings in Mumbai residential buildings
completed in the and I Hotel Building in in Thane, Kandivli
last 5 (five) years Pune and Kalyan
together with aggregating to
copies of approx. 21.93 lacs
Occupation sq.ft.
certificates.
11. We have been informed today by learned senior counsel, Mr.
Sanjiv Sen appearing on behalf ofRarnee 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. I 0 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 Mis 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 I 05 tenancies of the Trust, 65 consents have been
obtained, and another 11 consents have also been obtained which, however,
have subsequently been revoked. Jfwe were to add these 11 to 65, as
DATTATRAYA BABU RAO WALAWALKAR v. SIDDH!VINAYAK 913
CONSTRUCTION PVT. LTD. [R.F.NARIMAN, J.]
consents once given are irrevocable, the mathematics of the situation A
would yield a figure ofroughly 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 forthe benefit of
the Trust ifthe said offer is accepted by the Trustees, which acceptance
has, on instructions, been give1i '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.
Nidhi Jain Appeals disposed of