NOTICE OF MOTION No. 771 OF 2019

29th November 2019

Petitioner Counsel: Mr. Aspi Chinoy Dr. Birendra Saraf Mr. Vaibhav Charalwal Mr. Mehul Shah Mr. Daljeet Bhatia Mr. Surel Shah Mr. Ashok T. Gade Mr. Vishal Kanade Mr. Vishwajeet V. Mohite
Respondent Counsel: Mr. Janak Dwarkadas Mr. Pradeep Bakhru Ms. Upasana Vasu Wadia Ghandy Mr. Anoshak Davar Mr. Nikhil Mishra
Act Name: Indian Companies Act, 1913 Maharashtra Public Trust Act, 1950 Transfer of Property Act, 1882 Civil Procedure Code, 1908 Maharashtra Stamp Act, 1958

Section :
Section 26 Indian Companies Act, 1913 Section 36(1)(a) Maharashtra Public Trust Act, 1950 Section 41D Maharashtra Public Trust Act, 1950 Section 41E Maharashtra Public Trust Act, 1950 Section 106 Transfer of Property Act, 1882

Cases Cited :

JUDGEMENT

1. The present Notice of Motion has been filed by the plaintiff seeking the appointment of a Court Receiver as well as for an order of injunction in relation to the suit premises and the suit open ground. Since defendant No.1 is running an International School on the suit premises and the suit open ground, a further relief is sought restraining defendant No.1 from calling any fresh applications for admission in the said International School.

2. The suit, as filed, seeks the relief of a declaration that the purported tenancy agreement dated 31st December, 2011 (registered on 6th January, 2012) entered into between the plaintiff and defendant No.1 and defendant No.2 is fraudulent, illegal, void abinitio and not binding on the plaintiff. A declaration is also sought that defendant No.1 and/or their servants, agents, representatives and all persons claiming through and/or under defendant No.1 are trespassers in respect of the suit premises as well as the suit open ground.

3. The description of the suit premises as well as the suit open ground are set out in paragraph 5A of the plaint which states that it is a large plot of land bearing Cadestral Survey No. 1245 and 2/1245 admeasuring about 11,171.21 sq.mtrs and Cadestral Survey No. 1/1245 admeasuring about 1,217.67 sq.mtrs of Girgaon Division and which plots form part of Laughton Survey Nos. 7351, 7352 and 7353. These plots of land are situated at Proctor Road/Street, Vadilal Patel Marg, Grant Road, Mumbai 400 007. The said Plots of land bearing Cadestral Survey No. 1245, 1/1245 and 2/1245 admeasuring about 12,388.88 sq. mtrs comprise of and includes inter alia an open ground admeasuring about 3,048.65 sq. mtrs (for short “suit open ground”) and 3 buildings/structures (known as Robert Money High School, Staff Quarters and Robert Money Technical School) standing on the plot of land bearing Cadastral Survey No.1/1245 and 2/1245 admeasuring 3,208.91 sq.mtrs (for short the “suit premises”). The description of the suit open ground is annexed at Exhibit “B” to the plaint and the description of the suit premises is annexed at Exhibit “C” to the plaint. The site Plan showing inter alia the suit open ground and the suit premises is annexed at Exhibit “D” in red colour.

4. Before setting out the brief facts, it would be necessary to set out who are the plaintiff and the defendants in the present suit. The plaintiff was originally registered as the Bombay Diocesan Trust Association Limited, inter alia under Section 26 of the Indian Companies Act, 1913. On enactment of the Companies Act, 1956, the registration of the plaintiff inter alia continued under Section 25 of the said Act. On enactment of the Companies Act, 2013, even today, the plaintiff continues to be registered inter alia under Section 8 of the said Act of 2013. The plaintiff is also registered as a Public Charitable Trust bearing registration No. E-923 under the provisions of the Maharashtra Public Trust Act, 1950 (for short “the MPT Act”) with the office of the Charity Commissioner. The objective of the plaintiff is for promoting the Christian religion in India and is involved in various other charitable activities. In the year 1962, the name of the plaintiff was changed and the word “Private” was added to its erstwhile name and it is now known as “The Bombay Diocesan Trust Association Private Limited”. Considering that the plaintiff is a Trust registered under the provisions of the MPT Act, its activities are regulated by the office of the Charity Commissioner. The plaintiff’s primary source of income is through its various properties which are situated in the State of Maharashtra, Karnataka, Gujarat and Rajasthan. All the properties of the plaintiff are registered with the office of the Charity Commissioner and the income generated through the properties is invested in Fixed Deposits with various banks.

5. Defendant No.1 is also a Public Charitable Trust under the MPT Act bearing registration No. E-22365 (Bom.) and having its address as mentioned in the cause title. Defendant No.1(a) to 1(c) are the current trustees of defendant No.1. Defendant No.2 is a Society registered under the Societies Registration Act, 1860 and is also a Public Charitable Trust registered under the MPT Act bearing registration No.F-803 (Bom). Defendant No.2 (a) to 2(j) are the current trustees of defendant No.2.

6. It is not in dispute before me that the plaintiff is the owner of the suit open ground and the suit premises mentioned earlier and more particularly described in Exhibits B, C & D to the plaint. The suit open ground admeasures about 3048.65 sq.mtrs and the suit premises consist of three buildings known as Robert Money High School, Staff Quarters and Robert Money Technical School standing on a plot of land admeasuring about 3208.91 sq.mtrs and has a built up area of approximately 46,237 sq.ft. Since 1960 defendant No.2 was running the Robert Money High School and the Technical School in the said three buildings for the poor and under privileged students.

7. The brief facts are that on 3rd December, 2007 defendant No.1 submitted a proposal to Mr. P. B. Amolik, (the then Hon. Secretary, Trustee and Director of the plaintiff) to develop/construct a building of 1,00,000 sq. feet and 45,000 sq. feet basement (for parking) for an International School on the said open ground admeasuring 3048 sq.mtrs. Thereafter, on 3rd March, 2008 defendant No.1 submitted a revised proposal. Accordingly, on 8th March, 2008 the plaintiff Company’s board resolved to accept defendant No.1’s proposal for development. The said resolution contemplated that if development could not be carried out on the suit open ground without demolishing the existing school buildings, then, the students of the existing school buildings would be accommodated in a temporary structure before demolishing the same and thereafter, on construction of a new building, the said students would be re-accommodated in the Robert Money School with all modern amenities. This was obviously all subject to the permission of the Charity Commissioner. The resolution also recorded that as defendant No.2 was in possession/control of the said three buildings, 50% of the income to be received would be paid over to defendant No.2. The board further resolved that Mr. P. B. Amolik was to execute the necessary agreement as an authorised representative of the plaintiff. This resolution can be found at Exhibit “G” to the plaint and is not disputed by any of the parties.

8. Pursuant to the aforesaid resolution, a Memorandum of Understanding (“MoU”) dated 27th March, 2008 was executed between the plaintiff and defendant No.1. On behalf of the plaintiff, the said MoU was signed by Mr. P. B. Amolik. The highlights of this MoU are as under :-
i. The MoU was subject to obtaining all requisite permissions from the concerned authorities;
ii. Defendant No.1 was to carry out construction only on the suit open ground of the said property and without disturbing the existing structures/suit premises. However, if development could not be carried out without demolishing the suit premises, then the same could be demolished and Defendant No.1 was to provide temporary alternate accommodation to the schools and after development, the said schools were to be reaccommodated;
iii. Defendant No.1 was to construct 1 Lakh Sq. feet carpet area and an additional area of 45,000 sq. feet carpet area of basement;
iv. Defendant No.1 deposited Rs.75 Lakhs and agreed to deposit an additional amount of Rs.75 Lakhs within 30 days on getting permission of the Charity Commissioner. The annual rent was fixed at Rs.3.6 crores per annum for the first 7 years and was to be increased by 10% every 7 years;
v. The term of the Agreement would be for a period of 49 years;
vi. Defendant No.1 was to obtain the No Objection Certificate from the office of Charity Commissioner with the co-operation of the Plaintiff;
vii. The parties were to enter into a Development Agreement within 30 days from the receipt of the Sanction from Charity Commissioner;
viii. The possession would be parted with only at the time of the execution of the Development Agreement.

9. Pursuant to this MoU, on 28th March, 2008, Mr. P. B. Amolik filed an application under Section 36(1)(a) of the MPT Act on behalf of the plaintiff seeking sanction of the Charity Commissioner. I must note here that this application was not proceeded with and was finally not pressed and was dismissed by the Charity Commissioner on 16th October, 2018.

10. In the interregnum, in the year 2009 proceedings were filed before the Joint Charity Commissioner under Section 41D of the MPT Act for removal of all Trustees of the plaintiff inter alia on the grounds of malfeasance and misfeasance in respect of the trust properties. An application under Section 41E was also filed in which the Charity Commissioner restrained the trustees of the plaintiff by an order of injunction from alienating, transferring, selling and/or creating any third party interests in the trust properties. This order of the Charity Commissioner was challenged before this Court in Writ Petition No. 916/2010. This Court by its order dated 26th August, 2010 restrained the trustees of the plaintiff by an order of injunction from alienating, transferring, selling and/or creating any third party interest in the trust properties without obtaining permission under Section 36 of the MPT Act. The said order of this Court dated 26th August, 2010 reads thus :-
“1. Heard Mr.Thorat, Senior Counsel for the petitioners and Mr. Shettigar learned counsel for respondents no.1 & 2.
2. Rule. By consent, Rule is made returnable forthwith. Since short point is involved, petition is taken up for hearing.
3. The brief facts giving rise to the present writ petition are as follows:-
Petitioner No.1 is charitable trust, registered under the Bombay Public Trusts Act, 1950. Respondents no. 1 & 2 who claim to be beneficiaries of the petitioner-Trust have filed Application No.16 of 2009 under Section 41E of the Bombay Public Trusts Act, 1950 (hereinafter referred as “the said Act”) before the Joint Charity Commissioner, Greater Mumbai Region, Mumbai for various directions. In the said application, respondents no.1 & 2 filed an application at Exh.6 for interim reliefs. This application was disposed of by the impugned order thereby restraining the petitioners, from entering into any transaction with regard to the trust property, using trust funds for defending criminal case No.FIR/104/09 and other incidental proceedings thereto. By the said order, petitioners were also directed to give detail statement about all the transactions entered into for which the applications under Section 36 of the said Act are not moved.
4. Mr. Thorat, learned Senior Counsel submitted that as far as clause-1 of the operative order is concerned, the petitioners could not have been totally prohibited from entering into any transaction. He further submitted that, the trustees are entitled to use the trust fund to recover trust properties. He lastly submitted trust property is not sold without obtaining prior permission under Section 36 of the said Act.
5. Mr. Shettigar, learned counsel for respondents no.1 & 2 on the contrary, supported the impugned order. He submits that looking into the past conduct of the trustees of the Petitioner Trust, equitable order is passed.
6. Having heard learned counsel for the respective parties and having gone through the impugned order, I find that there are twelve trustees of the Petitioner Trust. The names of these trustees are recorded in the record of the Trust. Respondents nos. 1 & 2 are the original applicants in proceedings under Section 41E of the said Act and therefore presence of other respondents may not be necessary while disposing of this petition.
7. The Charity Commissioner is custodia legis of the trust property. The trustees cannot transfer the trust property without prior approval of the Charity Commissioner under Section 36 of the said Act. The title of the trust property does not pass over to the purchaser unless and until approval under Section 36 of the said Act is granted by the Charity Commissioner. While granting approval, the Charity Commissioner is obliged to consider relevant factors namely : -
(a) need to sell property;
(b) whether transaction is beneficial to the trust and
(c) whether the trust is getting best available price.
In the circumstances, the injunction prohibiting trustees of the petitioner trust from entering into any transaction with regard to the trust property, in my view, cannot be granted. The property and the interest of the trust would be sufficiently protected if the trustees are restrained from alienating, transferring, selling and/or creating third party interest in the trust property without taking prior permission under Section 36 of the said Act.
8. So far as the clause 2 of the operative order is concerned, Mr. Shettigar, learned Counsel for respondents no.1 & 2 submitted that restrictions are only for using trust funds to defend criminal case No.FIR No.104/2009 and incidental proceedings thereto and there is no restriction for spending the trust fund for recovery of property of the trust which is seized in criminal proceedings. In view of the statement, I am not inclined to modify clause 2 of the operative order.
9. So far as the clause 3 of the operative order is concerned, the respondents no. 1 & 2 have disputed the statement of the petitioners that none of the transaction is entered into in violation of Section 36 of the said Act. The issue whether trustees of the petitioner Trust have contravened the provisions of Section 36 of the said Act, will be decided at the time of final hearing of the main application under Section 41E of the said Act. However, it is the case of the petitioners that none of the transaction is entered into without obtaining sanction under Section 36 of the said Act. The petitioners can point out these facts to the Joint Charity Commissioner. Therefore, there is no need to modify clause 3 of the operative order. In these facts and circumstances, I dispose of the writ petition by passing the following order :-
ORDER
1. Clause 1 of the operative part of impugned order is substituted as under :-
The respondents-Trustees are restrained by an order of injunction from alienating, transferring, selling and/or creating third party interest in the trust property without obtaining prior permission under Section 36 of the said Act.
2. Clause 2 of the operative part of impugned order is confirmed. However, petitioners are at liberty to spend money from the trust fund for recovery of the trust property which is seized in criminal proceedings.
3. Clause 3 of the operative part of the impugned order is confirmed. However, petitioner is granted three weeks extension to give statement on the basis of available record.”
(emphasis supplied)

11. It is the case of the plaintiff that while the aforesaid order of the High Court was in force, Mr. P.B. Amolik fraudulently, and in collusion with the defendants, purported to execute an agreement styled as an alleged tenancy agreement in respect of the said three buildings (structure-A, Robert Money High School building structure-B, Staff Quarters and structure-C, Robert Money Technical School building) standing on the suit premises. Under this alleged tenancy agreement a purported monthly tenancy was sought to be created but only in respect of the said three buildings/structures. This tenancy agreement is at Exhibit “K” to the plaint and which is subjected to challenge in the present suit.

12. This tenancy agreement recorded that it had been executed by the said Mr. Amolik on behalf of the plaintiff, pursuant to a resolution dated 9th July, 2011, and on behalf of defendant No.2, pursuant to a resolution dated 8th June, 2010. However, the resolution annexed to the agreement was an alleged resolution dated 8th March, 2008 purporting to decide/resolve to let the said three buildings to defendant No.1. This resolution can be found at page 194 of the plaint. What is interesting to note is that even though this agreement is styled as a tenancy agreement, the same was stamped under Article 36 [i.e. as a lease] read with Article 25(b) [i.e. as a conveyance] of the Maharashtra Stamp Act (Bom. Act LX of 1958) and stamp duty of Rs.67,67,550/- was paid thereon.

13. Be that as it may, on 17th December, 2012, the Joint Charity Commissioner removed Mr. P. B. Amolik from the post of trustee for life and another trustee, namely, Dr. Aylwin Rajendram was removed for a period of five years. All other trustees were also removed for a period of six months and an Administrator was appointed. The Administrator appointed remained in-charge of the plaintiff Trust from 17th December, 2012 to 16th October, 2017.

14. Since Mr. Amolik and others were aggrieved by the order of the Joint Charity Commissioner, they preferred an appeal to the Hon’ble Bombay City Civil Court which affirmed the order of the Joint Charity Commissioner vide its order dated 30th October, 2015. The order of the City Civil Court was thereafter challenged before this Court by filing an Appeal. This Court, vide its order dated 14th June, 2017, confirmed the order of the learned Charity Commissioner with the exception that Mr. Amolik’s removal as a trustee for life was set aside as this Court was of the opinion that there was no power to disqualify a trustee for life. This Court also directed the Charity Commissioner to hold fresh elections for the post of trustees. It is pursuant to this order that fresh elections were held on 14th October, 2017 and 13 new trustees came to be appointed, one of which is the signatory to the plaint. Thereafter, on 16th October, 2017 the administrator handed over charge to the newly elected trustees.

15. Once the newly elected Trustees took charge, the plaintiff by their letter dated 8th November, 2017 referred to the MoU dated 27th March, 2008 and pointed out that despite an application being made under Section 36 of the MPT Act to the Charity Commissioner and which was pending, defendant No.1 had purported to make drastic changes on the property of the Robert Money High School. In these circumstances, defendant No.1 was called upon to produce all documents and provide information as to how those changes were being carried out by defendant No.1.

16. By a letter dated 15th November, 2017 addressed by the plaintiff to Mr. Amolik (with a CC marked to the defendants) the plaintiff pointed out that the new trustees had taken over from the Administrator on 20th October, 2017 and were surprised to find the aforesaid tenancy agreement. The plaintiff further pointed out that no such alleged resolution purporting to permit/execute the same existed and that the tenancy agreement appeared to be bogus and fraudulent. Mr. Amolik was therefore called upon to explain how the said tenancy agreement was executed by him.

17. After the newly elected trustees took over the management of the plaintiff and after perusing the statement of accounts for Shamrao Vithal Co-operative Bank, the plaintiff realized that defendant No.1 was depositing an amount of Rs. 37,260/- per month as per the purported tenancy agreement directly in the bank account of the plaintiff. In these circumstances, the plaintiff vide its letter dated 27th August, 2018 called upon defendant No.1 not to deposit any unsolicited amount into its bank account.

18. Thereafter, defendant No.1 vide its letter dated 5th September, 2018 claimed that the purported tenancy agreement was a valid and binding document and the amount of Rs.41,400 (less 10% TDS), was being deposited as monthly rent under the tenancy agreement.

19. Faced with this situation, the plaintiff issued a legal notice dated 1st November, 2018 and pointed out that the alleged tenancy agreement had been executed without any authority from the plaintiff trust. The plaintiff pointed out that there was no resolution dated 8th March, 2008 authorizing the execution of a tenancy agreement and the only resolution of the said date (08/03/2008) was a resolution for executing the development agreement with defendant No.1. It was further stated in the said letter that the execution of the purported tenancy agreement was in breach of the order of this Court dated 26th August, 2010 passed in Writ Petition No. 916/2010. In these circumstances, defendant No.1 was called upon to hand over vacant possession not only of the suit premises but also of the suit open ground and to pay mesne profits at market rate from 2011 till possession was handed over.

20. Thereafter, some correspondence ensued between the parties after which the present suit was filed on 21st December, 2018. The suit as well as the present Notice of Motion was served upon the defendants on 8th January, 2019. Thereafter, defendant No.1 filed its affidavit in reply and the plaintiff filed its affidavit in Rejoinder to which defendant No.1 filed its affidavit in Sur-rejoinder. I must mention that at the ad-interim stage, this Court passed an ad-interim order on 25th February, 2019 recording a statement on behalf of defendant No.1 that defendant No.1 shall not create any third party rights etc. in relation to the suit property. This is how the matter has come up before me for hearing and final disposal.

21. In this factual backdrop, Mr. Chinoy, the learned Senior Counsel appearing on behalf of the plaintiff submitted that from the documents on record, it was clear that the purported tenancy agreement was a false, bogus and a fraudulent document to deprive the plaintiff trust of its valuable immoveable property. Mr. Chinoy submitted that as per the MoU dated 27th March, 2008 executed between the plaintiff and defendant No.1, defendant No.1 was to construct 145,000 sq. feet and deposit a sum of Rs.1.5 Crores and pay annual rent of Rs.3.6 Crore per annum for the first seven years and which was to be increased by 10% every 7 years. Mr. Chinoy submitted that this MoU even contemplated that the tenure of the said agreement would be for a period of 49 years and this was subject to the permission of the Charity Commissioner. This agreement was entered into pursuant to a resolution dated 8th March, 2008. He submitted that there is absolutely no explanation as to why another resolution was purportedly passed on 8th March, 2008 giving the three constructed buildings which housed the school for the under privileged students to defendant No.1 on a monthly tenancy and that too for a paltry sum of Rs.41,400/- per month being paid to the plaintiff trust. He submitted that another glaring factor is that this Resolution of 8th March, 2008 does not find any mention in the body of the purported tenancy agreement dated 31st December, 2011. In fact, Mr. Chinoy submitted that the tenancy agreement clearly records that the same is signed pursuant to a resolution dated 9th July, 2011. This purported resolution is annexed at Exhibit “B” to the affidavit in reply of defendant No.1. What is important to note is that clause 13 of this resolution refers only to a resolution of 8th March, 2008 to execute a MoU with defendant No.1 to develop the property occupied by Robert Money High School run by defendant No.2 subject to the sanction of the Charity Commissioner. It thereafter records that the main building of Robert Money School was in a dilapidated condition and therefore the trust approached defendant No.1 to let out the premises occupied by defendant No.2 on a monthly tenancy basis for Rs.41,400/- and deposit of Rs.1,24,000/- which can take care of the maintenance expenses and other charitable activities of the plaintiff – trust. Mr. Chinoy pointed out that the resolution of 9th July, 2011 does not refer to the resolution of 8th March, 2008 which was annexed to the purported tenancy agreement dated 31st December, 2011. He submitted that in fact this resolution of 8th March, 2008 and pursuant to which the tenancy agreement has been entered into does not even find place in the minute books of the plaintiff trust. Even after one peruses the resolution of 9th July, 2011, it was the submission of Mr. Chinoy, that these minutes itself record that several members had opposed these minutes and a lot of heated arguments took place and since Mr. Amolik did not wish to create any law and order situation, it was decided to adjourn this meeting and shift the venue from the registered office of the plaintiff to the residence of Mr. Amolik at Byculla. It recorded that it was imperative that the meeting be continued and complete the agenda because the board meeting was held after a lapse of one and a half years. He submitted that this Resolution itself is suspicious for various reasons and also does not find place in the minute books of the plaintiff trust. Mr. Chinoy submitted that it is also important to note that Mr. Amolik was removed by the Charity Commissioner pursuant to the order dated 17th December, 2012. Despite this, rent receipts have been purportedly issued by Mr. Amolik to defendant No.1 from 2013 to 2017 for and on behalf of the plaintiff. Mr. Chinoy submitted that one fails to understand how this could be done by Mr. Amolik when he was no longer a trustee and in fact the Administrator was in-charge of the plaintiff trust. All these factors clearly go to show that with the help and conivance of Mr. Amolik, defendant No.1 had usurped valuable properties of the plaintiff – trust and that too without obtaining the permission of the Charity Commissioner and in violation of the restraint order passed by this Court on 26th August, 2010.

22. Thereafter, Mr. Chinoy submitted that in any event the so called monthly tenancy agreement was a sham in as much as it was nothing but a tenancy / lease in perpetuity. According to Mr. Chinoy this was quite clear from the way the said document was stamped by the stamping authorities (as a lease [Article 36]) and (as a conveyance [Article 25(b)]) as also clause 10(xiii) of the said agreement which inter alia provided that so long as defendant No.1 performed / discharged its obligations under the agreement without committing any default, the plaintiff was not be entitled to terminate the monthly tenancy. All this clearly went to show, at least prima facie that the tenancy agreement dated 31st December, 2011 was nothing but a lease / tenancy in perpetuity. If that be so, then clearly the said tenancy agreement was entered into in violation of the order of this Court dated 24th August, 2010 and section 36 of the MPT Act, was the submission. As a consequence of all this material, Mr. Chinoy submitted that the trust properties have to be adequately protected and therefore it was imperative that a Receiver be appointed and defendant No.1 be directed to pay royalty as per market value, if they wish to continue to use and occupy the trust properties which form the subject matter of the present suit.

23. On the other hand, Mr. Dwarkadas, the learned Senior Counsel appearing on behalf of defendant No.1, brought to my attention several paragraphs of the plaint and submitted that it was replete with allegations against Mr. Amolik. He submitted that admittedly, Mr. Amolik was not joined as a party defendant in the present suit. If the plaintiff has to establish his case of fraud, Mr. Amolik would be a necessary party to the present suit, as in the absence of Mr. Amolik, no finding of fraud could be rendered by this Court. He therefore submitted that the suit itself is bad for nonjoinder of a necessary party, namely, Mr. Amolik, and therefore there was no question of granting any interim relief in the above Notice of Motion. This is for the simple reason that in the absence of Mr. Amolik, no final relief could be granted and hence the granting of any interim relief would not arise.

24. Without prejudice to the aforesaid argument, Mr. Dwarkadas further submitted that this Notice of Motion suffers from delay and laches. Mr. Dwarkadas submitted that Mr. Barla who has verified the plaint, was one of the members of the board of the plaintiff during the period 2008 to 2011. This is reflected in Exhibit “D” to the said affidavit. He submitted that it was inconceivable that the plaintiff was unaware of defendant No.1’s occupation of the suit premises and the suit open ground as it was running a large International School over there since 2012. Mr. Dwarkadas submitted that defendant No.1’s occupation of the aforementioned premises was from the year 2012 and it was totally false on the part of the plaintiff to allege that it was unaware of this fact under the pretext that the control and management of the plaintiff was with the Administrator, who was appointed by the Charity Commissioner from 2012 to 2017. All this clearly goes to show that the present Notice of Motion clearly suffers from delay and laches and therefore no relief ought to be granted in favour of the plaintiff.

25. Regarding the submissions of Mr. Chinoy that the tenancy agreement dated 31st December, 2011 was entered into in breach of the order of this Court dated 26th August, 2010, Mr. Dwarkadas submitted that on a correct reading of the said order, it cannot be contended that the tenancy agreement dated 31st December, 2011 was in breach of any order passed by this Court. Mr. Dwarkadas submitted that initially, in proceedings filed under Section 41E of the MPT Act, the Charity Commissioner restrained the trustees of the plaintiff from alienating, transferring, selling and/or creating any third party interests in the trust properties. This was a blanket injunction order. This order of the Charity Commissioner was challenged before this Court in Writ Petition No. 916/2010. This Court by its order dated 26th August, 2010 modified the order of the Charity Commissioner and restrained the trustees of the plaintiff from alienating, transferring, selling and/or creating any third party interests in the trust properties, without obtaining the permission of the Charity Commissioner under Section 36 of the MPT Act. Mr. Dwarkadas brought to my attention Section 36 of the said Act and submitted that under the said provision there were only certain types of alienations of immovable property of a public trust that required the permission of the Charity Commissioner. Relying upon the said aforesaid provision, Mr. Dwarkadas submitted that creation of a monthly tenancy of an immovable property belonging to a public trust was not one that required the permission of the Charity Commissioner under Section 36. Considering that the order of the High Court dated 26th August, 2010 contemplated prior permission of the Charity Commissioner under Section 36 of the MPT Act and creation of a monthly tenancy was not one that required such permission (under section 36), the entering into a monthly tenancy by the plaintiff with defendant No.1 was not in violation of the order dated 26th August, 2010. He therefore submitted that there was no merit in the submission of Mr. Chinoy that the monthly tenancy agreement entered into between the plaintiff and defendant No.1 dated 31st December, 2011 was in breach of the order of this Court dated 26th August, 2010.

26. As far as the argument of Mr. Chinoy that the tenancy agreement was entered into without the requisite authority from the plaintiff, Mr. Dwarkadas pointed out that admittedly, this agreement creates a monthly tenancy in favour of defendant No.1. He submitted that, as stated in the affidavit in reply, this tenancy agreement was entered into pursuant to the Resolution dated 8th March, 2008 and 9th July, 2011. He submitted that the Resolution dated 8th March, 2008 can be found at page No.194 of the paper book and clearly states that the suit premises admeasuring 3208.91 square meters (on which the three structures of the Robert Money High School are constructed) would be let out to defendant No.1 on a monthly tenancy basis of Rs.41,400/- per month and a deposit of Rs.1,24,000/-. This Resolution thereafter again finds place in the Resolution dated 9th July, 2011 at page No. 42 (Exhibit “B” to the affidavit-in-reply of defendant No.1). Item 13 of this Resolution makes a reference to a resolution passed of 8th March, 2008. Pointing out all this material, Mr. Dwarkadas submitted that the tenancy agreement was properly executed for and on behalf of the plaintiff and no exception can be taken in that regard.

27. In regard to the argument of Mr. Chinoy that in any event the tenancy agreement dated 31st December, 2011 can never be styled as a monthly tenancy, Mr. Dwarkadas submitted that this argument was canvassed on behalf of the plaintiff mainly on two grounds. Firstly, that the said agreement was stamped under Article 36 read with Article 25(b) of the Maharashtra Stamp Act, (Bom. Act LX of 1958) and a stamp duty of Rs.67,67,550/- was paid thereon. Secondly, that clause 10 (xiii) of the said Agreement stipulated that so long as the tenant (defendant No.1) performed/discharged its obligations under the said tenancy agreement without committing any default, the owner (the plaintiff) would not be entitled to terminate the said agreement. Mr. Dwarkadas submitted that neither of the aforesaid two factors would militate against the fact that the agreement dated 31st December, 2011 was nothing but a monthly tenancy agreement. Mr. Dwarkadas submitted that the stamp duty paid on the said agreement will not by itself be determinative, whether it is a monthly tenancy or otherwise. One would have to see the clauses of the document to come to a conclusion whether it was a monthly tenancy or not. He submitted that the clauses in the said agreement dated 31st December, 2011 were clear and unambiguous and clearly stated that it was a monthly tenancy that was being created in favour of defendant No.1 by the plaintiff. This being the case, merely because the Stamp Authorities had adjudicated the stamp duty under Article 36 read with Article 25 (b) of the Maharashtra Stamp Act, (Bom. Act LX of 1958), would make no difference in the interpretation of the document. As far as the termination clause is concerned [clause 10(xiii)], Mr. Dwarkadas submitted that if this clause is contrary to Section 106 of the Transfer of Property Act (for short “the T.P. Act” ), then, the plaintiff is always at liberty to terminate the tenancy agreement as provided under Section 106 of the T.P. Act. Merely because the agreement provides that it would not be terminated unless there was a default committed by defendant No.1 would not in any way indicate that the agreement entered into on 31st December, 2011 was not a monthly tenancy agreement.

28. Mr. Dwarkadas submitted that the entire controversy in the present suit revolves around the aforesaid monthly tenancy agreement and in his submission since the said agreement was a valid, binding and subsisting agreement, no relief could be granted to the plaintiff as sought for in the above Notice of Motion. Consequently, he submitted that the Notice of Motion be dismissed with costs.

29. I have heard the learned Counsel for the parties at length and have perused the papers and proceedings in the present suit. Really speaking, everything turns on the agreement dated 31st December, 2011 and which is styled as monthly tenancy agreement. In fact, the execution of this very agreement is challenged in the above suit. Both parties have also, at length, addressed me on the validity of the said agreement. The outcome of this Notice of Motion would really depend on what would be the prima facie finding of the Court on this agreement.

30. In this regard, it would be appropriate to reiterate certain basic facts. It is not in dispute that on 8th March, 2008 a resolution was passed by the board of the plaintiff to accept defendant No.1’s proposal for development (i.e. development of a building of 1,00,000 sq. feet and 45,000 sq. feet basement for parking) on the suit open ground. Pursuant to this resolution, a MoU dated 27th March, 2008 was executed between the plaintiff and defendant No.1 and the salient features of which I have already reproduced earlier. One of the important features was that defendant no.1 was to carry out construction only on the suit open ground without disturbing the existing structures on the suit premises. The said agreement further contemplated that if development could not be carried out without demolishing the structures on the suit premises then the same could be demolished and defendant No.1 would provide temporary alternate accommodation to the schools standing on the suit premises, and after development, the said schools would be re-accommodated. It is on this basis that an application was made on 28th March, 2008 under Section 36 of the MPT Act seeking the previous sanction of the Charity Commissioner.

31. It appears that while this MoU was still very much in place, Mr. Amolik, acting on behalf of the plaintiff, entered into the purported tenancy agreement dated 31st December, 2011. At the outset, I must mention that this tenancy agreement was only in respect of the structures standing on the suit premises and not the suit open ground. Despite this, defendant No.1 is in occupation also of the suit open ground. This is not in dispute. Be that as it may, this monthly tenancy records that defendant No.1 has to pay monthly compensation of Rs.4,14,000/- to defendant No.2 and monthly rent of Rs. 41,400/- to the plaintiff. This, of course, is in stark contrast to the MoU dated 27th March, 2008 which contemplated a deposit of Rs.1.5 crores with the plaintiff and an annual rent of Rs.3.6 crores (Rs.30 lakhs per month) for the first seven years and the same was to be increased by 10% every seven years. One must also not lose sight of the fact that this tenancy agreement was entered into while proceedings under Section 41D of the MPT Act, were pending before the Joint Charity Commissioner for removal of all trustees of the plaintiff, inter alia, on the ground of malfeasance and misfeasance in respect of the trust properties.

32. When one considers the facts, as a whole, and as narrated earlier in this judgment, prima facie, I find considerable force in the arguments canvassed by Mr. Chinoy, the learned Counsel appearing on behalf of the plaintiff. I have gone through the tenancy agreement in great detail. Firstly, I must state that the scope of the tenancy agreement is only in respect of the three structures/buildings standing on the suit premises and not the suit open ground. Despite this, defendant No.1 is in use and occupation not only of the said 3 structures/buildings standing on the suit premises, but also of the suit open ground. To this, and which is an admitted position, Mr. Dwarkadas has no answer. There was also no explanation by Mr. Dwarkadas that when a resolution dated 8th March, 2008 was already passed by the plaintiff for development of the suit open ground and the suit premises, was there a need to pass another resolution of the very same date (8th March, 2008) under which the three structures/buildings standing on the suit premises were given on a monthly tenancy to defendant No.1, and that too for a paltry sum of Rs.4,14,000/- per month being paid to defendant No.2 and a sum of Rs.41,400/- per month being paid to the plaintiff. As mentioned earlier, this is in stark contrast to what the MoU dated 27th March, 2008 contemplated and which was a deposit of Rs.1.5 crores being placed with the plaintiff and rent being paid to the plaintiff in the sum of Rs.3.6 crores per year (Rs.30 lakhs per month) for the first seven years and which was to be increased by 10% every seven years.

33. Apart from this, I find that the body of this tenancy agreement refers to a resolution dated 9th July, 2011 (page 175). The said resolution is not annexed to the said agreement but in fact a resolution dated 8th March, 2008 is annexed under which, it is purportedly resolved that all three structures of the Robert Money High School (constructed on the suit premises) are being let out to defendant No.1. Why this resolution was required to be passed, is also not mentioned thereunder. For easy reference the said resolution dated 8th March, 2008 purportedly resolving to create a monthly tenancy in favour of defendant No.1 is reproduced hereunder :-

TABLE
“THE BOMBAY DIOCESAN TRUST ASSOCIATION PRIVATE LIMITED
(Incorporated in 1928 under the Indian Companies Act, Registered under the Bombay Public Trust Act 1950)
Registered Office: 19/21, Hazarimal Somani Marg, Fort, Mumbai-400 001.
Website:www.bdtapvtltd.org; E-mail :- bdtapvtltd@yahoo.com
Telephone: 22071725
Fax: 22003606
December 31, 2011
CERTIFIED TRUE COPY OF
EXTRACTS OF THE MINUTES OF RESOLUTION PASSED BY THE TRUSTEES OF THE “BOMBAY DIOCESAN TRUST ASSOCIATION PRIVATE LIMITED”
HELD ON 8TH MARCH, 2008 AT THE REGISTERED OFFICE OF THE TRUST
THE “” IN RESPECT OF PROPERTY BEARING 1245 & 2/1245 PART OF 7351, 7352 & 7353 (LOCALITY: PROCTOR STREET, GRANT ROAD)
WHEREON
ROBERT MONEY HIGH SCHOOL IS SITUATED
RESOLVED THAT bearing Plot No. 62 at Proctor Street, Grant Road, Mumbai 400 007 bearing C. S. No.1245 & 2/1245 and part of 1/1245 of Girgaum division Part of 7351, 7352, 7353 admeasuring 11171.21 sq.meters as the “said Property”. Out of the area of 11171.21 sq.meters the actual area of the Plot as per the demarcation works out to 6257.76 sq.meters including Compound wall bearing Plot No. 2/1245 and part of 1/1245 as the “said Portion”. Out of the area of 6257.76 sq. meters the open ground bearing C. S. No. 2/1245 and part of 1/1245 admeasuring 3048.65 sq. meters as the “said Ground”. The balance area of the said portion of the land bearing C. S. No. 2/1245 admeasuring 3208.91 sq. meters on which the three structures of the Robert Money High School are placed (referred to as the “said premises”) with all structures standing thereon presently occupied by the Bombay Diocesan society and who has agreed to relinquish their rights in favor of CHANKYA GYAN KENDRA.
FURTHER RESOLVED THAT all the three structures of the Robert Money High School be let out to CHANKY GYAN KENDRA on monthly tenancy basis of Rs. 41,400/- per month and a deposit of Rs. 1,24,000/-.
FURTHER RESOLVED THAT Rev. Dr. P. B. Amolik, Hon. Secretary is authorized to sign and execute the Tenancy Agreement, Power of Attorney and deliver the necessary documents of the said Property and to take necessary steps to register the documents according to the law and further make proper representation before the various Government authorities and bodies.
HON.SECRETARY
The Bombay Diocesan Trust Association Pvt Ltd”
(emphasis supplied)

34. Thereafter, the resolution of 9th July, 2011 is produced by defendant No.1 in its Affidavit-in-Reply. This resolution indicates that on 9th July, 2011 a purported board meeting of the plaintiff was held at 4:00 p.m., at the registered office of the plaintiff. The parties who opposed this meeting have been mentioned in the minutes, one of which was Mr. Barla, who is a signatory to the plaint. The minutes thereafter record that since there was opposition to the aforesaid meeting and heated arguments took place, it was decided by a majority of members to adjourn the meeting and shift the venue from the registered office of the plaintiff to the residence of Mr. Amolik. These minutes can be found at page Nos. 42 to 48 of the Affidavit-in-Reply filed on behalf of defendant No.1 (Exh.“B”). These minutes provided for several resolutions being passed/decisions being taken. However, for our purposes clause 13 of these minutes is relevant and read thus :-
“13. Robert Money School and Chankya Gyan Kendra – A Resolution was passed in the meeting held on 08.03.2008 to execute a Memorandum of Understanding with Chankya Gyan Kendra, a registered Public Trust to develop the Property occupied by the Robert Money High School, run by Bombay Diocesan Society, subject to the sanction of the Charity Commissioner, Maharashtra State, before its final disposal. The main building of the Robert Money School building is lying vacant and unutilized and is in a dilapidated condition and other structures also require major repairs. The same Trust has approached us to let out the premises occupied by the Bombay Diocesan Society on a monthly Tenancy basis for Rs.41,400/- per month and a deposit of Rs.1,24,000/- which can take care of the maintenance expenses and other charitable activity.”
(emphasis supplied)

35. As can be seen from the above reproduction, there is not a whisper in this resolution about a resolution passed on 8th March, 2008 under which the suit premises along with the structures thereon were to be let out to defendant No.1 on a monthly tenancy basis. The resolution referred to above and which is dated 8th March, 2008 was the resolution passed by the plaintiff trust to execute a MoU with defendant No.1 to develop the suit open ground and the suit premises, subject to the sanction of the Charity Commissioner. When one looks at this resolution coupled with the fact that it is the specific case of the plaintiff trust that there is no second resolution of 8th March, 2008 passed by the plaintiff trust to let out the suit premises and the structures to defendant No.1 in the minutes book of the plaintiff Trust, prima facie, casts a serious doubt on the validity of the monthly tenancy agreement. Even the resolution passed on 9th July, 2011 does not inspire any confidence considering the fact that many of the members present had opposed the holding of the said meeting in which the resolution was passed and therefore the meeting was thereafter shifted to the residence of Mr. Amolik. When one looks at all these factors, prima facie, I am of the view that the tenancy agreement was nothing but an attempt to alienate the trust property at a pittance of an amount in favour of defendant No.1 and that too without the permission of the Charity Commissioner.

36. That apart, even when one looks at the tenancy agreement as a whole, I am not satisfied that the same can be styled as monthly tenancy at all. When the monthly tenancy agreement was adjudicated by the Stamp Authorities, at least one public authority has clearly taken a view that it is not a monthly tenancy as the said authority has stamped the said agreement as a lease [Article 36] and a conveyance [Article 25(b)]. This is despite the fact that there is a specific clause in the agreement that the parties understood and acknowledged that the tenancy agreement does not create and/or convey any right, title or interest in the said property or any portion thereof nor does it constitute an agreement for sale or conveyance as per Article 25 of Schedule “I” of the Maharashtra Stamp Act. This being the position, at least, one public authority has not treated this agreement as a monthly tenancy agreement and has adjudicated the stamp duty of Rs.67,67,550/- thereon. This adjudication has not been disputed by defendant No.1 and in fact the stamp duty has also been duly paid. This being the position, I am clearly of the view that this tenancy agreement, at least prima facie, could not have been styled as a monthly tenancy. If its not a monthly tenancy then clearly, permission of the charity commissioner was required as per the order passed by this Court on 26th August, 2010 and which specifically recorded that the trustees of the plaintiff trust are restrained by an order of injunction from alienating, transferring, selling and/or creating any third party interest in the trust property without obtaining permission under Section 36 of the MPT Act. Prima facie, therefore, even if I was to assume that a monthly tenancy per se would not require the permission of the Charity Commissioner (as argued by Mr. Dwarkadas), I do not think that the tenancy agreement dated 31st December, 2011 can be genuinely treated as a monthly tenancy agreement.

37. Another telling factor in this regard (that the tenancy agreement dated 31st December, 2011 cannot be styled as a monthly tenancy), would be the termination clause of the said agreement, namely, clause 10 (xiii). The said clause reads thus :-
“10. It is now agreed by and between the OWNERS and the TENANT as follows :-
**********
“xiii) So long as the TENANT performs / discharge his obligations under these presents without committing any default on the part of the TENANT the OWNERS shall not be entitled to terminate these presents.”

38. As can be seen from the above clause, it is agreed between the plaintiff and defendant No.1 that so long as defendant No.1 performs/ discharges its obligations under the tenancy agreement dated 31st December, 2011, without committing any default, the plaintiff would not be entitled to terminate the same. In other words, what this clause postulates is that the plaintiff being the owner, would not be entitled to terminate the tenancy agreement with defendant No.1 unless defendant No.1 fails to perform or discharge its obligations under the tenancy agreement. This clause, therefore, indicates that this is not a monthly tenancy for the simple reason that Section 106 of the Transfer of Property Act, 1882 clearly stipulates that in the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either the lessor or the lessee, by six months’ notice; and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either the lessor or the lessee, by fifteen days’ notice. In other words, a monthly tenancy can be terminated either by the lessor or the lessee by giving fifteen days’ notice. However, the termination clause in the tenancy agreement before me clearly stipulates that the tenancy agreement cannot be terminated by the plaintiff (lessor) unless defendant No.1 (lessee) fails to perform and/or discharge its obligations under the tenancy agreement. This, therefore, would clearly be another telling factor which would prima facie go to show that the tenancy agreement dated 31st December, 2011 was not a monthly tenancy but was in fact a tenancy / lease in perpetuity and could be terminated only if any default or breach was committed by defendant No.1 of the terms and conditions of the said tenancy agreement. This is also probably the reason why the Stamp Authorities treated the tenancy agreement not as monthly tenancy but as a lease and/or a conveyance and adjudicated the stamp duty thereon under Article 36 read with Article 25(b) of Schedule- “I” of the Maharashtra Stamp Act.

39. Once I have come to the prima facie conclusion that the tenancy agreement and (which is styled as a monthly tenancy agreement) was entered into in violation of the order passed by this Court on 26th August, 2010 and would also be in the teeth of the provisions of Section 36 of the MPT Act, then, the other arguments canvassed by Mr. Dwarkadas are of no avail to defendant No.1. Merely because it appears that there is a lot of infighting amongst the trustees of the plaintiff, would not dis-entitle the plaintiff - trust from obtaining relief against defendant No.1. One must also not lose sight of the fact that the Administrator was appointed of the plaintiff – trust from 2012 to 2017. Despite this, from 2013 to 2017, Mr. Amolik continued to issue rent receipts (on behalf of the plaintiff – trust) to defendant No.1. These rent receipts have been produced by defendant No.1 itself in its Affidavit in-Sur-Rejoinder. How Mr. Amolik could have issued these rent receipts from 2013 to 2017, is beyond my comprehension. Even the school for the underprivileged children (Robert Money High School) and which was being conducted on the suit premises has been closed down in 2017. When one takes an overall view of the matter, it is clear that the properties of the trust (and which is a Public Trust) have to be protected under the orders of this Court.

40. Having said this, I am also mindful of the fact that defendant No.1 is running an International school with approximately 300 students. The interests of these students also will have to be protected by this order. To balance the equities and to ensure that while protecting the interests of the trust, the interests of the students of defendant No.1 are not prejudicially affected, a balance will have to be struck. Considering all these factors, I think that it would be in the fitness of things if pending the hearing and final disposal of the suit, the Court Receiver, High Court, Bombay is appointed as the Receiver of the suit premises (including the structures standing thereon) as well as the suit open ground and defendant No.1 is appointed as the Agent of the Court Receiver. The question still remains what would be the royalty that defendant No.1 would have to pay as the Agent of the Court Receiver. In this regard, Mr. Chinoy submitted that defendant No.1 should pay royalty to the Court Receiver as per the market value. According to Mr. Chinoy, the valuation report relied upon by the plaintiff would indicate that the market rent for the suit premises (including the structures standing thereon) as well as the suit open ground, would be approximately Rs.62.67 lakhs per month. I am not inclined, at this stage, to accept this submission. As mentioned earlier, I have also to be mindful of the fact that defendant No.1 is running an International School with approximately 300 students. The interests of these students would also have to be protected under this order. Considering these facts, at the interim stage, I think it would be in the interest of all, if defendant No.1 is directed to pay royalty to the Court Receiver in the sum of Rs.33 lakhs per month. I have arrived at this figure on the basis of the development agreement that was to be entered into between the plaintiff and defendant No.1 dated 27th March, 2008. The said development agreement contemplated an annual rent of Rs.3.6 crores and which was to be increased by 10% every seven years. If one were to take the increase of 10% into consideration (as seven years have already elapsed), then the annual rent under the said development agreement would be approximately Rs.3,96,00,000/-. It is in these circumstances that I think that it would be just and equitable if defendant No.1 is directed to pay royalty in the sum of Rs.33 lakhs per month to the Court Receiver for being appointed as the Agent of the Court Receiver. In these circumstances, considering the equities of all sides, the following order is passed :-
(i) Pending the hearing and final disposal of the suit, the Court Receiver, High Court, Bombay is appointed as the Receiver of the suit premises (including the structures standing thereon) as well as the suit open ground under Order XL Rule 1 of the Code of Civil Procedure, 1908;
(ii) The Court Receiver shall appoint defendant No.1 as the agent of the Court Receiver who shall pay royalty to the Receiver of an amount of Rs.33,00,000/- per month. Defendant No.1 shall execute with the Receiver the agency agreement and all undertakings required by the Receiver within a period of 4 weeks from today. The payment of royalty shall start from 1st January, 2020. The money deposited by the 1st defendant with the Court Receiver (as royalty) shall be invested in a Nationalized Bank and shall be subject to further orders passed by the Court;
(iii) In the event defendant No.1 commits any two defaults in the payment of the monthly royalty of Rs.33,00,000/-, then the Court Receiver shall take physical possession of the suit premises (including the structures standing thereon) as well as the suit open ground at the end of the school academic year in which the default has been committed. He shall thereafter file a report before this Court regarding the further course of action to be taken in the matter;
(iv) Pending the hearing and final disposal of the suit, defendant No.1 is also restrained, either through their servants, agents and/or their representatives by an order and injunction from selling, disposing of, alienating, encumbering, parting with possession and/or creating any third party rights and/or interests in respect of the suit premises (along with the structures standing thereon) and the suit open ground, or any part thereof.

41. The Notice of Motion is accordingly disposed of. However, in the facts and circumstances of the case, there shall be no order as to costs.

42. As far as the Chamber Summons filed by Mr. Amolik to be joined as a party defendant to the present suit is concerned, the same shall be decided on its own merits and in accordance with law.