MANU/MH/0542/2020

Equivalent/Neutral Citation: AIR2020Bom153, 2020(3)ALLMR349, 2020(3)BomC R323, 2020(3)MhLj323

IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Writ Petition No. 3483 of 2015
Decided On: 27.04.2020
Avinash Kishorchand Jaiswal and Ors. Vs. Rammandi Deosthan and Ors.
Hon'ble Judges/Coram:
B.P. Dharmadhikari, C.J., R.K. Deshpande and Amit B. Borkar, JJ.
Counsels:
For Appellant/Petitioner/Plaintiff: Anand Jaiswal, Senior Advocate assisted by Radhika
Bajaj, Advocate
For Respondents/Defendant: S.D. Abhyankar, R.M. Bhangde and S.Y. Deopujari,
Advocates
Case Note:
Trust and Societies - Public trust - Sections 50, 51 of Maharashtra Public
Trusts Act, 1950 - Charity Commissioner rejected application holding that
sale-deed was hit by doctrine of lis pendens - Hence, present petition -
Whether power of revocation of sanction on ground that such sanction was
obtained by fraud can be exercised even after execution of a sale-deed - Held,
remedies under Sections 50 and 51 of Act, 1950 were dependent upon order
passed under Section 36(2) of Act, 1950 in respect of sale of public trust
property - Thus, jurisdiction of Civil Court under Section 50 of Act, 1950 to
entertain and decide any dispute covered by Section 36(2) of Act, 1950 was
completely barred - Hence, power of revocation of sanction on ground that
such sanction was obtained by fraud could be exercised even after execution
of sale-deed on basis of sanction granted under Section 36(1)(a) of Act, 1950
- Registry directed to place matter before appropriate Bench for disposal in
accordance with law. [24], [26]
JUDGMENT
Amit B. Borkar, J.
1 . In the proceedings of Application No. 02 of 2009, the learned Joint Charity
Commissioner, Nagpur, accorded his sanction on 25-10-2011 under Section 36(1)(a) of
the Maharashtra Public Trusts Act, 1950 ("the said Act") for sale of the land Survey No.
302, admeasuring 15.19 acres ("the property in question"), belonging to Shri Ram
Mandir Deosthan, Pavnar, Wardha, in favour of the petitioner No. 1-Avinash
Kishorchand Jaiswal, who was the highest bidder, for total consideration of Rs.
11,05,000/-. This was subject to the decision in Special Civil Suit No. 24 of 2009, said
to have been filed by M/s. Ramdeobaba Developers and Builders, Arvi, for specific
performance of the property in question.
2. The respondent No. 2-Sudhakar Gajanan Deshpande, since dead, and the respondent
No. 3-Sanjay Ratiramji Satdeve, claiming to be the trustees, filed an application under
Section 36(2) of the said Act for revocation of sanction, in the month of September,
31-01-2025 (Page 1 of 15) www.manupatra.com Desai and Diwanji
2014. During the pendency of this application, the registered sale-deed was executed by
the respondent No. 1-Trust on 12-1-2015 in favour of the petitioners. On 20-2-2015,
Application No. 1 of 2014 was filed for dismissal of the application under Section 36(2)
of the said Act on the ground that the Joint Charity Commissioner has no jurisdiction to
pass an order of revocation of sanction after execution of the registered sale-deed. The
learned Charity Commissioner rejected the said application on 16-5-2015 holding that
the sale-deed was executed pending the application for revocation and hence it was hit
by the doctrine of lis pendens. The purchasers are, therefore, before this Court in this
writ petition.
3. In support of the contention that the Joint Charity Commissioner ceases to have any
jurisdiction to exercise the power of revocation of sanction under Section 36(2) of the
said Act after execution of the sale-deed, strong reliance is placed upon the decision of
the Division Bench of this Court in the case of Shri Mahadeo Deosthan, Wadali and
others v. Joint Charity Commissioner, Nagpur and others, reported in
MANU/MH/0698/1988 : 1989 Mh.L.J. 269. The learned Single Judge, after hearing the
parties, raised a doubt about the correctness of the view taken by the Division Bench in
the said decision and has, therefore, referred the following question for the decision of
the larger Bench:
Whether the power of revocation under Section 36(2) of the Maharashtra Public
Trusts Act, 1950 on the ground of such sanction was obtained by fraud or
misrepresentation or by concealing material facts can be exercised even after
execution of the sale deed on the basis of such sanction under Section 36(1)(a)
of the said Act?
Since there is a doubt expressed in respect of the correctness of the decision of the
Division Bench in the case of Shri Mahadeo Deosthan, cited supra, we would like to see
the facts involved in the said decision and the law laid down therein, as under:
4. In the case of Shri Mahadeo Deosthan, an application was made on 13-2-1984 under
Section 36 of the said Act for grant of sanction to transfer 10 acres of land belonging to
the Trust. On 11-5-1984, the sanction was accorded and thereafter on 26-7-1984, a
registered sale-deed was executed in favour of the petitioner No. 6 in the said decision.
Some of the trustees filed an application under Section 36(2) of the said Act for
revocation of the sanction. The question of maintainability of this application was raised
on the ground that after execution of the sale-deed, the sanction accorded is exhausted
and the Joint Charity Commissioner has no jurisdiction to entertain and decide such
application.
4.1. It is held in this decision that the intention of the Legislature under Section 36(2)
of the said Act is to restrict the exercise of power of revocation till the sanction
accorded under Section 36(1) of the said Act is exhausted by executing the registered
sale-deed. The reasons are three-fold - (i) that the sanction granted under Section
36(1) of the said Act merges into a sale-deed and the property loses its character as a
Trust property, (ii) that the property may change hands at several times and if the
sanction is to be revoked at any time even after the execution of the sale-deed, a
chaotic situation is likely to be created, and (iii) that under Section 36(3) of the said
Act, the purchaser may not get an opportunity to show why the sanction should not be
revoked.
5 . In the order of reference, the learned Single Judge expressed a doubt about the
correctness of the view. It is held that Section 36 of the said Act not only empowers the

31-01-2025 (Page 2 of 15) www.manupatra.com Desai and Diwanji

Charity Commissioner to grant sanction to alienate the property, but it equally
empowers recovery of the property if it is found that the sanction granted for alienation
was obtained by fraud or misrepresentation or by concealing the material facts. If it is
not possible to recover the property with reasonable effort or expense, the provision
empowers the Charity Commissioner to grant compensation to be paid by the trustee so
responsible to the Trust property. It holds that the operation of Section 36 of the said
Act does not appear to be restricted to cover the situations only till the property is
alienated on the basis of the sanction granted, but it also intends to cover the
contingencies that may arise on revocation of the sanction even after the property is
alienated. In such a situation, a direction can be issued to recover the property.
6. In order to consider the correctness of the view taken by the Division Bench in Shri
Mahadeo Deosthan's case and to answer the question of law referred to us for decision,
we will have to first-of-all consider the object and purpose of the said Act, the duties,
functions and powers of the Charity Commissioner specified under the said Act as
under:
6.1. The Maharashtra Public Trusts Act, i.e. the erstwhile Bombay Public Trusts
Act, 1950, was brought into force on 31-5-1950. Prior to it, Section 92 of the
Code of Civil Procedure dealing with the alienation of immovable property of a
trust was in force. The object of the said Act, as it reveals from the preamble, is
to regulate and make better provisions of the administration of the public,
religious and charitable trusts within the State of Maharashtra. The Charity
Commissioner is appointed by the notification issued under Section 3 of the
said Act in the Official Gazette having very wide powers and duties conferred
primarily in Section 69 under Chapter VIII and other provisions of the Act. It is
the power of general superintendence of the administration of the public trusts
for carrying out the purposes of the said Act. Along with the Charity
Commissioner, several other officers, like Joint Charity Commissioner, Deputy
Charity Commissioner and Assistant Charity Commissioner, are appointed as the
watchdogs for effective control and supervision of the public trusts, including
the activities of irregularities, malpractices and misconduct in the functioning of
the public trusts. The Charity Commissioner is in the position of parens patriae
in respect of the property of a public trust, and the essential functions are to
see that the property belonging to a public trust is utilized for the interest and
benefit of the trust and that it is protected from unlawful wastage.
6.2. Section 69 of the said Act deals with the duties, functions and powers of
the Charity Commissioner, and clauses (g), (l), (m) and (p) therein being
relevant are reproduced below:
"69. For the purposes of this Act, the following shall be the duties to be
performed and powers to be exercised by the Charity Commissioner,
namely:--
...
(g) power to sanction a sale, mortgage, exchange, gift or lease
of immovable property belonging to a public trust under
section 36;
...
(l) power to file suit under section 50;
31-01-2025 (Page 3 of 15) www.manupatra.com Desai and Diwanji
 (m) power to give or refuse consent to the institution of a suit
under section 51;
...
(p) to exercise such powers and perform such other duties and
functions as may be prescribed."
6.3. Section 36 of the said Act dealing with alienation of immovable property of
public trust and conferring power upon the Charity Commissioner to sanction a
sale of immovable property belonging to a public trust, runs as under:
"36. (1) Notwithstanding anything contained in the instrument of trust-
-
(a) no sale, exchange or gift of any immovable property, and
(b) no lease for a period exceeding ten years in the case of
agricultural land or for a period exceeding three years in the
case of non-agricultural land or a building, belonging to a
public trust, shall be valid without the previous sanction of the
Charity Commissioner. Sanction may be accorded subject to
such condition as the Charity Commissioner may think fit to
impose, regard being had to the interest, benefit or protection
of the trust;
(c) if the Charity Commissioner is satisfied that in the interest
of any public trust any immovable property thereof should be
disposed of, he may, on application, authorise any trustee to
dispose of such property subject to such conditions as he may
think fit to impose, regard being had to the interest or benefit
or protection of the trust.
1 [Provided that, the Charity Commissioner may, before the
transaction for which previous sanction is given under clause
(a), (b) or (c) is completed, modify the conditions imposed
thereunder, as he deems fit:
Provided further that, if such condition is of 1 time-limit for
execution of any contract or conveyance, then application for
modification of such condition shall be made before the expiry
of such stipulated time.].
2 [(1A) The Charity Commissioner shall not sanction any lease
for a period exceeding thirty years under this Act.].
(2) The Charity Commissioner may revoke the sanction given
under clause (a) or clause (b) of sub-section (1) on the ground
that such sanction was obtained by fraud or mis-representation
made to him or by concealing from the Charity Commissioner,
facts material for the purpose of giving sanction; and direct the
trustee to take such steps within a period of one hundred and
eighty days from the date of revocation (or such further period
not exceeding in the aggregate one year as the Charity
31-01-2025 (Page 4 of 15) www.manupatra.com Desai and Diwanji
 Commissioner may from time to time determine) as may be
specified in the direction for the recovery of the property.
3 [Providedthat, no sanction shall be revoked under this section
after the execution of the conveyance except on the ground
that such sanction was obtained by fraud practiced upon the
Charity Commissioner before the grant of such sanction.].
(3) No sanction shall be revoked under this section unless the
person in whose favour such sanction has been made has been
given a reasonable opportunity to show-cause why the sanction
should not be revoked.
(4) If, in the opinion of the Charity Commissioner, the trustee
has failed to take effective steps within the period specified in
sub-section (2), or it is not possible to recover the property
with reasonable effort or expense, the Charity Commissioner
may assess any advantage received by the trustee and direct
him to pay compensation to the trust equivalent to the
advantage so assessed.
4 [(5) Notwithstanding anything contained in sub-section (1), in
exceptional and extraordinary situations where the absence of
previous sanction contemplated under sub-section (1) results
in hardship to the trust, a large body of persons or a bona fide
purchaser for value, the Charity Commissioner may grant ex-
post-facto sanction to the transfer of the trust property,
effected by the trustees prior to the date of commencement of
the Maharashtra Public Trusts (Second Amendment) Act, 2017,
if he is satisfied that,--
(a) there was an emergent situation which warranted such
transfer,
(b) there was compelling necessity for the said transfer,
(c) the transfer was necessary in the interest of trust,
(d) the property was transferred for consideration which was
not less than prevalent market value of the property so
transferred, to be certified by the expert,
(e) there was reasonable effort on the part of trustees to
secure the best price.
(f) the trustees actions, during the course of the entire
transaction, were bonafide and they have not derived any
benefit, either pecuniary or otherwise, out of the said
transaction, and
(g) the transfer was effected by executing a registered
instrument, if a document is required to be registered under
the law for the time being force.]

31-01-2025 (Page 5 of 15) www.manupatra.com Desai and Diwanji

 5 [Explanation.--For
the purposes of sub-section (5), the term
"the Charity Commissioner" shall mean only the Charity
Commissioner appointed under section 3.]"
6.4. Section 50 of the said Act deals with the suit by or against or relating to
public trusts or trustees or others. This provision, to the extent it is relevant, is
reproduced below:
"50. In any case,--
...
6 [(ii)
where a direction or decree is required to recover the possession
of or to follow a property belonging or alleged to be belonging to a
public trust or the proceeds thereof or for an account of such property
or proceeds from a trustee, ex-trustee, alienee or any other person but
not a person holding adversely to the public trust, trespasser, licensee
or tenant,]
...
(iv) for any declaration or injunction in favour of or against a public
trust or trustee or trustees or beneficiary thereof, the Charity
Commissioner after making such enquiry as he thinks necessary, or two
or more persons having an interest in case the suit is under sub-
clauses (i) to (iii), or one or more such persons in case the suit is
under sub-clause (iv) having obtained the consent in writing of the
Charity Commissioner as provided in section 51 may institute a suit
whether contentious or not in the Court within the local limits of whose
jurisdiction the whole or part of the subject-matter of the trust is
situate, to obtain a decree for any of the following reliefs:--
(a) the order for the recovery of the possession of such
property or proceeds thereof;
...
(f) an order directing the trustees or others to pay to the trust
the loss caused to the same by their breach of trust,
negligence, misapplication, misconduct or wilful default;
...
(p) declaring or denying any right in favour of or against a
public trust or trustee or trustees or beneficiary thereof and
issuing injunctions in appropriate cases; or
...
Provided that, no suit claiming any of the reliefs specified in
this section shall be instituted in respect of any public trust,
except in conformity with the provisions thereof;
...

31-01-2025 (Page 6 of 15) www.manupatra.com Desai and Diwanji

 7 [Explanation.--In
this section, "Court" means, in the Greater
Mumbai, the City Civil Court and elsewhere, the District
Court.]."
6.5. Section 51 of the said Act deals with the consent of the Charity
Commissioner for institution of suit, and it runs as under:
"51. (1) If the persons having an interest in any public trust intend to
file a suit of the nature specified in section 50, they shall apply to the
Charity Commissioner in writing for his consent. If the Charity
Commissioner after hearing the parties and making such enquiries (if
any) as he thinks fit is satisfied that there is a prima facie case, he may
within a period of six months from the date on which the application is
made, grant or refuse his consent to the institution of such suit. The
order of the Charity Commissioner refusing his consent shall be in
writing and shall state the reasons for the refusal.
8 [(2)If the Charity Commissioner refused his consent to the institution
of the suit under sub-section (1), the persons applying for such
consent may file an appeal to the Court, as if such order was an order
passed by the District Court from which an appeal lies, within sixty
days from the date of the said order, which shall otherwise be final.]
(3) In every suit filed by persons having interest in any trust under
section 50, the Charity Commissioner shall be a necessary party."
7. First-of-all, we would like to see the entire scheme of Section 36 of the said Act, as
we understand, and it is briefly stated as under:
(A) It is a complete code in respect of the transfer of an immovable property
belonging to a public trust.
(B) Section 36(1)(c) empowers any trustee of a public trust to make an
application to the Charity Commissioner for grant of sanction to dispose of any
immovable property of such trust.
(C) If the Charity Commissioner is satisfied that in the interest of any public
trust any immovable property needs to be disposed of, he may, under Section
36(1)(a), authorize any trustee to dispose of such property, subject to such
conditions as he may think fit to impose, having regard to the interest or
benefit or protection of the trust.
(D) Though the requirement is of obtaining previous sanction of the Charity
Commissioner for sale or alienation of any immovable property of a public
trust, by way of an amendment made on 10-10-2017, the provision of sub-
section (5) is introduced empowering the Charity Commissioner, in exceptional
and extraordinary situations, to grant ex post facto sanction to the transfer of
the trust property, effected by the trustees prior to the date of amendment was
introduced, provided the Charity Commissioner is satisfied about the existence
of the conditions in clauses (a) to (g) under sub-section (5) of Section 36 of
the said Act.
(E) The provision of Section 36(2) further empowers the Charity Commissioner
to pass an order revoking the sanction upon recording the finding that such
31-01-2025 (Page 7 of 15) www.manupatra.com Desai and Diwanji
 sanction was obtained by fraud or by misrepresentation made to him or by
concealing from him, the facts material for the purpose of giving sanction.
(F) Upon passing an order of revocation of sanction, the provision of Section
36(2) further empowers the Charity Commissioner to direct the trustee to take
such steps within a period of one hundred and eighty days from the date of
revocation or such further period not exceeding in the aggregate one year as
the Charity Commissioner may from time to time determine as may be specified
in the direction for the recovery of the property.
(G) The amendment introduced on 10-10-2017 added proviso below Section
36(2) by the Maharashtra Act No. 55 of 2017 empowers the Charity
Commissioner to revoke such sanction obtained by fraud practised upon him,
before the grant of such sanction.
(H) The provision of Section 36(4) takes into consideration the contingency
where the Charity Commissioner finds that the trustee has failed to take
effective steps within the period specified in the order of revocation of sanction
or that it is not possible to recover the property with reasonable effort or
expense, and empowers the Charity Commissioner to assess any advantage
received by the trustee and to direct him to pay compensation to the trust
equivalent to the advantage so assessed.
8 . In our view, the requirement of obtaining previous sanction of the Charity
Commissioner under Section 36(1)(a) of the said Act to sell or alienate the immovable
property belonging to a public trust is mandatory and the power can be exercised only
on the application made under Section 36(1)(c) by a trust or the trustees, seeking
authorization to dispose of such property. Any sale or alienation of an immovable
property of the public trust without such sanction is null and void. While deciding such
application, the Charity Commissioner has to have regard to the interest, benefit and the
protection of the trust. The power cannot be exercised suo motu or on his own by the
Charity Commissioner. The power to grant sanction includes power to refuse sanction
on the ground that it is not in the interest and benefit of the trust and that the property
needs to be protected.
9 . There is no requirement of making an application for revocation of sanction under
Section 36(2) of the said Act, like one under Section 36(1)(c), and hence the power can
be exercised either on the application so made or suo motu or on his own by the
Charity Commissioner. However, it is subject to the satisfaction in respect of three
things - (i) that such sanction was obtained by fraud or misrepresentation made to him
or by concealing from him, the facts material for the purpose of giving sanction, (ii)
that such sanction was obtained by fraud practised upon the Charity Commissioner
before grant of such sanction, and (iii) that the person in whose favour such sanction
was granted is given a reasonable opportunity to show cause why the sanction should
not be revoked. The power to revoke sanction includes the power to refuse revocation
of sanction on the ground that there is a failure to satisfy the required conditions (i)
and (ii) above or that the Charity Commissioner has no jurisdiction to revoke the
sanction on the grounds other than those mentioned in Section 36(2) of the said Act.
10. Our attention is invited to several decisions of the Apex Court on the question of
effect of the order which is vitiated by fraud, misrepresentation or concealment of
material facts. We may not refer to all such decisions, except two. In the decision of the
Apex Court in the case of Gowrishankar and another v. Joshi Amba Shankar Family

31-01-2025 (Page 8 of 15) www.manupatra.com Desai and Diwanji

Trust and others, reported in MANU/SC/0555/1996 : (1996) 3 SCC 310, the question
considered was for grant of permission to sell the trust property. It was held in Para 17
that the trustees obtained the permission to sell the property to the purchasers
practising fraud upon the Court. Such an order by the first court or by the highest court
has to be treated as a nullity by every court, whether superior or inferior, and it can be
challenged in any Court even in collateral proceedings. It was further held that the
question whether the purchasers purchased the property bona fide subsequent to the
permission so granted without notice of the appellants' offer is immaterial. In another
decision of the Apex Court in the case of Meghmala and others v. G. Narasimha Reddy
and others, reported in MANU/SC/0608/2010 : (2010) 7 SCC 383, it is held in Para 36
that even in judicial proceedings, once fraud is proved, all advantages gained by
playing fraud can be taken away and that the every Court has an inherent power to
recall its own order obtained by fraud as the order so obtained is non est.
1 1 . In our view, the two aspects of Section 36(2), viz., (i) that the sanction was
obtained by misrepresentation, and (ii) that the concealment of facts material for giving
sanction, are the facets of fraud. In terms of the aforesaid law laid down, we are of the
view that the revocation of sanction on any or all such grounds, as are mentioned under
Section 36(2) of the said Act, would render the order of sanction as null and void,
meaning thereby that no such order granting sanction under Section 36(1)(a) was ever
passed and all advantages gained by playing fraud can be taken away.
12. The order of revocation of sanction passed under Section 36(2) of the said Act
obviously affects the civil rights of the persons in whose favour such order was passed.
Hence, it cannot be exercised unless a reasonable opportunity to show cause under
Section 36(3) of the said Act is provided to him as to why the sanction granted should
not be revoked. In our view, "the person" under Section 36(3) means a person who was
a party to the proceedings under Section 36(1)(a) of the said Act and/or a person in
whose favour the order of sanction was passed. It does not include a person - (i) who
was not the party to the proceedings under Section 36(1)(a) and/or (ii) in whose favour
such sanction was not granted, and (iii) who is the purchaser of the trust property from
the person in whose favour the sanction was accorded for sale or alienation.
13. The Charity Commissioner is not denuded of his jurisdiction under Section 36(2) of
the said Act on the ground that the sanction granted has been acted upon or exhausted
and the trust is divested of the ownership of the property by executing a sale-deed or
that the sanction granted has merged in the sale-deed executed before the sanction is
revoked or that the property has lost its character as the trust property. We express our
complete disagreement with the contrary view expressed by the Division Benches of this
Court in the cases of Shri Mahadeo Deosthan, cited supra, and Dr. Sam Sarosh Bhacca
and others v. P.V. Kakde, Joint Charity Commissioner, and others, reported in
MANU/MH/1014/1994 : (1994) 96 Bom.LR 714. We concur with the view expressed by
the learned Single Judge in the order of reference. After referring to the provision of
Section 36(4) of the said Act dealing with the situation where no steps are taken within
a reasonable period with reasonable effort or expense, it is held by the learned Single
Judge that the operation of Section 36 of the said Act is not restricted to cover the
situations only till the property is alienated on the basis of the sanction granted, but it
also intends to cover the contingencies that may arise on revocation of sanction to
alienate even after the property has been alienated. We also concur with the view that
unless such jurisdiction is available with the Charity Commissioner under Section 36 of
the said Act, it is not possible for him to direct steps to be taken to recover the trust
property alienated or to pass an order of payment of compensation. To take a contrary
view, would render the said provision otiose.
31-01-2025 (Page 9 of 15) www.manupatra.com Desai and Diwanji
1 4 . The intention behind introducing Section 36(2) of the said Act empowering the
revocation of sanction is clear that it is enacted for the benefit and protection of the
trust property. The disposal of the public trust property on the basis of the order of
sanction obtained by fraud or misrepresentation and concealment of facts material for
giving sanction is to be recalled. Hence, merely because a sale-deed is effected or the
multiple sale-deeds are effected pursuant to the sanction obtained under Section 36(1)
(a) of the said Act, that would not take away the jurisdiction of the Charity
Commissioner for revocation of such sanction. Otherwise, the very purpose of the
provision would be defeated. The Charity Commissioner, who is in the position of
parens patriae, cannot be allowed to be a mute spectator, particularly when he has
become the engine of fraud. However, the proviso below Section 36(2), introduced on
10-10-2017, restricts the power of the Charity Commissioner to consider the question of
revocation of sanction on the ground that such sanction was obtained by fraud practised
upon him before the grant of such sanction.
15. The power of revocation of sanction cannot be confused or equated with the power
to declare the sale-deed executed on the basis of the sanction which is revoked, as null
and void. Similarly, the power to direct the trustees to take steps to recover the trust
property also cannot be confused or equated with the power to direct recovery of the
trust property. There is a definite distinction in it. We are of the view that if the sale-
deed is executed and the possession of the trust property is delivered, the Charity
Commissioner has no jurisdiction under Section 36(2) of the said Act either - (i) to
declare the sale-deed in respect of the public trust property. as null and void, or to set
it aside, whether executed before or after initiation of proceedings or revocation of
sanction, and (ii) to direct recovery of property of the public trust either before or after
execution of the sale-deed. These are also not the automatic consequences in law to
necessarily follow, upon passing of an order under Section 36(2) of the said Act. These
are the steps to be taken after the sanction is revoked. We are, therefore, of the view
that the order of revocation of sanction and the direction to take steps to recover the
property only provide cause of action to seek a declaration from the Court of competent
jurisdiction that the sale-deed executed on the basis of such sanction is null and void or
to set it aside and to pass a decree for recovery of possession of the suit property.
1 6 . Normally, the doctrine of merger applies to the judicial or quasi judicial order
passed by the appellate or revisional Court or authority in a challenge to such order
passed by the lower Court or the authority. It does not apply to a registered sale-deed
executed on the basis of the order of sanction which is revoked. Be that as it may, the
doctrine of merger, res judicata, estoppel, etc., have an exception, and that is of the
fraud, misrepresentation and concealment of material facts. This is clear from the law
laid down by the Apex Court in Paras 38 and 39 of the decision of the Apex Court in the
case of A.V. Papayya Sastry and others v. Government of A.P. and others, reported in
MANU/SC/1214/2007 : (2007) 4 SCC 221, which are reproduced below:
"38. The matter can be looked at from a different angle as well. Suppose, a
case is decided by a competent Court of Law after hearing the parties and an
order is passed in favour of the plaintiff applicant which is upheld by all the
courts including the final Court. Let us also think of a case where this Court
does not dismiss Special Leave Petition but after granting leave decides the
appeal finally by recording reasons. Such an order can truly be said to be a
judgment to which Article 141 of the Constitution applies. Likewise, the
doctrine of merger also gets attracted. All orders passed by the
courts/authorities below, therefore, merge in the judgment of this Court and
after such judgment, it is not open to any party to the judgment to approach
31-01-2025 (Page 10 of 15) www.manupatra.com Desai and Diwanji
 any court or authority to review, recall or reconsider the order."
"39. The above principle, however, is subject to exception of fraud. Once it is
established that the order was obtained by a successful party by practising or
playing fraud, it is vitiated. Such order cannot be held legal, valid or in
consonance with law. It is non-existent and non est and cannot be allowed to
stand. This is the fundamental principle of law and needs no further
elaboration. Therefore, it has been said that a judgment, decree or order
obtained by fraud has to be treated as a nullity, whether by the court of first
instance or by the final court. And it has to be treated as non est by every
Court, superior or inferior."
In view of the aforesaid law laid down, once it is found that the order granting sanction
to sell or alienate an immovable property of a public trust is vitiated on any one or all
the grounds mentioned under Section 36(2) of the said Act, it will be treated as nullity,
having no existence in law. If the order is nullity, then the principle of merger would
not be attracted.
17. We now proceed to deal with the contention that once the sale-deed is executed on
the basis of the sanction granted under Section 36(1)(a) of the said Act, the only
remedy available to the aggrieved person is to file a civil suit under Section 50 of the
said Act and it is only the Civil Court which has exclusive jurisdiction to declare the
sale-deed as null and void and pass a decree for recovery of the public trust property
which is sold. The reliance is placed upon the decision of the Division Bench of this
Court in the case of Dr. Sam Sarosh, cited supra, wherein it is held in Para 11 that the
remedies provided under Sections 50, 51 and 52-A are not dependent upon revocation
of sanction accorded by the Charity Commissioner under Section 36(1) of the said Act
and these are the independent remedies.
18. In order to deal with the aforesaid contention, the provision of Section 80 of the
said Act regarding bar of jurisdiction of the Civil Court needs to be seen and it is
reproduced below:
"80. Save as expressly provided in this Act, no Civil Court shall have
jurisdiction to decide or deal with any question which is by or under this Act to
be decided or dealt with by any officer or authority under this Act, [and in
respect of] which the decision or order of such officer or authority has been
made final and conclusive."
The provision of Section 80 creates a bar of jurisdiction of the Civil Court to decide or
deal with any question which is by or under the Act is required to be decided or dealt
with by any officer or authority under the Act and in respect of which, the decision or
the order of such officer or authority has been made final and conclusive. The provision
begins with the expression "Save as expressly provided in this Act", which is indicative
of the extent of the jurisdiction to be exercised by the Civil Court. In our view, two
things are significant under Section 80, and those are - (i) that the Civil Court exercises
the jurisdiction only to the extent and in the manner provided for it under the said Act,
and (ii) that it ceases to have any jurisdiction over the matters which are required to be
decided or dealt with by any officer or authority under the Act, which has been made
final and conclusive. Circumstances in which the ouster of the jurisdiction of a civil
court can be presumed are explained by the Hon'ble Apex Court in Dhulabhai v. State of
Madhya Pradesh, reported in MANU/SC/0157/1968 : AIR 1969 SC 78 and Bata Shoe Co.
Ltd. v. City of Jabalpur Corporation, reported in MANU/SC/0260/1977 : 1997(2) SCC

31-01-2025 (Page 11 of 15) www.manupatra.com Desai and Diwanji

472. The principles laid down there hold good and clinch the controversy here in the
light of scheme in Section 80 of the Act. Earlier benches were not required to look into
these principles.
1 9 . In the decision of the Division Bench of this Court in the case of Charity
Commissioner, Maharashtra State, Bombay v. Shantidevi Lalchand Chhaganlal
Foundation Trust By Trustees Lalchand Chhaganlal Jain and others, reported in
MANU/MH/0697/1989 : 1989 Mh.L.J. 1048, the question considered was whether the
City Civil Court at Bombay is having jurisdiction to sanction development agreement
and lease-deed under the provisions of Section 50 of the said Act. While dealing with
this question and considering the provisions of Sections 36 and 50 of the said Act, it is
held in Para 18 that Section 36 of the said Act as applicable to the State of Maharashtra
is a complete code by itself and though the order of the Charity Commissioner is not
made expressly final, no appeal or revision having been provided against such order,
the same is in fact final and conclusive. It is held that by virtue of the provisions of
Section 80 of the said Act, once the matter falls within the provisions of Section 36, the
Civil Court will have no jurisdiction to deal and decide the subject-matter. It is held that
the Charity Commissioner under the provisions of Section 36 has the exclusive
jurisdiction to deal with the matters provided therein and clause (iii) or Clauses (i) and
(q) of Section 50 will not give jurisdiction to the Civil Court to sanction sale, exchange
or fit of any immovable property belonging to a public trust. There is no dispute raised
in respect of the correctness of this view and we concur with it.
2 0 . In the case of Bomi Jal Mistry and others v. Joint Charity Commissioner,
Maharashtra and others, reported in MANU/MH/0340/2002 : 2002(5) Mh.L.J. 660, the
Division Bench of this Court has culled out the ratio of the aforesaid decision as laying
down a law that though Section 50 would empower the Civil Court to authorize the
trustees to alienate the immovable property of the public trust that, however, would not
empower the Civil Court to grant sanction to the proposed transaction, for that can be
granted only by the Charity Commissioner in exercise of powers under Section 36(1)(a)
(b) of the Act. It is clarified that the said decision is not an authority on the proposition
that the Charity Commissioner cannot grant authorization at all making the provision of
Section 36(1)(c) of the said Act virtually otiose. There is no challenge to the correctness
of this view and we concur with it.
2 1 . Section 69(g)(l)(m) and (p) read with Sections 36, 50 and 51 of the said Act
confers a jurisdiction upon the Charity Commissioner to decide or deal with the
immovable property belonging to a public trust and pass orders - (i) to grant or refuse
to grant sanction to sell or alienate the property under Section 36(1)(a), (ii) to revoke
or refuse to revoke the sanction under Section 36(2), (iii) to direct the trustees to
recover the property under Section 36(2), (iv) to assess the compensation under
Section 36(4) for failure to recover the property against the trustees, and (v) to grant
consent in writing under Section 50 to file a suit, as provided under Section 51, to
recover even the property alleged to be belonging to a public trust and obtain a decree
in conformity with the provisions thereof. In our view, it is the exclusive jurisdiction of
the Charity Commissioner to decide or deal with all these matters and the ordinary
jurisdiction of the Civil Court under Section 9 of the Code of Civil Procedure is
completely barred by virtue of Section 80 of the said Act.
22. It is not possible for us to agree with the view that the remedies provided under
Sections 50, 51 and 52-A are not dependent upon the revocation of the sanction
accorded by the Charity Commissioner under Section 36(1)(a) of the said Act. We have
already taken a view that the order passed under Section 36(2) provides cause of action
31-01-2025 (Page 12 of 15) www.manupatra.com Desai and Diwanji
to file a suit in accordance with the provisions of Sections 50 and 51 of the said Act. In
our view, therefore, the remedies provided under Sections 50 and 51 are dependent
upon the order passed under Section 36(2) of the said Act in respect of the sale or
alienation of an immovable property of a public trust on the basis of fraud practised
upon the Charity Commissioner, before grant of such sanction. These remedies can be
availed in the mode and manner prescribed under the said Act. Apart from this, in the
two decisions, referred to above, in the cases of Shantidevi Lalchand Chhaganlal
Foundation Trust and Bomi Jal Mistry, a view is taken that Section 50 would not
empower the Civil Court to authorize to alienate an immovable property of a public trust
and it is the exclusive jurisdiction of the Civil Court under Section 36(1)(a) of the said
Act, to which finality and conclusiveness is attached. On the same ground or analogy, in
our view, the jurisdiction of the Civil Court under Section 50 to entertain and decide any
dispute covered by Section 36(2) of the said Act is completely barred.
2 3 . Lastly, we come to the contention that the rights of the subsequent successive
purchasers of the property belonging to a public trust sold by a registered sale-deed on
the basis of the order of sanction under Section 36(1)(a) are affected. It is also urged
that the sanctity of the sale transactions on the basis of the sanction granted has been
lost, if the sale-deed is to be set aside at any time without notice to the subsequent
purchasers and this will create a chaotic situation.
24. We have already held that the subsequent purchasers have no right to claim hearing
or an opportunity to show cause in respect of the proceedings under Section 36(2) of
the said Act. Obviously, their rights or defences available in law are not concluded by
the order passed under Section 36(2) of the said Act by the Charity Commissioner. It is
open for them to raise all such defences as are available in law to protect their
possession; in a suit under Section 50 of the said Act, if filed for grant of declaration
that the sale-deed is rendered null and void and seeking a decree for recovery of the
property, to which they have necessarily to be joined as party-respondents. If such suit
is not filed within a stipulated period or it is dismissed on merits, they succeed in
protecting their possession and ownership over it. In that event, it is open for the
Charity Commissioner to invoke his jurisdiction under Section 36(4) of the said Act to
assess any advantage received by the trustee arising out of such sale and to direct him
to pay the compensation to the trust equivalent to the advantage so assessed. If the suit
is decreed in favour of the trust, the subsequent purchasers cannot complain that they
were not permitted to raise the defences available to them in law or that they were not
heard in the matter, the adjudication of which has affected their civil rights.
2 5 . On a conjoint reading of Sections 36, 50 and 80 of the said Act, the Scheme
appears as follows:
(i) The first part of Section 36(2) of the said Act confers power upon the
Charity Commissioner to revoke the order of sanction on the ground of fraud,
misrepresentation or concealment of material facts.
(ii) The latter part of Section 36(2) confers power upon the Charity
Commissioner to pass an order of directing the trustees to take steps to recover
the property of a public trust, within a period of 180 days or himself filing suit
under Section 50 of the said Act, for recovery of the property.
(iii) Once the directions under the latter part of Section 36(2) are issued, the
Charity Commissioner himself or the trustee is required to file a suit under
Section 50 in accordance with law to give full effect to it and get the property

31-01-2025 (Page 13 of 15) www.manupatra.com Desai and Diwanji

 recovered, which is sold in pursuance of the order of sanction under Section
36(1) of the said Act.
(iv) If after granting an opportunity of hearing to all concerned, the Civil Court
comes to the conclusion that it is not possible to recover the property, then by
virtue of power conferred under sub-section (4) of Section 36 of the said Act,
the Charity Commissioner is required to assess any advantage received by the
trustee and direct him to pay compensation to the trust equivalent to the
advantage so assessed.
(v) The jurisdiction of the Civil Court under Section 50 of the said Act to
entertain, try and decide the suit in respect of the subject-matter which is
required to be dealt with and decided under Section 36 by any officer or
authority under the said Act, is completely barred under Section 80 therein.
26. In view of the aforesaid position of law, we answer the question referred to us as
under:
(I) The power of revocation of sanction under Section 36(2) of the Maharashtra
Public Trusts Act, 1950 on the ground that such sanction was obtained by fraud
or misrepresentation or by concealing the facts, material for the purpose of
giving sanction can be exercised even after the execution of a sale-deed or the
multiple sale-deeds on the basis of the sanction granted under Section 36(1)(a)
of the said Act.
(II) We overrule the two decisions - (i) Shri Mahadeo Deosthan, Wadali and
others v. Joint Charity Commissioner, Nagpur and others, reported in
MANU/MH/0698/1988 : 1989 Mh.L.J. 269, and (ii) Dr. Sam Sarosh Bhacca and
others v. P.V. Kakde, Joint Charity Commissioner and others, reported in
MANU/MH/1014/1994 : (1994) 96 Bom.LR 714, delivered by different Division
Benches of this Court and all other decisions delivered by different Single
Benches of this Court, including the cases of - (i) Fatmabai B. Bachooali v.
State of Maharashtra and others, reported in MANU/MH/0040/1991 : 1991 (1)
Bom.C.R. 1, (ii) Arole Construction Pvt. Ltd. v. Shaikh Sadullah Shahabuddin
Peerzade and others, reported in MANU/MH/0424/2014 : 2014 (4) Bom.C.R.
289, and (iii) Shri Motilal Girdharilal Sharma and others v. Shri Dattatray Bandu
Jagtap and others, reported in 2006(2) ALL Mr. 121, following the view taken in
Shri Mahadeo Deosthan's case, cited supra.
(III) Having answered the reference, we make it expressly clear that we have
not examined the issue of remedies and defences available to the bona fide
purchasers for valuable consideration without notice after the order of sanction
is revoked under Section 36(2) of the said Act was passed and we leave it open
to be agitated in appropriate proceedings.
(IV) We direct the Registry to place the matter before the appropriate Bench for
disposal in accordance with law.

1 These provisos were added by Mah. 55 of 2917, s. 6. w.e.f. 10-10-2017

2 Sub-section (1A) was inserted by Mah. 55 of 2017, s. 6(b)

31-01-2025 (Page 14 of 15) www.manupatra.com Desai and Diwanji

3 This proviso was added by Mah. 55 of 2017, s. 6(c)
4 Sub-section (5) was added by Mah. 55 of 2017, s. 6(d)
5 This Explanation was added by Mah. 4 of 2018, s. 2(b) w.e.f. 21-5-2018
6 This clause was substituted by Mah. 55 of 2017, s. 13(a)
7 This Explanation was added by Mah. 55 of 2017, s. 13(c)
8 This sub-section was substituted by Mah. 55 of 2017, s. 15(a)
© Manupatra Information Solutions Pvt. Ltd.

31-01-2025 (Page 15 of 15) www.manupatra.com Desai and Diwanji