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PETITIONER: NARANBHAI DAYABHAI PATEL & ANR.

       Vs.

RESPONDENT: SULEMAN ISUBJI DADABHAI

DATE OF JUDGMENT:       11/01/1996

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. G.B. PATTANAIK (J)

CITATION:  1996 AIR 1184            1996 SCC  (7) 278  JT 1996 (1)   626        1996 SCALE  (1)611

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      This appeal  by special  leave arises from the judgment of the  Division Bench  of the  Gujarat High Court in L.P.A. No. 10/76 dated July 27, 1979. The undisputed facts are that the Bombay  Tenancy &  Agricultural Lands,  Act,  1948  (for short, ’the Tenancy Act’) was amended from time to time. The Amendment Act,  1956 had  come into force on August 1, 1956. By operation  of Section  32 of  the Tenancy Act, the tenant has become  a deemed purchaser w.e.f. April 1, 1957 which is envisaged by  the Act  as the  "Tillers" day". The erstwhile land-holder, the  respondent on December 12, 1956 terminated the tenancy  of the  appellants and  filed  the  Trust  deed before the  Assistant Charity  Commissioner under Section 18 of the  Bombay Public  Trusts Act,  1950 (Bom.  Act XXIX  of 1950) (for  short, ’the  Act’) for  registration. On January 31, 1957, the Trust was registered without any notice to the appellants. Against  the said  registration, the  appellants carried the  matter in  appeal to  the Charity  Commissioner under Section 70 of the Act. But the Charity Commissioner by his order  dated August 8, 1957 dismissed the appeal holding that "It is difficult to accept this argument". A trust is a mode of  transfer known to law and if the legislature really wanted a  transfer by  way of a trust also to be prohibited, it could have so mentioned. A gift as defined in Section 122 of the Transfer of Property Act "cannot be said to include a trust". Against  the said  judgment,  the  appellants  filed before the  District Judge an appeal on October 4, 1957. The Assistant Judge, Surat in Misc. Appln. No. 64 of 1957 by his order dated  August 18,  1967 held  that "From the aforesaid comments, it  will be  seen that a distinction is made about the vesting  declaration  and  it  has  not  been  mentioned therein that  the vesting  declaration would tantamount to a gift." Accordingly,  it  had  confirmed  the  order  of  the Assistant Commissioner.  The appellants  further carried the matter in  appeal. The  learned single Judge in First Appeal

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No. 347  of 1968  by judgment and decree dated September 22, 1975 set aside the order and held submissions. We record the valuable assistance  rendered by  him.  The  question  is  : whether the  creation of the trust on the facts of this case is valid  in law?  It is  seen that, as found by the learned single Judge  of the High Court, pursuant to the proceedings taken under  Section 32  declaring that  the appellants were the  deemed   purchasers,  they  became  deemed  tenants  on Tillers’ day  on April  1, 1957.  The order  was allowed  to become final.  Therefore, it binds the respondent, erstwhile owner of the land. The lands stood vested in the appellants. The respondent,  thereby got  divested his  right  as  owner since the  tenant became  owner by  statutory purchase.  The question then  is :  whether the  respondent could  create a trust bequeathing the property as gift to the trust to which he also  is the  beneficiary? It  is contended by Shri Mukul Mudgal, learned counsel that in view of the judgment of this Court in  Maneksha Ardeshir  Irani & Anr. vs. Manekji Edulji Mistry &  Ors. [(1975)  2 SCR  341], the tenant has no right under Section  88-B of  the  Act  to  be  heard  before  the permission is granted by the Collector under the Tenancy Act and that,  therefore, though the Mamlatdar granted the order under Section  32, the appellant had no right to be heard in the matter.  We are  unable to agree with Shri Mudgal in his contention that  the  Mamlatdar  in  his  proceedings  under Section 32  had held  that the  appellants became the deemed purchasers  by  operation  of  Section  32.  The  respondent allowed that  order to  become final.  Therefore,  the  land having been  vested in  the tenant by statutory operation of Section 32,  the creation  of  the  trust  and  registration thereof under  Section 18  of the  Act is  not valid in law. Further a Letters Patent Appeal was carried and the Division Bench reversed  the findings and held that there cannot be a transfer by a single person in his capacity as an individual and at  the same  time as  a trustee  beneficiary and  that, therefore, it cannot be construed to be a gift under Section 122 of  the Transfer  of Property  Act. The  creation of the trust and registration thereof under Section 18 are valid in law. Thus this appeal by special leave has been filed.      Since the  respondent, though  served, had not appeared either through  counsel or  in person and since an important question of  law has  arisen, we requested Sri Mukul Mudgal, the learned  counsel to  assist this  Court as amicus curiae and he  has rendered  valuable assistance by making thorough study and filing written Ardeshir Erani’s case, [supra] this Court had held at page 344 thus:      "The appellant  at no  stage denied  the      fact that  the lands are the property of      a Trust.  The  inquiry  is  between  the      Collector and  the Trust. The conclusive      evidence clause  in  the  Section  means      that it  is a  rule  of  evidence  which      would not  render it necessary for it to      prove  again  the  compliance  with  the      requirements."      The High Court in that case had held that the appellant had at  no stage  denied the  fact that  the lands  were the properties of  the trust.  In the  backdrop of  those facts, this Court  concluded that the tenant was not entitled to be heard. As stated earlier, when the tenant has a pre-existing right and  he is  divested of that right and by operation of the provisions  of the  Act he  is precluded  to file a suit challenging the  correctness  of  the  registration  of  the trust, certainly,  he is  a  person  vitally  interested  to defend his  right,  title  and  interest  in  the  property.

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Therefore, he  is a  person interested  to be  heard  before registration of  the trust.  In this  case,  admittedly,  no notice was  issued nor  was he  heard. It  is clear from the proceedings that,  as a  fact, the registration was taken up by the  Assistant Charity  Commissioner on  January 31, 1957 and on  the same  day the  registration. It is seen that the order of Mamlatdar passed under Section 32 had become final. Thereby, the  erstwhile land  owner had been divested of his title to  the property w.e.f. April 1, 1957. All to which he is entitled  is the  compensation in  the manner  prescribed under  the  Act.  It  is  true  that  at  the  time  of  the registration of  the  trust,  strictly  the  tenant  is  not entitled to  be heard  provided he has no pre-existing right in the  land, the subject matter of bequeath. In the enquiry under Section  88-B, question  relating to two aspects would arise in  registration of  trust of the kinds covered by the Act, viz.,  of the  factum of  the creation of the trust and the  utilisation   of  the  income  derived  from  the  land bequeathed to  the trust towards charitable purpose. In that enquiry by the Collector on these two aspects, certainly the tenant has  no right  to say  in the  matter. But  in a case where the  tenant has  a pre-existing right and his right is sought to be divested in creating the trust, certainly he is an  interested   person  to   be  vitally  affected  by  the registration  of   the   trust.   Consequently,   when   the proceedings under  Section 18  of  the  Act  was  taken,  as envisaged in  Section 19  of the  Act, the  tenant being  an interested person  is entitled  to be heard. In Maneksha was granted. The enquiry contemplated under Section 19 was given a ceremonial  send off  without being  complied with.  Under those circumstances,  the learned  single Judge was right in concluding that  since the order passed under Section 32 was not assailed by the respondent, the appellants were entitled to be  heard before  granting registration for the trust and vesting the same in the trust.      The question  then is  : whether the Division Bench was right in  interfering with  the order?  It is contended that clause 15  of the Letters Patent Act is not available to the respondent and  that, therefore,  the Letters  Patent Appeal would not  lie.  This  point  is  squarely  covered  by  the judgment of  this Court  in Ramchandra  Goverdhan Pandit vs. Charity Commissioner  of State  of  Gujarat  [(1987)  2  SCR 1083]. In  that case  on suo motu enquiry under the Act, the Deputy Commissioner  had held  that the  properties were  of public  interest.   On  appeal,   the  Charity  Commissioner confirmed and  dismissed the appeal. Appeal under Section 72 of the  Act was  preferred to  the District  Court  and  the District Court dismissed the same. When the first appeal was filed in  the High Court, the learned single Judge dismissed the appeal.  In the Letters Patent Appeal the question arose : whether  an appeal  would lie  against the decision of the learned single  Judge. This  Court examined  the controversy and concluded at page 1089, thus :      "The power  of this  District  Court  in      exercising jurisdiction under Section 72      is a  plenary power. It is true that the      Commissioner is  not subordinate  to the      District Court  but the  District  Court      has powers to correct, modify, review or      set  aside   the  order  passed  by  the      Commissioner. All the characteristics of      an appeal  and  all  the  powers  of  an      appellant Court  are  available  to  the      District   Court   while   deciding   an      application under  Section 72. To decide

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    this case  we must be guided not only by      the nomenclature used by the Section for      the proceedings  but by  the essence and      content of  the proceedings.  That being      so, we  have no  hesitation to hold that      the  proceedings   before  the  District      Court under  Section 72(1)  are  in  the      nature of  an appeal  and that  District      Court exercises  appellant  jurisdiction      while  disposing   of  a   matter  under      Section 72(1).  Consequently, the Single      Judge of  the High  Court while deciding      the  appeal,   from  the  order  of  the      District Court  deals with a matter made      by the District Judge in the exercise of      an appellate  jurisdiction  by  a  Court      subject to  the superintendence  of  the      High Court  and hence  clause 15  of the      Letters Patent is directly attached."      Consequently, this  Court had  held  that  the  Letters Patent Appeal  against the  decision of  the learned  single Judge did  not lie.  The same  ratio applies to the facts in this case.  Leave of the learned single Judge was admittedly not obtained  for filing the appeal. Consequently, since the appeal of  the learned  single Judge arises under the Act by virtue  of   the   statutory   conferment   of   supervisory jurisdiction, by  operation of  earlier part of clause 15 of the Letters Patent Act would vest in him. The Letters Patent Appeal would  not lie  to  the  Division  Bench  unless  the certificate of the learned single Judge has been granted for leave to  appeal. In  that view,  the appeal to the Division Bench was incompetent and is accordingly set aside.      The appeal is allowed accordingly. No costs.