REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION(C) No.35164 of 2009

REKHABEN H. SHETH              … Petitioner Vs.

CHARU K. MEHTA & ORS. … Respondents

WITH  SPECIAL LEAVE PETITION(C) No.6685 of 2010

J U D G M E N T

ALTAMAS KABIR, J.

1. These Special Leave Petitions arise out of an  

order dated 11th September, 2009 passed by a

learned Single Judge of the Bombay High Court  

in Contempt Petition No.123/09 arising out of  

an order passed on 9th September, 2008, in Writ  

Petition No.5732/08.   

2. The  Respondent  No.1,  Charu  K.  Mehta,  is  a  

permanent  Trustee  of  the  Lilavati  Kirtilal  

Mehta  Medical  Trust.   She  had  filed  an  

application under Section 41D of the Bombay  

Public  Trusts  Act,  1950,  against  the  

Petitioner herein and the Respondent Nos.2 -  

Vijay K. Mehta, Respondent No.3 - Dr. Amritlal  

C. Shah, Respondent No.4 – Niket V. Mehta, and  

Respondent  No.5  –  Sushila  V.  Mehta  in  

SLP(C)No.35164/09,  for  their  removal  from  

Trusteeship   of  the  aforesaid  Trust  on  the  

ground  of  malfeasance,  misfeasance,  

misappropriation  of  Trust  funds,  breach  of  

Trust, etc.  An interim application was also  

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filed for the removal/ suspension/dismissal of  

the colluding Trustees.  Charges were framed  

against  the  Petitioner  and  the  aforesaid  

Respondents by the Joint Charity Commissioner,  

Mumbai,  on  3rd June, 2008, and the Trustees  

were  restrained  from  taking  any  policy  

decision and from entering into any financial  

transaction with regard to the Trust.

3. The  aforesaid  Respondents  Nos.2  and  3  in  

SLP(C)No.35164/09 challenged the said order of  

the  Joint  Charity  Commissioner  in  Writ  

Petition Nos.3849 and 3850 of 2008.  By common  

orders passed in those writ petitions on 11th  

July,  2008  and  15th July,  2008,  the  orders  

impugned in the writ petitions were set aside  

and  the  Joint  Charity  Commissioner  was  

directed to pass fresh orders in accordance  

with  law.   Thereafter,  the  Joint  Charity  

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Commissioner passed an ad-interim order on 9th  

September,  2008,  restraining  the  Petitioner  

and the Respondent Nos.2, 3, 4 and 5 herein  

from taking any policy decision and entering  

into financial transactions, without the prior  

approval of the Joint Administrators appointed  

by  this  Court.   Aggrieved  by  the  said  ad-

interim  order,  the  Respondent  Nos.2  and  3  

herein filed Writ Petition No.5732/08, wherein  

the High Court modified the aforesaid order  

passed by the Joint Charity Commissioner on 9th  

September, 2008.  The operative part of the  

order of the Joint Charity Commissioner was  

modified to the extent that the prior approval  

was to be taken not from the Administrators  

but from the Joint Charity Commissioner.

4. The  Bombay  High  Court,  therefore,  confirmed  

the order of the Joint Charity Commissioner  

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that  the  Respondents  Nos.1  to  9  in  the  

Application filed before him should not take  

any policy decision and should not enter into  

any financial transaction with regard to the  

Trust without the prior approval of the Joint  

Charity Commissioner till further orders.

5. In  the  Contempt  Petition  filed  by  the  

Respondent No.1 herein, it has been alleged  

that the Petitioner herein and the Respondents  

Nos.2, 3, 4 and 5 had withdrawn huge amounts  

from the Trust funds and had issued cheques in  

favour of solicitors and advocates appearing  

for them in the litigations pending before the  

various  courts,  including  the  proceedings  

before  the  Joint  Charity  Commissioner  under  

Section 41D of the Bombay Public Trusts Act,  

1950.  Rejecting the defence of the Petitioner  

and the Respondents Nos.2, 3, 4 and 5 herein  

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that  payment  of  fees  to  advocates  and  

solicitors  did  not  amount  to  financial  

transactions being undertaken by the Trust and  

that  the  services  of  the  advocates  and  

solicitors had to be engaged  to defend the  

interest  of  the  Trust,  the  learned  Single  

Judge observed that the question as to whether  

payments  to  advocates  were  financial  

transactions within the meaning of the order  

passed by the Joint Charity Commissioner, as  

modified  by  the  High  Court,  was  still  at  

large.

6. The learned Single Judge arrived at a  prima  

facie view that the payments made to advocates  

would  constitute  financial  transactions  with  

regard  to  the  Trust  and,  therefore,  prior  

approval of the Joint Charity Commissioner was  

required to be obtained before such payments  

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were made to the advocates.  While making such  

observations, the learned Judge also noticed  

that the Trust was not a party in many of the  

proceedings which were initiated by one group  

of Trustees against the others.  The learned  

Single  Judge,  accordingly,  issued  notice  to  

the Petitioner and the Respondent Nos.2, 3, 4  

and 5 herein to show cause as to why action  

should  not  be  taken  against  them  under  the  

Contempt of Courts Act for having willfully  

disobeyed  the  directions  contained  in  the  

order  dated  9th September,  2008  in  Writ  

Petition  No.5732/08  by  issuing  cheques  to  

professionals  without  the  prior  sanction  of  

the Joint Charity Commissioner.

7. It is the said order of the learned Single  

Judge of the Bombay High Court and the notice  

issued to show cause on the Contempt Petition  

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filed by the Respondent No.1 herein, that is  

the  subject  matter  of  the  present  Special  

Leave Petitions.

8. Appearing  for  the  Petitioner,  Rekhaben  H.  

Sheth,  in  S.L.P.  (c)  No.35164  of  2009,  Mr.  

Ashok  Desai,  learned  Senior  Advocate,  urged  

that  the  expression  “financial  transactions”  

indicated  in  the  order  passed  by  the  Joint  

Charity  Commissioner  on  9th September,  2008,  

subsequently modified by the High Court, did  

not  include  the  payment  of  fees  to  

professionals,  such  as  Solicitors,  Advocates  

and  Chartered  Accountants  for  the  services  

rendered by them in the interest of the Trust.  

It was submitted that such transactions were  

meant to cover the essential expenses incurred  

for the day-to-day running of the hospital and  

were entered into in lieu of goods provided to  

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the hospital. Mr. Desai submitted that it is  

only  for  the  purposes  of  acquiring  certain  

tangible objects that the hospital could enter  

into financial transactions and not for other  

purposes where there was no return involved.  

In fact, according to Mr. Desai, applying the  

said  expression  for  effecting  payment  to  

professionals  would  lead  to  an  absurd  

situation where every time professional such  

as an Advocate or Solicitor has to be engaged,  

the  prior  permission  of  the  Joint  Charity  

Commissioner would have to be taken.  It was  

urged that the entire process would be lengthy  

and self-defeating and would be difficult to  

put into operation each time matters came up  

before different Courts for consideration.

9. Mr. Desai contended that the expenses incurred  

towards  payment  of  professional  fees  to  

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Solicitors,  Advocates  and  Chartered  

Accountants were not on account of defending  

the Trustees in personam  but to defend the  

interests  of  the  Trust  and  the  hospital  

against the repeated litigations initiated by  

the Respondent No.1, Charu K. Mehta, against  

the other Trustees.  Referring to the various  

definitions of the aforesaid expression, Mr.  

Desai contended that the same could not apply  

to the facts of this case.

10. Mr. Desai also contended that even if it be  

held that the Petitioner and the Respondent  

Nos.2 to 5 and the other Trustees had acted  

against  the  interests  of  the  Trust  in  

utilizing its funds for payment to lawyers and  

other professionals, the same could at best be  

a case before another forum, but there was no  

element of contempt of Court involved since  

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the monies paid were not on account of any  

tangible goods received, but for preservation  

and  protection  of  the  Trust.   Mr.  Desai  

submitted that the contempt petition which has  

been filed by the Respondent No.1, upon which  

cognizance  has  been  taken  by  the  learned  

Single  Judge,  was  wholly  erroneous  and  was  

liable to be set aside.   Mr. Desai submitted  

that  the  contempt  proceedings  had  been  

initiated by the Respondent No.1, against all  

the other Trustees with the sole intention of  

harassing  the  other  Trustees  and  disturbing  

the smooth management of the Trust.

11. On  the  question  of  maintainability  of  the  

contempt  proceedings,  it  was  urged  by  Mr.  

Desai that although Section 19 of the Contempt  

of  Courts  Act,  1971,  made  provisions  for  

appeals  against  orders  which  adversely  

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affected those in contempt,  since appeal was  

a  creature  of  statute  the  provisions  of  

Section  19  of  the  above  Act  would  still  

continue to be operative.

12. In support of the submissions made by him, Mr.  

Desai firstly referred to the decision of this  

Court in Union of India v. Mario Cabral e Sa  

[(1982) 3 SCC 262] and  Tamilnadu Mercantile  

Bank  Shareholders  Association v.  SC  Sekar  

[(2009)  2  SCC  784],  wherein  it  had  been  

reiterated that once a period which had been  

prescribed under the Act had expired, contempt  

proceedings which had been initiated earlier  

could not be proceeded with further.

13.  Mr. Desai’s submissions were reiterated by  

learned counsel appearing for the respondents  

in  the  other  Special  Leave  Petitions.   Mr.  

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Ranjit  Kumar,  learned  Senior  Advocates,  

contended that on a mistaken interpretation of  

the  expression  “financial  transactions”,  the  

High  Court  had  taken  cognizance  of  the  

contempt  petition  filed  and  had  directed  

notices to issue thereupon.  Referring to the  

order of the Joint Charity Commissioner dated  

3rd June, 2008, Mr. Ranjit Kumar submitted that  

the  said  order  was  capable  of  being  de-

compartmentalized  in  that  the  same  neither  

indicated any policy decision nor a financial  

transaction  which  could  have  brought  the  

matter within the ambit of a contempt under  

the Contempt of Courts Act vis-à-vis the said  

order.  Mr. Ranjit Kumar further urged that  

the two have to be read together and would  

have  to  be  read  conjunctively  and  not  

disjunctively so as to give a meaningful and  

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harmonious  construction  thereto.    It  was  

further contended that till  a decision was  

rendered  as  to  what  would  constitute  

“financial transactions”, contempt proceedings  

would  not  lie,  since  such  decision  would  

determine whether the alleged contemnors could  

be said to be in contempt of the order passed  

by  the  Joint  Charity  Commissioner  on  9th  

September, 2008.

14.  On the question of issuance of notice, Mr.  

Jayant Bhushan referred to and relied upon the  

decision  of  this  Court  in  State  of  J&K v.  

Trehan  Industries  (P)  Ltd. [(2005)  11  SCC  

459],  where  the  question  of  civil  contempt  

fell  for  the  consideration  of  the  Jammu  &  

Kashmir High Court.  Mr. Bhushan pointed out  

that  in  the  said  decision  it  had  been  

categorically pointed out that the petitioners  

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therein could not have a cause of grievance  

persuading them to approach the Supreme Court.  

Mr. Jayant Bhushan concluded on the note that  

no  special  circumstances  existed  in  regard  

whereof the Special Leave Petition could have  

been filed.  He lastly pointed out that the  

Joint Charity Commissioner had by his order  

dated  10th October,  2008,  suspended  the  

Petitioner and the Respondent Nos.2 to 5 and  

had appointed an Administrator to look after  

the affairs of the Trust on the application  

filed by the Respondent No.1 herein, Charu K.  

Mehta, under Section 41D of the Bombay Public  

Trust Act, 1950.

15. Having  carefully  considered  the  submissions  

made on behalf of respective parties, we see  

no reason to interfere with the order of the  

learned  Single  Judge  issuing  notice  on  the  

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contempt petition filed by the Respondent No.1  

herein.   The learned Judge observed that the  

Respondent No.1 had raised serious objections  

in the main application about the payment of  

Advocate’s fees from Trust funds for fighting  

personal litigations of the Trustees.   The  

learned Judge took sufficient care to indicate  

that except for cognizance of the allegations  

made against the Petitioner and the Respondent  

Nos.2  to  5,  cognizance  against  the  other  

Trustees had not been taken as the material  

against  them  were  insufficient  to  frame  

charges.  However, liberty was also given that  

when  sufficient  material  in  support  of  the  

allegations  was  placed  on  record,  it  could  

take cognizance of such complaint.   A chart  

has been filed on behalf of the Petitioner,  

Respondent Nos.2 to 5 and the other Trustees  

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to show the amounts which had been paid to the  

learned  counsel  amounting  to  approximately  

Rs.3½ crores.   Although, an attempt was made  

by Mr. Desai to justify such expenditure, we  

are  unable  to  agree  with  his  submissions,  

since as observed by the learned Single Judge  

of the Bombay High Court, most of the said  

funds  were  spent  by  the  Petitioner,  the  

Respondent Nos.2 to 5 and the other Trustees  

for  defending  themselves  in  respect  of  the  

various cases which had been brought against  

them by the Respondent No.1, Charu K. Mehta.

16. We  are  not  convinced  with  Mr.  Desai’s  

submissions  that  payments  made  to  lawyers,  

advocates and solicitors does not amount to  

Contempt in the special facts of this case.  

This  Court  cannot  ignore  the  fact  that  the  

funds of the Trust were being utilized to a  

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considerable extent, not for the purposes of  

the  Trust  but  for  defending  the  Trustees  

against the allegations brought against them  

by the Respondent No.1.  There are, of course,  

prima  facie  observations  which  should  not  

influence the outcome of the matter pending  

before the High Court which has to decide the  

matter on its own merits.

17. In these circumstances, we are not inclined to  

interfere with the order of the High Court and  

the Special Leave Petitions are, accordingly,  

dismissed, but without any order as to costs.  

18. We have, however, been informed by Mr. Ranjit  

Kumar, learned senior counsel, who has appeared for  

Amritlal C. Shah, in S.L.P. (C) No.6685 of 2010,  

that  after  the  matter  was  heard,  the  Petitioner  

No.3,  Vijay  K.  Mehta,  passed  away  on  23rd July,  

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2010.  Since  we  have  dismissed  the  Special  Leave  

Petitions,  it  will  now  be  open  to  the  other  

Petitioners  herein  to  inform  the  learned  Court  

below  of  the  subsequent  event  and  take  further  

steps in that regard.   

…………………………………………J. (ALTAMAS KABIR)

…………………………………………J. (A.K. PATNAIK)

New Delhi Dated: 29.07.2010

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