Holding

The 1980 agreement between the plaintiff and the trust remained valid, the Charity Commissioner’s order to sell by auction was void, and the sale deed to the appellant was invalid, but the appellant is entitled to compensation for his investment.

Summary

The plaintiff, a lease‑holder of land and superstructure since 1951, entered into a sale agreement with a charitable trust on 26 February 1980, subject to permission from the Charity Commissioner under Section 36 of the Bombay Public Trust Act. The Commissioner initially ordered the property to be sold by public auction, but that order was set aside by the High Court, which directed a fresh order. In 1987 the Commissioner noted that the appellant (defendant No.2) was in possession and the trust executed a sale deed in his favour on 12 May 1988. The plaintiff sued for specific performance of the 1980 agreement and challenged the 1988 deed; the trial court and lower appellate courts decreed in her favour, holding the appellant was only a licensee and not a bona‑fide purchaser. The Supreme Court held that the Charity Commissioner’s auction order was void, the original agreement remained subsisting, and the sale deed to the appellant was invalid, but awarded the appellant compensation of Rs 2.25 lakh and a refund of earnest money to balance equity. The appeal was partly allowed, directing registration of the property in the plaintiff’s name upon payment of the compensation.

Issues considered

Whether the suit for specific performance of the 1980 sale agreement is maintainable despite the alleged cancellation notice and limitation period.
Whether a charitable trust may sell its immovable property without the prior sanction of the Charity Commissioner under Section 36 of the Bombay Public Trust Act.
Whether the courts can alter the terms of the contract or set aside the sale deed executed in favour of the appellant.
Whether the appellant is a bona‑fide purchaser for value without notice.

Legislation cited

Subjects

specific performancecharitable trustBombay Public Trust Actsale of trust propertylicenseebona fide purchaserlimitationequitycompensation

Judgment

[2008] 16 S.C.R. 297

HAMIDKHAN A
v.
ASHABI & ORS.
(Civil Appeal No. 6711 of 2008)

NOVEMBER 19, 2008 B
[S.B. SINHA AND CYRIAC JOSEPH, JJ.]

Specific Performance - Public trust property - Purchase
of - Suit by the Trust against trespassers on trust property - C
The Trust agreeing to sell the property to the vendee after
getting permission from Charity Commission - Charity
Commissioner granting pennission to sell the property in
I auction - Notice to the vendee to participate in auction -
Order of Charity Commissioner set aside by High Court -
Thereafter Charity Commissioner observing that the property D
was in possession of some other person - Trust selling the
property to the person in possession of the property - Suit by
vendee for specific performance of the agreement and
challenging the sale to the person in possession - Suit
decreed by Courts below- On appeals held: Suit was rightly E
decreed - Charity Commissioner could not have directed to
sell the property to the person in possession ignoring the
fact that the vendee was the owner of the property and the
person in possession was her licensee - However, since the
person in possession had invested a certain amount for F
purchase, in order to balance equity, it is directed to register
the property in the name of the vendeelowner, on her paying
certain amount to the person in possession - Bombay Public
Trust Act, 1950 - s. 36 - Constitution of India, 1950 - Article
142 G
Respondent No. 1 purchased lease hold rights in
respect of the land in question, together with the
superstructure standing thereupon from 'H' in 1951. Since
297 H
298 SUPREME COURT REPORTS [2008] 16 S. C. R

A the superstructure belonged to respondent No.8 (a
charitable trust), it filed a suit against trespassers on the
land. Respondent No.1 got herself impleaded in the suit.
In view of the fact that respondent No.1 had already
purchased the construction, respondent No.8 agreed to
B sell the same to respondent No.1 by agreement dated
26.2.1980 after seeking permission to sell the same from
Charity Commissioner u/s 36 of the Bombay Public Trust
Act, 1950. Charity Commissioner by order dated
30.10.1982 directed to sell the property in public auction.
C In view of the order dated 30.10.1982, respondent No.8
issued a notice to the respondent No.1 informing her
about the auction and asking her to participate in the
auction. Order dated 30.10.1982 was set aside by High
Court and the Charity Commissioner was directed to
pass a fresh order. Charity Commissioner in its order
0
dated 15.4.1987 noticed that appellant was in the
possession of the property. Respondent No.8 executed
sale deed in favour of the appellant by sale deed dated
12.5.1988.

E Respondent No.1 filed a suit for specific performance
of the agreement dated 26.2.1980 and also questioned
the validity of sale deed dated 12.5.1988. The suit was
decreed by trial court finding that appellant was in
possession of the property as a licensee under the
F plaintiff. First appellate court as well as second appellate
court confirmed the order of the trial court. Hence, the
present appeal.

Partly allowing the appeal, the Court

G HELD: 1.1. In view of the concurrent finding of fact,
there is no escape from the conclusion that the defendant
No. 2-appellant was a licensee under the plaintiff. He, Jc.-
therefore,· did not have any independent title or legal
possession. Even if he and his father were in possession
H
HAMIDKHAN v. ASHABI & ORS. 299

of a part of the property, the same was for and on behalf A
of the plaintiff. [Para 16) [311-E)
1.2. Although the Charity Commissioner directed that
instead of giving effect to the agreement dated
26.02.1980, the same should be sold in auction but the
said order has been set aside by the High Court. It was B
non est in the eye of law. The Charity Commissioner could
'i not have ignored the fact that the superstructure standing
on the land was owned and possessed by the plaintiff-
respondent No. 1. It was, therefore, fair and equitable to
allow the said agreement to be given effect to. Even c
otherwise the Charity Commissioner was to grant
permission to the defendant No. 1 to sell the property in
favour of the plaintiff. It could not have issued a direction
which was otherwise not sustainable. It could not have
ignored the fact that the plaintiff was the owner of the D

- +
superstructure of the property and was, thus, in lawful
possession thereof as well as the fact that the defendant
No. 2 was a mere licensee. [Para 16) (311-F-G; 312-A-B]
1.3. Once the said order of the Charity Commissioner
was set aside, steps taken pursuant thereto also became E
non est in the eye of law as the Charity Commissioner was
to apply his mind afresh for enabling him to exercise his
jurisdiction in terms of Section 36 of the Bombay Public
Trust Act. Relationship of vendor and vendee between
defendant No.1 and the plaintiff, therefore, continued. If F
• " that be so, the suit for specific performance was
maintainable. [Para 17) (312-G-H; 313-A)
1.4. Even if the order of Charity Commissioner dated
15.04.1987 was to be enforced, the same could be done
irrespective of the agreement dated 26.02.1980. Even in G
terms of the said order, it was the plaintiff and the plaintiff
zal ... alone in whose favour the deed of sale could be executed.
Inter alia on a wrong premise that the appellant herein was
in possession of the said property, the deed of sale was
H
·-i_.. . :~~::

300 SUPREME COURT REPORTS [2008] 16 S.C.R.

A executed on 12.05.1988 for the sum of Rs. 75,000/-.
Evidently, the defendant No. 1 obtained a higher amount.
He even had not refunded the earnest money paid by the
plaintiff - respondent No. 1. There was no occasion for
him to put the' appellant in independent possession of the
B property, as he himself was not in possession thereof, at
least since 1951. Even otherwise, being in continuous
possession of the superstructure from 1951; the title of
\- ,;.._
the defendant No. 1 became extinguished. [Para 16] [312·
C-E]
c 1.5. Equity in this case, however, has to be balanced.
On the one hand, the defendant No. 1 is an old lady and
her interest i,s required to be upheld, on the other, the
appellant has also invested a sum of Rs. 75,0001· in 1988
and since then he has been in possession of a part of
D the property as a vendee in terms of the said registered
deed of sale. dated 12.05.1988. The interest of justice
would be subserved if the plaintiff - respondent No. 1 is
directed to .~pay a sum of Rs. 2,25,000/· by way of
compensation to the appellant. Although the appellant is
*
E a party to the illegality, he is not deprived of the amount
which he had invested. [Para 18] [313-A-C]
1.6. It is directed that a registered deed of sale be
executed in favour of the plaintiff-respondent No. 1 within
one month from the date of deposit of the amount of
F Rs.2,25,0001-' by her. Defendant No. 1 is also directed to
refund the a!"ount of earnest money of Rs. 8000/- to the -It
•
plaintiff with interest at the rate of 9% per annum from the
date of institution of suit till realisation as he cannot be
permitted to; enrich himself unjustly. [Para 18] [313-G-H;
G 314"A·B]
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
6711 of 2008.

From the final Judgment and Order dated 30.8.2005 of the
H High Court of Karnataka at Bangalore in Regular Second
HAMIDKHAN v. ASHABI & ORS. 301

Appea! No. 336 of 2002. A

Sunil Kumar, Anita Kanungo, M. Khairati and lrshad
Ahmad for the Appellant.

Rajesh Mahale and Devendra Kr. Singh for the
Respondents. B

The Judgment of the Court was delivered by

S.B. SINHA, J. 1. Leave granted.

2. Defendant No. 2 in the Original Suit No. 358 of 1988 C
filed in the Court of the Additional Civil Judge, Hubli is the
appellant, herein.

Defendant No. 1 - Respondent No. 8 herein is a charitable
trust. By a registered deed dated 5.07.1951, the plaintiff - D
respondent No. 1 purchased the lease hold rights in respect
of the land together with the superstructure standing thereupon
from Shri Hasansab Bepari. In the year 1955, the original
defendant No. 1 filed a suit against several persons. Plaintiff
got herself impleaded as a defendant therein. Defendant No. E
1, having regard to the fact that the plaintiff had already
purchased the superstructure, agreed to sell the land to her by
an agreement dated 26.02.1980 for a consideration of
Rs.25,000/-. Out of the said amount, a sum of Rs.8000/- was
paid by way of earnest money.
... >
F
The relevant term of the said agreement reads as under:

"The said Rayanal math, being a public math,
the necessary permission required to sell the said
math properties shall be obtained from the Charity G
Commissioner, Belgaum and the Deputy
Commissioner, Dharwad, and after intimating you
about the same and receiving the balance
consideration amount within one month thereafter,
sale deed shall be executed in the presence of the H
...
302 SUPREME COURT REPORTS [2008] 16 S.C.R.

A sub-registrar".

3. Admittedly, in terms of the said agreement, permission
from the Charity Commissioner in terms of Section 36 of the
Bombay Public Trust Act was required to be taken. On or about
30.10.1982, an order was passed by the Charity Commissioner
8
directing that the land should be sold in public auction and the
highest bidder should be permitted to purchase the suit land.

Defendant No: 1, purported to be in pursuance thereof and
in furtherance of the said order, by a notice dated 22.04.1983,
C stated:

"As stated above, the Charity Commissioner has granted
permission subject to certain conditions. Therefore, you are
hereby informed that my client intends to conduct the public
D auction as per the order of the Charity Commissioner
within a few days. If you intend to purchase the said property
you may participate in ihe public auction. You will be
entitled to adjust the earnest money paid by you against
·-
the bid amount. In case you are unable to purchase the said
properties in the public auction, my client is willing to refund
E
the balance of the earnest money paid by you after
deducting appropriate amount as mesne profits you your
(sic) occupation till now. You are entitled to receive such
amount. You may understand that the contracts till now are
cancelled. This notice dated 22.4.1983 is for your
F information."

4. Indisputably, the said order of the Charity Commissioner
was set aside by the High Court and the matter was remitted
directing it to pass a fresh order. The Charity Commissioner in
G his order dated 15.04.1987 noticed that the appellant herein had
been in possession of the suit property. A deed of sale was .....
executed in his favour by the defendant No. 1 on or about ,.l -~
12.05.1988.
5. Plaintiff - Respondent No. 1 thereafter filed a suit for
H ..
HAMIDKHAN v. ASHABI & ORS. [S.B. SINHA, J.] 303

_, specific performance of the said agreement dated 26.02.1980 A
...i
and furthermore questioned the validity of the said deed of sale
dated 12.05.1988 in the Court of Principal Civil Judge, Hubli,
praying inter alia for the following reliefs:

"It is, therefore, humbly prayed that, the sale in favour of
B
Defendant No. 2 by the Defendant No. 1 being not binding
upon the plaintiff, as it is in derogation of the right of the
~
I: plaintiff to purchase the suit property by a sale agreement
dated 26.2.1980; be cancelled by a decree with an
ancillary relief of a decree for specific performance against
the Defendant No. 1, directing the Defendant No. 1 to sell
c
the suit property to plaintiff at the value at which it has been
sold to the Defendant No. 2. In case, if the Defendant No.
1 declines to or does not execute the sale deed of the suit
property on receipt of balance of consideration in
pursuance of a contract of sale dated 26.2.1980, a Court D
Commissioner. it is prayed, shall be appointed to execute
,, the sale deed on behalf of the Defendant No. 1 in favour
of the plaintiff at the cost of Defendant No. 1 or in the
alternative, if this Hon'ble Court does not grant a decree
for specific performance, the decree for refund of the E
earnest money of Rs. 8000/- from Defendant No. 1
payable to plaintiff, at the rate of interest of Rs. 18% per
annum on the principle of Rs. 8000/- from 26.2.1980, be
passed."
>
F
~
It is not in dispute that the appellant was a nephew of the
husband of the plaintiff. He was not in sound financial position.
Only out of compassion, the husband of the plaintiff -
respondent No. 1 permitted the appellant and his father to live
in the suit premises as licensees for a short period. After his
G
father's death, the appellant requested for some more time to
vacate.
--.,. l
Appellant, however, connived with the defendant No. 1 and
managed to get the suit property transferred in his name.
Appellant in the said suit not only denied and disputed the right H
304 SUPREME .COURT REPORTS [2008] 16 S.C.R.

A of the respondent No. 1 to obtain a decree for specific )....-
performance of contract but put forth a plea that he was a bona
fide purchaser for value without notice. It was furthermore ;

contended that the suit was barred by limitation.

6. The learned Trial Judge in view of the rival pleadings of
B
the parties inter alia framed the following issues:

"(i) Whether the plaintiff proves that defendant No. 1 "(
;::.
executed an agreement of sale on 26th February, 1980?

c (ii) Whether the plaintiff proves that she was ever ready
and willing to perform her part of I.he contract? ·

(iii) Whether the plaintiff proves that when the agreement
of sale in her favour was in force, defendant No. 1
executed sale deed in favour of defendant No. 2 on
D 12.5.1988?

(iv) Whether the plaintiff proves that the sale deed in favour
of defendant No. 2 is not binding on her?
..
E (v) Whether the defendant No. 2 proves that the order of
the Charity Commissioner is final?

(vi) Whether the defendant No. 2 proves that he is in
possession of suit property from the date of sale in his
favour?"
F
7. By reason of a judgment and decree dated 22.01.1993, ,\. •
the said suit was decreed by the learned Trial Judge, stating:

"28. In the light of the. above position of law, we have to
come to a just decision of the case. Defendant No. 1 says
G
that the execution of the sale deed.in favour of the plaintiff
become impossible since the charity commissioner did
not permit to sell, but asked to sell by public auction. The J. ,...
record goes to show that the order of the charity
commissioner dated 30-10-1982 as above was quashed
H
HAMIDKHAN v. ASHABI & ORS. [S.B. SINHA, J.] 305

-) in Cr. P. On the other hand, the Hon'ble High Court A
observed that the present defendant No. 1 stands himself
committed to the petitioner and the charity commissioner
is required to consider the agreement of sale. Under the
circumstances, there was an opportunity to defendant No.
1 to call upon the plaintiff to get the sale deed executed, B
but he did not Even otherwise, the order dated 15-4-1987
.., also is no way restrain defendant No. 1 in selling the suit
"' properties to the plaintiff subject to settlement concerning
price. At this juncture as well, there was an opportunity for
defendant No. 1 in asking the plaintiff to gel the sale deed
executed, but he did not. We do not find any direction from
c
the charity commissioner either in the order dated
30.10.1982 or order dated 15-4-1987 that the suit
properties should be sold to defendant No. 2 only. In spite
of these circumstances, defendant No. 1 selected
D
defendant No. 2 to sell the suit properties. There was no
pre-existing right with defendant No. 2 to purchase the suit
properties from defendant No. 1. In this connection,
"' counsel for plaintiff has argued that it is a plot created by
the defendants and there upon (sic) have brought the sale
deed in favour of defendant no. 2. To put in other words, E
the order dated 15-4-1987 was not so fundamental as to
be regarded by law as striking at the root of the contract.
Thus,. execution of sale deed in favour of the plaintiff was
not impossible from the point of view of defendant No. 1.
When there was possibility in performing his part of the F
• > contract on the part of defendant No. 1, where would be
the question of application of the doctrine of frustration.
Doctrine of frustration would be applicable only when the
contract is between defendant No. 1 and the plaintiff is

.. cancelled. We find no such cancellation of the said G
agreement even till today."
. ..I
The court noticed that the defendant No. 1 did not examine
himself as a witness in the suit and opined:
H
306 SUPREME COURT REPORTS [2008] 16 S.C.R.

A "... If defendant No. 1 had entered into the witness box, cat f-
would have been let out of the bag. In view of the foregoing
reasons, we hold that plaintiff has proved that when the
agreement of sale in her favour was in force, defendant
No. 1 executed a sale deed in favour of defendant No. 2
8 and we hold that plaintiff has proved that sale deed in
favour of defendant No. 2 is not binding on her and
accordingly, issues 3 and 4 are answered."
'
It was furthermore held that the appellant is not a bona fide
purchaser for value without notice, stating:
c
"... Under the circumstances, it is impossible to come to a
conclusion that defendant No. 2 is a bonafide purchaser
without notice, of a valid agreement between plaintiff and
defendant No. 2. These facts themselves go to show that
D defendant No. 2 purchased unlawfully, unauthorisedly and
illegally. In this view of the matter, it is held that plaintiff is
entitled to a declaration that sale in favour of defendant No.
2 is not binding on her and accordingly, it is held that ""'
plaintiff has proved issue no. 7."
E
8. On the premise that the defendant No. 1 did not obtain
the permission of the Charity Commissioner in which event only
the plaintiff -respondent No. 1 could perform her part of contract,
the suit was held to be not barred by the law of limitation.

F 9. An appeal preferred thereagainst was dismissed by the
... •
1st Addi. Dist!. Judge, Dharwad and by a judgment and order
dated 22.12.2001, the learned Appellate Court categorically
held:

G
"24. It is important to note that the plaintiff had purchased
not only the leasehold right of the land in question and also
the superstructure under Ex. P-4 sale deed. The sale deed
;.-
..
is dated 5-7-51. Thereafter, continuously, her name finds "'
place in the records and it is evidenced by Ex. P-2 and 3.
Nowhere at any point of time, the name of defendant no.
H
HAMIDKHAN v. ASHABI & ORS. [S.B. SINHA, J] 307

2 appear in any of the records. It is very well within the A
knowledge of Deft. No. 1 that the plaintiff had purchased
not only the leasehold rights, but also the superstructure.
And thereafter, she entered into a sale agreement to
purchase the suit property. Thatbeing so, how could Deft.
No. 1 det~rmine that Deft. No. 2 one was the occupant of B
the suit property. None of the defendants appear to have
applied their mind to verify the records to see as to who
~ 1
is in actual possession of the suit property. Further, Deft.
No. 2 also appears to have not made reasonable enquiries
about the title of the suit property. Therefore, the learned
trial Judge has rightly held that he could not be bonafide
c
purchaser of the suit property. Deft. No. 1 before executing
the sale deed in favour of Deft. No. 2 could have verified
as to the nature of possession or occupation Deft. No. 2
was having. Being very well aware of the subsistence of
D
the sale agreement, it could not have executed the sale
deed in favour of Deft. No. 2 in respect of the suit property.
A Therefore, it has to be held that the transaction between
the defendants in respect of the suit property was nothing
but suppression of material facts and somehow managed
to complete the sale. Therefore, the learned trial judge has E
rightly held that Deft. No. 2 purchased the suit property
unlawfully and unauthorisedly and, thus, it was not binding
on the plaintiff. It is also important to note that the plaintiff
has specifically pleaded in the plaint and it has come in
the evidence of PW-1 that they were always ready and F
~
" willing to perform their part of the contract..."

10. The second appeal filed by the appellant thereagainst
has been dismissed by the High Court by reason of the
impugned judgment. G
11. The substantial questions of law which were framed for
~ ..+ its consideration, were:

"1. Whether the courts below could have decreed the suit
H
308 SUPREME COURT REPORTS [2008] 16 S.C.R.

A for specific performance when admittedly the suit
agreement dated 26-2-1980 between the plaintiff and the
2nd defendant has been terminated by a cancellation
notice dated 22-4-1983 and in the circumstances whether
the suit for specific performance could be said to be within
s limitation"

2. Whether the property belonging to 2nd defendant which
is a charitable institution registered under the Bombay
Trusts Act, could be sold without the permission of the
charity commissioner'?
c
3. Whether the courts below had jurisdiction to alter the
terms of the contract as done now in the impugned
decree?"

0 The High Court answered all the said questions in favour
of the respondent No.1, opining:

"In the instant case, as noticed, the contract entered into
is more in the form of a contingent contract. The first
permission which was accorded by the charity
E commissioner was not in a good spirit as held by this Court
and the same was quashed in the writ petition. Thereafter,
the second permission was granted in the year 1987 which
was almost nearer fo the terms of the contract entered into
between the plaintiff and 1st defendant except the variation
F in the rate of the larid and the condition that the sale could
be made in favour of the occupant of the property. The suit
is filed subsequently i.e. within 1 1/2 years and it cannot
be said that it is beyond limitation. As such, the first
substantial question has to be answered in favour of the
G respondent.

It is seen that both the trial court as well as the lower
appellate court have held that the plaintiff was ready and
willing to perform her part of the contract and also that the
sale by 1st defendant in favour of 2nd defendant is not
H
HAMIDKHAN v. ASHABI & ORS. [S.B. SINHA, J.] 309

binding on the plaintiff. There is also a finding that the 2nd A
-~
defendant has not proved that he is in possession of the
., suit property. While decreeing the suit for specific
performance, the trial court has observed that the 2nd
defendant is not a bonafide purchaser for value without
notice. This is more a question of fact finding the same B
has been confirmed by the lower appellate court. It is also
... r noticed that the contract is subsisting between the plaintiff
and the 1st defendant and that the 1st defendant illegally
executed the sale deed in favour of the 2nd defendant. The
trial court having noticed that the relief of specific c
performance is a matter of discretion and has to be
exercised sparingly, has come to the conclusion that there
are no valid and cogent grounds to refuse the decree of
specific performance in favour of the plaintiff."

12. Mr. Sunil Kumar, learned senior counsel appearing on D
behalf of the appellant, would contend:
..
_ _

(i) Having regard to Article 54(2) of the Limitation Act,
-' 1963, the suit being barred by limitation, no decree
for specific performance of contract could have E
been passed, and

(ii) In any event, it was not a case where the court
should have exercised its discretionary jurisdiction

-'
,l
under Section 20 of the Specific Relief Act, 1963

13. Mr. Rajesh Mahale, learned counsel appearing on
F

behalf of the respondents, on the other hand, urged:

(i) By reason of the purported notice dated
22.04.1983, the agreement was not legally G
cancelled.

~- (ii) In any event, tile said purported notice being
passed on the order of the Charity Commissioner
dated 30.10.1982 which having been set aside,
H
310 SUPREME COURT REPORTS [2008] 16 S.C.R.

A limitation would run only from the date when the
Charity Commissioner passed its order dated
t--
15.04.1987 and not prior thereto.

(iii) In the suit, the plaintiff- respondent No. 1 having
B not only prayed for a decree for specific
performance of contract but also for cancellation of
the deed of sale, it was for the defendant No. 2 to
show that he had acquired a valid title thereto.

(iv) In any event, the courts below having arrived at a
c finding of fact that it was the plaintiff alone who was
in possession of the land even in terms of the order
of the Charity Commissioner, the land in suit should
have been transferred in favour of the respondent
No. 1.
D
14. In terms of the aforementioned agreement dated
26.02.1980, it was obligatory on the part of the defendant No.
1 to obtain the permission of the Charity Commissioner in terms
of Section 36 of the Bombay Public Trust Act, which reads as
E under:
"(1) Notwithstanding anything contained in the instrument
of trust,

(a) No sale, exchange or gift of any immovable property;
F and
--',
(b) No lease for a period exceeding ten years in the case '
of agriculture land or for a period exceeding three years
in the case of non agriculture land or a building belonging
to a public trust, shall be valid without the previous sanction
G
of the charity commissioner 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.

H (c) If the charity commissioner is satisfied that in the
HAMIDKHAN v. ASHABI & ORS. [S.S. SINHA, J.] 311

-* interest of any public trust any immovable property thereof A
should be disposed of, he may on application, authorise
any trustee to dispose of such property subject to such
condition as he may think fit to impose, regard being had
to the interest or benefit or protection of the trust."
B
15. The fact that as far back as in 19~_1, the plaintiff
y purchased the superstructure standing on the land is not in
dispute. Defendant no. 1 had filed a suit against the alleged
trespassers. Originally, the plaintiff was not impleaded as a party
therein. She got herself impleaded as a party at a later stage of
the suit. She was arrayed as the defendant No. 3. Plaintiff
c
evidently was not found to be a trespasser. Only because the land
on which the superstructure stood belonged to the trust, the
agreement of sale was-entered into. It was the only sensible way
of doing justice to the parties. Respondent No. 1 is a lady. She
must have relied upon the defendant No. 1. D

,) 16. In view of the concurrent finding of fact, there is no
escape from the conclusion that the defendant No. 2 - appellant
was a licensee under the plaintiff. He, therefore, did not have
any independent title or legal possession. Even if he and his E
father were in possession of a part of the property, the same
was for and on behalf of the plaintiff.

It may be true that the Charity Commissioner directed that
instead of giving effect to the agreement dated 26.02.1980, the
... A._
same should be sold in auction but we have noticed F
hereinbefore that the said order has been set aside by the High
Court. It was non est in the eye of law. If that order has been
set aside by the High Court pursuant whereto and in furtherance
whereof the purported notice dated 22.04.1983 was issued, the
performance of contract became dependant upon a fresh order G
which was to be passed by the Charity Commissioner. The
...._
Charity Commissioner could not have ignored the fact that the
superstructure standing on the land was owned and possessed
by the plaintiff - respondent No. 1. It was, therefore, fair and
equitable to allow the said agreement to be given effect to. H
312 SUPREME COURT REPORTS [2008] 16 S.C.R.

A Even otherwise the Charity Commissioner was to grant
permission to the defendant No. 1 to sell the property in favour
of the plaintiff. It could not have issued a direction which was
otherwise not sustainable. It could not have ignored the fact that
the plaintiff was the owner of the superstructure of the property
B and was, thus, in lawful possession thereof as well as the fact
that the defendant No. 2 was a mere licensee. We do now know
what transpired before the Charity Commissioner but even if
his order dated 15.04.1987 was to be enforced, the same could
be done irrespective of the aforementioned agreement dated
C 26.02.1980. Even in terms of the said order, it was the plaintiff
and the plaintiff alone in whose favour the deed of sale could
be executed. Inter alia on a wrong premise that the appellant
herein was in possession of the said property, the deed of sale
was executed on 12.05.1988 for the sum of Rs. 75,000/-.
Evidently, the defendant No. 1 obtained a higher amount. He
even had not refunded the earnest money paid by the plaintiff
- respondent No.· 1. There was no occasion for him to put the
appellant in independent possession of the property, as he
himself was not in possession thereof, at least since 1951. Even
E otherwise, being in continuous possession of the superstructure
from 1951, the title of the defendant No. 1 became
extinguished.

17. Defendant No. 1 for reasons best known to him did
not examine himself in the suit. It is not in dispute that he had
F served similar notices to other persons in whose favour, having
regard to the judgment passed in the suit bearing No. L.C. No.
11 of 1955, agreements for sale were entered into. Once the
said order of the Charity Commissioner was set aside, steps
taken pursuant thereto also became non est in the eye of law
G as the Charity Commissioner was to apply his mind afresh for
enabling him to exercise his jurisdiction in terms of Section 36
of the Bombay Public Trust Act.

Relationship of vendor and vendee between defendant
H No.1 and the plaintiff, therefore, continued. If that be so, the suit
HAMIDKHAN v. ASHABI & ORS. [S.B. SINHA, J.] 313

-r for specific performance was maintainable. A
18. Even otherwise in a case of this nature, it is eminently
fit and proper that this court with a view to do complete justice
to the parties should exercise its discretionary jurisdiction under
Article 142 of the Constitution of India. Equity in this case,
however, has to be balanced. On the one hand, the defendant
B
No. 1 is an old lady and her interest is required to be upheld,
)'
~
on the other, the appellant has also invested a sum of Rs.
75,000/- in 1988 and since then he has been in possession of
a part of the property as a vendee in terms of the said
registered deed of sale dated 12.05.1988. We, therefore, are c
of the opinion that the interest of justice would be subserved if
the plaintiff - respondent No. 1 is directed to pay a sum of Rs.
2,25,000/- by way of compensation to the appellant. For arriving
at the said figure, we have not only taken into consideration the
inflation in real estate market, but also the fact that the appellant D
has been in possession of a part of the property as a licensee
of plaintiff - respondent No. 1.
Although the appellant is a party to the illegality, we do not
intend to deprive him of the amount which he had invested and E
that is the principal reason we thought that he would be fully
compensated if the plaintiff - respondent No. 1 is directed to
pay a sum of Rs. 2,25,000/- in his favour being three times of
the amount that he had paid to the defendant No. 1 by way of

....-- ~
consideration for the execution of the deed of sale dated
12.05.1988. We direct accordingly.
F

Appellant shall vacate the premises within one month from.
the date of deposit of the amount of Rs.2,25,000/- by the plaintiff
- respondent No. 1 in the Court of learned Trial Judge and
execute a registered deed of sale in favour of the plaintiff - G
respondent No. 1. In the event, appellant vacates the premises
... -+ he would be entitled to withdraw the said sum failing which it
would be open to the respondent No. 1 to execute the decree
passed in her favour by the learned Trial Judge forthwith and
H
314 SUPREME COURT REPORTS [2008] 16 S.~.R.

A in which event he would be liable to pay all costs to the plaintiff
including the costs incurred by him in this Court. Defendant No.
1 shall also refund the amount of earnest money of Rs. 8000/-
to the plaintiff with interest at the rate of 9% per annum from
the date of institution of suit till realisation as he cannot be
B permitted to enrich himself unjustly.

19. For the reasons aforementioned, this appeal is allowed
in part and to the extent mentioned hereinbefore as also with
the aforementioned observati.Qns and directions. No costs.

C K.K.T. Appe·a1 ·partly allowed.