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1965 DIGILAW 63 (GUJ)

BAPALAL GODADBHAI KOTHARI v. CHARITY COMMISSIONER,gujarat

1965-07-30

M.U.SHAH

body1965
M. U. SHAH, J. ( 1 ) I will now consider the contentions raised in Appeal No. of 1963 filed by the Charity Commissioner. Mr. A. D. Desai learned Assistant Government Pleader has canvassed before me the view that order and directions regarding reimbursement passed and given by learned District Judge in favour of the first defendant was not a legal order. Mr. Desais submission is that the impugned order is passed having regard to the provisions of sec. 32 of the Indian Trusts Act 1882 which is not applicable to the Public Trusts and therefore no order reimbursement can be passed in the suit as no such corresponding provision is made in the Act. Mr. Desai has further contended that first defendants claim for reimbursement was in the nature of a counter claim; and the first defendant should have filed a separate suit for the purposei cannot accept these contentions. It is true that the instant case would not be governed by the Indian Trusts Act 1882. But even in cases arising under the Bombay Public Trusts Act 1950 the principle and spirit under-lying sec. 32 of the Indian Trusts Act 1882 can be followed in so far as it embodies the principles and rules of English law and practice on the subject which are not shown to be inconsistent with the rules and practice of the courts in India. ( 2 ) IN Re Sabnis Goregaonkar and Senjit 39 633 Mr. Justice B. J. Wadia has observed as under:-IN dealing with public charitable trusts the Courts in India are Dot to be guided by way of analogy by the provisions of the Indian Trusts Act 1882 for that would be doing what the legislature has expressly prohibited. The correct position in such matters is that the Courts will be governed by the principles and rules of English law and practice on the subject unless the English law and practice are inconsistent with the rules and practice of the Courts in India. Many provisions of the Indian Trusts Act reproduce the general law of trusts as administered in the Equity Courts in England but this does not mean that the Indian Trusts Act applies by analogy to religious and charitable endowments in India when the Act provides that it does not. Many provisions of the Indian Trusts Act reproduce the general law of trusts as administered in the Equity Courts in England but this does not mean that the Indian Trusts Act applies by analogy to religious and charitable endowments in India when the Act provides that it does not. In Underhills Law of Trusts and Trustees Eleventh Edition in Art. 82 under the caption Right to Reimbursement and Indemnity it has been stated that:-TRUSTEE is entitled to be reimbursed out of the trust property all expenses which he has properly incurred having regard to the circumstances of each particular case but without interest unless he has paid an interest bearing claim in which case he stands in the shoes of the creditor by subrogation. It is clear therefore that the first defendant would be entitled to be reimbursed out of the trust property all expenses which he has properly incurred. The point is now set at rest by a decision of Their Lordships of the Supreme Court in Sheikh Abdul Kayum and others v. Mulla Alibhai and others A. I. R. 1963 Supreme Court 309 wherein the learned Judges have observed:-IT is true that sec. I of the Trusts Act makes provisions of the Act inapplicable to public or private religious or charitable endowments; and so these sections may not in terms apply to the trust of that kind. These sections however embody nothing more or less than the principles which have been applied to all trusts in all countries. ( 3 ) SEC. 32 of the Indian Trusts Act final 1882 provides as under:-Every trustee may reimburse himself or pay or discharge out of the trust property all expenses properly incurred in or about the execution of the trust or the realization preservation or benefit of the trust property or the protection or support of the beneficiary. It is clear that sec. 32 of the Indian Trusts Act embodies nothing more or less than the principles which have been applied to Equity Courts in England. Therefore although sec. 32 of the Indian Trusts Act may not in terms apply to the cases covered under the Bombay Public Trusts Act still the principles underlying will have equal force in this case. 32 of the Indian Trusts Act embodies nothing more or less than the principles which have been applied to Equity Courts in England. Therefore although sec. 32 of the Indian Trusts Act may not in terms apply to the cases covered under the Bombay Public Trusts Act still the principles underlying will have equal force in this case. The first defendant is therefore entitled to be reimbursed out of the trust-property all expenses properly incurred in the execution of the trust or the realization preservation or benefit of the trust property. The learned Judge was therefore right in finding that the first defendant was entitled to be reimbursed. I therefore reject the contention of Mr. Desai on this count. The contention of Mr. Desai that the claim of reimbursement is in the nature of a counter claim has also no merit and must be rejected. ( 4 ) MR. Karlekar has argued that there was evidence on record showing that first defendant has advanced large sums of money and spent considerable amounts on different occasions for the benefit of the trust. However this will be a question for determination by the trial Court in subsequent proceedings on receipt of the report of the commissioner so appointed and ordered by the learned Judge. ( 5 ) MR. Desai then contended that the finding of the learned trial Judge that second defendant was not a trustee and was not liable for the accounts is erroneous and is not legal and proper. Now it is established on good evidence that the second defendant had never received any invitation to join as a trustee; that he had never accepted such an invitation if at all given and that he had never acted as a trustee. He was not served with a notice by the Deputy Charity Commissioner in the proceedings initiated by him suo motu under sec. 19 of the Act. These are undisputed and uncontroverted facts. ( 6 ) BUT Mr. Desais contention is that order of the Deputy Charity Commissioner Exh. 65 by which he has ordered the trust in question to be registered and found that the first and second defendant were the trustees of the said trust would operate as a bar to the raising of the question of the status of the second defendant as provided by sec. 80 of the Act. 65 by which he has ordered the trust in question to be registered and found that the first and second defendant were the trustees of the said trust would operate as a bar to the raising of the question of the status of the second defendant as provided by sec. 80 of the Act. Sec. 80 provides that:-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 or in respect of which the decision or order of such officer or authority has been made final and conclusive. Mr. Desai contends that the question whether the second defendant was a trustee or not was one which fell under clauses (iv) and (v) of sec. 19 of the Act. Now clause (iv) provides for an inquiry to be made by the Deputy or Assistant Charity Commissioner for the purpose of ascertaining the names and addresses of the trustees and manager of such trust; and clause (v) provides for such an inquiry to ascertain the mode of succession to the office of the trustee of such trust. None of these clauses are attracted in the instant case. The material question which falls for consideration in this case is whether the second defendant was guilty of alleged breaches of trust. In deciding his liability it has first to be found as a fact that the second defendant was a trustee. This question therefore cannot be said to be barred under the provisions of sec. 80 of the Act. Moreover the fact remains that the order Exh. 65 that was passed by the Deputy Charity Commissioner was an ex-parte order. It is well settled as observed by Their Lordships of the Supreme Court in R. Vishwanathan and Others v. Rukh-ul-Mulk Syed Abdul Wajid since deceased A. I. R. 1963 Supreme Court 1 that a judgment cannot be conclusive if the proceedings in which it was obtained is opposed to principles of natural justice and such a judgment will be regarded as a nullity. It cannot be denied that the action of the learned Charity Commissioner which was admittedly without service of the notice of hearing on the 2nd defendant was against the principles of fair play and natural justice. Mr. It cannot be denied that the action of the learned Charity Commissioner which was admittedly without service of the notice of hearing on the 2nd defendant was against the principles of fair play and natural justice. Mr. Desais contention that the decision of the Deputy Charity Commissioner is binding and operates as a bar under sec. 80 of the Act cannot therefore be sustained. Besides as aforesaid the material question is of fixing the liability for the breach of trust against the second defendant and therefore in order to determine this question the learned trial Judge was bound to take into consideration the various facts and circumstances aforesaid. In this view of the matter I confirm the finding of the learned trial Judge that the second defendant was not a trustee who could be held liable in the matter. ( 7 ) MR. Desai has then urged that the learned Judge had no business to give directions to the Charity Commissioner for consulting the representatives of the original families mentioned in the trust-deed for the purpose of suggesting a scheme. Mr. Desais contention is that such a direction could not legally be given and for the purpose document Exh. 111 could not be looked into. Now Exh. 111 is a document which has been relied upon by the plaintiff Charity Commissioner. It is true that the finding of the Deputy Charity Commissioner is that document Exh. 111 is not an instrument of trust. But this document Exh. 111 has been considered by the learned District Judge for a limited purpose as stated in his judgment with a view to under stand the history and background leading to the formation of the trust. There can be no legal objection to such a use. The said document mentions five original families as hereditary trustees and five other persons as nominated trustees to be nominated for the purpose of assisting the hereditary trustees. Now if in the proceedings for framing a scheme for the proper and better administration of a trust and for appointment of new trustees the Court directs the plaintiff to consult the families of the hereditary trustees this cannot be said to be an improper order. Now if in the proceedings for framing a scheme for the proper and better administration of a trust and for appointment of new trustees the Court directs the plaintiff to consult the families of the hereditary trustees this cannot be said to be an improper order. In Mohammed Ismail Arif v. Ahmed Moolla Dawood I. L. T. 43 Calcutta 1085 (P. C.) Their Lordships of the Privy Council have observed as under:-IN settling a scheme of management the question was not one involving the deter termination of conflicting rights but the consideration of the best method for fully and effectively carrying out the purposes of the trust. Section 539 vested a very wide discretion in the Court and in saving effect to its provisions and appointing new trustees and settling a scheme the court was entitled to take into consideration not merely the wishes of the founder so far as they can be ascertained but also the past history of the institution and the way in which the management had been carried on heretofore in conjunction with other existing conditions that might have grown up since its foundation. The Court also had the power of giving any directions and laying down any rules which might facilitate the work of management and if necessary the appointment of trustees in the future. ( 8 ) IN this view of the law it is clear that the learned Judge was - Entitled to go into the history and background of the trust as embodied in document Exh. 111 in order to give proper directions to the commissioner for framing a scheme to be submitted to the Court. It may be remembered that the direction is merely to consult and propose the names from amongst the original five families who were the founders of the trust provided they are found to be fit. The proposal will have then to be considered by the learned District Judge after hearing the parties. In this view of the matter in my judgment the learned Judge was justified in giving the said directions. Mr. Desais objection must therefore be rejected. This disposes of all the contentions raised by Mr. Desai in First Appeal No. 127 of 1963 which are rejected on the grounds aforesaid. Appeal dismissed. .