KANTILAL C. SHAH v. CHARITY COMMISSIONER — 1974 DIGILAW 129 (GUJ)

D. P. DESAI, J. ( 1 ) THIS appeal arises from a Scheme framed by the learned Charity Commissioner on February 28 1967 in respect of a public trust which trust was registered prior to the framing of the scheme. Against the decision of the Charity Commissioner framing the scheme present appellants moved the District Court under sec. 72 of the Bombay Public Trusts Act 1950 (hereafter referred to as the Act ). They had to approach the Court under sec. 72 because under scheme the Charity Commissioner had appointed first trustees leaving aside present appellant No. 1 Kantilal C. Shah who prior to the framing of the scheme was the managing trustee and the deceased appellant No. 2 Mukundray M. Thakore who prior to the framing of the scheme was a trustee. Before the District Court these two appellants raised only two contentions and they were as under: (1) That the learned Charity Commissioner had no jurisdiction to remove the two applicants (present appellants Nos. 1 and 2) as trustees that therefore the order of the learned Charity Commissioner is without jurisdiction and it should be set aside. (2) That the learned Charity Commissioner has not followed the necessary procedure while framing the scheme with regard to the said trust. (Vide paragraph 6 of the judgment of the learned Extra Assistant Judge ). The learned Extra Assistant Judge did not accept the aforesaid two contentions with the result that the application under sec. 72 filed by the appellants came to be dismissed. Hence this appeal. ( 2 ) ORIGINAL appellant No. 2 Mukundray M. Thakore died during the pendency of this appeal and therefore his name was deleted. In his place respondent No. 3 Veljibhai Premjibhai was transposed and substituted as appellant No. 2. ( 3 ) IN village of Valad Taluka Daskroi District Ahmedabad (Rural) there is an Ashram known as Vedant Ashram. This Ashram was a public trust and has been registered as such in or about 1953. Its registration No. is P. T. R. No. E. 545 (Ahmedabad ). One Sadhu Shitaldas resided in this Ashram prior to 1947; and in the year 1947 one Swami Madhavtirth came constructed certain buildings and started teaching religious tenets. This Ashram was a public trust and has been registered as such in or about 1953. Its registration No. is P. T. R. No. E. 545 (Ahmedabad ). One Sadhu Shitaldas resided in this Ashram prior to 1947; and in the year 1947 one Swami Madhavtirth came constructed certain buildings and started teaching religious tenets. On December 18 1948 a trust was created for the Ashram and the management remained with Swami Madhavtirth till he died in the year 1960 Thereafter the management of this trust was being done by the trustees under the deed of trust. Out of them appellant No. 1 K. C. Shah was the managing trustee and deceased appellant No. 2 M. M. Thakore was another trustee. There were other trustees also but they did not take active part and did not look after the management of the trust properties. It was on November 1 1963 that one Ishwaranandtirth who claimed to be a Chela or a disciple of Swami Madhavtirth made an application to the Charity Commissioner making certain allegations against the management of this trust. This application was numbered as Miscellaneous Application No. 703 of 1963; and an enquiry was made tn that application. There after the Charity Commissioner started suo motu proceedings under sec. 50 of the Act on November 11 1966 for the purposes of framing of a scheme. He gave an opportunity to the trustees to be heard and also to other persons interested in the trust. He also prepared a draft scheme and called a meeting and having heard the suggestions and submissions made to him ultimately framed a scheme on February 28 1967 Present appellant No. 1 and original appellant No. 2 were aggrieved by this scheme inasmuch as their names were not found amongst the first trustees appointed by clause 6 of the scheme. They took this appointment as amounting to their removal from the office of trustees and therefore raised a contention before the District Court that while framing the scheme the Charity Commissioner had no jurisdiction to remove the applicants as trustees. They also raised other contentions that the Charity Commissioner did not follow the necessary procedure while framing the scheme. Both these contentions did not find favour with the learned Judge. Hence the applicants have come in appeal to this Court. They also raised other contentions that the Charity Commissioner did not follow the necessary procedure while framing the scheme. Both these contentions did not find favour with the learned Judge. Hence the applicants have come in appeal to this Court. ( 4 ) THE contention as to the jurisdiction of the learned Charity Commissioner as regards removal of the existing trustees viz. the appellants has been repeated before this Court. The second contention raised by Mr. Joshi is that the scheme as framed is not proper and legal as required under the provisions of the Act. Two more contentions were also raised on behalf of the appellants and they are: (3) No grounds existed for framing of a scheme and the grounds mentioned by the Charity Commissioner are vague and imaginary; and (4) The suo motu enquiry started on the application of Ishwarnandtirth being Misc. Application No. 703 of 1963 amounted to an enquiry at the instance of some interested persons and the scheme was prepared with a view to remove the appellants. Mr. Joshi was frank enough to say that this fourth contention amounts to alleging mala fides against the Charity Commissioner in the exercise of his power of framing of a scheme. Now this catenation was not raised before the District Court. It is not to be found in the grounds set out in the memorandum of appeal as well. It raises for the first time in this Court a new question of fact which cannot be permitted. Therefore this last contention of Mr. Joshi was not Permitted to be raised by this Court. Then remain three contentions. ( 5 ) MR. I. C. Bhatt appearing for respondent No. 2 and Mr. S. N. Shelat appearing for respondents Nos. 4 and 6 supported the contentions of Mr. Joshi. Having heard the learned advocates I have come to the conclusion that none of the contentions advanced is tenable and there is no reason to interfere with the order passed by the learned Judge in the District Court. ( 6 ) THE first contention bears upon the interpretation of sec. 50a of the Act and in particular the provisions of sub-sec. (2a) thereof which have been inserted by Gujarat Act No. 31 of 1962. The provisions of sec. 50a may therefore be reproduced:50a (1) Notwithstanding anything contained in sec. ( 6 ) THE first contention bears upon the interpretation of sec. 50a of the Act and in particular the provisions of sub-sec. (2a) thereof which have been inserted by Gujarat Act No. 31 of 1962. The provisions of sec. 50a may therefore be reproduced:50a (1) Notwithstanding anything contained in sec. 50 where the Charity Commissioner has reason to believe that in the interest of the proper management or administration of a public trust a scheme should be settled for it or where two or more persons having interest In a public trust make an application to him in writing in the prescribed manner that in the interest of the proper management or admini stration of a public trust a scheme should be settled for it the Charity Commissioner may if after giving the trustees of such trust due opportunity to be heard he is satisfied that it is necessary or expedient so to do frame a scheme for the management or administration of such public trust (2) Where the Charity Commissioner is of opinion that in the interest of the proper management of administration two or more public trusts may be amalgamated by framing a common scheme for the same he may after : (a) publishing a notice in the Official Gazette and also in at least two newspapers (one in English and the other in the language of the region) with a wide circulation in the region in which the trust is registered and (b) giving the trustees of such trust and all interested persons due opportunity to be heard frame a common scheme for the same. (2a) A scheme under this section may provide for the number of trustees the mode of appointment of trustees including the appointment of the first trustees vesting of the trust property in the trustees so appointed mode of filling any vacancy of a trustee the remuneration of a trustee or manager of the public trust and where necessary a clarification of the objects of the public trust. (3) The Charity Commissioner at any time after hearing the trustees modify the scheme framed by him under sub-sec. (1) or sub-sec. (2 ). (4) The scheme framed under sub-sec. (1) or sub-sec. (2) or modified under sub-sec. (3) shall subject to the decision of the competent court under sec. (3) The Charity Commissioner at any time after hearing the trustees modify the scheme framed by him under sub-sec. (1) or sub-sec. (2 ). (4) The scheme framed under sub-sec. (1) or sub-sec. (2) or modified under sub-sec. (3) shall subject to the decision of the competent court under sec. 72 have effect as a scheme settled or altered as the case may be under a decree of a Court under sec. 50. The Charity Commissioner in paragraph 4 of his order has considered various suggestions as to the number of trustees and has fixed the maximum number of trustees as 7 and minimum as 5. He has then considered the names of the persons to be appointed as the first trustees and taken into consideration the suggestions made and ultimately made appointment of six persons shown in clause 6 of the scheme as the first trustees. With regard to the 7th trustee who was to hail from the disciples of Swami Madhavtirth the learned Charity Commissioner provided by sub-clause (b) of clause 6 that the aforesaid six trustees will recommend to the Charity Commissioner the name of a fit and proper disciple to be appointed as a 7th trustee and the Charity Commissioner after taking into consideration this recommendation will make the proper order. Now the six trustees named in clause 6 have been appointed expressly as the first trustees under the scheme. The consequence of this appointment if at all the Charity Commissioner had the power and jurisdiction to do so is that the appellants who were trustees before the scheme ceased to be the trustees by virtue of this appointment of six trustees under the scheme. This according to the appellants results in removing of the appellants from the office of trustees and the submission is that the Charity Commissioner has no power under sec. 50a to remove an existing trustee while framing a scheme and that this power is not conferred or recognised by sub-sec. (2a) of sec. 50a as well. The most material phrase occurring in sub-sec. (2a) having bearing upon this contention is the mode of appoint ment of trustees including the appointment of the first trustees. It is submitted on behalf of the appellants as well as respondents Nos. 2 4 and 6 that the inclusive portion of this phrase can relate only to mode of appointment of the first-trustees. (2a) having bearing upon this contention is the mode of appoint ment of trustees including the appointment of the first trustees. It is submitted on behalf of the appellants as well as respondents Nos. 2 4 and 6 that the inclusive portion of this phrase can relate only to mode of appointment of the first-trustees. According to this contention the phrase would on proper interpretation read the mode of appointment of trustees including the mode of appointment of the first trustees. Now there are two fallacies in this interpretation. First of all the inclusive phrase does not sneak of the mode at all but speaks of the appointment alone. Secondly if this interpretation as suggested is correct the inclusive phrase becomes superfluous because the phrase the mode of appointment of trustees would as well cover the mode of appointment of first trustees. Ex-facie therefore it is not possible to agree with the above interpretation suggested on behalf of the appellants as well as respondents Nos. 2 4 and 6. 6a Now so far as the rule of interpretation of Statutes with regard to definition clauses is concerned this is a well-settled rule. Where the word includes is used in a definitive section the correct view to take is that it is used in order to enlarge the meaning of the words or phrases occurring in the body of the statute and when it is so used these words or phrases must be construed as comprehending not only such things as they signify according to their natural import but also those things which the interpretation clause declares that they shall include. In other words the word in respect of which includes is used bears both its extended statutory meaning and its ordinary popular and natural sense whenever that would be properly applicable. There is no reason why this canon of construction in respect of the definitive clauses should not be applied to be provisions of sub-sec. (2a) of sec. 50a of the Act in the present case. More so when the inclusive phrase would become superfluous if it is limited to mode of appointment of first trustees as shown above. There is no reason why this canon of construction in respect of the definitive clauses should not be applied to be provisions of sub-sec. (2a) of sec. 50a of the Act in the present case. More so when the inclusive phrase would become superfluous if it is limited to mode of appointment of first trustees as shown above. In my opinion this whole phrase reading the mode of appointment of trustees including the appointment of first trustees deals with the subject of appointment of trustees and while dealing with this subject it provides that the scheme may make provisions for the mode of appointment of trustees as well as for the appointment of the first trustees. A bare reading of sub-sec. (2a) of sec. 50a clearly shows that it confers enabling power on the Charity Commissioner while framing a scheme and if it is an enabling provision there is no reason why the inclusive phrase should not be given its proper natural meaning viz. the power to appoint the first trustees. This power of appointment of course is restricted to the appointment of first trustees only. With regard to the vacancies falling in future the Charity Commissioner has to provide for. the mode of filling of those vacancies. Therefore; the power of appointment as given under sub-sec. (2a) to the Charity Commissioner while framing a scheme is limited to the appointment of the first trustees under the scheme. A scheme framed by the Court under sec. 50 or by the Charity Commissioner under sec. 50a takes the place of the management of the trust and its properties prior to the framing of the scheme. The scheme would therefore provide for number of trustees and the mode of their appointment as well as the appointment of frist trustees under the scheme. In a given case the Charity Commissioner may continue the old trustees under the scheme framed by him. By implication that would amount to appointment of old trustees as first trustees under the scheme because vis-a-vis the scheme they will be the first trustees. The power of appointment of trustees is such an important and integral part of the power of framing of a scheme that without the former the latter power would become useless. By implication that would amount to appointment of old trustees as first trustees under the scheme because vis-a-vis the scheme they will be the first trustees. The power of appointment of trustees is such an important and integral part of the power of framing of a scheme that without the former the latter power would become useless. If the power to appoint first trustees under the scheme is not there a very cumbrous procedure in the matter of appointment of first trustees would emerge. Having framed a scheme the Charity Commissioner will have to file a suit under sec. 50 of the Act for the removal of the existing trustees (if they are to be removed on account of mismanagement found) and await the decision of the Court. Till then the whole scheme would be in abeyance. The final disposal of the suit would naturally take long time and the purpose with which the scheme was framed would suffer. Therefore if the power of appointment of first trustees under the scheme is an integral part of the framing of the scheme the consequence of the exercise of that power which in a given case may result in the so-called removal of the old trustees has no bearing upon the interpretation of sub-sec. (2a) of sec. 50a of the Act. It is the power of appointment of first trustees which results in the eyes of law in the so called removal of the old trustees. And that consequence must follow. In a case where a scheme is framed by the Charity Commissioner or by the Court where power is given under the statute to make appointment of first trustees it is not necessary to provide specifically for the removal of the old trustees. This is for the simple reason that the management under the scheme takes the place of the old management and the old management is fully eclipsed by the management under the scheme. The view that sub-sec. (2a) confers in terms the power of appointment of the first trustees under the scheme on the Charity Commissioner is supported by the phrase regarding vesting of trust properties which follows. Both the phrases relating to tie power of appointment and the power of vesting trust properties would read mode of appointment of trustees including the appointment of the first trustees vesting of the property in the trustees so appointed. Both the phrases relating to tie power of appointment and the power of vesting trust properties would read mode of appointment of trustees including the appointment of the first trustees vesting of the property in the trustees so appointed. The words so appointed in the later phrase are very material. These words indicate the trustees who are appointed under the preceding phrase as first trustees. These first trustees appointed under the scheme are described as the trustees so appointed. This phrase would therefore also show that there is power to appoint the first trustees vested in the Charity Commissioner while framing the scheme. If the said power of appointment was not there there would be no point in conferring on the Charity Commissioner the power to vest the trust properties in the trustees so appointed. It is therefore clear that the Charity Commissioner while framing the scheme under sec. 50a has under sub-sec. (2a) thereof the power to appoint the first trustees. His power under sub-sec. (2a) is not restricted to providing merely mode of appointment of first trustees. The Legislature having conferred power on him to provide for the mode of appointment of trustees extended that power by conferring the power of appointment of the first trustees on the Charity Commissioner and the further power of vesting the trust properties in the first trustees so appointed. ( 7 ) IT is interesting to find that in Maharashtra where sub-sec. (2a) of sec. 50a is not there the power of appointment of additional trustees while framing a scheme was recognized by a learned Single Judge of the Maharashtra High Court in Charity Commissioner Maharashtra State v. Hirjibhoy 73 Bom. L. Reporter page 880. I am beholden to Mr. A. M. Joshi appearing for the appellants for bringing this decision to my notice even though in part it goes against his contention. Even in the absence of sub-sec. (2a) of sec. 50a the learned Single Judge in the aforesaid case held that the Charity Commissioner has the power to make initial appointment of the additional trustees of the scheme framed by him. The learned Judge having considered the provisions of secs. 50 50 47 and 69 (11) of the Act and sec. 92 of the Civil Procedure Code came to the conclusion that on account of the non-obstante clause in sec. The learned Judge having considered the provisions of secs. 50 50 47 and 69 (11) of the Act and sec. 92 of the Civil Procedure Code came to the conclusion that on account of the non-obstante clause in sec. 50a alternative independent power of framing of the scheme has been created in favour of the Charity Commissioner. Then he observed: This power prima facie must be parallel and similar in all respects to the power of the Court to frame a scheme in a suit instituted under sec. 50 Now before noticing the contents of the sections on which reliance has been placed by Mr. Chitale it first requires to be stated that the power vested in Court to frame and settle and ary and modify schemes which continuously existed under sec. 92 of the Code of Civil Procedure from the date of its enactment and which otherwise existed by reason of High Courts being guardians of charity is included the incidental power to make provisions for appointment etc. of trustees and for appointing trustees of the scheme itself. This power has been continued in the Courts under sec. 50 of the Act and has been by sec. 50a added in the statute in 1960 vested in and or delegated to the Charity Commissioner. It would be surprising therefore to come to the conclusion that the Legislature whilst delegating under sec. 50a power of Courts to the Charity commissioner had not intended that he should have power to make initial appointment of the trustees of the scheme framed by him. The language of sec. 50a itself provides that the Charity Commissioner should proceed to frame a scheme under that section after giving an opportunity to be heard to the trustees of the trust concerned. It is patent that the power to frame scheme for the management of administration of a trust must include power altogether to amend and nullify the previously existing scheme. The power must be sufficiently large to provide that the persons in management of the trust as at the date of the framing of the scheme will not continue in the management and ceased to be managers and/or trustees. This wider construction is however not necessary for the purposes of the present case because the Charity Commissioner has not sought to remove respondent Na. I from continuing in the office of the trust in question. This wider construction is however not necessary for the purposes of the present case because the Charity Commissioner has not sought to remove respondent Na. I from continuing in the office of the trust in question. ( 8 ) IT is therefore clear that the phrase including appointment of the first trustees cannot be construed to mean including the mode of appointment of the first trustees as contended on behalf of the contesting respondents and that the said phrase refers to the making of the appointment of first trustees and in terms confers power on the Charity Commissioner to do so while framing the scheme. ( 9 ) THE next question then is whether in exercising this power of appointment of first trustees the Charity commissioner can in effect bring about removal of the existing trustees ? This question it is urged by Mr. Joshi was kept open in Charity Commissioner v. Hirjibhoy (supra); and it directly arises before us. It was submitted on behalf of the appellants as well as respondents Nos. 2 4 and 6 that the power of removal of a trustee is in terms conferred by clause (b) of sec. 50 of the Act on the Court. It is also pointed out that clauses (b) and (e) of that sec. 50 refer to the removal of any trustee or manager and the appointment of a new trustee or manager whereas clause (g) refers to the settlement of a scheme or variations or alterations in a scheme already settled. The contention raised on behalf of the contesting respondents is that under sec. 50a only the power as contemplated by clause (g) by sec. 50 is conferred on the Charity Commissioner. As clauses (b) and (c) existed separately from clause (g) runs the argument the power of removal of a trustee does not vest in the Charity Commissioner while framing a scheme under sec. 50a. It is also pointed out that under clause (g) of sec. 47 (1) of the Act in a given case the Court may exercise this power of appointment of a new trustee which may result in removal of an existing trustee because that clause contemplates the unfitness of the existing trustees. Relying upon secs. 47 and 50 therefore it is urged that the power of removal of a trustee is not conferred on the Charity Commissioner by sec. 50a. Relying upon secs. 47 and 50 therefore it is urged that the power of removal of a trustee is not conferred on the Charity Commissioner by sec. 50a. The result as per the argument is that in a case where trustees exist first trustees cannot be appointed so as to remove the existing trustees and only additional trustees can be appointed under the scheme Now as observed earlier the power of appointment of a trustee while framing a scheme is an integral part of the general power of framing a scheme for the proper and better management of an existing public trust and without this power the mere power to frame a scheme becomes futile. This power to frame a scheme necessarily implies the obliteration of earlier management of the public trust in question and substitution of a scheme of proper and better management in its place. If this is the purpose of framing a scheme under sec. 50a the trustees under the old management cannot continue inspite of the obliteration of the old scheme of management. They have got to be either reappointed under the scheme or removed by appointment of other trustees in their place as first trustees. In fact in a good many cases it will be on account of the acts of mismanagement misfeasance or negligence of the trustees that framing of a scheme by the Court or the Charity Commissioner may be called for. There is no reason why therefore we should construe sec. 50a as conferring a restricted sort of power of appointment of trustees as contended on behalf of the appellants and respondents Nos. 2 4 and 6. Really speaking the question is not one of removal of existing trustees. Their removal is merely a consequence of the appointment of the first trustees under the scheme. It is not necessary in such a case to provide specifically for the power of removal of an existing trustee. The phrase vesting of the trust property in the trustees so appointed also supports the conclusion that by appointment of first trustees under the scheme in the place of old trustees the old trustees are removed. In order however to see that the legal title to the property of the public trust does not continue to remain vested in the old trustees a specific provision has been made in sub-sec. In order however to see that the legal title to the property of the public trust does not continue to remain vested in the old trustees a specific provision has been made in sub-sec. (2a) conferring power on the Charity Commissioner to vest the trust property in the first trustees appointed under the scheme. This would result in divesting the legal title in the old trustees and vesting of the same in the first trustees appointed under the scheme. The distinction made out by relying upon clauses (b) and (c) of sec. 50 and their absence in sec. 50a may well be due to the fact that the Court under sec 50 may be having larger power than the Charity Commissioner in respect of the removal of trustees. It is conceivable that the Court acting under sec. 50 may merely remove one of the trustees without framing a scheme whereas the power conferred on the Charity Commissioner under sec. 50a resulting in removal of existing trustees is conferred as part and parcel of the power of framing of a scheme only. The contention based on the absence of provisions like clauses (b) and (c) of sec 50 in sec. 50a of the Act cannot be upheld. It is thus clear that the Charity Commissioner has ample power to make appointment of first trustees in the place of the old trustees without continuing them so as to bring about their removal. Thus the first contention must fail. Appeal dismissed. .