IBRAHIM MOHMADSALEH BHAM v. MOHMAD AJAM HATIA — 1979 DIGILAW 239 (GUJ)

D. H. SHUKLA, M. K. SHAH, J. ( 1 ) THIS appeal arises out of an application which was made under section 72 of the Bombay Public Trusts Act 1950 (the Act) by the appellants who were aggrieved by an order passed by the Charity Commissioner under section 50a of the Act whereby five trusts which had been registered on coming into force of the Act at Sr. Nos. B. 139 to B. 143 were ordered to be amalgamated and a common scheme as per ex. 177 was settled for proper administration thereof by the Charity Commissioner. . . . . . . . . . . . . . . . . . . . . . ( 2 ) IN the month of May 1972 two of the trustees viz. Ajam Mohmed Hatia and Ismail Hasam Jiva (applicants Nos. 3 and 4) and two beneficiaries that is applicants Nos. 1 and 2 viz. Mohmed Azam Hatia and Soeb Ismail Jiva presented an application to the Charity Commissioner Gujarat State at Ahmedabad for amalgamation of all the said five trusts registered at S1. Nos. B. 139 to B. 143 and for framing a common scheme for better administration thereof. . . . . . . . . . . . . . . . . . . . . ( 3 ) THE Charity Commissioner after recording evidence and considering the same came to the conclusion that though there were five trustees in the trusts registered at B. 139 and B. 141 at the time when he decided application there was only one trustee in the said trusts and though there were three trustees in each of the trusts registered at B. 140 142 and 143 there was only one trustee for the said trusts at that time. He also found that the mode of succession was mostly common in all the trusts and that the trusts were inter connected and interdependent. He further held that there was a large estate and on account of differences of opinion between the existing trustees regarding management of the trusts the property of the trusts was not properly managed and the objects of the trusts were not carried out. In terms he held that there was mismanagement of the trusts by opponent No. 2. He further held that there was a large estate and on account of differences of opinion between the existing trustees regarding management of the trusts the property of the trusts was not properly managed and the objects of the trusts were not carried out. In terms he held that there was mismanagement of the trusts by opponent No. 2. He also held that there would not be any violation of the precepts of the Mohmedan Law in amalgmating five trusts. He there fore gave directions for amalgamation of the trusts and for framing a common scheme which was framed as per Ex. 177. The trust was named as Geeth Haji Aref Bham Wakf Rander. The objects shown in the scheme were mostly the same as the objects of the aforesaid various separate trusts which had been created. The scheme provided for appointment of a miximum number of 9 trustees and a minimum number of 6 trustees and the qualification for being appointed as a trustee was selection from respectable persons of Sunni Vohra Panchayat at Rander. The mode of succession was provided by laying down that the trustees vacancy was to be filled in by the remaining trustees and if they failed to do so within a specified time the same was to be filled in by the Charity Commissioner. The scheme also provided that one third of the trustees would retire after three years and the term of the office of a trustee would be for 9 years. ( 4 ) THIS order of the Charity Commissioner was the subject matter of challenge before the court of the learned Extra Assistant Judge at Surat in miscellaneous application No. 92 of 1977 preferred by original opponent No. 2 Yusuf Mohmed Bharucha under sec. 72 of the Act. ( 5 ) THE said application was resisted by the oppnents. The main contentions on behalf of the applicants viz. 72 of the Act. ( 5 ) THE said application was resisted by the oppnents. The main contentions on behalf of the applicants viz. that there was no justification for amalgamation when the settlor himself had provided a scheme for management of each trust that there was no cogent evidence establishing gross mismanagement of the trusts; that the amalgamation would result in frustration of the objects for creation of the different trusts inasmuch as the income of a trust or its property would be utilised for the purposes of a trust for which the same was not meant and that by the scheme mode of succession was completely changed and the maximum number of five trustees was raised to 9 trustees were negatived by the learned Extra Assistant Judge. He therefore dismissed the said application by his order dated 20th February 1979 and hence this appeal by the persons who have been brought on record in place of the original opponent Yusuf Mohmed Bharucha (since deceased ). ( 6 ) THE main contentions in support of the appeal are thus formulated by Miss Shah the learned Advocate for the appellants : (1) Mismanagement by a managing trustee or a sole trustee by itself cannot be a ground for amalgamation of various trusts or for framing common scheme for the same. (2) Proper notice as required under sec. 50a (2) (a) of the Act has not been given in the instant case and hence the Charity Commissioner had no authority to amalgamate the trusts by framing a common scheme. (3) In framing the scheme and amalgamating the trusts some of the objects for which the various trusts were created have been frustrated or impliedly revoked which is contrary in the precepts of Mohamedan Law as per example the object of making available two rooms on the ground floor of the property settled by the trust deed at Sr. No. B. 139 for being used for the purpose of office for the trust created by the settlors father and another room for the trust which was to be created and which was later created by the settlor himself. No. B. 139 for being used for the purpose of office for the trust created by the settlors father and another room for the trust which was to be created and which was later created by the settlor himself. (4) The amalgamation eans that funds specifically earmarked for a particular purpose by a particular trust would be utilised for a different purpose because in an amalgamation and framing of a common scheme of different trusts the funds specifically dedicated for a particular object will be channelised for the general purpose of the main scheme and consequently for a different purpose and for an object of a different trust. (5) If amalgamation results in the destruction of the objects of a trust it cannot be said to be in the interest of proper management or administration of the trust. (6) When the settlor in the instrument of trust has set out a complete scheme for administration of the said trust there cannot be amalgamation of that trust with another trust or trusts by framing a common scheme. ( 7 ) THE relevant provisions concerning amalgamation of trusts by framing a common scheme may be first looked into. They are contained in sec. 50a of the Act and the material part thereof as is relevant for the discussion on hand reads thus:"50 (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 administration 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 the opinion that in the interest of the proper management or 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 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 trusts and all other interested persons due oppo rtunity to be heard frame a sommon 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 may at any time after hearing the trustees modify the scheme framed by him under sub-sec. (1) or sub-sec. (2) ( 8 ) ON a bare reading of the section it becomes manifest that what is relevant for the purpose of considering as to whether one or more trusts should be amalgamated for framing a common scheme is as to whether such course would be in the interest of the proper management or administration of the trusts concerned. The section gives wide powers to the Charity Commissioner and after the amendment by which sec. 2a was introduced by Gujarat Act 31 of 1962 the Charity Commissioner is even empowered to make provisions in the scheme with regard to the number of trustees mode of appointment of the trustees and the mode of filling in the vacancies and if necessary clarification of the objects of the trust. ( 9 ) BUT the first contention raised by Miss Shah was that mere mismanagement by the managing Trustee or the sole trustee cannot provide a ground for amalgamation of the trusts by framing a common scheme because there is a remedy available viz. ( 9 ) BUT the first contention raised by Miss Shah was that mere mismanagement by the managing Trustee or the sole trustee cannot provide a ground for amalgamation of the trusts by framing a common scheme because there is a remedy available viz. providing a machinery for proper running and conduct of the trusts which can be done by framing a scheme in respect of the individual trust concerned which may provide fro better management or in suitable cases action may be taken against the trustees for mismanagement and that way ensures better management. But this does not justify amalgamation of different trusts with different objects having different properties belonging to the respective trusts. We do not find any substance in this submission of Miss Shah. Apart from the fact that the Charity Commissioner was not guided merely by the fact of mismanagement by the Managing Trustee or the sole trustee in his decision for amalgamation by framing a common scheme and that apart from mismanagement there were other factors which weighed with him in taking the said decision what is to be looked into is as to whether such a course is in the interest of proper management or administration of the trust and if the trust is mismanaged then there can be hardly any scope for meeting an argument that that would supply atleast substantial basis to come to the conclusion that it would be in the interest of the proper management or administration of the trusts to devise ways and means to remove the mismanagement and to ensure proper management in future. Now so far as the said five trusts are concerned it would be significant to note that the trusts registered at Sr. Nos. B. 139 and 141 have no independent existence as such but they are dependent on the trust registered at Sr. No. B. 143 because the trust at No B. 143 is the feeding trust for the former two trusts; that out or the income or funds provided by trust at No. B. 143 the objects for which the previous two trusts were founded are to be carried out. If therefore these three trusts are mismanaged can it be said that amalgamation of all the three trusts by framing a common scheme would not be in the interest of the proper management or administration of the trusts concerned? If therefore these three trusts are mismanaged can it be said that amalgamation of all the three trusts by framing a common scheme would not be in the interest of the proper management or administration of the trusts concerned? Similarly trust at No. B. 140 is also not independent as such and it is dependent on the feeding trust registered at No. B. 142. Another factor which is of great importance in testing the problem of proper management and administration of the trusts is that the object for which those trusts have been created at different times by the same settlor are if not the same similar. They are all created for the purpose of general charity in a sense. None of the objects of the different trusts are in conflict inter se and it is evident that though the settlor created five separate trusts he intended them to be managed commonly and their income utilised for general charity and not restricted to any particular purpose as such There are no restrictions imposed by any of the documents creating the trusts restraining the trustees from making changes in the mode of administration of the trusts nor is it stated any where that these trusts are never to be amalgamated and that they should be separately managed. But on the contrary by creating a trust by his will of 1941 in respect of his onethird share in the properties which trust was registered at No. B 143 the settlor in terms provided that the trustees would be entitled to make any changes in the wakf for better management thereof. The mode of succession to trusteeship in all the trusts is mostly common. Same set of trustees who are acting for one trust have also to act for another trust and one trustee was common for all the five trusts. This therefore is a clear indication that the trusts are inter linked and if such trusts are amalgamated by framing a common scheme it would be difficult to follow as to how this would not be in the interest of proper management or administration of the trusts. Again it cannot be said that this would run counter to the wishes or intention of the settlor who had created the said trusts. The amalgamation of the trusts under a common scheme would certainly result in reduction of over head expenses. Again it cannot be said that this would run counter to the wishes or intention of the settlor who had created the said trusts. The amalgamation of the trusts under a common scheme would certainly result in reduction of over head expenses. As for example the expenses which would be incurred in filing returns etc. separately in respect of each trust will considerably be curtailed as only one return will have to be filed before the Charity Commissioner and the tax authorities after getting the accounts audited. ( 10 ) THE second point concerns interpretation of sec. 50a (2) (a) of the Act which provides for amalgamation by framing of a common scheme by the Charity Commissioner after he publishes notice in the official gazette and also in two newspapers as earlier set out. The argument was that in the instant case though the notice was published in the official gazette and in two newspapers viz. Pratap and Gujaratmitra having wide circular in the Surat district both the newspapers were published in Gujarati language and none of them was English newspaper; while it was contended by Miss Shah that as provided by the clause (a) of sub-sec. (2) of sec. 50 one of the newspapers must be an English newspaper. Apart from the question as to whether it would be open now to the appellants to raise this question in view of the fact that as clearly stated in the judgment of the learned Extra Assistant Judge Surat in para 20 it was not disputed that the procedure required to be followed under sec. 50a of the Act had been followed while passing the impugned order by the Charity Commissioner we fail to read a mandate in the provisions contained in clause (a) of sub-sec. (2) to the effect that the notice has to be published in two newspapers that is one English newspaper and the other newspaper in the regional language. The words in the parenthesis after the words at least two newspapers in the following terms One in English and the other in the language of the region refer to the notice and not to the newspaper. Reading the same in any other way would be doing violence to the language and when there is no ambiguity in the language the question of interpreting the provisions in conformity with the possible intention of the legislature would not arise. Reading the same in any other way would be doing violence to the language and when there is no ambiguity in the language the question of interpreting the provisions in conformity with the possible intention of the legislature would not arise. In the instant case the notice which was published in Gujaratmitra which is a newspaper in Gujarati was published in English while the other notice in the other news paper that is Pratap was published in Gujarati. This therefore fully complies with statutory provisions. ( 11 ) THE next contention was that by framing a scheme and amalgamating the trusts some of the objects for which the various trusts were created have been frustrated or impliedly revoked and that this being against the tenets of Islam the amalgamation should be struck down. We have carefully scrutinised the objects for which the five trusts as earlier set out were created by the settlor from time to time in juxta position with the objects which are mentioned in the common scheme framed by the Charity Commissioner for the amalgamated trust. Seven objects are mentioned therein and we find that each one of the objects for which the said five trusts were created falls within the ambit of those seven objects except that one of the objects mentioned in the trust registered at No. B. 143 viz. of giving donations to Dini Madrassas in the towns of Makka Sharif and Madina Munavara as also to the poor Muslims of those places has been left out. But it appears that this was done because as per the existing restrictions imposed by the Reserve Bank of India it was not possible to transfer moneys to these places and that way the Charity Commissioner was justified in not including this object of trust No. B. 143 in the object of the common scheme for the amalgamated trust. But there is nothing to show that these restrictions are permanent and there can therefore be no harm in including this object subject to feasibility. We therefore propose to modify the scheme by adding one more object to this effect. But there is nothing to show that these restrictions are permanent and there can therefore be no harm in including this object subject to feasibility. We therefore propose to modify the scheme by adding one more object to this effect. Another object which according to Miss Shah was also frustrated was according to her the object of utilising two rooms on the ground floor of the property settled by the trust registered at No. B. 139 for the use of the charity trust of the father of the settlor and the trust which the settlor was proposing to create by his will which he in fact created as per the trust registered at No. B. 143. In our opinion strictly speaking this is not an object of the trust. This refers to the use of a part of the trust property for a particular purpose and would thus form part of administration of the trust and it would be for the trustees to see that as far as possible and practicable the wishes of the settlor are fulfilled in this respect. On amalgamation of the five trusts the question of utilising the second room for the purpose of trust No. B. 143 would not survive but if the trustees of the amalgamated trust wish to utilise the room for their office they should be permitted to do so. In the scheme at clause 19 while referring to the trust property being vested in the trustees it is provided that the trustees shall manage and administer the property in pursuance of the provisions of this scheme. We propose that as far as possible and practicable the trustees may permit the two rooms to be used for the said purposes viz. the first room to be used for the office purposes of the charity trust created by the father of the settlor and the second room for the office purpose of the amalgamated trust and in clause 19 therefore the following will be added: We thus find that none of the objects are frustrated or impliedly revoked. Miss Shah has not been able to show us as to how the scheme and amalgamation is against the precepts of Islam. She therefore fails in her third contention. Miss Shah has not been able to show us as to how the scheme and amalgamation is against the precepts of Islam. She therefore fails in her third contention. ( 12 ) SHE next urged that by virtue of the amalgamation one of the consequences would be that the funds which are specifically earmarked by the settlor for a particular purpose by creating a particular wakf would in fact be now used for a different purpose and thus the funds specifically dedicated for a specific purpose will be channelised for the general purposes of the impugned scheme and consequently for a different purpose resulting in frustration of the objects of the individual trust. We are unable to see any such frustration or any of the objects of the individual trusts being revoked by virtue of amalgamation. Amalgamation has to be done for the purpose of ensuring proper management and administration of the individual trusts. When separate trusts amalgamate and form into one compact trust they become part and parcel of the amalgamated trust. Amalgamation by its very nature provides for merger of various trusts into one compact trust and therefore instead of each trust utilising its funds for the objects of the particular trust in amalgamation funds of all the trusts are treated as funds of the amalgamated trust and they are to be used for the objects of the amalgamated trust. By doing so as we find in the instant case separate trusts are likely to be better managed and administered besides being more economically managed as compared to their being separately maintained. Amalgamation is a statutory power conferred on the Charity Commissioner. It is coupled with the power to frame a common scheme for the amalgamated trust which takes within its sweep the power with regard to appointment of trustees mode of succession clarification of objects etc which powers are wide enough permitting incorporation of provisions in the scheme even in conflict with or disregard to the wishes of the settlor. Amalgamation by its very nature results in the wiping out of the separate entity of the individual trusts and it is an essential concomitant of amalgamation that it further results in utilisation of the funds specifically settled for a particular trust for the purposes of the amalgamated trust in which have merged the other trusts besides the said particular trust. Amalgamation by its very nature results in the wiping out of the separate entity of the individual trusts and it is an essential concomitant of amalgamation that it further results in utilisation of the funds specifically settled for a particular trust for the purposes of the amalgamated trust in which have merged the other trusts besides the said particular trust. It is therefore an inevitable result flowing from statutory provisions vis a vis amalgamation by framing a common scheme and has thus a protective umbrella of a statutory enactment. ( 13 ) IN the instant case the very nature of the five trusts is such that it would be desirable that they are administered by amalgamation under a common scheme. As earlier stated the first three trusts viz. B. Nos. 139 140 and 141 are dependent on and are supplied funds to run those trusts by the last two trusts. The objects are also to a certain extent overlapping so far as these five trusts are concerned and generally speaking are for general charities. The said three trusts have to depend for their existence on the said two trusts. Thus the trusts themselves provide that two of the five trusts will feed the remaining two. There is already a provision for utilising the funds and income of these two trusts for the other three trusts. By amalgamation this would be done in a systematic and scientific manner so as to advance the cause of proper administration and management of trust. W do not see any objection to such a course. If the scheme as a whole is looked at it will be clear that it advances the cause of batter administration of each of the individual trusts; but that is sought to be achieved by providing a machinery for its centralised administration instead of piecemeal administration. ( 14 ) WE have already dealt with the question as to whether any of the objects of the separate trusts have been frustrated destroyed or revoked by framing the common scheme. Point No. 5 does not therefore survive and need not be dealt with over again. ( 14 ) WE have already dealt with the question as to whether any of the objects of the separate trusts have been frustrated destroyed or revoked by framing the common scheme. Point No. 5 does not therefore survive and need not be dealt with over again. ( 15 ) THAT will bring us to the last contention of Miss Shah and that was that in the instant case the instrument in respect of each trusts sets out a complete scheme for administration of the trust and when such is the case amalgamation of such a trust with another trust or trusts by framing a common scheme is ruled out and should not be resorted to. We do not agree with Miss Shah that the document in respect of each of the above trusts contains a complete scheme. The concerned document provides what may be termed a skeleton scheme and many contingencies have been overlooked. If we look at the scheme framed by the Charity Commissioner and compare the same with the provisions contained in the various instruments of the Trusts the difference is obvious and one gets an impression that the scheme framed by the Charity Commissioner is a scheme which provides for proper administration of the trust and in that sense it is a complete scheme; while in the documents creating the various trusts by the settlor a few aspects with regard to the administration of the trusts are touched here and there and nothing beyond. ( 16 ) WE are also unable to persuade ourselves to see any logic in this proposition of Miss. Shah. The amalgamation by framing a common scheme has no bearing with the instruments of the respective trusts. It solely concerns proper administration and management of the trust concerned. What emerges from sec. ( 16 ) WE are also unable to persuade ourselves to see any logic in this proposition of Miss. Shah. The amalgamation by framing a common scheme has no bearing with the instruments of the respective trusts. It solely concerns proper administration and management of the trust concerned. What emerges from sec. 50a of the Act is that the sole criterion is as to whether the amalgamation by framing a common scheme for the various trusts is in the interest of proper management or administration of the concerned trust or not and once after following the procedure prescribed the Charity Commissioner forms that opinion then he would be justified in amalgamating the trusts by framing a common scheme and viewed in this context a glance at the scheme under consideration would show that what it envisages is the merger of machinery set up to run several trusts in question but not obliteration of their objects. ( 17 ) WIDE powers have been conferred on the Charity Commissioner to amalgamate two or more trusts by framing a common scheme and the powers include powers to appoint trustees mode of appointment mode of filling in the vacancies and clarification of objects if necessary. In view of such powers it cannot be urged with any success that though the individual trusts in some cases provided five trustees and in some cases three trustees the Charity Commissioner went beyond his powers in making provision for appointment of nine trustees or that though the settlor had appointed trustees for life the Charity Commissioner in providing term of nine years with a provision for retirement of one third trustees every three years has exceeded his powers. Such a contention would not be available in the face of statutory provisions clothing the Charity Commissioner with wide powers in this behalf. ( 18 ) WE may lastly also refer to the argument made by Miss Shah which requires only to be stated to be rejected. She drew our attention to sec. Such a contention would not be available in the face of statutory provisions clothing the Charity Commissioner with wide powers in this behalf. ( 18 ) WE may lastly also refer to the argument made by Miss Shah which requires only to be stated to be rejected. She drew our attention to sec. 92 (1) (2) of the Code of Civil Procedure and stated that the contents thereof reveal provisions analogous to the ones embodied in secs 50 and 50a of the Act; that even in a Central Act like the Code of Civil Procedure even civil courts are not empowered to amalgamate various trusts by framing a common scheme resulting in frustration or revocation of any of the original objects or purposes of the trusts and that therefore no such power can be spelled out as vesting in the Charity Commissioner by virtue of sec. 50a of the Act. The provisions contained in sec. 92 (1) and (2) though they are in a sense analogous to the provisions contained in sec. 50 of the Act they are in no sense comparable to the provisions contained in sec. 50a of the Act which section starts with a non stance clause the starting words being Notwithstanding anything contained in sec. 50. . . . . . . . . Miss Shah drew our attention to sub-sec. (3) of sec. 92 of the Code of Civil Procedure and urged that the powers with regard to altering original purposes of an express or constructive trust created for public purposes of a charitable or religious nature and allowing the property or income of such trust or any portion thereof to be applied Cy pres in one or more of the circumstances enumerated therein were given by a specific provision in terms clothing the court with powers to alter the original purposes and that therefore in absence of any express provisions in sec. 50a clothing the Charity Commissioner with a power to alter the original purposes or objects of a trust he would be debarred from doing so. Here also we find that the argument is absolutely misconceived. The provisions of sub sec. (3) of sec. 92 are also in no way analogous to the provisions contained in sec. 50 A of the Act because they in terms refer to the application of Cy pres. Here also we find that the argument is absolutely misconceived. The provisions of sub sec. (3) of sec. 92 are also in no way analogous to the provisions contained in sec. 50 A of the Act because they in terms refer to the application of Cy pres. The section incorporates the doctrine of Cy pres and that can hardly provide comparison with the provisions of sec. 50a of the Act which deals with the subject or framing of a scheme and amalgamation of two or more trusts by framing a common scheme. How ever in the instant case as already earlier observed there is neither any frustration nor revocation nor destruction of any of the objects and the question is mooted by Miss Shah therefore has no legs to stand on. ( 19 ) THESE were all the points urged by Miss Shah in support of the appeal and she has not been able to substantiate any one of them with the result that the appeal substantially fails and deserves to be dismissed with costs except with regard to slight modification which we propose to make in the common scheme ex. 177. The result will be the following order: ( 20 ) APPEAL dismissed with costs including the costs of the Charity Commissioner. However the order of the learned Extra Assistant Judge Surat and the order of amalgamation and framing of the common scheme as per ex. 177 are confirmed subject to the modification to this effect that in clause 2 entitled (objects of the trust) object No. 8 will be added in the following words: (IF and when possible to give and distribute donations to Dini Madressas in Macca Sharif and Madina Munavar and the poor Muslims therein ). In clause 19 after wordsthe following will be added: (But to the extent it is possible and convenient to continue the office of the amalgamated trust under the common scheme framed in the front room on the ground floor of Limdaoli house property settled by trust No. B 139 bearing Sikka No. 4 survey No. 281 as also to continue in the adjoining room the office of the Waquifs deceased father Haji Aref Ismail Khan Charity Wakf Department to the extent possible and convenient in the very room.)Orders accordingly. .