R. P. Kapoor (Dr. ) & others v. Charity Commissioner, Maharashtra State & others
1988-09-07
T.D.SUGLA
body1988
DigiLaw.ai
JUDGMENT - T.D. SUGLA, J.:---Shri Janardhan for the respondents (original plaintiffs) raised a preliminary objection. According to him the appeal as filed is incompetent. It is, therefore, proposed to consider the preliminary objection first. It is stated that a complaint/application was filed in this case before the Joint Charity Commissioner who by his order dated 27th July, 1982 passed under section 50-A of the Bombay Public Trusts Act, 1950 finally disposed the complaint/application. Appeal filed against that order by the appellants (original defendants) was also disposed of by the Appellate Court vide order and judgement dated 13th June, 1983 finally. In the above view of the matters appeal under section 100 of the Code of Civil Procedure and not an appeal from order under section 104 of the Code against the judgement and decree of the Appellate Court would be competent. The learned Counsel for the appellate fairly conceded that strictly speaking her client should have filed appeal under section 100 of the C.P.C. and not an appeal under section 104 of the C.P.C. treating the appellate judgment as an order. She, however, contended that the preliminary objection raised was very much belated particularly as it was not even raised at the stage of admission of this appeal as an appeal against order under section 104 of the C.P.C. on 1st August, 1983 by this Court and should not therefore be entertained at this late stage. Besides, she submitted that the objection was too technical. The Court has direction to convert the appeal against order into a regular appeal under section 100 of the Code and direct the appellant to pay the difference in Court fees. She placed reliance on the Bombay High Court decisions in the case of (Abdul Gafur v. Md.
Besides, she submitted that the objection was too technical. The Court has direction to convert the appeal against order into a regular appeal under section 100 of the Code and direct the appellant to pay the difference in Court fees. She placed reliance on the Bombay High Court decisions in the case of (Abdul Gafur v. Md. Mukaram)1, A.I.R. 1932 Bombay 77, at page 78 and the Supreme Court decision in the case of (The Reliable Water Supply Service of India (P.) Ltd. v. The Union of India and others)2, A.I.R. 1971 S.C. 2083 at pages 2084 and 2085 and the Goa High Court decision in the case of (Paixao Fernandes and another v. Amelia, de Souza and another)3, A.I.R. 1977 Goa, Daman Diu 8 at page 9 in support of the proposition that this Court has discretion to convert an appeal against order under section 104 of the C.P.C. into an appeal under section 100 of the C.P.C. Referring to section 107 of the Code of Civil Procedure, she urged that so far as the powers of this Court were concerned those were identical both in appeal filed under section 100 of the Code and an appeal against order filed under section 104 of the Code. 2. Evidently it is a case of bona fide mistake on the part of the appellants. They should have filed regular appeal under section 100 of the Code of Civil Procedure rather than an appeal against order under section 104 of the Code. However, to some extent, the respondents have also contributed to the continuance of this mistake inasmuch as even at the time of the admission of the appeal this objection was not raised. The appeal was filed within time and if the mistake was pointed out at that stage by the Registry or the respondents, regular appeal under section 100 of the Code could have been filed which would have been in time. Having regard to the above stated facts and keeping in view the decisions relied upon, I am of the view that it is a fit case for converting the appeal against order under section 104 to regular appeal under section 100 of the Code of Civil Procedure.
Having regard to the above stated facts and keeping in view the decisions relied upon, I am of the view that it is a fit case for converting the appeal against order under section 104 to regular appeal under section 100 of the Code of Civil Procedure. This appeal is accordingly converted from appeal against order under section 104 to regular appeal under section 100 of the C.P.C. and the appellants are directed to pay difference in the Court fees so as to enable the office to regularise the matter. 3. As regards merits, the material facts are not very much in dispute. A little before 1963, an association named Versova Welfare Association was registered under the Society's Registration Act. It started a school in June 1962. A trust was subsequently brought into existence for very similar purposes and it was registered with the Deputy Charity Commissioner, Greater Bombay on 21st February, 1963. Clause 3 of the trust deed enumerates 8 objects of the trust. They primarily relate to the running of schools and to the advancement of education in general. In the original trust deed, the minimum number of trustees was given as five and the maximum as nine. It was also stipulated that in the trustees there should be one nominee of the Versova Welfare Association. Clause 8 provided for the appointment of new and additional trustees in case of death, insolvency, unfitness, refusal, resignation, incapability or such other circumstances disabling the trustees from working as such. The trustees have also powers to appoint additional trustees, so as not to exceed the maximum number of trustees. 4. The applicants filed the suit application being Application No. 16 of 1982 in January 1982 under section 50-A of the Bombay Public Trusts Act, 1950. Grounds given in the application for suggesting a new scheme broadly were that the wishes of the founders have been flouted by the present trustees. There is no provision in the trust deed for retirement and re-election of trustees. In the absence of provisions for accountability to the public the trustees fail and neglect their duties to effectively conduct the activities of the trust thereby causing heavy losses to the trust property and hardship to the public.
There is no provision in the trust deed for retirement and re-election of trustees. In the absence of provisions for accountability to the public the trustees fail and neglect their duties to effectively conduct the activities of the trust thereby causing heavy losses to the trust property and hardship to the public. It was contended that the proposed scheme would take care of all the deficiencies and provide checks and balances and be an effective instrument to function the trust activities properly. 5. However, the learned Joint Charity Commissioner framed these issues for determination, viz.--- 1) Whether it is necessary, expedient and in the interest of the trust to settle a scheme ? 2) Whether it is necessary to appoint additional trustees ? 3) What scheme should be settled ? and by his judgement and order dated 27th July, 1982 determined all the three issues in the affirmative and in favour of the applicants. 6. The appellants (some of the original opponents) carried the matter in appeal. The Appellate Court, i.e. the learned City Civil Court Judge, after going through the record and after heading rival contentions came to the conclusion that the real dispute between the parties was as to who should be in control of the suit trust. The suggestion made by the original applicants that instead of permanent trustees there should be periodical elections of the trustees so that the electoral college would judge the performance of the management etc. was not accepted by the Joint Charity Commissioner and that the said conclusion was not even challenged before him. However, after going through the new scheme settled, he more or less accepted the appellants' case that there was no material difference between the original scheme and the new scheme. On the contrary many of the provisions made in the new scheme framed by the Charity Commissioner were to be found in the Act itself. According to him the whole dispute was regarding (1) whether the number of the trustees was rightly increased and (2) whether the four out of the six applicants were appointed trustees justifiably. For reasons given in paragraph 3, sub paragraph (2) and (3) of paragraph 4 and paragraph 5 of his judgement, he agreed with the Joint Charity Commissioner on all the issues.
For reasons given in paragraph 3, sub paragraph (2) and (3) of paragraph 4 and paragraph 5 of his judgement, he agreed with the Joint Charity Commissioner on all the issues. Regarding the contention that the old trust deed was comprehensive and the allegations made by the applicants were frivolous and unsubstantiated and that the applicants were interested persons trying to get into the trust for personal gains, the learned Judge observed that assuming all that was correct the same would not come in the way of the Charity Commissioner framing a new scheme. He also felt that running of coaching classes, even if it was true, did not come in the way of any one's acting as a trustees of a trust conducting an educational institution. However, for reasons given in paragraph 8 of his judgment, he modified the new scheme framed by the Charity Commissioner as he found that the trusteeship was unnecessarily restricted to Hindu and that the school run by the trust being not a temple, the provisions for a collection box in the school was not warranted. 7. Both the learned Counsel for the appellants Miss Paranjape and Shri Janardhan for the main respondent, it must be stated in fairness to them, had prepared their respective cases well and rendered good and commendable assistance to the Court in understanding and deciding the issues involved in this appeal. For the sake of bravity instead of referring to their submissions separately and then dealing with them, it is proposed to deal with the rival contentions in the course of the judgment. 8. The first issue that requires consideration pertains to the purport and scope of section 50-A(1) of the Bombay Public Trusts Act, 1950 (hereafter referred to as “the Act”), because the application was admittedly made by the applicants (respondents herein) under section 50-A(1) of the Act and the Joint Charity Commissioner had passed his order on 27th July, 1982 also under that sub-section. The sub-section reads as under:--- “50-A(1).
The sub-section reads as under:--- “50-A(1). Notwithstanding anything contained in section 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 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 as to do, frame a scheme for the management or administration of such public trust.” The sub-section can be broadly divided into five parts: (i) notwithstanding anything contained in section 50; (ii) 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 (iii) 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; (iv) the Charity Commissioner may, (v)(a) if after giving the trustees of such trust due opportunity to be heard, (b) he is satisfied that it is necessary or expedient so to do; pass a scheme for the management or administration of such public trust. The admitted position in this case is that an application was filed by certain persons in terms of the 3rd part to the Charity Commissioner. He has given due opportunity to the trustees in terms of part (v)(a) and framed a scheme for the management or administration of the suit public trust in terms of part (iv). Thus, what is in dispute is only admitted aspect, viz., part (v)(b), i.e. whether he was or could be said to have been satisfied that it was necessary or expedient to frame a scheme for the management or administration of such public trust. 9. This aspect of the matter can be judged from two different angles viz.,--- (1) whether his satisfaction which is subjective and is not justicable is perverse?
9. This aspect of the matter can be judged from two different angles viz.,--- (1) whether his satisfaction which is subjective and is not justicable is perverse? And (2) whether the new scheme framed by him really serves any purpose? For examining the case from the former point of view one has to consider the nature of the application and the allegations made therein which impressed the Charity Commissioner. On the face of it the allegations are against the manner in which the management of the trust was carried and not against the provisions in the original trust deed. In the circumstances it is desirable to deal with the allegations as a result of which the Joint Charity Commissioner was satisfied and the leaned City Civil Court Judge agreed with him. These are found in paragraph 7 of the Charity Commissioner's judgment and paragraphs 4 and 5 of the judgement of the City Civil Court Judge. The Joint Charity Commissioner has given two reasons in support of his satisfaction as required as per part (v)(b). These are as under:--- “(1) I have carefully gone through the said document and I find that the provisions of the said deed are not sufficient to manage the day to day affairs of the trust and (2) There are complaints against the trustees regarding the management and I feel that unless a proper scheme is settled perhaps the management would not be properly carried out and, therefore, a scheme is necessary.” The first reason given by him is too general and vague as he has not indicated as to what where the provisions needed for proper management of the trust which were not there in the old scheme. Therefore, whether or not the provisions of the old trust deed were sufficient to manage the day to day affairs of the trust property could be judged, if at all, in the light of the scheme he ultimately framed. The second reason given is equally vague. Firstly because he has used the word “perhaps” before the further expression “ the management would not be properly carried out indicating mere doubt as distinct from conviction. Secondly the nature of the complaints the cause of his doubt is not at all indicated in the judgment.
The second reason given is equally vague. Firstly because he has used the word “perhaps” before the further expression “ the management would not be properly carried out indicating mere doubt as distinct from conviction. Secondly the nature of the complaints the cause of his doubt is not at all indicated in the judgment. The complainants as stated by me earlier refer to the high handedness on the part of the trustees despite the proper provisions in the deed of trust. On the contrary reading his judgment as a whole one gets the impression that there was nothing basically wrong with the old deed of trust. I am inclined to take this view because the Charity Commissioner referred to two aspects which were really vital for the scheme, viz., the mode of succession of the trustees and the increase in the number of the trustees. However, he ultimately concluded vide paragraph 9 of his judgment that mode of succession contemplated under the old scheme was satisfactory. As regards the provision for increase in the number of trustees from 9 to 13, this Court was told that by a subsequent resolution the board of trustees had already increased the number of trustees to 15. This fact is found noted by the learned City Civil Court Judge in paragraph 3 of his judgment. Therefore, so far as the judgment of the Charity Commissioner is concerned, I find no acceptable material in support of his conclusion that it was necessary or expedient to frame a scheme etc. 10. Examining the new scheme vis-a-vis the provisions in the existing deed of trusts, it is seen that the modifications envisaged under the new scheme are of two kinds, viz. (1) certain statutory provisions which were in any event applicable to public trusts have been specifically made part of the new scheme. This modification, to my mind, is of no consequence whatsoever. (2) The second kind of modifications are in the nature of provisions:--- (a) of atleast one meeting every three months (Clause 11) as against atleast one meeting in one calendar month (Clause 12 in the trust deed), (b) tenure of chairman as one year (Clause 10) as against flexible tenure under the old scheme (Clause 12), (As a matter of practice, however, the chairmans have resigned and been removed occasionally. For instance Dr. Purandhare himself was removed in May, 1982).
For instance Dr. Purandhare himself was removed in May, 1982). (c) absence of provision for a managing trustees, (d) coram for the meeting fixed at 7 as against 3 if the number of the trustees was 5 and 5 if the number of the trustees was more than 5 under the old scheme, (e) maximum number of trustees increased from 9 to 13. (However, this is factually wrong as it is on record that by a resolution the provision in this regard under the old scheme itself was amended and the maximum number of trustees was raised to 15.), (of) Clause 9 of the new scheme was stated to be not exactly analogous to section 47 of the Act, (g) provision of the circumstances in which an existing trustee shall cease to be a trustee (Clause 9 of the new scheme). As against this Clause 8 of the old scheme was silent but the law could take its own course. (h) provision for meeting on requisition (Clause 12) as against a slightly different provision in Clause 12 of the old scheme, (i)(j)(k)(l) provisions regarding office of the trust, minute book to be maintained, to be read over and certified, resolution could be passed by circulation and the liabilities of the trustees (Are too general and in fact do not require specific provisions), (m) (n) restriction as regards the caste of the trustees and collection box (deleted by the learned City Civil Court Judge). 11. If the changes envisaged in the new scheme referred to above are indicative of defects considered by the Joint Charity Commissioner in the old scheme, I am afraid that I will have to hold that the defects were, if at all, so trifle that action on the part of the Charity Commissioner under section 50-A was not at all justified for which the condition precedent was his satisfaction that it was necessary or expedient to frame a scheme for the management or administration of such public trust. 12. Thus as rightly pointed out by the learned City Civil Court Judge the real dispute between the parties has been that of clash of personalities rather than of principles. The applicants wanted all or a few of them to be appointed as trustees and succeeded partly. The appellants (original opponents) hotly contested the applicants.
12. Thus as rightly pointed out by the learned City Civil Court Judge the real dispute between the parties has been that of clash of personalities rather than of principles. The applicants wanted all or a few of them to be appointed as trustees and succeeded partly. The appellants (original opponents) hotly contested the applicants. The pertinent questions, to my mind, thus are--- (1) Whether section 50-A can be resorted to for appointing new trustees in case of vacancies not filled by the trustees themselves for quite some time assuming the trustees were bound to fill in the vacancies is within a reasonable time in view of the circular relied upon by the other side in this regard ? (2) Whether it will not be more appropriate in a case like this to appoint new trustees, if at all, after adjudicating upon the application by almost the same set of applicants under section 41-D of the Act ? and (3) Whether in a case like this it would be enough for the Charity Commissioner to consider the applicants, whether one or more of them, were good enough to be appointed as trustees or whether he should make an honest endeavour to find out the best suitable public spirited persons from the locality with any appropriate method and appoint them as trustees? Before dealing with those questions, it is desirable to deal with in brief the reasons given by the learned City Civil Court Judge in justification of the Charity Commissioner's framing the new scheme. 13. The reasons, as stated earlier, are found in paragraphs 4, 5 and 6 of his judgement. Briefly stated these are:--- (1) The existing trustees did not care to fill in the vacancies of the trustees for quite some time. (2) Dr. Purandhare (who was the founder of the trust) filed as affidavit indicating that even his complaints to the then chairman through correspondence were not attended to and even circulated among the other trustees. Mainly from the above 2 facts the learned City Civil Court Judge concluded that if the management was conducted in this manner the trust needed a new scheme. Hence he opined--- “If the management was conducted in this manner, it is easy to understand why the inclusion of some inquisitive members would be treated as an attempt to disrupt the harmonious working of the managing committee.
Hence he opined--- “If the management was conducted in this manner, it is easy to understand why the inclusion of some inquisitive members would be treated as an attempt to disrupt the harmonious working of the managing committee. In my opinion, one man doing everything and others being indifferent to or ignorant of what is being done by him is the worst way of carrying out the endeavour of a public trust. Though the learned Charity Commissioner has not chosen to give to the suit trust periodical elections which constitute an essential element of democracy the inclusion of members healthily suspicious of the acts done by the brother office bearers, is in my opinion, an essential feature of management of public concerns.” In this context it requires to be mentioned that the first fact taken into consideration by the learned City Civil Court Judge appears to be correct. The second fact, however, is not so. For this purpose it is desirable to mention that the correspondence referred to in Dr. Purandhare's affidavit pertains to the period from November 1981, i.e. his correspondence with the then chairman of the trust Shri Shadilal Jain. Before this application was filed in January 1982, Dr. Purandhare had taken over as chairman of the trust in November 1981. Thus what happened prior to 1981 would hardly have any material bearing on the functioning of the trust in January 1982 when Dr. Purandhare himself was the chairman. No doubt subsequently Dr. Purandhare also joined the applicants, but that was after he was removed from the chairmanship of the suit trust on 16th May, 1982. All this Justifies the learned City Civil Court Judge's impression that the dispute was more a matter of clash of personalities than principles and in fact principles regarding succession and election of the trustees about which something could really be said were not seriously pressed by the applicants and in any event not incorporated in the new scheme. Since non-filing of the vacancies of the trustees forms part of the three pertinent questions formulated by me to be decided in this case, the same need not be separately dealt with herein. 14.
Since non-filing of the vacancies of the trustees forms part of the three pertinent questions formulated by me to be decided in this case, the same need not be separately dealt with herein. 14. Coming to the three pertinent questions posed by me in the earlier paragraphs of this judgment, on the face of it I do not think that recourse can be had to section 50-A for the mere purpose of filling in of vacancies of trustees not filled in by the existing trustees for quite some time. On the other hand particularly having regard to the nature of complaints against the existing trustees the proper course would have been to resort to section 41-D and section 47 of the Act rather than section 50-A. Here again I would agree with the learned Counsel for the appellants without hesitation that the appointment of the new trustees has to be made objectively by finding the best suited public spirited persons and not just choose one or more of the appellants /complainants. Record clearly shows that the Charity Commissioner did not take any steps in this regard. He has simply referred to the brief bio-data of the appellants and appointed four of them as trustees. This is certainly not a satisfactory manner in which the trustees should be appointed. Moreover complaint filed under section 41-D is still pending. Continuing the present trustees under the new scheme framed under section 50-A without disposing the said complaint might be an impediment in the way of proper adjudication of the complaint particularly after this Court's decision. In this view of the matter. It is considered desirable to set aside the judgement and order of the Charity Commissioner as well as that of the learned City Civil Court Judge. The nature of the complaint is different which requires to be dealt with in accordance with the provisions of section 41-D and section 47 of the Act rather than section 50-A. 15. Before concluding, reference may briefly be made to the comments in the Commentary, 'Scott on Trust”, 1939 Edition, Volume 1, page 566. This was relied upon by the Counsel for the respondents for the purpose of showing that the Court can appoint trustee or trustees in certain circumstances. There is no dispute about such a power. It is not necessary to refer to the commentary at length.
This was relied upon by the Counsel for the respondents for the purpose of showing that the Court can appoint trustee or trustees in certain circumstances. There is no dispute about such a power. It is not necessary to refer to the commentary at length. The Gujarat High Court decision in the case of (Bipinchandra Purshottamdas Patel and others v. Jashwant Lalbhai Naik and another)4, 1974(15) Guj.L.R. 411 generally refers to and defines the scope of section 50-A(1). According to me, the manner in which I have dealt with the issue is in accordance with the manner Gujarat High Court dealt with the issue. Comments of the learned commentator Shah in Shah on the Bombay Public Trusts Act, 1950 6th Edition page 475 also do not carry the case of the respondents further. In this context the learned commentator has, while referring to the words “necessary” and “expedient” observed at page 479--- “ “Necessary” and Expedient” : Meaning of:-This is a power conferred under the Act in a special contingency when it is necessary or expedient to frame a scheme in the interest of a public trust. Recently the Gujarat High Court explained the words---'Necessary' and 'Expedient'. The term 'necessary' means what is indispensable needful, essential. The term has a precise meaning and connotation and there is nothing vague or nebulous about it. The term 'expedient' has no doubt a wide ambit and gives large scope to the exercise of power. But this expression has also a recognised connotation in the eye of law. The dictionary meaning of the term 'expedient' that would in the context in which it is used and which a most fitting is 'useful for affecting a desired result : fit or suitable for the purpose, (Jayantilal Parshottamdas Kapali v. State of Gujarat)5, (1970)11 G.L.R. 403". No doubt the legislature has intentionally and advisedly not referred to any nature of the enquiry specifically and the Charity Commissioner is given discretion to make enquiry in any manner he deems fit. However, it cannot possibly be disputed that before he proceeds to frame a scheme for the management or administration of such trust, he has to satisfy himself that it is necessary or expedient so to do in public interest. This is what has been found wanting in this case for reasons given hereinabove.
However, it cannot possibly be disputed that before he proceeds to frame a scheme for the management or administration of such trust, he has to satisfy himself that it is necessary or expedient so to do in public interest. This is what has been found wanting in this case for reasons given hereinabove. At page 488 of the Commentary, the learned Commentator has given 15 grounds for framing a scheme. Atleast the judgments of the lower authorities do not indicate that this case falls under any of those grounds. 16. In the result, the appeal is allowed and the impugned order and judgment of the learned Judge, City Civil Court and that of the Charity Commissioner are set aside with no order as to costs. Appeal allowed. -----