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2006 DIGILAW 1474 (BOM)

DATTATRAY A s/o MAHADEO HIWARE v. ARJUN s/o SAMBHAJI SHINDE

2006-09-19

V.R.KINGAONKAR

body2006
ORAL JUDGMENT :- Rule. Rule made returnable forthwith and heard finally by consent of the parties. 2. "Jai Jawan Jai Kisan Shikshan Sanstha" Anala is a registered educational trust. Petitioners claim that they are elected trustees of the trust. They filed a change report No. 289 of 2001 which was pending for the enquiry before the Jt. Charity Commissioner, Latur. According to them, elections were held on 3rd July, 2001 and they were elected as trustees of the educational trust. Respondent Nos. 4 to 7 also claimed to be elected members of the same trust and filed a separate change report No. 307/2001. There are two groups of the members and admittedly inter se disputes are going on about legality of elections held in 2001. There are allegations and counter-allegations made against each other by the two groups, one comprising of the petitioners and another comprising of respondent Nos. 4 to 7. An enquiry (Enquiry No. 85/2001) pursuant to application under section 41-D of the Bombay Public Trusts Act, 1950 was also initiated on an application filed by respondent Nos. 4 to 7 alleging mismanagement of the trust, non-submission of accounts etc. While the enquiries were pending, respondent No.1 to 3 filed an application under section 41-A and 41-B of the Bombay Public Trusts Act, 1950 before the Asstt. Charity Commissioner, Osmanabad, against the petitioners as well respondent Nos. 1 to 7. On basis of such application, learned Asstt. Charity Commissioner started Enquiry No. 118/2003. 3. The respondent Nos. 1 to 3/original applicants alleged that there was mismanagement of the educational trust, the record was not properly maintained and the accounts were not audited. They further alleged that in May, 1998, the period of earlier elected members of the trust was over yet the President and the Secretary failed to conduct elections. They further submitted that the present petitioners, who were original respondents Nos. 1 to 3, prepared certain false record regarding the elections. They contended that the petitioners and the respondents Nos. 4 to 7 were indulging in disputes for their personal gains and the interest of the educational trust was being ignored. The respondents Nos. 1 to 3 sought intervention of the Asstt. Charity Commissioner and urged to appoint them and two from the non-applicants i.e. present petitioners and the respondents No.4 to 7 as members of a Committee so as to manage affairs of the trust. The respondents Nos. 1 to 3 sought intervention of the Asstt. Charity Commissioner and urged to appoint them and two from the non-applicants i.e. present petitioners and the respondents No.4 to 7 as members of a Committee so as to manage affairs of the trust. They urged that such appointed committee of five members may be allowed to conduct affairs of the educational trust. 4. The petitioners resisted the application on various grounds. They denied all the material allegations. They contended that the applicants had no locus standi, whatsoever, to file the application. They further averred that the application is filed at behest of the respondent Nos. 4 to 7. The respondents No.4 to 7. however, consented to the claim of the applicants by their separate written statement. 5. The learned Asstt. Charity Commissioner granted the application by his order dated 12th May, 2006 with a directions that Inspector Shri A. B. Waghmare, shall hold election of the managing committee from amongst members Nos. 1 to 30 shown in the original receipt book of the educational institution as submitted in change report No. 307 in the year 2001. The petitioners impugn the said order of the Asstt. Charity Commissioner. 6. Heard learned counsel for the parties. 7. Learned counsel Mr. R N. Dhorde, appearing for the petitioners with Mr. R L. Kute, Advocate, argued that the impugned order is outside the scope of powers available under section 41-A of the Bombay Public Trusts Act, 1950, and the learned Asstt. Charity Commissioner exceeded his jurisdiction. He argued that the appointment of a committee as per the prayers of the applicants is a disastrous proposition and could not have been allowed without any such legal provision in the Bombay Public Trusts Act, 1950. He pointed out that the applicants/respondents No. 1 to 3 had not made any prayer in their application for holding of elections. According to him, the respondents Nos. 1 to 3 had no locus standi to file such application. They were not admitted as members of the educational trust and have filed such application at the instance of the respondents Nos. 4 to 7. The learned counsel would submit that the entire record was submitted by the petitioners to the Jt. Charity Commissioner at Latur and this fact was brought to the knowledge of the Asstt. They were not admitted as members of the educational trust and have filed such application at the instance of the respondents Nos. 4 to 7. The learned counsel would submit that the entire record was submitted by the petitioners to the Jt. Charity Commissioner at Latur and this fact was brought to the knowledge of the Asstt. Charity Commissioner yet a contrary finding is recorded that they have failed to produce the record of the trust and adverse inference was drawn against them without any basis. It is contended, therefore, that the impugned order is bad in law and deserves to be quashed. On the other hand, learned counsel Mr. R. A. Dhengle, for respondent Nos. 1 to 3 and learned counsel Mr. V. D. Salunke, for respondent Nos. 4 to 7 have supported the impugned order. They contended that the Asstt. Charity Commissioner is empowered to give directions for smooth running of the trust and, therefore, giving of directions to hold elections is implicit part of the power available to him. 8. Herein, the questions to be determined are: (i) Whether the Asstt. Charity Commissioner has power to appoint a committee for administration of the trust, under section 41-A of the Bombay Public Trusts Act, 1950? (ii) Whether the Asstt. Charity Commissioner has the power to give directions to hold election of the public trust under section 41-A of the Bombay Public Trusts Act, 1950? 9. Before I proceed to consider the legal position, let it be noted that the term of the elected body as per the byelaws of the "Jai Jawan Jai Kisan Shikshan Sanstha" is of five years. Even assuming that the elections were held on 3rd July, 2001, about which there is a dispute between the petitioners and the respondents Nos. 4 to 7, then also it is explicit that the term of the elected body is over. The petitioners cannot continue to remain in the office without being elected. So also, the respondents Nos. 4 to 7 cannot claim to be holders of the office of the trust. There is a dispute about the fact as to whether the respondents Nos. 1 to J were allowed to become members of the educational trust or that they are merely henchmen of the respondents No.4 to 7. There is nothing on record to show that internal audit was regularly carried out. There is a dispute about the fact as to whether the respondents Nos. 1 to J were allowed to become members of the educational trust or that they are merely henchmen of the respondents No.4 to 7. There is nothing on record to show that internal audit was regularly carried out. There is dispute about transparency of the transaction of the educational trust. Needless to say, all is not well with the affairs of the said educational trust. There are disputes between the two groups and naturally it would probabilise alleged mismanagement of the trust. 10. Another significant aspect is that though affidavit was filed by respondent No.1 Arjun in the course of enquiry yet cross-examination was not asked for by the petitioners. The learned Charity Commissioner has observed that in spite of sufficient opportunity the petitioners have failed to conduct cross-examination of the applicants and hence the enquiry proceeded without their cross-examination. The learned Asstt. Charity Commissioner noticed that no meeting of the management committee and that of the general body was convened in accordance with the byelaws and the constitution of the educational trust. There were complaints about the affairs of the trust. 11. It appears, however, that the learned Asstt. Charity Commissioner committed error while drawing an adverse inference regarding non-production of the documents by the petitioners. The petitioners had explained that the relevant documents were in the custody of Jt. Charity Commissioner, Latur. The learned Asstt. Charity Commissioner could have verified the factual position before raising any adverse inference. The learned Asstt, Charity Commissioner has observed that the respondents Nos. 4 to 7 had filed original receipt book of the educational institution in enquiry No. 307/2001 and the members shown as per the receipt book would be the eligible voters from amongst whom the election should be conducted. These are un-warranted observations of the learned Asstt. Charity Commissioner. The right of franchise could not have been predetermined unless appropriate voters list was drawn by the Election Officer. 12. The learned Asstt. Charity Commissioner simply allowed the application without giving specific directions whether the committee of five members as sought by the applicants was constituted or not. The blanket order by which the application came to be allowed is likely to be interpreted favourably by the respondents Nos. 1 to 3 and may be implemented if not set aside. The learned Asstt. Charity Commissioner simply allowed the application without giving specific directions whether the committee of five members as sought by the applicants was constituted or not. The blanket order by which the application came to be allowed is likely to be interpreted favourably by the respondents Nos. 1 to 3 and may be implemented if not set aside. So, it is first necessary to dispel any legitimate doubt about constitution of such committee under the impugned order. 13. Section 41A of the Bombay Public Trusts Act, 1950, deals with power of the Charity Commissioner to issue directions for proper administration of the trust. Then, there are certain powers available under section 41B to initiate enquiries with regard to the charitable or public trust. The impugned order is passed in the exercise of powers available under section 41A of the Bombay Public Trusts Act. Section 41A(1) reads as under: "Section 41A. Power of Commissioner to issue directions (for proper administration of the trust) : (1) Subject to the provisions of this Act, the Charity Commissioner may from time to time issue, directions to any trustee of a public trust or any person connected therewith, to ensure that the trust is properly administered, and the income thereof is properly accounted for or duly appropriated and applied to the objects and for the purposes of the trust; and the Charity Commissioner may also give directions to the trustees or such person if he finds that any property of the trust is in danger of being wasted, damaged, alienated or wrongfully sold, removed or disposed of." . 14. A bare reading of Sub-Clause (1) of section 41A would make it manifest that there is no specific power enumerated therein to make appointment of a committee for running of the trust. The learned Asstt. Charity Commissioner appears to have usurped such power without there being any specific provisions contained in section 41A. It would be detrimental to the interest of the public trust to read such a power with the Charity Commissioner in the provisions of section 41A. For, the Charity Commissioner may induct some persons who have no concern with the objects of the trust and they would be custodians of the properties and the affairs thereof. 15. It would be detrimental to the interest of the public trust to read such a power with the Charity Commissioner in the provisions of section 41A. For, the Charity Commissioner may induct some persons who have no concern with the objects of the trust and they would be custodians of the properties and the affairs thereof. 15. Learned counsel Shri R. N. Dhorde, seeks to rely upon Ramdas Shivaji Sakhare and others vs. Karuji Dago Ambade and others, 2002(2) Mh.L.J. 304 and Asaram Bhimrao Shinde and others vs. State of Maharashtra and others, 2001(4) Mh.L.J. 548 . In both these matters, it is held that section 41A does not empower the Charity Commissioner to remove or to appoint any new committee for the administration of the trust. The purpose of section 41A is to ensure that the administration of the trust is properly carried out and there is no mismanagement. The expression " issue direction to any trustee of a public trust or any person connected therewith" as used in section 41A, would show that the directions can be issued only against trustees or the persons connected with the trusts. In the present case, the status of the respondent Nos. 1 to 3 as members of the educational trust was seriously disputed. The learned Asstt. Charity Commissioner did not enquire about the status of the respondents No.1 to 3 and straightway proceeded to allow their application. This approach of the Asstt. Charity Commissioner is improper and erroneous. Consequently, I have no hesitation in holding that the Asstt. Charity Commissioner cannot appoint a committee and the application could not have been allowed to the extent of such appointment. 16. So far as the directions to hold election is concerned, it need not be reiterated that the term of the Office is already over and, therefore, the elections are due in accordance with the byelaws of "Jai Jawan Jai Kisan Shikshan Sanstha ". Disputes are going on between two groups of the members. The accounts are also required to be properly verified. Hence, giving directions to hold the elections is quite legal and proper. There is nothing in section 41A of the Bombay Public Trusts Act, 1950 to prohibit the Asstt. Commissioner from giving directions for holding of elections which are due. The directions are to be given to the trustees and the members connected with the affairs of the trust. Hence, giving directions to hold the elections is quite legal and proper. There is nothing in section 41A of the Bombay Public Trusts Act, 1950 to prohibit the Asstt. Commissioner from giving directions for holding of elections which are due. The directions are to be given to the trustees and the members connected with the affairs of the trust. The power to give such directions is implicit in section 41A. 17. A single Bench of this Court in Nathmal Kisanlalji Goenka and another vs. Asst!. Charity Commissioner, Akola, 1994 Mh.L.J. 303 has held that the Charity Commissioner is empowered to issue directions to the trustees to hold election in the interest of administration and proper management of the trust under section 41A of the Bombay Public Trusts Act, 1950. In the given case, the Asstt. Charity Commissioner had partly allowed the application directing the· society to hold its election but had rejected the prayer for holding election by secret ballot. This Court, however, granted the prayer for holding of elections by secret ballot. The learned Asstt. Charity Commissioner was justified, therefore, in directing holding of election of the educational trust. The appointment of Inspector Shri A. B. Waghmare as Election Officer is also legal and proper since he is an independent Officer and can be expected to conduct the election fairly. The Asstt. Charity Commissioner was wrong, however, while giving directions that the election shall be conducted from amongst the members at serial Nos. 1 to 30 in original receipt book submitted in change report No. 307 of 2001. The eligibility of voters could not have been pre-determined without proper enquiry. Such direction of the Asstt. Charity Commissioner deserves to be appropriately modified. 18. In view of the foregoing discussion, it goes without saying that the Asstt. Charity Commissioner was justified in giving directions to hold elections although the application could not be allowed without clarification regarding request for appointment of the committee as requested for by the respondents No. 1 to 3. The finding of the Asstt. Charity Commissioner that the election should be held from amongst members shown at serial Nos. 1 to 30 in the original receipt book submitted in the enquiry of change report No. 307/2001 also deserves to be quashed. 19. In the result, the petition is partly allowed. The finding of the Asstt. Charity Commissioner that the election should be held from amongst members shown at serial Nos. 1 to 30 in the original receipt book submitted in the enquiry of change report No. 307/2001 also deserves to be quashed. 19. In the result, the petition is partly allowed. The impugned order to the extent of direction to hold the election from amongst members shown at serial Nos. 1 to 30 in the receipt book of the educational trust namely "Jai Jawan Jai Kisan Shikshan Sanstha" submitted in the change report No. 307 of 2001, is quashed. The impugned order only to the extent of directions for holding of elections is maintained. The Election Officer-Inspector Shri A. B. Waghmare, shall verify the list of eligible voters, ascertain as to who are the legally admitted members of the trust and prepare a provisional voters list within two months from the date of this order and thereafter shall declare election programme before 14th January, 2007 and conduct the elections within one month thereafter. He shall submit his report to the Asstt. Charity Commissioner, accordingly. No order as to costs. Petition partly allowed.