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2020 DIGILAW 997 (BOM)

Eknath Tukaramji Pise v. Rama Kawaduji Bhende

2020-09-17

ANIL S.KILOR

body2020
JUDGMENT : 1. The dismissal of the proceeding under Section 41-D (5) of the Bombay Public Trust Act, 1950 (The Act, 1950) vide judgment and order dated 30th January, 2014 passed by the District Judge-II, Nagpur upholding the removal of the appellants from the posts of President, Secretary and Trustees of the Trust, by the Joint Charity Commissioner, Nagpur vide its judgment and order dated 3rd April, 2012, has been questioned in the present appeal. 2. The facts leading to the present appeal are that : The appellant is the founder trustee of Shubham Bahuuddeshiya Shikshan Sanshta, Waddhamana, Nagpur and was the President of the said Trust, which was registered under the provision of Bombay Public Trust Act, 1950, (hereinafter in short “the Act, 1950”). 3. The appellant No.2 is the Headmistress of the school Swami Vivekanand School, Waddhamana, Nagpur run by the trust and ex-officio Secretary of the School Committee of the said school, constituted under the provisions of Maharashtra Employees of Private School (Regulations) Act, 1977. 4. The respondent nos.1 to 7 are claiming to be trustees whereas the appellants dispute the same. 5. The respondent nos.1 to 7 filed an application under Section 41-D against the appellants and one Shri Nandu Namdeo Jaipurkar, the respondent No.8, for removal of them from their respective posts, which they were holding in the said trust. 6. The allegations against the appellants and respondent No.8 were of misappropriation of non-salary grant and amount of fees of the students and procurement of hand loan without any resolution of the Managing Committee and in violation of Section 36(A) of the Act, 1950. 7. The appellant and the respondent No.8 resisted the application under Section 41-D of the Act 1950, by filing joint reply and thereby denied all the allegations made in the said application. 8. On 25th November, 2009, the learned Joint Charity Commissioner framed charges on the basis of pleadings. The charges are as follows: (1) That you have misappropriated the amounts of the grants and other such amount from the fees of the students and utilised it for your own purposes and/or dealt with such amount improperly. (2) That you have also committed malfeasance and deliberately neglected to discharge the duty and accordingly you shall be tried by me for above said purpose. 9. (2) That you have also committed malfeasance and deliberately neglected to discharge the duty and accordingly you shall be tried by me for above said purpose. 9. Both the parties led oral evidence considering which alongwith documentary evidence the learned Joint Charity Commissioner held that the charge No.2 was partly proved against the appellants and accordingly, in exercise of powers under Section 41-D of the Act 1950, the appellants were removed from the posts of President and Secretary, held by them, vide judgment and order, dated 3rd April, 2012. 10. Feeling aggrieved by the said judgment and order, the appellants preferred an application under Section 41-D(5) of the Act, 1950, on various grounds mentioned in the said application. 11. In this proceeding the respondent Nos.1 to 7 filed cross objection under Order 41, Rule 22 of the Code of Civil Procedure seeking thereby the findings that the charge No.2 is proved against the appellants, which was rejected. 12. The learned District Judge-II, Nagpur dismissed the Regular Civil Application No.17 of 2012 filed by the appellants vide its judgment and order dated 30th January, 2014, which is assailed in the present appeal. 13. Heard Shri Shambharkar, learned counsel for the appellants, Shri Jibhkate, learned counsel for the respondent Nos.1, 2, 5 and 7, learned Senior Advocate Shri R.L. Khapre, assisted by Shri D.R.Khapre, learned counsel for the respondent Nos.3 and 4, learned A.G.P for the respondent No.9. None for the respondent nos. 6 and 8, though served on merit. 14. Shri Shambharkar, learned counsel for the appellants, submits that both the authorities below have failed to consider that, after removal of the respondent Nos.1 to 7 as Trustees, they cannot maintain the application under Section 41-D of the Act 1950 against the appellants or even they cannot maintain it as persons having interest in the Trust. Thus, according to him, the application under Section 41-D of the Act 1950 is itself not maintainable. 15. He further submits that charge No.2 framed by the learned Joint Charity Commissioner is vague because of which sufficient opportunity could not get to the appellants to meet the said charge and therefore, the whole proceeding suffers from violation of principles of natural justice. 16. 15. He further submits that charge No.2 framed by the learned Joint Charity Commissioner is vague because of which sufficient opportunity could not get to the appellants to meet the said charge and therefore, the whole proceeding suffers from violation of principles of natural justice. 16. He further submits that the charge of malfeasance and misfeasance attract the criminal liability and therefore, it is mandatory to make specific pleadings to that effect with supporting evidence to prove such charge beyond reasonable doubt. He draws my attention to the findings recorded by the both the Courts-below and submits that the said charge has not been proved by the respondent Nos.1 to 7 beyond reasonable doubt and therefore, removal of the appellants as President and Secretary is contrary to the well settled provision of law. In support of this, he has placed reliance on the judgment of this Court in a case of Mukund Waman Thatte Vr. Sudhir Parshuram Chitale and others reported in 2012 (3) Mah. Law Journal 322. 17. He points out that the appellant No.2 is the Headmistress of the school run by the Trust and she is the ex-officio Secretary of the School Committee and not the Secretary of the Trust. Thus, he submits that under Section 41-D, there is no power to remove any employee of the school or Secretary of the School Committee which is constituted under the provision of Maharashtra Employees of Private School (Conditions of Service) Regulation Act, 1977. 18. Per contra, learned Senior Advocate Shri Khapre appearing for the respondent Nos.3 and 4, supports both the judgments and orders passed by the learned Joint Charity Commissioner and the learned District Judge-II, Nagpur. He draws attention to the findings recorded by both the Courts-below to point out that the respondent No.1 had taken hand loan from the trustees or members without obtaining permission under Section 36-A(b) of the Act, 1950. 19. He further fairly conceded that the appellant No.2 is not a Secretary of the Trust and therefore, application under Section 41- D of the Act, 1950 is not maintainable against her. 20. Shri Jibhkate, learned counsel for the respondent Nos.1, 2, 5 and 7 and the learned AGP echoed the argument of Senior Advocate Shri Khapre and prays for dismissal of the present appeal. 21. 20. Shri Jibhkate, learned counsel for the respondent Nos.1, 2, 5 and 7 and the learned AGP echoed the argument of Senior Advocate Shri Khapre and prays for dismissal of the present appeal. 21. To consider the rival contentions of the parties, I have gone through the record and considered the relevant provisions of law and judgments. 22. At this juncture it is necessary to refer to Section 41D (1) (c) which read thus. 41.D. Suspension, removal and dismissal of trustees (1) The Charity Commissioner may, either on application of a trustee or any person interested in the trust, or on receipt of a report under section 41B or suo motu may suspend, remove or dismiss any trustee of a public trust, if he- (a)…………………………………………………… (b)…………………………………………………... (c) continuously neglects his duty or commits any mal-feasance or misfeasance, or breach of trust in respect of the trust; 23. From the language of the above said provision it is clear that the Charity Commissioner may either on application of a trustee or any person interested in the trust, or on receipt of a report under section 41B or suo motu may suspend, remove or dismiss any trustee of a public trust, if he, continuously neglects his duty or commits any mal-feasance or misfeasance, or breach of trust in respect of the trust under clause (c) of Sub Section 1 of Section of Section 41-D of the Act, 1950. 24. This Court had an occasion to consider the scope of inquiry under Section 41D of Bombay Public Trust Act in a case of Mukund Waman Thatte Vr. Sudhir Parshuram Chitale and others (supra) wherein this Court has held thus: 26. The scope of the enquiry under section 41D will have to be considered. For taking drastic action of removal, suspension and dismissal from the posts of the trustees, a very high degree of proof is required and the person seeking removal has to prove that the irregularities within the scope of section 41D(i) are proved without any manner of doubt. The scope of the enquiry under section 41D will have to be considered. For taking drastic action of removal, suspension and dismissal from the posts of the trustees, a very high degree of proof is required and the person seeking removal has to prove that the irregularities within the scope of section 41D(i) are proved without any manner of doubt. In the case of Mallikarjuanappa S/o Sidramappa Bidve v. Joint Charity Commissioner [since reported in 2008 (1) Mh.L.J 148 ] decided by the learned Single Judge (Coram : V.R Kingaonkar, J.), it is observed in paragraphs 18 and 19 as under: “Para 18 :— The legal position, which may be kept at back of the mind, is that removal of a trustee is a drastic action. The charge of malfeasance and/or misfeasance is serious one. The proceedings are of quasi civil and quasi criminal nature. Though the proceedings under section 41D is not criminal proceeding as such, yet, proof required to sustain the charges is of high standard. The standard of proof in such proceedings is somewhat more than normally required in cases governed by preponderance of probabilities and somewhat less than required in trials of criminal cases. The degree of proof required in criminal case is such that would prove criminal charge beyond a reasonable realm of doubt. The imputation reflecting on integrity of trustees have to be fortified by proof of high degree which would be somewhere in between standard of proof required in civil proceedings like a suit and criminal proceedings like a trial for offence of criminal breach of trust, or that of cheating. Thus, unless the lapse on part of the trustee is proved to be actuated by dishonestly or active connivance with other trustees, who are guilty of misfeasance or malfeasance, the drastic action under section 41D of the BPT Act may not be warranted. Para 19 :— The expression “misfeasance” as used in Clause (c) of section 41D would imply commission of breach of trust. It is more than mere negligence of the trustee to perform his duty. “Misfeasance” includes breach of duty by the trustee which would result into loss to the trust or would cause unlawful gain to such a trustee, charged with act of misfeasance. Acceptance of donations from students for giving admission to first year Engineering course is not contemplated under the terms of the office of the trusteeship. “Misfeasance” includes breach of duty by the trustee which would result into loss to the trust or would cause unlawful gain to such a trustee, charged with act of misfeasance. Acceptance of donations from students for giving admission to first year Engineering course is not contemplated under the terms of the office of the trusteeship. It requires no mincing of words to say that ordinarily no student will volunteer to pay in excess of the prescribed fees for admission to the professional course. It is only for compelling reasons, that the donations or capitation fees is paid by the students. They are a needy class. The exploitation is made by those who can fleece the easy money.” 27. It is thus clear that imputation reflecting on the integrity of the trustees have to be fortified by proof of high degree which will have to be higher than the standard of proof required in the civil proceedings. Unless and until the lapse on the part of the trustee is proved to be actuated by dishonesty, a drastic action under section 41D is not warranted. In my opinion, the Charity Commissioner has considered the entire evidence available on record and has, thereafter, reached an appropriate decision that the case for drastic action for removal of the trustees had not been made out. No fault can be found with the reasoning of the Charity Commissioner in the impugned order. I entirely agree with the view expressed by the Charity Commissioner that the errors committed by the trustees were not so severe so as to warrant their removal. There is no merit in the Writ Petition and the same will have to be dismissed.” 25. It is thus clear that expression “misfeasance” as used in Clause (c) of Section 41D is more than mere negligence of the trustee to perform his duty. “Misfeasance” includes breach of duty by the trustee which would result into loss to the trust or would cause unlawful gain to such a trustee, charged with act of misfeasance. Further the said judgment makes it clear that imputation reflecting on the integrity of trustees have to be fortified by proof of high degree which will have to be higher than the standard of proof required in civil proceedings. Further the said judgment makes it clear that imputation reflecting on the integrity of trustees have to be fortified by proof of high degree which will have to be higher than the standard of proof required in civil proceedings. Unless and until the lapse on part of the trustee is proved to be actuated by dishonestly, the drastic action under section 41-D of the Act, 1950 may not be warranted. 26. In light of above well settled of law position, at this juncture it is necessary to refer the paragraphs 13 and 14 of the judgment of the learned Joint Charity Commissioner, Nagpur which are as follows : 13. In statement with Exh.23 loan and advances are shown Rs.4000/-, 2000/- 1000/- from Swami Vivekanand High School. Stantosh Madandakar, Tukaram Pise repayment of loan is shown Rs. 53,000/-. In statement with Ex. 24 loan of refund of Rs.43,000/- Rs.1250 to Tukaram Pise Rs.1000/- to Vithoba Pise is shown. In statement with Ex.25 loan and advances from Swami Vivekanand High School is shown Rs.10,231.65 Paise from trustee 4,60,500/- payment of loan to Swami Vivekanand Swami High School is shown Rs.4,54,600/- to trustee 7500/-. In statement with Ex. 26 loan from trustee shown Rs.7,16,000/- repayment of loan to Swami Vivekanand High School Rs.7,39,100/- Tukaram Pise Rs.1000/-. Similar entries are found regarding loan taken from Swami Vivekanand High School and Trustees. In statement with Exh.27, 28, 29, 30 and 31. In audit report Ex. 32 loan from Swami Vivekanand High School Wadhamana is amount Rs.50,000/- of trustee Ekanath Tukaram Pise, 35,000/- Nandu Jaipurkar 52,000/- Vijay Pise 58,000/- Pramila Asthankar 50,000/- Hemlata Sawarkar 75000/-, Rajesh Pise 33,000/- Sheshrao Rahmahari Ashtankar 34,000/- Baban Maroti Ashtankar Rs.25000/-. Total Rs.3,77,000/-. Such reference is found of taking loan amount in statement with account Exh.33 to 37. 14. The amount of hand loan taken from trustees is shown as per evidence of the non-applicants witness hand loan from Head Mistress and trustees amount was repaid to them in shown in detail. No resolutions are produced on record that on request of the school committee the trust had decided to take hand loan from trustee or members. No permission under Section 36-A (B) B.P.T. Act taken by non-applicant nos. 1, 2 for taking hand loan. No resolutions are passed while repaying loan amount to Head Mistress the non-applicant no.1 or other trustees/members. No resolutions are produced on record that on request of the school committee the trust had decided to take hand loan from trustee or members. No permission under Section 36-A (B) B.P.T. Act taken by non-applicant nos. 1, 2 for taking hand loan. No resolutions are passed while repaying loan amount to Head Mistress the non-applicant no.1 or other trustees/members. Section 36-A (3) provides “No trustee shall borrow moneys (whether by way of mortage or otherwise) for the purpose of or on behalf of the trust of which he is a trustee, except with previous sanction of the Charity Commissioner and subject to such conditions and limitations as may be imposed by him in the interest of protection of the trust”. The non applicants no.1, 2 have not obtained permission taking hand loan from the other trustee of the trust or amount of hand loan was repaid from evidence on record allegations of the applicants in that regard are established. The non-applicants have taken loan from other members of the trust without passing resolution, without obtaining permission from under Section 36-A(3) B.P.T.Act. The non-applicants no.1, 2 have committed Act of malfeasance, misfeasance by taking loan without obtaining permission. Allegation against applicant no.3 cannot be proved from evidence on record. 27. At the same time, it would also be appropriate to consider paragraph 24 of the judgment and order passed by the learned District Judge-II, which read thus. 24. It is an admitted fact on record that the non-applicants have raised the loan to run the administration of the school. Such raising of the loan in fact are not barred. However, the necessary permission is obligatory to be obtained under Section 36-A (3) of the B.P.T. Act. The non-applicants are having no case of having such permission from the Charity Commissioner. The permission to raise the loan is subject to the sanction or the permission from the Charity Commissioner and in other words, it may be stated that it is condition precedent. Chapter-V (A) of the B.P.T Act deals with the powers and duties of and restriction on trustee. There are various sections till Section 41-E. All these sections are included in the Chapter-V (A) of the Act. Reading the provisions of Section 41(D)(C), it is clear that commission of malfeasance or misfeasance amounts to failure of the performance of the legal duty as well as it may be negligent act. There are various sections till Section 41-E. All these sections are included in the Chapter-V (A) of the Act. Reading the provisions of Section 41(D)(C), it is clear that commission of malfeasance or misfeasance amounts to failure of the performance of the legal duty as well as it may be negligent act. Malfeasance means wrong doing by a public official. Misfeasance means the wrongful exercise of lawful authority. The provisions of Section 36-A sub-section (3) specifically bars or prohibits the trustees from borrowing the money for the purpose of or on behalf of the Trust of which he is a trustee. If all the provisions of this chapter is read together, failure to obtain the previous sanction of the Charity Commissioner for borrowing the loan amounts to malfeasance which is a ground to remove the trustee.” 28. Both the Courts below nowhere have recorded the findings that, not obtaining permission under Section 36-A Sub Section (3) of the Act, 1950, resulted into loss to the trust or unlawful gain to the appellant no.1. Both the Courts below did not discuss any evidence having proof of high degree than required in the civil proceedings while holding that the charge 2 is partly proved. Even there is no finding given by both the Courts below that failure to obtain previous sanction by Charity Commissioner for borrowing the loan amount, such lapse on the part of appellant no.1 is proved to be actuated by dishonestly. 29. Both the Courts below have considered the lapse on the part of appellant no.1 in not obtaining permission under Section 36-A of Sub Section 3 of the Act, 1950 from the Charity Commissioner for borrowing the loan amount, as misfeasance, without observing such lapse resulted in loss to the Trust or caused unlawful gain to the appellant no.1. In the circumstances, I am of the considered view that both the Courts below have committed error in holding that the appellants have committed malfeasance and misfeasance or breach of trust in respect of Trust. 30. As far as the appellant no.2 is concerned there is no dispute that she is working as Headmistress and she is ex-officio Secretary of the School Committee constituted under the provision of the Maharashtra Employees of Private Schools (Conditions of Service) Regulation Act, 1977. 30. As far as the appellant no.2 is concerned there is no dispute that she is working as Headmistress and she is ex-officio Secretary of the School Committee constituted under the provision of the Maharashtra Employees of Private Schools (Conditions of Service) Regulation Act, 1977. There is no doubt that such employee has nothing to do with the Management of the Trust or functioning of the Trust under the provisions of Act, 1950. Thus, I have no hesitation to hold that judgments and orders passed against the appellant nos. 2 by both the Courts below, are without jurisdiction. 31. In the above backdrop, this Court does not want to go into the issue raised by the learned counsel for the appellants that the respondent nos. 1 to 7 are removed from the trusteeship of the Trust, as answer either way to the said issue will not change the result of the present proceeding because even if they are held to be removed as trustees, they are ‘persons having interest in the Trust’ which is sufficient to maintain the application under Section 41-D of the Act, 1950. Therefore, without touching to the said issue whether the respondent nos. 1 to 7 are trustee or not, I pass the following order. ORDER The appeal is allowed in following terms: i. The judgment and order dated 3rd April, 2012 passed by the Joint Charity Commissioner, Nagpur in Appeal No. 8 of 2005 and judgment and order dated 30th January, 2014 passed by the District Judge-2, Nagpur in Regular Civil Application No. 17 of 2012 are set aside. ii. The matter is remanded back to the Joint Charity Commissioner to decide the matter afresh on Charge No.2 to the extent of appellant no.1 only, after considering the law laid down by this Court in Mukund Waman Thatte Vr. Sudhir Parshuram Chitale and others (supra), and after hearing both the sides. 32. The appeal is disposed of accordingly. No order as to costs.