Posted On by &filed under Bombay High Court, High Court.


Bombay High Court
Bhanudas vs The Joint Charity Commissioner on 3 March, 2009
Bench: K.U. Chandiwal
                     (1)
    IN THE HIGH COURT OF JUDICATURE AT BOMBAY
             BENCH AT AURANGABAD

         SECOND APPEAL NO.207 OF 2008


         Date of decision: 3/3/2009




                                                                   
    For approval   and signature




                                         
         HON'BLE   MR. JUSTICE   K.U.CHANDIWAL




                                        
    1.   Whether the Reporters of Local Papers ]                Yes/No
         may be allowed to see the Judgment    ]




                                  
    2.   To be referred to the Reporter or not ? ]              Yes/No

    3.
                    
         Whether Their Lordships wish to
         the fair copy of the Judgment ?
                                              see         ]
                                                          ]
                                                                Yes/No


    4.   Whether this case involves a substantial]              Yes/No
                   
         question of law as to the interpretation]
         of the Constitution of India, 1950,   or]
         any order made thereunder ?             ]

    5.   Whether it is to be circulated to       the      ]     Yes/No
         Civil Judges ?                                   ]
      


    6.   Whether the case involves an important           ]     Yes/No
   



         question of law and whether a copy of            ]
         the Order should be sent to   Bombay,            ]
         Goa and Nagpur Office ?                          ]






      (A.G.PARALIKAR)
     Private Secretary
    uniplex/sa207-08
    uniplex/




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          IN THE HIGH COURT OF JUDICATURE OF BOMBAY
                  BENCH AT AURANGABAD

              SECOND APPEAL NO.207 OF 2008




                                                            
     1.   Bhanudas s/o Madhavrao Deshmukh,
          Age 72 years,
          Occupation agriculture & Business,




                                    
          r/o Parali Vaijinath,
          Taluka Parali, District Beed.

     2.   Sanjay s/o Sushilkumar Deshmukh,
          Age 30 years,




                                   
          Occupation agriculture,
          r/o as above.
                                  ...APPELLANT
                                     APPELLANT
                                  (Original
                                   applicants in
                                   Dist. Court)




                          
          VERSUS

     1.
               
          The Joint Charity Commissioner,
          Latur.

     2.   The Assistant Charity Commissioner,
              
          Beed.

     3.   Rajesaheb s/o Narharrao Deshmukh,
          Age 72 years,
          Occupation agriculture,
          r/o Ganesh Par Road, Parali,
      


          Taluka Parali, District Beed.
   



     4.   Amar s/o Rajesaheb Deshmukh,
          Age 26 years,
          Occupation agriculture,
          r/o as above.





     5.   Anant s/o Purushottamrao Deshmukh,
          Age 32 years,
          Occupation agriculture,
          r/o Deshmukh Galli,
          Parali Vaijnath,
          Taluka Parali, District Beed.





     6.   Rajesh @ Jaywant Vithalrao Deshmukh,
          Age 38 years,
          Occupation agriculture,
          r/o Near Krishna Talkies, Parali,
          Taluka Parali, District Beed.

     7.   Shamrao Santukrao Deshmukh,
          (deceased).
                                  ...RESPONDENTS
                                     RESPONDENTS
                              (Ori.Respondents
                               in Dist. Court).




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                                            ...

     Mr. R.N.Dhorde, Advocate, h/f
     Shri V.G.Sakolkar, Advocate, for the appellants.

     Shri V.J.Dixit, Senior Counsel, for Mr.
     A.N.Nagargoje, Advocate, for respondent nos. 4 and 5.




                                                                                  
     Shri S.S.Deshmukh, Advocate for the respondent No.3
     to 6.
                              ...




                                                          
                        CORAM : K.U.CHANDIWAL, J.

                        Date:            3/3/2009
                                            ...




                                                         
     JUDGMENT:

1. Modern Education Society, Parli

Vaijnath, was formed on 7.8.1971. There were 12

trustees and the Trust Scheme, by amendment

dt.1.9.1984,
ig put a cap & ceiling on number of General

Body members to be 12. It is a matter of record, now

only one Trustee Shri Bhanudas ( appellant) is alive.

One of the applicant Rajesaheb expired in Nov.,2007

and another Trustee Shamrao expired on 6.11.2005.

. The Scheme of Trust provides for coram of 5

trustees, if changes are to be effected in the Trust.

2. Rajesaheb Deshmukh, Shamrao Deshmukh

and Nandkishore Jaju made the application to Assistant

Charity Commissioner on 24.6.2005, vide enquiry number

722/2005. Bhanudas and others filed objection to the

change report. On hearing, the Assistant Charity

Commissioner, by order dt.9.3.2006, allowed the

application Enquiry No.722/2005 and framed new scheme

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and appointed new committee. These orders were tested

by Bhanudas and others before Additional District

Judge, Ambejogai, in Miscellaneous Civil Application

No.22 of 2006. The learned Additional District Judge,

on hearing both the sides, by his order dated

15.12.2007, dismissed the application. This gave rise

to file Second Appeal on 10.3/2008. On hearing the

Counsel, by order dated 7th July, 2008, this Court

admitted the appeal by formulating following

substantial questions of law:

(I) What are the guidelines for framing of

the scheme under Section 50-A of Bombay Public
Trusts Act, when already a scheme is in
existence ?

(II)

Whether in case of breach of existing
provisions of a scheme by existing Board of

trustees, the proper remedy is to apply for
removal of trustees or to apply for
modification of the existing scheme, without
proving the necessity and expediency for
modification of the scheme ?

3. In Civil Application No.3138/2008, ad

interim relief in terms of prayer clause ‘B’ was

granted with notice to respondents. This situation

gave rise to numerous proceedings. I do not wish to

advert to them, since such proceedings and orders have

no decisive bearing to the appeal.

4. The respondent no.3 Rajesaheb ( since

deceased) and others made application (No.1807/2009)

on 3.2.2009 to vacate the ad interim reliefs in C.A.

No.3138/2008 in S.A. No.207/2008. During the

extensive submissions of said applications, both the

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learned Counsel urged to hear and dispose the Second

Appeal, which prompted to give audience accordingly.

5. Mr. Dhorde would contend, there was

no legal requirement for new scheme, as old scheme

would absorb, accept amendment to it. The

mismanagement or illegalities, by any of the trustees

would not invite drastic action to invite a new

scheme, as law will take its own course. Section 50A

cannot be invoked. But for mismanagement by Trustees,

the Charity Commissioner will not be able to accept

new scheme. He has relied to the judgment in the

matter

Vs.

of

Mallikarjun Basvanappa Masute and

Dattatraya Krushnath Wadane and others ( 2005(2)
another

Mh.L.J.266) and Vasantrao s/o Vishwanathrao Mane and

others V. Apparao s/o Baibanna Sidore and others (

2008 (3) Mh.L.J. 242).

242

6. Mr. Deshmukh, Counsel for respondent

Nos. 3 to 6 canvassed about the inadequacy of present

scheme of Trust to cope up with change of

circumstances and impediments in force by virtue of

old scheme. He has read the judgment in the matter of

Ramkrushna-appa Vishweshwar-appa Versus Krushna

Udaybhanji Ingale and others ( 2006(2) Bom.C.R. 294),

Saiyad Mohammad Bakar Eledroos Vs. Abdulhabib Hasan

Arab ( 1998 DGLS(Soft.) 409 = 1998 AIR (SC 1624).

1624)

7. The Hon’ble Lordships of the Supreme

Court, in Saiyad Mohammad Bakar Eledross V.





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     Abdulhabib    Hasan Arab    ( 1998 (4)    SCC      343),
                                                        343)        while

     dealing    with   scope of Section 50-A of Bombay            Public

     Trusts Act, observed:




                                                                  
               "7.      Section 50-A infuses      the    Charity




                                          

Commissioner with power in addition to Section
50 to frame, amalgamate or modify any scheme
in the interest of proper management of a
public trust. This is exercised either suo
motu when he has reason to believe it is

necessary to do so or when two or more persons
having interest in a public trust make an
application to him in writing in the
prescribed manner. This merely enables the
Charity Commissioner to initiate proceedings
for settling a scheme for the proper

management or administration of a public
trust. In the background of the setting of

various provisions, the object of the Act, the
Charity Commissioner being clothed
sufficient power to deal with all exigencies
with

where a public trust or its trustees stray

away from its legitimate path and where the
materials are before him or placed before him
by the said two persons, then to hold
abatement of proceedings on application of any
procedural laws not only would amount to the
curtailment of his power but make him

spineless and helpless to do anything in the
matter of a public trust eroding the very

object of the Act. This is a too restrictive
interpretation to be accepted.

(9) If the interpretation sought by the
learned Counsel for the appellant is to be

accepted, it would tie the hands of a Charity
Commissioner not to proceed with settling a
scheme inspite of material placed before him,
only because one of the applicants is dead.
The concept of abatement under Section 50-A
would never arise, specially in such a
situation where for achieving such an

objective he in addition is capped with power
to initiate suo motu. It is not in dispute
that the said two persons have made an
application in the prescribed form. The
proceeding has been initiated in terms and in
accordance with Section 50-A; this cannot be
said to be improper or illegal. Once the
material is brought before him, he may on the
materials or after inquiry or after giving
opportunity to the person concerned or
trustees may or may not exercise his power

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depending on facts and circumstances of each
case, but his exercise of power cannot be
ousted either on the death or withdrawal of
any one of the applicants.”

8. Sub-section 1 of Section 50A of the

Bombay Public Trusts Act, 1950 reads as under:

“50A (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 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.”

9. The powers of Charity Commissioner are

wide enough when he has reason to believe that, in the

interest of proper management or administration of a

public trust, a scheme should be settled for it or,

secondly, where two or more persons, having interest

in public trust, make an application to him, in

writing, in prescribed manner, indicating, in the

interest of proper management or administration of the

public trust, a scheme should be settled for it. The

non obstantate clause takes away effects of other

positions as carved out in Section 50 which, more or

less, are touching to Section 41(A), 41(B) and 41(D).

The powers in Section 41-D come into play for

suspension, removal or dismissal of a trustee of a

public trust.

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10 In the situation, the making of

application by the applicants ( respondent herein),

will have to be looked into from the angle of Section

50-A. The Charity Commissioner cannot be expected to

stave off and shrink the obligation cast on him by

simply taking recourse to Section 41-B or 41-D,

without curing the defect in entirety.





                                                          
     11.                        Now,       reverting to the new scheme, Mr.

     Dhorde        has     furnished comparative chart                   to     impress,




                                              
     that     new scheme is identical in material particulars,

     except

     Post     of
                   placement

                     Vice
                            ig        of     clauses by     different

                                 President & Joint Secretary is
                                                                                numbers.

                                                                                     a    new
                          
     condition,           Rule making powers are also added.                         There

should not be a quarrel on these facts and figures.

12. As per the old scheme, tenure of 5

managing committee members is 3 years while the total

general body strength is only 12. The change report

of 1995 came to be rejected. Another change report

309/1999 also came to be rejected on 23.8.2002. On

21.6.2005 managing committee was elected and change

report was submitted on 3.8.2005 which also came to be

rejected on 9.2.2007.

13. The learned Assistant Charity

Commissioner and the learned Additional District Judge

have scanned the evidence and documents and were of

the considered opinion that new scheme only will

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provide new life to the virtual deadwood of the trust.

Thus, there was subjective satisfaction of the

Assistant Charity Commissioner to accept new scheme.

14. The evidence and, particularly, cross

examination of Bhanudas, indeed, expose the bona fides

and his credentials to manage the Trust. The

allegations are not one or two but numerous, followed

years together, with the same pattern,

(a) The meeting of managing committee and
general body was not called.

(b) Accounts are not submitted before general
body, nor approved.

(c) Audit report not submitted to the office.

(d) The Bank Account of Trust is to be

operated by President and Treasurer but
Bhanudas, ignoring the same, operated Bank
account with joint signature of Principal.

(e) Without prior sanction from Assistant
Charity Commissioner, Metadoor of Trust was

sold, that too, without inviting tender or
soliciting the maximum prospective bidders.

(f) The details of Trust property not included
in the Record.

(g) Purchase of new school Bus was obviously

in violation of Rules.

(h) Bus fare collected are not accounted.

(i) The contribution to employees fund and
their deduction is not accounted.

15. The Managing Committee has acted in

defiance to bye-laws of Trust. The Trust property is

mortgaged as could be seen in resolution

dt.19.10.2004, without permission and approval of

Charity Commissioner. There is violation of Section

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36A of the Act while raising loan.

16. The Trust, due to the omission of

Trustees, has invited penal notice from the office of

Employees Provident Fund as, the deposit/deductions of

salary are not accounted and institute was sealed.

The Rules framed by Trust are inconsistent with

provisions of the Act. Though death of Trustees could

have been taken due care to infuse new trustee,

deliberately, a system of anarchy and authoritative

approach is surfacing, to circumvent the Rules and the

very Bombay Public Trusts Act. A legitimate

impression is generated that Bhanudas has arrogated to

himself all the authority and treated the Trust as his

proprietary concern.

17. The old scheme required a quorum for

smooth administration of Trust and it is now the one

man show of appellant Bhanudas. The Court will not

encourage such situation to prevail, detrimental to

the object and interest of trust. The requisite

quorum is not available to facilitate conducting

business of Trust legitimately. The term ‘Quorum”

means, “such a number of the members of a body as is

competent to transact business in the absence of other

members”. The appellant Bhanudas is figuring even in

the first Board of Trustees, of new scheme. Taking

survey of all these events, the logical conclusion

would rest in holding that the guidelines do encourage

to accept a new scheme, if old scheme has failed and

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is crippled. Since Bhanudas is the sole surviving

trustee, his removal will not provide an impetus to

the existing position, as it would inihibit the Trust

itself. The substantial questions are answered as

under, holding that there is no bar in the Charity

Commissioner for framing a new scheme when already a

scheme is in existence and that, in the event of

breach committed by the trustee, it is not the remedy

of removal alone, the remedy of modification of

existing scheme is available.

(a)

The appeal is dismissed.

(b) The parties to bear the expenses of

litigation, without debiting to the Trust.

(c) The learned Assistant Charity

Commissioner will take action in terms of

Bombay Public Trusts Act against the Trustee

within a period of six months and send

compliance report to this Court.

(d) Civil Application No.3138/2008, is

rejected. C.A. No.1807/2009, disposed of.

Ad interim relief vacated.

( K.U.CHANDIWAL, J.)
J )

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(agp:u/sa207-08)

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