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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 oftrustees, 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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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 schemeshould 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 forit, the Charity Commissioner may, if, after
giving the trustees of such trust dueopportunity 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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