Andhra Pradesh High Court - Amravati
In These Two Writ Petitions vs S.P.Sahi on 9 February, 2022
Author: M.Venkata Ramana
Bench: M.Venkata Ramana
HON'BLE SRI JUSTICE M.VENKATA RAMANA
WRIT PETITION Nos. 1470 & 1502 of 2022
COMMON ORDER:
In these two writ petitions, the petitioners sought an appropriate writ, order or direction in the nature of writ of mandamus declaring order of the 2nd respondent-Commissioner, Endowments Department, Government of Andhra Pradesh, dated 05.01.2022 being illegal, arbitrary and contrary to the provisions of the Andhra Pradesh Charitable and Hindu Religious Institutions & Endowments Act, 1987, vitiated by mala fides, colourable exercise of power and unconstitutional.
2. The 1st petitioner in W.P.No.1502 of 2022- Sri Dhulipalla Veeraiah Chowdary Memorial Trust, Vadlamudi village, is a registered trust. The trust deed in respect thereof was entered into on 17.09.1994 and it was registered on the same day in the office of the Joint Sub Registrar, Guntur. The 2nd petitioner in W.P.No.1502 of 2022 is described as the donor in this deed of trust while the 1st petitioner in W.P.No.1470 of 2022 is also one of the trustees of this trust. The 2nd petitioner in W.P.No.1470 of 2022 was former trustee of the same.
3. This trust, according to the petitioners in both these writ petitions, was founded in the name of Sri Dhulipalla Veeraiah Chowdary, who served as the President of Guntur District Milk Producers Cooperative Union Limited and to commemorate his memory.
4. Since both these writ petitions are heard together where identical arguments are addressed except reference to application of Provisions of Indian Trust Act and their effect vis-à-vis Act 30 of 1987 in MVRJ, W.P.Nos.1470 & 1502 of 2022 2 w.P.No.1470 of 2022, they are now being disposed of together. The parties as arrayed in W.P.No.1502 of 2022 shall be referred to hereinafter, for convenience.
5. The deed of trust relating to the 1st petitioner trust sets out the circumstances under which, it came to be set up, by virtue of the decision in General Body Meeting of Guntur District Milk Producers Cooperative Union Limited, for establishing farmers training centers, milk producers training centers and to establish, aid and maintain educational and other institutions. The contribution of the donor, namely the 2nd petitioner in constituting the trust fund was Rs.1,116/-. Clause-3 of this deed of trust sets out its objectives as under:
"a. To train farmers, milk producers and rural youth in Dairying, livestock production, agriculture and other allied activities so as to develop self employment in the rural areas.
b. To establish, aid and maintain educational and other institutions to impart education, at all stages for the promotion of literature, arts, sciences and other subjects specifically in Dairying, Animal husbandry and Agriculture.
c. To conduct cattle shows, milk yielding competitions and calf rallies. d. To conduct workshops/seminars which are useful to Milk Producers, Farmers and Dairy Industry.
e. To give financial assistance to the children of Milk Producers of Guntur District for higher education.
f. To train employees of Dairy for better skill and knowledge in modern Dairying.
g. To honour every year the best milk producer and the best Milk Producers' Cooperative Society in the District. h. To honour the eminent persons in the fields of animal husbandry, dairying and agriculture for their outstanding services to the Rural Community."
6. Clause-5 of this deed of trust also provides for a mechanism to derive funds from different sources that included those received from Milk MVRJ, W.P.Nos.1470 & 1502 of 2022 3 Producers' Cooperative Societies in Guntur District, donations, subscriptions, contributions, gifts received from the employees of Sangam Dairy and other public at large apart from the funds and properties received from Guntur District Milk Producers Cooperative Union Limited. This deed of trust provides for the management, to vest in the Board of Trustees with a Managing Trustree, who incidentally is the 2nd petitioner.
7. This deed of trust also provides for winding up mechanism in Clause-13, by means of which the assets and liabilities, if any, after discharging of the liabilities of the trust shall be transferred to another trust having similar objects and aims and registered with the Income Tax Department under Section 12-A of the Income Tax Act, 1961 and recognised under Section 80-G of the Income Tax Act, 1961.
8. This deed of trust was amended later, on 29.06.2002 to meet the requirements of Income Tax Act under Section 12A and under Section 80G, making this trust irrevocable and that the benefits of the trust are open to all, irrespective of caste, religion, sex etc.
9. Another amendment of the articles of this deed of trust was brought on 06.10.2016 amending Clause 3(f) of the original deed of trust. The following were incorporated by this amendment:
No Existing Clause Clause proposed to be amended/ altered/ added/ modified 3 f) To train employees of 3 f) to impart education by opening any Diary for better skill and institution, school, college etc., for general as knowledge in modern well as vocational; medical and technical dairy. education including skilled.
MVRJ, W.P.Nos.1470 & 1502 of 2022 4 NIL 3 f) To start, run maintain and manage educational institutions and manage the training institutions for advancement of education. Advancement, promotion and spread of education, science, art, literature and to encourage to the establishment, maintenance and support of colleges, schools, educational institutions, hostels, libraries, reading rooms or other educational institutions, providing grants, aids (financial or otherwise), donations, loans, scholarships, fees and prizes;
NIL 3 h) to start, run, maintain and manage medical institutions for medical relief and/ or maintain of the sick and/ or establishment, maintenance and support of or donations to one or more hospitals, dispensaries, nursing homes, medical centres and utilization of funds for medical relief of all kinds;
NIL 3 i) To help the needy students of all communities for the pursuance of studies.
NIL 3 j) to organise, equip and maintain hospitals, mobile medical centres, maternity homes, medical camps, etc., thereby rendering medical aid to the needy and poor people.
10. The 2nd petitioner, in terms of Clause-9 of the Trust deed, is its Managing Trustee for life and the trusteeship, is hereditary where the law of Primogeniture shall apply, if there is no nomination.
11. The 2nd respondent issued Form-II notice dated 05.01.2022 in terms of Rule-5 of A.P.Charitable and Hindu Religious Institutions & Endowments Rules framed under Section 43 of the A.P.Charitable and Hindu Religious Institutions & Endowments Act, 1987 (Act 30 of 1987, for short), calling upon the 2nd petitioner to make an application for registration of the 1st petitioner trust within 15 days from the date of receipt of this notice, on the premise that the 2nd petitioner, as person in- charge of the management of the 1st petitioner trust, failed to apply for its MVRJ, W.P.Nos.1470 & 1502 of 2022 5 registration with the Assistant Commissioner of Endowments Department, Guntur as required under Section 43(1) of the said Act.
12. Issuance of this notice is the cause for the petitioners to approach this Court by means of these two writ petitions for the relief as stated above.
13. Sangam Dairy is being run by Sangam Milk Producers Company Limited. The Guntur District Milk Producers Union Limited initially was registered under A.P.Mutually Aided Cooperative Societies Act, 1995 on 01.02.1997. On the premise that procurement of milk increased many fold and several milk products are being manufactured and marketed, this Mutually Aided Cooperative Society was incorporated on 18.06.2013 under the Companies Act, 1956 as a Producer Company under the name and style 'Sangam Milk Producers Company Limited'.
14. It is the contention of the petitioners that, on 03.05.2016 the 1st petitioner decided to establish a hospital within the premises of Sangam Dairy to cater the needs of the beneficiaries under this trust, subject to payment of charges. While the general public are made to pay for the services obtained in this hospital, as a regular private hospital, the beneficiaries under this deed of trust, have certain amount of facility by means of reduced rates of charges. This hospital is now known as 'Dhulipalla Veeraiah Chowdary Hospital and Research Centre', which was originally named 'Dhulipalla Veeraiah Chowdary Hospital.
15. It is also relevant to note that Guntur District Milk Producers Cooperative Union Limited, had also set apart Ac.10-00 of land in the MVRJ, W.P.Nos.1470 & 1502 of 2022 6 premises of Sangam Dairy to the 1st respondent trust, basing on the proposal dated 13.09.1994 of its directors.
16. It is the contention of the petitioners in these two writ petitions that the 1st petitioner trust is created for the benefit of an ascertained body of individuals, namely milk producers, who supply milk to Sangam Dairy, their families, employees of the dairy and their family members.
17. Thus, they contended that it is a purely private entity having no public character, as demonstrated by its activities. It is also their contention that the donors of this trust intended it being a private organisation and never a public charitable institution or for the benefit of the public at large.
18. The petitioners further contended that the 1st petitioner is an inextricable part of Sangam Milk Producers Company Limited and its milk producers. Stating that to wreck vengeance against the petitioners, particularly the 2nd petitioner, the present ruling dispensation in the State of Andhra Pradesh, to have control over Sangam Milk Producers Company Limited, indirectly is trying to bring the 1st petitioner into its control and fold, by virtue of the provisions of Act 30 of 1987, for which purpose the impugned notice in Form-II is issued.
19. The petitioners also stated the alleged attempts of the present dispensation in the Government, in the State to take over Sangam Dairy issuing G.O.Ms.No.19, Animal Husbandry, Dairy Development and Fisheries Department, dated 27.04.2021, which was subject matter of challenge in W.P.No.9279 of 2021 on the file of this Court, where by an order dated 07.05.2021 it was suspended in I.A.No.1 of 2021. The MVRJ, W.P.Nos.1470 & 1502 of 2022 7 petitioners further stated that W.A.No.281 of 2021 presented against the above interim order was dismissed by Division Bench of this Court by the judgment dated 01.09.2021.
20. The petitioners further referred to the notice issued by the Joint Commissioner-cum-Executive Officer, Sri Durga Malleswara Swamy Devasthanam, Vijayawada dated 17.08.2021 to the 2nd petitioner on the memo issued by the Government of Andhra Pradesh dated 06.08.2021 calling for certain information in the enquiry being conducted by her. The 2nd petitioner issued a reply dated 30.08.2021 to this notice disputing the jurisdiction of the Government to direct an enquiry, also the authority of the Joint Commissioner calling for such information and records, while asserting the nature of this trust, being in the activity through paid services and not as charity. Thus, the 2nd petitioner stated in his reply that this hospital is not a charitable institution. A reference is also made in this letter by the 2nd petitioner of a Polytechnic college for the course in dairy technology set up by the 1st petitioner trust and admission of students on allotment on Sri Venkateswara University, Tirupathi through counselling.
21. The petitioners also adverted to another notice in the nature of memo issued by the 2nd respondent-Commissioner dated 25.10.2021 calling upon the 2nd petitioner to submit his objections with reference to proposed publication of the 1st petitioner trust under Section 6 of Act 30 of 1987 stating that it is a 'Charitable Institution' as defined under Section 2(4) of the said Act and its purpose being charitable, within the definition under Section 2(5) of the said Act. The 2nd petitioner on his behalf and on behalf of the 1st petitioner objected to this course, by his reply dated MVRJ, W.P.Nos.1470 & 1502 of 2022 8 11.11.2021 addressed to the respondents 2 to 4 asserting its nature as a private entity and not being a charitable institution nor serving charitable purposes. Setting out that the primary object of the 1st petitioner trust is not to establish hospital for charity but advancement of interest of milk producers, it is stated that establishment of this hospital is only ancillary/ or incidental to the main object. Asserting that its activities are not concerned to the general public or a section thereof, application of Act 30 of 1987 is denied. It is alleged that the present political dispensation in the State is grudgingly militating against Sangam Milk Producers Company Limited and persons concerned with it.
22. The official respondents through the 2nd respondent filed counters resisting these writ petitions justifying issuance of Form-II notice to the petitioners and questioning the maintainability of these writ petitions. It is further stated in the counter-affidavits that Form-II notice was issued in exercise of power vested in the 2nd respondent under Section 44 of Act 30 of 1987 and following the provisions therein.
23. The 2nd respondent further stated in the counter-affidavits that the Government of Andhra Pradesh came to know about the mal- administration of the 1st petitioner represented by the 2nd petitioner as its Managing Trustee and hence, vide memo No.Rev01-Endw/476/2021-Vig- IV, dated 06.08.2021 appointed Smt. D.Bramaramba, Joint Commissioner of Endowments Department & Executive Officer, Sri Durga Malleswara Swamy Devasthanam, Vijayawada as an enquiry officer directing to submit a detailed report thereon. It is further stated that pursuant to material gathered in the course of such enquiry, a report was submitted MVRJ, W.P.Nos.1470 & 1502 of 2022 9 stating that the assessable income of the 1st petitioner trust exceeded Rs.25,00,000/-, coming within the purview of Section 6(a)(i) of Act 30 of 1987 and that, it is a 'Public Charitable Institution' within the purview of Section 1(3)(a) of A.P.Act 30 of 1987.
24. It is further stated in the counter-affidavits that the 6th respondent and four others presented a representation to the 2nd respondent on 28.09.2021 levelling certain allegations against the 2nd petitioner in the administration of the 1st petitioner trust requesting appropriate action in order to serve the public interest. It is also stated in the counter-affidavits that it was got enquired into by the Assistant Commissioner, Endowments Department, Guntur (4th respondent) through the 5th respondent and submitted a report vide Lr. Rc.No.A2/7853/2021, dated 20.12.2021 to the Commissioner, Endowments recommending registration of the 1st petitioner trust in terms of Section 43(1) of Act 30 of 1987. Explaining the reasons in issuing Form-II notice to the petitioners on account of the orders of this Court in W.P.No.21986 of 2020 dated 05.10.2021, W.P.No.10283 of 2021 dated 22.11.2021 as well as I.A.No.1 of 2021 in W.P.No.28588 of 2021 dated 06.12.2021, being the law laid down, it is stated that the procedure so directed by these orders is followed in issuing the impugned Form-II notice to the 2nd petitioner.
25. It is asserted in this counter-affidavit that the 1st petitioner trust is created for public charitable purposes, benefits of which are open to all irrespective of caste, religion, sex etc. Thus contending that this 1st petitioner trust, is within the purview of the provisions of Act 30 of 1987, it is stated that in view of constitution of Endowment Tribunal under MVRJ, W.P.Nos.1470 & 1502 of 2022 10 Section 87 of this Act, the dispute as to nature of institution, as a charitable institution in terms of Section 2(5) of Act 30 of 1987 is within its purview and exclusive jurisdiction. Reference is also made to the declaration submitted for income tax purposes in the returns of the 1st petitioner as a public charitable trust, which was registered under Section 12 AA (1)(b)(i) of the Income Tax Act and its approval in terms of Section 80G. Thus, it is stated in the counter affidavits that this institution is liable to be registered in terms of Section 43 of A.P. Act 30 of 1987. Pointing out the nature of activities of the 1st petitioner trust, it is stated in the counter-affidavits that, it is a public charitable trust.
26. The respondents 6 to 11 got impleaded themselves as per orders in I.A.No.2 of 2022 in W.P.No.1502 of 2022. They supported the stand of the official respondents in this matter mainly contending that the 1st petitioner is a public charitable institution. However, no formal counter is filed on behalf of the respondents 6 to 11 in W.P.No.1502 of 2022.
27. Sri B.Adinarayana Rao, learned senior counsel for Sri V.Venugopala Rao, learned counsel for the petitioners in W.P.No.1047 of 2022 and for Sri Srinivas Bodduliri, learned counsel for the petitioners in W.P.No.1502 of 2022 addressed arguments on behalf of the petitioners. Sri S.Sri Ram, learned Advocate General, addressed arguments on behalf of the official respondents 1 to 5. Sri Prabhunath Vasireddy, learned counsel for the respondents 6 to 11 in W.P.No.1502 of 2022 addressed arguments on their behalf.
28. The essential questions to determine in these two writ petitions are:
MVRJ, W.P.Nos.1470 & 1502 of 2022 11
1. Whether issuance of Form-II notice to the petitioners in W.P.No.1502 of 2022 by the 2nd respondent is justified applying provisions of Act 30 of 1987?
2. Whether writ petitions as filed are maintainable since directed against the impugned Form-II notice?
3. Whether the action of the 2nd respondent in serving this notice to the petitioners 1 and 2 in W.P.No.1502 of 2022 is fraught with malice in law or fact?
4. Relief to grant?
POINT No.1:
29. It is the contention of the petitioners that the 1st petitioner is not a charitable institution having public character and nature and therefore it is not within the purview of any of the provisions of A.P. Act 30 of 1987.
30. Sri B.Adinarayana Rao, learned senior counsel for the petitioners, making a copious reference to following provisions of A.P. Act 30 of 1987 tried to substantiate this stand of the petitioners.
31. Section 1(3)(a) of Act 30 of 1987 reads as follows:
"1(3)(a) all public charitable institutions and endowments, whether registered or not, in accordance with the provisions of this Act, other than Wakfs governed by the provisions of the Wakfs Act, 1954.
Explanation:- In this clause, the expressing "public charitable institutions and endowments" shall include every charitable institution or endowment the administration of which is for the time being vested in any department of Government, or Civil Court, Zilla Praja parishad, Municipality or local authority, or any company, society, organisation, institution or other person;"
32. Charitable Institution is defined in Section 2(4) of this Act as under:
MVRJ, W.P.Nos.1470 & 1502 of 2022 12 "2(4) 'charitable institution' means any establishment, undertaking, organisation or association formed for a charitable purpose and includes a specific endowment and dharmadayam"
33. Charitable purpose in Section 2(5) of this Act is defined as follows:
2(5) 'charitable purpose' includes-
(a) relief of poverty or distress;
(b) education;
(c) medical relief;
(d) advancement of any other object of utility or welfare to the general public or a section thereof not being an object of an exclusively religious nature"
34. Section-6 of this Act relates to 'Preparation and Publication of list of charitable and religious institutions and endowments on the basis of income'. Three categories of institutions and endowments are brought within the fold of this Section. Mainly the institutions other than maths having annual income exceeding rupees twenty five lakhs, are one category. Next category being these institutions with annual income exceeding rupees two lakhs, which did not exceed rupees twenty five lakhs and the third category is those which did not fall within the above two categories. Maths and Dharmadayam irrespective of income are also brought within the fold of Section 6 of this Act. Powers and functions of hierarchy of the officers of the Endowments Department are set out in Sections 8 to 11 of this Act.
35. Section 14 of this Act provides for vesting of all the properties in the institution or endowment.
MVRJ, W.P.Nos.1470 & 1502 of 2022 13
36. Chapter-IV of this Act is important for the present purpose. It relates to registration of charitable and religious institutions and endowments. Specific procedure is provided in Section-43 for this purpose. Every charitable and religious institution or endowment, shall be registered in terms of section 43 by the trustee or other person in-charge of their management. A detailed procedure is set out with reference to processing the application filed under Section 43(1) that should contain particulars in terms of Section 43(4) of the Act 30 of 1987.
37. It directed the procedure to follow by the Assistant Commissioner, who received such application, to make an enquiry as thinks fit and hearing any person having interest in the institution or endowment in terms of Section 43(5) of this Act. The Assistant Commissioner is ordained to pass order on such application directing registration of the institution and grant to the trustee or other person a certificate of registration containing the particulars furnished in the application with alterations, if any, made by him as a result of his enquiry. These particulars in terms of Section 43(6) of this Act shall be entered in the register of institutions and endowments maintained by the Assistant Commissioner of jurisdiction.
38. Entries in the register so maintained, are amenable for challenge before Endowment Tribunal in terms of Section 45 of this Act by an aggrieved person. Section 46 of this Act provides for a presumption to be drawn, in respect of the entries or particulars in the register maintained under Section 43 of this Act being genuine and that a certified MVRJ, W.P.Nos.1470 & 1502 of 2022 14 copy of an entry in this register, shall be admissible in evidence in any Court.
39. The 2nd respondent issued Form-II stated to be in exercise of power under Section 44 of this Act. Section 44 reads as under:
"44. Power of Commissioner to have the institution or endowment registered:- Where any trustee or other person in charge of the management of a charitable or religious institution or endowment fails to apply for the registration of the institution or endowment, the Commissioner, shall give notice to the trustee or the other person aforesaid to make an application in that regard within a specified period and if he fails to make such application within the period specified, the Commissioner may have the institution or endowment registered after following the prescribed procedure and recover the cost incurred for such registration from the funds of such institution or endowment."
40. Application of Section 44 of this Act comes into play when any trustee or other person incharge of management of a charitable or religious institution or endowment fails to apply for registration. Upon such failure the Commissioner is ordained to issue notice to the trustee or other person to make an application in that regard within a specified period. In default, the commissioner has discretion to have the institution or endowment registered after following the procedure and recover costs incurred for such registration from the funds of the institution or endowment.
41. Sri B.Adinarayana Rao, learned senior counsel, contended ;further that in terms of Section 43 of A.P.Act 30 of 1987 while application to be made to the Assistant commissioner for registration is a voluntary act by applicant, Section 44 of this Act requires registration of a Charitable institution in compelling circumstances under the orders of the Commissioner of Endowments. It is further contended that when the MVRJ, W.P.Nos.1470 & 1502 of 2022 15 authority rests with a properly constituted Tribunal under this Act to decide and adjudicate such questions or issues in dispute, the 2nd respondent Commissioner cannot have jurisdiction to determine the nature of the institution unilaterally and issue the impugned notice. Therefore, it is contended that, upon considering the objections raised by the 2nd petitioner at every stage, prior to issuance of impugned form-II notice, it is but necessary for the 2nd respondent to approach Endowment Tribunal under Section 87 of this Act for adjudicating the nature and character of the 1st petitioner trust, as a charitable institution.
42. Learned senior counsel also contended that the 1st petitioner institution remained a private entity for all purposes and did not have a public character nor serving the public purpose in general. Sri B.Adinarayana Rao, learned senior counsel, cautioned this Court not to consider the question as to the nature of this institution as a public charitable institution or a private entity in as much as Section 87(1)(a) of this Act expressly provided for determination of such issue by Endowment Tribunal upon proper enquiry. Learned senior counsel further pointed out that for this purpose, evidence has to be let-in in a regularly constituted enquiry and such question cannot be decided in a summary manner in a writ petition.
43. Sri S.Sriram, learned Advocate General referring to the provisions of the Act 30 of 1987 including Section 87 of this Act as to powers conferred on the Endowment Tribunal constituted under Section 162 of this Act, brought to the notice of this Court, the presumption to draw in respect of the matters covered by certain clauses therein.
MVRJ, W.P.Nos.1470 & 1502 of 2022 16 Important for the present purpose is clause (a) of Section 87(1) relating to determination, whether an institution is a charitable institution or not.
44. This presumption in terms of Section 87(4) is to the effect that an institution or endowment is a public one and that the burden of proof in all such cases lies on the person claiming the institution or endowment to be private. Therefore, learned Advocate General Sri S.Sri Ram contended that the burden is on the petitioners to establish that the 1st petitioner institution is a private entity and not a public charitable institution.
45. However, Sri B. Adinarayana Rao, learned senior counsel, contended that this presumption under Section 87(4) of this Act is can be raised only in a dispute pending before the Endowment Tribunal and it is not a general presumption applicable to all instances. Learned senior counsel further contended that the foundational facts should be laid by means of evidence to apply the presumption under Section 87(4) of Act 30 of 1987.
46. In spite of the contention that this Court cannot go into the question whether the 1st petitioner institution is of public character or not, strenuous effort is made by Sri B.Adinarayana Rao, learned senior counsel referring to various rulings of Hon'ble Supreme Court, the tests to apply to draw a distinction between these entities and to identify their exact character and nature.
47. A well-known decision of Constitution Bench of Hon'ble Supreme Court in Mahant Ram Saroop Dasji vs. S.P.Sahi, Special MVRJ, W.P.Nos.1470 & 1502 of 2022 17 Officer-in-charge of the Hindu Religious Trusts and others1 is relied on by Sri B.Adinaayana Rao, learned senior counsel, pointing out the distinction between 'religious endowment', which is public in nature or which is private. With reference to religious endowments in terms of Hindu Law, in para-6 of this decision, it is stated as under:
"In order to appreciate this argument it is necessary to state first the distinction in Hindu law between religious endowments which are public and those which are private. To put it briefly, the essential distinction is that in a public trust the beneficial interest is vested in an uncertain and fluctuating body of persons, either the public at large or some considerable portion of it answering a particular description; in a private trust the beneficiaries are definite and ascertained individuals or who within a definite time can be definitely ascertained. The fact that the uncertain and fluctuating body of persons is a section of the public following a particular religious faith or is only a sect of persons of a certain religious persuasion would not make any difference in the matter and would not make the trust a private trust (see the observations in Nabi Shirazi v. Province of Bengal) [(1942) ILR 1 Cal 211, 228]. ...."
48. Sri S.Sri Ram, learned Advocate General, also relied on the same passage, drawing attention of this Court to the factors required and definition of 'religious trust' considered in this decision. Sri S. Sri Ram, learned Advocate General, referring to the test to apply in this context, relied on observations in Para-43 of this ruling, which are:
"43. When the origin of an endowment is obscure and no direct oral evidence is available, the Court will have to resolve the controversy about the character of the trust on documentary evidence, if any, the object and purpose for which the trust was created, the consistent manner in which the property has been dealt with or managed by those in charge, the manner in which the property has long been used by the public, the contribution of the public, to all intents and purpose, as a matter of right without the least interference or restriction from the temple authorities, to foster maintenance of the worship, the accretion to the trust property by way of grants from the State or gifts from outsiders inconsistent with the private nature of the trust, the nature of devolution of the property, are all important elements in determination of the question whether a property is a private or a public religious endowment. We are satisfied that in this case all the above tests are fulfilled."1
. 1959 Supp (2) SCR 583 : AIR 1959 SC 951 MVRJ, W.P.Nos.1470 & 1502 of 2022 18
49. Reliance is further placed in the same context on Dhaneshwarbuwa Guru Purshottambuwa, owner of Shri Vithal Rukhamai Sansthan vs. The Charity Commissiioiner, State of Bombay2, Bala Shankar Maha Shanker Bhattjee and others v. Charity Commissioner, Gujarat State3, Idol of Sri Renganathaswamy represented by its Executive Officer, Joint Commissioner v. P.K.Thoppulan Chettiar, Ramanuja Koodam Anandhana Trust, rep. By its Managing Trustee and others4 apart from a judgment of learned single Judge of this Court in Duvvuri Rama Krishna Rao Tust v. The Deputy Commissioner, Endowments Department and another5.
50. The respondents 6 to 11 and the petitioners relied on Deoki Nandan v. Murlidhar and others6 for the same purpose. In para-5 of this ruling it is thus observed:
"5. It will be convenient first to consider the principles of law applicable to a determination of the question whether an endowment is public or private, and then to examine, in the light of those principles, the facts found or established. The distinction between a private and a public trust is that whereas in the former the beneficiaries are specific individuals, in the latter they are the general public or a class thereof. While in the former the beneficiaries are persons who are ascertained or capable of being ascertained, in the latter they constitute a body which is incapable of ascertainment. The position is thus stated in Lewin on Trusts, 15th Edn., pp. 15-16:
"By public must be understood such as are constituted for the benefit either of the public at large or of some considerable portion of it answering a particular description. To this class belong all trusts for charitable purposes, and indeed public trusts and charitable trusts may be considered in general as synonymous expressions. In private 2 . (1976) 2 SCC 417 3 . 1995 Supp (1) Supreme Court Cases 485 4 . 2020 SCC OnLine SC 214 5 . 2015 SCC OnLine Hyd 307: (2016) 1 ALD 129 6 . AIR 1957 SC 133 MVRJ, W.P.Nos.1470 & 1502 of 2022 19 trusts the beneficial interest is vested absolutely in one or more individuals who are, or within a certain time may be, definitely ascertained...."
Vide also the observations of Mitter J. in Nabi Shirazi v. Province of Bengal [ILR (1942) 1 Cal 211, 227, 228] . Applying this principle, a religious endowment must be held to be private or public, according as the beneficiaries thereunder are specific persons or the general public or sections thereof."
51. This ruling is cited and followed in the later rulings of Hon'ble Supreme Court and many High Courts.
52. In view of the caution which this Court requires to observe, to consider the nature of the 1st petitioner as a public charitable institution or a private entity, suggested by Sri B.Adinarayana Rao, learned senior counsel and also Sri S.Sri Ram, learned Advocate General, the status of the 1st petitioner for the limited purpose required in these writ petitions needs attention and in order to find out if the impugned action of the 2nd respondent issuing Form-II notice is justified. Having regard to the effect of Section 87 of Act 30 of 1987, when a properly constituted tribunal is vested with jurisdiction and authority, to determine action of this nature which is in dispute, as rightly pointed out on behalf of both the parties, this Court has to tread on a path, bearing in mind the contours of the present action.
53. Sri S.Sri Ram, learned Advocate General, strenuously contended explaining the circumstances under which the 2nd respondent had to extend his power and jurisdiction under Section 44 of Act 30 of 1987. They are- (1) the deed of trust of the 1st petitioner with an indenture, (2) stand of the petitioners in relation to gaining exemptions in terms of Section 12-A (i)(v)(i) and Section 80G of the Income Tax Act and (3) nature of the activity carried out by this institution in running hospital MVRJ, W.P.Nos.1470 & 1502 of 2022 20 and Polytechnic college, and (4) stand of the 2nd petitioner in a pending civil suit.
54. Admittedly, a suit in terms of Section 92 CPC in O.S.No.487 of 2016 is pending on the file of the Court of the learned XII Additional District Judge, Guntur. The respondents 6 to 11 filed this suit against the 2nd petitioner. The relief sought in this suit included removal of the 2nd petitioner as the Managing Trustee of the 1st petitioner trust among other things. In para-4 of the written statement filed by the 1st petitioner, it is the version of the 2nd petitioner that the clauses of the trust deed provide for benefits to all and the question whether the beneficiaries are milk producers or not is not relevant. These statements are made in the context of nature of the lis in the suit. Amendments brought to this deed of trust are also stated in the written statement to the effect that the benefit under the trust is not confined to the milk producers alone and it is for the benefit of all. Thus, it is contended for the respondents that the contents of this written statement belie the stand of the 2nd petitioner at present in these writ petitions.
55. Sri B.Adinarayana Rao, learned senior counsel in this context contended that averments in the written statement cannot be deemed 'admissions' and necessarily they should be considered in the context of the circumstances with reference to explaining a particular situation.
56. As rightly contended by Sri S.Sri Ram, learned Advocate General, to justify the action in issuing Form-II notice, the 2nd respondent Commissioner should find basis. It is the jurisdiction conferred statutorily on him. Therefore, as rightly contended for the respondents, upon MVRJ, W.P.Nos.1470 & 1502 of 2022 21 consideration of the material available and the stand of the petitioners as to nature of the activity carried on by the 1st petitioner trust, in the considered opinion of the second petitioner, such notice was issued.
57. Prominently, as pointed out by Sri Prabhunath Vasireddy, learned counsel for the respondents 6 to 11, the income tax returns filed on behalf of the 1st petitioner refer the status of the 1st petitioner as 'a public charitable trust'. The amendments brought out referred to supra to this deed of trust are, indeed is for this purpose and they were put into action, as is reflected in the income tax returns.
58. Pointing out divergence in the conduct and stand of the petitioners in the suit and in the present matters, it is contended for the respondents that an attempt is made, to present a picture as if provisions of Act 30 of 1987 did not apply to the petitioners.
59. Sri S. Sri Ram, learned Advocate General, draws parity between definition of 'Charitable purpose' in Section 2 (5) of Act 30 of 1987 and Section 2(15) of the Income Tax Act which defines 'charitable purpose' for registration of a trust or institution under Section 12(AA) of the Income Tax Act. It is further contended that that the 2nd respondent Commissioner formed his opinion on such basis and when similar tests are required to apply with reference to Section 44 of the Act 30 of 1987, to construe an institution whether a public charitable institution or not, no exception can be made out. Sri B.Adinarayana Rao, learned senior counsel referring to these provisions of the Income Tax Act in reply contended that they are not referable to a Public Charitable Trust relying on the effect of Sections 11,12 and 12A of the Income Tax Act.
MVRJ, W.P.Nos.1470 & 1502 of 2022 22
60. Suffice to consider for the present purpose, the uncontroverted statements in the nature of I.T.returns of the 1st petitioner institution which clearly referred to status of this trust as a public charitable trust. It is not necessary in the circumstances to elaborate on the effect of all these provisions of the Income Tax Act.
61. It is contended for the petitioners that the activities of this trust in running a hospital subject to payment of fee from all those entitled to use it including public in general, upon issuing health cards to the milk producers, who are part of Sangam Dairy and its employees is not an indicator of nature of this trust. Further contention is advanced basing on the preliminary report of Smt. D.Bramaramba, Joint Commissioner, where there is reference to income derived from Dhulipalla Veeraiah Chowdary Hospital and Polytechnic college. The tabulated statement in this preliminary report, referring to the income tax returns of the 1st petitioner trust for the years 2018-19, 2019-20 and 2020-21 shows income from these two entities at Rs.11,47,850/-, Rs.2,26,96,926/- and Rs.6,49,48,131/- respectively. The income so generated, according to the contention of the petitioners is demonstrative of the nature of this institution and thus it is not a public charitable institution.
62. On behalf of the official respondents, it is contended that merely because certain fee or charges are levied in extending such services to particular sections entitled to these facilities or the general public, it cannot be a instance of the 1st petitioner trust being a private institution and not a public charitable trust. It is also pointed out for the respondents that running Polytechnic college drawing the pupil through MVRJ, W.P.Nos.1470 & 1502 of 2022 23 Sri Venkateswara University, Tirupathi on counselling is another indicator of nature of use of the facilities provided by this trust.
63. The facilities or amenities provided by the 1st petitioner trust are not for an identified class of entities or an ascertained body of individuals or a select group in exclusion to others, as the prima facie material in this case indicated.
64. The indenture of the trust deed, setting out the purpose in establishing this trust as well as its objects, prima facie indicate the same purpose. Source of funds to this trust referred supra including from public at large is another indicator in this direction. Powers of Board of Trustees to accept endowments, donations etc., set out in this trust deed supports this inference. The version of the 2nd petitioner in O.S.No.487 of 2016 on the file of the Court of the learned XII-Additional District Judge, Guntur, in a scheme suit when viewed in this background, further strengthens the nature of this trust. The averments in the written statement of the 2nd petitioner in the suit reflect his stand.
65. In the preliminary reports of Smt. D.Bramaramba-Joint Commissioner to the 2nd respondent Commissioner or in the memo dated 25.10.2021 factors and circumstances are stated to apply Act 30 of 1987 to this trust.
66. The contents of the deed of trust and the I.T.Statements cannot be brushed aside on behalf of the petitioners, being ill-drafted or amalgamous or self-descriptions. The petitioners cannot afford to disown these documents and their effect. Further, it has to be borne in mind that all these documents emanated during the period when the petitioners MVRJ, W.P.Nos.1470 & 1502 of 2022 24 were at peace without any challenge to their constitution or activities. They are bound by the contents of these documents, which did offer prima facie material to consider nature and character of the 1st petitioner trust.
67. One of the contentions of Sri B.Adinarayana Rao, learned senior counsel for the petitioners, is that when an elaborate reply dated 11.11.2021 was issued to the memo dated 25.10.2021 disputing the claim of the 2nd respondent Commissioner of Endowment, it has not been adjudicated upon by proper forum. Impugned notice, in fact is an order of the 2nd respondent according to the petitioner, requiring them to comply.
68. However, the 2nd respondent in his counter-affidavit specifically referred to the events particularly orders of one of the learned Judges of this Court in W.P.No.21986 of 2020 and W.P.No.10283 of 2021, directing to follow certain procedure with reference to application of Sections 43 and 44 of Act 30 of 1987. In W.P.No.10283 of 2021, learned Judge specifically directed these official respondents to follow the procedure ordained therein. In application of Section 44 of the Act, the learned Judge directed thus:
"B) Where the registration is carried out under Section 44 of the Act, the following procedure shall be followed:
i) The Jurisdictional Assistant Commissioner either suo motu or on such information that is given to him, shall give a report to the Commissioner, Endowments detailing the institution that requires to be registered and the names of the person or persons, who have failed to approach the competent Jurisdictional Assistant Commissioner under Section 43 of the Act.
ii) Upon such information being given by the Assistant Commissioner, or being received from any other source, the Commissioner shall issue notices under Form-II to all persons, MVRJ, W.P.Nos.1470 & 1502 of 2022 25 who are in default, to file an application for registration within the time given in the notice.
iii) The Commissioner shall also issue notices to all persons having interest in the institution either by way of personal notice or by way of publication of the notice in the local news papers or both, giving opportunity to such persons to put-forth their views and objections on the aspect of registration as well as the details which are to be contained under Section 43(4) of the Act.
iv) The Trustees, persons in management and/or the persons having interest are entitled to file their objections in relation to the question of whether the said Institution is liable to be registered and/or the details that are required to be included in the register under Section 43 of the Act. They may also place such material as they deem necessary before the Commissioner. After giving adequate opportunity for all such objections to be filed, the Commissioner after considering these objections and material submitted by the objectors and after such enquiry as may be deemed fit, shall take a decision as to whether the institution is to be registered or not and the details that need to be registered under Section 43(4) of the Act.
v) In the event of the Commissioner determining that the institution requires to be registered, he shall issue directions to the Jurisdictional Assistant Commissioner to register the institution along with the details that need to be entered in the register under Section 43(4) of the Act.
vi) Upon such instructions being received, the Jurisdictional Assistant Commissioner shall register the institution duly entering of the details required under Section 43(4) of the Act.
This process shall be done at the cost of the institution."
69. Reasons are also assigned in the order in W.P.No.10283 of 2021 in drawing such procedure particularly with reference to notice, finding it as a fundamental requirement of natural justice.
70. The reason so assigned by the 2nd respondent in this context cannot be brushed aside. When there are directions of the Court, when the 2nd respondent is a party to W.P.No.10283 of 2021, he is bound to follow. These directions particularly with reference to prior notice of the action contemplated either under Section 43 or 44 to all concerned are indeed in application of these provisions. The legislature prescribed in MVRJ, W.P.Nos.1470 & 1502 of 2022 26 Section 45 of the Act 30 of 1987, a procedure to challenge the entries made in the Endowment Register. A robust mechanism thus is now provided affording multiple opportunities for the aggrieved or affected by the action of the authorities under the Act 30 of 1987.
71. In this backdrop, it is certain that it is not for the official respondents to invoke Section 87 of Act 30 of 1987 merely basing on the assertions and disputations of the 2nd petitioner with reference to the status of the 1st petitioner trust. The jurisdiction conferred on the 2nd respondent in terms of Section 44 as well as authority, is hedged by Section 87 of the Act 30 of 1987 as pointed out by Sri S.Sri Ram, learned Advocate General, and any action taken in terms thereof is subject to challenge before the Endowments Tribunal under Section 87 of Act 30 of 1987.
72. If the effect of Section 87(4) relating to presumptions is considered, it is not permissible to confine its operation in respect of those matters pending determination before the Endowment Tribunal. The instances that bear presumption of public character in their favour, can be invoked and applied for all purposes under Act 30 of 1987 alone. Necessarily foundational facts to make out an institution being charitable or endowment, need be established before raising this presumption.
73. In W.P.No.1470 of 2022 application of Act 30 of 1987 to the 1st petitioner trust is questioned on the ground that it is already a trust registered under Section 5 of the Indian Trust Act and therefore very foundation in issuing directions in Form-II to register again under local enactment shall fail. In this context, reference is also made to Section 156 MVRJ, W.P.Nos.1470 & 1502 of 2022 27 of Act 30 of 1987 under which central enactments enlisted thereunder cease to apply to charitable and religious institutions. It is also contended that in view of Article 254 of Constitution, law made by the Parliament prevails with respect to matters enumerated in the concurrent list over a local legislation of the State to the extent of repugnancy and therefore, the 1st petitioner trust cannot be brought within the ambit of Act 30 of 1987.
74. Sri B.Adinarayana Rao, learned senior counsel for the petitioner, contended that this particular ground raised has not been controverted in the counter by the 2nd respondent nor any specific stand of the official respondents is forthcoming.
75. It is contended on behalf of the official respondents that what all 2nd respondent did in issuing Form-II notice is to follow the order of this Court in W.P.No.10283 of 2021 where specific directions are set out including with reference to application of Section 44 of Act 30 of 1987.
76. Section 156 of Act 30 of 1987 is not specifically challenged in these writ petitions, on the grounds set out by the petitioners in W.P.No.1470 of 2022. Therefore, its validity vis-à-vis the central enactment like Indian Trust Act, is not a question open for determination now.
77. Section-1 of Indian Trust Act provides for savings. On account of the effect of the same, the provisions of the said Act, are not applicable to public or private religious or charitable endowments. In these circumstances, the objections so raised on behalf of the petitioners in W.P.No.1470 of 2022 cannot stand.
MVRJ, W.P.Nos.1470 & 1502 of 2022 28
78. Thus, it is contended for the respondents that a cumulative consideration of all these instances, which the 2nd respondent did, made out a prima facie inference that the 1st petitioner is a public charitable institution. Thus, Sri Sri Ram, learned Advocate General justified the action of the 2nd respondent in issuing Form-II notice to the petitioners on a tentative opinion formulated.
79. Sufficient material is found to hold propriety in the action of the 2nd respondent against the petitioners. The action of the 2nd respondent in issuing Form-II notice is justified, in the circumstances. Contention of the official respondents requires acceptance in preference to that the petitioners.
80. Therefore, rejecting the contentions of the petitioners, it is held that the action of the 2nd respondent in issuing Form-II notice invoking his power and jurisdiction in terms of Section 44 of Act 30 of 1987 is proper. POINT No.2:
81. Sri S.Sri Ram, learned Advocate General, contended that a notice so issued to the petitioners cannot be subject matter of challenge in the writ petition due to its very nature and time and again the Apex Court has warned, with interference of notices of this nature.
82. Placing reliance in Special Director and another v. Mohd. Ghulam Ghouse and another7, this contention is advanced by learned Advocate General. In para-5 of this ruling in this context it is observed: 7
. (2004) 3 SCC 440 MVRJ, W.P.Nos.1470 & 1502 of 2022 29 "5 This Court in a large number of cases has deprecated the practice of the High Courts entertaining writ petitions questioning legality of the show-
cause notices stalling enquiries as proposed and retarding investigative process to find actual facts with the participation and in the presence of the parties. Unless the High Court is satisfied that the show-cause notice was totally non est in the eye of the law for absolute want of jurisdiction of the authority to even investigate into facts, writ petitions should not be entertained for the mere asking and as a matter of routine, and the writ petitioner should invariably be directed to respond to the show-cause notice and take all stands highlighted in the writ petition. Whether the show-cause notice was founded on any legal premises, is a jurisdictional issue which can even be urged by the recipient of the notice and such issues also can be adjudicated by the authority issuing the very notice initially, before the aggrieved could approach the court."
83. Another ruling relied on by Sri S.Sri Ram, learned Advocate General in the same context is State of Uttar Pradesh vs. Brahm Datt Sharma and another8. In para-9 of this ruling, in a situation where a Government servant was issued a show-cause-notice basing on a statutory provision, interfering with the order of the High Court in quashing such show-cause-notice, the observations recorded are:
"9. ...... When a show cause notice is issued to a government servant under a statutory provision calling upon him to show cause, ordinarily the government servant must place his case before the authority concerned by showing cause and the courts should be reluctant to interfere with the notice at that stage unless the notice is shown to have been issued palpably without any authority of law. 'The purpose of issuing show cause notice is to afford opportunity of hearing to the government servant and once cause is shown it is open to the Government to consider the matter in the light of the facts and submissions placed by the government servant and only thereafter a final decision in the matter could be taken. Interference by the court before that stage would be premature, the High Court in our opinion ought not have interfered with the show cause notice."
84. Another judgment of this Court relied on by Sri S.Sri Ram, learned Advocate General, is Kothamaram Nagi Reddy and 5 others v. The Government of Andhra Pradesh rep. By its Principal Secretary, Revenue (Excise-II), Secretariat, Hyderabad and 8 8 . (1987) 2 SCC 179 MVRJ, W.P.Nos.1470 & 1502 of 2022 30 others9. In respect of interference with the administrative decision in Judicial Review Proceedings, the role of the Court is stated thus:
While examining an administrative decision, in judicial review proceedings, the Court does not act as a court of appeal and record a finding whether such decision could have been taken otherwise in the facts and circumstances of the case. The doctrine that powers must be exercised reasonably has to be reconciled with the no less important doctrine that the court must not usurp the discretion of the public authority appointed to take the decision. Within the bounds of legal reasonableness is the area in which the deciding authority has genuinely free discretion. If it passes those bounds, it acts ultra vires. The court must therefore resist the temptation to draw the bounds too tightly, merely according to its own opinion. It must strive to apply an objective standard which leaves to the deciding authority the full range of choices which the legislature is presumed to have intended. Decisions which are extravagant or capricious cannot be legitimate. But if the decision is within the confines of reasonableness, it is no part of the court's function to look further into its merits. 'With the question whether a particular policy is wise or foolish the court is not concerned; it can only interfere if to pursue it is beyond the powers of the authority." (Sterling Computers Ltd. v. M & N Publications Ltd.17; Administrative Law, Prof. Wade)...."
85. Thus, it is contended for the respondents that in a proceedings of this nature, in the backdrop of the facts and circumstances, this Court cannot step-in to interdict the jurisdiction so exercised by the 2nd respondent.
86. These rulings relied on by the learned Advocate General are fact based and basing on the requirements of law considered therein, it was so held, according to Sri B.Adinarayana, learned senior counsel, and therefore they are inapplicable to the present situation.
87. Form-II notice issued to the petitioners is in the nature of reminding them of their obligation in terms of Section 43 of Act 30 of 1987 to register this institution. Not only on account of the inbuilt safeguards in Section 43 and as provided by Section 45 of Act 30 of 1987, 9 . (2013) 3 ALT 521 MVRJ, W.P.Nos.1470 & 1502 of 2022 31 ruling in W.P.No.10283 of 2021 is providing for procedure to follow in a situation of this nature. Thus, there is scope and opportunity for the petitioners to ventilate and agitate their grievances before appropriate forum to a full measure.
88. These decisions relied on by the learned Advocate General are apt and they squarely cover the present situation. Therefore, filing these writ petitions questioning Form-II issued by the 2nd respondent as such, as rightly contended for the respondents, is rather premature.
89. Thus, it is held that these writ petitions are not maintainable. POINT No.3:
90. The grievance of the petitioners is that the present ruling dispensation in the State of Andhra Pradesh is bent upon harming the interests of the 2nd petitioner, who is leader of opposition in the State. Earlier attempt of those in governance now to take over reigns of Sangam Milk Producers Company Limited failed on account of the interference of this Court in W.P.No.9279 of 2021, which was confirmed in W.A.No.281 of 2021 according to the petitioners. A reference is also made to criminal cases registered against the management of this Company.
91. On such premise, on behalf of the petitioners, Sri B.Adinarayana Rao, learned senior counsel, contended that this is a clear indication of malicious practices adopted by the present ruling dispensation and being malice in law and the attempt at present is to take over the Sangam Dairy indirectly bringing pressure on the 1st petitioner MVRJ, W.P.Nos.1470 & 1502 of 2022 32 trust. It is further contended that no other cause is seen in this action against the petitioners, indirectly invoking A.P.Act 30 of 1987.
92. The learned Advocate General stoutly refuted this contention on the premise that it is not an instance of regime revenge nor making out malice in law. The learned Advocate General further contended that when there is prima facie material remaining outstanding against the petitioners for the Government to act, regime revenge as such cannot be applied. When the activities of the petitioners are riddled with instances in not complying with law and its requirements, it was not either investigated or detected earlier, possibly on account of alignment of the 2nd petitioner, due to regime compatibility. For such reason, no action was initiated against the petitioners, according to the learned Advocate General.
93. When there is prima facie material remaining outstanding against the petitioners, initiating action of the present nature cannot be attempted to be shielded on the premise of the concerted action on the part of the present ruling dispensation in the State to victimise the petitioners, by indirect method. Therefore, this ground as sought to be projected by the petitioner cannot afford protection for them against the action of the official respondents under Act 30 of 1987. It cannot be an instance that can lead to hold that an attempt is made in this fashion by the State to get at the 1st petitioner institution to wield control over the Sangam Milk Producers Company Limited. Thus, in the action of the 2nd respondent against the petitioner now sought to be impugned, no mala fides as such can be attributed. Thus, this point is held.
MVRJ, W.P.Nos.1470 & 1502 of 2022 33 POINT No.4:
94. The findings recorded on points 1 to 3 lead to an irresistible conclusion that it is a misconceived attempt by the petitioners in both the writ petitions, against the respondents without merit. These two writ petitions are not maintainable. Therefore, they shall be dismissed.
95. In the result, both the writ petitions are dismissed. No costs. It is open for the petitioners in W.P.No.1502 of 2022 to file their objections before the 2nd respondent within two (02) weeks from now, pursuant to Form-II notice served on them.
As a sequel, pending miscellaneous petitions, if any, stand closed. Interim Orders, if any, stand vacated.
________________________ JUSTICE M.VENKATA RAMANA Dt: 09.02.2022 RR