Gujarat High Court
Shri His Highness Maharaja Shri Raol ... vs Thakorsahebshri Balbhadrasinhji on 10 May, 2019
Author: A.Y. Kogje
Bench: A.Y. Kogje
C/SCA/7997/2019 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 7997 of 2019
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE A.Y. KOGJE Sd/-
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1 Whether Reporters of Local Papers may be allowed to No
see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law No
as to the interpretation of the Constitution of India or any
order made thereunder ?
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SHRI HIS HIGHNESS MAHARAJA SHRI RAOL VIJAYRAJSINHJI OF
BHAVNAGAR
Versus
THAKORSAHEBSHRI BALBHADRASINHJI
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Appearance:
MR MEHUL S SHAH, SENIOR ADVOCATE assisted by MR JENIL M
SHAH(7840) for the Petitioner(s) No. 1,2,3,4,5,6
MR DHAWAN JAYSWAL, AGP (1) for the Respondent(s) No. 5
MR MITUL K SHELAT(2419) for the Respondent(s) No. 4
MR DEVANG NANAVATI with MR ADITYA PARIKH and MR MRUGEN K
PUROHIT(1224) for the Respondent(s) No. 1,2,3
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CORAM: HONOURABLE MR.JUSTICE A.Y. KOGJE
Date : 10/05/2019
ORAL JUDGMENT
1. RULE. Learned Advocate Mr.Mrugen Purohit waives service of Rule on behalf of respondent Nos.1, 2 and 3, learned Advocate Mr.Mitul Shelat waives service of Page 1 of 18 Downloaded on : Tue Jun 25 07:23:00 IST 2019 C/SCA/7997/2019 JUDGMENT Rule on behalf of respondent No.4 and learned AGP Mr.Dhawan Jayswal waives service of Rule on behalf of respondent No.5.
2. This petition under Article 226 of the Constitution of India is filed seeking direction to quash and set aside judgment and order dated 28.03.2019 passed by the Joint Charity Commissioner below application Exhs.4 and 6 in Judicial Misc.Application No.41/15/18. In the aforesaid case, management of Rajkumar College, Rajkot managed by a Trust, viz. Rajkumar College Trust, Rajkot is brought in question on the ground of non- holding of election to the post of President. The petitioners herein are the trustees of the Trust whereas respondent Nos.1 to 3 are members of the founding families of the Trust. Respondent No.4 is one of the Trustees. Respondent Nos.1 to 3 are the applicants in the application under Section 41A of the Gujarat Public Trusts Act ("the Act" for short) filed before the Joint Charity Commissioner, wherein it is prayed inter alia for a direction to declare and conduct election as per the rules of management of Rajkumar College, which provides for election after period of five years with opportunity to all the members to contest and vote in such election. Along with application under Section 41A, application Exh.4 came to be filed with almost identical prayers as Page 2 of 18 Downloaded on : Tue Jun 25 07:23:00 IST 2019 C/SCA/7997/2019 JUDGMENT in the main application and below such application, an order came to be passed on 17.12.2018 and under such order, it was directed not to take any decision on Agenda item No.6 of the meeting scheduled on 18.12.2018. It was also directed not to take any policy decision regarding management of the Trust and major expenditure except day- to-day expenditure for the administration of the Trust without the permission of the General Board. The application Exh.6 was also filed seeking stay on decision of issue No.6 of agenda item for the meeting scheduled on 18.12.2018.
2.1 The Joint Charity Commissioner proceeded to hear and dispose of application Exhs.4 and 6 by the impugned order dated 28.03.2019.
2.3 After the impugned order, application Exh.42 was filed by the petitioners, who are opponents in application under Section 41A for staying the operation of the order. Below such application, operation of the impugned order was suspended for a period of three months. Thereafter, by issuing notice dated 26.04.2019, the order of suspension dated 28.03.2019 was continued. Respondent Nos.1 to 3 have appeared on caveat through learned Advocate Mr.Mrugen Purohit whereas upon notice, respondent No.4 has appeared through learned Advocate Mr.Mitul Shelat.
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C/SCA/7997/2019 JUDGMENT 3. Learned Senior Advocate for the petitioners
mainly contended that the proceedings under Section 41A of the Act cannot be invoked for the purpose of direction to conduct election and when the proceeding under Section 41A for such purpose is not maintainable, no interim direction can be issued. He drew attention of this Court to judgment of this Court in the case of Syenda Mohamed Burhanuddin the 52nd Dai-ul-Multaq and Head of the Dawoodi Bohra Community Vs. Charity Commissioner, Gujarat State, Ahmedabad & Ors., reported in 1992 (1) GLH, 331. It is submitted that powers under Section 41A are only administrative and not adjudicatory, whereas the issues sought to be raised by the respondents in the application are purely adjudicatory.
3.1 It is submitted that the only ground raised by the respondents in the application under Section 41A is of non-holding of election. However, nothing is pointed on record with regard to any mismanagement so as to invoke Section 41A. It is submitted that the rules of management provide for a power to the President to extend the period of the trustees for a particular period and the President, i.e. petitioner No.5, in exercise of such power, has extended the period of the body earlier for a period between 2018-19 and again for a period of one year between 2019-20. He emphasized on such powers which are Page 4 of 18 Downloaded on : Tue Jun 25 07:23:00 IST 2019 C/SCA/7997/2019 JUDGMENT provided under Rules 5 and 6.
3.2 It is submitted that though the President is not required to seek any support from any of the trustees to exercise powers for extending the period and such decision can be his sole decision, yet, petitioner No.5 was in consultation with all the trustees, except for respondent No.4 and all other trustees have supported petitioner No.5-President in such extension. It is submitted that there is no provision for seeking any validation from any authority or from the Board of Trustees for exercise of such power. Attention is drawn of this Court to letters by the trustees to demonstrate their support to the decision of the President for extension of the tenure of the trustees at Annexure-C. 3.3 It is submitted that application under Section 41A is premature application as two Change Reports are filed and pending which directly deal with the issues which would have effect on the subject matter raised in application under Section 41A. It is submitted that unless these Change Reports which are pending for decision are decided finally, no decision on the relief prayed for is possible.
3.4 It is submitted that the applicants of application under Section 41A are not even the trustees Page 5 of 18 Downloaded on : Tue Jun 25 07:23:00 IST 2019 C/SCA/7997/2019 JUDGMENT
and therefore, would not have any locus with regard to subject matter raised in such application. It is submitted that such ground will assume importance when the duly elected Trustees, except for one are in favour of the decision taken by the President and the application is filed with oblique motive to support a disgruntled sole trustee, who opposes the motion also for oblique reasons. It is submitted that prior to petitioner No.5 becoming President, respondent No.4 had continued uninterrupted as the President for a long period of 12 years without holding election as contemplated under the rules of management and since such trustee is now out of power, is making all efforts to get back to power.
3.5 It is submitted that exercise of powers by the President under Rule 6 for extending the period was very much within the knowledge of respondent No.4 and even other respondents herein. It is submitted that first period of five years expired in February 2018 and was thereafter extended by the President till 2019 and during this period, meetings of the Board of Trustees were conducted, where respondent No.4 had also participated and had never objected to holding of such meetings upon expiry of five years term. Once having participated and not objected, respondent No.4 has impliedly accepted the Page 6 of 18 Downloaded on : Tue Jun 25 07:23:00 IST 2019 C/SCA/7997/2019 JUDGMENT situation and now cannot be permitted to object.
4. As against this, it is submitted by learned Advocate Mr. Devang Nanavati with Advocate Mr.Mrugen Purohit appearing on caveat for respondent Nos.1 to 3 and learned Advocate Mr.Mitul Shelat for respondent No.4 that the impugned order is an interim order and the main matter is still pending and therefore, the Court under Articles 226 and 227 may not interfere. It is submitted that admittedly, term of the elected body is over and therefore, directions issued in the impugned order does not prohibit elected body from functioning, but only provides for the elected body to take consent of the Board of Trustees for any policy decision or for any major expenditure. It is submitted that such a direction issued cannot be considered to be a direction of such nature which would require interference. 4.1 It is submitted that though the challenge is to the interim order, scope of exercise of powers under Article 227 of the Constitution of India is limited. The orders are passed below application under Section 41A of the Act and there is no lack of jurisdiction. The order also is not so unreasonable that it would require interference under Article 227 of the Constitution of India. Reliance is placed on the decision of the Apex Court in the matter of Mohd.Yunus Vs. Mohd. Mustaqum & Page 7 of 18 Downloaded on : Tue Jun 25 07:23:00 IST 2019 C/SCA/7997/2019 JUDGMENT Ors., reported in AIR 1984 SC, 38, on the point of limitation of supervisory jurisdiction under Article 227 of the Constitution of India.
4.2 It is submitted that the first meeting of the elected body was on 27.02.2013 and therefore, the term of elected body of five years expired on 26.02.2018. For the first time, in the meeting of 27.07.2018, reference is made to extension of tenure though there was no agenda item for the scheduled meeting. It is submitted that when the resolution was passed, at that time, term had already expired and therefore, the Board of Trustees had no authority to convene the Board of Trustees meeting and more so, no authority to pass resolution of extending their own term.
4.3 It is vehemently submitted by drawing attention of the Court to the resolution pertaining to extension of term that the reasons contained in such resolution are not in consonance with the requirements of Rule 6. It is submitted that the letters of the Board of Trustees to the President for support of extension are not referred to in the resolution and therefore, such letters apparently created subsequently. The resolution does not refer to any emergency situation which would require extension of term. The so called emergency situation in view of Fee Regulation Act, 2017 cannot be said to be Page 8 of 18 Downloaded on : Tue Jun 25 07:23:00 IST 2019 C/SCA/7997/2019 JUDGMENT emergency situation in view of the agenda item recorded in the very meeting, where it is recorded that no updation regarding Fee Regulation Act is received and therefore, the students have been charged for textbooks and notebooks as no order is received from the Fee Regulation Committee regarding fixation of fees. Moreover, there was sufficient surplus funds in the accounts of the Trust which would be sufficient to face any emergent situation.
4.4 It is submitted that in absence of the requirement of Rule 6, extension of term is unjustified and therefore, rightly interfered by the Joint Charity Commissioner by interim order.
4.5 It is submitted that non-holding of election as per the Rules governing the administration of the Trust is an example of mismanagement, for which Section 41A application would be maintainable. Reliance is placed on the decision of this Court in the case of Pavankumar Jain Vs. Priyavadan Ambalal Patel, reported in 2016(1) GLR, 242, where it is held that the powers under Section 41A cannot be restricted to the matters falling under Sections 32 to 41 of the Act only.
4.6 It is submitted that the directions were issued in December 2018 and the Board of Trustees have Page 9 of 18 Downloaded on : Tue Jun 25 07:23:00 IST 2019 C/SCA/7997/2019 JUDGMENT
functioned under the interim order and having faced no difficulty in administration and therefore also, there is no need to interfere.
5. Having heard rival submissions of the parties and having perused documents on record, it appears that the petitioner are Trustees of Rajkumar College Trust, which is registered under order dated 22.03.1963 for the purpose of imparting education. The Trust is governed by the Rules for Management of the Rajkumar College, which provides for affairs of the college by the Board of Trustees, constitution of Trustees, Trusteeship, management, President, period for which the Trustees to be elected, quorum at the Trustees meeting, working of the Trustees, etc. For the purpose of the present case, it is necessary to record from the Rules of Management that the foundation of Trust and its concerns are governed and regulated by the constituent body of up to seven constituent members /Trustees. These seven constituent members are elected by the two orders of the founding members of the founding houses of the foundation of Trust. The election is to be from the eligible members of the houses who are qualified to be public Trustees. There are several requirements which may not be necessary for the purpose of this case. Note-1 of Rule-4 provides for "Successor-in-line". Note-2 provides Page 10 of 18 Downloaded on : Tue Jun 25 07:23:00 IST 2019 C/SCA/7997/2019 JUDGMENT for "eligible members", which means in the first place, a founding member and in the second, heir of a founding member sponsored by that member or otherwise an agnate, not exceeding one per house, sponsored by the head of that house and cosponsored by two founding members. The President and the Warden and /or Secretary of the electoral body and or the foundation and trust are respectively elected and appointed by the constituent members. The aforesaid provisions in the Rules, appears to have been made with an object to restrict the management within the founding families of the Trust. The provision for management provides for affairs of the institution and other organizations under the Trust to be administered through appropriate bodies constituted pursuant to by-laws and may include President and constituent members /Trustees and appointed and co-opted members, one member elected by the successors-in-line of the non-Kathiawad rulers, who subscribed to the endowment fund of the Rajkukar College. Rules 5 and 6 of the Management Rules read as under:-
"The President
5. The Trustees as elected above shall elect its own President for the duration of its own existence. The President is not eligible for re-election to two consecutive terms.
Period for which Trustees elected:
6. The term of the Trustees shall be five Page 11 of 18 Downloaded on : Tue Jun 25 07:23:00 IST 2019 C/SCA/7997/2019 JUDGMENT years as from the date of its meeting, but the President shall have power to extend the period temporarily, in cases of emergency, by a maximum period of one year at a time, but not exceeding three years, to be communicated by him in writing to the Trustees of the Board.
5.1 Rule-10, which provides for working of the Trustees, reads as under:-
"Working of the Trustees
10. All resolutions at Trustees Meetings shall be carried by a bar majority. In case of an equality of votes the Chairman shall have an additional casting vote."
6. The present body appears to have been elected and there does not appear to be any dispute regarding their election, except for the aspect of President, who appears to have become the President on account of demise of the previous President. The first meeting of the elected body was convened on 27.02.2013. The Change Report pursuant to newly elected body was submitted on 28.02.2013, which was accepted by order below Change Report No.137 of 2013 dated 07.04.2014. The period of five years, therefore, was to expire on 26.02.2018. On 27.07.2018, meeting was convened, under which resolution was passed for extending the tenure by one year and it is recorded in such resolution that the President has used his discretion under Rule 6 of the Rules of Management. It is found that objection of respondent No.4 is also Page 12 of 18 Downloaded on : Tue Jun 25 07:23:00 IST 2019 C/SCA/7997/2019 JUDGMENT recorded.
7. On 14.12.2018, respondent Nos.1 to 3 filed Judicial Misc.Application No.41/15/18 under Section 41A of the Act before the Joint Charity Commissioner along with application Exh.4. On 17.12.2018, respondent Nos.1 to 3 filed application Exh.6 seeking stay on decision of issue No.6 of agenda item for the meeting scheduled on 18.12.2018. An ex parte ad interim order was passed on 17.12.2018, which stayed the decision on agenda item No.6 pertaining to further extension of term of the elected body for a period from February 2019 to February 2020 and further directed the Trust not to take any policy decision of incurring expenditure for daily administration without the approval of the General Body. Pursuant to notice, petitioners filed their reply to the main application as well as interim application and the petitioners also filed Change Report No.127 of 2019 for effecting change on the basis of resolution for extending the term of the elected body for a period between 2018 to 2019. The respondents also preferred Change Report No.137 of 2019 before the Joint Charity Commissioner for deletion of the name of existing Trustees from the PTR record on expiry of the term of five years. After hearing the parties, the impugned order came to be passed, whereby ex party ad interim relief came to be Page 13 of 18 Downloaded on : Tue Jun 25 07:23:00 IST 2019 C/SCA/7997/2019 JUDGMENT confirmed, meaning thereby the discussion and decision on agenda item No.6 of the meeting scheduled on 18.12.2018 was stayed till final disposal of the application and that the body was prohibited from taking any policy decision without the permission of the General Board and daily expenditure and any heavy expenditure, except for the expenditure for daily administration to be made only after sanction of the General Board.
8. The foundation for the challenge in application under Section 41A is for non-holding of election by the elected body even after expiry of its term and that the resolution for extending the term for the period between February 2018 to 2019 was taken in the meeting of 27.7.2018, which was after expiry of the term of the elected body. This, according to the respondents, is a case of mismanagement and therefore, application under Section 41A was preferred. As recorded hereinabove, Rule 6 clearly provides for the powers of the President to extend the period temporarily by a maximum period of one year at a time, but restricting such extension not exceeding three years. Therefore, power to the President is recognized by the Rules itself and for exercise of such powers, there is no requirement of any approval or ratification by the Board of Trustees. Therefore, exercise of powers under Rule 6 ipso facto cannot be Page 14 of 18 Downloaded on : Tue Jun 25 07:23:00 IST 2019 C/SCA/7997/2019 JUDGMENT termed to be an instance of mismanagement to invoke Section 41A of the Act. However, if the case of the respondents is to be considered that requirement for invoking Rule 6 is existing of emergency situation and requirement of communication in writing to the Trustees of the Board not being fulfilled, in the opinion of this Court would require adjudication and not mere decision on administrative side as is contemplated under Section 41A. In the facts of the present case, extension of term of Board of Trustees for a period of one year from February 2018 to February 2019 is already questioned in the Change Report filed under Section 22 and therefore, when the Asst. Charity Commissioner is to examine this issue under Section 22, which would include adjudication on the contentions raised, including contention of the existence of emergency situation or requirement of communication in writing to the Trustees of the Board is still at large and required to be decided in an application for Change Report pending under Section 22. Therefore, the Joint Charity Commissioner was justified in directing stay on the proceedings of the meetings in connection with agenda item No.6 till final disposal of the application coupled with the direction to conclude the proceedings of the Change Report within a period of 90 days thereof. This Court is also of the opinion that while the first extension is still under consideration in an application Page 15 of 18 Downloaded on : Tue Jun 25 07:23:00 IST 2019 C/SCA/7997/2019 JUDGMENT under Section 22, the decision on item agenda No.6 of the meeting would have further precipitated the situation and therefore the course adopted by the Joint Charity Commissioner in staying the proceedings on agenda item No.6 is justified.
9. The other direction which puts restriction on the functioning of the existing body needs to be considered in the light that the only ground for filing application under Section 41A was of non-holding of election, which according to the respondents is an instance of mismanagement. However, when the mismanagement alleged involves adjudicatory process, the exercise is required to be undertaken under Section 22. However, in the entire proceeding, there are no instances pointed out with regard to mismanagement by the body or any instance that would require the Joint Charity Commissioner to issue direction for proper administration and for proper accounting of the income. In absence of this crucial issue, the direction under Section 41A were uncalled for. The Joint Charity Commissioner has therefore exceeded his jurisdiction when no instance of mismanagement in the administration and /or in the income is brought on record so as to justify the exercise of powers under Section 41A. The Court therefore finds sufficient cause to interfere, insofar these directions Page 16 of 18 Downloaded on : Tue Jun 25 07:23:00 IST 2019 C/SCA/7997/2019 JUDGMENT are concerned and therefore, the directions contained in the impugned order to the effect of restricting management from taking any policy decision without the permission of the General Board and daily expenditure and any heavy expenditure, except for the expenditure for daily administration to be made only after sanction of the General Board are required to be quashed. More over the Direction regarding control by the General board the court, from the record does not find from the rule of the Management any existence of a "General Board". "the Only body recognized it the Board of Trustees. The direction therefore, in any case be complied with. The direction certainly cannot be interpreted to mean creation of "General Board" in absence of any provision to create it.
10. As the submissions which have been made before this court elaborately by both the sides are still to be examined by the Joint Charity Commissioner in the proceedings of the Change Report, this Court does not deem it proper to enter into and give findings on merits.
11. For the forgoing reasons, the impugned order dated 17.12.2018, confirmed by order dated 28.03.2019, are hereby interfered with to the following extent:-
I. The direction pertaining not to take any policy decision and /or decision regarding day-to-day expenditure without permission Page 17 of 18 Downloaded on : Tue Jun 25 07:23:00 IST 2019 C/SCA/7997/2019 JUDGMENT of the General Board is hereby set aside. Therefore, it is open for the Board of Trustees to proceed with the business of managing the Trust as if the aforesaid directions do not exist.
II. The direction pertaining to agenda No.6 of meeting dated 18.12.2018 is not interfered with.
III. The direction to the Assistant Charity Commissioner to proceed and decide upon the pending Change Reports within a period of 90 days is modified to a period of 60 days. The period of 60 days to commence from today and both parties are directed to cooperate with conducting and final disposal of the pending Change Reports.
12. The petition stands partly allowed. Rule is made absolute to the aforesaid extent. No order as to costs.
Learned Advocate Mr.Aditya Parikh for the respondents prays for staying of the aforesaid judgment and order. As no sufficient reasons are pointed out in support of such request, the Court does not find it proper to stay this judgment and order. Hence, the request is rejected.
Sd/-
(A.Y. KOGJE, J) SHITOLE Page 18 of 18 Downloaded on : Tue Jun 25 07:23:00 IST 2019