Bombay High Court
R.P. Kapoor And Ors. vs The Charity Commissioner, Maharashtra ... on 7 September, 1988
Equivalent citations: AIR1989BOM274, 1988(3)BOMCR546, (1989)91BOMLR529, AIR 1989 BOMBAY 274, (1988) 3 BOM CR 546, (1989) MAHLR 415, 1989 BOM LR 529
JUDGMENT
1. Shri Janardhan for the respondents (original plaintiffs) raised a preliminary objection. According to him the appeal as filed is incompetent. It is therefore, proposed to consider the preliminary objection first. It is stated that a complain/application was filed in this case before the Joint Charity Commissioner who by his order dt. 27th July, 1982 passed under s. 50A. Bombay Public Trusts Act , 1950 finally disposed the complaint/application. Appeal filed against that order by the appellants (original defendants) was also disposed of by the Appellate Court vide order and judgment dt. 13th June 1983 finally. In the above view of the matter appeal under S. 100 Civil P.C. and not an appeal from order under s. 104 of the Code against the judgment and decree of the appellate Court would be competent. The learned counsel for the appellant fairly conceded that strictly speaking her client should have filed appeal under S. 100, C.P. C, and not an appeal under S. 104, C.P.C treating the appellate judgment as an order. She, however, contended that the preliminary objection raised was very much belated particularly as ti was not even raised at the stage of admission of this appeal as an appeal against order under s. 104, C P. C. , on 1st August 1983 by this court and should not therefore be entertained at this late stage. Besides, she submitted that the objection was too technical. The Court has discretion to convert the appeal against order into a regular appeal under s. 100 of the Code and direct the appellant to pay the difference in court fes. She placed reliance on the Bombay High Court decision in the case of Abdul Gafur v. Md. Mukaram, AIR 1932 Bom 77 at p. 78 and the Supreme Court decision in the case of Reliable Water Supply Service of India (P) Ltd v. Union of India, and the Goa High Court decision in the case of Paixao Fernandes v. Amelia De Souza, AIR 1977 Goa 8 at page 9 in support of the proposition that the Court has discretion to convert an appeal against order under s. 104. C.P.C., into an appeal under S. 100, C.P.C Referring to S. 107 C.P.C she urged that so far as the powers of this Court were concerned, those were identical both in appeal filed under s. 100 of the Code and an appeal against order filed under S.104 of the Code.
2. Evidently it is a case of bona fide mistake on the part of the appellants. They should have filed Regular Appeal under S. 100 of the Code rather than an appeal against order under s. 104 of the Code. However, to some, extent, the respondents have also contributed to the continuance of this mistake inasmuch as even at the time of the admission of the appeal this objection was not raised. The appeal was filed within time and if the mistake was pointed out at that stage by the Registry or the respondents, regular appeal under s. 100 of the Code have been filed which would have been in time. Having regard to the above stated facts and keeping in view the decisions relied upon. I am of the view that it is a fit case for converting the appeal against order under s. 104 into regular appeal under s. 100 C.P.C. This appeal is accordingly converted from appeal against order under s. 104 to regular appeal under S. 100, C.P.C and the appellants are directed to pay difference in the court-fees so as to enable the office to regularise the matter.
3. As regards merits, the material facts are not very much in dispute. A little before 1963, an association named Versova Welfare Association was registered under the Society's Registration Act . it started a school in June 1962. A trust was subsequently brought into existence for very similar purposes and it was registered with the Deputy Charity Commissioner, Greater Bombay on 21 st Feb. 1963, Clause 3 of the trust deed enumerates 8 objects of the trust. They primarily relate to the running of schools and to the advancement of education in general. In the original trust deed, the minimum number of trustees was given as five and the maximum as nine. It was also stipulated that in the trustees there should be one nominee of the Versova Welfare Association. Clause 8 provided for the appointment of new and additional trustees in case of death, insolvency, unfitness, refusal ,resignation, incapability or such other circumstances disabling the trustees from working as such. The trustees have also powers to appoint additional trustees so as nto to exceed the maximum number of trustees.
4. The applicants filed the suit application being Application No.16 of 1982 in January 1982 under s. 50-A. Bombay Public Trusts Act , 1950. Grounds given in the application for suggesting a new scheme broadly were that the wishes of the founders have been flouted by the present trustees. There is no provision in the trust deed for retirement and re-election of trustees. In the absence of provisions for accountability to the public the trustees fail and neglect their duties to effectively conduct the activities of the trust, thereby causing heavy losses to the trust property and hardship tot he public. It was contended that the proposed scheme was to take care of all deficiencies and provide checks and balances and be an effective instrument to function the trust activities properly.
5. However, the learned Joint Charity commissioner framed three issues for determination, viz., (I) Whether it is necessary, expedient and in the interest of the trust to settle a scheme? (2) Whether it is necessary to appoint additional trustees? (3) What scheme should be settled? And by his judgment and order dated 27th July 1982 determined all the three issues in the affirmative and in favour of the applicants.
6. The appellants (some of the original opponents) carried the matter in appeal. The appellate Court, i.e., the learned City Civil Court Judge, after going through the record and after hearing rival contentions came to the conclusion that the real dispute between the parties was as to who should be in control of the suit trust. The suggestion made by the original applications that instead of permanent trustees there should be periodical elections of the trustees so that the electoral college would judge the performance of the management etc. was not accepted by the Joint Charity Commissioner and that the said conclusion was not even challenged before him. However, after going through the new scheme settled he more or less accepted the appellants case that there was no material difference between the original scheme and the new scheme. On the contrary many of the provisions made in the new scheme framed by the Charity commissioner were to be found in the Act itself. Accordingly to him to number of the trustees was rightly in created and (2) whether the four out of the six applicants were appointed trustees justifiably. For reasons given in para 3, subparas 2 and 3 of para 4 and para 5 of his judgment, he agreed with the Joint Charity Commission of all the issues. Regarding the contention that the old trust deed was comprehensive and the allegations made by the applicants were frivolous and unsubstantiated and that the applicants were interested persons trying to get into the trust for personal gains, the learned Judge observed that assuming all that was correct the same would not come in the way of the Charity Commissioner framing a new scheme. He also felt that running of coaching classes, even if it was true, did not come in the way of any one's acting as a trustee of a trust conducting an educational institution. However, for reasons given in para 8 of his judgment, he modified the new scheme framed by the Charity Commissioner as he found that the trusteeship was unnecessarily restricted to Hindus and that the school run by the trust being not a temple, the provision for a collection box in the school was not warranted.
7. Both the learned counsel for the appellants Miss Paranhape and Shri Janardhan for the main respondent, it must be stated in fairness to them, had prepared their respective cases well and rendered good and commendable and dealing the issues involved in this appeal. For the sake of brevity instead of referring to their submissions separately and they dealing with them, it is proposed to deal with the rival contentions in the course of the judgment.
8. The first issue that requires consideration pertains to the purport and scope of s.50A(I). Bombay Public Trusts Act , 1950 (hereafter referred to as "the Act "). Because the application was admittedly made by the applicants (respondents herein) under s.50A(I) of the Act and the Joint Charity Commissioner had passed his order on 27th July 1982 also under that sub-Section. The sub-Section reads as under;-
"50A. (I) Notwithstanding anything contained in S.50, where the Charity Commissioner has reason to believe that, in the interest of the proper management or administration of a proper management of administration of public trust, a scheme should be settled for it, or where two or more persons having interest in a public trust make an application to him in writing in the prescribed manner, that in the interest of proper management or administration of a public trust, a scheme should be settled for it, the charity Commissioner may, if after giving the trustees of such trust due opportunity to be heard, he is satisfied that it is necessary or expedient so to do, frame a scheme for the management or administration of such public trust."
The sub-Section can be broadly divided into five parts. (I) Notwithstanding anything contained in s.50, (ii) where the Charity Commissioner has reason to believe that in the interest of the proper management or administration of a public trust, a scheme should be settled for it; or (iii) where two or more persons having interest in a public trust make an application to him in writing in the prescribed manner that in the interest of the proper management or administration of a public trust a scheme should be settled for it; (iv) the charity Commissioner may, (v) (a) if after giving the trustees of such trust due opportunity to be heard, (b) he is satisfied that it is necessary or expedient so to do; pass a scheme for the management or administration of such public trust. The admitted position in this case is that an application was filed by certain persons in terms of the 3rd part to the Charity Commissioner; he has given due opportunity to the trustees in terms of part (v) (a) and framed a scheme for the management or administration of the suit public trust in terms of part (iv). Thus what is dispute is only a limited aspect, viz., part (v) (b) i.e., whether he was necessary or expedient to frame a scheme for the management or administration of such public trust.
9. This aspect of the matter can be judged from two different angles, viz., (I) whether his satisfaction which is subjective and is not justiciable is perverse? And (2) whether the new scheme framed by him really serves any purpose ? For examining the case from the former point of view one has to consider the nature of the application and the allegations made therein which impressed the Charity commissioner. On the face of it the allegations are against the manner in which the management of the trust is carried out and not against he provisions in the original trust deed. In the circumstances it is desirable to deal with the allegations as a result of which the Joint Charity Commissioner was satisfied and the learned City Civil Court Judge agreed with him. These are found in para 7 of the charity Commissioner's judgment and paras 4 and 5 of the judgment of the learned city Civil Court Judge. The Joint Charity Commissioner ahs given two reasons in support of his satisfaction as required as per part (v)(b). these are as under ;- "(I) I have carefully gone through the said document and I find that the document and I find that the provisions of the said deed are not sufficient to manage the day to day affairs of the trust and (2) There are complaints against the trustees regarding the management and I feel that unless a proper scheme is settled perhaps the management would not be property carried out and therefore, a scheme is necessary". The first reason given by him is too general and vague as he has not indicated as to what were the provisions needed for proper management of the trust which were not there in the old scheme. Therefore, whether or not the provisions of the old trust deed were sufficient to manage the day to day affairs of the trust property could be judged it at all, in the light of the scheme he ultimately framed. The second reasons given is equally vague. Firstly because he has used the word "perhaps" before the further expression "the management would not be properly carried out" indicating mere doubt as distinct from conviction. Secondly the nature of the complaints, the cause of his doubt is not at all indicated in the judgment. The complaints as stated by me earlier refer to the highandedness on the part of the trustees despite the proper provisions in the deed of trust . on the contrary reading his judgment as a whole one gets the impression that there was nothing basically wrong with the old deed of trust. I am inclined to take this view because the Charity Commissioner referred to two aspects which were really vital to the scheme, viz., the mode of succession of the trustees and the increase in the number of the trustees. However he ultimately concluded vide para 9 of his judgment that mode of succession contemplated under the old scheme was satisfactory. As regards the provision for increase in the number of trustees from 9 to 13 this Court was told that by a subsequent resolution the board of trustees had already increased the number of trustees to 15. This fact is found noted by the learned City Civil Court Judge in para 3 of his judgment. Therefore, so far as the judgment of the Charity Commissioner is concerned. I find no acceptable material in support of his conclusion that it was necessary or expedient to frame a scheme etc.
10. Examining the new scheme vix-a-vis the provisions in the existing deed of trust, it is seen that the modifications envisaged under the new scheme are of two kinds, viz. (I) certain statutory provisions which were in any event applicable to public trusts have been specifically made part of the new scheme. This modification, to my mind, is of no consequence whatsoever, (2) the second kind of modifications are in the anture of provisions; - (a) of at least one meeting evey three months (cl.11) as against at least one meeting in one calendar month (cl. 12 in the trust deed), (b) tenure of chairman as one year (cl.10) as against flexible tenure under the old scheme (cl. 12), (As a matter of practice, however, the charimen have resigned and been removed occasionally. For instance Dr. Purandhare himself was removed in May 1982), (c) absence of provision for a managing trustee, (d) coram for the meeting fixed at 7 as against 3 if the number of the trustees was 5 and 5 if the number of the trustees was more than 5 under the old scheme (e) maximum number of trstees increated from 9 to 13 (however this is factually wound as it is on record that by a resolution the provision in this regard under the old scheme itself was amended and te maximum number of trustees was raised to 15.), (f) clause 9 of the new scheme was stated to be not exactly analogous to S.47 of the Act , (g) provision of the circumstances in which an existing trustee shall cease to be a trustee (cl. 9 of the new scheme). As against this cl. 8 of the old scheme was silent but the law could take its own course. (h) provision for meeting on requisition (cl. 12) as against a slightly different provision in cl. 12 of the old scheme, (I)(j) (k) (I) provision regarding office of the trust, minute book to be maintained, to be read over and certified, resolution could be passed by circulation and the liabilities of the trustees (are too general and in fact do not require specific provisions), (m) & (n) restriction as regards the caste of the trustees and collection box (deleted by the learned City Civil Court Judge).
11. If the changes envisaged in the new scheme referred to above are indicative of defects considered by the Joint Charity Commissioner in the old scheme, I am afraid that I will have to hold that the defects were, if at all, so trifle that action on the part of the Charity Commissioner under S.50A was not at all justified for which the condition precedent was his satisfaction that it was necessary or expedient to frame as scheme for the management or administration of such public trust.
12. Thus as rightly pointed out by the learned City Civil Court Judge the real dispute between the parties has been that of clash of personalities rather than of principles. The applicants wanted all or a few of them to be appointed as trustees and succeeded partly. The appellants (original opponents) hotly contested the applicants. The pertinent questions, to my mind, thus are - (I) Whether s.50A can be resorted to for appointing new trustees in case of vacancies not filled up by the trustees themselves for quite some time assuming the trustees were bound to fill in the vacancies within a reasonable time in view of the cricular relied upon by the other side in this regard ? (2) Whether it will not be more appropriate in a case like this to appoint new trustees, if at all, after adjudicating upon the application by almost the same set of applicants under S.41D of the Act ? and (3) Whether in a case like this it would be enough for the Charity Commissioner to consider the applicants, whether one or more of them, were good enough to be appointed as trustees or whether he should make an honest endeavour to find out he best suitable public spirited persons from the locality with and appropriate method and appoint them as trustees?
13. Before dealing with thee question, it is desirable to deal in brief with the reasons given by the leaned City Civil Court Judge in justification of the Charity Commissioner's framing the new scheme.
14. The reasons, as stated earlier, re found in paras 4, 5 and 6 of his judgment. Briefly stated these are - (I0 The existing trustees did not care to fill in the vacancies of the trustees for quite some time. (2) Dr. Purandhare (who was the founder of the trust) filed an affidavit indicating that even his complaints to the then chairman through correspondence were not attended to and not even circulated among the other trustees.
15. Mainly from the above 2 facts the learned City Civil Court Judge concluded that if the management was conducted in this manner the trust needed a new scheme. Hence he opined- "If the management was conducted in this manner it is easy to understand why the inclusion of some inquisitive members would be treated as an attempt to distrupt the harmonious workings of the managing committee. In my opinion, one man doing everything and others being indifferent to or ignorant of what is being done by him is the worst way of carrying out the endeavour of a public trust. Though the learned Charity commissioner has not chosen to give to the suit trust periodical elections which constitute as n essential element of democracy the inclusion of members healthily suspicious of the acts done by the brother office bearers is, in my opinion, an essential feature of management of public concerns."
16. In this context it requires to be mentioned that the first fact taken into consideration by the learned City Civil Curt Judge appears to be correct. The second fact, however, is not so. For this purpose it is desirabel to mention that the correspondence referred to in Dr. Purandhare's affidavit pertains to the period from November 1981, i.e., his correspondence with the then chairman of the trust Shri Shadilal Jain. Before this application was filed in January 1982, Dr. Purandhare had taken over as chairman of the trust in November, 1981. Thus what happened prior ot 1981 would hardly have any material bearing on the functioning of the trust in January, 1982 when Dr. Purandhare himself was the chairman. No doubt subsequently Dr. Purandhare also joined the applicants, but that was after he was removed from the chairmanship of the suit trust on 16th May, 1982. All this justifies the learned City Civil Court Judge's impression that the dispute was more a matter of clash of personalities then principles and in fact principles regarding succession and election of the trustees about which something could really be said were not seriously pressed by the applicants and in any event not incorporated in the new scheme. Since non-filling of the vacancies of the trustees forms part of the three pertinent questions formulated by me to be decided in this case, the same need not be separately dealt with herein.
17. Coming to the three pertinent questions posed by me in the earlier paras of this judgment, on the face of it I do not think that recourse can be had to S.50A for the mere purpose of filling in of vacancies of trustees not filled in by the existing trustees for quite some time. On the other hand particular having regard to the nature of complaints against the existing trustees the proper course would have been to resort to Ss. 14D and 47 of the Act rather than S.50A. here again I would agree with the learned counsel for the appellants without hesitation that the appointment of the new trustees has to be made objectively by finding the best suited public spirited persons and not just choose one or more of the applicants/complainants. Record clearly shows that the Charity Commissioner did not take any steps in this regard. He has simply referred to the brief bio-date of the applicants and appointed four of them as trustees. This is certainly not a satisfactory manner in which the trustees should be appointed. Moreover complaint filed under S.41D si still pending. Continuing the present trustees under the new scheme framed under S.50A without disposing the said complaint might be an impediment in the way of proper adjudication of the complaint particularly after this Court's decision. In this view of the matter, it is considered desirable to set aside the judgment and order of the Charity Commissioner as well as that of the learned City Civil Court Judge. The nature of the complaint is different which requires to be death with in accordance with the provisions of Ss. 14D and 47 of the Act rather than S.50A.
18. Before concluding reference may briefly be made to the comments in the Commentary "Scott on Trust", 1939 Edition, Volume, 1, page 566. This was relied upon by the counsel for the respondents for the purpose of showing that the Court can appoint trustee or trustees in certain circumstances. There is no dispute about such a power. It is not necessary to refer to the commentary at length. The Gujarat High Court decision in the case of Bipinchandra Purshottamdas Patel v. Jashwant Lalbhai Naik, generally refers to and defines the scope of s.50A(I). According to me, the manner in which I have dealt with the issue is in accordance with the manner in which Gujarai High Court dealt with the issue Comments of the learned commentator Shah in Shah on The Bombay Public Trusts Act 1950, 6th Edition, Page 475 also do not carry the case of the respondents further. In this context the learned commentator has, while referring to the words "necessary" and "expedient", observed at page 479-
" "Necessary" and "Expedient"; Meaning of ;- This is a power conferred under the Act in a special contingency when it is necessary or expedient to frame a scheme in the interest of a public trust. Recently the Gujarat High Court explained the words - "Necessary" and "Expedient". The term "necessary" means what is indispensable, needful, essential. The term has a precise meaning and connotation and there is nothing vague or nebulous about it. The term "expedient" has no doubt a wide ambit and gives large scope to the exercise of power. But this expression has also a recognised connotation in the eye of law. The dictionary meaning of the term "Expedient" that would in the context in which it is used and which a most fitting is "useful for effecting a desired result; fit or suitable for the purpose". Jauantilal Prashottamdas Kapali v. State of Gujarat, (1970) 11 Guj LR 403."
19. No doubt the legislature ahs intentionally and advisedly not referred to any nature of the equiry specifically and the charity Commissioner is given discretion to make enquiry in any manner he deems fit. However, it cannot possibly be disputed that before he proceeds to frame a scheme for the management or administration of such trust, he has to satisfy himself that it is necessary or expedient so to do in public interest. This is what has been found wanting in this case for reasons given here in above. At page 488 of the Commentary, the learned commentator has gives 15 grounds for framing a scheme. At leas the judgments of the lower authorities do not indicate that this case falls under any of those grounds.
20. In the result, the appeal is allowed and the impugned order and judgment of the learned Judge, City Civil Court and that of the Charity Commissioner are set aside with no order as to costs.
21. Appeal allowed.