Gujarat High Court
Prabhudas vs Charity on 17 June, 2010
Author: Jayant Patel
Bench: Jayant Patel
LPA/910/2012 17/ 17 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD LETTERS PATENT APPEAL No. 910 of 2012 with CIVIL APPLICATION-FOR CONDONATION OF DELAY No. 7698 of 2012 With LETTERS PATENT APPEAL (STAMP NUMBER) No. 678 of 2012 In SPECIAL CIVIL APPLICATION No. 9273 of 2010 With CIVIL APPLICATION No. 7661 of 2012. With CIVIL APPLICATION (STAMP NUMBER) No. 7667 OF 2012 ========================================================= PRABHUDAS BECHARDAS PATEL - Appellant(s) Versus CHARITY COMMISSIONER & 8 - Respondent(s) ========================================================= Appearance : M/S THAKKAR ASSOC. for Appellant(s) : 1, MR CB UPADHYAYA for Respondent(s) : 1, MS DHARA M SHAH for Respondent(s) : 2, None for Respondent(s) : 3, 5,7 - 9. MR MANOJ SHRIMALI for Respondent(s) : 4, 6, ========================================================= CORAM : HONOURABLE MR.JUSTICE JAYANT PATEL and HONOURABLE MR.JUSTICE C.L. SONI Date : 29/08/2012 ORAL ORDER
(Per : HONOURABLE MR.JUSTICE JAYANT PATEL)
1. Leave to delete respondent no. 6 Keshavlal Vitthalbhai patel since he has expired.
2. Rule.
Ms. Pahwa appears for respondent no. 1, learned AGP appears for Charity Commissioner, respondent no. 2, Ms. Dhara M Shah appears for respondent no. 3, Mr. Modi appears for respondent no. 4 and Mr. Manoj Shrimali appears for respondent no. 5 and 7 and waives service of rule.
3. The present application is preferred for condonation of delay. As such, we have heard the learned counsel appearing for appellants and all parties, even on the merits of the main LPA which is simultaneously heard with main LPA No. 910 of 2012. Therefore, considering the facts and circumstances and in-view of the grounds stated in the present application for condonation of delay, sufficient cause is made out for condonation of delay.
4. Learned counsel appearing for the parties have also not objected for condonation of delay. Hence it deserves to be condoned.
5. Therefore the application for delay condonation is allowed to the aforesaid extent. Rule is made absolute accordingly.
6. Office shall give Pakka number to LPA (Stamp) No. 678 of 2012 immediately, since the LPA (Stamp) No. 678 of 2012 is also simultaneously heard with the LPA no. 910 of 2012 along with C.A. No. 7661 of 2012 with LPA (Stamp) No. 678 of 2012 with CA (Stamp) No. 7667 of 2012.
7. We have heard Ms. Pahwa for Prabhudas Bechardas Patel, appellant of LPA No. 910 of 2012, Mr. B.S. Patel for Bholabhai Chaturbhai Patel, Revabhai Shankarbhai Patel and Mulchandbhai Lalubhai Patel, appellant of LPA (Stamp) No. 678 of 2012.
8. We have also heard Mr. S.N.Shelat learned senior Counsel with Ms. Dhara M Shah for Prakashbhai Shantibhai Patel, Mr. Hiren Modi for Manendrabhai Narisnhbhai Patel, Mr. Shalin Mehta for respondent no. 5 for Visnagar Taluka Majoor Sahakari Mandali Limited.
9. The parties in the proceedings are either appellant or respondents in the respective appeals.
10. All learned advocates are heard on the aspects of admission and interim order.
11. It prima-facie appears that there was no agreement in writing between the Trust and the donor for offering certain persons as member, so as to include them as members as per Clause 8 (B) of the Constitution of the Trust. Therefore, in absence of such agreement on record the Charity commissioner in exercise of power under Section 41 A has set-aside the resolution for admitting certain persons as members in the trust. Such resolutions were initially for admission of 40 members but thereafter it is reduced to 25 + 6, total 31 members. If, the trust has acted beyond the powers so vested in the constitution of the Trust, the Charity Commissioner could be said as justified in exercise of powers under Section 41 A of the Act.
12. The further aspect is that the pending matter for consideration before the charity commissioner, the trust had decided to hold election vide resolution no. 7 and 8 and against the same, interim application was filed to stay the decision of holding the election. The Charity Commissioner vide order dated 17.06.2010 stayed the declaration of the result, pursuant to the decision taken by the trust. As per the decision, vice retirement of 4 persons as trustees and one vacancy on account of death of one trustee namely Narsinhbhai Patel, election was conducted for electing 5 trustees. The aforesaid order was in operation till final disposal of the main application filed under Section 41 A of the Bombay Public Trust Act 1950 (hereinafter referred as Act). Thereafter the final order was passed on 21.07.2010, against which the main petition being Special Civil Application No. 9273 of 2012 was preferred. The Charity Commissioner, on the very day, had suspended the final order, so as to enable the party to carry the matter before the higher forum, and thereafter such interim stay again was in operation, pending SCA as well as LPA before this Court.
13. The contention of the learned counsel Mr. Navin Pahwa for the appellant was that the interim order has merged with the final order and therefore interim order is no more.
14. Whereas Mr. B.S.Patel appearing in LPA (Stamp) No. 678 of 2012 contended that once the final order was stayed the interim order would continue.
15. In our prima-facie view the position as was prevailing would continue,since the operation of final order was suspended by the Charity Commissioner on the very day and continued thereafter.
16. Under the above circumstances it prima-facie appears that in-spite of the aforesaid interim order dated 17 June 2010 passed by the Charity Commissioner, the result of the election dated June 22, 2010 for 5 members has been implemented, which in our prima-facie view is not only illegal but in contravention to interim order passed by the Charity Commissioner, in the pending proceedings under Section 41 A of the Act.
17. It was submitted by the learned counsel for the appellant that the main prayer in the application under Section 41 A was to consider the matter in exercise of power under Section 41 A until the change report no. 180 of 2009 was decided or disposed of, and therefore, the prayer would come to the effect that until the change report No. 180 of 2009 is decided, the Charity Commissioner could exercise the power under Section 41A for considering the matter in respect of implementation of the resolution passed for admission of new members. But, once the Charity Commissioner has decided, the application can be said as had become infructuous.
18. It was also submitted that this Court even while examining the present matter would consider the controversy before, and not after the change report is disposed of or otherwise.
19. The dispute before the Charity Commissioner is not to be considered as if a lis between the parties in strict sense and scope of the judicial scrutiny to that extent. In our view in the matter of proper functioning or maladministration or mismanagement any Charitable Trust, when have brought to notice of the Charity Commissioner, that the trust is being run contrary to the provisions of the Constitution or otherwise, it is the duty of the Charity Commissioner to keep in mind the object of the trust and to pass further effective order. At this stage, we may refer to observations of this Court in case of Hamumiya Bachumiya and Ors. Vs. Mehdihusen Gulamhusen & Ors. Reported in GLR Vol. 19 page 661, more particularly pare 4, relevant part of which reads as under:
"
He argued that the respondent no. 1 was minority trustee and the trustee were to act in a body as per the majority rule and, therefore, in any event, respondent No. 1 could never file an appeal before the Revenue Tribunal and the whole appeal was incompetent. The Jamat itself having withdrawn the earlier resolution and having opposed this sale the Charity Commissioner or the Revenue Tribunal had no jurisdiction whatever. These contentions of Mr.Patel are completely out of place in such a public oriented litigation. In Thenappa Chattier Vs. Kuruppan Chhietier, A.I.R. 1968 S.C. 915 at page 919, Their Lordships pointed out that in India the Crown is the Constitutional protector of all infants and as the deity occupies in law the position of an infant, the Shebeits who represented the deity were entitled to seek assistants of the Court in case of mismanagement or fraud or maladministration on the part of Shebeits and to have a proper scheme for the management framed for the administration of the private trust. Therefore, in charities court, as constitutional protector of all charities, is the sole guardian of the paramount interest of the charities and its jurisdiction is analogous to one as a protector of the infant.
It was further observed in the very paragraph the relevant part of which reads as under:
"
Therefore,the Charity commissioner having been conferred with this jurisdiction of sanction of sale of immoveable properties of a public trust and this jurisdiction having been conferred, notwithstanding anything contained in the instrument of the trust, the Charity Commissioner would have to exercise its jurisdiction by making an inquisitorial enquiry so that public interest of such public trust are properly served."
Hence if the Charity Commissioner has found it proper to exercise the power in respect of wrong action of the trust or trustees or its members running counter to the constitution of the trust it could not be said as totally without jurisdiction since any action of admission of members of the trust in contravention to the provisions of the constitution of the trust could be said as maladministration and also rather beyond the power of the trustees. We also find that there are other aspects which are required to be considered in the present appeal. Therefore appeal may deserves consideration, but at the same time till the appeal is finally heard, on the aspects of interim order,equitable consideration would prevail, keeping in mind the larger public interest and of Charitable trust, which is running educational institutions. We have to ensure that the illegality committed may not be perpetuated further.
20. Prima-facie it appears that the induction of new members by the so-called election dated June 20th 2010 was, as observed earlier, in contravention to the interim orders passed by the Charity commissioner. Therefore, those persons, who were inducted as trustees, at the said election, can not be allowed to function. If the implementation of the resolution nos. 7 and 8 and the actions are stayed, the trustees namely (1) Patel Shantaben Bholabhai; (2) Patel Kaushikbhai Bholabhai; (3)Patel Bharatbhai Ishwarbhai;&(4)Patel Prakashkumar Satishbhai, who were earlier holding the post of the trustees, could continue to hold the post.
21. We may also record that if the constitution of the trust is considered as it is, every year 1/3rd of the trustees are to retire and a fresh election is to be held and new trustees representing 1/3rd may be inducted. As in all there are 15 trustees, 1/3rd would come to 5 and if considered on yearly basis as their retirement, the term of everyone could be said as having expired, because the last so called election was held in the year 2010, but was in contravention to the interim order of the Charity Commissioner, therefore, the election is considered prior thereto i.e. up to 2009. By now the period of 3 year has passed and therefore the term could be said as having expired of all the trustees. However since the particular time limit has not been provided expressly in the constitution and if read reasonably one may say that until the period of newly elected body or newly elected trustee assumes office, the existing trustee may continue.
22. One course available to the court was that if the term of all trustees have expired, the fresh election can be held from amongst the members of the trust, excluding those 25 persons for which result has been set-aside by the Commissioner, and the another option is to allow undisputed trustees to continue to hold the office who were functioning prior to June 20th 2010. Further there are allegations in respect of certain admissions granted by the Chairman of the trust and his supporting group, but, at the same time it does appear that the trust is running about 13 educational institutions and more than 5000 (Five Thousand) students are undergoing the studies in their respective educational institutions. It is true that the properties of the trust may be running into Crores of Rupees, but, at the same time, we find that such would require large scale management of the properties and also running of the educational institutions. Hence if, one or two officers of the Government appointed to take care of the administration, it may be just and proper. At the same time the court should ensure that the trustee's may be continued on account of the situation of no fresh election held, after 2010 onwards to look after the affairs of the trust as caretaker with the involvement of representative of the Charity Commissioner and one representative of the Education Department of the State Government, both of the higher rank.
23. Further option for holding of the election by interim order in exclusion of those 25 disputed members, may create reversible situation. Therefore, also we find that the former option to allow the trustees to take care of the administration of the trust in association with the representative of the Charity Commissioner and of the Education Department of the State government could be in the larger interest of the trust as well as in the interest of beneficiaries of the trust and more particularly the students who are undergoing studies in the various educational institutions.
24. In view of the aforesaid, the following order:
(A) Both the appeals are admitted.
However it is also directed that the office shall give Pakka number/ regular number to the LPA(St.) no. 678 of 2012.
(B) By interim order, it is also directed that the trustees who are not impleaded as parties either as appellant or as the respondents in both the appeals, and who were holding the office prior to June 20th 2010 as well as 25 newly admitted members, as per resolution dated 18.04.2009, shall be impleaded as the party in both the appeals. Notice of admission of the appeal shall also be issued upon all such parties.
(C) By interim order it is directed that until further orders;
(a) The trustees who were holding the office as the trustees of Nootan Sarvavidyalaya Kelvani Mandal Sanchalit Trust, prior to June 20th 2010 shall continue to hold the office as the trustees. It is also clarified that such body of trustees would include; (1) Patel Shantaben Bholabhai; (2) Patel Kaushikbhai Bholabhai; (3)Patel Bharatbhai Ishwarbhai;&(4)Patel Prakashkumar Satishbhai. Since one member has expired, his seat shall remain vacant.
(b) the aforesaid trustees of the trust shall look after the administration of the trust of the day-today business in association with one officer, who may be nominated by the Charity Commissioner, not below the rank of Assistant Charity Commissioner, and one officer, who may be nominated by the Secretary Education Department of the State government, not below the rank of District Education Officer. Both the government officers shall be entitled to attend all the meetings of the trust, as and when it is held and they shall also be at liberty to examine the relevant record of the business of the meeting and shall also be at the liberty to express their views at the business of the meeting, and after considering their views, the appropriate decision may be taken by the whole body of the trustees in association with the aforesaid officers.
It is also clarified that if either of the officers has any dissenting view on any item with the business as may transacted and the officer concerned are of the view that the decision is against the interest of the trust, the same shall be recorded in the proceeding and he shall, within the 48 hours report, to the Charity Commissioner, about the aforesaid decision and the Charity Commissioner shall examine the same and if he finds that the decision is against the interest of the trust or the beneficiaries of the trust, he shall pass appropriate orders for preventing damage to the corpus of the trust, and for better administration of the trust as per its object.
After any such order is passed by the Charity Commissioner it would be open to the trust or any of the trustees to move this court in the present LPA, in connection with the order of the Charity Commissioner, for setting-aside the order or for other direction.
Final hearing of the appeal is fixed on 4th December 2012. Interim order passed earlier shall stand modified to the aforesaid extent. Both the applications shall stands disposed of. The office shall also send the copy to the Secretary of Education Department of the State Government for appropriate action.
(JAYANT PATEL,J.) (C.L.Soni,J.) deepak