Karnataka High Court
M/S. Madani Educational Trust (R) vs The Karnataka State Board Of Auqaf on 18 April, 2023
Author: Ravi V Hosmani
Bench: Ravi V Hosmani
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WP No. 51662 of 2018
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 18TH DAY OF APRIL, 2023
BEFORE
THE HON'BLE MR JUSTICE RAVI V HOSMANI
WRIT PETITION NO. 51662 OF 2018 (GM-WAKF)
BETWEEN:
1. M/s. MADANI EDUCATIONAL TRUST (R).,
NO.33, 1ST CROSS, MILLERS ROAD,
BENSON TOWN, BANGALORE-560 046,
REP. BY ITS SECRETARY,
SRI. M. FAZAL AHMED.
...PETITIONER
(BY SRI. NAVEED AHMED.,ADVOCATE)
AND:
1. THE KARNATAKA STATE BOARD OF AUQAF
NO.6, CUNNINGHAM ROAD,
BANGALORE-560 052,
REP. BY ITS CHIEF EXECUTIVE OFFICER.
2. THE GULISTAN SHADI MAHAL (WAQF),
NO.129, INFANTRY ROAD,
BANGALORE-560 001,
REP. BY ITS ADMINISTRATOR.
...RESPONDENTS
(BY SRI M.H. HANEEF, ADVOCATE FOR R1;
Digitally signed by NOTICE TO R2 IS SERVED)
GURURAJ D
Location: High THIS W.P IS FILED UNDER ARTICLES 226 & 227 OF THE
Court of Karnataka CONSTITUTION OF INDIA, PRAYING TO QUASH/SETTING ASIDE THE
IMPUGNED RESOLUTION PASSED BY THE R-1 BOARD VIDE SUBJECT
NO.14[4] IN ITS 295TH BOARD MEETING HELD ON 23.06.2012
PRODUCED AT ANNEXUER-A, BY ALOWING THIS W.P. AND ETC.,
THIS PETITION, COMING ON FOR DICTATING ORDERS, THIS
DAY, THE COURT MADE THE FOLLOWING:
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WP No. 51662 of 2018
ORDER
Challenging resolution passed by respondent no.1 in it's 295th Board Meeting held on 23.06.2012 on Subject no.14(4) at Annexure-A; and Certificate of Recovery bearing no.KBW/AUD/06/BNG/2011-12 dated 27.10.2014 at Annexure- B issued by respondent no.1 for recovery of Rs.80,25,000/- from petitioner and direct respondent no.1 to consider petitioner's representation dated 06.01.2018 at Annexure-L etc., this writ petition is filed.
2. Sri Naveed Ahmed, learned counsel for petitioner submitted that petitioner was a Trust created on 08.11.1996 under Deed of Trust (Annexure-C). Aims and objects of said Trust was educational and charitable purposes. However, it was not contemplated as Waqf.
3. It was further submitted that respondent no.2 was a notified Waqf Institution as per notification dated 07.06.1965. During 1998, petitioner approached respondent no.2 for financial aid of Rs.10,00,000/- for establishing Educational Institution for Girls. Respondent no.2, however, agreed to provide financial assistance of Rs.65,00,000/- with condition contained in Memorandum of Understanding dated 19.09.1998 (for short 'MoU') executed by petitioner and respondent no.2. -3- WP No. 51662 of 2018 With said assistance, petitioner constructed school building and is running educational institution. As per MoU, 25% of annual profit from educational institution established, after expiry of moratorium period of three years, was to be paid to respondent no.2 towards loan.
4. It was further submitted that in addition to Rs.65,00,000/- petitioner also received additional sum of Rs.20,25,000/- upto 05.03.2002 from respondent no.2. Thus, total amount of financial assistance was Rs.80,25,000/-. It was submitted that petitioner had repaid Rs.60,00,000/- to respondent no.2 by way of two cheques dated 20.01.2005 and 22.01.2005 for Rs.30,00,000/-. Said payment is corroborated by account transaction statement issued by Branch Manager, Amanath Bank, Shivajinagar, Bangalore, at Annexure-G. Said payment was also acknowledged in notice dated 27.07.2005 issued by Administrator of respondent no.2, at Annexure-F.
5. Such being case, respondent no.1 in it's Board Meeting held on 23.06.2012 impugned herein resolved to initiate criminal proceedings against petitioner and also directed it's Chief Executive Officer to initiate proceedings for recovery of Rs.80,25,000/- by issuing impugned Certificate of Recovery. It was submitted that said resolution and certificate were -4- WP No. 51662 of 2018 issued without giving adequate opportunity to petitioner and without taking into account substantial repayment made by petitioner. It was submitted that when said matter was brought to notice of Hon'ble Minister for Minority Welfare and Waqf, in a joint meeting held on 11.09.2017, it was resolved with petitioner coming up scheme for payment. Thereafter, on 06.01.2018 petitioner informed Minister as well as respondents no.1 and 2 herein that petitioner had repaid amount of Rs.60,00,000/- as per particulars mentioned in Annexure-G to respondent no.2 and remaining amount of Rs.20,25,000/- was proposed to be repaid in five equal annual installments at Rs.4,05,000/- each. Even same was not considered. Hence, it was submitted that petitioner was entitled for relief.
6. On other hand, Sri M.H. Haneef, learned counsel appearing for respondent no.1 opposed writ petition. Referring to statement of objections filed, it was submitted that respondent no.1 was a Statutory Body constituted under Waqf Act, 1995 ( for short 'Act'). It was further submitted that said enactment provided specific remedy to petitioner under Section 83 of the Act, at before Karnataka Waqf Tribunal and writ petition would not be tenable.
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7. It was submitted that respondent no.2 was a notified Waqf institution under management of respondent no.2
- Trust. Said Trust did not have authority to extend financial assistance without prior permission from respondent no.1 - Board. If respondent no.2 had extended financial assistance to petitioner, without prior approval of Board, same would be beyond it's authority. As per audit report of respondent no.2 institution dated 23.06.2012, in terms of Section 47 of the Act, a sum of Rs.80,25,000/- was found due from petitioner. Hence, notice under Section 49 of the Act was issued to defaulters including petitioner. But, in response, vague replies were received. Therefore, as provided under Section 34 of the Act read with Rule 49(2), Certificate of Recovery was issued in Form-58 requesting Deputy Commissioner, Bangalore Urban District to recover amount due as arrears of land revenue and remit same to respondent no.1. Since action of respondent no.2 in lending money to petitioner was in violation of the Act, subjecting property of Waqf to loss or damage, constitute offences under Section 403, 405, 408, 415, 418 and Section 420 of Indian Penal Code, direction to prosecute offenders was also issued. As same was in pursuance of provisions of law and determination of dues was in terms of audit report, no interference was called for.
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8. Respondent no.2 is served unrepresented.
9. Heard learned counsel and perused writ petition records.
10. From above submission, it is not in dispute that petitioner had obtained financial assistance from respondent no.2 - Trust to tune of Rs.80,25,000/-. It is also not in dispute that respondent no.2 is notified Waqf institution under governance of respondent no.1 - Board.
11. While petitioner contends that it has repaid Rs.60,00,000/- to respondent no.2, for which respondent no.1 had not accounted for and therefore, issuance of impugned Recovery Certificate for entire amount borrowed was illegal and arbitrary, it is contention of respondent no.1 - Board that audit of respondent no.2 conducted as per Section 47 of the Act, Rs.80,25,000/- was due from petitioner. And therefore, issuance of Certificate for recovery of said sum as per Section 34 of the Act, would be fully justified.
12. Section 34 of the Act provides for mode of recovery of amounts determined under Section 33. Sub-section (3) of said provision provides manner of determination namely where after inspection or otherwise it appears that mutawalli or any -7- WP No. 51662 of 2018 other officer/employee had misappropriated, misapplied etc., any money of Waqf etc., Chief Executive Officer of Board after giving mutawalli or such other persons concerned reasonable opportunity of showing cause why an order of recovery of amount should not be passed against him and after considering explanation, if any furnished, determine amount due and make an order directing him to pay said amount to Waqf within time to be specified.
13. In instant case, while petitioner has contended that determination was without opportunity and took into account partial repayment made by petitioner, respondent despite filing statement of objections and seeking to justify its action as being in accordance with law, has failed to produce any notice issued to petitioner prior to passing of impugned resolution and issuance of Recovery Certificate. Therefore, determination would be contrary to Section 33(3) and in violation of principles of natural justice.
14. There is yet another aspect. While petitioner has contended that determination of amount due was without considering repayment as indicated in Annexures-F and G, respondent has contended that since audit of accounts of respondent no.2 resulted in reporting due of Rs.80,25,000/- by -8- WP No. 51662 of 2018 from petitioner, there was no further determination necessary would be uncharitable and against intent of Section 33 of the Act, which expressly provides for participation of affected person while audit does not. Therefore, respondent no.1 while determining amount due under Section 33 cannot straightaway accept audit report as conclusive. It has to consider material produced by affected parties and after due consideration, proceed for determination. Upon such determination, it would be open to aggrieved person to prefer appeal before Tribunal under Section 33(4) of the Act.
15. Further, as remedy of approaching Tribunal after determination is specifically provided under Section 33(4) of the Act, contention of respondent about alternative remedy available under Section 83, which is a general provision, would not be justified. Since petitioner has successfully established violation of principles of natural justice as well as specific provision of law by respondent, invocation of writ jurisdiction would be justified.
16. In view of above discussion, following:
ORDER i. Writ petition is allowed.-9-
WP No. 51662 of 2018 ii. Impugned resolution passed by respondent no.1 in its 295th Board Meeting held on 23.06.2012 on Subject no.14(4) at Annexure-A; and Certificate of Recovery bearing no.KBW/AUD/06/BNG/2011-12 dated 27.10.2014 issued by respondent no.1 for recovery of Rs.80,25,000/- from petitioner at Annexure-B are quashed. However, reserving liberty to respondent no.1 to initiate fresh action against petitioner in compliance with Section 33 of the Act and by considering petitioner's representation dated 06.01.2018 at Annexure-L, at time of such determination in accordance with law.
Sd/-
JUDGE GRD