Gujarat High Court
Neela Associates & 2 vs State Of Gujarat & 37 on 4 March, 2014
Author: Ravi R.Tripathi
Bench: Ravi R.Tripathi, Mohinder Pal
C/LPA/852/2013 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
LETTERS PATENT APPEAL NO. 852 of 2013
In
SPECIAL CIVIL APPLICATION NO. 10520 of 2013
With
CIVIL APPLICATION NO. 6820 of 2013
In
LETTERS PATENT APPEAL NO. 852 of 2013
With
CIVIL APPLICATION NO. 7242 of 2013
In
CIVIL APPLICATION NO. 6820 of 2013
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE RAVI R.TRIPATHI
and
HONOURABLE MR.JUSTICE MOHINDER PAL
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1 Whether Reporters of Local Papers may be allowed to see
the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law as
to the interpretation of the Constitution of India, 1950 or any
order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
Page 1 of 127
C/LPA/852/2013 JUDGMENT
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NEELA ASSOCIATES & 2....Appellant(s)
Versus
STATE OF GUJARAT & 37....Respondent(s)
===========================================================
Appearance:
MR AMIT M PANCHAL, ADVOCATE with PARTHIV B SHAH, ADVOCATE for the
Appellant(s) No. 1 - 3
MR ABHIJIT P JOSHI, ADVOCATE for the Respondent(s) No. 35 , 37
MR BB NAIK, SENIOR ADVOCATE assisted by MR BHARAT T RAO, ADVOCATE for the
Respondent(s) No. 4 and 11 to 25
MR C B UPADHYAYA, ADVOCATE for the Respondent(s) No. 3
MR DAXAY D PATEL, ADVOCATE for the Respondent(s) No. 12
MR ND NANAVATI, SENIOR ADVOCATE assisted by MR MITUL K SHELAT, ADVOCATE
for the Respondent(s) No. 26 to 34
MR YATIN OZA, SENIOR ADVOCATE assisted by MR MRUGEN PUROHIT for Respondent
Nos.27 & 29
MR SI NANAVATI, SENIOR ADVOCATE assisted by MR SANJIV D DAVE, ADVOCATE for
the Respondent(s) No. 38
MS NALINI S LODHA, ADVOCATE for the Respondent(s) No. 36
RULE SERVED for the Respondent(s) No. 1 - 2 , 5 - 8 , 10 , 13 - 18 , 20 - 25 , 31 , 34
RULE UNSERVED for the Respondent(s) No. 32 - 33
SERVED BY AFFIX.-(R) for the Respondent(s) No. 9
=======================================================================
CORAM: HONOURABLE MR.JUSTICE RAVI R.TRIPATHI
and
HONOURABLE MR.JUSTICE MOHINDER PAL
Date : 04-05-06/03/2014
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE RAVI R.TRIPATHI)
1. The present LPA is filed by the appellants- original petitioners, who are three in number, viz. (1) Neela Associates, through its partner Shri Indrakant Girdharlal Shah, (2) Pavan Edifice Pvt. Ltd., through its Director Shri Harshad H.Shah and (3) Arcadia Developers, through its partner Shri Bharatkumar Navnitbhai Parikh, Page 2 of 127 C/LPA/852/2013 JUDGMENT being aggrieved by judgment and order dated 02.07.2013 passed by the learned Single Judge in SCA No.10520 of 2013, whereby the learned Single Judge was pleased to dispose of the petition, observing as under:-
"2. In the above view of availability of efficacious alternative remedy, I am not inclined to exercise extraordinary jurisdiction under Article 226 of Constitution of India and keeping it open for the petitioners to raise all the available legal and permissible contentions taken in this petition before the appropriate forum in accordance with law."
2. The matter was heard on 08.07.2013 and the Court passed the following order in CA No.6820 of 2013 in LPA No.852 of 2013:-
"Heard learned advocate Mr.Amit M. Panchal appearing with Ms.Shivani Rajpurohit for the applicants/ appellants- original petitioners. The learned advocate for the applicants submitted that the Joint Charity Commissioner has granted 60 days time to file appeal against his order in one of the matters, but the said request made by the applicants/ appellants- original petitioners was not considered.
The learned advocate for the applicants
submitted that the order was passed on
25.04.2013 and consent letters of the persons who were to act as trustees were obtained well in advance. Not only that even the letter-heads Page 3 of 127 C/LPA/852/2013 JUDGMENT of the trust having names of those trustees printed were available on 26.04.2013. This is suggestive of the fact that either these trustees knew in advance about the order and in anticipation they got everything ready which goes to indicate that the Joint Charity Commissioner, for the reasons known to him did not grant time to the applicants/ appellants original petitioners for filing the appeal.
2. RULE. NOTICE as to interim relief returnable on 15.07.2013. Ad interim relief in terms of paras 6(B)(i) and (ii). Direct service is permitted TODAY.
(emphasis supplied) 2.1 On the same day, i.e. 08.07.2013, the Court passed the following order in LPA:-
"Heard learned advocate Mr.Amit M. Panchal appearing with Ms.Shivani Rajpurohit for the appellants- original petitioners. The learned advocate invited attention of the Court to section 2(10)(d), 50-A and 72 of the Bombay Public Trusts Act, 1950. Besides, the learned advocate invited attention of the Court to the relevant documents including pages 136-Z-30, 143 and 146. The matter requires consideration. ADMIT."
2.2 On 09.07.2013, the matter was mentioned in morning and permission was sought to move a Note for Speaking to Minutes and a request was made to suitably Page 4 of 127 C/LPA/852/2013 JUDGMENT modify order dated 08.07.2013. It was prayed that the phrase, i.e., "said request made by the applicants/ appellants- original petitioners was not considered", be substituted by the phrase, "Original petitioners were never given an opportunity to initiate proceedings and apply to the Court under section 72 as aggrieved persons". Besides, the portion, i.e. "for the reasons known to him did not grant time to the applicants/ appellants-original petitioners for filing the appeal"
was sought to be deleted. The Court allowed the Note for Speaking to Minutes by the aforesaid substitution and deletion of the aforesaid portion.
2.3 Civil Application No.7242 of 2013 came to be filed, which came up for consideration on 18.07.2013 and the Court (Coram: Hon'ble Mr.Justice Jayant Patel & Hon'ble Mr.Justice Z.K.Saiyed) passed a detailed order, relevant part of which reads as under:-
"6. In our view, it prima facie appears that the direction issued vide order dated 08.07.2013 in Civil Application No.6820 of 2013 deserves to be modified at this stage to the extent that the new trustees may be allowed to continue to hold the office and the aspect as to whether new trustees should be removed from the office or any person other than new trustees or old trustees should be allowed to resume the management of the Trust, can be Page 5 of 127 C/LPA/852/2013 JUDGMENT decided by the Regular Bench taking up the Letters Patent Appeal. Hence, the following order:-
The ad-interim-order dated 08.07.2013 is
clarified to the extent that so far as
suspension of the Scheme is concerned, the same shall stand modified to the extent that the new trustees shall be permitted to continue with the management of the Trust but with the further rider that they shall not take any policy decision or shall not take any further action for implementation of the new Scheme which is the subject matter of the petition before the learned Single Judge as well as before the Division Bench in the Letters Patent Appeal.
The other aspects may be decided by the Regular Bench.
For consideration of other aspects, matter is adjourned to 25.07.2013.
2.4 The matter came up for consideration before this Court on 25.07.2013 and the Court passed the following order:-
"After the matter is heard form some time, i.e. Civil Application No.7242 of 2013, it is deemed proper that Letters Patent Appeal No.852 of 2013 be fixed for final hearing at the earliest. On the request of learned advocates for the parties, Registry is directed to list this Letters Patent Appeal with all other Page 6 of 127 C/LPA/852/2013 JUDGMENT relevant matters i.e. civil applications on 1st August, 2013 peremptorily.
In view of the fact that Letters Patent Appeal is ordered to be listed for final hearing on 1st August, 2013, at the request of learned advocates, the order passed in this Civil Application No.7242 of 2013 on 18th July, 2013 is ordered to continue with the consent of outgoing trustees.
So far as contention raised by appellants in Civil Application No.7242 of 2013 in Civil Application No. 6820 of 2013 in Letters Patent Appeal No. 852 of 2013 in Special Civil Application No.10520 of 2013 recorded in paragraph No.5 of the order of 18th July, 2013 is kept open.
2.5 At this juncture, it will be appropriate to reproduce para-5 of order dated 18.07.2013 in CA No.7242 of 2013. Para-5 reads as under:-
"5. Whereas, Mr. Panchal, learned counsel appearing for the original appellant has submitted that his client is not desirous to continue old trustees or new trustees, but he is desirous to see that the management of the Trust is given to a person who will take appropriate care in the interest of the property and objects of the Trust. Therefore, he has submitted that the matter may be examined accordingly."
2.6 Shri K.J.Mehta Kshay Nivaran Hospital and two Page 7 of 127 C/LPA/852/2013 JUDGMENT others - original respondent Nos.4, 11 and 19 filed Civil Application No.7708 of 2013 praying that:-
"27. (B) To revoke /recall order dated 08.07.2013 passed by the Hon'ble Court in L.P.A. No.852 of 2013 in S.C.A. No.10520 of 2013 admitting the said L.P.A. in view of the fact that the first proceedings of SCA No.10520 of 2013 is itself a petition under Art.227 of the Constitution of India challenging the order of subordinate authority directly in the High Court which requires serious adjudication of disputed questions of facts and against the order dismissing such petition, L.P.A. is not maintainable for the reasons stated in the Memo of Civil Application and in the interest of justice;"
2.7 This Civil Application came up for consideration on 25.07.2013 and the Court passed the following order:-
"In view of the order passed in Letters Patent Appeal No.852 of 2013, learned senior advocate, Mr.B.B.Naik, appearing for the applicants does not press this application. Application is disposed of accordingly.
Liberty is reserved in favour of the applicants to revive the application in the event the Letters Patent Appeal is not heard in reasonable time."
2.8 The matter was heard from time to time and Page 8 of 127 C/LPA/852/2013 JUDGMENT during the course of hearing, on 23.08.2013, the Court passed the following order:-
"1. During the course of argument, learned senior advocate, Mr.B.B.Naik, brought to the notice of the Court that the property of K.J.Mehta T.B. Hospital Trust was mortgaged with State Bank of India and in this regard, he invited the attention of the Court to page Nos.283 of the paper book. Interestingly, page No.283, is a certificate issued by State Bank of India of Manusar Branch, 115-116, ELS Tower, GIDC Manusar, Tal. Savli, District: Baroda. This Certificate is dated 15.7.2013 and the contents of the Certificate are as under:
"TO WHOMSOEVER IT MAY CONCERN This is to certify that M/s.K.J.Mehta T.B. Hospital is enjoying overdraft facilities. We had received advice from K.J.Mehta T.B. Hospital dtd. 24.4.2013 for settling overdraft account with our Manjusar Branch. On 27.4.2013, we have received fund through RTGS (Real Time Gross Settlement) and settled the overdraft account of K.J.Mehta T.B. Hospital. This certificate is issued as per the request".
2. It will be worth noting here that the judgment and order of the Charity Commissioner is dated 25th April, 2013.
3. The learned senior advocate also invited the attention of the Court to page No.284, which is also Certificate issued by Union Bank Page 9 of 127 C/LPA/852/2013 JUDGMENT of India, Karelibaug Branch, Shop No.1 to 4, Shrusti Avenue, Opp. Amrapali Complex, Karelibaug, Baroda-390018. This certificate is also incidentally of the same date i.e. 15.7.2013 and the contents of the Certificate are as under:
"TO WHOM SO EVER IT MAY CONCERN This is to certify that M/s. K J Mehta TB Hospital Trust is having current account with us.
They had given us request for RTGS
transaction of Rs.1,50,00,000/- (Rs.One
Crore Fifty Lacs Only) on 25.4.2013 after business hours. The transaction was executed on 27.4.2013. They have done above mentioned transaction by cheque No.51021661, dated 25.4.2013".
4. A copy of "Deed of Mortgage without possession" is also made available for perusal. The "deed of Mortgage without possession" is executed by State Bank of India through its Branch office at "Industrial Finance Branch, Marble Arch, Racecourse Road, Vadodara".
5. In light of these documents, this Court deems it necessary that these Banks should be before this Court to explain not only the contents of these documents but also the details of the transaction/s as the same will have a direct bearing on the subject matter of the matter.
6. Learned senior advocate also invited the attention of the Court to one another important aspect that, there was an attempt for Page 10 of 127 C/LPA/852/2013 JUDGMENT amalgamation of "K.J.Mehta TB Hospital Trust"
with "Sumandeep Vidhyapith", Waghodia, District: Vadodara. It is pointed out that there was an MoU for amalgamation but than Charity Commissioner did not grant necessary approval and therefore, amalgamation could not take place. There is yet another important fact is coming on record and that is about mortgage of the property of "K.J.Mehta TB Hospital Trust". The property of "K.J.Mehta TB Hospital Trust" consists of land granted by the erstwhile Ruler of State of Bhavnagar and the State Government. The land was granted on lease, if that is so, whether that land could have been mortgaged with the Bank for obtaining any overdraft or loan facility?
7. None of the learned advocates for the parties has objected to the Banks / Branches being impleaded as parties.
8. Registry is directed to issue Notice to aforesaid three Banks / Branches at the address stated herein above returnable on 29th August, 2013.
9. Newly added Banks / Branches to furnish the details of the transaction referred to in page No.283 and 284 and the "mortgage deed without possession", on the returnable date.
10. Learned senior advocate, Mr.N.D.Nanavati, appearing for respondent Nos.26 to 30 states that he will instruct his clients to produce
(i) the Bank accounts and other relevant material regarding (ii) the change in the Trust Page 11 of 127 C/LPA/852/2013 JUDGMENT on the next date of hearing.
11. At the request of learned advocate, Mr.Panchal, direct service is permitted TODAY, to be effected by the appellants."
2.9 Hearing of the matter got adjourned from time to time on one ground or the other.
2.10 In the course of hearing of the matter, the Court passed the following order on 31.01.2014:-
"1. As the order passed by In-Charge Joint Charity Commissioner, Saurashtra and Kutch Department, Rajkot dated 25.4.2013 is under consideration of this Court and this Court is, prima-facie, of the opinion that certain aspects of the lapses on the part of the In- Charge Joint Charity Commissioner are required to be answered. The learned advocate Mr.Upadhyay was asked to clarify the same.
2. Learned advocate, Mr.Upadhyay, submitted that they can be answered by Mr.C.J.Patel who has passed that order as In-charge Joint Charity Commissioner on 25.4.2013. In view of that, it is necessary to implead Mr.C.J.Patel as party respondent so that he is able to give reply to the same. Learned advocate for the appellant to implead Mr.C.J.Patel as party respondent in his personal capacity.
3. Notice to newly added respondent returnable on 6th February, 2014. Direct service is permitted. Amendment shall be carried out Page 12 of 127 C/LPA/852/2013 JUDGMENT during the course of the day.
4. Learned advocate, Mr.Upadhyay for the Joint Charity Commissioner for respondent No.3 in LPA No.852 of 2013 shall make available for perusal the record pertaining to K.J.Mehta Kshay Nivaran Hospital Trust particularly, the PTR i.e. Public Trust Register as one of the dispute is that, notices required under Section 50A of the Bombay Public Trust Act, 1950 were issued to Trustees whose names appeared in the PTR. In view of the provision to the effect that the Charity Commissioner can come to a conclusion that a scheme is required to be framed in the given matter but that conclusion is to be reached only after giving Trustees of such Trust due opportunity of being heard."
2.11 The newly added respondent Mr.C.J.Patel, the then In-charge Joint Charity Commissioner remained present before the Court on 06.02.2014 and learned Senior Advocate Mr.S.I.Nanavati with learned Advocate Mr.Sanjeev Dave sought time to file reply to the averments made in the LPA alleging lapses on the part of the In-charge Joint Charity Commissioner. The request was granted and the matter was adjourned to 10.02.2014. 2.12 Finally, the arguments concluded on 20.02.2014 and the matter was ordered to be listed for dictation of judgment on 21.02.2014.
2.13 The dictation could not be taken up on account
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of other matters requiring urgent attention of the Court. The matter is now taken up for dictation of judgment.
3. The controversy involved in the matter revolves around Section 50A of the Bombay Public Trusts Act ("the Act" for short). Section 50A was read, reread and reread for umpteen number of times by almost every learned Senior Advocate appearing in the matter, be it for the appellants, be it for respondents, be it for the new Trustees, be it for outgoing Trustees, be it for the Charity Commissioner, Gujarat State or be it for the In- charge Joint Charity Commissioner, who passed the order impugned dated 25.04.2013. In this regard, it will be appropriate to reproduce Section 50A. Section 50A reads as under:-
"50A. (1) Notwithstanding anything contained in section. 50, 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 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, 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 Page 14 of 127 C/LPA/852/2013 JUDGMENT so to do, frame a scheme for the management or administration of such public trust.
(2) xxxxx
[(2A) A scheme under this section may
provide for the number of trustees, the mode of appointment of trustees including the appointment of the first trustees, vesting of the trust property in the trustees so appointed, mode of filling any vacancy of a trustee the remuneration of a trustee or manager of the public trust and where necessary, a clarification of the objects of the public trust.].
(3) The Charity Commissioner may, at any time, after hearing the trustees, modify the scheme framed by him under subsection (1) or subsection (2).
(4) The scheme framed under subsection (1) or subsection (2) or modified under subsection (3) shall, subject to the decision of the competent court under section 72, have effect as a scheme settled or altered, as the case may be, under a decree of a Court under section 50.]"
3.1 At this juncture, it will be appropriate to refer to Section 72 of the Act. Section 72 of the Act reads as under:-
"72. (1) Any person aggrieved by the decision of the Charity Commissioner under section 40, 41 (41C and 43 (2) (a) and (c) (50A) (70 or 70 Page 15 of 127 C/LPA/852/2013 JUDGMENT A) or on the questions (whether a trust exists and whether such trust is a public a trust) or 91 whether any property is the property of such trust may, within sixty days from the date of the decision, apply to the court to set aside the said decision.
(1A) xxxxx (2) xxxxx (3) Pending the disposal of an application under subsection (2) all proceedings for surcharge shall be stayed if the person aggrieved makes out a prima facie case for a stay order.
(4) An appeal shall lie to the High Court, against the decision of the court under subsection (2) as if such decision was a decree from which an appeal ordinarily lies.
[Explanation-In this section, the expression "decision" shall include a scheme framed or modified under section 50 A.]"
3.2 At this juncture, it will be appropriate to refer to Section 2(8) of the Act, which defines, 'manager'. The said Clause-(8) reads as under:-
(8) "Manager" means any person (other than a trustee) who for the time being either alone or in association with some other person or persons administers the trust property of any public trust and includes-Page 16 of 127
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(a) in the case of a math, the head of such math,
(b) in the case of a wakf, a mutawalli of such wakf,
(c) in the case of the society registered under the Societies Registration Act, 1860, its governing body, whether or not the property of the society is vested in a trustee."
3.3 Definition of the, 'person having interest' is contained in Section 2(10) of the Act, which reads as under:-
"(10) "Person having interest" includes -
(a) in the case of a temple, person who is entitled to attend at or is in the habit of attending the performance of worship or service in the temple, or who is entitled to partake or is in the habit of partaking in the distribution of gifts thereof,
(b) in the case of a math, a disciple of the math or a person of the religious persuasion to which the math belongs,
(c) in the case of wakf, a person who is entitled to receive any pecuniary or other benefit from the wakf and includes a person who has right to worship or to perform any religious rite in a mosque, idgah, imambara, dargah, maqbara or other religious institution connected with the wakf or to participate in any religious or charitable institution under Page 17 of 127 C/LPA/852/2013 JUDGMENT the wakf,
(d) in the case of a society registered under the Societies Registration Act, 1860, any member of such society, and
(e) in the case of a society registered under the Societies Registration Act, 1860, any member of such society, and (e) in the case of any other public trust, any trustee or beneficiary;"
3.4 Definition of 'Public Trust' is contained in Section 2(13) of the Act, which reads as under:-
"(13) "Public Trust" means an express or constructive trust for either a public, religious or charitable purpose or both and includes a temple, a math, a wakf, church, synagogue, agiary or other place of public religious worship, [a dharmada] or any other religious or charitable endowment and a society formed either for a religious or charitable purpose or for both and registered under the Societies Registration Act, 1860."
4. The matter is heavily contested by newly appointed Trustees and the outgoing Trustees.
5. Learned Senior Advocate Mr.B.B.Naik with learned Advocate Mr.B.T.Rao for the newly appointed Trustees made submissions and highlighted the acts of the ousted Trustees so as to convince this Court that the In-
charge Joint Charity Commissioner was justified in
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passing the order, framing of scheme and appointing new Trustees.
6. On the other hand, learned Senior Advocates for the ousted Trustees emphasized the illegalities and irregularities in the order and the manner and method in which the In-charge Joint Charity Commissioner passed the order impugned.
7. This Court while considering the LPA for admission did make it clear that the appeal is entertained in view of certain glaring irregularities in the order passed by the In-charge Joint Charity Commissioner. This could be seen from the order passed by this Court on 08.07.2013, admitting the appeal, relevant part of which reads as under:-
".....The learned advocate invited attention of the Court to section 2(10)(d), 50-A and 72 of the Bombay Public Trusts Act, 1950. Besides, the learned advocate invited attention of the Court to the relevant documents including pages 136-Z-30, 143 and 146......".
7.1 Besides, this Court also made it clear in the order passed on the same day on CA No.6820 of 2013 that:-
"The learned advocate for the applicants submitted that the Joint Charity Commissioner has granted 60 days time to file appeal against his order in one of the matters, but the Page 19 of 127 C/LPA/852/2013 JUDGMENT original petitioners were never given an opportunity to initiate proceedings and apply to the Court under section 72 as "aggrieved persons"."
(The order is modified by order dated
09.07.2013 - the phrase "for the reasons known
to him did not grant time to the applicants/ appellants original petitioners for filing the appeal" was ordered to be deleted).
7.2 What weighed with the Court was that if the Joint Charity Commissioner granted 60 days time to file appeal against his order in one of the matters, he ought to have followed the same practice and should have given an opportunity to the appellants-original petitioners to initiate proceedings and to apply to the Court under Section 72 as 'aggrieved persons'. Section 72 specifically provides that, "Any person aggrieved by the decision of the Charity Commissioner under section .................... (sec.50A) ............ or on the questions (whether a trust exists and whether such trust is a public a trust) or (sec.91) whether any property is the property of such trust may, within sixty days from the date of the decision, apply to the court to set aside the said decision". (emphasis supplied). 7.3 What weighed with the Court is that assuming for the sake of argument that appellants-original petitioners did not or could not make a request for stay Page 20 of 127 C/LPA/852/2013 JUDGMENT of the judgment and order of the In-charge Joint Charity Commissioner, it was in the interest of justice to have made the said judgment and order operative "on the expiry of 60 days from the date of the order". The fact that the order was made operative and was given effect to soon on passing of the order on 25.04.2013, made this Court to inquire into the matter by going deep into the matter. (emphasis supplied) 7.4 Though the matter is fully heard, it is not controverted that, "consent letters of the persons who were to act as trustees were obtained well in advance" and "even the letter-heads of the trust having names of those trustees printed were available on 26.04.2013". (emphasis supplied).
7.5 It is in light of these facts that the Court observed that, "This is suggestive of the fact that either these trustees knew in advance about the order and in anticipation they got everything ready which goes to indicate that the Joint Charity Commissioner, for the reasons known to him did not grant time to the applicants/ appellants original petitioners for filing the appeal". The later phrase, "for the reasons known to him did not grant time to the applicants/ appellants original petitioners for filing the appeal" is already deleted.
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8. In the appeal memo, Grounds for challenge are set out in para-2, wherein Ground-(c) reads as under:-
"(c) The Hon'ble Single Judge has failed to appreciate that the impugned order dated 25.4.2013 visits the appellants and the alike with such dire consequences that they have been removed from the respondent no.4 Trust permanently even after the contributions which have been made by the appellants and the alike and that too in a highhanded, arbitrary manner in contravention of the provisions of the Act."
8.1 Besides, in Ground-(d), a decision of Full Bench of this Court in the matter of Atmaram Ranchhodbhai vs. Gulamhusein Gulammohiyaddin and Anr. reported in Volume XIII GLR 828 is referred wherein it is held that:-
"..... unless the instrument of trust otherwise provides, all co-trustees must join in filing a suit to recover possession of the property from the tenant after determination of the lease. No single co-trustee, even he be managing trustee unanimously chosen by the co-trustees, can maintain such a suit against the tenant without joining the other co-trustees. All co-trustees must be joined in the suit and if any one or more of them are unwilling to be joined in the suit as plaintiffs or for some reason or the other, it is not possible to join them as plaintiffs, they must be impleaded as defendants so that all co-trustees are before the Court......".
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C/LPA/852/2013 JUDGMENT 8.2 The submission of the appellants is that if any
action is sought to be taken against the Trust, all co- trustees are required to be impleaded as defendants/ opponents to the application and in absence of the same, the said application would be defective and it would not be possible for the Court to properly adjudicate the issues on hand which would consequently lead to travesty of justice.
8.3 Learned Advocate for the appellants emphatically pressed into service Ground-(f) and submitted that on this ground alone, the judgment and order of the In-charge Joint Charity Commissioner deserves to be quashed and set aside, as from the contents of this Ground, it becomes clear that the In- charge Joint Charity Commissioner did not pay any heed to the relevant provisions of law and fell into error in passing the order under Section 50A of the Act. For ready reference, Ground-(f) is reproduced hereunder:-
"(f) The Hon'ble Single Judge has failed to appreciate the facts of the case in its true perspective. The Hon'ble Single Judge has failed to appreciate that the appellants are the members of the respondent no. 4 Trust. The appellant no.1 to 3 have contributed Rs. 30 Lakhs, 20 Lakhs and 10 Lakhs respectively for the betterment, wellbeing and proper management Page 23 of 127 C/LPA/852/2013 JUDGMENT of the respondent no. 4 Trust. The appellants submit that the respondent no. 4 trust was originally registered as a Society under the Society Registration Act, 1860 vide order dated 21.10.1950. In view of the provisions of the Bombay Public Trust Act, the society was also registered as a Public Trust under the Bombay Public Trust Act, 1950 on 20.3.1964. The Respondent No.4 has since incorporation been administered in accordance with the constitution and the rules duly framed under the Society Registration Act, 1860. The appellants submit that the respondent no. 4 trust came into existence on and from 1950 and has been fulfilling the objects for which it was created. The respondent no.4 Trust has a general hospital of 530 beds which caters to the need of the local residents. The hospital also has an attached dental college, which has been in existence since past 4 years and is affiliated with the Bhavnagar University in the State of Gujarat. The appellants submit that there have been no complaints against the Trust by any of the Trustees or members and it is for the very purpose that there has been as many as 338 members who have contributed various sums of money to the tune of around Rs.7,26,00,000 on various dates. The appellants submit that the appellants as donors and members of the respondent no. 4 have filed this petition seeking protection against the highhanded, arbitrary and illegal act of the respondent no.
3, who is crowned with very wide powers to check and control the functioning of any public Page 24 of 127 C/LPA/852/2013 JUDGMENT trust including the respondent no. 4 of which the appellants are members. The appellants submit that the respondent no. 3 is also to supervise, regulate and settle the Scheme for proper management or administration of the public trust and is involved in almost every step of the functioning of a public trust which infuses the power upon him to frame, amalgamate or modify any scheme in the interest of proper management of the public trust. The appellants submit that it is therefore necessary that the said exercise of power by the respondent no. 3 is legitimate and reasonable and with a view to promote the wellbeing of a public trust viz. respondent no.4 trust."
8.4 Learned Advocate for the appellants invited attention of the Court to Clause-(d) of Section 2(10) of the Act, which defines, "persons having interest". Learned Advocate for the appellants submitted that so far as appellants are concerned, they are the members of the society and by virtue of the provisions of law - Bombay Public Trusts Act, came to be registered as 'public trust' and continue to retain its identify as a 'registered society'. Learned Advocate for the appellants submitted that there is no provision in the Act which denudes the society and its status which it obtained by getting itself registered under the Societies Registration Act, 1860. Learned Advocate for the appellants submitted that this position is clear by Page 25 of 127 C/LPA/852/2013 JUDGMENT various provisions of law, viz. Section 2(13), which defines, 'public trust', wherein society like the present one is included by saying that, "society formed either for a religious or charitable purpose or for both and registered under the Societies Registration Act, 1860". Learned Advocate for the appellants submitted that this provision by itself does not bring an end to the legal existence of a society which was registered under the Societies Registration Act, 1860. Similarly, Section 2(8), which defines, 'manager', do provide in clause-(c) that, "in the case of the society registered under the Societies Registration Act, 1860, its governing body, if the property of the society is not vested in a trustee". Learned Advocate for the appellants submitted that even at the cost of repetition, he be permitted to say that even this Clause-(c) of Section 2(8) does not wipe out existence of a society registered under the Societies Registration Act, 1860. On the contrary, the provisions are so made that recognition is given to such legal entity. Simultaneously other regulatory provisions of the Act are made applicable to such legal entity. Learned Advocate for the appellants submitted that that is why the 'Governing Body' of a society which is registered under the Societies Registration Act, 1860 is recognized as 'manager' under Section 2(8) of the Act. Page 26 of 127
C/LPA/852/2013 JUDGMENT 8.5 Learned Advocate for the appellants submitted
that the law has given recognition to such legal entity even by providing sub-clause while defining "persons having interest". Learned Advocate for the appellants invited attention of the Court to Clause-(d) of Section 2(10) of the Act, which defines "persons having interest". Clause-(d) says that, "in the case of a society registered under the Societies Registration Act, 1860, any member of such society". Learned Advocate for the appellants submitted that it is in light of these provisions of the Act that the allegations made referred to hereinabove against the act of In-charge Joint Charity Commissioner, which, is referred to even by using mild term, 'hot haste', assumes significance. The In-charge Joint Charity Commissioner has given a go-by to the fundamental document of the society by which the affairs of the society are liable to be governed. Learned Advocate for the appellants submitted that as set out in Ground-(f), appellant Nos.1, 2 and 3 have contributed Rs.30 Lakhs, Rs.20 Lakhs and Rs.10 Lakhs respectively and by contributing that amount to the society, they obtained status of 'member of the society'. Once they obtained status of 'member of the society', it was obligatory on the part of the In-charge Joint Charity Commissioner to take care of the interest of such "members". Learned Advocate for the appellants submitted that in the entire Page 27 of 127 C/LPA/852/2013 JUDGMENT scheme, the In-charge Joint Charity Commissioner has not provided anything for protecting interest of such "members". (emphasis supplied).
8.6 Learned Advocate for the appellants submitted that it was made clear on 18.07.2013 and it is again reiterated that the appellants are not desirous to continue old Trustees or new Trustees, but they are desirous to see that the management of the Trust is in the hands of a person who will manage the affairs of the trust /society taking proper care of the properties and objects of the Trust'. Learned Advocate for the appellants submitted that it was submitted on that day and it is again submitted that the matter may be examined keeping in mind the 'wish' of the appellants-original petitioners expressed in the aforesaid terms. 8.7 Learned Advocate for the appellants next invited attention of the Court to Ground-(g) and submitted that it is in light of the contents of this Ground that the action of the In-charge Joint Charity Commissioner stands vitiated and deserves to be quashed and set aside. Ground-(g) reads as under:-
"(g) The Hon'ble Single Judge has failed to appreciate that in the instant case by virtue of the impugned proceedings, the process of the office of the Charity Commissioner has been Page 28 of 127 C/LPA/852/2013 JUDGMENT used to convert a society into a trust and transfer the management of the society from the committee duly elected from amongst the members to persons who were not members of the society and were hitherto strangers to the Society. It is submitted that the manner and method in which the orders have been passed, it would become evident that the exercise of power is malafide, illegal and unconstitutional. the Respondent No.4 was functioning as a society.
It was administered by the members by constituting committees as contemplated under the rules. The Committee so constituted included nominees of the State Government and ex-officio government employees. In respect of a society, the charity commissioner exercising powers under the Bombay Public Trust Act, has no powers to frame a scheme since such powers is exclusively vested with the members of the society under the provisions of the Society Registration Act, 1860. Furthermore the Charity Commissioner has no power to pass any order which affects the very existence of the society and the rights of the members of the Society.
The entire exercise of powers by the Charity Commissioner is without jurisdiction and authority in law and hence unconstitutional. Appellant submits that the object of passing the impugned order was clearly with a view to entrust the administration of the society from its members to non members. It is submitted that the provisions contained in the Bombay Public Trust Act, including Section 50-A does not empower the Charity Commissioner to pass Page 29 of 127 C/LPA/852/2013 JUDGMENT such an order. The Appellant submit that by the impugned proceedings and the impugned order, the In-Charge Joint Charity Commissioner has deprived the Appellant of their fundamental right under Article 19(1)(g) by adopting a procedure impermissible in law rendering the proceedings and the orders passed thereon non est and void."
8.8 Learned Advocate for the appellants submitted that under Section 50A of the Act, there is a proviso, i.e. 'the Charity Commissioner of his own, on having reason to believe that, in the interest of the proper management or administration of a public trust, a scheme should be settled and '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'. On such application being made, the Charity Commissioner can come into motion. Learned Advocate for the appellants submitted that in the second set of circumstance, the law has made it mandatory that once 'two or more persons having interest in a public trust', if make an application then the Charity Commissioner has to give notice to the Trustees of such Trust along with "due opportunity of being heard", to come to the satisfaction that, 'it is necessary or expedient to frame a scheme for the Page 30 of 127 C/LPA/852/2013 JUDGMENT management or administration of such public trust'. Learned Advocate for the appellants submitted that in the present case, more than one application were filed, some of which were filed by 'single applicant'. But then, none of these applicants was fulfilling the criterion of "persons having interest". Learned Advocate for the appellants submitted that in the matter of 'legal entity' that is society registered under the Societies Registration Act, 1860, only the 'members of the society' will fall within the definition of the term "persons having interest" as provided by Clause-(d) of Section 2(10). So far as 'member of the society' is concerned, one could be a member of the society only by making necessary contribution as provided by the document by which the society was created. The appellants have averred that appellant Nos.1, 2 and 3 contributed Rs.30 lacs, Rs.20 lacs and Rs.10 lacs respectively and obtained status of 'member of the society'. Once they are members of the society, they are the "persons having interest". Learned Advocate for the appellants submitted that none of the applicants whose applications were taken into consideration by the In-charge Joint Charity Commissioner could demonstrate that they are 'members of the society' and if they are not members of the society, they do not fall in the category of the "persons having interest". Page 31 of 127
C/LPA/852/2013 JUDGMENT 8.9 Besides that, learned Advocate for the
appellants also submitted that Section 50A of the Act is very clear. In the second part of the Section, i.e. 'filing of application by two or more persons having interest in a public trust', it is mandatory for the Charity Commissioner to give Trustees of such trust 'due opportunity of being heard' and then 'come to satisfaction that it is necessary or expedient to settle a scheme'. Learned Advocate for the appellants submitted that in the present case, before recording satisfaction by the In-charge Joint Charity Commissioner that 'scheme is required to be framed', 'no opportunity of being heard' was given to the Trustees and therefore, even on that count, the judgment and order of the In-charge Joint Charity Commissioner deserves to be quashed and set aside.
8.10 Learned Advocate for the appellants submitted that under sub-section (2A) of Section 50A of the Act, a scheme has to provide for, (i) the number of trustees,
(ii) the mode of appointment of trustees (iii) the appointment of the first trustees, (iv) vesting of the trust property in the trustees so appointed, (v) mode of filling any vacancy of a trustee, (vi) the remuneration of a trustee or manager of the public trust and (vii) wherever necessary, a clarification of 'the objects of Page 32 of 127 C/LPA/852/2013 JUDGMENT the public trust' is also to be provided. Learned Advocate for the appellants submitted that in the present case, even on repeated scrutiny of the scheme framed by the In-charge Joint Charity Commissioner, one will not find that it has provided for the aforesaid aspects though required under the Act. Learned Advocate for the appellants submitted that the In-charge Joint Charity Commissioner has appointed first Trustees and thereafter has left everything to the sweet will of those newly appointed Trustees. Not only that, In-charge Joint Charity Commissioner has missed even an important aspect of taking care of the interest of the various classes of members of the registered society, who were conferred specific rights in the matter of administration of affairs of the society.
8.11 Learned Advocate for the appellants submitted that glaring drawback of the scheme is that, 'it does not provide for mode of filling up of vacancy of Trustee'. Not only that, it does not provide as to how long these newly appointed Trustees will continue to hold the office and how their successors will be appointed. 8.12 Learned Advocate for the appellants submitted that as submitted hereinabove, it was not unreasonable to expect from the In-charge Joint Charity Commissioner to provide in the judgment and order itself in clear terms Page 33 of 127 C/LPA/852/2013 JUDGMENT that the same will be effective on expiry of 60 days from the date of decision as that is the period provided to the aggrieved party to apply to the Court for setting aside the decision of the Charity Commissioner. 8.13 Learned Advocate for the appellants submitted that to test the bonafides of the In-charge Joint Charity Commissioner, it will be appropriate to inquire as to what was the emergency or contingency which made the In- charge Joint Charity Commissioner to make its order effective forthwith that is right on the day when it was signed. Learned Advocate for the appellants submitted that this contention may not be treated as a contention raised to favour the ousted Trustees /outgoing Trustees. But then, it is necessary to inquire as to why was it inevitable to allow the ousted /outgoing Trustees to continue for the period of appeal provided by the law and to see that the scheme takes effect on expiry of the same. It is nobody's case that there was imminent danger of failure of law and order if the scheme is made effective on expiry of appeal period.
8.14 Learned Advocate for the appellants submitted that it was expected from the In-charge Joint Charity Commissioner to opt for healthy practice in a matter of exercise of his power, in a transparent manner. Page 34 of 127
C/LPA/852/2013 JUDGMENT 8.15 Learned Advocate for the appellants invited attention of the Court to Annexure-B, page No.23 -
'Certificate of Registration of Societies Act XXI of 1860 No.1 of 1950, which says as under:-
"I hereby certify that KHUSHALDAS J.MEHTA KSHAYA NIVARAN HOSPITAL has this day been registered under The Societies Registration Act, XXI of 1860.
Given under my hand at Rajkot this twenty fifth day of November One thousand nine hundred and fifty."
8.16 Learned Advocate for the appellants next invited attention of the Court to the constitution of 'Shree Kushaldas J.Mehta Kshay Nivaran Hospital', a copy of which is produced at page Nos.36 to 49 and translation of which is produced from page No.70A onwards. The constitution provides: name of the institution, Head Office of the institution, objectives of the institution. Clause-4 provides for various committees like General Committee, Governing Committee and Managing Committee. Clause-5 provides as to how the General Committee will be constituted and who will be the members of the General Committee. It will be appropriate to refer to this provision, which provides for (i) 'Founding members' mentioned in Annexure-A, (ii) Selected members as per Clause 22(2), (iii) 'Elders' mentioned in Clause 18, (iv) Page 35 of 127 C/LPA/852/2013 JUDGMENT 'Donors' providing finance or assistance mentioned in Clauses 19, 20, 21, for the period mentioned in the respective sections, (v) 11 representatives appointed by the Gujarat Government. Representatives so appointed by the Gujarat Government will be for 'any period' and can be changed from time to time, Gujarat Government can cancel the appointment of any representative who is its appointee. In the event, any representative appointed by Gujarat Government resigns or the post falls vacant then another representative can be appointed by the Government, (vi) 'Honorary workers' as mentioned in Section 17, (vii) 'Superintendent of the Hospital'. 8.17 Learned Advocate for the appellants submitted that 'donor', who provides finance or assistance for different periods as set out in Clauses 18, 19 and 21, will be the member of General Committee. For ready perusal, Clauses 18, 19 and 21 are reproduced:-
"18. If any person who donates Rs.50,000/- (Fifty Thousand) or more than that amount at a time to the institute or provides property which is worth to said amount then he will be considered as 'elder member' of the institute and his membership will be for lifetime.
19. If a person donates Rs.25000/- (Twenty Five Thousand) or more than that amount at a time to the institute or provides property Page 36 of 127 C/LPA/852/2013 JUDGMENT which is worth to the said amount then he will be given membership of the institution for 10 years.
21. If any person who donates Rs.5000/- (Five thousand) to the institute then he will be given membership for that year only."
(emphasis supplied).
8.18 Learned Advocate for the appellants submitted that the scheme does not provide and thus fails to take care of any of the aforesaid categories of members. Learned Advocate for the appellants submitted that not only that, the In-charge Joint Charity Commissioner has done away with the rights of the members under the aforesaid categories provided in Clauses 18, 19, 21 and no reason is given as to why he did not deem it proper to make a provision in the scheme so that those who are the members by virtue of Clauses 18, 19 and 21 continue to have their say in the administration of the society registered as Trust. Clause 6 provides for functions /duties of the General Committee, Clause 7 provides for regular meeting of the General Committee, Clause 8 provides for notice of conducting meeting for General Committee and Clause 9 provides for Quorum for the meeting of General Committee, etc. Learned Advocate for the appellants submitted that the 'constitution of the society' was so well drafted that under Clause 10(1), it took care of the rights of any company or corporation or Page 37 of 127 C/LPA/852/2013 JUDGMENT legal body which obtains membership of the General Committee. Under Clause 10(2), it provided for the 'founding members'. Learned Advocate for the appellants submitted that so far as founding members are concerned, it is provided that 'they' can send any person as their representative who is not a member of the General Committee.
8.19 Learned Advocate for the appellants submitted that society was, in true spirit, constituted to serve the people and that is why, in Clause 17, it is provided that, "If Managing Committee decides to take service of any person who is ready to give service for atleast 20 years, such person will be considered as 'lifetime' member". The very clause provides that, "Managing Committee can decide to provide remuneration to such member who is ready to provide honorary service to the institute and then also person providing honorary service will enjoy rights of 'founding member' for lifetime. 8.20 Clause 22 provides for Governing Body and its constituents. The details of the constituents will make it clear that the framers of the constitution of the society were live to every single aspect like 'rights of the members of the society' and that is why they provided, (i) Founding members mentioned in Schedule-A and members coming after them, (ii) Member selected by Page 38 of 127 C/LPA/852/2013 JUDGMENT the Honorary members as per Clause (17) and total number of such members shall be two, (iii) seven members nominated at every three years from the donors by General Committee, (iv) Civil Surgeon of the District Bhavnagar,
(v) eleven representatives appointed by the Gujarat Government on governing body will appoint five inhabitants for any term and can make change from time to time in it, (vi) Hospital Superintendent of the institute and (vii) Five members which are elected by the members from aforesaid no.1 to 6 jointly at every three years. 8.21 Learned Advocate for the appellants submitted that under Clause 25, it was provided that the Governing Body will elect the Managing Committee from amongst itself. Clause 30 onwards provides for regulating the affairs of the Managing Committee. Clause 33 in detail provides for scope of Managing Committee. Clause 34 provides for role of secretaries. Learned Advocate for the appellants submitted that the gist of the submission is that if at all the In-charge Joint Charity Commissioner wanted to dwell upon the task of framing of a scheme for proper management and administration of the Trust, he ought to have taken clue and assistance from such a detailed document of the society. But, for no valid reason, for no justifiable cause, for no acceptable ground, the In-charge Joint Charity Commissioner has Page 39 of 127 C/LPA/852/2013 JUDGMENT given a go-by to a document which had all these detailed provisions and has settled a scheme which outright suggest that he has exercised the power vested in him for extraneous consideration.
8.22 Learned Advocate for the appellants submitted that in view of the various decisions of the Hon'ble the Apex Court, the petition deserved to be entertained, more particularly in light of the fact that the contention of the appellants-original petitioners was that the entire exercise undertaken by the In-charge Joint Charity Commissioner was beyond his powers because there was no application filed by two or more "persons having interest" in the society in question and the In-charge Joint Charity Commissioner did not give any opportunity to the Trustees of the said society-Trust being heard before recording his satisfaction for settling of scheme and ultimate product, i.e. 'scheme' framed by the In- charge Joint Charity Commissioner is an example of sheer non-application of mind on the part of the In-charge Joint Charity Commissioner and therefore, petition under Article 226 of the Constitution of India ought to have been allowed by the learned Single Judge, but having failed to do so, the present appeal is required to be entertained by this Court to see that miscarriage of justice is not perpetuated, interest of justice is Page 40 of 127 C/LPA/852/2013 JUDGMENT protected and advanced by passing necessary orders in the matter, more particularly when the scheme settled by the In-charge Joint Charity Commissioner do not provide, protect the interest of the persons like the appellants- original petitioners.
8.23 Learned Advocate for the appellants relied upon the following decisions of the Hon'ble the Apex Court:
(i) Civil Appeal No. 7141 of 2005 (Para 13, 14, 15, 16 and 18) Bangalore Development Authority vs. M/s. Vijaya Leasing Ltd.
(ii) Civil Appeal No. 4691 of 2013 (Para 5, 23, 26, 27 28, 33 and 34) State of M.P. Vs. Sanjay Nagayach & Ors.
(iii) (2009) 16 SCC 187 (Para 4 to 7)
Mariama Roy Vs. Indian Bank & Ors.
(iv) (2003) 2 SCC 107 (Para 7) Harbanslal
Sahnia & Anr. Vs. Indian Oil Corpn. Ltd. & Ors.
(v) (2010) 1 SCC 126 Satwati Deswal Vs.
State of Haryana & Ors.
(vi) (2010) 14 SCC 553 (Para 6 and 7) Union of India & Ors. Vs. Mangal Textile Mills Indisa Pvt. Ltd. & Ors.
(vii) (2012) 11 SCC 651 Union of India &
Anr. Vs. Guwahati Carbon Limited
(viii) 1998 (8) SCC 1 (Para 14, 15, 20 and
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21) Whirlpool Corporation Vs. Registrar Of Trade Marks, Mumbai
(ix) Civil Appeal No.4715-4716 of 2013 (Para 13 to 15) S.R. Tewari Vs.Union of India & Anr.
8.24 Learned Advocate for the appellants repeated his submissions to emphasis the drawbacks /flaws in the scheme settled by the In-charge Joint Charity Commissioner. In nutshell, learned Advocate for the appellants submitted that so far as matters regulated by Clauses 4, 5, 16, 17, 18 and 19 of the constitution of the society are concerned, there are no corresponding clauses provided in the scheme.
9. Learned Senior Advocate Mr.B.B.Naik appearing with learned Advocate Mr.B.T.Rao for respondent Nos.4 and 11 to 25 - newly appointed Trustees strenuously contested the matter by submitting that LPA is not maintainable, as there is alternative remedy by way of statutory appeal, to which some of the parties have already resorted to; that the appellants have no locus standie; that there is suppression of earlier orders; that there is suppression of facts and that the points which were not argued before the learned Single Judge are sought to be pressed into service in this LPA.
9.1 Learned Senior Advocate for the contesting
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respondents submitted that K.J.Mehta Trust has been
registered under the provisions of The Bombay Public
Trust Act on 20.3.1964 vide Registration No.F-28,
Bhavnagar and the Constitution of the Trust is at pages- 36-49, typed copy is at page nos.50-70 and English translation is at pages-70A to 70W. Learned Senior Advocate for the contesting respondents submitted that the Trust was formed by erstwhile Ruler-Maharaja of Bhavnagar, family of Khushaldas J.Mehta, permanent resident of Mumbai and family of Sheth Laxmidas Raghunath Bhuta. Learned Senior Advocate for the contesting respondents submitted that as per Clause-16 of the Constitution of the Trust, 'founder Trustees' had right to nominate s trustee in case any of the founder trustees expires, meaning thereby the succession was by 'heredity'. Learned Senior Advocate for the contesting respondents invited attention of the Court to various other provisions of the constitution like clauses 8, 17, 18, 19, 20 and 21. Learned Senior Advocate for the contesting respondents submitted that Clause-20 is not deleted as no General Board resolution is passed to that effect. Learned Senior Advocate for the contesting respondents highlighted various aspects from the constitution of the Trust like vesting of the Trust management in 3 different bodies like General Body, Governing Body and Managing Committee. Learned Senior Page 43 of 127 C/LPA/852/2013 JUDGMENT Advocate for the contesting respondents invited attention of the Court to Clause 22 of the constitution of the Trust and other clauses.
9.2 Coming to the objects of the Trust, learned Senior Advocate for the contesting respondents submitted that it is provided that in addition to T.B., the trust shall set up medical centre, hospitals, surgical, xray, pathology laboratory, ambulance and at independent place, in the vicinity medical college, surgical, school. 9.3 Learned Senior Advocate for the contesting respondents submitted that on 06.07.2008 one Shri Dilip Mehta was President and on 14.06.2008, a committee consisting of 5 persons was constituted for assessment of the proposal submitted by Sumandeep Vidyapith and Dr.Mansukh Shah. On 23.06.2008, a meeting was called at Bhavnagar and one of the members of the Committee Dr.Kamlesh Bavishi had read over the proposal of Sumandeep Vidyapith who is running Medical, Dental, Physiotherapy, Pharmacy and Nursing College at 'Waghodia', District Vadodara and having hospital of 1000 bed. In that meeting, a decision was taken that proposal of Sumandeep Vidhyapeeth be accepted and accordingly official MOU be prepared and thereafter the person nominated by Sumandeep Vidyapith be accommodated in the KJ Mehta Trust on condition that the present trustees Page 44 of 127 C/LPA/852/2013 JUDGMENT will resign from the Trust. Accordingly on 06.07.2008 a resolution was passed, which reads as under:-
"It is hereby resolved that Shri Dilipkumar P.Mehta, President is hereby given power to accept the resignations of the trustees which are received. The President is further empowered to get prepared MOU with Sumandeep Vidyapith after getting advice from legal experts and after consultation with the members of the 5 members' Committee and to sign the MOU on behalf of the organisation. He is further empowered to decide the date, time, place and agenda for convening the subsequent AGM."
Thereafter the meeting concluded after vote of thanks to the President.
Sd/-
President, K.J.Mehta T.B.Hospital.
Date:-"
9.4 It is thereafter that agenda was circulated for convening meeting on 20.07.2008. The first item of the Agenda was 'ratifying the business transacted in the meeting dated 31.03.2006', second item was 'Presenting audited accounts for the years 2005-2006, 2006-2007 with other items'. On 20.07.2008, in all 50 members were present at 'Amargadh' wherein Dr.Mansukh Shah, Dr.Urviben Shah, Dr.Purvesh Shah,Dr.Ankur Shah, Dr.Dikshit Shah, Dr.Ramesh Dak, Shri N.M.Shah, Smt.Kalpanaben Shah, Dr.Ruchirani P.Shah-family members of Dr.Mansukh Shah and Page 45 of 127 C/LPA/852/2013 JUDGMENT Dak family remained present. It is the case of the contesting respondents that though these persons remained present as members, nothing is mentioned as to how they became members, in the proceedings, it is observed that there is resignation from three 'donors' of Niyamak Samiti as per Clause-22(3) and remaining two persons having expired, in their place 5 persons viz. Dr.Mansukhbhai K.Shah, Dr.Purvesh M.Shah, Dr.Dikshit M.Shah, Dr.Varsha D.Shah and Dr.Ruchirani P. Shah are appointed. It is the say of the contesting respondents that in the said meeting, certain objectors entered and objected and therefore, meeting was postponed by Dr.Mansukh Shah. Learned Senior Advocate for the contesting respondents submitted that it is interesting to note that the meeting was presided over by Shri Dilip Mehta and its proceeding were signed by Dr.Mansukh Shah as President of KJ Mehta Trust.
9.5 Learned Senior Advocate for the contesting respondents submitted that on 07.07.2008 another agenda was circulated by Shri Dilip Mehta calling meeting on 20.07.2008 at Amargadh. In the said meeting, business transacted in the meeting held on 06.07.2008 at 'Nilambaug' was ratified. The MOU entered into by KJ Mehta Trust and Sumandeep Vidhyapeeth was circulated. In the meeting of Managing Committee held on 06.07.2008, Page 46 of 127 C/LPA/852/2013 JUDGMENT President accepted the resignations of all members of Managing Committee. Founder member of KJ Mehta T.B.Hospital Shri Pratap Mehta permanent trustee expressed his inability to continue as Trustee on account of ill-health and requested to retire him and in his place his son Dilip Mehta be appointed and also be appointed in Managing Committee. Learned Senior Advocate for the contesting respondents submitted that the proceedings of said meeting were signed by Dr.Mansukh Shah. In that very meeting, Dr.Mansukh Shah was appointed as President, Dr.Purvesh Shah (his son) as Vice President and Dr.Dikshit Shah (his another son) as Secretary. A resolution was passed that President of meeting has handed over administration of the Trust to newly appointed President Dr.Mansukh Shah. 9.6 Learned Senior Advocate for the contesting respondents submitted that Change Report No.171/2008 was filed by Shri Dilip Mehta on 04.08.2008 though he had already resigned as President, whose name is reflected in the said report. On the same day, Shri Dilip Mehta also filed Change Report No.173/2008 for joining new Trustees pursuant to resolution No.6 dated 20.07.2008. 9.7 Learned Senior Advocate for the contesting respondents submitted that the aforesaid facts are set out to bring home a very important aspect of the matter, Page 47 of 127 C/LPA/852/2013 JUDGMENT viz. entry of Dr.Mansukh Shah and his family members was against the provisions of law, no election had taken place, no books of accounts are produced anywhere. Not only that, after taking over the management of K.J.Mehta Trust illegally, Dr.Mansukh Shah and others started Medical College in the name of K.J.Mehta General Hospital and College of Medical Sciences, Bhavnagar in 2008-09. 9.8 Learned Senior Advocate for the contesting respondents submitted that as per the MCI guidelines for the institution, desirous to start medical college for M.B.B.S. Course, there must be 300 bed attached hospital with all branches so that students studying in M.B.B.S. may get practical knowledge of all branches of all basic medical sciences. Besides, the Institution has to run general hospital so that people of surrounding area can get medical treatment. As per the guidelines for starting medical college, undertaking has to be given that required infrastructure, staff, professors, lecturers, will be available.
9.9 Learned Senior Advocate for the contesting respondents submitted that K.J.Mehta Medical College run by Dr.Mansukh Shah and family was denied renewal of recognition. Learned Advocate for the contesting respondents submitted that it will be appropriate to place on record that students of the college had Page 48 of 127 C/LPA/852/2013 JUDGMENT approached this Court by filing SCA No.16600 of 2010 and other matters, which were decided by judgment and order dated 26.08.2011, wherein this Court had made remarks about illegalities committed by the management of K.J.Mehta Trust. The deficiencies in the college are noted by this Court at pages Nos.7, 8 and 9 of that judgment. Besides that, on page No.12, the Court has noted the attitude of the college. On page No.13, the Court has noted as to how the college is acting contrary to the provisions of law and playing mischief with the students' career. On page No.24, the Court observed about the behaviour of the college, whereas on page No.29, the Court has said thus:-
"We are also informed that in the Essentiality Certificate it has been stated that respondent no.8 - College shall give bank guarantee worth Rs.2 crores in favour of Government of Gujarat as per Government Resolution No.MCG-1097-2454-J dated 20th June 2001, which has also not been complied with".
05.03.2014 9.10 Learned Senior Advocate for the contesting respondents invited attention of the Court to page No.34 of the said judgment, wherein attitude of the College is noted by saying that:-
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C/LPA/852/2013 JUDGMENT "..... The respondent no.8 -College adopted a very obstinate stand and attitude even being conscious of all the shortcomings against them. We are constrained to observe that not even for a moment they have thought of protecting the interest and the career of 148 students. They opposed this petition tooth and nail and put forward the following contentions....." 9.11 Learned Senior Advocate for the contesting respondents then invited attention of the Court to the observations made by the Court on page No.39 of the said judgment, which reads as under:-
" The team of Medical Council of India, during the course of inspection on 21st June 2010, 18th August 2010 and 22nd September 2010, noticed and recorded large scale of deficiencies at respondent no.8 - College. It is very unfortunate to note that there was no teaching staff for the second year M.B.B.S. Course as contemplated under the Minimum Standard Requirements for Medical College for 150 Admissions Regulations, 1999. Against the statutory requirement of 25 Lecturers as Professors/Assistant Professors/Associate Professors, only 8 Lecturers were available, and that too, out of 8, 6 of them were found to be permanent Professors of S.B.K.S. Medical College of Vaghodia,Vadodara."
9.12 Learned Senior Advocate for the contesting respondents next invited attention of the Court to page Page 50 of 127 C/LPA/852/2013 JUDGMENT No.43 of the said judgment, wherein the Court observed as under:-
"We fail tom understand that in spite of all this how can respondent no.8 - College still assert and insist that the students should not be transferred and they must be asked to continue their studies in respondent no.8 -
College. We do not understand why an institution obliged to impart education wants to play with the career of innocent students. The students have already wasted their precious time in attending the classes of a college, which has miserably failed to impart necessary education in medicine, and that too, a college who has been refused renewal by the Medical Council of India for both the academic years 2010-2011 and 2011-2012. Irresponsible attitude and manipulative action on the part of the college resulted in wastage of almost six months and added misery to their sufferings which, otherwise, could have been restricted. The students have been made to run from pillar to post. The fees which they have paid is not something which every parent can afford. We know how finance is managed in this country by parents to educate their students. What sacrifices are to be made and to the extent that if a child is brilliant and outstanding, parents have gone to the extent of mortgaging their houses and pawning their jewelleries for the purpose of educating their children."
9.13 Learned Senior Advocate for the contesting Page 51 of 127 C/LPA/852/2013 JUDGMENT respondents submitted that the Court directed the college to refund the fees of the students. Learned Advocate for the contesting respondents submitted that the matter was carried to the Hon'ble the Apex Court by filing SLP (C) No.24699/2011 and Hon'ble Supreme Court has confirmed the judgment and order passed by the High Court. Learned Advocate for the contesting respondents submitted that in the said judgment, the Hon'ble the Apex Court observed that:-
"In the peculiar facts and circumstances of the case, it would be appropriate if MCI does not enforce the bank guarantee given by the institution at present. However, if any application in regard to 2012-13 is not received by the MCI from the college before 31.12.2011, or the circumstances then (after 31.12.2011) warrant, the MCI may proceed with encashment of the bank guarantee in accordance with law....."
9.14 Learned Senior Advocate for the contesting respondents submitted that the erstwhile trustees of KJ Mehta Medical College did not return the fees to the students and therefore M.C.A.Nos.979/2013, 606/2013, 607/2013 and 609/2013 are filed which are pending. 9.15 Learned Senior Advocate for the contesting respondents submitted that K.J.Mehta General Hospital and College of Medical Sciences had filed Writ Petition Page 52 of 127 C/LPA/852/2013 JUDGMENT (C)No.4010/2012 before the Hon'ble Delhi High Court challenging the refusal to grant permission by MCI, which is dismissed on 03.05.2013 by the Delhi High Court and while dismissing the said petition, observations were made against the petitioners' behaviour. 9.16 Learned Senior Advocate for the contesting respondents submitted that the students who had approached this Court had filed SLP which was dismissed on 12.09.2011, but while dismissing the same, the Hon'ble the Apex Court permitted the college to fulfill the requirement suggested by MCI. Once that is done, MCI was required to inspect the college to verify the infrastructure and other requirements for medical college. The learned Senior Advocate for the contesting respondents submitted that prosecution is undertaken against the erstwhile management for breach of the provisions of the Income Tax Act as T.D.S. has not been deposited. In this regard, learned Senior Advocate for the contesting respondents invited attention of the Court to the notice issued by the Income Tax Commissioner dated 12.07.2013 for launching prosecution for Assessment Year 2010-11. Learned Senior Advocate for the contesting respondents submitted that an order is passed under Sec.201(1) and 201(1A) of the Income Tax Act against trust for non-payment of the TDS amounts for 2012-13 and Page 53 of 127 C/LPA/852/2013 JUDGMENT penalty is imposed.
9.17 Learned Senior Advocate for the contesting respondents submitted that though newly appointed Trustees, time and again requested to supply documents and record and books of accounts, but the same are not supplied till date. Learned Senior Advocate for the contesting respondents submitted that on 18.08.2013 a letter was written to Chartered Accountant to provide audit report along with other documents, but the Chartered Accountant refused to accept the same and therefore, notice is sent by post.
9.18 Learned Senior Advocate for the contesting respondents submitted that in the affidavit filed by the Manager of Union Bank of India, it is stated that KJ Mehta Trust is having current account at Vadodara and Rs.1.5 crore was transferred on 25.04.2013. Learned Senior Advocate for the contesting respondents emphatically submitted that the application was submitted after business hours. Learned Senior Advocate for the contesting respondents submitted that, the trust had submitted fixed deposit receipt of Rs.1.5 crores and the said amount was transferred to Certificate of Deposit Account No.619201010050081 prematurely and aster the scheme sanctioned by the Charity Commissioner, the said amount was transferred to State Bank of India, Manjusar Page 54 of 127 C/LPA/852/2013 JUDGMENT Branch Account No.30776886514. Learned Senior Advocate for the contesting respondents submitted that the said amount was thereafter withdrawn by Dr.Mansukh Shah and family.
9.19 Learned Senior Advocate for the contesting respondents then invited attention of the Court to the affidavit filed on behalf of State Bank of India, Manjusar Branch, wherein it is admitted that KJ Mehta Hospital Trust is having 'overdraft' account. An amount of Rs.1.50 crore was transferred to clear 'overdraft'. Account No.30776886514 is account of Dr.Mansukh Shah and deposit of Rs.2.30 crores with interest was to be adjusted against O.D. Facility. Learned Senior Advocate for the contesting respondents invited attention of the Court to various correspondences like letter of Purvesh Shah, Director of KJ Mehta Trust, certificate of State Bank of India for use of funds and an affidavit filed by one Mr.Anand Singh, Chief Manager, State Bank of India, Industrial Finance Branch, Vadodara, wherein it is admitted that a term loan of Rs.8 crores and bank guarantee of Rs.11.50 crores was sanctioned by the Bank against equitable mortgage of immovable properties of KJ Mehta Trust registered on 14.07.2009 with Sub-Registrar Office, Shihor. It is stated in the affidavit that auditor of the bank had raised objection and inquired Page 55 of 127 C/LPA/852/2013 JUDGMENT about the permission of the Charity Commissioner. The Bank therefore demanded from the KJ Mehta Trust vide letter dated 26.11.2011, permission, if any, granted by the Charity Commissioner. As no permission was granted, properties of Sumandeep Multipurpose Ltd. situated at Vadodara, were offered as security and the properties of KJ Mehta TB Hospital were released on 07.09.2012. Learned Senior Advocate for the contesting respondents invited attention of the Court to release deed of KJ Mehta Trust properties. Learned Senior Advocate for the contesting respondents then invited attention of the Court to further affidavit of State Bank of India, wherein it is admitted that there is overdraft loan still continues in the name of KJ Mehta TB Hospital. Learned Senior Advocate for the contesting respondents then invited attention of the Court to additional affidavit filed on behalf of State Bank of India. Learned Senior Advocate for the contesting respondents submitted that it is admitted in the said affidavit that bank guarantee of Rs.11.50 crores in the name of KJ Mehta TB Hospital is still in force and it was enhanced to Rs.17.50 crores. Learned Senior Advocate for the contesting respondents emphasized that the officer of the bank has nowhere stated that entire loan is repaid.
9.20 Learned Senior Advocate for the contesting
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respondents submitted that order was passed below Change Report No.171/2008 on 30.11.2012, which is subject to final outcome of SCA No.1496/2010. By virtue of the order passed below Change Report, the "New Trustees" came on record of the Trust. Learned Senior Advocate for the contesting respondents submitted that against the order passed on Change Report No.171 of 2008, an appeal is filed and in appeal stay is refused.
9.21 Learned Senior Advocate for the contesting respondents then invited attention of the Court to affidavit filed by one Mr.Rajesh Mehta - newly appointed trustee and also to the notice given to Advocate Shri Abhijit Joshi appearing for State Bank of India for production of xerox copies of original documents produced along with affidavit filed before the High Court on 17.09.2013 by Shri Surendrakumar Suman, Branch Manager, State Bank of India, Manjusar Branch and Shri Anand Singh, Chief Manager, Relationship and Manager, SBI, Industrial Finance Branch, Vadodara. Learned Senior Advocate for the contesting respondents also invited attention of the Court to a letter written by the Trust to Chartered Accountant on 31.07.2013 for providing original audit reports along with other documents. Learned Senior Advocate for the contesting respondents submitted that yet another letter was written on Page 57 of 127 C/LPA/852/2013 JUDGMENT 18.08.2013 to K.J.Shah & Co. requesting to provide documents. Thereafter, legal notice was issued to K.J.Shah & Co. on 24.08.2013 for production of documents and audit reports. Learned Senior Advocate for the contesting respondents submitted that K.J.Shah & Co., has replied the aforesaid notice on 27.08.2013. Learned Senior Advocate for the contesting respondents then invited attention of the Court to legal notice given by Shri Sharad Rana, Advocate of Bhavnagar on 02.09.2013 for breach of Income Tax Act, to which Dr.Mansukh Shah, Dr.Purvesh Shah replied on 10.09.2013. 9.22 Learned Senior Advocate for the contesting respondents set out in detail the breaches committed by Trustees of the Trust which are as under:-
I. No election has been held regularly as per the Constitution of the Trust.
II. No meeting has been called regularly as per the Constitution of the Trust.
III. No audit report has been filed with the Charity Commissioner by the trustees of the trust.
IV. Without prior permission of the Charity Commissioner, as required under Sec.50A, Page 58 of 127 C/LPA/852/2013 JUDGMENT the Trust has entered into MOU for amalgamation of the Trust which is in violation of the provisions of Sec.50A and agreement has been executed.
V. 39 workers employed by erstwhile trustees have filed Recovery Application No.20/2009 to 63/2009 before the Labour Court, Bhavnagar for recovery of short salary which was not paid by erstwhile trustees.
The said applications were decided on 27.09.2013 and the court has ordered to pay salary from April,2008 to 2009 to these employees who have been wrongly denied their salaries and huge liability has been fastened on the Trust. Because this is the time when Dr.Mansukh Shah and family were in the trust and remained till 25.04.2013.
9.23 Learned Senior Advocate for the contesting respondents submitted that all sorts of illegalities are committed by violating various provisions of law. There is no record in the office of the Charity Commissioner of members, list of donors. No record is available with Charity Commissioner and no reports are filed. Accounts are filed belatedly and that too with insufficient Page 59 of 127 C/LPA/852/2013 JUDGMENT details. The Charity Commissioner has taken into consideration all these things, while framing the scheme. 9.24 Learned Senior Advocate for the contesting respondents next invited the attention of the Court to 'Deed of Merger' of the Trust, Deed of Mortgage, order of Charity Commissioner refusing to grant permission for mortgage, Audit report, State Bank of India letter, proceedings of meetings dated 06.07.2008, 20.07.2008 and Change Report no.171/2008 and 173/2008. 9.25 Learned Senior Advocate for the contesting respondents submitted that as on date, the financial liability of the Trust is of Rs.20 crores. 9.26 Learned Senior Advocate for the contesting respondents, replying to the submissions made by the learned Advocate for the appellants, submitted that Scheme Application was moved before the In-charge Joint Charity Commissioner by various persons who are 'interested persons'. In this regard, learned Senior Advocate for the contesting respondents invited attention of the Court to page-136-136-Y (order of the In-charge Joint Charity Commissioner). Learned Senior Advocate for the contesting respondents submitted that the In-charge Joint Charity Commissioner has formed opinion vide Ex.1 on 21.10.2011 and a public notice was given in a Page 60 of 127 C/LPA/852/2013 JUDGMENT newspaper, which has wide circulation namely 'Saurashtra Samachar', which was published on 02.12.2011, intimating that date of hearing is fixed on 09.12.2011. Learned Senior Advocate for the contesting respondents submitted that Mr.Shailesh I.Patel, Advocate, filed his Vakalatnama for Dr.Mansukh Shah & Family-Trustees. An application Exh.17 was filed raising preliminary objections under Sec.50A of the Act read with Rule-26 of Bombay Public Trusts Rules. Learned Senior Advocate for the contesting respondents submitted that Dr.Mansukh Shah & family appeared before the Charity Commissioner on 05.11.2011 and filed written submissions before the In-charge Joint Charity Commissioner. Learned Senior Advocate for the contesting respondents submitted that preliminary objections raised vide Exh.17 by Dr.Mansukh Shah's Advocate were decided by the Charity Commissioner by saying that, "it will be decided along with scheme application. Learned Senior Advocate for the contesting respondents submitted that the said order was not challenged by Dr.Mansukh Shah. Learned Senior Advocate for the contesting respondents invited attention of the Court to Page-136J (internal page-11) of judgment and order passed by the In-charge Joint Charity Commissioner, wherein it is mentioned that learned Advocate Shri Shailesh I. Patel appeared for Dr.Mansukh Shah and family and produced documentary evidence and raised preliminary Page 61 of 127 C/LPA/852/2013 JUDGMENT objections which were decided on 18.02.2013. This was also not challenged by Dr.Mansukh Shah. On behalf of the Trustees, Dr.Mansukh Shah produced written submissions before the In-charge Joint Charity Commissioner.
Learned Senior Advocate for the contesting respondents submitted that submissions of Shri Shailesh Patel, Advocate for Dr.Mansukh Shah are recorded. 9.27 Learned Senior Advocate for the contesting respondents submitted that administration of the Trust has been taken over by newly appointed Trustees on 26.04.2013 and the same was intimated to all concerned authorities. It is thereafter that a letter was written to Shri Nilesh Patel, Chief Accountant, KJ Mehta Hospital, requesting him for all records of the trust. 9.28 Learned Senior Advocate for the contesting respondents submitted that the order produced by the appellants at Page-183 in Scheme Application No.3/12 is not relevant to the dispute involved in the present case. Learned Senior Advocate for the contesting respondents relied upon the affidavit of Shri Komalkant F. Sharma, wherein it is contented that the present LPA is not maintainable under Arts.226, 227 of the Constitution of India, various judgments are relied upon and quoted in the said affidavit. Learned Senior Advocate for the contesting respondents submitted that 'any person' has Page 62 of 127 C/LPA/852/2013 JUDGMENT right to file appeal under Sec.72 of the Act and therefore, the learned Single Judge has rightly dismissed the petition.
9.29 Learned Senior Advocate for the contesting respondents submitted that after scheme was sanctioned by the In-charge Joint Charity Commissioner, Dr.Mansukh Shah, Dr.Purvesh Shah, Dr.Dikshit Shah filed Regular Civil Appeal Nos.24, 26 and 27 of 2013 before the District Court, Bhavnagar under Sec.72 of the Act. Learned Senior Advocate for the contesting respondents submitted that initially, District Court granted stay, against which newly appointed Trustees filed petitions in this Court being SCA No.8465/2013 and 8491/2013. The High Court passed an order on 10.05.2013, setting aside the order of the District Court, Bhavnagar dated 01.05.2013 and remanded the matter to the District Court, Bhavangar for hearing afresh after giving opportunity of hearing to the petitioners. The District Court, Bhavnagar, after hearing at length, dismissed Application Ex.5 in Regular Civil Appeal Nos.24, 26 and 27 of 2013 by speaking order dated 31.05.2013. Learned Senior Advocate for the contesting respondents submitted that against that order, SCA Nos.9350, 9351 and 9352 of 2013 were filed before this Court. The newly appointed trustees filed entire record of the In-charge Joint Charity Page 63 of 127 C/LPA/852/2013 JUDGMENT Commissioner before this Court in the said petitions and the Court has not granted any interim relief in these petitions.
9.30 Learned Senior Advocate for the contesting respondents submitted that Regular Civil Appeal No.31/2013 has been filed by 4 donors in Bhavnagar District Court challenging the scheme. In the said appeal also, application Ex.5 has been rejected after hearing at length. The said donors have not approached this Court.
9.31 Learned Senior Advocate for the contesting respondents submitted that the present appellants-3 donors have directly approached this Court by filing the present petition, but the learned Single Judge has not entertained the same in view of Section 72 of the Act. The learned Senior Advocate submitted that this LPA is not maintainable because the learned Single Judge has not touched the merits of the matter. Learned Senior Advocate for the contesting respondents submitted that the petitioners have challenged the order passed by the quasi judicial authority, but when statutory appeal is available, in view of the various judgments which are relied upon in support of the contention that, 'when statutory remedy is available under the Act, a petition under Article 226 is not required to be entertained. The Page 64 of 127 C/LPA/852/2013 JUDGMENT learned Senior Advocate submitted that the learned Single Judge has not committed any error 'apparent on the face of the record' and therefore, present LPA deserves to be dismissed.
9.32 Learned Senior Advocate for the contesting respondents submitted that merely because allegations are made against the In-charge Joint Charity Commissioner, a petition cannot be said to be a petition under Article
226. The learned Senior Advocate submitted that when the Act (Bombay Public Trusts Act) confers power on the In- charge Joint Charity Commissioner to frame a scheme and legislature has provided an appeal which can be filed by any person, a petition does not lie and the same is rightly rejected by the learned Single Judge, against which the present LPA is filed which deserves to be dismissed.
9.33 Learned Senior Advocate for the contesting respondents then invited attention of the Court to the affidavit of Shri Rajesh Mehta - one of the newly appointed trustees, wherein it is stated that:-
"I say and submit that respondent nos.27 to 34 are running various accounts in the name of KJ Mehta T.B.Hospital Trust at Bhavnagar, Shihor, Amargadh and Vadodara. They have not produced any accounts from the date on which they have illegally entered in the said Trust and till Page 65 of 127 C/LPA/852/2013 JUDGMENT they were ousted from the trust and they have not handed over any details, books of accounts, balance-sheet, audited reports, bank accounts, receipt books, funds etc. till date."
9.34 Learned Senior Advocate for the contesting respondents submitted that in the very same affidavit, it is stated that, "not a single document or record of the trust has been given to the newly appointed Trustees because when the management was taken over on 26.04.2013, no documents or trust record is available and all the books of accounts and records are in the custody of respondent nos.27-34" (ousted /outgoing Trustees). 9.35 Learned Senior Advocate for the contesting respondents submitted that the following legal contentions be noted:-
I. Petition is not maintainable.
II. The present LPA is not maintainable as
learned Single Judge has not gone into the merits because under the Act statutory appeal is provided.
III. In the same matter, 'Trustees' have filed Regular Civil Appeal Nos.24,26 and 27/2013 before District Court, Bhavnagar under Sec.72, wherein District Court refused to Page 66 of 127 C/LPA/852/2013 JUDGMENT grant stay, against which SCA No.9350,9351 and 9352/2013 were filed in which no interim relief was granted and the same are pending for final hearing. The said SCAs are against rejection of application Exh.5. The main appeals are pending before the District Court.
IV. The other donors filed Regular Civil Appeal No.31/2013 wherein also Application Ex.5 is rejected on 12.07.2013. Against that order, no petition is filed.
V. SCA No.10520/2013 was filed on 01.07.2013, in which incorrect statement was made. The learned Single Judge has not entertained the same as statutory appeal is provided.
VI. The newly appointed Trustees relied upon various judgments and the same are produced which are as under:-
In the matter of Karuna Singh Vs. State (NCT of Delhi) & Anr., reported in 2012 (5) SCC 407, in the matter of Union of India & Anr. Vs. Guwahati Carbon Limited, reported in 2012 (11) SCC 651 and in the matter of Nivedita Sharma Vs. Cellular Operators Page 67 of 127 C/LPA/852/2013 JUDGMENT Association of India & Ors., reported in 2011 (14) SCC 337.
In these judgments, the Hon'ble the Apex Court has held that, "when a statutory appeal is provided under the Act, it is not proper for the writ court to entertain petition under Art.226 of the Constitution. Therefore the learned Single Judge was justified in observing that, since there is remedy in the form of appeal that remedy must be exhausted'.
The order passed by the Learned Single Judge in our opinion ought not to have been interfered by the High Court in the appeal filed by the respondent assessee". VII. The learned Senior Advocate emphatically submitted that this appeal is also not maintainable on the ground of 'suppression of facts'. The order passed by this Court in SCA No.8465/2013, 8491/2013 is not produced; the order passed in Regular Civil Appeal Nos.24, 26 and 27/2013 is also not produced; the order passed by the learned Single Judge in SCA No.9350/2013 and allied matters is not produced;
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C/LPA/852/2013 JUDGMENT various incorrect statements are made in the Memo of petition which are pointed to this Court.
9.36 Learned Senior Advocate for the contesting respondents invited attention of the Court to the additional affidavit filed by Shri Ketan Vyas, one of the newly appointed Trustees. It is stated that there is 'suppression of facts' and correct facts are not disclosed. The learned Senior Advocate relied upon a judgment of the Hon'ble the Apex Court in the matter of K.D.Sharma Vs. Steel Authority of India Limited & Ors., reported in 2008 (12) SCC 481, in support of the submission that there is suppression of facts and therefore, this appeal should be dismissed. 9.37 Learned Senior Advocate for the contesting respondents submitted that when Change Report Nos.171/08, 172/08, 173/08 were filed, objection was raised by Shri Rajesh Mehta and Shri Ramesh Viradiya, at that point of time, Dr.Mansukh Shah had raised objection saying that they have no right to object. The said objection of Dr.Mansukh Shah was upheld. Against that order, a petition was filed before this Court, which is disposed of by this Court. Against that order passed in petition, an appeal is pending. The learned Senior Advocate submitted that it is thereafter that the In-charge Joint Page 69 of 127 C/LPA/852/2013 JUDGMENT Charity Commissioner has settled the scheme. 9.38 Learned Senior Advocate for the contesting respondents submitted that it is not a case of 'one single breach', but it is a case wherein there are so many breaches, taking that into consideration, the Charity Commissioner has rightly framed the scheme that too after complying with the relevant provisions of law. 9.39 Learned Senior Advocate for the contesting respondents invited attention of the Court to the Scheme framed by Charity Commissioner, which is produced in CA No.7242 of 2013 at pages-224-231 and typed copy at pages- 232-244. Learned Senior Advocate for the contesting respondents submitted that about the said scheme, respondent nos.27 to 34, Dr.Mansukh Shah & family has made wrong statement before the Court to the effect that, 'the Government's representatives have been removed, which is not correct'. The In-charge Joint Charity Commissioner has provided for administration of trust at page No.237. It is provided that minimum seven Trustees are required and maximum number prescribed is twenty one. It is also provided that at the expiry of five years, 1/3 Trustees will retire, in place of retiring Trustees, new Trustees will be appointed by the majority. It is also provided in the scheme that over and above the newly appointed Trustees, three Trustees will be nominated by Page 70 of 127 C/LPA/852/2013 JUDGMENT the Government and in addition to that, Civil Surgeon of Sir T. Hospital will be one of the Trustees. The quoram for the meeting of Board of Trustees is provided to be 1/3 of Board. It is provided that trust can raise loan after passing necessary resolution and obtaining prior permission of the Charity Commissioner. 9.40 Learned Senior Advocate for the contesting respondents submitted that KJ Mehta Trust is registered under the Bombay Public Trusts Act and Government of Gujarat has not issued any notification in exercise of powers under Sec.1(a) for non-application of provisions of Bombay Public Trusts Act. Definition of 'person having interest' is defined under Sec.2(13) which includes trust registered under the Bombay Public Trust Act and Society Registration Act.
9.41 Learned Senior Advocate for the contesting respondents submitted that once the Trust is registered under Bombay Public Trust Act, it will be governed by the provisions of Bombay Public Trust Act. Learned Senior Advocate for the contesting respondents submitted that not a single document is produced before the Charity Commissioner or District Court by ousted trustees to show that the trust has been following the procedure under the Societies Registration Act. Learned Senior Advocate for the contesting respondents submitted that as against Page 71 of 127 C/LPA/852/2013 JUDGMENT that, sufficient documentary evidence is produced to show that the trust has all along followed the provisions of Bombay Public Trust Act. Learned Senior Advocate for the contesting respondents submitted that for the first time change reports were filed in 2008 being Change Report Nos.171/2008, 172/2008 and 173/2008, in between, no change report is filed. Learned Senior Advocate for the contesting respondents submitted that notice under Sec.50 of the Act for forming the scheme was issued by the In- charge Joint Charity Commissioner only to the persons who were registered in Public Trust Register. Learned Senior Advocate for the contesting respondents submitted that power of Charity Commissioner to frame scheme under Section 50A of the Act is discussed by this Court in a judgment in the case of Kantilal C.Shah Vs. Charity Commissioner, reported in 1975 GLR 594, wherein the Court, while discussing various aspects of the matter has held that, "It is thus clear that the Charity Commissioner has ample power to make appointment of first trustees in the place of old trustees without continuing them so as to bring about their removal". The Court has expressly examined the effect of word 'includes' and it was held to be that it should be so construed that it enlarges the meaning of the words or phrases occurring in the body of the statute. Learned Senior Advocate for the contesting respondents submitted that in Para-7 of the judgment, the Page 72 of 127 C/LPA/852/2013 JUDGMENT Hon'ble Court referred a judgment of Bombay High Court in case of Charity Commissioner, Maharashtra State Vs. Hirjibhoy, reported in 1973 Bombay Law Report page no.880, wherein in Para-9, the court has discussed the power of appointment of first Trustees. The Court has held that, 'the Charity Commissioner can in effect bring about removal of the existing Trustees'. Learned Senior Advocate for the contesting respondents submitted 'power of appointment of Trustees' while framing the scheme is an integral part of the general power of framing the scheme for the proper and better management. Learned Senior Advocate for the contesting respondents submitted that in absence of such power, power to frame scheme becomes ineffective. Learned Senior Advocate for the contesting respondents submitted that the power of framing scheme necessarily implies obliteration of the earlier management of the public trust in question. Learned Senior Advocate for the contesting respondents submitted that the trustees under the old management cannot continue in spite of obliteration of the old scheme of the management. Learned Senior Advocate for the contesting respondents submitted that they have got to be either reappointed under the scheme or removed by appointment of new Trustees in their place as Trustees.
9.42 Learned Senior Advocate for the contesting
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respondents also pressed into service the decision of this Court in case of Bipinchandra Parsottamdas Patel reported in 1974 GLR, 411, wherein this Court has held that:-
"Sub-section(1) of Sec.50A of the Bombay Public Trust Act it is a non-obstent clause clearly indicates that the Charity Commissioner has been empowered by the legislature to frame scheme for the management or administration of such public trust, if he is satisfied that it is necessary or expedient to so to do, he himself has been empowered to initiate proceedings if he has reason to believe that in the interest of proper management and administration of the public trust, the scheme should be settled for it. It will naturally depend upon his subjective satisfaction. It cannot be said that even by any stretch of imagination that for such subjective satisfaction of his".
9.43 Learned Senior Advocate for the contesting respondents submitted that this Court has considered power of Charity Commissioner to frame the scheme under Sec.50A(1) and it is held that, "no judicial inquiry is necessary". Learned Senior Advocate for the contesting respondents submitted that this Court has gone further to say that, "regarding administration and appointment of trustees any instrument of trust does not debar the Charity Commissioner to frame scheme if condition under Page 74 of 127 C/LPA/852/2013 JUDGMENT Sec.50A is satisfied". Learned Senior Advocate for the contesting respondents emphatically submitted that in view of the judgment aforesaid, there was no necessity for the In-charge Joint Charity Commissioner to give time for taking over management. Besides when the scheme is framed, old trustees automatically stand obliterated. Learned Senior Advocate for the contesting respondents submitted that Sec.50A of the Act does not provide for grant of any time. Learned Senior Advocate for the contesting respondents submitted that the reliance placed by the appellants on some other order of the Charity Commissioner is not a binding precedent, which ought to have been followed by the In-charge Joint Charity Commissioner in the present case also.
9.44 Learned Senior Advocate for the contesting respondents submitted that after the new management had taken over the management, they have made various changes and have infused huge funds; the 'mess' is renovated which was in dilapidated condition; the 'mess' is provided all modern equipments; Digital x-ray machine has been purchased; Operation theater and OPD and indoor hospital have been renovated by incurring huge expenditure; new D.G.S. (Diesel Generating Set) is purchased to ensure power supply during electricity failure; Blood Donation camps are organized; new vehicles Page 75 of 127 C/LPA/852/2013 JUDGMENT are purchased for staff; new teaching and non-teaching staff has been appointed; High mast lighting towers have been erected to ensure the safety and security of female students. All these steps have boosted the confidence of students and parents. For the first time,100% seats are filled in the College.
10. Learned Senior Advocate Mr.N.D.Nanavati appearing with learned Advocate Mr.Mitul K.Shelat for ousted Trustees, whom he refers as others - respondent Nos.26 to 34 contested the matter with all vehemence at his command and submitted that respondent Nos.26 to 34- ousted Trustees became lifetime members by donating a sum of Rs.50,000/- in July 2008. They were elected to be members of the 'Niyamak Samiti' (Managing Committee). Opponent No. 26 was elected as President, Opponent No.28 as Vice President, Opponents 27,29 and 30 were elected as Honorary Secretaries. Learned Senior Advocate for the answering respondents submitted that being members of the 'Sanchalak Samiti' (Executive Committee), their names were recorded as Trustees in the PTR of the Trust. During the period from their appointment till the passing of the impugned order, the administration of the Trust was carried on by the Sanchalak Samiti which included 2 nominees of the State Government, the Director of the KJ Mehta T B Hospital and Civil Surgeon, Bhavnagar. Learned Page 76 of 127 C/LPA/852/2013 JUDGMENT Senior Advocate for the answering respondents submitted that by the impugned Scheme, the In Charge Joint Charity Commissioner has effected dissolution of the Society; divested the members of the Society of their right to administer the society and has appointed new Trustees and entrusted the administration to them with a further right to appoint trustees.
10.1 Learned Senior Advocate for the answering respondents submitted that the answering respondents have impugned the order of the In-charge Joint Charity Commissioner and writ petitions are pending hearing before this Honourable Court being SCA No. 9350- 9352/2013.
10.2 Learned Senior Advocate for the other respondents submitted that the answering respondents applied for hearing of the said writ petitions along with the present Appeal, but that application is not entertained.
10.3 Learned Senior Advocate for the answering respondents submitted that the scheme is framed in respect of a Society which is registered under the Societies Registration Act, 1860, which is administered in accordance with the 'memorandum' as provided under Section 2(2) of the said Act. There is no provision Page 77 of 127 C/LPA/852/2013 JUDGMENT empowering the Charity Commissioner while exercising powers under the Bombay Public Trust Act, 1950 to change/alter or obliterate the 'memorandum' and impose a scheme substituting the same. The 'Memorandum' of the Society is produced along with translation thereof. In the same 'memorandum', Power to Amend is conferred by clause 6(3) and administration is to be carried on by the Committee which is provided in clauses 4,5,16 to 21. The 'memorandum' provides for 'life members' under Clause 16-
18. In support of his submission, learned Senior Advocate for the answering respondents relied upon a decision of this Court in the matter of Krishnakumar G.Dholakiya & Ors. Vs. Assistant Registrar of Societies, Rajkot, reported in 2002(3) GLH 197.
10.4 Learned Senior Advocate for the answering respondents submitted that assuming for the sake of argument that the Charity Commissioner can effect change in the 'memorandum' of the society, the Charity Commissioner cannot impose 'such' change, the effect of which is to appoint 'non members' of a Society as Trustees and transfer the administration and management of the Society from the members to such non-members Trustees. Learned Senior Advocate for the answering respondents relied upon a decisions of the Hon'ble the Apex Court reported in the matter of Andhra Pradesh Dairy Page 78 of 127 C/LPA/852/2013 JUDGMENT Development Corporation Federation Vs. B.Narasimha Reddy & Ors., reported in 2011(9) SCC 286 and in the matter of Smt.Damyanti Naranga Vs. The Union of India & Ors., reported in AIR 1971 SC 966.
10.5 Learned Senior Advocate for the answering respondents submitted that the powers under Section 50A cannot be exercised so as to achieve the object of removing trustees and to appoint persons of one's choice as trustees. The power under Section 50A is to be exercised, 'only if the existing system (management) is not workable'. For removal of Trustees, the Act provides in Section 50. When there is a specific provision providing for 'Removal of Trustees', for the reasons set out therein, the same cannot be done and cannot be allowed to be done by framing a scheme under Section 50A. The learned Senior Advocate submitted that entire order is based on the premise that, 'the Trustees have misconducted themselves'. Misconduct on the part of Trustees does not confer power on the Charity Commissioner to have recourse to Section 50A and frame a Scheme. In this regard, learned Senior Advocate for the answering respondents relied upon a decision of the High Court of Judicature at Bombay, Bench at Aurangabad in the matter of Mallikarjun Basvanappa Masute & Anr. Vs. Dattatraya Krushnath Wadane & Ors., reported 2005 (2) MHLJ Page 79 of 127 C/LPA/852/2013 JUDGMENT 266 (paras 13 and 14) and a decision of the Bombay High Court in the matter of Vasantrao S/o Vishwanathrao Mane Vs. Apparao S/o Baibanna Sidore, reported in 2007 (109) BLR 2787.
10.6 Learned Senior Advocate for the answering respondents submitted that only on the short ground that the In-charge Joint Charity Commissioner did not follow the mandatory procedure prescribed under Section 50A while settling the scheme under challenge, the same is required to be quashed and set aside by this Court. To elaborate the same, learned Senior Advocate for the answering respondents submitted that:-
a) Applications in respect of a Society could not have been entertained at the instance of the persons who were not members of the Society:
Section 2(10)(d) read with Section 50A requires that in respect of a Society only a member could file an application.
b) Applications under Section 50A could not have been heard unless the persons who were working as trustees and against whom allegations were made were impleaded as parties to the Application: Section 50 A read with Rule 26 of the Bombay Public Trust Rules.Page 80 of 127
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c) Before proceeding to frame a Scheme it is a condition precedent to hear the trustees and decide that there is a necessity to frame a Scheme. Only after the said decision is taken in manner prescribed, the further proceedings could have been taken for framing a Scheme that also after hearing the trustees. In this regard, Learned Senior Advocate for the answering respondents relied upon a decision of this Court in the matter of Chhotubhai L.Patel Vs. State of Gujarat, reported in 2007(2) GLR 1716: paragraph 6 to 9.
10.7 Learned Senior Advocate for the answering respondents submitted that while passing the impugned order, the In Charge Joint Charity Commissioner has followed 'a procedure which is not known to law', which is on the face of it unfair, motivated by extraneous consideration and with a clear usurpation of powers which are not available under the Act. Learned Senior Advocate for the answering respondents submitted that though objections were raised and specific preliminary issues were framed in each of the Scheme Applications regarding, 'Maintainability of a Scheme Application in respect of a Society', which are: (i) Scheme Application No.4/10 filed by Dr Jayant Pandya, (ii) Scheme Application No.51/09 Page 81 of 127 C/LPA/852/2013 JUDGMENT filed by Mr.Mitesh Lakhani and (iii) Scheme Application No.40/10 filed by Mr.Suresh Makati, the In-charge Joint Charity Commissioner did not pay any heed to the 'objections' raised and did not deem it proper to decide the preliminary issues.
10.8 Learned Senior Advocate for the answering respondents submitted that the In-charge Joint Charity Commissioner ought to have considered 'the question of maintainability' of a Scheme Application filed by the Non Members. Learned Senior Advocate for the answering respondents submitted that in the Scheme Application filed by Shri Kamlesh Purohit, wherein the answering respondents were impleaded, no notice was issued to them and the application was permitted to be withdrawn. This speaks volumes about the 'ultimate goal' which the In- charge Joint Charity Commissioner had decided to achieve. 10.9 Learned Senior Advocate for the answering respondents submitted that maintainability of a Scheme Application without deciding the preliminary issue of 'desirability to frame a Scheme', the In-charge Joint Charity Commissioner passed an order to the effect that, "He would decide the application along with the main matter". Learned Senior Advocate for the answering respondents invited attention of the Court to the judgment and order of the In-charge Joint Charity Page 82 of 127 C/LPA/852/2013 JUDGMENT Commissioner, wherein it is so recorded. Learned Senior Advocate for the answering respondents submitted that thereafter, when it came to pass the impugned order, the In-charge Joint Charity Commissioner said that, "since the application is decided and no appeal is filed, nothing further is to done". Learned Senior Advocate for the answering respondents invited attention of the Court to the relevant part of the judgment and order wherein it is so recorded.
10.10 Learned Senior Advocate for the answering respondents submitted that thus, in totallity, 'without deciding the preliminary issue', the In-charge Joint Charity Commissioner proceeded to frame the Scheme. This could happen only when the 'authority' is motivated and is having an agenda to frame the scheme at any cost even by abusing the powers conferred on him under the Act. 10.11 Learned Senior Advocate for the answering respondents submitted that what is more shocking is that the In-charge Joint Charity Commissioner was in know of the fact that, "the Society had elected a Committee and the members were administering the Trust and that their names were reflected as Trustees in terms of the Change Report", he proceeded to decide and allow the Scheme Applications without impleading, without issuing notice and without giving the said Trustees an opportunity of Page 83 of 127 C/LPA/852/2013 JUDGMENT hearing wherein they could have convinced the In-charge Joint Charity Commissioner that 'shortfalls', if any, can be taken care of even without framing the scheme. Learned Senior Advocate for the answering respondents submitted that it is equally shocking that the In-charge Joint Charity Commissioner appointed the 1st trustees, who were 'not the members of the society' and had no relation with the society. What is 'glaringly' important is that the In-charge Joint Charity Commissioner acted on the letters addressed to him by 'non parties' to the proceedings and appointed these persons as 'Trustees' under the impugned scheme. To bring home the submission that In-charge Joint Charity Commissioner was working on a "HIDDEN AGENDA", it is required to be inquired as to how these persons addressed letters to the In-charge Joint Charity Commissioner and in what manner their credentials were verified". Learned Senior Advocate for the answering respondents submitted that it is a matter of investigation. In fact, even a layman can compare and see that all letters bear same signature and these letters are received after the hearing was concluded. Learned Senior Advocate for the answering respondents submitted that he may be allowed to put a question to himself that 'whether Charity Commissioner owe a duty to verify the antecedents of these persons, if yes, in what manner that duty was discharged before he appointed them Page 84 of 127 C/LPA/852/2013 JUDGMENT as Trustees. Was it required to look into their qualifications, before appointing them as Trustees to run the administration'. Learned Senior Advocate for the answering respondents submitted that in fact, 'no notice inviting people to offer their consent for being appointed as Trustees' was ever issued. As if this was not enough, the parties to the proceedings were never informed about the letters so received by the In-charge Joint Charity Commissioner much less his intention turning out to be his decision to act on the basis of the said letters. Learned Senior Advocate for the answering respondents submitted that the entire modus operandi demonstrates that the impugned order and consequent scheme is in furtherance of the Secret Agenda of the In- charge Joint Charity Commissioner under which he had made up his mind to frame a scheme and appoint 'strangers' (non members of the society) as Trustees. 10.12 Learned Senior Advocate for the answering respondents submitted that the appointment of Trustees is required to be made essentially in the manner provided in the 'instrument' (Document) by which the society is registered in which it is provided how it will be governed. In the instant, it being a society, the members have decided the manner and method in which the Governing Body, the 'Sanchalan' Samiti would be Page 85 of 127 C/LPA/852/2013 JUDGMENT constituted from amongst the members. Despite that, while framing the impugned 'scheme', the In-charge Joint Charity Commissioner appointed 'strangers' as Trustees which is contrary to the memorandum of the society. Learned Senior Advocate for the answering respondents submitted that the In-charge Joint Charity Commissioner having found that 'no elections were held', he could have directed the persons in-charge of the affairs 'to hold the elections' and in the event, that direction was not complied with, the In-charge Joint Charity Commissioner could have taken necessary action against the persons defying the direction in accordance with law. But, instead of that, the In-charge Joint Charity Commissioner, for the reasons best known to him, which are not very difficult to infer, deemed it proper to resort to Section 50A of the Act, which could not have been done. Thus, there is glaring abuse of process of law in appointing 'strangers' as Trustees in the society. Learned Senior Advocate for the answering respondents submitted that if he is allowed to submit and use an expression, he will like to describe the action of the In-charge Joint Charity Commissioner as that of the 'monarch' of earlier days, who used to act on their sweet will and whim. Learned Senior Advocate for the answering respondents reiterated that under no circumstances, the In-charge Joint Charity Commissioner could have appointed Page 86 of 127 C/LPA/852/2013 JUDGMENT non-members as Trustees, that too with the power to appoint new Trustees in utter disregard to the provisions of the memorandum of the society by which its affairs are required to be governed under the law.
10.13 Learned Senior Advocate for the answering respondents submitted that, 'if there was power under Section 50A of the Act and the In-charge Joint Charity Commissioner had exercised the same for framing the scheme, it could have accepted, but in the present case, the In-charge Joint Charity Commissioner went out of all known bounds of law to implement his hidden agenda which was preplanned, that is why the In-charge Joint Charity Commissioner did not specify the date on which the 1 st meeting should be held under the new scheme'. Learned Senior Advocate for the answering respondents submitted that it may be inquired by this Court whether it is a consistent practice or not to comply with the mandate of law that a date for the first meeting to be held is required to be prescribed by the In-charge Joint Charity Commissioner and that date if necessarily to be after 60 days coinciding with the period of limitation of filing the appeal. Learned Senior Advocate for the answering respondents submitted that it is in support this submission, the appellants have produced another order passed on the very same day by the very same In-charge Page 87 of 127 C/LPA/852/2013 JUDGMENT Joint Commissioner. There he did grant 60 days time for implementation of the order of scheme. In the present case, as submitted hereinabove, the In-charge Joint Charity Commissioner, for the extraneous reasons, not only acted malafide, but highhandedly ensured that 'soon on passing the order on 25.04.2013, new Trustees enter office on 26.04.2013'. Learned Senior Advocate for the answering respondents submitted that even at the cost of repetition, he will reiterate that, 'this was done without verifying the antecedents, qualifications and suitability of the persons whose consent letters were obtained by the Charity Commissioner. In this regard, learned Senior Advocate for the answering respondents referred to the Charity Commissioner's own order which is produced at page Nos.214-238, translation of which is produced at page Nos.384-385 (of common compilation). Learned Senior Advocate for the answering respondents also invited attention of the Court to opinion of learned Advocate Mr.Piyush Pandya, which is at page No.208-213, translation of which is produced at 362-367. 10.14 Learned Senior Advocate for the answering respondents submitted that it is really surprising that the In-charge Joint Charity Commissioner has filed his his affidavit and has justified his action of 'not prescribing a date for holding a meeting pursuant to the Page 88 of 127 C/LPA/852/2013 JUDGMENT framing of the scheme which was supposed to be beyond the period of limitation, i.e. sixty days as was provided by him in similar other cases. Learned Senior Advocate for the answering respondents submitted that it is required to be noted that the orders produced by the In-charge Joint Charity Commissioner do not support his contention. On the contrary, each of the orders is passed in Scheme Applications preferred by the Trust itself; (each of the orders passed is after the date of the impugned order passed by the Charity Commissioner). The In-charge Joint Charity Commissioner is not able to explain the following very important aspects of the matter which point an accusing finger:-
(i) How opponent-newly appointed Trustees had knowledge of the pronouncement of the order when no date was fixed for pronouncement; though they were not party to the proceedings and the Rojkam reflects that the order was, "to be sent by RPAD".
(ii) The In-charge Joint Charity Commissioner had not provided for holding a meeting (after the period of limitation for filing of appeal) when in identical matters he himself had prescribed a date for holding of the meeting after the period of Page 89 of 127 C/LPA/852/2013 JUDGMENT limitation.
(iii) Under which provision he could have entertained and acted upon the material received by him after the matter was kept for orders.
(iv) In no other Application, an order similar to the order passed in the present proceedings, was passed.
10.15 Learned Senior Advocate for the answering respondents invited attention of the Court to the following facts:-
Sr Date Trust Content Page
1 27/06/2013 Khodaldham Modification @718 para 6,
Trust sought by @719, 720
trustees with
consent
02 18/07/2013 Bolbala By Trustee for @723, above
Traffic change of name para 3
Education of the Trust @724, @para
Trust 5,6
@725
03 06/07/2013 Kacchi By Trustees with @726
Maheshwari resolution of @727
Trust trust and
consent of all
trustees
04 11/07/2013 Patidar By Trustee with @729
Sarvoday consent of all @732
Seva Trust trustees
05 06/07/2013 Bhuj Coco By Trustees with @734
Bank Trust consent @735 consent
10.16 Learned Senior Advocate for the answering
respondents submitted that from the aforesaid facts, it is clear that the conduct of the In-charge Joint Charity Page 90 of 127 C/LPA/852/2013 JUDGMENT Commissioner was not above Board and that it is also clear that he was not acting bonafide in resorting to Section 50A of the Act. Learned Senior Advocate for the answering respondents submitted that undisputed impression which is created from the aforesaid conduct of the In-charge Joint Charity Commissioner is that he was out and out to favour the opponents herein (newly appointed Trustees).
10.17 Learned Senior Advocate for the answering respondents submitted that assuming for the sake of argument that the In-charge Joint Charity Commissioner acted within the powers conferred on him with bonafides, even then on merits, the scheme is so defective that it cannot be allowed to stand and operate. Learned Senior Advocate for the answering respondents submitted that this may not be construed to mean that the ousted Trustees /outgoing Trustees have given go-by to their submission, 'that the scheme is framed without following the procedure required to be followed under the Act, without giving sufficient opportunity to enable them, to conduct themselves as per the directions which could have been issued by the In-charge Joint Charity Commissioner to see that the administration of the Trust, if not conducted satisfactorily, the Trustees improve themselves and conduct the affairs of the trust as required by law. Page 91 of 127
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submitted that if an opportunity would have been given to the answering respondents, they could have pointed out to the In-charge Joint Charity Commissioner that it is after the present Trustees entered in the administration of the trust that trust activities were revived. The Trust started the first Dental College and Medical College. The trust applied to the State Government and other authorities seeking for permission to expand its education activities along with the medical facilities. But, all this could not be brought on record only because the In-charge Joint Charity Commissioner did not follow the prescribed procedure. Learned Senior Advocate for the answering respondents submitted that under Section 50A of the Act, which is read, reread and reread at the instance of every learned Advocate appearing in this matter, it was necessary for the In-charge Joint Charity Commissioner to act only when two or more 'persons having interest' (in the case of society, the members of the society) make an application to the Charity Commissioner in writing in the prescribed manner and Charity Commissioner on receipt of such application, after giving the Trustees due opportunity of hearing, satisfies himself that it is necessary or expedient to settle a scheme, the machinery could have been set in motion. But, that is not done, which has resulted in miscarriage Page 92 of 127 C/LPA/852/2013 JUDGMENT of justice as members of the society are deprived of their valuable right to manage /govern their society as provided in the memorandum of the society. 10.18 Learned Senior Advocate for the answering respondents submitted that if the answering respondents were given an opportunity, they could have brought the following facts to the notice of the In-charge Joint Charity Commissioner:-
Sr Finding Fact
01 MOU executed with MOU was executed by erstwhile by trustees
the Patel on 07.06.2008 prior to election of the
engineering applicant. MOu not acted upon. The person
responsible for the MOU is appointed as trustee Dr. Viradia 02 Election has not Election was conducted and applicant were been conducted elected on 20.07.2008. change report has been approved learned charity commissioner rejected the stay application. Thereafter again in the meeting held on 17/11/2011 and the same office bearers have been reappointed.
03 Regarding Loan obtained for the creating obtaining loan by infrastructure. More than 14,900 sq. mt the trust undertaken. Loan was repaid. No charge on trust properties is existing as on date. In fact personal properties of the trustees have been mortgaged to secure financial assistance for the Trust.
04 Medical college Renewal was not granted on account on MCI permission not report citing absence of staff. Non grant granted of renewal does not warrant any misconduct by any trustee. Supreme court had there after permitted the Trust to apply for fresh inspection.
05 Monetary loss to There has been no loss. In fact the the trust capital of the trust has increased and substantial liability of the trust have been repaid during the period when the applicants were managing the trust 06 Account are not Account s duly submitted, no proceedings submitted within initiated for non submissions of account. time and found No irregularity mentioned.
many
irregularities
therein
07 Life members have Not a single life member appeared before
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represented that the charity commissioner, the finding Is
election are not therefore false. Charity commissioner
held himself has prima facie found the election
to be proper and refused stay against the change report.
08 Reliance is place The order in fact records that the on an application applicant are not persons interested and under section 41 does not justify the findings recorded. 09 Trustees have Record shows that the trust was revived properly during the period, a dental college was administrated started and is operating a medical college trust property was started , hospital was over hauled, new equipments were installed, charitable activities were undertaken 10 On account of Government took a policy decision to conduct of discontinue grant to all T.B. hospitals in trustees, the state by the resolution dated Government grant 13.04.2009 was discontinued 10.19 Learned Senior Advocate for the answering respondents submitted that a serious allegation is made that funds of the trust have been transferred in the personal account of the trustees. It is also alleged that the amount so transferred has been withdrawn by cash. It is also alleged that not a single document is produced. Learned Senior Advocate for the answering respondents submitted that the allegation is belied by the document at page 283-284, translation of which is at page 423-424. Learned Senior Advocate for the answering respondents submitted that the amount has been transferred from the account of the trust for the repayment of over draft of the trust in the trust account only. The transaction was prior to the order passed by the In-charge Joint Charity Commissioner. In this regard, learned Senior Advocate for the answering respondents invited attention of the Court to para-11 of Page 94 of 127 C/LPA/852/2013 JUDGMENT the affidavit filed, which reads as under:-
"11. I state that it has been alleged that after the order was passed by the In Charge Joint Charity Commissioner a sum of Rs.1.5 crores has been siphoned by the Answering Respondents. I state that the allegation is incorrect. I state that the amount of Rs.1.5 crore has been transferred from the account of the Trust maintained in the Union Bank, Karelibaug branch, to the account of the Trust maintained in the State Bank of India Manusar Branch. I state that both the accounts are of the Trust and are duly reflected in the accounts of the Trust. I state that the fixed deposit had matured on 18/04/2013 and was submitted alongwith the TRGS request. I state that the transfer of funds was in routine course as is reflected from the documents produced on record by the Union Bank of India and the State Bank of India."
10.20 Learned Senior Advocate for the answering respondents submitted that taking into consideration the allegations made by the newly appointed Trustees and taking into consideration the submissions made by the answering respondents consisting of allegations against the In-charge Joint Charity Commissioner, in the event the Court comes to conclusion that the matter is required to be heard and decided de novo right from the stage of taking decision about the administration of trust in an efficient manner then while remanding the matter same be Page 95 of 127 C/LPA/852/2013 JUDGMENT directed to be heard either by the Charity Commissioner of the State of Gujarat or any other Joint Charity Commissioner but not the same officer. The learned Senior Advocate for the answering respondents submitted that for that period during which the matter is heard and decided afresh, the answering respondents are ready to submit to an arrangement under which the affairs of the Trust be looked after by a '3 member committee' which may be headed by an Hon'ble retired High Court Judge which may be nominated by the learned Senior Advocates for the newly appointed Trustees and the answering respondents by agreeing on the name of the Hon'ble retired High Court Judge. Beside that, Dean of Medical Sciences, Gujarat University be one of the members of the Committee, as the Trust is having a running Dental College and Civil Surgeon of Civil Hospital, Bhavnagar be the other Member, as the Trust is running a Hospital. Learned Senior Advocate for the answering respondents submitted that the answering respondents will bear the expenses of this Committee for the period for which this Committee will be looking after the affairs of the Trust. Learned Senior Advocate for the answering respondents also submitted that the respondents are ready to deposit a sum of Rs.10 lacs initially to meet with the expenses to be incurred by the Committee with an understanding that more funds will be deposited if so required.
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C/LPA/852/2013 JUDGMENT 11. As against that, learned Advocate Mr.B.T.Rao
appearing for the contesting respondents-newly appointed Trustees submitted that he has an alternative suggestion to make. He submitted that there is staff and students on the campus in all about 500 in number. They be given an opportunity to elect either set of the Trustees, i.e. contesting respondents-newly appointed Trustees or the answering respondents-the ousted Trustees and whosoever is elected by the staff members and the students together, be allowed to manage the affairs of the Trust till the matter is de novo decided by the Charity Commissioner or the Joint Charity Commissioner.
12. Having heard the rival submissions of the learned Advocates appearing for the appellants, contesting respondents-newly appointed Trustees, the answering respondents - the outgoing or ousted Trustees and In-charge Joint Charity Commissioner, this Court is of the opinion that it is required to be clarified that this LPA is entertained in peculiar facts of the case. A Charity Commissioner is an officer who is vested with certain powers to be exercised within the bounds which circumscribe them set out in the Bombay Public Trusts Act, 1950. But, with a view to see that a wrong message does not go to the society at large that the Charity Commissioner and for that reason, the In-charge Joint Page 97 of 127 C/LPA/852/2013 JUDGMENT Charity Commissioner can act as a 'Monarch', the Court felt it necessary to entertain this LPA.
13. On perusal of the facts of the case and on consideration of the rival submissions made by the contesting respondents-newly appointed Trustees and the answering respondents, it gave an impression as if this Court is to decide about suitability of either set of the Trustees. The Court deems it proper to make it clear that by this judgment and order, the Court is not undertaking an exercise of assessing the suitability of either set of Trustees, but at the same time, the Court feels that it is the bounden duty of the Court to see that no authority, howsoever high or important it may be, assumes power which is not available to it. Any assumption of power in this manner is not warranted. This Court is using the term, 'warranted', because even where power is conferred on an authority, that power is to be exercised with full responsibility and not even remotely in an arbitrary manner. This Court is also of the opinion that it is the duty of every such authority to see that it does not conduct itself in such a manner that it gives an impression that the authority is acting to achieve an agenda-predetermined.
14. Coming to the facts of the case on hand, it is not in dispute that the trust in question is a 'society' Page 98 of 127 C/LPA/852/2013 JUDGMENT registered under the Societies Registration Act, 1860. If that is so, as noted hereinabove, there are specific provisions which deal with such an institution (society registered under the Societies Registration Act). To start with, 'public trust', defined under Section 2(13) of the Act, specifically provides that, "Public Trust"
means an express or constructive trust for either a public, religious or charitable purpose or both and includes a temple, a math, a wakf, church, synagogue, agiary or other place of public religious worship, [a dharmada] or any other religious or charitable endowment....". What follows is important for our purpose, i.e. "and a society formed either for a religious or charitable purpose or for both and registered under the Societies Registration Act, 1860".
This provision makes it clear that a society registered under the Societies Registration Act, 1860 continuous to maintain its identity as a society. While doing so, the Act regulates its affairs as if it is a public trust under the Act. The natural consequence of this provision is that the society continuous to be governed by its memorandum until an event occurs by which the authorities like the Charity Commissioner under the Act is required to interfere with the affairs of the society.
(emphasis supplied)
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14.1 Coming to the definition of the term 'Manager'
contained in Section 2(8), while defining 'manager' in Clause-(c), it is specifically provided that, "(c) in the case of the society registered under the Societies Registration Act, 1860, its governing body, whether or not the property of the society is vested in a trustee". That being so, even the Act contemplates that the society should be managed by its Governing Body as a manager thereof. In view of specific provisions, the authority under the Act that is the In-charge Joint Charity Commissioner, ought to have appreciated that if at all the Charity Commissioner had material to take suo motu cognizance of 'improper management' or if he was moved by the 'persons having interest', he was required to act only in accordance with law. Under the Act, 'existence of the society' is to be respected and while necessary directions could have been given to see that the object of the 'proper administration' is achieved, the authority could not have discarded the right of the members of the society to run the society as per the memorandum of the society. Even if there would have been disobedience of the instructions issued to achieve proper management then also, the authority has to respect various provisions of law by which the society has to be governed. Keeping this spirit intact, the In-charge Joint Charity Commissioner was required to see that the same is Page 100 of 127 C/LPA/852/2013 JUDGMENT disturbed to the least possible extent. This necessarily means that the authority, in the present case, the In- charge Joint Charity Commissioner, while providing for a scheme, ought to have seen that 'rights of various categories of persons (members) were not wiped off and the scheme provides for the governance of the affairs of the society in such a manner that it remains in closet vicinity of the provisions contained in the memorandum of the society.
(emphasis supplied) 14.2 Coming to Section 50A, as set out hereinabove, the Section was read, reread and reread by every Advocate appearing for the parties, in support of their contention. The learned Advocates for the parties tried to convince the Court so as to accept their interpretation. So far as earlier part of sub-section (1) of Section 50A is concerned, it pertains to, 'Charity Commissioner suo motu taking note of improper management or administration of a public trust and coming to conclusion that a scheme is required to be settled'. But, so far as later part of sub-section (1) of Section 50A is concerned, it reads as under:-
"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 Page 101 of 127 C/LPA/852/2013 JUDGMENT interest of the 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.
(emphasis supplied) Of all the phrases, the crucial phrase used in this later part of sub-section (1) is, 'persons having interest'. This phrase 'persons having interest' is defined in Section 2(10). In that also, Clause-(d) specifically provides that, 'in the case of a society registered under the Societies Registration Act, 1860, any member of such society', meaning thereby in the matter of a society which is registered under the Societies Registration Act, 1860, the condition precedent is that 'a member of the society has to come forward as a person having interest and file an application before the Charity Commissioner praying for settling of a scheme for effective and proper management or administration of the public trust', which includes registered society by virtue of Section 2(13).
(emphasis supplied) 14.3 The term, 'person having interest' is followed by term 'includes' and therefore, learned Senior Advocate Page 102 of 127 C/LPA/852/2013 JUDGMENT for the contesting respondents-newly appointed Trustees vehemently submitted that the term, 'person having interest' cannot be given restricted meaning and therefore, any beneficiary of the trust will be considered to be 'person having interest'. 14.4 This Court, despite strenuous efforts on the part of the learned Senior Advocate along with learned Advocate Mr.B.T.Rao for the contesting respondents-newly appointed Trustees, is not able to accept this submission. This Court is of the opinion that if this submission is accepted, it will amount to rendering Clause-(d) of Section 2(10) nugatory. If that was the intention of the legislature then Clause-(d) of Section 2(10) was not required to be placed on the statute book at all. In fact, the very fact that Clause-(d) in Section 2(10) is incorporated, is making the intention of the legislature clear. The legislature being conscious of the fact that the society registered under the Societies Registration Act, 1860 is brought within the ambit of the Act only with a view to see that its affairs are managed or administered not only properly but in such a manner so that the object for which such society is formed, i.e. religious or charitable, is achieved. It is a trite law that legislature does not waste words and could not have done so in giving separate recognition to Page 103 of 127 C/LPA/852/2013 JUDGMENT existence of the society registered under the Societies Registration Act, in Sections 2(8), 2(10)(d) and 2(13). Taking the aforesaid provisions together, this Court is of the opinion that 'person having interest' can be given only one meaning which is assigned to the term under Clause-(d) of Section 2(10). That being so, on this short ground, the judgment and order of the In-charge Joint Charity Commissioner deserves to be quashed and set aside. But then, the matter was considered in detail, it is argued at length and various contentions are raised by all the learned Advocates appearing for the parties are appreciated to decide the points agitated before this Court.
14.5 Coming to the aspect of 'procedure required to be followed' at the time of framing of scheme, later part of sub-section (1) of Section 50A is very clear. Once 'persons having interest' two or more in number, make an application to the Charity Commissioner in writing in the prescribed manner requesting that it will be in the interest of proper management or administration of a public trust a scheme should be settled, the role of the Charity Commissioner starts. The law vests discretion with the Charity Commissioner and therefore, the word is 'Charity Commissioner may', but then once that discretion is decided to be exercised, the same can be exercised Page 104 of 127 C/LPA/852/2013 JUDGMENT only in the manner which is prescribed by the subsequent phrase and that subsequent phrase is, 'after giving the trustees of such trust due opportunity to be heard', meaning thereby before taking any decision on an application filed by the 'persons having interest', the Charity Commissioner is duty bound to give notice to the Trustees of such Trust.
(emphasis supplied) 14.6 On this aspect,, 'notice to the Trustees of such Trust', it was debated as to which Trustee of such Trust should be given due opportunity to be heard. Incidentally, there was no difference of opinion amongst the learned Advocates on this point because 'the Trustees whose names appear in the PTR are required to be given such opportunity'.
14.7 In the present case, it is not in dispute that the names of erstwhile Trustees were in the PTR, but then it is also a fact that there were Change Reports filed in the year 2008 and the same were pending and therefore, names of answering respondents - the ousted Trustees could not be entered into PTR as Trustees. But then, it is a matter of fact, of which In-charge Joint Charity Commissioner could not have refused to take note of that the management was in the hands of the answering respondents and administration of the society registered Page 105 of 127 C/LPA/852/2013 JUDGMENT under the Registration of Societies Act, 1860, which is deemed to be a 'Trust' under the Bombay Public Trustees Act. When the 'Change Reports' were pending in the office of the Charity Commissioner, he cannot be heard saying that he was not required to give notice to these answering respondents.
14.8 Learned Senior Advocate for the contesting respondents-newly appointed Trustees vehemently submitted that one Mr.Shailesh I.Patel, Advocate, had filed his appearance on behalf of the answering respondents - the ousted /outgoing Trustees and therefore, even without notice, the answering respondents were in know of the application and the proceedings. Question is, 'what is contemplated by law and whether that was complied with or not'. It it a matter of fact of which judicial notice can be taken that under certain Acts, 'only procedural safeguards' are provided and if the procedure prescribed is not adhered to, it amounts to 'violation of rights of the persons' on whom the same are conferred by the statute. In this case, applications, more than one, were filed and as provided in the Act, it was for obligatory for the Charity Commissioner to follow the procedure before passing an order of settling scheme. The In- charge Joint Charity Commissioner dealt with those applications in a manner which is not the 'prescribed Page 106 of 127 C/LPA/852/2013 JUDGMENT procedure', to be followed in such matter. 14.9 Learned Senior Advocate appearing for the answering respondents invited attention of the Court to various Applications which were filed in this case before the Charity Commissioner being Scheme Application No.4/10 filed by Dr Jayant Pandya, Scheme Application No.51/09 filed by Mr.Mitesh Lakhani and Scheme Application No.40/10 filed by Mr.Suresh Makati and emphatically submitted that these applications were not filed by 'two or more persons'. The learned Senior Advocate submitted that it is a matter of record, which is not controverted by anybody that the application which was filed by 'two or more persons' was withdrawn. What is important about this application is that this was the only application in which the answering respondents were impleaded as parties and that may be the only reason that this application was withdrawn and other applications were pursued. Even if one wants to give benefit of doubt to the In-charge Joint Charity Commissioner, it is difficult to do so. It is mandatory under law to have 'two or more persons having interest' as applicants before an application could be entertained then why could not the In-charge Joint Charity Commissioner insist for a proper application from the 'persons having interest' and verification thereof as to whether the person filing application satisfies the Page 107 of 127 C/LPA/852/2013 JUDGMENT requirement of 'person having interest' under Clause-(d) of Section 2(10). Why was he in hot hurry to entertain the application, settling the scheme, install new Trustees and then see to it that on the next day of the order (order is dated 25.04.2013), i.e. 26.04.2013, new Trustees take charge of the affairs of the trust. 14.10 What weighed with the Court at the time of initial hearing of this LPA is recorded in order dated 08.07.2013 and that reads as under:-
"The learned advocate invited attention of the Court to section 2(10)(d), 50-A and 72 of the Bombay Public Trusts Act, 1950. Besides, the learned advocate invited attention of the Court to the relevant documents including pages 136- Z-30, 143 and 146."
Not only that, the Court has recorded in its order passed in CA No.6820 of 2013 also in so many words that:-
"The learned advocate for the applicants submitted that the Joint Charity Commissioner has granted 60 days time to file appeal against his order in one of the matters, but the said request made by the applicants/ appellants- original petitioners was not considered."
This order was subsequently modified and a sentence, "said request made by the applicants/ Page 108 of 127 C/LPA/852/2013 JUDGMENT appellants- original petitioners was not considered", was substituted by the sentence, "Original petitioners were never given an opportunity to initiate proceedings and apply to the Court under section 72 as aggrieved persons". Besides that, it is also recorded by the Court in its order on CA that:-
".....The learned advocate for the applicants submitted that the order was passed on 25.04.2013 and consent letters of the persons who were to act as trustees were obtained well in advance. Not only that even the letter-heads of the trust having names of those trustees printed were available on 26.04.2013. This is suggestive of the fact that either these trustees knew in advance about the order and in anticipation they got everything ready which goes to indicate that the Joint Charity Commissioner, for the reasons known to him did not grant time to the applicants/ appellants original petitioners for filing the appeal.
(emphasis supplied) This later part, "for the reasons known to him did not grant time to the applicants/ appellants original petitioners for filing the appeal", was deleted by order dated 09.07.2013. But then, even after that deletion, the fact remains that the order was passed on 25.04.2013 and consent letters of the persons who were set to act as Trustees were obtained well in advance. So far as Page 109 of 127 C/LPA/852/2013 JUDGMENT printing letterheads are concerned, learned Advocate for the contesting respondents-newly appointed Trustees submitted that those letterheads were computer generated and therefore, it was possible to have the same on 26.04.2013.
14.11 At this juncture, it will be appropriate to take note of the fact that it is alleged in so many words against the In-charge Joint Charity Commissioner that the In-charge Joint Charity Commissioner did take cognizance and acted on the letters addressed to him by 'non- parties' and went on to appoint them as Trustees under the impugned scheme; all letters bear similar signature; these letters are received after the hearing was concluded; there is no verification of the antecedents of these persons or their qualifications; there was no notice given to the people at large to offer their candidature for being appointed as Trustees; the parties to the proceedings were not made aware of the letters received by him - In-charge Joint Charity Commissioner and that he is going to act on these letters. These are the facts which can be answered only be one person that is the In-charge Joint Charity Commissioner. In absence of any acceptable explanation justifying the aforesaid act, this Court deems it proper not only to entertain this appeal but quashes the judgment and order of the In-charge Page 110 of 127 C/LPA/852/2013 JUDGMENT Joint Charity Commissioner settling the scheme and remand the matter for being considered afresh, after giving due opportunity to all the concerned parties and then to pass an order after complying the procedural mandates prescribed in the Act, without being influenced by the fact that the impugned scheme was settled. 14.12 Coming back to sub-section (1) of Section 50A of the Act, duty is cast on the Charity Commissioner, 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 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, 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. Section (2A) of Section 50A specifically provides as to what is to be provided in a scheme. It provides that:-
"A scheme under this section may provide for the number of trustees, the mode of appointment of trustees including the appointment of the Page 111 of 127 C/LPA/852/2013 JUDGMENT first trustees, vesting of the trust property in the trustees so appointed, mode of filling any vacancy of a trustee the remuneration of a trustee or manager of the public trust and where necessary, a clarification of the objects of the public trust."
14.13 On close perusal of the scheme and the averments made in that regard, this Court is of the opinion that the In-charge Joint Charity Commissioner has failed in his duty to frame a scheme, taking care of the aforesaid aspects and framed a scheme in utter disregard of the memorandum of the society by which the members of the society agreed to govern their affairs. 14.14 This Court is alive to the fact that it is a settled law that 'members of the society have inbuilt right of managing their affairs in the manner in which they have agreed'. Ofcourse, that right is subject to a limitation and that limitation is that they cannot agree to something which is against the public policy, against any existing law or against the public order. Otherwise, the members of the society do have a right to govern their affairs in a manner they like.
14.15 In the present case, members of the society at the time of 'forming the society' provided for 'memorandum of the society' wherein detailed provisions Page 112 of 127 C/LPA/852/2013 JUDGMENT are made by which affairs of the society are to be managed. It will be appropriate to note here that In- charge Joint Charity Commissioner has not mentioned a word in his judgment and order as to why did he find 'the memorandum of the society' not workable. At this juncture, it will be appropriate to put it on record that even if allegations made and contentions raised by the learned Advocate for the contesting respondents-newly appointed Trustees are taken at their face value, the only thing which can come out is that 'the answering respondents - ousted Trustees /outgoing Trustees were not managing or administering the trust properly'. But then, that is not sufficient to dislodge 'the memorandum of the society' for the mis-deeds of the persons in charge of the affairs of the society. Power of settling of a scheme could not have been used for uprooting a well- founded, well-considered 'memorandum of society'. The remedy was to dislodge the persons - the Trustees in a manner prescribed for the same in the Act. If this is allowed, the Court has a valid apprehension that all the officers like the present In-charge Joint Charity Commissioner will act as per their 'own sweet will' and will dislodge the working Trustees of a public trust by settling a scheme and will install a new set of Trustees as per their own notions. The Court restrains itself from saying that this will be done for extraneous Page 113 of 127 C/LPA/852/2013 JUDGMENT consideration. The real charm of the society which is governed by 'rule of law' is that no individual can be allowed to assume power as is assumed by the In-charge Joint Charity Commissioner in this case. 14.16 Learned Senior Advocate for the contesting respondents-newly appointed Trustees strenuously submitted that if this appeal is entertained, that will frustrate the appeal pending before the District Court. As set out hereinabove, in the facts of the case, the Court is of the opinion that the judgment and order of the In-charge Joint Charity Commissioner cannot be allowed to hold the field. Otherwise, any officer like the In-charge Joint Charity Commissioner may under the guise of its satisfaction that particular public trust is not managed properly will dislodge the existing management of that trust and will settle a scheme and will appoint new set of Trustees of his choice for managing the affairs of such trust, that too without following the mandates of law - the prescribed procedure. 14.17 What could be the graver illustration of such misuse of power than the present one. In the present case, (i) the application was not filed by the 'persons having interest, (ii) the application was not filed by two or more 'persons having interest', (iii) the persons having filed the Scheme Application were never members of Page 114 of 127 C/LPA/852/2013 JUDGMENT the society, (iv) In-charge Joint Charity Commissioner did not issue any notice before coming to conclusion that a scheme is required to be settled and (v) while settling the scheme, In-charge Joint Charity Commissioner has not taken care of the interest various categories of the persons of the society, (vi) the In-charge Joint Commissioner is not able to set out as to why 'memorandum of society' is required to be discarded for the alleged misdeeds of the set of persons working as Trustees. 14.18 At this juncture, it will be appropriate to take note of the submissions made by learned Senior Advocate for the contesting respondents-newly appointed Trustees that donation receipts to the tune of Rs.30 lac, Rs.20 lac and Rs.10 lac are not supported by the record. This is a matter of inquiry and is is nobody's case that such inquiry was ever made by anybody. As set out hereinabove, assuming for the sake of argument that, 'the affairs of the trust were thoroughly mismanaged' and in fact, that is the attempt on the part of the learned Senior Advocate for the contesting respondents-newly appointed Trustees by depicting every single negative quality of the answering respondents-ousted Trustees, but then it is made clear by this Court that, 'it is not examining the character of either set of the Trustees'. The question which falls for consideration of this Court Page 115 of 127 C/LPA/852/2013 JUDGMENT is whether In-charge Joint Charity Commissioner can be allowed to act according to his whims and notions and the answer of this Court is that, 'no person can be allowed to take law in his hands and cannot be allowed to act according to his whims and notions'.
14.19 Learned Senior Advocate for the contesting respondents-newly appointed Trustees made available to this Court set of photographs in support of their contention that since 26.04.2013, a golden era has begun for the Trust and it can be said that now there is 'Ram Rajya' for this Trust and that is why every student of the Dental College, every patient visiting Hospital is happy. Noe only that, parents are happy, staff is happy and on that count alone, this Court should throw this appeal out. Learned Senior Advocate for the contesting respondents - newly appointed Trustees submitted that if at all there is any substance in the grievance made by the appellants herein or the answering respondents-ousted Trustees, the same will be examined by the District Court in pending appeals. But then, what is pointed out by the learned Senior Advocate is in direct conflict with the order passed by this Court in Civil Application No.7242 of 2013 dated 18.07.2013, wherein this Court (Coram:
Hon'ble Mr.Justice Jayant Patel & Hon'ble Mr.Justice Z.K.Saiyed), said that:-
Page 116 of 127
C/LPA/852/2013 JUDGMENT "6. In our view, it prima facie appears that the direction issued vide order dated 08.07.2013 in Civil Application No.6820 of 2013 deserves to be modified at this stage to the extent that the new trustees may be allowed to continue to hold the office and the aspect as to whether new trustees should be removed from the office or any person other than new trustees or old trustees should be allowed to resume the management of the Trust, can be decided by the Regular Bench taking up the Letters Patent Appeal. Hence, the following order:-
The ad-interim-order dated 08.07.2013 is clarified to the extent that so far as suspension of the Scheme is concerned, the same shall stand modified to the extent that the new trustees shall be permitted to continue with the management of the Trust but with the further rider that they shall not take any policy decision or shall not take any further action for implementation of the new Scheme which is the subject matter of the petition before the learned Single Judge as well as before the Division Bench in the Letters Patent Appeal.
(emphasis supplied) 14.20 In this regard, written submissions made by learned Senior Advocate for the contesting respondents-
newly appointed Trustees are required to be considered, wherein it is stated that:-
Page 117 of 127
C/LPA/852/2013 JUDGMENT "after the new management has taken over the management, they have made various changes and infused huge funds; the mess has been renovated which was in dilapidated condition; the mess is provided all modern equipments; Digital x-ray machine has been purchased; Operation theater and OPD and indoor hospital have been renovated by making huge expenditure; new D.G.S. purchased for power supply during electricity failure; Blood Donation camp organized; new vehicles are purchased for staff; new teaching and non-teaching staff has been appointed; High mast lighting towers have been erected for the safety and security of female students. All these steps have boosted confidence in students and parents. For the first time,100% seats are filled in the College".
(emphasis supplied) 14.21 This Court restrains itself from going into the question whether all these actions are in violation of the order passed by this Court on 18.07.2013 in CA No.7242 of 2013. But, this Court cannot, as noted hereinabove, allow an officer - the In-charge Joint Commissioner to act as per the his sweet will and impose 'strangers' on a society which is registered under the Societies Registration Act, 1860 and see that a situation is created whereby the affairs of the society are governed by such strangers. The term 'stranger' is used because law itself provides that 'Manager' of the society Page 118 of 127 C/LPA/852/2013 JUDGMENT has to be its 'Governing Body' and the 'person having interest' in the case of society is a person who is a 'member of the society'. The 'memorandum of the society' did provide for 'Samanya Samiti' (General Committee, 'Niyamak Sammittee' (Governing Committee) and Sanchalan Sammittee (Managing Committee). When the 'memorandum of the society' provided for a well thought of mechanism for managing the affairs of the society and also for taking care of the interest of the various categories of members, the same was required to be protected while settling the scheme. Perusal of the 'memorandum of the society' reveals that Clause-17 of the memorandum of the society provides: 'The persons who have agreed to provide service for 20 years and who have been approved by the Sanchalan Samiti for such purposes shall be the lifetime members of the society', Clause-18 provides: 'The person who has paid a sum of Rs.50,000/- in cash or in kind shall become a lifetime member of the Society and Clause- 19 provides: 'The person who has paid a sum of Rs.25,000/- in cash or in kind shall become a member of the Society for a period of 10 years'. As against that, there are no corresponding provisions in the scheme settled by the In-charge Joint Charity Commissioner. Besides, there is not a word to explain, "why this 'memorandum of society' could not work or will not work'. If the society which was formed in the year 1950 could Page 119 of 127 C/LPA/852/2013 JUDGMENT manage its affairs for over 6 decades, why could it not govern its affairs by the same 'memorandum' hereafter. 06.03.2014
15. The Court deems it proper to put it on record even by way of repetition that the exercise undertaken by the Court should not be construed to mean that the Court is here to decide on the aspect of desirability of the administration of the society being managed either by the contesting respondents-newly appointed Trustees or the answering respondents-ousted Trustees. This clarification is required to be reiterated for the simple reason that the Court is conscious of the fact that in the written submissions submitted by learned Advocate Mr.B.T.Rao for some of the newly appointed Trustees, the shortcomings in the administration by the answering respondents-ousted Trustees is set out in detail. In fact, during the midst of hearing of this matter, the Court had expressed its opinion that a serious note is required to be taken of some of the facts which are brought to the notice of this Court during the course of arguments. The Court had asked the answering respondents-ousted Trustees to answer the allegations made by the newly appointed Trustees. But thereafter, except asking the concerned Banks as to how the loan Page 120 of 127 C/LPA/852/2013 JUDGMENT /Overdraft Facility was sanctioned in favour of the Trust and the answering respondents-ousted Trustees, the Court did not go deeper into the matter as the same was to enlarge the scope of inquiry involving highly disputed facts. That in turn may result into hearing of the entire matter by this Court instead of the authority under the Act that is the Charity Commissioner of the State.
16.1 The Court again makes it clear that the Court has not dwelt upon the merits of the allegations made by the contesting respondents-newly appointed Trustees about their managing the affairs of the Trust since the date they entered into the administration of the trust. Similarly, the Court is also not examining the averments made by the answering respondents about the manner in which the contesting respondents-newly appointed Trustees got into the administration of the trust after the In- charge Joint Charity Commissioner passed an order of settling the scheme. The Court is also not going into the question of legality and validity of the acts which are undertaken by the contesting respondents-newly appointed Trustees which are in detail set out by the learned Advocate for the contesting respondents in the written submissions filed by him. The Court has restricted itself only to examination of the legality and Page 121 of 127 C/LPA/852/2013 JUDGMENT validity of the order passed by the In-charge Joint Charity Commissioner under Section 50A of the Act and the desirability of the matter being considered de novo by an independent officer, may be the Charity Commissioner of the State of Gujarat himself or any other officer, but not the very same officer who decided the matter as In- charge Joint Charity Commissioner.
16.2 This Court has no hesitation in holding that that in view of the discussion made hereinabove, the order passed by the In-charge Joint Charity Commissioner of settling the scheme cannot be allowed to stand and this appeal is required to be allowed, quashing and setting aside that order so that the contesting respondents-newly appointed Trustees who have entered into the administration of the trust do not continue to hold till the regular appeal filed under Section 72 of the Act is decided, which in any case is to take long time. The period may be significantly long and for that long, the affairs of the society, registered under the Societies Registration Act, 1860 cannot be allowed to be governed by the strangers.
17. The Court being conscious of the fact that the 'Trust' is a society registered under the Societies Registration Act, 1860 and there are special provisions made with regard to such societies, to reiterate Page 122 of 127 C/LPA/852/2013 JUDGMENT provisions contained in Sections 2(8), 2(10)(d), 2(13) and the procedure prescribed under Section 50A, which, as discussed hereinabove, are required to be followed by an authority under the Act at the time of settling a scheme. It will not be inappropriate to record here that this Court is of the opinion that there is sufficient material to hold that the In-charge Joint Charity Commissioner did not follow the procedure as contemplated under sub- section (1) of Section 50A of the Act and therefore, it will not be in fitness of things to endorse the negation of the rights available to the members of the society under the relevant provisions of law, particularly 'getting its affairs managed by its own members' in terms of the provisions contained in 'the memorandum of the society' and therefore, to allow strangers to administer the affairs of the Trust will be a clear case of perpetuating the injustice and therefore, this Court quashes and sets aside the judgment and order passed by the In-charge Joint Charity Commissioner dated 25.04.2013. The matter is remanded to the Charity Commissioner for being decided a fresh in accordance with law. 17.1 Next comes the question that by the time the matter is decided in accordance with law either by the Charity Commissioner of the State of Gujarat or any other officer, who shall administer the affairs of the trust. Page 123 of 127
C/LPA/852/2013 JUDGMENT This Court is of the opinion that it will be appropriate if the Collector of the District is given this responsibility by providing necessary assistance of two experts in the field, viz. (1) the expert who is able to take care of the affairs of the Dental College run by the Trust and (2) a person who is expert in handling the affairs of the Hospital run by the trust. The Court is therefore of opinion that the Collector, Bhavnagar shall be assisted by (1) Dean of Medical Faculty of the Gujarat University. The Court deems it proper to nominate Dean of Medical Faculty of the Gujarat University because Gujarat University is having more than one medical colleges including the Dental college. Similarly, Superintendent of Civil Hospital, Bhavnagar shall be the right person to render assistance to the Collector, Bhavnagar in the matter of managing the affairs of the hospital run by the Trust. It will be in fitness of things if the answering-respondents-ousted Trustees and the newly appointed Trustees hand over the record pertaining to the trust to the Collector at an early date so that the Collector is able to exercise the power of administration of trust effectively.
Order accordingly.
17.2 Taking into consideration the fact that the affairs of the Trust are required to be run for quite Page 124 of 127 C/LPA/852/2013 JUDGMENT some time-the time during which the Charity Commissioner of the State of Gujarat or any other officer who is assigned this task of deciding the matter, it is deemed proper that this committee of three persons, i.e. (1) the Collector, Bhavnagar, (2) Dean of Medical Faculty of the Gujarat University and (3) Superintendent of Civil Hospital, Bhavnagar, shall report monthly to the High Court and such report shall be placed before the Hon'ble the Chief Justice, who in turn may pass necessary orders, if required, in the matter.
17.3 The Court also deems it proper to accept the offer made by learned Senior Advocate Mr.N.D.Nanavati appearing for the answering respondents-ousted Trustees to deposit an amount of Rs.10 lacs initially with the Collector, Bhavnagar, who will be at liberty to incur expenses necessary for the Committee to function under this order like reimbursement of expenses incurred by the Dean of Medical Faculty of the Gujarat University for travelling undertaken by him and payment of some token honorarium to him as well as to Superintendent of Civil Hospital, Bhavnagar. So far as the Collector is concerned, the Court is of the opinion that no payment is required to be made for the Collector. The Collector is asked /requested to undertake this task pursuant to the order of this Court.
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C/LPA/852/2013 JUDGMENT 17.4 Taking into consideration the nature of the
question involved in the matter, it is deemed proper to direct the Charity Commissioner, State of Gujarat, to decide the matter afresh without being influenced by any observations made by this Court in this order, as early as possible, but not later than 4 (four) months from the date of receipt of copy of this judgment and order. Looking to the workload of the Charity Commissioner, it will be open for the Charity Commissioner, Gujarat State, to assign the matter to any other officer by a specific order in this regard.
18. With the aforesaid directions, the appeal is allowed.
19. As the appeal is allowed, no separate orders are passed in Civil Applications, the same are disposed of.
20. At this juncture, learned Advocate Mr.B.T.Rao for the newly appointed Trustees requested that this judgment and order be stayed for some reasonable time so as to enable them to approach the higher Forum. Learned Advocate submitted that as the newly appointed Trustees are already managing the affairs since 26.04.2013 and as submitted by the learned Advocate, there is no complaint received against them or their working, this judgment and Page 126 of 127 C/LPA/852/2013 JUDGMENT order is required to be stayed for some reasonable time.
21. This Court is of the opinion that the Collector, Bhavnagar, assisted by two aforesaid experts, will be equally competent to administer the affairs of the trust and therefore, the Court declines the request made by learned Advocate Mr.B.T.Rao.
(RAVI R.TRIPATHI, J.) (MOHINDER PAL, J.) SHITOLE Page 127 of 127