These two petitions are in substance arising out of the orders passed by the Charity Commissioner in respect of a trust known as Nutan Sarva Vidyalaya Kelvani Mandal, Mehsana, and as both these matters involve common challenge and as they are arising out of common facts, they were heard together and are being disposed of by this common order.
The petitioner of Special Civil Application No. 9273 of 2010 has preferred this petition under Article 226 of the Constitution of India challenging the order dated 21/7/2010 passed in Misc. Application No. 26 of 2010 which was preferred by respondent no.2 in this petition invoking provision of Section 41A of the Public Trust Act, 1950 (herein after referred to as the 'Trust Act' for the sake of brevity).
The petitioner of petition no. 404 of 2012 is filed by the person who is claiming to be son of original successor Sheth Shri Chinubhai Naranbhai Parikh. The petitioner had appointed two trustees named in the petition as per the authority vested in him under clause 12 of constitution of the trust. The petitioner was constrained to file this petition for challenging the order dated 15/9/2011 passed by the respondent no.1 on application being Judicial Misc. Application No.4 of 2011 filed by the petitioner under provision of section 41A of the Bombay Public Trust Act.
The facts in brief as could be culled out from the memo of both these petitions need to be set out as under, in order to appreciate the controversy between the parties which give rise to filing of these petitions under Article 226 & 227 of the Constitution of India.
The Nutan Sarva Vidyalaya Kelavani Mandal, Visnagar, is a trust registered vide Registration No. E/251/Mehsana with the competent authority and it is carrying on its activities in the field of education as it is managing educational institutions under the auspice of the trust. As per the constitution of the trust the head office is situated in Visnagar and the main object is to impart education in different fields mentioned in clause 4. Matter of making member and classification thereof is provided in clause 6, 7, 8, 9 & clause 12 provided for managing committee which is referred to in vernacular as 'Vyvasthapak Mandal' .
As per clause 6 of the constitution, any one who is believing and following objects of the trust and who has completed 18 years of age could become member of the trust in accordance with provision of clause 7 & 8, provided, he is not a paid employee of the institutions managed by the trust or a student in the institutions run by the trust. Clause 7 provides for classification of various categories of members ranging from Murbbi to Annual Member and the note appended thereto indicate that the member who is Murbbi Sathe Sahitik is to be treated as life time member. Clause 8 provides those who have sympathy towards the trust and who have been helping the trust in any manner and who is otherwise eligible could be given any of the membership mentioned in clause-7. Clause 8(b) confers right upon the person contributing Rs.10,000/- or more towards the activities of the trust or who is rendering financial assistance of Rs.10,000/- or more to the trust will have right to nominate persons as per the agreement or contracts made with him by the trust, and such persons on their nomination will be members of the trust. Clause 9 provides for the eventualities in which a trustee is either retired or ceased to be trustee of the trust. Clause (10) provides for various committees to be formed by carrying out decisions of management of the trust. Clause (11) provides as to what general body or meeting will be consisting of and how and what work will be carried out by them. Clause (12) provides for constituting managing committee known as 'Vyavasthapak Mandal' in vernacular, in which it is provided that the managing committee would be consisting of 15 members, out of which 2 members would be those whose names are recommended and send by the donor Sheth Shri Chinubhai Naranbhai or his heirs and they would be thus members of general body and one member would be from that of Sarva Vidyalaya Kelvani Mandal, Kadi, who is looking after initial working and maintenance and would enjoy the rights of membership. Clause 13 provides for transacting business in the meeting, clause 14 provides constitution of executive committee consisting of one President, 2 Secretaries, 4 Members from the Managing Committee and 1 (one) nominated from the donor and or his heirs; thus total 7 members and one President would form executive committee.
Petitioner of Special Civil Application No. 9273 of 2010 has averred in the memo of the petition in para no. 4.2 that the executive committee of the trust passed Resolution No.3 on 7/3/2008 authorizing the trust to admit members on the request of donors. Said resolution is placed on record at Annexure-C being resolution no.3 dated 7/3/2008. Petitioner has further averred in the memo of said petition that the persons named in para no. 4.3 of the petition who were donors requested the trust to admit 40 persons as members of the trust. The executive committee's meeting was convened on 20/2/2009 and said committee accepted the application for admitting 40 members. However on account of more discussions, which as per the say of the petitioner held with respondent no.2 also, it was decided to rather reconsider the issue and convene another meeting of the executive committee on 18/4/2009. This meeting was also attended by respondent no.2.
As it is averred by the petitioner in this petition in para no. 4.5, the executive committee of the trust in its meeting held on 18/4/2009 admitted 25 members out of 40 persons named by donors. The 25 persons so admitted became members of the trust and all of them have deposited membership fees of Rs.100/- with the trust as provided under clause 7 of the Bye Laws, which made them life time member of the trust. These resolutions namely resolution dated 20/2/2009 and 18/4/2009 are produced at Annexure-D collectively to the memo of the petition. The executive committee passed one more resolution no. 15 on 20/2/2009 where under it was resolved to increase the members of the trust from15 % to 20% of the total number of members of the trust or 25 whichever was higher. This resolution no.15 is produced at Annexure-E to the petition.
The decision of the executive committee dated 18/4/2009 was placed for consideration before the general board which held its meeting on 24/5/2009. Said general board of trust approved decision dated 18/4/2009 taken up by executive committee, and ratified resolution no. 15 passed by the executive committee of the trust on 20/2/2009 whereby the number of trustees of the trust were increased from 15 to 20% of the total number of trust or 25 members whichever was higher. It is contended by petitioners that respondent no.2 was present in the general board of the meeting and resolution therein was passed unanimously. Copy of the resolution no. 7 & 8 passed in the meeting of general board on 24/5/2009 are produced as Annexure-F collectively to the petition. Petitioners therefore averred in the petition that the trust had already admitted members and the said decision was approved by general board of the trust wherein respondent no.2 was a party, and there was no objection from respondent no.2 as the decision of the general board were unanimously taken. Thus respondent no.2 could be said to have acquiesced in the decision of the trust.
The Change Report came to be filed being Change Report No. 180 of 2009 with the office of Assistant Charity Commissioner on 9/7/2009. This was in respect of increasing permissible strength of the trustees from 15 to 20% of the total number of strength, subject to maximum 25 trustees or whichever was higher. Said change report was not accepted by the Assistant Charity Commissioner as could be seen form his order dated 26/5/2010. Said order is placed at Annexure-G.
Petitioner has averred in para no. 4.10 in respect of respondent no.2 preferring objection to the change report indicating his objections which came to be registered as Misc. Application No. 62 of 2009. The petitioners have annexed the application no. 62 of 2009 at Annexure-H and if one looks at Annexure-H page 54 though it bears the date which has been mentioned in para as 28/8/2009, but it bears no number being Misc. Application No. 62 of 2009 as it is referred into in the paragraph and that documents appears to be in respect of change report no. 207 of 2009. Be that as it may; there appears to be some error in referring the document and mentioning thereof in the memo. Petitioners thereafter averred that Jt. Charity Commissioner sent in communication dated 15/3/2010 indicating that it was in respect of Patel Prakashbhai Anishbhai's application dated 4/9/2009. Thus, once again there appears to be some kind of error as in this communication there is no mentioning of date 28/8/2009. On the contrary this communication at page 57 there exists some application filed by respondent no.2 dated 4/9/2009 wherein communication sent on 15/9/2010 indicate that if someone approached the trust for becoming member, then as per the constitution of the trust appropriate decision shall be taken.
Petitioner has further averred that respondent no.2 filed Mic. Application No. 26 of 2010 before respondent no.1 under section 41A of the Act praying for direction that until the change report no. 180 of 2009 is initially decided, the resolution dated 20/2/2009 passed by executive committee in respect of admitting members and increasing number of trustees from15 to 25 % may not be implemented. Copy of said application is on page 59 to 68. The petitioner has averred that this application was only for limited purpose of obtaining interim relief pending decision on change report no. 180 of 2009 and this application suffers from vice of non-joinder of all the trustees concerned.
The Annual General Meeting of the trust was due to be held on 20/6/2010, 1/3rd trustees were to retire and those vacancies were to be filled in, 4 trustees were therefore to be elected and on account demise of one trustee N.K. Patel, one more vacancy had been created.
It was case of the petitioner that in past no elections were held and retired trustees were generally re-elected by consensus and change if any was to be made on consensus only. Respondent no.2 addressed letter on 18/6/2010 seeking for filling up of those vacancies as per clause-20 of the bye-laws and it was requested to be held through ballots. Two panels of candidates have filled nominations, one panel was representing group of respondent no.2 with symbol of 'Kumbh'. Respondent no.2 himself contested election and it was emphatically submitted by petitioner that out of candidates filled by respondent no.2's group one Mukund Govindbhai Patel was also there who was one of those admitted under resolution dated 18/4/2009. The averments to this respect is made in para 4.16. It is further averred in the petition that respondent no.2 acquiesced in the proceedings and on the other hand he was filing applications like Misc. Application No. 26 of 2010 before respondent no.1 wherein ex-parte interim order dated 17/6/2010 came to be granted, where under the decision taken in respect of agenda no.88 in the general board meting to be held of 20/6/2010 was not to be implemented till final disposal of Misc. Application No. 26 of 2010. It is to be noted that by then the change report was already disposed of on 26/5/2010 and therefore, the authority had no jurisdiction to entertain or to make order on application. Copy is at Annexure-O. Respondent no.2 and panel lost the election in the meeting held on 20/6/2010. Petitioner and 4 others panel came to be elected as trustees of the trust and Resolution No. 7 & 8 came to be passed which are produced at Annexure-P. That application of petitioner being application No. 26 of 2010 was heard & decided vide order dated 21/7/2010, despite that was an interim application in nature, it was finally disposed of by allowing the application for relief. This order is under challenge in Special Civil Application No. 9273 of 2010.
The facts in respect of Special Civil Application No. 404 of 2012 also deserves to be narrated in short so as to appreciate the controversy as it is stated herein under.
This petitioner appears to have filed application being Judicial Misc. Application No. 4 of 2011 on 15/9/2011 under section 41A of the Bombay Public Trust Act as said application was not entertained and ordered to be filed, hence present petition is preferred on the grounds stated there under. At this stage it is required to be clarified that, this revision order does not contain any reference to the earlier proceedings which have been culminated into order dated 21/7/2010 and which is subject matter of challenge in a cognate matter being Special Civil Application No. 9273 of 2010.
Thus in a way, on reading of these petitioners facts, one can safely conclude that the challenge is though appearing to be in respect of order made under section 41A, but both these orders, namely order dated 21/7/2010 and 15/9/2011 are diametrically opposite in their contents in as much by order dated 21/7/2010 the application under section 41A appears to have been allowed and directions have been issued, whereas in order dated 15/9/2011 the application under section 41A is simply ordered to be filed in a sense no action is initiated qua the request for interfering under section 41A of the Bombay Public Trust Act. Therefore, it could be said that the petitioner there under also prayed for some direction under section 41A of the Act qua trust management by fructifying in the form of order dated 21/7/2010 which is subject matter of challenge of petition being Special Civil Application No. 404 of 2012. Therefore it is appropriate for the sake of expediency to first narrate the contentions of the petition being Special Civil Application No.9273 of 2010 and the contentions of respondent in Special Civil application No. 404 of 2010.
Apart from what are contended in the petition, in written submissions the petitioner of SCA No. 9273 of 2010 in support of his contention stated as under:
= The petitioner is an elected trustee of the trust, and has been elected in the general board meeting held on 20/6/2010 as per the bye laws of the trust. By the impugned order the decisions taken in the general meeting dated 20/6/2010 are also jeopardized. The petitioner is therefore directly prejudiced by the impugned order made by learned Commissioner.
= As per bye-law No.7, it is open for the trust to admit members on receipt of membership fee. As per clause 4 of bye-law no.7, a member can be admitted as lifetime member on payment of Rs.100/- and above.
= As per bye-law no.8, the trust may also admit members who have given donation of Rs.10,000/- subject to certain terms.
= On 7/3/2008 the Executive Committee of the trust passed resolution no.3 resolving to admit persons who have made donations in the trust as primary members and also to make them trustees at an appropriate time.
= On 20/2/2009, the executive Committee of the trust passed resolution no.12 resolving to admit 40 members on the request made by five donors.
= On 20/2/2009 the executive committee of the trust passed resolution No.15 resolving to increase the permissible strength of the trustees of the trust from 15 trustees to 20 subject to limit of 20% of total numbers of members of the trust, and was also resolved to submit Change Report in this regard with the Charity Commissioner.
= On 18/4/2009 in view of further deliberations in the trust including with respondent no.2, it was decided to reconsider the issue and convene another meeting to discuss and resolve on the issue of admitting members on the request of the donors. The executive committee of the trust resolved to admit 25 members, who were suggested by the donors as against 40 members, who were earlier admitted vide resolution dated 20/2/2009.
It is relevant to note that the respondent no.2 who was then trustee of the trust was present in the meeting and the resolution was passed unanimously.
On grounds mentioned in the petition, it is stated by the petitioner that all the 25 members deposited fee of Rs.100/- with the trust and the trust admitted all these members as Life Members of the trust. The admission is also recorded as per bye-law No.7 of the trust.
= On 24/5/2009 the General Board of the trust in the general meeting approved/ratified the resolution no.76 passed in the meeting dated 18/4/2009. General board also approved/ratified the resolution no.12 regarding increase of the permissible strength of the trustees. It is relevant to note that respondent no.2 was present in this meeting and the above referred resolutions were passed unanimously.
= On 9/6/2009 the trust filed Change Report No. 180/2009 with respect to Resolution no.12 passed in the executive committee meeting dated 20/2/2009 and as ratified in the general board meeting on 24/5/2009 with respect to increase in the permissible strength of the trust of the trust.
= On 26/3/2010, after almost one year from the date of admission of 25 members. The respondent no.2 filed under Sec. 41A, Misc. Application No.26/2010, before the Ld. Charity Commissioner seeking reliefs as are prayed in para 8. The reliefs essentially pertain against the decision of the trust in admitting 25 members.
office bearers of the then body of the trust as party respondents. The trust is not made as party respondent. The 25 members who are admitted are also not joined as party respondents.
= As per bye-law no.11(4), 1/3rd of the total number of the trustees are to retire by rotation and the said vacancies are to be filled in together with other vacancies every year in the General Board meeting of the trust. Accordingly the General Board meeting was scheduled on 20/6/2010 to elect five trustees. Four trustees were to be elected on the post of trustees who were to retire by rotation and one vacancy was to be filled in place of a trustee who had passed away. The respondent no.2 was also to retire by rotation, however respondent no.2 offered to be re-elected.
= On 26/5/2010 Ld. Charity Commissioner disposed of the Change Report No. 180 of 2009.
= On 17/6/2010 respondent no.2 filed application before the Ld. Charity Commissioner to stay the proceedings of General Board meeting scheduled on 20/6/2010. Ld. Charity Commissioner made interim order directing that the decision on item nos. 7 and 8 of the agenda which was for the purpose of filling up the vacant posts of trustees shall not be implemented until disposal of main application.
= On 18/6/2010 respondent no.2 requested the trust to hold the elections through ballot process. The trust accepted the request of respondent no.2. Two panels of candidates were made. One panel was made by respondent no.2 with election symbol 'Kumbh'. This panel included one Shri Mukundbhai Govindbhai Patel, who was one of the members admitted vide resolution passed in the executive meeting dated 18/4/2009. Shri Nileshkumar Govindbhai Patel who seconded the proposal of Shri Mukundbhai G Patel and Shri Dhiren Navinbhai who signed as supporter of Shri Mukundbhai Govindbhai Patel were members from amongst 25 members admitted vide resolution passed in the executive committee meeting dated 18/4/2009.
= On 20/6/2010, the General Board meeting of the trust is held. The entire panel of respondent no.2 lost the elections. The petitioner came to be elected as trustee. The respondent who is the applicant of Section 41-A application also contested the election with the help of some of the members who are admitted and in respect of which the proceedings were taken out by the concerned respondent. However, he has lost the said elections and he no longer remains to be trustee of the trust.
= On 21/7/2010, the Ld. Charity Commissioner made the impugned order.
= On 21/7/2010 upon an application made on behalf of the respondents in Section 41A application, the impugned order came to be suspended up to 20/8/2010.
= On 10/8/2010, this Court was pleased to issue notice on the petition which was made returnable on 18/8/2010.
= On 18/8/2010 the interim order made by Ld. Charity Commissioner dated 21/7/2010 whereby the impugned order is suspended, is ordered to be continued. This interim order is continued thereafter.
2. Petitioners in background of above dates and events and the challenge made to the impugned order, has submitted further & relevant points together with supporting judgments as under.:-
2A. the trust is not made party though the reliefs prayed are in relation to the trust and affecting the interest of the trust as a whole. Action impugned before the Charity Commissioner has the action of the trust. Only the then three office bearers are joined as party respondents,whose term had expired in June 2010 by virtue of bye laws of the trust, therefore the impugned order is not sustainable.
Learned advocate in support of the petition cited following judgments, viz. (1) 1972 GLR 828 and (2) 2009 (111) (9) BOM LR 4086 (BOM).
B.
The application filed by respondent no.2 suffers from acquiescence and waiver.
The respondent no.2 is party to the Resolution dated 18/4/2009 and Resolution dated 24/5/2009.
The respondent no.2 participated in the elections wherein the 25 members were also participated. In fact, three of 25 members were candidates / supports of respondent no.2. Many others may have cast their votes in favour of respondent no.2.
Petitioner also relied upon the averments contained in para 4.7, 4.8, 4.15, 4.16, Ground (g), documents at Annexure-K, and Annexure-M, page 74, and judgment 2011 SC 150.
C.
The Charity Commissioner has granted reliefs which are beyond the prayers made in Section 41A application and has challenged this order on following grounds.
Prayers are at page 65 which is subject to decision of the Change Report.
The change report is disposed by order dated 29.5.2010 and therefore as such Section 41A application became infructuous.
The application is sought for suspending the decision dated 20/2/2009. However there is no relief against the decision taken on 18/4/2009 and on 24/5/2009.
The Charity Commissioner by the impugned order has set aside the resolution dated 20/2/2009 and all consequential other resolutions. This order is thus completely beyond the reliefs prayed in the Section 41A application.
D.
Section 41A of the act does not permit grant of such orders. As per settled law, the issue regarding admission of members can not be decided u/s. 41A jurisdiction. As per settled legal position, it is clear that the application u/s. 41A does not contain any of the ingredients of Sec. 32 to 41 of the Act which is necessary requirement as held by Hon'ble Division Bench in 1992 (1) GLH 331. In support of this contention following judgments are cited (1) 2003(1) GLR 392 ()para 2,3,5,6); (2) 1992 (1) GLH 331 (para 36, 41 to 45); (3) 2008 (1) GLH 427.
E.
Petitioner has further contended that the impugned order made is in breach of principles of natural justice, on the following grounds.
As per the provisions of Bye laws, elections to elect the Executive Committee of the trust took place on 20/6/2010 in the general board meeting of the trust. The new trustees are elected by the election process, The petitioner who contested the elections on 20/6/2010 has lost the elections.
By virtue of the impugned order, the elections of the newly elected trustees is deemed to haver been set aside without there being an opportunity of being heard given to them. The impugned order thus on the face of it is in complete violation of principles of natural justice.
The impugned order as such has remained suspended firstly by the order dated 21/7/2010 made by Ld. Charity Commissioner on the same day when the impugned order is made and thereafter by various interim orders of this Court.
In view of the above, as the impugned order made by Ld. Charity Commissioner is in breach of principles of natural justice and if the same is quashed and set aside by this, it would not cause prejudice to any person as the impugned order has never come into operation. The quashing and setting aside of the impugned order would also permit the elected trustees to function and administer the trust. Judgment quoted in support of this contention is 1992 (1) GLH 331 (Para 41, 51 to 53).
F.
The impugned order is tantamount to setting aside the elections of the five new trustees which is not permissible under Sec. 41A of the Act.
G.
Members are admitted as per the bye-laws. Reference be made to bye law nos. 7 to 8, in particular bye law no. 7 and ground (k) of the petition.
H.
The members viz. 25 in number who are affected are not made parties by respondent no.2. Newly elected trustees are also not made parties.
I.
Section 41A application and the reliefs prayed therein lost relevance upon elections held on 20/6/2010. The elections are already held though in respect of 1/3 rd of members and a new body is elected. The private respondent who was applicant of Section 41-A has lost the elections. He therefore would have no right to be heard in the present proceedings. New office-bearers are also required to be elected. Section 41A Application only impleads the earlier office-bearers. In support of this contention petitioner has cited judgment reported in 2009 (3) GLH 306.
J.
The petitioner submits that in the reply affidavit to the petition, the private respondents raised various issues which were not before the learned Commissioner. Apart from written submissions, petitioner also dealt with all the issues in the rejoinder filed to the reply affidavit.
The petitioner of SCA No. 404 of 2012 has also submitted its written submissions stating that, petitioner is son of founder donor Chinubhai Narandas Parikh as referred in clause 12 of the scheme. The impugned judgment is pre-incurium in ignorance of order dated 26/5/2010 whereby two petition (PTR) No. 207/2009 and 180/2009 submitted by Mandal came to be rejected by Charity Commissioner. So, impugned judgment which is sought to be relied upon Mandal's PTR 180/2009; and PTR 207/2009 whereby Donor's right to nominate his nominee is wiped out, is totally out of place. Consequently the impugned judgment is not sustainable.
It is submitted that upon receipt of impugned judgment, the petitioner was advised to file review petition so as to press order dated 26/5/2010 - rejecting two PTR by Mandal. But since, 26/5/2010 order was already on record and wrongly ignored the same may not be valid ground for review as provided under Civil Procedure Code. Therefore, unless this Court under its extra ordinary power directs the Charity Commissioner to consider order dated 26/5/2010, petitioner's application will not be considered.
Clause 12 of the scheme empowers the petitioner being (heir) son of Chinubhai Narandas Parikh to appoint two members in executive committee. The letter mark 11/1 dated 29/7/2004 addressed to Chandrakantbhai (Secretary of Trust in Reference to condolence message sent by trust and denied to work as trustee but not denied to exercise the power of clause 12 to appoint two members in the executive committee of Mandal.
On 26/5/3009 - A fabricated letter in the name of Vice President is created to show that the petitioner is informed to exercise power of clause 12 of the trust showing address of Navrangpura and Ellisbridge where petitioner never resided. The petitioner was residing at Panjarapole at Ambawadi, Ahmedabad and presently residing at Paramount Residence at Bodakdev, Ahmedabad. The letter was created to misguide the Charity Commissioner and General Body of Mandal.
The clause 12 of the scheme only empowers Chinubhai Narandas and his successor to appoint two of his nominees. Petitioner thus appointed two members in Mandal (1) Niketu Maniar, (2) Dasharathbahi Nagardas Patel and informed the Secretary of Trust.
The petitioner submitted that the respondent ought to have made report under section 22 of Bombay Public Trust Act, 1882 regarding the change made in the trust body. But the respondents are not taking any steps and have tried to fill up the two post of executive members by their relatives. The said PTR No. 207/2009 is set aside.
The petitioner has stated that if the respondents are not interested and not making compliance of law then they may be permitted to make change report to Asst. Charity Commissioner, Mehsana. This grievance is not decided by joint Charity Commissioner and hence order passed by Asstt. Charity Commissioner is perverse. It is contented that the authority failed to exercise the power to decide the grievance of petitioner, and there is jurisdictional error to decide the issue raised before the joint Charity Commissioner.
The petitioner has placed reliance in respect of B.J. Dhami Vs. S.K. Ratanpara reported in 2010 (2) GLH page 1399, wherein it is held that issue pertained to legality of appointment of members of particular posts in the committee fall under the domain of administration of the trust and power under Section 41A could have been invoked.
This Petitioner thus has prayed that his petition deserved to be allowed and respondents be directed to allow his two members (the appointees) as members of executive committee of respondent Mandal.
Against the petition being SCA No. 9273 of 2010 as well as written submission of petitioner, respondent no.2 has submitted its reply cum written submissions as under:
1) The petitioner has challenged the order dated 21.07.2010 passed by Charity Commissioner in Misc. Application No.26 of 2010 in Para-10A, to the effect that the trust should comply with the provisions of Clause 8(B) of the Constitution of the trust and prepare a list of donors whose representatives are to be made members in accordance with the constitution by legal procedure. The effect of the order was that the resolution dated 20.02.2009 and consequential resolution dated 18.04.2009 whereby in discriminatory the trustees have accepted nomination of the donors by resolution which have been set aside. The resolution dated 20.02.2009 resolved to admit the nominated persons as a members of the Trust as under :-
Sr.
No.
Name of the donor No.
of nominated members 1 Shantaben Bholabhai Patel 10 2 Kaushikbhai Bholabhai Patel 10 3 Shantibhai Kalyanbhai Patel 10 4 Prakashbhai C.Shah 5 5 Mahendrabhai Narendrabhai Patel 5 All of them are related to Bholabhai Patel.
2) The resolution dated 18.04.2009 modified the earlier resolution and restricted to twenty five representatives of the donors. There is no principle or policy laid down by the trust to provide membership to those nominated by donors.
3) The Charity Commissioner has also come to the conclusion that on the basis of the written statement that Shantaben Bholabhai and Kaushikbhai Bholabhai, mother and son had declared donation of Rs.51 lacs. While the actual donation on 20.02.2009 when the resolution was passed was only payment of Rs.30 Lacs dated 06.06.1999 and 23.12.2008. All other donations were after 20.09.2009.
4) The Charity Commissioner therefore gave a direction to frame policy in accordance with the constitution and to hold election thereafter.
5) The direction therefore does not affect any member of the trust or even any trustee of the trust and it is in compliance with the provisions of the constitution of the trust.
6) The Charity Commissioner was therefore justified in giving such direction under Section 41A of the Bombay Public Trust Act which enables the Charity Commissioner to give direction for proper administration of the trust in accordance with the constitution.
7) When the proceedings were pending before the Charity Commissioner, an application was preferred before the Charity Commissioner on 17.06.2010 praying for staying of general board meeting for election.
On 17.06.2010 by consent of the parties i.e. trustees and the respondents, the Charity Commissioner passed an order that the item Nos.7 and 8 on the Agenda of General Board meeting be not implemented and therefore, the petitioner cannot claimed to be elected as a trustee.
8) It is submitted that the trustees have accepted the direction of the Charity Commissioner and have not challenged the same.
9) Joining the trustees at later stage as respondents and the trustees contesting the decision is of no relevance.
10) The petitioner is not the trustee because according to the petitioner he was elected at the meeting held on 20.06.2010 but the implementation of the resolution declaring him elected was stayed by the Charity Commissioner and the Charity Commissioner has directed for calling of General Meeting to hold election after complying with the provision of the Constitution. The petitioner therefore cannot claim any right as a trustee.
11) Even if petitioner claims any right as a trustee no prejudice is caused to him because the General Board can frame proper policy and hold election.
12) It is submitted that the petitioner can claim his right as a member, and no prejudice is caused by the aforesaid direction, and hence prayed to dismiss the petition, as there is no miscarriage of justice or any jurisdictional error.
13) It is submitted that the application under Section 41A is maintainable. The content of the application is specific about the donors being given representation contrary to Clause 8B of the Constitution.
14) It is contended that the relief claimed is only pending the Change Report No.180/2009 and, therefore, since the Change Report was disposed of no relief could have been granted and the application became infructuous is not justified.
The proper reading of the application is that the petitioner was within his right in challenging the resolution dated 20.02.2009 which was inconsistent with Clause 8B. Increasing the strength from 15 to 25 has never been challenged in the present proceedings.
14) It is also contended that the decision of the Division Bench in 2010 (3) GLR 2632 is not applicable. According to the Division Bench, election disputes are outside the provisions of Section 41A of the Act.
15) It is submitted that challenge is not to the election. The grievance is that the resolution is contrary to the provisions of Clause 8B of the constitution and, therefore, the trust is not administered in accordance with the constitution and the Charity Commissioner should give direction under Section 41A of the Act that the Trust be administered in accordance with Constitution.
16) It is within the purview and jurisdiction of the Charity Commissioner to direct the trust to act in accordance with clause 8B of the constitution having regard to the decision in 1992 (1) GLH 331. Navsari Taluka Halpati decision is not applicable in the facts because there is no election dispute before the Charity Commissioner.
17) Section 22 of the Act is not applicable in the facts of the case because the legality of the election of the officer bearer is not in question. No Change Report is to be filed in respect of the members of the Executive Committee. The direction is only to grant membership on the basis of Clause 8B of the Constitution which is not required to be reported under Section 22 of the Act.
18) It is further submitted that the Charity Commissioner is competent to take notice that the trust is not administered in accordance with the provisions of the constitution at the instance of the petitioner and the Charity Commissioner. The Charity Commissioner can direct that the trustees should act in accordance with the constitution and draw the attention about the mistake in implementing the provisions of constitution Clause 8B. Even hearing may not be necessary in such case.
19) The plea of acquiescence is not warranted in the facts of the case. There cannot be any acquiescence on the part of the petitioner at the meeting on 20.02.2009. If any resolution is inconsistent with the constitution the members have every right to draw the attention of the Charity Commissioner. No doctrine or acquiescence or waiver can apply to such application.
20) On above grounds it is submitted that the petition deserves to be rejected. There is no miscarriage of justice. The Court may not interfere when only direction is to act in accordance with Clause 8B. In support of this contention reference is made to 2011 (3) GLH 257.
Respondent No.3 also resisted the petition being SCA No. 9273 of 2010 by submitting his written submission, which reads thus:-
1) The respondent no.3 is the member of executive committee and had donated the amount of Rs.2,01,00,000/- to the Trust.
2) Respondent no. 3 is the most effective party in the proceedings because as a donor the present respondent has suggested the name of 5 members of the applicant, which are approved in meeting by resolution dated 20/02/2009 and 18/04/2009. Therefore, in support of main petition the present respondent no. 3 also joined as a party respondent.
3) Short details of the Trust is given by respondent no.3 in the written submission, which reads thus:-
(A) The Nutan Sarva Vidyalaya Kelavani Mandal, a public trust is one of the oldest trust, the said trust established in the year 1953 and till date the activities of said trust running very smoothly. The respondent no. 3 is the donor and member of executive committee in the said trust and he also looked after the activity and management of the said trust.
(B) The respondent no. 3 found that management of the said Trust running the trust in true sense and never heard about any case of the mis-management either in case of administration or in financial matter. The respondent no. 3 also found that within a span of last 10 years the trust has purchased 130 Vighas of land and established Pharmacy, Dental, MBA, MCA, Engineering Colleges and today more than 11000 student (including school) is getting education in reasonable and government prescribed fees.
(C) The respondent no. 2 Parkashbhai Satisbhai Patel being a member and trustee want to grab the management and therefore, he stood in the election and lost the elections. Therefore, by way of filing application before the Charity Commissioner tried to harass the trustees by interrupting the smooth management of the Trust.
4) The Trust is Governed by its bye-laws. As per the Bye Law No. 7, it is open for the Trust to admit members on receipt of membership fee. As per the bye law no. 7(4), whosoever pays Rs.100/- or more than that can be considered as a life members.
5) On 07.03.2008 Executive Committee of the Trust passed Resolution No. 3 resolving to admit persons who have made donations in the Trust as Primary Members and also to make them Trustees at an appropriate time.
6) On 20/02/2009 Executive Committee of the Trust passed Resolution No. 12 resolving to admit 40 members on the request made by five donors. The present respondent no.3 is the one of the donor.
7) On 20/02/2009 executive committee of the trust also passed another resolution no.15 resolving to increase the permissible strength of the trustees of the trust from 15 members to 25 members.
8) It was also resolved to submit Change Report in this regard with the Charity Commissioner. Respondent no.2 was present in the meetings in which resolutions were passed, but has never raised any objections.
9) On 18/4/2009 executive committee of the trust resolved to admit 25 members, who were suggested by the donors as against the 40 members,who were earlier admitted vide Resolution dated 20/2/2009. The respondent no.2 asserted that he was also present here, he did not raise any objection and he was agreed to above resolution.
10) All 25 members deposited fee of Rs.100/- with the trust and the trust admitted all these members as Life Members of the trust as per the bye law no.7 of the trust.
11) On 24/5/2009 in the general board meeting approved / ratified the resolution no.7 passed in the meting dated 18/4/2009. The general board also approved the resolution no.12 regarding increase of permissible strength of the trustees. Here also the respondent no.2 was present, no-objection and the resolution passed unanimously.
12) On 9/6/2009 the trust has filed Change Report no. 180 of 2009 with respect to resolution no.12 passed in Executive committee meting dated 20/2/2009 and has ratified and confirmed in general board meeting on 24/5/2009 with respect to increase in the permissible strength of the trustee of the trust. The said Change Report is pending and the respondent no has filed Misc. Application No. 26 of 2010 on 26/3/2010.
13) After long period i.e. from 9/6/2009 to 26/3/2010, the respondent no.2 has filed Misc Application being no. 26 of 2010 before the learned Charity Commissioner under section 41A of the Act praying that the resolution dated 20/2/2009, wherein the strength of member of Executive Committee has been increased from 15 to 25, shall not be implemented till the decision on the Change Report no.180 of 2009 is taken.
Respondent no.2 has further submitted that: (A) The prayer was made categorically that the resolution dated 20/2/2009 in which the strength of executive member was increased shall not be implemented till the decision of Change Report no. 180 of 2009. Even than the learned Charity Commissioner has quashed the resolution dated 20/2/2009, 1842009 and 24/5/2009, which is beyond the prayer and beyond the jurisdiction.
(B) The respondent no.2 impleaded only some office bearers of the then body of the trust as party respondent. The 25 members who are admitted are not joined as party respondents.
14) 26/5/2010 learned Charity Commissioner has disposed the Change Report No.180 of 2009 and has accepted the order. Therefore, now the prayer made in Misc. Application No. 26 of 2010 has been satisfied and now the said Misc. Application No. 26 of 2010 became infructuous.
15) The General Board meeting was scheduled on 20/6/2010 to elect five trustees, four Trustees were to be elected on the post of trustees who were to retire by rotation and one vacancy was to be filled in place of a trustee who had passed away. The respondent no.2 was also to retire by rotation. He however offered to be re-elected.
16) On 17/6/2010 respondent no.2 filed application before the learned Charity Commissioner to stay the proceedings of general board meting scheduled on 20/6/2010.
17) The Charity Commissioner made interim order directing that the decision on item no. 7 and 8 of the agenda which was for the purpose of filing up the vacant posts of the trustees shall not be implemented until disposal of main application.
18) On 18/6/2010 respondent no.2 requested the trust to hold the election through ballet process. Trust accepted the request of the respondent no.2 Two panels of candidate were made. One panel was made by respondent no.2 with election symbol "Kumbh" and other is "Elephant". In the panel of the respondent no.2 Shri Mukundbhai Govindbhai Patel, who was one of the members, admitted vide resolution passed in executive meeting dated 18/4/2009. Shri Nileshkumar Govindbhai Patel, Shri Dhiren Navinbhai Patel who are supporters of Mukundbhai were members amongst 25 members admitted vide resolution dated 18/4/2009 of executive committee. The respondent no.2 lost the elections and the petitioner came to be elected as trustee.
19) On 21/7/2010: The Ld. Charity commissioner passed impugned order wherein the learned Commissioner has quashed the resolutions dated 20/2/2009, 18/10/2009 and 24/5/2009. Respondent no.2 has further submitted as under:
(A) The trust is not made party though the reliefs prayed are in relation to the trust and affect the interest of the trust as a whole.
(B) The members, who are affected with resolution dated 20/2/2009 are also not joined as a party respondent in the said proceedings.
(C) Only three office bearers were made party, whose term had expired in June 2010, Therefore, the impugned order is not sustainable and moreover the application being Misc application 26 of 2010 ought to have rejected by the learned Charity Commissioner on the ground of non joinder and misjoinder of parties.
Respondent no.2 in his further submission states that:-
(A) The application is filed under section 41(A) of the Act being misc Application no. 26 of 2010 but as per the bare reading of section 41(A) of the Act, the section does not permit the learned Charity Commissioner to pass such orders. That this Court in 2003 (1) GLR 392 observed that "it clear beyond any doubt that the three matters which Sec. 41A provide for - (a) proper administration of a public trust, (b) proper accounting of its income and (c) due appropriation and application of the income to the objects and for the purposes of the trust are abbreviated expressions of those very matters which Secs. 32 to 41 provide for. The only purpose which, therefore, Sec., 41A serves is to issue directions in respect of matters falling under Secs. 32 to 41. It is therefore, merely an enabling and ancillary provision intended to make the implementation and enforcement of the provisions of Secs. 32 to 41 more effectively and the present issues is not fall under this purview." It is further observed by this Court that "it is clear that the Jt. Charity Commissioner will be entitled to exercise the power under Sec. 41A of the Act in respect to the items which are specified under Secs. 32 to 41 of the Act. If the averments made in the application are considered then it appears that the basis of the application was that the applicants therein before the Jt. Charity Commissioner were ascertaining that they have a right to be admitted as the members of the trust since they are natives of Veraval and because of the conservative interpretation given by the trustees of the trust, thy are not being admitted as the members. Therefore, if while administering the trust, the question arises regarding the interpretation of making any expenses or running day-to-day affairs of the trust, it might fall under the scope of Sec. 41A of the Act. However, the question of right to be admitted as the members of the trust is an independent right which are persons may be claiming upon the terms and conditions of the trust against the trustees of the trust. In assertion of such right an inquiry is required to be held for the purpose of establishing the case as to whether the applicants who are ascertaining the right, are covered by the eligibility criteria of becoming the members or not. Such process in my view would require adjudication of the facts, and therefore, in view of the ratio of the Division Bench in case of Syedna Mohamed Burhanuddin V. Charity Commissioner Gujarat State & Ors. (supra) the adjudication process is not envisaged under Sec. 41A of the Act."
(B) Here also the matter pertains to the admission of the members, which is not fall under the purview of Section 41(A) of Act.
(C) That as contended by the respondent no.2 that the Charity Commissioner under section 41A of the Act can exercise suo motu power regarding the administration of the trust if any such question regarding maladministration of the trust comes to the notice of the Charity Commissioner. To this contention it is required to be noted that the Charity commissioner in the present case have not used his Suo Motu powers and he himself has not found any maladministration of the trust. If at all the learned Charity Commissioner want to use Suo Motu power than for very specific issue the Charity Commissioner has to issue the notice to all concerned and decide the issue. Here in present case the issue before the Charity Commissioner only regarding the stay of resolution dated 20/2/2009 till the out come of change report. The impugned order also passed on application and not using the suo motu power.
(D) The resolution dated 20/2/2009, which is in question before the learned Charity Commissioner is directly pertains to the admission of members and as per the settled law the issue of admission of member is not in the purview of section 41(A) of the Act. However learned Charity commissioner also quashed the Resolution dated 18/4/2009 and 24/5/2009.
(E) It is therefore submitted that the contention raised in the petition are legal, valid and the impugned order is beyond the jurisdiction, beyond the prayer, Illegal against the natural justice, suffers from non-joinder and misjoinder of parties and requested to be quashed and set aside by allowing the petition.
In SCA No.9273 of 2010 Respondent No. 4,5 & 6 also submitted their written submission as under:
1) The question raised by the petitioner is regarding the powers of the Charity Commissioner under Section 41A of the Bombay Public Trusts Act, 1950 and validity of the order dated 21.07.2010 of the Charity Commissioner.
2) That the petitioner, a member and a trustee elected in the meeting under challenge has challenged the order dated 21.7.2010 of the Charity Commissioner.
3) The present case is a typical case where the President Bholabhai Chaturbhai Patel, the Vice-President Revabhai Shankarbhai Patel and Secretary Mulchandbhai Lallubhai Patel have made attempts to control the Nutan Sarva Vidhyalaya Kelavani Mandal, a registered public trust by packing the trust with their friends and family members hijacking the trust and converting the whole establishment of educational trust founded by eminent person late Sanakalchand Patel as early as 19.12.1952 into family trust.
4) It is submitted that the directions given by the Charity Commissioner by his order dated 21.7.2010 canceling the resolutions passed by the trust regarding the enrollment of new members and directing the trust to enroll members in accordance with the Constitution of the trust and unroll members in accordance with the Constitution of the trust and in a fair manner and do the necessary things within the full scope and jurisdiction of the powers of the Charity Commissioner under Section 41A of the Bombay Public Trusts Act, 1950.
5) The questions raised in the present petition are in relation to whether the resolutions passed by the trust are in accordance with the provisions of the trust deed and are in the interest of the administration of the trust and whether the affairs of the trust are administered fairly, legally and bonafide in the interest of the trust and the trust properties.
6) Section 41A of the Bombay Public Trust Act, 1950 confers administrative powers of control and supervision upon the Charity Commissioner. As it is well known that the State is the protector of the pubic trust or charities and the Bombay Public Trusts Act, 1950 provides for control, management and administration of the public trust in accordance with the principles of public trust and fiduciary capacity.
7) The Charity Commissioner under the Act is exercising all powers as a representative of the State to ensure that the public trust is administered in accordance with the trust deed and provisions of law and the income and property of the trust are appropriated and used for the purposes of the trust and not for any other extra purposes. For this purpose, under Section 41A (i) the Charity Commissioner has power to give directions, (ii) on application by any person interested in the trust or even suo-motu, (iii) directions can be issued to any trustee or any person connected therein (not necessary to all trustees), (iv) the purpose of the direction is to ensure that the trust is property administered or income is properly accounted for or duly appropriated and applied to the objects of the trust, (v) these powers are administrative powers, (vi) it is a duty of every trustee to comply with such directions, and (vii) the High Court of Gujarat has held that as the powers are administrative and not quasi judicial, principles of natural justice need not be strictly observed or applied.
8) A bare reading of the order of the Charity Commissioner under challenge will clearly point out the questions which are involved in the proceedings and nature of directions given by the Charity Commissioner.
9) The Charity Commissioner was mainly concerned with whether the trustees have passed the resolutions in accordance with the Constitution and have decided to admit new members in accordance with the specific rule of the trust deed fairly and honestly.
10) Misc. Application No.26/2010 was made by the respondent No.2, a member and a trustee who was the grandson of the original founder of the trust. The said application raised very important questions as to how the President conducts the affairs of the trust with the help of his friends and tries to establish his supremacy over the trust.
11) The question raised by the respondent No.2 was that the trustees are trying to enroll new members on the alleged recommendation of the donors of the trust allegedly in accordance with the provision of the trust deed but enrolling the members, the trustees have not complied with the letter and spirit of the trust deed and have enrolled only those persons who were recommended by the close relatives of the President and rejecting the names recommended by other donors. Moreover, there were various irregularities in respect of the donation, the receipts, the signature of the donors, the dates on which donations were made and whether there was any contract with the donor which is required under Clause 8(2) of the trust deed.
12) The president and other opponents in the application filed their reply dealing with the complaints made by the respondent No.2.
13) The application of the respondent No.2, the detailed reply given by and on behalf of the opponents viz. the President, the Vice-President and the Secretary, all relevant documents regarding resolutions passed by the trust under challenge and all other necessary documents regarding the donations, receipts etc. were produced before the Charity Commissioner.
14) After considering all these documents and papers, the Charity Commissioner found several irregularities and violations of the provisions of the trust deed in passing the impugned resolutions, particularly there was no contract with the donor as required by Rule 8(2), when donations were made, the receipts thereof, how much donation was made, whether there are dates or not and whether their signatures are there or not, found that the trustees have not acted and complied with the rules of the trust deed particularly rule 8(2) and have also acted discriminately favoring their own men and rejecting the cases of others. The Charity Commissioner has also found that the trustees were not behaving in a bona fide manner and have not checked the correctness and genuineness of all documents. The trustees also could not explain why they enrolled the members of 3 donors of their choice and relation and relation and rejected the claims of other 2 donors. Originally they decided to enroll 40 members, 10 each of the donors who were their relatives viz. The wife of the President, the son of the President and son-in-law of the President and 5 each of 2 other donors but immediately thereafter in the next meeting, only 25 members were enrolled and 15 were rejected. The Charity Commissioner therefore, clearly came to a conclusion that the affairs of the trust were not properly administered and the attempts are made to control the whole trust and therefore held that the resolutions enrolling the new members (25 members) are not in accordance with the trust deed and are irregular and, therefore, they are of no effect and then directed the trustees to enroll the members according to the provisions of the trust and then to act further.
15) A bare reading of the order will show that there was no question of any dispute or lis between one party and other party which requires to be investigated and adjudicated upon. There were effectively no other parties. The application of the respondent no. 2 was there and reply by the opponents was there with their documents. The Charity Commissioner was not required to adjudicate anything but was only concerned with whether the trustees have complied with the rules of the trust deed in enrolling the members. No further evidence was required because the documents before the Charity Commissioner were very clear viz., there were no contracts with the donors regarding enrollment, the documents regarding donations were there, the resolutions were there and may documents did not bear the signatures or did not bear the date, there was also discrepancy in the amount of donation and when it was given. All these questions were the matter of documents and did not call for oral or any other evidence.
16) It is therefore submitted that the Charity Commissioner has concerned himself with the questions of proper administration and the proper accounting of the donations and has not adjudicated upon any other questions. The directions also are very clear the fact that the members were enrolled not in accordance with the provisions of the trust deed but were also clear, other irregularities were clearly visible from the documents presented.
17) These directions of the Charity Commissioner fully and squarely fall within the administrative jurisdiction of the Charity Commissioner under Section 41A of the Act read with general power of supervision of the Charity Commissioner under Section 69 of the Act.
18) The various judgments cited by the petitioner or on behalf of the petitioner fully support the directions of the Charity Commissioner. The latest judgment of this Court in Letters Patent Appeal [((2010) 3 GLR 2632 (Division Bench judgment)] is not applicable to the facts of the present case for two reasons - (i) the questions which were involved in that judgment were in relation to the entitlement of the trustees and management and not in relation to simple enrollment of membership. It also involves adjudication of questions and disputes between the two groups of people and therefore, the Court accepted the contention that Section 22 of the Bombay Public Trusts Act, 1950 will be attracted and not Section 41A. Section 22 of the Act deals with the change report and powers of the Assistant Charity Commissioner to decide the validity of the change. In the present case, the question involved does not relate to any of the items in respect of which a change report is to be submitted and therefore, the question of attracting Section 22 does not arise and (ii) The Hon'ble Court itself observed that "regarding question of nature of powers exercised by the Joint Charity Commissioner, the issue is not free from doubt." Therefore, the entire judgment is whether section 41A applies or Section 22 applies and the Court held that in light of the facts involved and disputes involved, Section 22 is applicable and not Section 41A.
19) That, correct reading of the Misc. Application No. 26/2010 will clearly show that it deals with two different aspects - (i) regarding the resolution enrolling new members recommended by the donors; and
(ii) increasing the number of members of managing committee from 15 to 25.
20) So far as the resolution regarding the increase of the members of the managing committee, the change report was submitted by the trustees before the Assistant Charity Commissioner, it was opposed by the respondent no. 2 and ultimately the change report was rejected by the Assistant Charity Commissioner by order dated 26.5.2010 and there was no appeal by the trustees and therefore the chapter was closed.
21) Regarding second question viz. enrolling the members, it was not the subject matter of change report.
22) When the Misc. Application was made on 26/3/2010, the change report was pending before the Assistant Charity Commissioner and therefore, the relief was claimed for not to implement the changes made by the trustees till the change report is decided. But during the pendency of the Misc. Application, the change report was rejected by the Assistant Charity Commissioner on 26/5/2010 and the Assistant Charity Commissioner has also noted this and therefore the relief claimed that resolution about increasing the number of members of the managing committee did not survive.
23) So far as the first question is concerned viz. Resolutions regarding enrollment of new members, the relief claimed was not an interim relief but substantive relief. That question has nothing to do with whether the change report is accepted or not accepted.
24) As regards the petitioner himself, he cannot claim the right of hearing as an elected trustee, as the Charity Commissioner has granted interim relief not to implement that resolution regarding election till the final disposal of the application and the interim relief dated 17.06.2010, the petitioner cannot complain of violation of the principles of natural justice because he has not till then become a trustee.
25) It is further submitted that the Hon'ble Supreme Court of India has laid down in a series of judgments that the violation of the principles of natural justice must result into some prejudice to the persons who complained of violation. In the present case if we consider the final directions issued by the Charity Commissioner, no prejudice has been caused to anybody because the Charity Commissioner has strictly directed the trust to enroll members in accordance with the trust deed in a fair manner and nothing more. Nobody's right is adversely affected. No prejudice has been shown by any of the members of trustees.
26) It is further submitted that even on merits, the order of the Charity Commissioner giving directions is legal, proper, just and valid. He heard all the parties, considered all documents and then gave directions nothing the major findings on the grievances if findings are just, proper and legal. The final order therefore is also legal, just and proper necessary for the proper administration of the trust.
In SCA No. 9273 of 2010 Respondent nos. 7, 8 and 9 also submitted their written submissions as under.
1) That respondent no.2 had submitted an application for direction under section 41-A of the Bombay Public Trust Act, 1950, to consider that the resolution passed for admitting the members, given more than Rs.10000/- as donation to the trust and also the resolution passed by the trust for increasing the number of trustees from 15 to 25, till finalization of the change report no. 1802/009 pending before the Charity Commissioner.
The above prayer clearly reveals that the prayer was till final disposal of the change report no. 180/2009 hence it is an admission on behalf of the respondent no.2 before the Ld. Charity Commissioner that the subject matter is under adjudication before the Ld. Charity Commissioner in Change Report no. 180/2009.
2) The order passed by Ld. Charity Commissioner is produced at Annexure"A" in which it has been specifically mentioned that the change report is dismissed and finally concluded. In that event, the prayer made by the respondent no.2 had become infructuous.
3) The prayer of respondent no.2 that the resolution for admitting the members the stay had been sought till disposal of change report but the respondent no.2 had chosen not to disclose the fact that in pursuance of the said resolution the members had been already enrolled and they have participated in the affairs of the trust. In that event, the prayer was to for canceling the members and even if the resolution is challenged and implementation of the resolution is not challenged, the petitioner cannot claim the relief which he had not claimed before the Ld. Charity Commissioner.
4) It is submitted hat if the resolution of trust is to be challenged, all the trustees are required to be impleaded as party. In the present case, neither the trust nor all the trustees have been made party. It is correct that the trust property is vested with the trustees but when a question of all trustees is involved either the trust or all trustees are required to be impleaded as party, in absence of which the Ld. Charity Commissioner cannot issue the direction. In the present case, the Ld. Charity Commissioner has chosen to issue the direction to the entire trust and all trustees, even though in the application only three trustees had been made party.
5) It is pertinent to be considered that it was pointed out by filing the reply to the Ld. Charity Commissioner that in the meeting 40 members had been admitted and subsequently the number had been reduced from 40 to25. All of them participated in the election. Respondent no.2 contested the election by forming a panel and lost the election. The right in favour of members had been accrued hence they have been made members by the trust. The respondent no.2 was conscious regarding their membership and exercise of the right as a member, without joining 25 persons who had been admitted as members, the order is passed by Ld. Charity Commissioner, which would amount to removal of the members from the trust. A serious prejudice is caused to the members and to the trust who have admitted them as members and without making them as party, in that event, the order at Annexure "A" cannot be sustained.
6) On the question of admission as member cannot be said to be in contravention of clause 8 (b) of the trust deed. That, there is no breach of clause 8(b) of the Act as there is no specific model of contract envisaged under the trust-deed to be entered between the trust and the donors. The donors made the offer which had been accepted by the trust and it can be said to be a concluded contract and no formal contract is required to be executed as envisaged under clause 8(b) of the trust-deed.
7) Regarding powers of the Ld. Charity Commissioner under section 41-A of the act, respondents submit that the powers which were exercised by the Ld. Charity Commissioner are beyond the scope of section 41 of the Act. Is also rely upon section 56-A of the Act, which reads as under-
"The trustees have go the right to apply to the court where within the local limits of whose jurisdiction the whole or part of the subject matter of the trust tis situated for opinion, advice or direction of any court on any question affecting the management or administration of the trust property or income thereof and the court shall give its opinion, advice or direction, as the case may be thereto."
In view of the above provision under the Act, the powers to adjudicate and issue the direction is vested with the court and the same powers have not been vested with the Ld. Charity Commissioner under section 51A of the Act as per the powers of section 56A of the Act have to be exercised after giving an opportunity being heard and it is a clear case of adjudication. If the learned Court has got the powers to adjudicate and issue th direction, the Ld. Charity Commissioner under section 41A of the Act cannot exercise such powers. Hence also the order at Annexure"A" to the petition is without authority and is required to be quashed.
Heard learned advocates for the respective parties and perused the documents produced on record. The admitted facts indicate that en-masse appointment of trustees came to be made under the resolution which were subject matter of change report and thus change report were not accepted.
The written submissions as well as reply affidavits indicate that there was exercise of right on the part of donor to first time nominate the nominees which is said to have been even exercised after huge gap between gap of donation and right of exercise of nomination.
Nomination was not also supported by any contract as normally provided under the clause which emphasis or authorise the donor to nominate, meaning thereby the donation was to be governed by contract of donation and that contract was to spell out how and in what fashion and at what stage or way or of which cadre of membership is to be opined to the person to be nominated under the exercise of the right to nominate.
The impugned order is though challenged on various grounds by way of elaborate written submissions, the grounds of challenge could be summarized as under.
That the respondent no.2 was party to the meeting where under the resolution was passed for increasing membership strength. The respondent no.2 was also party to the resolution in which it was decided to elect trustees on five vacancies. The respondent no.2 therefore was having no justification to challenge the same subsequently when decisions of election did not come in his favour.
The respondent no.2 did not lodge any protest during the meetings when the deliberations were going on in respect of increasing the strength of the members by accepting nomination of donors and therefore respondent no.2 could not have been permitted to challenge this aspects by filing application under section 41-A of BPT Act.
The respondent no.2 not only did not protest against the increasing strength but participated in the election by forming panel with symbol of "Kumbh" and by fielding one of the newly admitted member as a candidate of his panel and when the election results were against him, he filed Misc. Application under section 41-A of BPT Act.
The respondent no.2 while filing application under section 41-A of BPT Act, did not choose to act either the trust or the trustees as party respondent which is hit by observation of this Court and therefore it is contrary to law and the application on which the order is passed itself was not maintainable.
The application whereon the impugned order is made was therefore not maintainable for want of joining proper parties.
The respondent no.2 joined only few trustees and not all the trustees and therefore on this ground also the application on which impugned order is made was bad in law.
The provision of section 41-A of BPT Act, could not have been invoked by the respondent no.2 for challenging the election as the matter of election being matter not falling under section 41-A of BPT Act the application as well as order made thereon stood vitiated.
The petitioners application was allowed though the change report during pendency whereof the application was made itself was rejected prior to passing of the impugned order.
The maintainability of application under section 41-A of BPT Act itself is questioned on relying upon various decisions of this Court cited at the Bar on behalf of petitioners and the respondents which have been set out herein above.
As against this, respondent no.2 has also submitted elaborate written submissions, the gist whereof could be set out as under.
The order of Charity Commissioner is only qua compliance with Clause-8(B) of the Constitution of the Trust which could not have been in any manner treated as prejudicial to the petitioner.
The effect of the order is of course setting aside the resolution dated 20/2/2009 and 18/4/2009 but the reasoning adopted by the Charity Commissioner for doing so would indicate justification on his part for passing this order.
The petitioner cannot said to be trustee so as to bring any action against the order of Charity Commissioner. The petitioner was elected in the meeting held on 20/6/2012. But the implementation of the resolution declaring him to be elected was stayed by the Charity Commissioner and the Charity Commissioner has directed fresh calling of general meeting to hold election after complying with provisions of trust's constitution. Therefore petitioner cannot claim any right in the trustees nor can he bring any action, as such he is not trustee on account of the stay order granted earlier.
Petitioner no.2 at the best can claim as member and as such no prejudice is caused to him on account of order impugned.
The respondent no.2 has prayed in application under section 41-A as under.
"The resolution dated 20/2/2009 is contrary to Clause 8(B) of the constitution and the respondent be directed not to implement the said resolution.
The resolution increasing the strength of members of the Executive Committee from 15 to 25 is subject matter of challenge in Change Report No. 180 and, therefore, the same should not be implemented."
The said prayer indicate that the respondent no.2 contended with regard to donor being given representation contrary to clause 8(B) of the Constitution of the trust.
The proper reading of the application thus would show applicant / respondent no.2 herein above was justified in contending that resolution dated 20/2/2009 was inconsistent with clause 8(B) of the Trust's constitution. Increase in strength from 15 to 25 was itself not under challenge.
The petitioner could not have relied upon decision of Division Bench reported in 2010 (3) GLR 2632 as the same has no applicability to the facts of the present case. The challenge as could be seen from application of respondent no.2 before the Charity Commissioner was not qua election at all. It was confined to non observation of procedure vis-à-vis clause 8(B) of the constitution of the Trust.
The decision of the Court in case reported in 1992 (1) GLH 321 would also be of no avail as there was no election dispute.
On the same way the provision of section 22 of BPT Act will not be placed into service as it was not classified to be challenging election of the office bearers. No change report was filed in respect of members of executive committee. Reliance is placed of the appropriate observation of the Court in case of 1992 (1) GLR 331 to explain the purport of section 41-A of the BPT Act.
The following judgment has been cited and relied upon reported in 1978 GLR pg 661 and contended that the interest of trust is paramount and not office bearers of the trust.
Against the aforesaid backdrop of rival contentions it would be appropriate to set out the relevant provision of Section 41-A of BPT Act as under.
"41A.
Power of Charity Commissioner to issue directions to trustees and other persons.
Subject to the provisions of this Act, the Charity Commissioner may, from time to time, issue directions to any trustee of a public trust or any person connected therewith to ensure that such trust is properly administered and the income thereof is properly accounted for or duly appropriated and applied to the objects and for the purposes of the trust.
It shall be the duty of every such trustee and person to comply with a direction issued to him under sub-section."
Thus plain reading of Section 41A of the Act as it is interpreted by this Court time and again unequivocally go to indicate that section 41-A is clothing the Charity Commissioner with requisite power to issue directions to the trust. In case of management of trust the beneficiary and trustees are supposed to act in accordance with the constitution of trust and in furtherance of the object and interest of the trust. The Court need not elaborately discuss the purpose of section 41-A as it has already been now well settled by various judgments of this Court as well as Apex Court which would certainly go to show that section 41A of the BPT Act is making Charity Commissioner competent enough to issue appropriate directions to the trust for its proper management, therefore the said exercise of power cannot be restricted if the controversy has indirect resultant effect upon any election of office bearers. In case if the election of the office bearer is the result of contrary action and omission of the managers and managing trustees then irrespective of its result upon the election of office bearers which would be subject matter per se not falling under the purview of section 41-A would not debar the Charity Commissioner from acting on the application under section 41A of BPT Act.
Thus this Court is of the considered view that the application made before the Charity Commissioner by respondent no.2 cannot be said to be incompetent in any manner so as to render the decision vitiated thereon on any count.
Having observed aforesaid and holding that the application made before the Charity Commissioner was maintainable even though it had resultant effect upon election of office bearers, the Court needs to examine whether the order impugned is required to be quashed and set aside on any other grounds, including ground of non joinder of all the trustees as asserted on behalf of the petitioners.
The fact remains to be noted that the petitioner became trustee on the strength of the resolution which is said to have been passed contrary to provision of clause8(B) of the constitution of the trust . Therefore said irregularity was directly hit by non compliance with provision of section 8(B) of the BPT Act. Therefore in the first instance the respondent no.2 was justified in submitting that petitioner could not have claimed to be trustee so as to hit by the application under section 41-A of BPT Act as the application under which he was elected was stayed by the competent authority The order impugned on its close perusal indicate that the Charity Commissioner has recorded his findings which need to be adverted to for examining for challenge to the order.
The findings recorded by the charity commissioner under the impugned order could be summarized and enlisted as under, namely:-
There exists no decision or policy qua in what manner and how the donors representatives and or nominees are to be made trustees. In fact the provision of the trust provides for accepting nomination from the donor of more than Rs.10,000/- as per the contract or agreement with them. Admittedly there exists no such agreement with the donor coming on record.
One donor Prakashbhai Shah gave donation of Rs.11,00,000/- and he applied for making member of any nominated persons but his nominees were not approved to be taken as member in the meeting held on 7/3/2010.
There is no agreement or contract with the donor with regard to nominating their nominees as members.
The resolution dated 18/4/2009 do not contain any material with regard to who is the signatory of the same, how many trustees were present and how many members were present.
The opponents have produced applications of the donors under mark 13/2/, 13/3, 13/4, 13/5 and 13/6. The said applications have been said to be got up applications and did not contain any dates of making applications.
It is also recorded that those applications appeared to be got up and no resolution in support thereof is said to have been passed.
It is also been recorded that there is an endorsement of receipt of this application on 10/2/2009 but signatory is not recognized or established. Said application creates doubt.
Application dated 13/2/2009 refers to donation of Rs.25.00 lakhs from on Shantilal Kalyanbhai and he has nominated 10 members, but it does not contain any details of the donation, date of donation, receipt number or anything of that nature. In absence of this and in absence of specific contract it would not been possible for accepting the request of nomination of ten members.
Application of Prakashbhai Shah said to have been donated Rs.11.00 lakhs and five members for nomination but that application did not contain any date and any information qua the donation or date of donation or receipt number or receipt.
Charity Commissioner has also observed that it is said that Shantaben Bholabhai Patel donated 25.00 lakhs but those donation facts have not been substantiated. On the contrary it is indicated that the donation by Shantaben was Rs.5.00 lakhs only. And therefore Charity Commissioner has not accepted that Shantaben had donated Rs.25.00 lakhs.
It is further recorded by the Charity Commissioner that it is canvassed that one Shri K.R. Patel has donated Rs.25.00 lakhs. But even in respect of that donation also no receipt number or any other information is available on record. Yet his request for taking ten members is considered. Similarly Shantaben also requested for taking ten members of hers.
The Charity Commissioner has recorded that out of total 5 applications from the donor 40 persons were nominated. Out of these 40 names on 18/4/2009, 25 persons have been registered as members.
One Sharad Foundation is said to have donated Rs.25.00 lakhs but none of the nominees out of ten nomination of their came to be made as member.
The Charity Commissioner has also recorded that one Prakash H. Shah is said to have given donation of Rs.11.00 lakhs and has recommended or requested for 5 nominees to be made member, but none of them have been made member.
Charity Commissioner has further recorded that though it is contended that Kaushikbhai Bholabhai Patel and Shantaben Bholabhai Patel have donated Rs. 25.00 lakhs each, but it is indicated that only Rs.5.00 lakhs and Rs.5.00 lakhs are said to have been donated by them. The factum of Rs.25.00 lakhs donation given by them is not proved or established on record. Shantaben Bholabhai and Kaushikbhai Bholabhai are mother and son, the persons suggested and nominated by them are registered as members. Whereas ten members nominated by Sharad Foundation and 5 nominees of Prakash Shah have not been given membership and no reason for nominating them is shown. The resolution dated 18/4/2009 is shown to be contrary to the provisions of trust constitution.
Charity Commissioner has also while recording the contention of the opponent in the application stated that Bholabhai Patel is in Sabarmati Jail and summons is not served upon him.
Thus, from the aforesaid findings recorded by the Charity Commissioner it becomes clear that the affairs of the trust and the process of making members was found to be not in accordance with the provisions and constitution of the trust and this finding of the facts recorded by the Charity Commissioner have not been cogently demolished by the petitioners in the present petition. The petitioners have argued at length on technical aspects about the jurisdiction of the Charity Commissioner while examining matter under section 41A of BPT Act, but have not even attempted to indicate as to how findings recorded by Charity Commissioner are perverse or contrary to material on record. The Court has no other alternative but in absence of any such attempt on the part of the petitioner the Court is left with no alternative but to accept the findings recorded by the Charity Commissioner for issuing appropriate direction issued under section 41-A of the BPT Act.
The Court is of the considered view that the decisions cited at the Bar and the grounds for assailing impugned order passed by the Charity Commissioner needs to be examined in light of the aforesaid findings recorded by the Charity Commissioner which have remained unassailed in the petition and provision of section 41-A of the BPT Act. The authorities cited at the Bar would not support the proposition that in a given facts and circumstances like the present one where the Charity Commissioner has recorded findings going to suggest that the affairs of the trust were required to be regulated by issuing appropriate directives under section 41-A of the BPT Act, then also the Charity Commissioner shall not act merely on the ground that his order if any made under section 41-A of the BPT Act would have effect upon the election or result of the election of the trust.
The process of election or making member in the trust has to be in accordance with the provision of the trust deed and the constitution itself. If a drastic variation is made in making members and on that basis if the election is held then even if the participating person in the election cannot be precluded from raising the question with regard to the manner and method of making members as the question of making members contrary to the provision of trust deed and Constitution of trust would heavily touch upon the aspect of administration of the trust itself. The management and administration of trust has to be essentially in accordance with provision of trust deed and constitution of trust and in the instant case it is recorded by the Charity Commissioner that the resolution passed for registering new members was not in consonance with the provision of the trust or trust deed and hence issuance of appropriate direction for taking the entire exercise afresh cannot be said to be overstepping of jurisdiction vested in Charity Commissioner under section 41-A of the BPT Act.
The Charity Commissioner under section 41-A of the BPT Act is competent to issue appropriate directions in the interest of proper management and administration of the trust. This power cannot be curtailed in any manner on spacious plea that the subject matter is arising out of election or office bearers appointment or nomination. The appointment of office bearers is blatantly contrary to the provision of the trust and of the trust deed, then Charity Commissioner in exercise of power under section 41-A of the Act when confronted with blatant disregards to the constitution of the trust would be well within his power to issue appropriate direction. This Court hasten to add here that if it is merely a question of some irregularities not vital enough to indicate any violation of provisions of constitution of trust in the subject matter of appointment of office bearers and registering members, then it may assume different colour so as to justify confining it to matter falling under section 22 of the BPT Act only, and invocation of section 41-A of the Act may not be warranted.
Thus, in view of the aforesaid discussions and especially discussion on the findings recorded by the Charity Commissioner and in absence of any cogent material to indicate that those findings are perverse and ill founded, this Court need not interfere with the order impugned dated 21/7/2010 passed by the Charity Commissioner and the petition being SCA No. 9273 of 2010 is required to be dismissed.
So far as Special Civil Application No. 404 of 2012 is concerned, this Court need not pass any other order as the Court has already upheld the order dated 21/7/2010 where under also the Charity Commissioner has passed necessary orders to adhere into constitution of the trust strictly and that should take care of the grievances if any of the petitioner of this petition, and the same is also therefore required to be disposed of along with Special Civil Application No. 9273 of 2010, as the trust shall be governed by the order passed by the Charity Commissioner.
The parties are bound by the observations made herein above as well as the orders which has been upheld by this Court and as the petitions are bereft of merits both are disposed of as dismissed. Civil application No. 9862 of 2011 is dismissed along with main matters. Notice discharged in Special Civil Application No. 9273 of 2010. However there shall be no order as to costs.
At this stage Shri Pahwa and Shri Modi prays that this order may be stayed as the Charity Commissioner himself had stayed his order and that stay has been continued. Therefore, in the interest of justice and enabling the petitioners to approach Letters Patent Appeal Bench or higher forum the order may be stayed. This request is strongly objected by learned advocate for the respondents. However, as the stay has been continued, this request is accepted and the order passed by this Court is stayed till 9/7/2012.
[S.R.
BRAHMBHATT, J ] /vgn Top