C O M M O N O R D E R T.S.SIVAGNANAM J.
The above writ petitions have been filed challenging a common order passed by the Tamil Nadu Land Reforms, Special Appellate Tribunal in SRP Nos. 21 and 26 of 1999.
2. SRP No. 21 of 1999 was filed by Sowcar Welfare Fund Family Trust (hereinafter referred to as Welfare Fund Family Trust) challenging the order passed by the Land Tribunal Chennai dated 30.10.1998 in LTCMA No 39 of 1997.
3. SRP No. 26 of 1999 was filed by Sowcar Gopaldas Dwarakadas Private Family Trust (hereinafter referred to as Private Family Trust) challening the order passed by the Land Tribunal, Chennai in LTCMA No. 29 of 1998 dated 30.04.1999.
4. The common issue which arises for consideration in these writ petitions is as to whether the Welfare Fund Family Trust and Private Family Trust are "Private Trust" as defined under Section 3 (36)-A of the Tamil Nadu Land Reforms or whether both the Trusts are to be considered as "Trusts" within the definition under Section 3 (36)-AAA of the Act.
5. The factual background in SRP No. 21 of 1999, is that the Welfare Fund Family Trust held agriculture lands at Srirangam to an extent of 46.24 ordinary acres equivalent to 25.806 standard acres as on 01.03.1972. Since the total holdings of the Trust exceeded the ceiling limit, notice in Form No. 4 was issued to the land owner Trustee together with a statement showing the total holding by the Trustee as on the crucial date 01.03.1972, informing them to file objections, if any, on or before 28.10.1973 and also to appear for enquiry on 31.10.1973. On 14.12.1973, objections were filed stating that the Trust is a Religious Trust of public nature. Accordingly, an order was passed by the Authorised Officer on 03.09.1974. The land owner filed an appeal before the Land Tribunal, Thanjavur in LTCMA No. 130 of 1974 and the Tribunal, in its order dated 28.04.1976, set aside the order of the Authorised Officer and remanded the matter to the Authorised Officer for fresh consideration. The land owner did not appear for enquiry on remand. Therefore, an order was passed under Section 9 (2)(b) of the Act on 30.08.1978, treating the trust as Public Charitable Trust. An appeal was filed before the Land Tribunal, Thanjavur against such order in LTCMA No. 146 of 1980 which came to be dismissed on 27.11.1981. The Trust filed a Revision before this Court in CRP No. 2306 of 1985 which was subsequently transferred to Tamil Nadu Land Reforms Special Appellate Tribunal. The Special Appellate Tribunal, in TRP No. 148 of 1991, by order dated 16.10.1992 remanded the matter to the Authorised Officer with a direction to conduct a detailed enquiry, after giving an opportunity to the petitioner Trust to produce oral and documentary evidence and to decide the nature of the Trust. As per the direction, notices were issued by the Authorised Officer to the Trustee of the Welfare Fund Trust and an enquiry was conducted. After giving sufficient opportunity and based on the documents produced, an order was passed on 07.10.1997 under Section 9(2)(b) of the Act. This order was challenged by the land owner by filing an appeal in LTC RA/39/97 which was dismissed by an order dated 30/10/1998. This order is the subject matter of SRP No. 21 of 1999.
6. The factual background in SRP No. 26 of 1999 is that an extent of 30 standard acres was allowed to be retained by the Family Trust as on 06.04.1960. A notice in Form No. 2 was issued to the Family Trust and was asked to submit their objections on or before 25.05.1982, furnishing the particulars of the land, held by the Trust as on 01.03.1972. The Trust did not file their Form 2 return as directed and hence notice in Form No. 4 was issued with a statement showing the total extent of lands held by them as on 01.03.1972 and called upon them to file objections on or before 20.10.1982. The 2nd respondent herein posted the enquiry to 25.10.1982 which was adjourned to 27.12.1992. The representative of the petitioner appeared on the adjourned date and requested three months time for production of their records. Subsequently, the Trust was called upon to produce the original Trust Deed and notices were issued to appear for enquiry before the Authorized Officer. Though the representatives of the Trust appeared for enquiry, the document was not produced. The Authorised Officer declared that the Trust is of charitable nature and as per Section 5(d)(i) of the Act, it is eligible to hold 5 standard acres and accordingly passed order dated 29.09.1998 under Section 9(2)(b) of the Act. Aggrieved by the said order, the Trust filed an appeal in LTCMA No. 29 of 1998 before the Land Tribunal, Chennai, which was dismissed on 30.04.1999. This order is the subject matter of SRP No. 26 of 1999.
7. Based on the above facts, the Special Appellate Tribunal framed the following question for consideration:
"Whether the petitioner in SRP. 21/99 viz. Sowcar Gopaldas Dwarakadas Welfare Fund Family Trust and the petitioner in SRP. 26/99 viz. Sowcar Gopaldas Dwarakadas Private Family Trust are private trusts as defined in Section 3(36-A) of the Act or whether both the petitioner-trusts are public trusts as mentioned in Section 3(36-AAA) of the Act".
8. On the above question, the Tribunal by common order dated 17.07.2000 held that both the Trusts are public Trusts, as such they are not entitled to any relief and both the revision petitions were dismissed. The correctness of the decision of the Special Appellate Tribunal is assailed before this court in the above writ petitions.
9. Mr. K.C. Rajappa, learned counsel for the petitioner would submit that the impugned order calls for interference by this court on the following grounds:
(a). The Special Appellate Tribunal committed a patent error in mixing up the definition of 'Private Trust' in Section 3(36A) of the Act. The said definition of 'Private Trust' is in two parts. The main section defines a 'Private Trust' under which the beneficiaries are persons, who are ascertained or capable of being ascertained. Section 3(36A), deals with a public trust and provides that "where the income of such public trust is substantially appropriated for the benefit of the founder or his heirs or the family of the founder or his heirs, such trust shall be deemed to be private trust." It is stated that the Tribunal, instead of examining the applicability of the main definition, wrongly confined whether the petitioner as a public trust, could be deemed to be a private trust.
(b). That the Tribunal committed error which is apparent on the face of the record that, the agreement among the members of the petitioner's family dated 05.06.1955 being an unregistered agreement, the sanction or permission of this Honourable Court ought to have been obtained before modifying the terms of the Scheme Decree. The said agreement dated 05.06.1955 was a result of a consensus reached among the members of the family and the same would be valid in the eye of law. Further, the said agreement dated 05.06.1955 has been given effect to and acted upon by the members of the petitioner's family for more than four decades and cannot be called in question in the Land Ceiling proceedings.
(c). The observation of the 1st respondent is that there is a discrepancy in the number of families branching out since the creation of the private trust is wrong and unfounded. The Tribunal acted in excess of jurisdiction in putting certain statements made by the previous learned counsel for the Managing Trustee against the interest of the petitioner in order to negative the contention of the petitioner as a private trust.
(d). The Tribunal committed a palpable error in the impugned order dated 17.07.2000 by giving a finding that the petitioner ought to have moved the court under
Section 59 of the Trust Act 1882 before embarking on modification of the Trust by the agreement dated 05.06.1955.
10. Per contra, Mrs. Malarvizhi Udayakumar, learned Special Government Pleader, appearing for the respondents would submit that the impugned order calls for no interference since the Tribunal has gone into the oral and documentary evidence placed on record and come to a conclusion that the trusts are the "public trust" and those factual findings cannot be re-appreciated in a proceeding under
Article 226 of Constitution of India, especially when the reasoning is cogent and based on the documents; that the claim made by the petitioner is that it is a public trust only for the purpose of getting over rigour of the Act. The Managing Trustee of the petitioner / Trust had, in fact, given a declaration to the effect that it is a public trust. The scheme decree passed by the Civil Court cannot be set aside by an unregistered instrument where all the parties of the scheme decree were signatories.
11. We have carefully considered the submissions made by the learned counsel appearing on either side and perused the materials available on record.
12. The question which arises for consideration in the above Writ Petitions, is that whether the two trusts in question are Private Trust or Public Trusts. For deciding this question, it is necessary to refer to certain provisions of the Act for the purpose of appreciating the respective contention of the Acts:
i)Section 3(36-A):
"Private trust" includes a trust under which the beneficiaries are persons who are ascertained or capable of being ascertained.
Explanation: Notwithstanding anything contained in this Act, for the purpose of this clause, where the income from a public trust is substantially appropriated for the benefit of the founder of the trust or his heirs or of the family of the founder or of his heirs, such trust shall be deemed to be a private trust notwithstanding the terms of the trust."
ii) Section 3(36-AAA):
"Public Trust" means a trust for a public purpose of religioius, charitable or of an education nature."
iii) Section 5(1)(a):
"The ceiling area in the case of every person other than the institutions referred to in Clauses (c) and (d) shall be 15 standard acres.
Section 3(34) states that "person" includes any private trust or public trust and so according to the definition in
Section 3(34) read with
Section 5(1)(a) of the Act, a private trust can hold 15 standard acres."
iv) Section 5(d)(i):
"The ceiling area in the case of a public trust of a charitable nature in existence on the date of the commencement of this Act (other than such trusts under which the institutions referred to in clause (c)(i) are the beneficiaries) shall be 5 (five) standards acres; provided that such extent of land is held by such trust on the date of commencement of this Act."
v) Section 5(3-A)(i):
"For the purposes of this Act, the land owned by a private trust shall be deemed to be the land owned by the beneficiaries under the private trust and each such beneficiary shall be deemed to be the owner of the land to the extent of the share of his beneficial interest in the said trust."
Therefore, in terms of the above provisions, it is to be seen that where the income from a public trust is substantially appropriated for the benefit of the founder or his heirs or the family of the founder or his heirs, and such trust shall be deemed to be private trust. On the other hand, public trust is a trust established for the purpose of religious charity or of educational nature. The ceiling area in respect of the private and public trusts are mentioned in Section 5(1)(a) and
Section 5(d)(i) respectively. To decide the matter in controversy, it is necessary to look into the facts of the case. The Managing Trustee of Welfare Fund Family Trust filed a statement before the Authorised Officer on 14.12.1973 wherein the Managing Trustee has stated that the trust is a religious trust of a public nature since a portion of income is utilized for the pooja in Samayapuram Mariamman Kovil in the month of Purattasi and since another portion of the income is utilized for the daily pooja of Sri Balaji and Sahasranama Archana to the said deity called Keela Veettu Pooja. Therefore, the Managing Trustee requested that further proceedings initiated under Act may be dropped. After a lapse of around 6 years, another petition was filed before the Authorized Officer by the trust, on 04.06.1979, stating that the trust in SRP No. 21 of 1999, the Welfare Fund Family Trust, is a private trust. The said statement is signed by the Managing Trustee as well as the learned counsel appearing for the trust. In the said petition, it has been stated that the Trust is a private trust, the beneficiaries are only the members of 16 Trustee's families, the number of beneficiaries are well defined and it is not a public trust to attract the provision of the Act 37 of 1972 and therefore the private trust is entitled to hold 15 standard acres and is requested to revise the order dated 30.08.1978.
13. The Authorized Officer, by a memo dated 28.01.1992 called upon the land owner to produce the Trust Deed of the above Trust. In response to the said memo, learned counsel for the Trust, by a reply on 28.01.1992 said that there is no Trust Deed that can now be traced and the Trust is governed by the Scheme framed by this Court in C.S. No. 721 of 1923, if the same is required, 8 weeks time may be granted as the document has to be traced. Therefore, it was admitted that no Trust deed was available and the Trust was governed by a Scheme in C.S. No. 721 of 1923. The Tribunal perused the copy of the scheme Decree and observed that there are only 3 plaintiffs and 5 defendants and nowhere in the Scheme Decree in C.S. No. 721 of 1923, it is stated that the beneficiaries of the petitioner/Trust in SRP No. 21 of 1999 are members of 16 trustee families. In fact, the Tribunal extracted relevant portions of the Scheme Decree dated 17.02.1925. The Tribunal analyzed the evidence on record i.e. the Scheme Decree and the statement given before the Authorized Officer. On perusal of the statement given by the Managing Trustee before the Authorised Officer on 08.06.1978, no family has claimed that the income of the Trust properties is utilised for their sustenance or for means of support or livelihood, and instead the income from the trust properties was being spent towards daily pooja, festival expenses and other administrative work and in the statement given by the Managing Trustee on 08.06.1979, there was no reference to the beneficiaries of this trust. Further, there is no whisper among beneficiaries and the share of the beneficiaries in the trust property is not ascertained.
14. Presumably, to get over such factual hurdle, an unregistered agreement dated 05.06.1955 entered into by the male descendants of the Trust was produced before the Officer. The Tribunal, after elaborately going through the terms and conditions of the agreement, held that it is an unregistered agreement which was executed after the passing of the Scheme Decree and therefore, it is not valid. Even if it is assumed that this unregistered agreement is valid, on facts, the Tribunal held that the unregistered agreement has not mentioned about the beneficiaries of the trust who can be identified and nothing has been stated about the share of the beneficiaries with the Trust and accordingly, on facts, the Tribunal came to a conclusion that two trusts are only public trusts and not a private trust.
15. Further, it is to be noted that in the statement given by the Managing Trustee in an enquiry held on 01.03.1972, it has been stated that the Trust is religious trust and the income from the trust properties are fully utilized for religious matters. This statement was not objected at any point of time. Therefore, the Tribunal held against the petitioner / Trust.
16. Learned counsel for the petitioner Mr. K.C. Rajappa, by relying on a decision of the Division Bench reported in 1970 Vol.II MLJ Pg. 555 (K.M. Senthilvel Pillai and Kkulandaivel Pillai) contended that if all the members agree to put an end to the trust and share the properties among themselves, the same was permissible and by consensus of members of the private trust, they can modify the terms and conditions of the Trust to suit their convenience. The question which arose before the Honourable Division Bench in the above judgment was whether the Trust created by one Ammani Ammal was valid and whether it was put to an end, but not in the manner stated by the 1st defendant therein. In fact, the Honourable Division Bench held that there appears to be no room for doubt that the dedication in the said case, if it can be called such, was in the nature of a private trust and that position is not seriously controverted by the plaintiff/appellant therein. Thereafter, the Honourable Division Bench proceeded to analyze the broad distinction between the public and private trusts and held that public trusts are trusts constituted for the benefit of either the public at large or of some considerable part of it answering to a public description, while private trusts are trusts wherein the beneficial interest is vested absolutely in one or more individuals who are or who may be definitely ascertained. Therefore, we find that the decision in the case of "K.M. Senthil Pillai Vs. Kulandaivel Pillai" cannot be made applicable to the facts of the present case and it does not advance the case of the petitioner.
17. Learned counsel for the petitioner also placed reliance on a judgment in "Commissioner of Income Tax V. Kamla Town Trust (1996 Vol.217 ITR, Pg.699" wherein, the Honourable Supreme Court was considering the case of Kamla Town Trust as to whether they were entitled to exemption from the payment of income tax as per the provisions of
Section 4(3)(i) of the Indian Income-tax Act, 1922 and under
Section 11(1)(a) r/w
Section 256(1) of the Income tax Act 1961.One of the questions which are framed for consideration was whether on the facts and in the circumstances of the case, the Income-tax Officer was entitled to go beyond the civil court decree and adjudge the validity of the rectification. While deciding that question, the Honourable Supreme Court, considering the facts and circumstances on the said case held that the rectified Trust Deed of 1995 did create a public charitable trust as held by the High Court.
18. As noted above, in the case on hand, the petitioner has miserably failed to establish that the trust would fall within the definition of 3(36A) of the Act as there was no evidence on record to establish that income from the trust is substantially appropriated for the benefit of the founder or their heirs or their families. Further, there was no evidence to show that there was group of identified beneficiaries. Hence, we are of the view that the above referred judgement in "Commissioner of Income Tax V. Kamla Town Trust (1996 Vol.217 ITR, would not render any assistance to the case on hand.
19. A Division Bench of this court in "V. Krishnakumari Vs. Authorised Officer (2002) LW 134 Pg. 813, while considering the order passed by the Special Tribunal, has held that the fiction, which was created by Section 5(3-A) of the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, is only in order to see that the beneficiaries do not defeat the provisions of the Act and its main objectives. Under this Section, if the lands are owned by a private trust and are being enjoyed by the beneficiaries, then, fictionally it is deemed that the lands are owned by those beneficiaries, thereby the beneficiaries are made liable to file the returns. It was further held that the deeming fiction was created so that the beneficiaries do not take undue advantage by dividing the whole lands of the deity into small pockets and thereby claim the lands to be under the ceiling limit. The Scheme of the Section is that if the lands are actually owned by the private trust, even then, they will be deemed to be lands of the beneficiaries, thereby the beneficiaries and such other persons who are enjoying the benefit of the land should file their returns and face the proceedings.
20. The Hon'ble Supreme Court in (1979) 3 Supreme Court Cases 466 (AUTHORISED OFFICER, THANJAVUR AND ANOTHER Vs. S.NAGANATHA AYYAR AND OTHERS) was considering the scope and construction of 1961 Act. The Hon'ble Supreme Court in the following paragraphs has held as follows:
"7. When a whole legislation is geared to deprivation of property, subject to payment of compensation, rules which have frowned upon confiscatory legislation cannot apply at all. We are concerned with a Republic created by the people of India, with a social transformation where the State is not antagonistic to the citizen but harmonises individual interest with community good. The jurispridential principles in such a situation cannot be the same as have been inherited from a culture which postulates the State versus the subject. We do not explore the aspect of the law further as we are satisfied that the answer to the specific question raised before us flows directly from a reading of the Section in the light of well-established rules of interpretation.
14.Moreover, when the whole purpose of the section is to prevent any alienation which defeats any of the provisions of the Act, it is impermissible to introduce any requirement, other than is mentioned in the Section, as a condition for its operation. Obviously, the provision seeks to provide social justice for the landless and it defeats the purpose if, by the interpretative process, soft justice to large landholders is brought about. We consider the 'literal' meaning of the section to be that any transfer of other alienation mentioned in the section which reduces or impairs the otherwise available extent of surplus land beyond the ceiling "defeats ..... the provisions of this Act." This is the plain meaning of the Section which give no room for doubt or justification for importation of any further condition like sham, bogus, etc.
16.In the interpretation of
Section 22 we too are Portia me. For this reason we reverse the view of the High Court that
Section 22 will not apply nullify any transaction of transfer or partition unless it is further shown that it is sham, nominal or bogus. Nor do we agree with Shree Ramamurthi that even if a transaction defeats the ceiling provisions, it may still be valid if the transfer is, from an individual point of view bona fide. The short reply is that from the community's angel, especially the landless community's angle hungering for allotment, the alienation, however necessary for the individual, is not bona fide vis-a-vis the community."
21. This Court in A. Venkataswami Naidu Vs. The State of Tamil Nadu and others, reported in (1973)(I) MLJ 410, while considering the scope of recitals in a Trust Deed to determine whether the Trust was "Public" or "Private" held as follows:
"7. According to the trust deed, dated 13th September, 1956, the petitioner has clearly endowed the properties for the purpose of performance of certain charities. The predominant intention and purpose of creating the trust is only to perform the charities which the petitioner's ancestors were doing prior thereto. Incidental honours which the trustee gets by reason of such performance of charities cannot be construed as the purpose for which the trust was created. The main intention of the founder of the trust is to do certain mandagapadis to feed the bakthas who collect there. Both in the A schedule dharmam, and the B Schedule dharmam, mentioned in the deed of trust, the main object is to perform necessary mandagapadis to do deities mentioned there and also to the charity with the residual funds."
"8. Thus it is clear that the main purpose of the trust is only a public purpose of a religious and charitable nature. If it is a public purpose of a religious and charitable nature, the exemption granted under
Section 73 will squarely apply."
"11. For construction of a trust deed as a deed for public purpose of a religious or charitable nature, it is not necessary to take into account certain immaterial recitals in the deed which confer benefits to the trustee or members of his family. For this position, Thiru S.V. Jayaraman, the learned Counsel for the petitioner, cited the decision in Nirmala Bala V. Balai Chand, wherein the Supreme Court has held that provision for maintenance and residence of the shebaits is an ordinary incident of such a dedication and could not therefore be interpreted as restrictive of the estate of the deity and that the deed consequently created an endowment for the benefit of the deity absolutely but subject to certain charges in favour of the shebaits and the descendants of the settlor."
"14. The description that it is a 'private' trust and that the Hindu Religious and Charitable Endowments Board has no voice in the trust and like recitals in a trust deed cannot give it the character of a 'private' or 'public' trust to the trust created. It is the duty of the Court to read the recitals in the deed of trust and spell out the intention of the founder of the trust for the purpose for which it is created."
22. As could be seen from the facts of the case on hand, the Tribunal went into the factual aspects and found that there is absolutely no material to establish that the trust in question was a private trust as there were no specified beneficiaries, who would be entitled to enjoy the benefits as mentioned in the deed of trust.
23. The Honourable Supreme Court in Valivalam Desikar Chatram Trust Vs. Assistant Commissioner (Land Reforms) (2000) 9 Supreme Court Cases 374 was considering the effect of corrigendum appended to the trust deed after the 3rd amendment to the Land Reforms Act. The Honourable Supreme Court held as follows:
"1. The Tamil Nadu Land Reforms Special Appellate Tribunal constituted under Section 77-C of the Tamil Nadu Reforms (Fixation of Ceiling on Land) Act categorically held that the Trust in question was not a public religious trust as defined under
Section 2 of the Act as on 01.03.1972 on which date the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) (Third Amendment) Act came into force.
2. The Tamil Nadu Land Reforms Special Appellate Tribunal looked into the oral and documentary evidence and considered the statement of the Manager of the Trust recorded by the Land Tribunal. The Manager had stated that there were no entries in the records of the Trust to show that the paddy grown by it was being used for the performance of the puja or for other religious purposes. The account-books maintained by the Trust for the period from 1.4.1986 to 31.3.1989, and for the period from 1985-86 to 1988-89 as also from 1989-90 to 1991-92 were examined. It was thereafter held that there was no evidence to prove that the income was being spent on charity or that the trust in question was a public religious trust.
3. The corringendum appended to the deed of trust was executed on 1.7.1981 in which the charities for which the income of the Trust was to be utilized were specified. This was done after the third amendment to the Act which came into force in 1972. The corrigendum cannot, therefore, be taken note of particularly in view of the finding of fact recorded by the Tribunal that no part of the income of the Trust was used for charities.
4. The appeals are, therefore, dismissed."
24. In view of the above, we find that the trusts in question are the "Public Trusts" and the Tribunal, after analyzing the factual and legal contention, has rightly come to a conclusion and dismissed both the petitions. We, therefore, see no reason to interfere with the order passed by the Tribunal. Accordingly, these writ petitions are dismissed. Consequently, connected miscellaneous petitions are closed. However, there will be no order as to costs.
ar To
1.The Tamil Nadu Land Reforms Special Appellate Tribunal Santhome High Road, Chennai 600 004.
2.Assistant Commissioner of Land Reforms (Authorised Officer) Land Reforms Trichy