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Kanyakaparameswari Varthaka Sangham Vs. Commissioner of Endowments, Andhra Pradesh, Hydrabad and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtAndhra Pradesh High Court
Decided On
Case NumberLetter Patent Appeal No. 11 of 1977
Judge
Reported inAIR1979AP173
ActsA.P. Charitable and Hindu Religious Institutions and Endowments Act, 1966 - Sections 2(3), 2(4), 77 and 78; A. P. General Clauses Act, 1891 - Sections 3(22)
AppellantKanyakaparameswari Varthaka Sangham
RespondentCommissioner of Endowments, Andhra Pradesh, Hydrabad and ors.
Appellant AdvocateP. Babulu Reddy, Adv.
Respondent AdvocateGovt. Pleader
Excerpt:
.....- charitable institution - sections 2 (3), 2 (4), 38, 77 and 78 of a.p. charitable and hindu religious institutions and endowments act, 1966 and section 3 (22) of a.p. general clauses act, 1891 - assistant commissioner of endowment issued notice to appellant to register 'sathram' as charitable institution under section 38 - contended that charitable objects were specified in memorandum of association - objects of association could be altered at any time - 'sathram' not solely dedicated to charitable activities - no evidence found to establish that 'sathram' was charitable endowment - held, 'sathram' not charitable institution and cannot be registered as one. - - one other circumstance which requires to be noticed is that the varthaka sangham is a society registered under the..........before the deputy commissioner of endowments, under section 77 of the charitable and hindu religious institutions and endowments act far a declaration that the pavaram in west godavari district run by the appellant accretion was not a charitable institution within the meaning of section 2(4) of the ad. the petition under section 77 was itself necessitated by the fact that the assistant commissioner of endowments had issued 4 notice to the appellant to register the sathram as a charitable institution under the provisions of section 38 of the charitable and hindu religious institutions and endowments act. alleging that the building known as 'sathram was constructed by the appellant, sangham, a society registered under the societies registration act, that the ownership of we.....
Judgment:

Chinnappa Reddy, J.

1. The Kanyaka Parameswari Varthaka Sangham. Ganapavaram is the appellant before us. This appeal under C1. 15 of the Letters Patent has its roots in a petition died by the Appellant, before the Deputy Commissioner of Endowments, under Section 77 of the Charitable and Hindu Religious Institutions and Endowments Act far a declaration that the pavaram in west Godavari District run by the appellant Accretion was not a charitable institution within the meaning of Section 2(4) of the Ad. The petition under Section 77 was itself necessitated by the fact that the Assistant Commissioner of endowments had issued 4 notice to the appellant to register the Sathram as a Charitable institution under the provisions of Section 38 of the Charitable and Hindu Religious Institutions and Endowments Act. alleging that the building known as 'Sathram was constructed by the Appellant, Sangham, a Society registered under the Societies Registration Act, that the ownership of We building was always. and continued to be with the Sangham. that there was never any dedication or divestiture, that though part of the building was used for the purpose of lodging travelers pursuant to a resolution of the Sangham the public had no right to so use the budding, that it was open to the Sangbam to divert the building for some ether propose pt any time and that the building was not a charitable institution, the appellant sought the declaration already mentored before the Deputy Commissioner of Endowments, Kakinada. The Assistant Commissioner of Endowments, Eluru was impleaded as a party in the proceedings under Section 77 before the Deputy Commissioner of Endowments, The Deputy Commissioner, after considering the memorandum of Association of the Sangham and its bye-laws, came to the conclusion that the building was never endowed and was never used by the public as of right and that merely because a portion of the building was let out for convenience by passengers, it did not become a charitable institution. The Deputy Cmnmissioner, therefore, declared that the institution run by the appellant was not a charitable institution. Purporting to be aggrieved by the decision of the Deputy Commissioner, the Commissioner of Endowments and the Assistant Commissioner of Endowments filed the suit out of which the appeal arises under Section 78 of the Andhra Pradesh Charitable and Hindu Religious institutions and Endowments Act 'to set aside the order of the Deputy Commissioner. Endowments Department, Kakinada passed in O. A. No. 50/1969 dated 22-11-1969 on the ground that the 1st defendant and its properties are charitable institutions or endowments coming under the purview or Act 17 of 1966'.

2. It will be noticed at once that while the petition under S. 77 and the order of the Deputy Commissioner concerned themselves with the question whether the building known as 'Sathram' was a Charitable Institution, the relief sought in the suit, though mentioning that the suit was to set aside the order of the Deputy Commissioner. was, in fact, of much wider amplitude, involving the appellant-Sangham itself end not merely the Sathram run by it. The relief sought was that the Sangham itself should be declared a charitable institution

3. The suit was resisted by the Sangham. It was contended in the written statement that the Scheme was established for the benefit of its members primarily to install the spirit of mutual help among its members, all of whom were to be drawn from the merchant community under its bye-laws. The members had to pay their subscription by way of Rsums which were compulsory exaction's and not donations as appeared to have been understood by the plaintiffs. The charitable objects of the Sangham mentioned in its bye-laws were secondary in nature. The properties acquired by the Sangham were Its exclusive properties and were never dedicated as endowments. The building described as Sathram was the absolute property of the Sangham. A pert of the Building was used to lodge wayfarers for rent. It was open to the Sangham to alter its bye-laws at any time and divert the purpose even in respect of the portion of the building which was used to lodge wayfarers. Neither the Sangham nor the Sathram was a charitable institution. It was also pleaded in the written statement that the Commissioner of Endowments and the Assistant Commissioner of Endowments were not competent to maintain the suit under S. 78 of the Act as they could not be described as aggrieved parties,

4. The two issues on which the suit proceeded to trial were whether the order of the Deputy Commissioner was liable to be set aside and whether the suit was maintainable. The learned District Judge held that the suit was maintainable and the Sathram was charitable endowment within the rneaning of section 2(3) of the Charitable end Hindu Religious and institutions Endowments Act. According to the learned District Judge, the site on which the choultry was constructed had been gifted to the Sangham by the Zamindar of Vuyyur for the purpose of construction of the choultry and there could therefore be no difficulty in concluding that the building was a charitable endowment He,therefore, decreed the suit

5. The Sangham preferred an appeal to the High Court. Jeevan Reddy, J.. by his judgment dated 27-10-1976 confirmed the decree of the trial court, but he rested his decision on grounds different from those on which the District Judge had rested his judgment. Jeevan Reddy J., held that the Sangham it self was a charitable institution and that all properties owned by it including the Sachram were necessary charitable endowments. The Sangham has preferred this appeal under Cl. 15 of the Letters Patent.

6. Sri P Babulu Reddy, learned counsel for the appellant argued that the dominant object of the Varthaka Sangham was to render assistance to its members all of whom were merchants, in various ways. Merely because certain charitable objects were also specified in the Memorandum of Association and the bye-laws of the Sangham it did not follow, on that account alone, that the Sangham was a charitable institution. He pointed out that the objects of the Association could be altered at any time and the use to which its properties were put could also be changed. No property of the Sangham had even been dedicated nor was there ever any divestiture of ownership or control. Neither the Varthaka Sangham nor the Sathram was a charitable institution or endowment. It we. also argued that the Commissioner and the Assistant Commissioner had suffered no legal injury end therefore neither of them could properly be described as a person aggrieved within the meaning of the expression in Section 78 of the Act. it was argued that they were not even 'persons'. They were mere authorities constituted under the Act.

7. The appellant-Verthaka Sangham is an association of Merchants, akin to a chamber of commerce. According to the bye-laws the persons who an eligible to be members of the Sangham or Association are persons carrying on business. The Memorandum of Association states that the Association is intended 'to create a close union among the business community and other people and to create and develop the economic rural and business interests', Amongst the objects of the Association are mentioned various charitable objects, such as the starting of a library for the use of the members and the public, the opening of schools, dispensaries, hospitals, the award of scholarships, helping people who are victims of fire accidents, celebration of anniversaries of great men, etc. There are several non-charitable objects also mentioned in the memorandum of Association. They are: 'To represent the merchants in their dealings in trade and to help them in making representations regarding the inconvenience in business and to secure the necessary relief required In business', To examine the several bills relating to business and to make representation of the amendments necessary to the higher authorities and giving proper advice in business dealings to the members' 'to devise the new ways of business either inland or foreign and to create interest in such', ''to see that none of the members of the Association resort to unhealthy competition or black-marketing in their personal business activities and to take necessary steps against anyone who resorts to such things', 'to create and develop unity in business activities and to increase the strength of the Association and educate the members in adopting legal and useful ways for the people and the Government' 'to put the members in the view of all news publications in gazette or in papers regarding business', and 'to see end help in deciding by way of arbitration of all business disputes arising in business dealings amongst the several members of the wording committee of their Association. The Memorandum of Association also provides that in order to carry out the objects of the Association the necessary funds should be obtained by collecting Resumes from members, donations from members and public and rents for the properties of the association, etc.

8. The bye-laws of the Association provide that traders and persons carrying on business are eligible to the member of the Association, The working committee of the Association is given the power to admit members on their application end to collect fee for admission. Every member is required to pay monthly fee called a Resume calculated on the basis of the monthly sales of the members.

9. Every member is also required to submit a monthly sales statement to the Association Continuous default for period of three months entails loss of membership of the Association There are detailed bye-laws providing for the day to day conduct of the business of the Association It is provided that the main building of the Association should be given for occupation of wayfarers. No rent is to be charged for the first: three days and thereafter rent is to be charged at the writ of 25 paise per room per day for twelve days and 50 paise per day thereafter. Part of the building mad also be let out for purposes of marriage and other functions on payment of rent of Rs. 5/- per day plus current charges. Buildings to be constructed after the formation of the Association are to be let out for reasonable rent It may be mentioned here that number of shops have been constructed by the Association since its formation and they have been let out to various traders. It is also provided in the bye-laws that the Sales-tax to be paid by the members may be collected from time to time and remitted to the Government by the Association on behalf of the members. Finally it is expressly provided, 'the objects of this Association may be altered or new provisions made in accordance with Section 12 of the Societies Act'

10. It is patent from the Memorandum of the Association and the bylaws that the Varthalea Sangham is primarily meant to serve the needs to the merchant community and to promote their interests in various wars as set forth in the Memorandum of Association and the bye-laws. For example. the association is expected to make representations on behalf of the members about their grievances and to try to secure redress. The Association is expected to study the various legislation affecting business and trade and to suggest necessary amendments. The Association is expected to prevent unhealthy competition between its members. The Association is required to disseminate to its members information concerning business. It is required whenever necessary to arbitrate in disputes between the members. It is also expected to collect and pay Sales-tax an behalf of its members. These are the usual services which any Association of Merchants or chamber of Commerce may be expected or required to render to its members The appellant-Varthaka Sanghean is thus no more than the usual Association of Merchants formed to secure, advance and promote the commercial interests of the merchant community. It is true that certain charitable objects are also included in the objects in the appellant-Varthaka Sangham. The inclusion of such charitable objects does not alter the basic character of the Sangham which is that of an ordinary Association of merchants. The Merchants Association does not thereby become 'charitable institution'. A 'Charitable institution' is defined in the Charitable and Hindu Religious Institutions and endowments Act as meaning 'any establishment, undertaking, organization a association formed for a charitable purpose and includes a specific endowment', 'Charitable purpose' is defined as including ''(a)relief of poverty or distress; (b) education (c) medical relief; (d) advancement of any other object of utility or welfare to the general public or a section there of not being an object of exclusively religious nature' The definition of 'charitable institution' shows that the very formation of the Association must be for charitable purpose in order to make the Association a charitable institution In other words, the charitable purpose must be the sole a at least the dominate object of the Association before it can be called a charitable institution An Association formed for other purposes, but amongst whose objects are also some charitable purposes, is not a charitable institution since it is not formed for charitable purpose. An Association of merchants whose dominant purpose is to promote the commercial interests of the merchant community cannot be said to be a charitable institution merely because the Memorandum of Association also refers to certain charitable purposes amongst its objects. One other circumstance which requires to be noticed is that the Varthaka Sangham is a society registered under the Societies Registration Act and is entitled to change its objects at any time

While a change of the objects of the Sangham may not affect any trust which has already been created, the right to change the objects of the Association is clearly indicative of the fact the Association itself cannot be a 'charitable institution' within the meaning at the Charitable end Hindu Religious Institutions and Endowments Act, We are, therefore not inclined to agree with the conclusion of Jeevan Reddy, J, that the Varthaka Sangham is itself charitable institution.' The would also like to add that the notification issued by the Commissioner under S. 6 of the Act and the petition filed by the appellant before the Deputy Commissioner under S. 77 of the Act refer only to the building and not to the Varthaka Sangham The suit in so far as it sought a declaration that the Varthaka Sangham itself was a charitable institution was clearly wider in scope, than the proceeding u/s. 77. Since the suit was one to set aside the order under S. 77, it war not permissible for the plaintiffs to seek relief which went beyond the relief sought and granted in the proceeding under 8. 77 of the Act.

11. The next question for consideration is whether the Sathram is a charitable endowment within the meaning of the expression in the Charitable and Hindu Religious Institutions and Endowments Act. Jeevan Reddy, J., considered that It was a charitable endowment, because the Sangham itself was a charitable institution. We have held that the Sangham is not a charitable institution Therefore, that ground falls. The trial Court held that the portion of the building which was used for the purpose of accommodating wayfarers was a charitable endowment. The conclusion of the trial Court was based on the circumstances that the site on which the building was constructed was gifted to the Varthakta Sangham by the Zamindar of Vuyyuru for the purpose of constructing a choultry. According to the trial Court. by making a gift the Zamindar had divested himself of his ownership of the site and, therefore, the building constructed on the site became a charitable endowment It is difficult to follow the reasoning of the trial Court. assuming that the Zamindar of Vuyyuru had gifted the site to the Varthaka Sangham it did not follow that the building constructed on the site became a charitable endowment. The Varthaka Sangham was the owner of the site and the building. There cannot be an endearment unless there is an unequivocal divestiture of ownership and dedication. In the absence of a deed of dedication long user by the public as of right may lead to a presumption of such dedication in the case or an alleged endowment or recent origin there can be no such presumption. We do not think that the evidence in the case justifies any such presumption We are of the view that it has not been established that the Sathram is charitable endowment,

12. The last question for consideration is whether the Commissioner and the Assistant Commissioner of Endowments can be said to be 'persons aggrieved' by the order of the Deputy Commissioner under S. 77 of the Act so as to be competent to institute a suit under S.78 of the Act. Sri Babulu Reddy would say that the Commissioner and Assistant Commissioner were not 'persons' even but mere statutory authorities Now the word 'person' is defined In S. 3 (22) of the Andhra Pradesh General Clauses Act as follows:

' 'person' shall include any company or association or individuals, whether incorporated or not.'

The definition is an inclusive definition, not very helpful, but, useful to show that the expression includes natural as well as artificial persons and must receive an extended connotation. The meaning to be given to the word must naturally depend on the context and there is nothing in the Charitable and Hindu Religious Institutions and Endowment Act which compels us to give such a restricted meaning to the expression 'persons' as to exclude from its ambit persons entrusted with statutory duties. Nor are we inclined to accept the submission of Sri Babulu Reddy that the Commissioner and Assistant Commissioner are not 'persons aggrieved' because no legal right of theirs is infringed. Sri Babulu Reddy incited our attention to the decision of the Supreme Court in And Pheroz Shah Gandhi v. H. M. Seenrai, : [1971]1SCR863 where it was held that the Advocate-General of a State was not a 'person aggrieved' within the meaning of that expression in S. 37 of the Advocates Act and, therefore, incompetent to file an appeal against the decision of the disciplinary committee of a State Bat Council. Under the Advocates Act, the entertaining of complaints, the inquiry into them and the punishment to be meted out to the delinquent Advocate were all concerns of the Bar Council. The Advocate-General was entitled to a hearing it the complaint was not rejected summarily. All that he was expected to do was to render fair and impartial assistance to the Bar Council, assuming to himself neither the role of a prosecutor nor that of a defence counsel. He was not obliged to appear before the Bar Council unless he desired to be heard. If he appeared or if he did not appear, there was an end of the matter. He could have no grievance against whatever decision was rendered by the Bar Council. As we shall presently point out the position of a Commissioner and an Assistant Commissioner is altogether different from that of the Adv.-General under the Advocates Act. A reference was made by the Supreme Court to the statement of James L J., in re Sidebotham (1880) 14 Ch D 458 that 'a person aggrieved must be a man who has suffered a legal grievance, a men against whom a decision has been pronounced which has wrongfully deprived him of something or wrongfully refused him something or wrongfully affected his title to something', Hidayatullah, C. J. has pointed out that the definition was held in later cases to be not exhaustive and several other feelers of the phrase were pointed out. We do not think that this century old exposition of the meaning of the expression 'person aggrieved can properly be considered relevant when we are dealing with modern statutes which deal with situations which could have never been contemplated a century back. The proper way to consider the question is indicated in Halsbury's Laws of England, 3rd Edition, Vol. 25 where referring to the expression 'person aggrieved' it was said:

''The expression is nowhere defined and must be construed by reference to the context of the enactment in which it appears and all the circumstances.'

13. Now, let us examine the provision of the Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act. It is an Act to consolidate and amend the law relating to the administration and governance of Charitable and Hindu Religious Institutions and Endowments in the State of Andhra Pradesh. It applies to all public Charitable Institutions and Endowments other than Wakfs governed by the provisions of the Wakfs Act. The expressions 'charitable endowment', 'charitable institution'. 'charitable purpose', 'religions endowment', religious charity mutt'. 'temples are au defined Provision Is made for the appointment of a Commissioner, Deputy Commissioners and Assistant Commissioner. The Commissioner, it is said shall be a corporation sole and shall have perpetual succession and common seal and may file or be sued in his corporate name. Section 6 enjoins a duty upon the Commissioner to prepare separately end publish in the prescribed manner a list of all mutts charitable institutions and endowments, religious institutions and endowments with reference to their income. Section 8 of the Act vests in the Commissioner the general superintendent and control over the administration of all charitable and Hindu religious institutions and endowments. He is empowered to pass any order which may be deemed necessary to ensure the proper administration of such institutions and endearments. He is empowered to delegate certain functions to the Deputy Commissioner end certain other functions to the Asst. Comer Sec 12 empowers the Commr,. Dy. Command Assistant Commissioner to inspect any charitable religious institution or endowment, the properties, records, etc., belonging to such institution to satisfy themselves that the provisions of the Act end the rules are duly carried out. The Board of Trustees for Charitable or Religious Institutions or Endowments are required to be appointed by the Government in some cases and by the Commissioner, the Deputy Commissioner and the Assistant Commissioner in certain other cases The Commissioner, Deputy Commissioner or the assistant Commissioner, as the case may be, is empowered to require the trustees to furnish far inspection books, accounts, returns, etc. The trustees of all charitable or religious Institutions or endowments are required to obey all lawful orders issued under the provisions of the Act by the Commissioner, Deputy Commissioner, Assistant Commr., as the can may be. The trustees are required to submit proposals for fixing the Dittam to the Commissioner, Deputy Commissioner or Assistant Commissioner, as the case may be Trustees may be removed or dismissed by the Government in some cases and by the Commissioner, Deputy Commissioner and Assistant Commissioner in certain other cases. The Government and the Commissioner am also empowered to appoint Executive Officer for charitable or religious institutions end endowments. The power to punish office holders of institutions and endowments is given to the Commissioner, Deputy Commissioner and Assistant Commissioner. Section 38 requires the trustee of every charitable religious institution or endowment to make an application ha registration to the Assistant Commissioner. If no application is presented for registration, the Commissioner is empowered to hew the institution or endowment compulsorily registered The budget has to be submitted by the trustee to the Commissioner, Deputy Commissioner or the Assistant Commissioner, as the case may be. Every charitable or religious institution or endowment whose annual income is not less than Rs. 1,000/- is liable to pay contribution to the Government. The contribution is required to be assessed by the Comrm. These are only some of the provisions dealing with the powers and duties of the Conmr., Dy. Commr. and Asstt. Commr. under the Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act. These provisions indicate the wide range or powers and dudes required to be performed by the Commissioner and the Assistant Commissioner. It is evident that they have vital roles to play in the administration of charitable or religious institutions and endowments; they are not mere non-combatant. disinterested spectators, ready to offer advice, they are persons charged with the proper administration of charitable or religious institutions and endowments, The very applicability of the provisions of the Act are dependent on the action taken by them The Commissioner is required to prepare a list of all charitable or religious institutions and endowments while the Assistant Commissioner is required to register all such institutions and: endowments. They are, therefore, persons who have a vital Interest in any dispute as to the question whether an institution or an endowment is a charitable institution or an endowment, etc. which disputes are required to be decided by the Deputy Commissioner under S. 77 of the Act. In our opinion, having regard to the basic role which the Government and the Assistant Commr. play in the proper administration of charitable or religious institutions and endowments, they are personal aggrieved' with in the meaning of the expression in S. 78 of the Act. We therefore, hold that the suit was maintainable at the instance of the Commissioner and the Assistant Commissioner, though for the reasons already mentioned by us, we allow the appeal and dismiss the suit There will be no order as to costs either here or in any of court below.

14. Appeal allowed.


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