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Bipinchandra Purshottamdas Patel and ors. Vs. Jashwant Lalbhai Naik and anr. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtGujarat High Court
Decided On
Case NumberFirst Appeal No. 90 of 1973 and C.A. No. 1138 of 1973
Judge
Reported inAIR1974Guj129; (1974)0GLR411
ActsBombay Public Trusts Act, 1950 - Sections 50-A
AppellantBipinchandra Purshottamdas Patel and ors.
RespondentJashwant Lalbhai Naik and anr.
Advocates: I.M. Nanavati in F.A. No. 90 of 1973,; H.B. Shah,; N.R.
Cases ReferredBombay v. The Municipality of Taloda
Excerpt:
trust and societies - management - section 50-a of bombay public trusts act, 1950 - petition challenging framing of scheme for trust - charity commissioner framed scheme on account of mismanagement of trust - such decision arrived at on basis of material on record and after giving opportunity to trustees - impugned order does not require interference. - - (1) notwithstanding anything contained -in section 50, where the charity commissioner has reason to believe that, in the interest of the proper management or administration of a public trust, a scheme should be- settled for -it, or where two or more persons having interest in a public-trust make an application to him in writing in the prescribed manner that, in the interest of the pro-,per management or administration of a public.....1. first appeal no. 90 of 1973 has been filed by the appellants who were, along with respondent no. 1, trustees of the trust known as 'shri sanskar bharti trust', which was registered under the bombay public trusts act, 1950 (which will be hereinafter referred to as 'the act'), against the order passed by the learned district judge, bulsar at navsari, in civil miscellaneous application no. 23 of 1969, filed by them under section 72 of the act against the order passed by the learned charity commissioner in suo motu scheme proceeding no. 311 of 1966 framing the scheme for the trust in question. the learned district judge has dismissed the aforesaid civil application filed by the appellants under section 72 of the act. respondent no. 2 is the charity commissioner.2-3. * * * 4. mr. i. m......
Judgment:

1. First Appeal No. 90 of 1973 has been filed by the appellants who were, along with respondent No. 1, trustees of the trust known as 'Shri Sanskar Bharti Trust', which was registered under the Bombay Public Trusts Act, 1950 (which will be hereinafter referred to as 'the Act'), against the order passed by the learned District Judge, Bulsar at Navsari, in Civil Miscellaneous Application No. 23 of 1969, filed by them under Section 72 of the Act against the order passed by the learned Charity Commissioner in suo motu scheme proceeding No. 311 of 1966 framing the scheme for the trust in question. The learned District Judge has dismissed the aforesaid civil application filed by the appellants under Section 72 of the Act. Respondent No. 2 is the Charity Commissioner.

2-3. * * *

4. Mr. I. M. Nanavati, appearing for the appellants, made the following submissions.

(1) On a true interpretation of Section 50A of the Act, the Charity Commissioner has jurisdiction to frame a scheme only in a case where a trust exists but there is no scheme for its administration.

(2) Even if the -power under Section 50-A of the Act can be exercised despite a scheme being in existence for administration or management in the instrument of trust, no additional trustees can be, appointed by the Charity Commissioner under Section 50-A of the Act.

(3) If Section 50-A of the Act is construed to be a parallel provision of Section 50A of the Act, then inquiry must be held as a judicial inquiry and no statements recorded behind the back of the party and not disclosed to him and not allowed to be tested by cross-examination can form the basis of either an order-initiating inquiry under Section 50-A of the Act or framing a scheme under Section 50-A of the Act, where it involves appointment of new trustees or a removal of a trustee.

(4) In the instant case, judicial inquiry has not been held, either at the stage prior to actual initiation of the proceedings under Section 50-A of the Act, or in the course of the proceedings under Section 50-A of the Act.

Mr. Nanavati has also alternatively made .a few submissions in regard to -particular clauses of the scheme, Ex. 123, framed by the Charity Commissioner.

5. Section 50-A of the Act reads:

'(1) Notwithstanding anything contained -in Section 50, where the Charity Commissioner has reason to believe that, in the interest of the proper management or administration of a public trust, a scheme should be- settled for -it, or where two or more persons having interest in a public-trust make an application to him in writing in the prescribed manner that, in the interest of the pro-, per management or administration of a public trust, a scheme should be settled for it, the Charity Commissioner may, if, after giving the trustees of such trust due opportunity to be heard, he is satisfied that it is necessary or expedient so to do, frame a scheme for the management or administration of such public trustee.

(2) Where the Charity Commissioner is of opinion that in the interest of the proper management of administration, two or more public trusts may be amalgamated by framing a common scheme for the same, he may, after: -

(a) publishing a notice in the Official Gazette and also in at least two newspapers (one in English, and the other in the language of the region) with a wide circulation in the region in which the trust is registered, and

(b) giving the trustees of such trusts and all other interested persons due opportunity to be heard, frame a common scheme for the same.

(2-A) A scheme under this section may provide for the number of trustees, the mode of appointment of trustees including the appointment of the first trustees, vesting of the trust property in the trustees so appointed, mode of filling any vacancy of a trustee, the remuneration of a trustee or manager of the public trust and where necessary, a clarification of the objects of the public trust.

(3) The Charity Commissioner may at any time, after hearing the trustees, modify the scheme framed by him under sub-section (1) or sub-section (2).

(4) The scheme framed under subsection (1) or sub-section (2) or modified under sub-section (3) shall, subject to the decision of the competent Court under Section 72, have effect as a scheme settled or altered, as the case may be under a decree of a Court under Section 50.'

There is a no-obstante clause . It is , therefore, evident that in spite of the provisions of Section 50A of the Act, the Charity Commissioner has got overriding powers. Sub-section (1) of Section 50-A of the Act in which that non obstante clause is found, clearly indicates that the Charity Commissioner has been empowered by the legislature to frame a scheme for the management or administration of such public trust, if he is satisfied that it is necessary or expedient so to do. He himself has been empowered to initiate proceedings if he has reason to believe that in the interest of a proper management or administration of a public trust, a scheme should be settled for it. It will naturally depend upon his subjective decision. It cannot be said even by any stretch of imagination that for such satisfaction of his, meaning thereby, for coming to the conclusion that he has reason to believe that in the interest of proper management or administration of a public trust a scheme should be settled for it, any judicial inquiry was necessary. Mr. Nanavati has conceded to that position that for initiating such proceedings, no such judicial inquiry will be necessary. I, therefore, need not dilate on that point further.

6. The legislature has also contemplated initiation of such proceedings when two or more persons having interest in a public trust make an application to the Charity Commissioner in writing in the prescribed manner that in the interest of a proper management or administration of a public trust, a scheme should be settled for it. The word 'prescribed' has been defined in Section 2(ii) of the Act as under:

' 'prescribed' means prescribed by rules'.

In exercise of the powers, the Government has framed the rules called 'The Bombay Public Trusts (Gujarat) Rules, 1961 (which will be hereinafter referred to as 'the Rules'). Rule 26 of the Rules lays down that every application under Section 50-A to the Charity Commissioner shall set out concisely the material facts about the Public Trust and shall contain inter alia the following particulars referred to in clauses (a) to (k). In the instant case, we are not concerned with any such application, as the Charity Commissioner himself, having reasons to believe that in the interest of the proper management or administration of a public trust a scheme should be settled for it, had started suo motu proceedings.

7. A plain reading of sub-section (1) of Section 50-A of the Act clearly indicates that the Charity Commissioner has jurisdiction to frame a scheme for the proper management or administration of a public trust, if, after giving the trustees of such trust due opportunity to be heard, he is satisfied that it is necessary or expedient so to do. It does not indicate a complete scheme for the administration of the trust, the Charity Commissioner has no jurisdiction or power to frame a scheme for the management or administration of such public trust. We cannot import any restrictions and read any such restrictions in this section where the legislature has not -placed any such restrictions. It is significant to note that sub-section (3) of Section 50-A of the Act even empowers the Charity Commissioner at any time, after hearing the trustees, to modify the scheme framed by him under sub -section (1) or sub-section (2). A scheme has to be framed by a competent authority; it is by the Court or by the Charity Commissioner, in view of the provisions of the Act. The contents of the instrument of trust which provide for the management and administration of the trust cannot be said to be a scheme.

8. It is significant to note that Section 2(7-A) of the Act defines 'instrument of trust' as under:

' 'instrument of trust' means the instrument by which the trust is created by the author of the trust and includes a scheme framed by a competent authority.'

Material part of Section 50A of the Act reads :

'In any case

(i) where it is alleged that there is a breach of a public trust.

(ii) where a direction is required to recover possession of a property belonging to a public trust or the proceeds thereof or for an account of such property or proceeds from any person including a person holding adversely to the public trust, or

(iii) where the direction of the Court is deemed necessary for the administration of any public trust, the charity Commissioner after making such enquiry as he thinks necessary or more persons having any interest in the trust and having obtained the consent in writing of the Charity Commissioner as provided in Section 51 may institute a suit whether' contentious or, not in the Court within the local limits of whose jurisdiction the whole or part of the subject-matter of the trust is situate, to obtain a decree for any of the following reliefs:

(a) to (f) ......

(g) the settlement of a scheme or variation or alteration in a scheme already settled, or

(h) ...... ......... ........ .......... :

Provided that no suit claiming any of the relief's specified in this section shall be instituted in respect of any public trust except in conformity with the provisions thereof :

Provided further that the Charity Commissioner may, instead of instituting a suit make an application to flip Court for a variation or alteration in a scheme already settled.'

It is thus evident that so far as Section 50A of the Act is concerned, certain conditions have got, to be satisfied. If any one of the three conditions referred to in Section 50A of the Act is satisfied, the Charity Commissioner, after making such enquiry as he thinks necessary, can institute a suit for getting any of the reliefs specified therein including a relief for settlement of the scheme or variation or alteration in the scheme already settle can also empower two or more persons having interest in the trust to institute such a suit after obtaining his consent in writing as provided in Section 51 of the Act. It is further significant to note that the Charity Commissioner, by the proviso, has been empowered to move the Court by filing an application instead of institution of a suit for a variation or alteration in a scheme already settled. So far as Section 50-A of the Act is concerned, there are no such restrictions placed. There is, therefore, no indication in any of the provisions of the Act that for exercising the jurisdiction of the Charity Commissioner for framing a scheme for the management or administration of a public trust, if he has reasons to believe that in the interest of a proper management or administration of a public -trust, a scheme should be settled for it, it must be proved that the instrument of trust itself did not present a complete scheme for the administration of the trust. It is no doubt true that in the instrument of trust, Ex. 83/1, appointment of the first trustees is made. It lays down the maximum and minimum number of trustees. It provides for the duration of the founder trustees and the mode of succession to them. It provides for appointing more trustees. It also provides for the increase in the maximum and minimum number of trustees. It provides for a removal of a trustee. It also provides for disqualifications of a trustee. It also lays down the objects of the trust. It also deals with vesting of properties in the trustees. It also deals with powers given to the trustees to deal with movable as well as immovable properties of the trust. It provides for day-to-day administration, appointment of chairman by election in future and decision to be taken at the meeting by majority, as regards quorum, etc. It also provides for accounts and audits. But the fact that the instrument of the trust makes all these provisions, will not in any way come in the way of the Charity Commissioner as regards his jurisdiction to frame a scheme if the conditions referred to in Section 50-A of the Act are satisfied. Submission No. 1 made by Mr. Nanavati, therefore devoid of any merits.

9. Coming next to submission No. 2, a mere glance at sub-section (2-A) of Section 50-A of the Act will indicate that there is no substance in this submission No. 2. It reads

'(2-A) A scheme under this section may -provide for the number of trustees, the mode of appointment of trustees including the appointment of the first trustees, vesting of the trust property in the trustees so appointed, mode of filling any vacancy of -a trustee, the remuneration of a trustee or manager of the public trust and where necessary, a clarification of the objects of the public trust.'

It is, therefore, evident that the legislature- by insertion of this sub-section (2-A) by Gujarat Act No. 31 of 1962, has empowered the Charity Commissioner while framing a scheme to provide for the matters specified therein. It is left to him to provide for the number of trustees and the mode of appointment of trustees. It cannot, therefore, be said that the Charity Commissioner has no power in regard to appointment of additional trustees. I need not dilate further on this -point, as this question is covered by the decision of this Court in First Appeal No. 118 of 1966, decided on 27-11-1972 (Guj.), by a Division Bench of this Court consisting of myself and C. V. Rane, J. It was contended in that appeal that under Section 50-A of the Act, the Charity Commissioner has no power to remove the original trustees who were to be trustees for life and to reduce the term of office of the trustee and to make provisions in the scheme as to the election of the trustees. All those contentions were negatived. It is observed therein:

'According to Section 50-A of the Act, wide powers have been conferred on the Charity Commissioner to frame a scheme in the circumstances mentioned in the section. The above section inter alia provides that, where the Charity Commissioner has reason to believe that, in the interest of proper management or administration of the public trust, a scheme should be settled for it, he may, if after giving the trustees of such trust the opportunity to be heard, he is satisfied that, it is necessary or expedient so to do, frame a scheme for the management or administration of such public trust. The section makes it clear that, the main consideration which should weigh with the Charity Commissioner while framing a scheme is that, he should be satisfied that, it is necessary to frame a scheme in the interest of the proper management or administration of the public trust. In the present case, as observed above the Charity Commissioner has pointed out in clear terms as to how necessary it was to frame a scheme in the interest of proper management of the trust in question.'

After referring to sub-section (2-A) of Section 50-A of the Act, it is observed:

'The wording of sub-section (2-A) makes it clear that, the Charity Commissioner has powers even to fix the number of trustees and it cannot be denied that, while fixing the number of trustees, it is open to him to reduce or increase the number of trustees. If any authority is needed on the -point, it is -provided by the decision in the case of Bapugouda Yadgouda v. Vinayak Sadashiv AIR 1941 Born 317, in which it has been observed, 'Framing a scheme for the management of an institution may or may not involve the appointment of new trustees or the removal of existing trustees'. In the case of Guru Nathrudha swami Guru Shidharudha swami v. Bhimappa Gangadharappa Divate , also, it has been observed: 'In settling a scheme for the administration of a charitable trust involving the appointment of trustees or managers, the Court is bound to secure persons whom it regards as suitable. The fact that the late deceased trustee desired that the present trustee should succeed him does not fetter the discretion of the Court or preclude consideration of the conduct of the present trustee both before and since the death of the late trustee'.'

Submission No. 2 also, therefore, fails.

10. It will be convenient to decide submissions Nos. 3 and 4 together. It has been contended vehemently by Mr. Nanavati for the appellants that the functions that are to be discharged by the Charity Commissioner under Section 50-A of the Act are judicial functions or at any rate quasi judicial functions and not administrative functions. The moment the Court comes to the conclusion that the functions that are to be performed are judicial functions or quasi judicial functions, there is no escape from the conclusion that the procedure that is to be followed is the procedure prescribed for the trial of a suit. Provisions of sub-section (4) of Section 50-A of the Act clearly indicate that the scheme framed under sub-section (1) or sub-section (2) or modified under sub-section (3) has been given effect as a scheme settled or altered, as the case may be, under a decree of a Court under Section 50A of the Act, it is only subject to a decision of the competent Court under Section 72 of the Act. It, therefore, means that the framing of a scheme even by the Charity Commissioner has been given the same effect as a scheme framed under a decree of a Court under Section 50A of the Act. Furthermore, Section 72 of the Act gives a right of appeal to any person aggrieved by the decision of the Charity -Commissioner under Section 50-A of the Act. Explanation added to this section in terms states that in this section, the expression 'decision' shall include a scheme framed or modified under Section 50-A. It is, therefore, evident that a scheme framed or, modified by the Charity Commissioner under Section 50-A of the Act will be a decision of a Charity Commissioner and any person aggrieved by it has been given a right of appeal under Section 72 of the Act. There is no escape from that conclusion. It was, therefore, urged by Mr. Nanavati that sub-section (I-A) of Section 72 of the Act, which reads:

'No party to such application shall be entitled to produce additional evidence, whether oral or documentary, before the Court, unless the Deputy or Assistant Charity Commissioner or the Charity Commissioner has refused to admit evidence which ought to have been, admitted or the Court requires any document to be produced or any witness to be examined to enab1e it to pronounce judgment or for any other substantial cause the Court thinks it necessary to allow such additional evidence,'

gives an indication that the Charity Commissioner has to follow the procedure in such a proceeding that is to be followed in the trial of a suit. It is only if the Charity Commissioner has not permitted the person aggrieved by his decision to adduce such evidence, if the conditions specified in sub-section (1-A) of Section 72 of the Act are satisfied, such additional evidence can be allowed to be led in an application filed in the District Court under Section 72 of the Act.

11. Mr. Nanavati has further invited my attention to Section 73 of the Act, which reads:

'In holding inquiries under this Act, the officer holding the same shall have the same powers as are vested in Courts in respect of the following matters under the Code of Civil Procedure, 1908, in trying a suit:

(a) Proof of facts by affidavits,

(b) Summoning and enforcing the attendance of any person and examining him on oath,

(c) Compelling the production of documents.

(d) Issuing of commissions.'

He has urged that if the procedure followed in the trial of a suit was not to be followed, there was no reason for the legislature to engraft such a section like Section 73. It will be proper to refer to Section 78 of the Act in this context. It reads :

'Save in so far as they may be inconsistent with anything contained in this Act. the provisions of the 'Code of Civil Procedure, 1908, shall apply to all proceedings before the Court under this Act.'

A Plain reading of this section indicates that it is only in the proceedings before the Court under the Act that the provisions of Civil Procedure Code which are not inconsistent with anything contained in this Act, will apply it does not apply to proceedings before the Charity Commissioner. It is significant to note that the word 'court' has been defined in Section 2(4) of the Act as under:

''Court' means in the Greater Bombay, the City Civil Court and elsewhere the District Court.'

It is, therefore, evident that in an application filed under Section 72 of the Act before the Court, the provisions of Civil Procedure Code which are not inconsistent with any provisions in the Act will apply. But they will not apply to the proceedings before the Charity Commissioner.

12. Another significant feature to be noted in this context is that the scheme of the Act clearly indicates that there are three categories of cases referred to. First category relates to cases wherein hearing of the Parties and holding an inquiry in the prescribed manner is contemplated. In the second category of cases, hearing of parties and holding an inquiry in the manner the Charity Commissioner deems fit, is contemplated, and in the third category of cases, due opportunity of being heard is contemplated.

13. In the first category of cases, fall Sections 19, 22A and 39 of the Act. Section 19 of the Act deals with, inquiry for registration of the trust. The authority specified therein has to make an inquiry in the prescribed manner for the purposes of ascertaining:

'(i) Whether a trust exists and whether such trust is a public trust,

(ii) Whether any property is the pro- of such trust,

(iii) whether the whole or any substantial' portion of the subject-matter of the trust is situate within his jurisdiction,

(iv) the names and addresses of the trustees and manager of such trust,

(v) the mode of succession to the office of the trustee of such trust,

(vi) the origin, nature and object of such trust,

(vii) the amount of gross average annual income and expenditure of such trust, and

(viii) any other particulars as may be Prescribed under sub-section (5) of ,Section 18.'

On completion of such an inquiry, the specified authority has to record its findings with the reasons there fore as to the matters mentioned in the said section, and to make an order for the payment of the registration fee. It is contemplated by Section 20 of the Act.

14. Section 22A of the Act deals with further inquiry by the specified authority that any Particular relating to any public trust, which was not the subject-matter of the inquiry under Section 19 or sub-section (3) of Section 22, as the case may be, has remained to be inquired into. Section 39 of the Act reads :

'On considering the report referred to in Section 38, and the accounts and explanation, if any, furnished by the trustees or any other person, and after holding an inquiry in the prescribed manner, the Deputy or Assistant Charity Commissioner shall record his finding as to whether the trustees or any other person have been guilty of gross negligence, a breach of trust, misapplication or misconduct which has resulted in loss to the public trust and make a report thereof to the Charity Commissioner.'

It is thus evident that this statute which was a special statute has made Provisions about formal inquiries wherein questions regarding the proprietary rights of persons and personal rights are concerned or a person is to be visited with civil consequences.

15. I have already stated that prescribed means prescribed by the Rules. For such formal inquiries which are to be done in the prescribed manner, relevant rule is Rule 7 of the Rules. It reads:

'Except as expressly provided in these rules, inquiries under the Act shall be held, as far as possible, in accordance with the procedure prescribed for the trial of suits under the Presidency Small Cause Courts Act, 1882, where that Act is in force and elsewhere under the Provincial Small Cause Courts Act, 1887. In any inquiry a party may appear in person or by his recognised agent or by a pleader duly appointed to act on his behalf:

Provided that any such appearance shall, if the Deputy or Assistant Charity Commissioner so directs, be made by the party in person.'

This rule-will apply only where an inquiry- is to be made in the prescribed manner. Argument advanced by Mr. Nanavati on behalf of the appellants that this rule will apply to such a proceeding for framing a scheme initiated by the Charity Commissioner himself, in my opinion, has no substance. It is significant to note that in Rule 25 of the Rules a specific provision is made regarding the manner of holding inquiry under Section 39 of the Act. It reads:

'If the Deputy or Assistant Charity Commissioner finds that there is a prima facie case for an inquiry under Section 38, he shall

(a) Fix a date for the inquiry and cause a notice to be served on the trustee or any other person concerned to appear on the date fixed; and

(b) On the date fixed for such hearing, or any subsequent date to which the hearing may be adjourned, allow them an opportunity to represent their case and to adduce evidence, and make any further inquiries as he may consider necessary; and

(c) on completion of the inquiry record his findings and the reasons therefore; and

(d) if he holds that the trustee or any other person has been guilty of gross negligence, a breach of trust, misapplication or misconduct which has resulted in loss to, the public trust, report the matter to the Charity Commissioner and forward to him the papers of the inquiry.21

It is thus evident that a separate procedure has been provided by the rule-making authority in cases where a trustee is to be visited with civil consequences and he is to be penalised.

16. In the second category of cases fall Sections 28, 40, 51 and 54. Section 28 of the Act deals with public trust previously registered under enactments specified in the schedule for the purpose of recording entries relating to such trust in the register kept under Section 17 of the Act. Section 40 of the Act reads :

'The Charity Commissioner shall, after considering the -report of the Deputy or Assistant Charity Commissioner, giving an opportunity to the person concerned and holding such inquiry as he thinks fit, determine

(a) The amount of loss caused to a public trust;

(b) Whether such loss was due to any gross-negligence, breach of trust, misapplication or misconduct on the part of any person;

(c) Whether any of the trustees, or any other person was responsible for such loss;

(d) The amount which any 'of the trustees or any other person is liable to pay to the public trust for such loss.

Section 51 of the Act deals with inquiry to be made by the Charity Commissioner when the persons having an interest in any public trust intend to file a suit of the nature specified in Section 50A of the Act, apply to the Charity Commissioner in writing for his consent. Section 54(3) of the Act reads:

'The Deputy or Assistant Charity Commissioner shall have power to make such inquiry as he thinks fit to verify the correctness of the account submitted and may pass order for the disposal of the amount in the manner prescribed.'

These two categories of cases clearly indicate that the legislature has purposely made distinction in the procedure to be followed in the different inquiries to be made under this special Act taking into .account the nature of different proceedings.

17. In the third category of cases falls Section 50-A of the Act, which is material for our purposes. The legislature has, in my opinion, intentionally and advisedly not referred to any nature of the inquiry specifically. It is not stated therein that the inquiry is to be made in the prescribed manner or the inquiry is to be made in the manner the Charity Commissioner deems fit. The only condition laid down therein is that the Charity Commissioner is entitled to frame a scheme for the management or administration of a public trust if he is satisfied that it is necessary or expedient so to do after giving the trustees of such trust due opportunity to be heard. It, therefore, means that the legislature intended that due opportunity should be given to the trustees to be heard, and that opportunity is to be given when the Charity Commissioner has reasons to believe that in. the interest of the proper management or administration of a public trust a scheme should be settled for it, It clearly means that- it will depend upon his subjective satisfaction. If there is such subjective satisfaction of his, he has to give the trustees due opportunity to be heard, and after giving such due opportunity to be heard, he has to satisfy himself that it is necessary or expedient so to do to frame a scheme for the management or administration of such public trust or when two or more persons having interest in a public trust make an application to him in writing in the prescribed manner that in the interest of the proper management or administration of a public trust, a scheme should be settled for it, he has to give such due opportunity to the trustees of being heard and after being satisfied that it is necessary or expedient so to do, he is entitled to frame a scheme, for the management or administration of such a public trust. In my opinion, therefore, it cannot be said that in all such cases, the procedure that is to be followed in the trial of a suit has got to be followed. In my opinion, it will all depend on the facts and circumstances of each case and on the facts and circumstances of each case, one will be required to decide whether due opportunity to the trustees of such public trust of being heard was given or not.

18. In my opinion, the proposition enunciated by Mr. Nanavati that in all cases where witnesses are not examined in presence of persons aggrieved and those witnesses have not been tendered for cross-examination, the Court must necessarily come to the conclusion that there is violation of principles of natural justice, is a very wide proposition.

19. Mr. Nanavati, in support of his argument, has invited my attention to the decision of the Supreme Court in Union of India v. T. R. Varma : (1958)IILLJ259SC . It is observed therein:

'The Evidence Act has no application to enquiries conducted by tribunals even though they may be judicial in character. The law requires that such tribunals should observe rules of natural Justice in the conduct of the enquiry and if they do so, their decision is not liable to be impeached on the ground that the procedure followed was not in accordance with that, which obtains in a Court of law. Stating it broadly and without intending it to be exhaustive it may be observed that rules of natural justice require that a party should have the opportunity of adducing all relevant evidence on which he relies, that the evidence of the opponent should be taken in his presence, and that he should be given the opportunity of cross-examining the witnesses examined by that party, and that no materials should be relied on against him without his being given an opportunity of explaining them. If these rules are satisfied, the enquiry is not open to attack on the ground that the procedure laid down in the Evidence Act for taking evidence was not strictly followed.'

20. In later decision of the Supreme Court in Union of India v. P. K. Roy : (1970)ILLJ633SC , wherein it is In terms stated :

'The extent and -application of the doctrine of natural justice cannot be imprisoned within the strait-jacket of a rigid formula. The application of the doctrine depends upon the nature of the jurisdiction conferred on the administrative authority, upon the character of the rights of the persons affected, the scheme and policy of the statute and other relevant circumstances disclosed in the particular case.'

21. In the latest decision of the Supreme Court in Hira Nath Mishra v. The Principal, Agenda Medical College, Ranchi : (1973)IILLJ111SC the Supreme Court had to deal with a case where the students, who were dismissed for misconduct, contended that the rules of natural justice had not been followed before the order was pass Old against them expelling them from the college. They submitted that the enquiry, if any, had been held behind their back; the witnesses who gave evidence against them were not examined in their presence; there was no opportunity to cross examine the witnesses with a view to test their veracity; that the Committee's report was not made available to them and for all these reasons the enquiry was vitiated and the order passed by the Principal acting on the report was illegal. The High Court held that rules of natural justice were not inflexible and that in the circumstances and the facts of the case, the requirements of natural justice had been satisfied. On those very grounds, which did not find support with the High Court appeal to the Supreme court was sought to be supported. The Supreme Court has observed:

'The High Court was plainly right in holding that principles of natural justice are not inflexible and may differ in different circumstances. This Court has pointed out in : (1970)ILLJ633SC (referred to by me earlier) at page 187 that the doctrine of natural Justice cannot be imprisoned within the strait-jacket of a rigid formula and its application depends upon several factors. In the present case the complaint made to the Principal related to an extremely serious matter as it involved not merely internal discipline but the safety of the girl students living in the hostel under the guardianship of the college authorities. These authorities were in loco parentis to all the students male and female who were living in the hostels and the responsibility towards the young girl students was greater because their guardians had entrusted them to their care by putting them in the hostels attached to the college.'

After referring to two English decisions, observations made by Harman, J., in Byrne v. Kinematograph Rentors Society Ltd., (1958) 2 All ER 579, have been quoted:

'What, then, are the requirements of natural justice in a case of this kind? First, I think that the person accused should know the nature of the accusation made: secondly that he should be given an opportunity to state his case; and thirdly, of course, that the tribunal should act in good faith. I do not think that there really is anything more.'

After quoting those observations, it is observed:

'Rules of natural justice cannot remain the same applying to all conditions. We know of statutes in India like the Goonda Acts which permit evidence being collected behind the back of the Goonda and the Goonda being merely, asked to represent against the main charges arising out of the evidence collected. Care is taken to see that the witnesses who gave statements would not be identified. In such cases there is no question of the witnesses being called and the goonda being given an opportunity to cross-examine the witnesses. The reason is obvious. No witnesses will come forward to give evidence in the presence of the goonda. However, unsavory the procedure may appear to a judicial mind, these are facts of life which are to be faced.'

There is no doubt that the functions to be discharged by the Charity Commissioner in a proceeding under Section 50-A of the Act are of a quasi judicial character. It cannot be said that it is to discharge administrative functions. Section 50-A (4) of the Act clearly indicates that the decision regarding the framing of a scheme or a modification of a scheme by the Charity Commissioner has the effect as a scheme settled or altered, as the case may be, under a decree of a Court under Section 50. It is also made appealable. In my opinion, as said earlier, the legislature has advisedly stated that the Charity Commissioner has to come to a decision and frame a scheme after giving opportunity to the trustees of being heard and on his satisfaction, that it is necessary or expedient so to do. If really the procedure of a trial of a suit was to be followed or the inquiry was to be made in the prescribed manner in all cases falling under Section 50-A of the Act, the legislature could have very well made a specific provision in that behalf. If the suit trial procedure was to be followed, in my opinion, there would have been no good reason for the legislature to empower the Charity Commissioner to frame such a scheme as that could have been done by institution of a suit by the Charity Commissioner as contemplated under Section 50A of the Act. In my opinion, therefore, what is required to be seen is, whether on the facts and circumstances of the case, could it be said that due opportunity of being heard was given to the appellants-trustees or not.

22. Before I embark on that inquiry, I would like to refer to the decision of the Supreme Court in A. K. Kraipak v. Union of India : [1970]1SCR457 . The observations made therein are:

'The aim of the rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice. These rules can operate only in areas not covered by any law validly made. In other words they do not supplant the law of the land but supplement it. The concept of natural justice has undergone a great deal of change in recent years.

In the past only two rules were recognised but in course of time many more subsidiary rules came to be added to these rules. Till very recently it was the opinion of the Courts that unless the authority concerned was required by the law under which it functioned to act judicially there was no room for the application of the rules of natural justice. The validity of that limitation is now questioned. If the purpose of the rules of natural justice is to prevent miscarriage of justice there is no reason why those rules should be made inapplicable to administrative enquiries. Often times it is not easy to draw the line that demarcates administrative enquiries from quasi judicial enquiries. Enquiries which were considered administrative at one time are now being considered as quasi judicial in character. Arriving at a just decision is the aim of both quasi-judicial enquiries as well as administrative enquiries. An unjust decision in an administrative enquiry may have more far reaching effect than a decision in a quasi judicial enquiry.

The rules of natural justice are not embodied rules. What Particular rule of natural justice should apply to a given case must depend to a great extent on the facts and circumstances of that the framework of the law under which the enquiry is held and the constitution of the Tribunal or body of persons appointed for that purpose. Whenever a complaint is made before a Court that some principle of natural justice had been contravened the Court has to decide whether the observance of that rule was necessary for a just decision on the facts of that case.'

I am in respectful agreement with these observations made, and I am bound by them also.

23. In Shah Jagmohandas Purshottamdas v. Jamnadas Vrajlal Gandhi : AIR1965Guj181 , this Court has observed:

'The power to remove a member of the Committee on good cause shown is clearly a judicial power. The function of appointing and removing trustees is thus a judicial function properly exercisable by a Court of law. In view of Section 92 of the Civil Procedure Code it is futile to contend that the power to appoint or remove trustees is an administrative power and not a judicial power and the reference to the District Court must therefore be regarded as reference to the presiding officer of the District Court as a persona designata and not to the District Court as a Court of law.'

I have, therefore, no hesitation in coming to the conclusion that the functions that are to be discharged by the Charity Com-, missioner under Section 50-A of the Act are quasi judicial functions. One has, therefore, to see whether there is any violation of principles of natural justice. It is significant to note that the authorities referred to in Section 37 of the Act which includes the Charity Commissioner amongst them, have been given supervisory jurisdiction over such public trusts.

24. In the Charity Commissioner, Bombay v. The Municipality of Taloda, a Division Bench of the Bombay High Court has observed:

'In order to consider whether or not this contention is sound, we must consider the scheme of the Act and the functions which the Charity Commissioner exercises in relation to public trusts. There cannot be any scope for doubt that the Crown or Government is parents patrix in respect of wards and is also the protector of charities in general (see Tudor on charties , 5th Edn., p 174 ). From time to time various Acts were made by the Government both Central and State for controlling mismanagement in the properties of public trusts. However, it was only about 1950 in almost every State that Acts for the supervision of public trusts came to be passed. The purpose of the Act as shown by the preamble is to make better provision for the administration of public religious and charitable trusts in the State and having due regard to the purpose of the Act, i.e. it having been passed for the public good. it is the duty of the Courts of justice to put such a construction upon it and may tend to the furtherance rather than t o the restriction of the powers conferred by it upon the Charity Commissioner.'

These observations were made in connection with the contention raised, whether the Charity Commissioner has a right to appeal, and he can be said to be an aggrieved person.

25. It is significant to note that in the instant case, the trustee-principal made an application making twelve grievances against the trustees and especially against the secretary-trustee. That application was made on 21-8-1965 to the Charity Commissioner. Assistant Charity Commissioner, Baroda, made inquiry in pursuance of the orders of the Charity Commissioner. He had even to take action for the production of the account books and other documents of the trust under Section 37 of the Act. It was only after resorting to such action that he could avail of those account books of the trust. He recorded the statements of both persons connected with the inquiry and made his own report to the Charity Commissioner and sent all the inquiry papers with the statements collected by him as well as the documents or notes of the documents and the account books of the trust. Another significant fact to be borne in mind is that thereafter the Charity Commissioner had issued notices for hearing the parties and both trustee principal and secretary-trustee-were heard by him on 18-3-1966 and 19-3-1966 in pursuance of the report of the Assistant Charity Commissioner, remarks were seen and the persons concerned were asked to offer their explanation. Trustee-principal submitted his explanation while secretary-trustee did not submit his explanation it is only after hearing the parties, Mr. P. H. Parikh, the then Charity Commissioner, Passed an order, Ex. 103, dated 5-5-1966. It is necessary to refer to this most important document, as challenge is made by Mr. Nanavati that in the instant case, there is no evidence whatsoever to enable the Charity Commissioner to come to the conclusion that it is necessary expedient to frame scheme for the proper management or administration of the trust in question.

26. The Charity Commissioner has referred to the grievances made by the trustee-principal and has come to his own conclusion in respect of them, dealing with them in separate paragraphs and has made the following observations at the end of his order dated 5-5-1966:

'It appears that Shri Jaswant Naik (trustee-principal) and Shri Mahesh Kothari (Secretary-trustee) who were once friends, have fallen out more especially after Shri Kothari became the Secretary of this trust in 1965. The trust is created in the year 1962. It appears that accounts of the trust were first kept by Shri Naik from 1962 to 1964. It was urged by Shri Mahesh Kothari that Shri Naik has raised all these contentions about management and accounts not only for the period during which he became the Secretary but also for the period during which he kept the accounts. It is true that he had not brought all these irregularities, etc. in the management and the accounts to the notice of the Charity Organisations prior to October, 1965. On examination of accounts of both these periods it is found that the management is not proper in the sense it should be and the accounts are not maintained in proper and regular manner. It is also found that except Shri Kothari and Shri Naik, the remaining trustees do not take active part in the management of the trust. I would suggest that the trustees should get a scheme framed for the proper management and administration of this trust so that proper rules and regulations can be settled for all matters connected with the management of this trust as laid down in Section 50-A of the Bombay Public Trusts Act, 1950. If the trustees do not apply for framing a scheme on or before 1-7-1966, we may start suo motu scheme proceeding under Section 50-A of the Bombay Public Trusts Act, 1950. The Board of trustees may be informed as to what they ,are required to do under this report. Shri Mahesh Kothari may also be informed as to what he is required to do under the report. The copies of the said letters may be sent to Shri Jaswant Naik.'

It is thus evident that the then Charity Commissioner, on examination of accounts and hearing both the parties reached the conclusion that the management was not proper in the sense that it should be and accounts were not maintained in the proper and regular manner. It was also found that except the trustee principal and the secretary trustee, the remaining trustees do not take active part in the management of the trust. Another significant feature of this document is that the copies of these reports were sent to the Persons concerned who were directed to comply with the directions given.

27-28 * * * *

29. I have already referred to the averments made by these concerned persons in their written statements filed in suo motu scheme proceeding. It thus appears that hardly any challenge was made to the conclusion reached by the then Charity Commissioner in his order, Ex. 103, dated 5-5-1966. The matter does not rest there only. It is significant to note that on 24-3-1966, in the presence of all these concerned parties, during the pendency of this proceeding, the Charity Commissioner inspected the office of the trust and scrutinised the accounts and inspected the documents and had found several irregularities. In his judgment, Ex. 3, in para. 4, the Charity Commissioner has stated :

'in the presence of parties at their request, the office of the trust was visited and certain books of account and proceeding book of the trust were inspected and the matter was formally discussed. On the next day i.e. on 25-3-1969, Advocates Messrs. A. B. Patel, K. N. Shah, V. V. Gandhi and U. T. Shah were present. Trustees-opponents Nos. 4 and 6 and interested persons Shri Naranbhai Madhav bhai Rathod .......... were also present. The matter was further discussed in the course of which, on behalf of the trustees-opponents, it was orally agreed that a proper scheme be framed.'

On the next day, persons referred to therein were present. Opponent No. 4 Mahesh Kothari produced certain documents with the list, Ex. 84. Further discussion was held and further hearing was kept at Navsari at 11-30 a.m. on 24-4-69 and 25-4-1969 at the request of the parties. The Charity Commissioner framed the necessary points for determination:

1. Whether it is necessary or expedient to frame a scheme for the management or administration of 'Sanskar Bharati, Navsari Public Trust'?

2. If yes, what scheme should be framed?

He answered point No. 1 in the affirmative and framed the scheme as Per Ex. 123.

30. It is significant to note that the Charity Commissioner has given elaborate reasons for coming to his, conclusion that it is necessary and expedient to frame a scheme for the management or administration of the trust in question. It is, I must say, a good reasoned order.

* * * *

In my opinion, inquiry having been started by the Charity Commissioner himself who has got supervisory jurisdiction, if he has reasons to believe that in the interest of Proper management or administration of a public trust a scheme should be settled for it, this approach made by the Charity Commissioner is perfectly justified and legal.

31-32. * * * * *

33. It is, thus evident that learned red to, in detail the materials brought on the record which go to show that the management was not properly done and in the interests of the trust, for proper management and administration of the trust, it was necessary to frame a scheme. In such a case, where the Supervisory body itself acts after collecting the materials in an initial inquiry and after the trustees were given proper opportunity to explain and they do not say anything against the findings arrived at, and on the contrary, gave assurance to rectify and in the course of proceedings also, the state of affairs found is in confirmation of the earlier conclusion regarding improper management and irregular maintenance of accounts, it is difficult to understand how it could be said that these persons were not given due opportunity of being heard. On the contrary, it can be said that they were given all opportunities to explain. It was their own acts to be explained. As these acts were all of practically indefensible character, they have chosen to take up an attitude that the persons whose statements were collected at the initial inquiry should be asked to confirm their statements in the proceeding itself in their presence and they should be tendered for cross examination. Supervisory authority itself had collected the materials and it was in relation to their own acts which they had to explain and they were given sufficient opportunity from time to time to explain. They did not choose to explain them before the Charity Commissioner as well as in the District Court and no serious at tempt has been made to explain before me and to point out any data indicating that the conclusion reached by the learned Charity Commissioner is not justified.

34. Appeal dismissed.


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