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Quazf ReziuddIn BadruddIn Vs. Mahmad AmIn Haji Abdulkader and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtGujarat High Court
Decided On
Judge
Reported in(1968)9GLR93
AppellantQuazf ReziuddIn Badruddin
RespondentMahmad AmIn Haji Abdulkader and ors.
Excerpt:
- - 1, 2 and 3 were admittedly interested in the trust, the assistant charity commissioner bad power to give inspection of the books tit axjeosnt of the trust to them and the appellant was not entitled to restrain. 1, 2 and 3'.the appellant (hereupon carried the matter in second appeal to this court, but the second appeal was also unsuccessful. the act, as the preamble and the lonjj title wits passed fat the purpose of regulating arid making better provfaten fwr the adtttrnistraifori of public religious and charitabte trusts in the state of bombay. this contention of the appellant appears to be well-founded. the assistant charity commissioner cannot, therefore, claim power to give inspection of the books of account of the trust to a third party in virtue of any provision contained in..........in the trust within the meaning of section 2(10) of the act, made an application to the assistant charity commissioner for inspection of the accounts of the trust ftwa 1950 to 1954. the appellant agreed give inspection pf the accounts of the trust for the years 1950-51 and 1951-52 and inspection of accounts; the tfflpt for those years was accordingly taken by respondents nos. 1, 2 and 3. it is 4h of pwidenta nos. 1, 2 add 3 that; on taking $urfis4nection ta y ootiod that there was mismaqagemaat of the trust fnads, and afy to look into the accounts for the years 1932-53 of - for the - purpose-flodiog out whether there was further hi those years. respondents nos. 1, 2 and 3 accordingly, applied, the assistant 'charity commissioner for inspection of the accounts of the trust for the, years.....
Judgment:

P.N. Bhagwati, J.

1 This Letters Patent Appeal raises a short question pf construction of certain provisions of the Bombay Public Trusts Act, 1950. The question is purely one of law but in order to appreciate the arguments bearing upon the question, it is necessary to state briefly, a few facts, giving rise to the litigation. The appellant claims to be hereditary Mutavali and Sajjadaaashin of Navsari Jaine Masjid and Hazrat Pir Malek Nasiruddin Saheb Durgah Wakf which is a public trust registered, under the provisions of the Act. Sometime in August 1954, respondents Nos. 1, 2 and 3 who are admittedly persons 'having interest in the trust within the meaning of Section 2(10) of the Act, made an application to the Assistant Charity Commissioner for inspection of the accounts of the trust ftwa 1950 to 1954. The appellant agreed give inspection pf the accounts of the trust for the years 1950-51 and 1951-52 and inspection of accounts; the tfflpt for those years was accordingly taken by respondents Nos. 1, 2 and 3. It is 4h of pwidenta Nos. 1, 2 add 3 that; on taking $urfis4nection ta y ootiod that there was mismaQagemaat of the trust fnads, and afy to look into the accounts for the years 1932-53 of - for the - purpose-flodiog out whether there was further hi those years. Respondents Nos. 1, 2 and 3 accordingly, applied, the Assistant 'Charity Commissioner for inspection of the accounts of the trust for the, years 1952-53 and 1953-54. Notice of the application was given by the Assistant Charity Commissioner to the appellant. The appellant, ho we, declined to give inspection of the aocoaate for years 1952-53 and 1953-54. The Assistant Charity Commissioner in the meantime in exercise of his powers under Section 37 Sub-section (1) Clauses (b) and (c) called for the books of account of the trust for the years 1952-53 ad 1953-54. The appellant apprehended, that the Assistant Charity Commissioner would proceed to give inspection of the books of account 'called for by him to respondents Nos. 1, 2 and 3 and he, therefore, filed the present suit seeking to restrain respondents Nos. 1, 2 and 3 from taking inspection of the books of account and the Assistant Charity Commissioner from giving inspection of the books of account to respondents Nos. 1, 2 and 3. Respondents Nos. 1, 2 and 3 were impleaded as respondents Nos. 1, 2 and 3 and the Assistant Charity Commissioner was hnpteaded as the 4th defendant in the suit. The Charity Commissioner was not joined as a party in the suit as originally filed, but inbsequently the appellant, after obtaining leave of the trial Court to amend the pkunt, ed the Charity Commissioner as the 5th defendant to thft suit. The tftam contention of the appellant in the suit was that the Assistant Commissioner had no power to give inspection of the books of account of the trust to respondents Nos. 1, 2 and 3 and he should, therefore be restrained by perpetual injunction front doing so. The suit was resisted by respondents Nos. 1, 2 and 3 as also by the Assistant Charity Commil stoner and. the Charity Commissioner and the defence urged on tHoir bttratff was that the Assistant Ghafity Commissioner Had power to give inspection of the books of account to respondents Nos. 1, 2 and 3, if it wad necessary or desirable so to do for the purposes of the Aefc. They pointed out that tile Assistant Ghafity Commissioner had not yet made an order acceding to the request of respondents Nos. 1, 2 and 3 hi give inspection and that hel would not decide the application: of respond dents Nos. 1, 2 and 3 without giving' a hearing' to the appellants Those; were also certain other contentions raised on their behalf in answer, to the suit, bet it is riot necessary to refer to then since they have Ml been pressed before us. The main and substantial question on which the parties joined issue before the trial Court, therefore, was whether the Assistant Charity Commissioner had power to give inspection of the books of account to respondents Nos. 1, 2 and 3. The trial Court rejected the cantenthttk erf the appellant and held that the Assistant Charity Commissioner was entitled to give inspection of the books of account of the trust to any person who was interested in the trust and since respondents Nos. 1, 2 and 3 were admittedly interested in the trust, the Assistant Charity Commissioner Bad power to give inspection of the books tit axjeosnt of the trust to them and the appellant was not entitled to restrain. Mm from doing so. The appellant preferred an appeal to the District Court, but the teamed Assistant Judge who heard the appeal came to the same cdocfttsldn and negatived the contention of the appellant that the Assistant Charity Commissioner had no power to give inspection ttr respondents Nos. 1, 2 and 3'. The Appellant (hereupon carried the matter in Second Appeal to this Court, but the Second Appeal was also unsuccessful. Raju, J. agreed with the view takes by the trial Court and the first appellate Court and dismissed the appeal. He, however, granted leave to appeal under Clause 15 of the Letters Patent and heric the present Letters Patent Appeal before us.

2. The only question debated before us was as to whether the Assistant Charity Commissioner has power to give inspection of the books of account of the trust to respondents Nos. 1, 2 and 3 when the appellant we fe fne sofe Mutaraffi of the trust objects to such inspection being gftfo. ttt otdet td determine this question, it iS nedelssy to refer 16A proisf6r of the Act. The Act, as the preamble and the lonjj title Wits passed fat the purpose of regulating arid making better provfaten fWr the adtttrnistraifori of public religious and charitabte trusts in the State of Bombay. Section 2, Sub-section (10) gives atn inclusive definition of 'pe'rten having interest' and Clause (c) of the sub-section deals with the case of a Wafcf. Respondents Nos. 1, 2 arid 3 were admittedly, accordrng to this clause, persons having interest in the trust. Section 3 empower the State Government, by notification in the Official Gazette, to appoint an Officer called the Charity Commissioner and the Charity Commissioner is generally to superintend the administration and carry out the provision of the Act throughout the State. The provision for Deputy and Assistant Charity Commissioners is made in Section 5 and according to that section the Deputy and Assistant Charity Commissioners are to exercise such powers and perform such duties and functions as may be provided by or under the provisions of the Act. Then follow sections dealing with charitable purposes and validity of certain public trusts which are not material to the decision of the present controversy. We go straight to the Chapter on Accounts and Audit and in that Chapter there are two sections to which reference may be made. Section 32 says that every trustee of a public trust shall keep regular accounts and Section 33 provides that the accounts shall be balanced each year and audited annually by a Chartered Accountant; Section 34 requires every auditor auditing the accounts of a public trust under Section 33 to prepare a balance-sheet and income and expenditure account and to forward a copy of the same to the Deputy or Assistant Charity Commissioner or to the Charity Commissioner, if the latter requires him to do so. Sections 35 and 36 which are the remaining sections in this Chapter need not detain us as they are not relevant. Then follows the Chapter dealing with Control. This Chapter contains a fascicules of Sections from 37 to 41A. Section 37 was repeatedly referred to in the course of the arguments and we would, therefore, set out the same in extenso

37. (I) The Charity Commissioner, the Deputy or Assistant Charity Commissioner or any officer authorized by the State Government by a general or special order shall have power-

(a) to enter on and inspect or cause to be entered on and inspected any property belonging to a public trust;

(b) to call for or inspect any extract from any proceedings of the trustees of any public trust and any book or account in the possession of or under the control of the trustees;

(c) to call for any return, statement, account or report which he may think fit from the trustees or any person connected with a public trust:

Provided that in entering upon any property belonging to the public trust the officers making the entry shall give reasonable notice to the trustee and shall have due regard to the religious practices or usages of the trust.

(2) It shall be the duty of every trustee to afford all reasonable facilities to any officer exercising any of the powers under Sub-section (1), and the trustees or any other person in charge of the public trust shall comply with any order made or direction issued by such officer in exercise of the power conferred upon him by or under Sub-section (1).

Sections 38 to 41 deal with a case where it is found that the trustees or any other person concerned have been guilty of gross negligence, breach of trust, mis-application or misconduct which has resulted in loss to the public trust, and in such a case the Charity Commissioner may, after following the procedure set out in those sections direct that the amount of loss shall be surcharged on the person liable to pay the same to the trust. Section 41A which is a new section recently added by Gujarat Act 31 of 1962 is rather important and it provides:

41A. (1) Subject to the provisions of this Act, the Charity Commissioner may, from time to time, issue directions to any trustee of a public trust or any person connected therewith to ensure that such trust is properly administered and the income thereof is properly accounted for or duly appropriated and applied to the objects and for the purposes of the trust.

(2) It shall be the duty of every such trustee and person to comply with a direction issued to him under Sub-section (1).

We need not refer to the sections which follow as they are not material and it would be sufficient to go straight to Section 68. That section deals with the duties, functions and powers of the Deputy or Assistant Charity, Commissioner:

68. For the purposes of this Act, the following shall be the duties and functions to be performed and powers to be exercised by the Deputy or Assistant Charity Commissioner for the region or sub region for which he is appointed, namely:

x x x x x x x x x (d) o enter on and inspect any trust property, to call for and inspect any proceedings of a trustee and to call for any return, statement, account or report from trustees or any person connected with a public trust under Section 37;

(e) to permit inspection of any statement, notice, intimation, account, audit note or any other document;

x x x x x x x x x (g) to exercise such other powers and to perform such other duties and functions as may be prescribed.

Section 84 confers rule-making power on the State Government. Sub-section (1) says that the State Government may make 'rules for the purpose of carrying into effect the provisions of the Act and Sub-section (2) provides that in particular and without prejudice to the generality of the provision enacted in Sub-section (1), such rules may be made inter alia for the following matters, namely:

(s) the other powers, duties and functions to be exercised and performed by a Deputy or Assistant Charity Commissioner under Section 68;

In exercise of powers conferred by Section 84, the State Government made the Bombay Public Trusts Rules, 1951. Oat of these rules, the only rule which is material for the decision of the present controversy is Rule 22, the relevant portion of which runs as under:

22. Inspection of entries in the Public Trusts Register and other documents: (1) Subject to the conditions and on payment of the fees hereinafter specified, the Deputy or Assistant Charity Commissioner shall on application by any person having interest or permitted in this behalf by the Deputy or Assistant Charity Commissioner allow inspection of any entry or portion thereof in the Register of Public Trusts or any statement, notice, intimation, account, audit report or any other document filed under the Act.

The question is whether under these provisions the Assistant Charity Commissioner has power to give inspection of the books of account of the trust to respondents Nos. 1,2 and 3.

3. Now it is clear that under Section 37(1)(b) the Assistant Charity Commissioner has power to call for or inspect any books of accounts in the possession, or under the control, of the trustees or any person on behalf of the trustees. The Assistant Charity Commissioner can in exercise of this power conferred under Section 37(1)(b) call for the books of accounts of the trust and inspect them and this power of inspection can be exercised by the Assistant Charity Commissioner either personally or through an agent. The Assistant, Charity Commissioner can also employ the services of an auditor or an accountant for the purpose of inspecting the books of accounts of the trust. This much was not disputed by Mr. S.B. Vakil on behalf of the appellant but his contention was that the Assistant Charity Commissioner has no power to give inspection of the books of account of the trust to a third person who desires to inspect on his own account and not as agent of the Assistant Charity Commissioner. The Appellant urged that what Section 37(1)(b) authorizes the Assistant Charity Commissioner to do is to inspect the books of account of the trust and not to allow them to be inspected by a third party. This contention of the appellant appears to be well-founded. We do not think Section 37(1)(b) confers powers on the Assistant Charity Commissioner to give inspection of the books of account of the trust to a third party and no justification for the existence of such power in the Assistant Charity Commissioner can be found in Section 37(1)(b). Section 37(1)(a) also cannot help as that deals with the power to enter on and inspect any immovable property of the trust nor can Section 37(1)(c) be of any assistance as that does not confer any power of inspection. The Assistant Charity Commissioner cannot, therefore, claim power to give inspection of the books of account of the trust to a third party in virtue of any provision contained in Section 37.

4. But when we turn to Section 68 we find that a power to permit inspection of the books of account of the trust to a third party is clearly conferred by Clause (e) of that section. Section 68 enumerates the duties and functions to be exercised by the Assistant Charity Commissioner for the purposes of the Act and one of the duties and functions to be performed and powers to be exercised by the Assistant Charity Commissioner is, as set out in Clause (e), 'to permit inspection of any statement, notice, intimation, account, audit note or any other document'. The Assistant Charity Commissioner, therefore, has power under Section 68 Clause (e) to permit inspection of any statement, notice, intimation, account, audit note or any other document, subject only to one condition, namely, that it must be for the purposes of the Act. The exercise of the power is co'ditioned only by the requirement that it must be for the purposes of the Act. If the Assistant Charity Commissioner finds that for the purposes of the Act it is necessary to permit inspection of any account or document to a third party, he can permit such inspection by third party. The appellant, however, contended that Section 68 was not intended to impose any duties or to confer any powers on 'the Deputy or Assistant Charity Commissioner but it was merely intended to indicate which of the duties and functions to be performed and powers to be exercised under the Act shall be performable or exercisable by the Deputy or Assistant Charity Commissioner. This contention is wholly without merit. It fails to give due effect to the language of Section 68. Section 68 in terms says that for the purposes of the Act the duties, functions and powers enumerated in various clauses of the section shall be the duties and functions to be performed and powers to be exercised by the Deputy or Assistant Charity Commissioner and the power to permit inspection of any statement, notice, intimation, account, audit note or any other document as set out in plause (e) is, therefore, expressly declared by the section to be a power exercisable by the Assistant Charity Commissioner for the purposes of the Act. It is no doubt true that the other clauses of Section 68 refer to duties, functions and powers which are already provided for in other sections of the Act but that should not deter us from giving effect to the plain language of the section which says, in terms clear and explicit, that the power to permit inspection of any statement, notice, intimation, account, audit note or any other document shall be a power exercisable by the Deputy or Assistant Charity Commissioner for the purposes of the Act. Such a legislative device for conferring power on statutory authority is not unknown to law. We find it employed also in Section 70 of the Bombay Tenancy and Agricultural Lands Act, 1948, where various powers, such as the power to decide whether a person is a tenant or a protected tenant or a permanent tenant as set out in Clause (b) of the section, are conferred on the Mamlatdar adopting identical phraseology namely: 'For the purposes of this Act, the following shall be the duties and functions to be performed by the Mamlatdar'. The power to permit inspection of. any statement, notice, intimation, account, audit note or any other document for the purposes of the Act is, therefore, clearly vested in the Assistant Charity Commissioner and the 'only question would be whether the books of accounts of the trust are included within 'any statement, notice, intimation, account, audit note or any other document'. The word 'account' is a comprehensive word which includes within its scope and ambit books of accounts. Account cannot exist in the extract. It must be recorded somewhere either in the books of accounts or other documents relating to accounts or loose sheets of paper. The books of the trust would, therefore, be included within the connotation of the word 'account'. They would also be covered by the words 'any other documents' for books of accounts are certainly documents in the broad sense of the term 'document'. If, therefore, the Assistant Charity Commissioner has in his custody or possession the books of accounts of the trust, he can permit inspection of the books of accounts by a third party, provided the inspection is for the purposes of the Act. There is undoubtedly no right in a third party to take inspection of the books of accounts of the trust but if a third party satisfies the Assistant Charity Commissioner that for the purposes of the Act it is necessary or desirable that inspection of the books of accounts should be given, the Assistant Charity Commissioner can give such inspection to him.

5. The question then would be what is the connotation of the expression 'for the purposes of the Act.' What are the purposes of the Act for which inspection can be granted by the Assistant Charity Commissioner to a third party? The long title and the preamble show 'that A is enacted for the purpose of regulating and making better provision for the administration of public religious and charitable trusts. The several provisions of the Act show that the purposes of the Act are to secure that public trusts are properly administered, the trustees do not act negligently or commit breach of trust, mis-application or mis-conduct in the management of the public trusts, no loss is caused to the public trust by reason of gross-negligence, breach of trust, misapplication or misconduct on the part of the trustees and the income of the public trust is properly accounted for and duly appropriated and applied to the objects and for the purposes of the trust. If for the purpose of advancing or effectuating these purposes of the Act it is necessary or desirable to give inspection of the books of accounts of the trusts to a third party, the Assistant Charity Commissioner can in exercise of the power conferred under Section 68 Clause (e) give inspection to such third party. The Assistant Charity Commissioner may, if he is satisfied that in order to ascertain whether the trustees have acted with gross negligence or committed any breach of trust, misapplication or misconduct or any loss has been caused to the public trust by reason of such gross-negligence, breach of trust, misapplication or misconduct 01 there is any maladministration of the public trust requiring issue of direction under Section 41A or removal of the trustees or appointment of additional trustees or special audit of the accounts of the public trust, it is necessary or desirable to give inspection to a third party give such inspection to a third party. All these would be purposes of the Act and in order to carry out these purposes, the Assistant Charity Commissioner would have power to give inspection of the books of accounts of the trust to a third party. We cannot, therefore, accept the contention of the appellant that the Assistant Charity Commissioner has no power at all to give inspection of the books of account of the trust to respondents Nos. 1,2 and 3, The Assistant Charity Commissioner has power to give inspection of the books of accounts to respondents Nos. 1, 2 and 3 and the question whether such inspection should be given or not would have to be decided by the Assistant Charity Commissioner in the light of the principles set out by us above. The Assistant Charity Commissioner has not yet disposed of the application of respondents Nos. 1, 2 and 3 and we have no doubt that he will hear the appellant and decide the application of respondents Nos. 1, 2 and 3 in the light of the aforesaid principles. Since we are of the view that the power to give inspection of the books of accounts of the trust is vested in the Assistant Charity Commissioner under Section 68 Clause (e), it is not necessary for us to consider whether Rule 22 of the Bombay Public Trusts Rules, 1951, has any application in the present case. Rule 22 empowers the Assistant Charity Commissioner to permit inspection of 'any statement, notice, intimation, account, audit report or any other, document' provided it is 'filed under the Act'. The question is :can the books of accounts of the trust called for by the Assistant Charity Commissioner under Section 37(1)(b) be said to be books of accounts 'filed under the Act' within the meaning of this expression as used in Rule 22, when they are produced by the trustees? Prima facie it appears to us that they cannot be said to be filed under the Act. The expression 'filed under the Act' appears to be intended to cover documents which are submitted so as to form part of the file of the record before the Charity Commissioner and not documents which may be called for by the Deputy or Assistant Charity Commissioners from the trustees for a limited purpose and then returned to the trustees.

6. The appellant is, therefore, not entitled to an injunction restraining the Assistant Charity Commissioner from giving inspection-of the books of accounts of the trust to respondents Nos. 1, 2 and 3 and his suit must be dismissed. The appeal, therefore, fails and is dismissed with costs.


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