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Chandulal Dahyabhai Vs. the State - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtGujarat High Court
Decided On
Judge
Reported in(1961)2GLR514
AppellantChandulal Dahyabhai
RespondentThe State
Excerpt:
- - 100/- inflicted on him by the learned judicial magistrate, first class, fourth court, ahmedabad, was confirmed for contravention of the provisions of section 35 of the bombay public trusts act, 1950, in that he failed to invest the trust funds lying with him in authorized investments......court, ahmedabad, was confirmed for contravention of the provisions of section 35 of the bombay public trusts act, 1950, in that he failed to invest the trust funds lying with him in authorized investments. the actual conviction is under the provisions of section 66 of the said act.2. the facts leading to this offence are that the petitioner is the sole trustee of the lunsawada moti-pole panch-parabadi trust, which is registered under the said act. the object of the trust is to feed birds with food-grains in the said motipole. it appears that this trust is about 100 years old and there is no written instrument of trust. it was alleged that in s.y. 2013 (about 1957), a sum of rs. 5901-45 np. was the cash balance of this trust and it was invested in the firm of the petitioner bearing.....
Judgment:

R.B. Mehta, J.

1. The petitioner has come in revision against the order of the learned Extra Additional Sessions Judge, Ahmedabad, by which a conviction and a fine of Rs. 100/- inflicted on him by the learned Judicial Magistrate, First Class, Fourth Court, Ahmedabad, was confirmed for contravention of the provisions of Section 35 of the Bombay Public Trusts Act, 1950, in that he failed to invest the trust funds lying with him in authorized investments. The actual conviction is under the provisions of Section 66 of the said Act.

2. The facts leading to this offence are that the petitioner is the sole trustee of the Lunsawada Moti-pole Panch-Parabadi Trust, which is registered under the said Act. The object of the Trust is to feed birds with food-grains in the said Motipole. It appears that this Trust is about 100 years old and there is no written instrument of Trust. It was alleged that in S.Y. 2013 (about 1957), a sum of Rs. 5901-45 nP. was the cash balance of this Trust and it was invested in the firm of the petitioner bearing interest at the rate of 4 1/2% per annum. After inquiries, it was found by the Deputy Charity Commissioner that this amount was lying uninvested in contravention of Section 35 of the said Act, which says as follows:

(1) Where the trust property consists of money and cannot be applied immediately or at any early date to the purposes of the public trust the trustee shall be bound notwithstanding any direction contained in the instrument of the trust to deposit the money in any Schedule Bank as defined in the Reserve Bank of India Act, 1934, in the Postal Savings Bank or in a Co-operative Bank approved by the State Government for the purpose or to invest it in public securities.

Provided that such money may be invested in the first mortgage of immovable property situate in any part of India if the property is not leasehold for a term of yeais and the value of the property exceeds by one-half the mortgage money.

Provided further that the Charity Commissioner may by general or special order permit the trustee of any public trust or classes of such tiust to invest the money in any other manner.

(2) Nothing in sub-section (1) shall affect any investment or deposit already made before the coming into force of the Bombay Public Trusts (Amendment) Act, 1954, in accordance with a direction contained in the instrument of the trust:

Provided that any interest or dividend received or accruing from such investment or deposit on or after the coming into force of a said Act or any sum realized on the maturity of the said investment or deposit shall be applied or invested in the manner prescribed in sub-section (1).

3. This section says that in the circumstances mentioned therein, viz,, that where the property consists of money and where it could not be applied immediately or at any early date to the purposes of the public trust, the trustee shall be bound to invest surplus amount in authorised investment as mentioned in the said Act. An inquiry was made by the Deputy Charity Commissioner and it was found, as stated above, that an amount of Rs. 5901 Ps. was lying uninvested and it was not necessary to be kept for an immediate application or an application at an early date for the purpose of the trust The petitioner was therefore asked by the Charity Commissioner to invest the said cash amount in accordance with the provisions of Section 35(1) of the said Act. The petitioner thereafter from time to time asked for time to comply with the provisions of Section 35(1) of the Act. It appears that thereafter on the 6th of May 1958 a notice was issued by the Charity Commissioner to the petitioner under Section 55 of the Act asking the petitioner to obtain directions of the District Judge for the utilization of the said Trust Fund half the amount food-grains for birds and half cypress for secular education. The petitioner accordingly applied to the learned District Judge on 2nd August 1958 and the learned District Judge by his order dated 23rd October 1959 directed the petitioner that a sum of Rs. 3 400 out of the surplus income should be handed over to the Trustees of the Society for Prevention of Cruelty to Animals Ahmedabad on specific condition that the amount was to be spent for the purpose of a Veterinary Hospital run by that Society and on further condition that the Society submitted accounts so far as this amount was concerned to the Charity Commissioner every year. It appears that no directions were given by the learned District Judge in regard to the application of funds for secular education. In the meanwhile on 3rd September 1958 a notice was issued from the office of the Charity Commissioner for the prosecution of the petitioner. A sanction for this prosecution was given on 25th October 1918 and the actual complaint was lodged on the 7th January 1959 for the prosecution of the petitioner under the provisions of Section 66 of the sand Act.

4. The defence of the petitioner before the learned Judicial Magistrate was firstly that in the year 1923 there was a Resolution of the Panch by which the monies were directed to be invested in the firm of the accused and that accordingly the investment was regular and as the investment under this direction by the said Resolution was earlier than coming into force of the Bombay Public Trusts (Amendment) Act 1954 by which an investment or a deposit made in accordance with a direction contained in the instrument of trust before the said Amendment Act was saved from the operation of Section 35(1) of the Act The second defence of the petitioner was that this was not a case where it could be said that the trust monies could not be applied immediately or at any early date to the purposes of the public trust for under the directions of the Charity Commissioner he had made an application to the learned District Judge seeking for directions for the application of the trust fund and that he was entitled to wait till the directions were given by the learned District Judge in regard to the application of those funds.

5. The first defence of the accused was negatived by the learned Magistrate and so far as the second defence is concerned the learned Magistrate has not referred to it in the judgment. In the circumstances the petitioner was convicted and fined as stated above. Against this order the applicant approached the learned Extra Additional Sessions Judge Ahmedabad in revision and his revision application was dismissed and the conviction was confirmed. Against this order of the learned Extra Additional Sessions Judge Ahmedabad the petitioner has approached this Court in revision.

6. Before this Court the only defence that has been taken is that the petitioner is not guilty of an offence under Section 35(1) of the Act on the ground that it is contended that that section comes into operation provided the trust monies could not be applied immediately or at any early date to the purposes of the public trust It is further contended in this connection that in pursuance of the notice given by the Charity Commissioner the petitioner had applied to the learned District Judge on 2nd August 1958 for directions for the application of this trust fund and that the learned District Judge passed his order in this connection on 23rd October 1959. The petitioner says that till the order of the learned District Judge was passed he had kept the funds with him in order to enable him to act according to the directions given by the learned District Judge. It is further contended that therefore it could not be said that the monies remained with him such that they could not be either applied immediately or at any early date to the purposes of the public trust It is further contended that it was in this situation that the investment continued with his firm and that before the learned District Judge passed his order and before the petitioner had time to act according to the directions of the learned District Judge the notice to prosecute him was given on 3rd September 1958 sanction to prosecute was given on 25th October 1958 and that actual complaint was filed on 7th January 1959. It is clear from the dates which are given above that the complaint was filed on 7th January 1959 while the learned District Judges order giving directions for the application of this trust fund was passed on 23rd October 1959. Therefore the order of the learned District Judge giving directions was in point of time after the complaint was already filed. It is therefore contended that in these circumstances the petitioner has committed no offence for on the date on which the complaint was filed his application before the learned District Judge was pending and the learned District Judge had not passed any final orders. It appears to me that there is some force in the contention advanced on behalf of the defence for when the Charity Commissioner has given statutory direction to the petitioner to apply to the learned District Judge and when the petitioner had himself in pursuance of this notice applied to the learned District Judge seeking for directions for the application of the trust monies the petitioner was certainly entitled to wait and hold the monies in his hands till the final order of the learned District Judge giving him directions for the application of the trust monies was passed for he should be ready to apply the trust monies in accordance with the directions of the learned District Judge and that is what he seems to have done in this case. Therefore it cannot be said that at the date when the complaint was filed on the 7th January 1959 and when the petitioners application before the learned District Judge was pending he had contravened Section 35(1) of the Act by holding the trust monies which could not be applied immediately or at any early date to the purposes of the public trust In these circumstances it seems to me that the conviction of the petitioner cannot stand under Section 66 of the Act. In the circumstances the revision application is allowed. The order of conviction and sentence is quashed. The fine if paid should be refunded.


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