Appeal No 230 of 1955
Appeal from the judgment and order dated October 5 1953 of the Patna High Court in M J C No 128 of 1953
Mahabir Prasad Advocate General for the State of Bihar and R C Prasad for the appellants
N C Chatterjee and P K Chatterjee for the respondent
April 15
The Judgment of the Court was delivered by section K DAS J
This appeal relates to a trust known as the Srimati Charusila Trust and the properties appertaining thereto
By its judgment and order dated October 5 1953 the High Court of Patna has held that the trust in question is a private trust created for the worship of a family idol in which the public are not interested and therefore the provisions 604 of the Bihar Hindu Religious Trusts Act 1950 Bihar I of 1951 hereinafter referred to as the Act do not apply to it
Accordingly it allowed an application made to it under article 226 of the Constitution and quashed the proceedings taken against the respondent herein under sections 59 and 70 of the Act
The State of Bihar the President of the Bihar State Board of Religious Trusts and the Superintendent of the said Board who were respondents to the petition under article 226 are the appellants before us
The trust in question was created by a trust deed executed on March 11 1938
Srimati Charusila Dasi is the widow of one Akshaya Kumar Ghose of No 3 Jorabagan Street in Calcutta
She resided at the relevant time in a house known as Charu Niwas at Deoghar in the district of Santhal Parganas in the State of Bihar
In the trust deed she described herself as the settlor who was entitled to and in possession of certain properties described in schedules B C and D Schedule B property consisted of three bights and odd of land situate in mohalla Karanibad of Deoghar town together with buildings and structures thereon schedule C property was Charu Niwas also situate in Karanibad of Deoghar and schedule D properties consisted of several houses and some land in Calcutta the aggregate value of which was in the neighborhood of Rs 850000
In a subsequent letter to the Superintendent Bihar State Board of Religious Trusts it was stated on behalf of Srimati Charusila Dasi that the total annual income from all the properties was about Rs 87839
In the trust deed it was recited that the settlor had installed a deity named Iswar Srigopal in her house and had since been regularly worshipping and performing the  puja  of the said deity that she had been erecting and constructing a twin temple jugal mandir and a Nat Mandir entrance hall to be named in memory of her deceased son Dwijendra Nath on the plot of land described in schedule B and was further desirous of installing in one of the two temples the deity Srigopal and such other deity or deities as she might wish to establish during her lifetime and also of installing in 605 the other temple a marble image of Sri Sri Balanand Brahmachari who was her religious preceptor and who was regarded by his disciples as a divine person
It was further recited in the trust deed that the settlor was also desirous of establishing and founding a hospital at Karanibad for Hindu females to be called Akshaya Kumar Female Hospital in memory of her deceased husband
By the trust deed the settler transferred to the trustees the properties described in schedules B C and D and the trustees were five in number including Srimati Charusila Dasi and her deceased husband s adopted son Debi Prasanna Ghosh the other three trustees were Amarendra Kumar Bose Tara Shanker Chatterjee and Surendra Nath Burman but they
were not members of the family of the settlers Amarendra Kumar Bose resigned from the office of trusteeship and was later replaced by Dr Shailendra Nath Dutt
The trusts imposed under the trust deed were 1 to complete the construction of the two temples and the Nat Mandir at a cost not exceeding three lakhs to be met out of the trust estate and donations if any  2 after the completion of the two temples to instal or cause to be installed the deity Iswar Srigopal in one of the temples and the marble image of Sri Balanand Brahmachari in the other and to hold a consecration ceremony and a festival in connection therewith  3 after the installation ceremonies and festivals mentioned above to provide for the payment and expenditure of the daily  sheba puja  and periodical festivals each year of the deity Srigopal and such other deities as might be installed at an amount not exceeding the sum of Rs 13600 per annum and also to provide for the daily  sheba  of the marble image of Sri Balanand Brahmachari and to celebrate each year in his memory festivals on the occasion of a the  Janma tithi  the anniversary of the installation of the marble image b  Gurupurnima  full moon in the Bengali month of Ashar  and c  Tirodhan  anniversary of the day on which Sri Balanand Brahmachari gave up his body at a cost not exceeding Rs 4500 per annum  and 4 to establish or cause to be established and run and 606 manage in Deoghar a hospital for Hindu females only to be called Akshaya Kumar Female Hospital and an attached outdoor charitable dispensary for all out patients of any religion or creed whatsoever and pay out of the income for the hospital and the outdoor dispensary an annual sum of Rs 12000 or such other sum as might be available and sufficient after meeting the charges and expenditure of the two temples and after paying the allowance of the  shebait  and trustees and members of the temple committee
It was further stated that the work of the establishment of the hospital and the out door charitable dispensary should not be taken in hand until the construction of the temples and the installation of the deities mentioned above
It may be here stated that it is the case of both parties before us that the temples and the Nat Mandir have been constructed and the deity and the marble image installed therein but neither the hospital nor the charitable dispensary has yet been constructed
The powers functions and duties of the trustees were also mentioned in the deed and in schedule A detailed rules were laid down for the holding of annual general meetings special meetings and ordinary meetings of the trustees
To these details we shall advert later
On October 27 1952 the Superintendent Bihar State Board of Religious Trusts Patna sent a notice to Srimati Charusila Dasi under section 59 of the Act asking her to furnish a return in respect of the trust in question
Srimati Charusila Dasi said in reply that the trust in question was a private endowment created for the worship of a family idol in which the public were not interested and therefore the Act did not apply to it
On January 5 1953 the Superintendent wrote again to Srimati Charusila Dasi informing her that the Board did not consider that the trust was a private trust and so the Act applied to it
There was further correspondence between the solicitor of Srimati Charusila Dasi and the President of the Bihar State Board of Religious Trusts
The correspondence did not however carry the matter any further and on February 5 1953 the President of the State Board of 607 Religious Trusts said in a notice that he had been authorised to assess a fee under section 70 of the Act in respect of the trust
Ultimately on April 61953 Srimati Gharusila Dasi made an application to the High Court under article 226 of the Constitution in which she prayed that a writ or order be issued quashing the proceedings taken against her by the Bihar State Board of Religious Trusts on the grounds a that the trust in question was a private trust to which the Act did not apply and b that the Act was ultra vires the Constitution by reason of the circumstance that its several provisions interfered with her rights as a citizen guaranteed under article 19 of the Constitution
This application was contested by the State of Bihar and the Bihar State Board of Religious Trusts though no affidavit was filed by either of them
On a construction of the trust deed the High Court came to the conclusion that the trust in question was wholly of a private character created for the worship of a family idol in which the public were not interested and in that view of the matter held that the Act and its provisions did not apply to it
Accordingly the High Court allowed the application and issued a writ in the nature of a writ of certiorari quashing the proceedings under sections 59 and 70 of the Act and a writ in the nature of a writ of prohibition restraining the Bihar State Board of Religious Trusts from taking further proceedings against Srimati Charusila Dasi in respect of the trust in question
The appellants then applied for and obtained a certificate from the High Court that the case fulfilled the requirements of article 133 of the Constitution
The present appeal has been filed in pursuance of that certificate
In connected Civil Appeals numbered 225 226 228 229 and 248 of 1955 1 judgment has been pronounced to day and we have given therein a conspectus of the provisions of the Act and have further dealt with the question of the constitutional validity of those provisions in the context of fundamental rights guaranteed by Part III of the Constitution
We have held therein that the provisions of the Act do not take away or 1 Mahant Moti Das vs section P Saki see P 563 ante 608 abridge any of the rights conferred by that Part
In Civil Appeal No 343 of 1955 1 in which also judgment has been pronounced today we have considered the definition clause in section 21 of the Act and come to the conclusion that the Act does not apply to private endowments and have further explained therein the essential distinction in Hindu law between private and public religious trusts
We do not wish to repeat what we have said in those two decisions but in the light of the observations made therein the two questions which fall for decision in this appeal are I if on a true construction of the trust deed dated March 11 1938 the Charusila Trust is a private endowment created for the worship of a family idol in which the public are not interested as found by the High Court and 2 if the answer to the first question is in the negative does the Act apply by reason of section 3 thereof to trust properties which are situate outside the State of Bihar
We now proceed to consider and decide these two questions in the order in which we have stated them
On behalf of the appellants it has been contended that on a true construction of the deed of trust the Charusila Trust must be held to be a public religious trust
The learned Judges of the High Court emphasised that part of the preamble wherein it was stated that the settler had installed a deity called Iswar Srigopal in her house and had been regularly worshiping the said deity which circumstance according to them showed that in its origin the endowment was a private endowment created for the worship of a family idol in which the public were not interested and the learned Judges were further of the view that the installation of the said deity in one of the two temples and of the marble image of Sri Balanand Brahmachari in the other temple did not alter the nature of the endowment which continued to be a expressed the opinion that deed for the establishment of a females and a charitable dispensary for patients of any main objects of the endowment
These findings of the private endowment they also the provision in the trust hospital for Hindu religion or creed was merely incidental to the other 1 Mahant Ram saroop Dasji vs section e
sahi see 609 High Court have been seriously and strenuously challenged before us
We say this with respect but we consider that the learned Judges of the High Court have failed to give to several material clauses of the trust deed their due weight and these have an important bearing on the question in issue
It is true that the settler said that she had installed the deity Iswar Srigopal in her house and she had been regularly worshipping the deity since such installation if the trust had been created only for the purpose of continuing such family worship the conclusion would no doubt be that the endowment was wholly of a private character in which the public had no interest
That was not however what was done
The settlor created the trust for the construction of two temples in one of which was to be installed the deity Iswar Srigopal and in the other the marble image of her preceptor the trustees consisted of persons three of whom were strangers to the family though the settlor reserved to herself the power to remove in her absolute discretion any one or more of the trustees for misconduct by reason of change of religion etc
One of the relevant considerations is if by the trust deed any right of worship has been given to the public or any section of the public answering a particular description
One of the clauses of the trust deed reads   The  pronamis  and perquisites to be offered to the deities and image in the Jugal Mandir shall form part of the Srimati Charusila Trust Estate and neither the shebait nor any one else shall have interest or claim in or over same This clause to which the learned Judges of the High Court have made no reference shows that the right of worship was not confined to the family of the settlor or founder but was given to other members of the Hindu public who could offer  pronamis  and perquisites to the deities and those I pronamis  and perquisites were to form part of the trust estate
Schedule E of the deed gives details of the festivals and ceremonials to be performed for the deity and the image of Sri Balanand Brahmachari
One of the cere monials is a Jal Chhatra  free distribution of 77 610 water another is annakoot  distribution of food at the time of Diwali the approximate expenditure being fixed at Rs 500
A third ceremony is a bhandara  culminating in free distribution of food of the Mataji of Sri Balanand Brahmachari
These are ceremonies which even if ancillary to deva sheba appear prima facie to confer benefit on the general body of worshippers
Though not conclusive by them selves they have to be considered in the light of the other main provisions of the trust deed
The other festivals which have to be performed as a rule for the deity are such well known festivals as Rath Yatra Jhulan Janmastami Rash and Dol Holi in which members of the Hindu community usually take part in large numbers and the scale of expenses laid down shows that the festivals are to be performed on a large scale so as to enable a large number of persons to take part in them
Even with regard to the special festivals for Sri Balanand Brahmachari on the occasion of the Janmatithi Gurupurnima and Tirodhan the provisions of the trust deed contemplate that they are to be performed on a large scale so that other disciples of Sri Balananda Brahmachari may also join in them
Even the constitution of the committee of trustees is such as would show that the endowment is not a mere private endowment
The trust deed says  In filling up a vacancy the trustees shall see that in the Board of Trustees there shall be if available one who is the seniormost lineal male descendant of Akshaya Kumar Ghose the deceased husband of the settlor who is eligible and willing and capable of acting as a trustee another who is a trustee of the Sree Sree Balanand Trust created at Deoghar by the said Sree Balanandji Brahmachari Maharaj of sacred memory and a third who shall be disciple of Sree Sree Balanand order that is to say any one of the disciples of the said Sree Sree Balanand Brahmachari Maharaj of sacred memory and his disciples and the disciples of the latter and so on if such a disciple is willing eligible and capable of acting as a trustee of the said Trust hereby created provided always that the full number of trustees shall at all times be five in number and no one 611 shall be eligible to be a trustee unless he be adult male pious Bengali Hindu and provided also that the shebait of Sree Gopal and the shebait of Sree Baleshwari Devi of the Ashram Deoghar shall under no circumstances be eligible to be a trustee tinder these presents save and except in the case of the settlor who shall so long as she lives to both a trustee and a shebait
 We may here draw attention to the formation of the temple committee as envisaged by the trust deed
It says that the temple committee shall consist of the Jugal Mandir shebait for the time being who shall be the ex officio member and president of the committee and the other members who will be appointed or nominated by the trustees shall consist of six pious Hindus who must be residents of Deoghar and of whom at least four shall be Bengalis
If the trust were created for the worship of a family idol one would not expect provisions of this nature which vest the management of the temple and the  sheba puja  in members of the public outside the family of the settlor
Besides the aforesaid provisions there is in express terms the imposition of a trust in favour of the public so far as the hospital and the charitable dispensary are concerned
It is necessary to quote here el 8 of the trust deed
That clause reads  To establish or cause to be established and run and manage in Deoghar a hospital for Hindu females only to be called in memory of the husband of the settlor since deceased the  Akshaya Kumar Female Hospital  and an attached out door Charitable Dispensary for all out patients of any religion or creed whatsoever and out of the said income to pay andor spend for the objects of the said Hospital and out door Dispensary annually a sum of rupees twelve thousand or such sum as will be available and sufficient after meeting the aforesaid charges and expenditure and after paying the allowance of the shebait and trustees and members of the temple committee and the establishment charges of offices at Calcutta and Deoghar and of the temple establishment hereinafter mentioned provided however that the work of the establishment 612 of the Hospital and out door Charitable Dispensary shall not be taken in hand by the trustees until the construction of the temple and installation of the deities hereinbefore mentioned The trust deed further states that the female hospital and charitable dispensary shall so long as the settlor is alive be located in a house to be rented in Deoghar and after her death shall be shifted to and located in Charu Niwas
Charu Niwas was however sold by an order of the Calcutta High Court and the sale proceeds it is stated were appropriated towards the satisfaction of the debts and liabilities of the trust estate
One clause of the trust deed relating to the hospital and the charitable dispensary says  The object of the said Hospital shall be to provide Hindu females with gratuitous medical and surgical and maternity advice and aid and also to admit them as indoor patients in conformity with such rules and regulation as may be made by or with the sanction of the Board of Trustees
The outdoor Charitable Hospital shall be run as the trustees shall provide by rules
In furtherance of these objects its funds may be expended in subscriptions or contributions to convalescent and other similar institutions and to other special hospitals and in sending patients to and maintaining them in such institution and hospitals provided that the sum so expended in any one year shall not exceed rupees one thousand or such sum as may be fixed by the trustees from time to time
 The learned Judges of the High Court have expressed the view that these provisions for the establishment of a hospital and charitable dispensary are merely incidental or ancillary to the other main objects of the trust
With great respect we are unable to appreciate how the establishment of a hospital and charitable dispensary of the nature indicated in the trust deed can be said to be ancillary or incidental to other objects of the trust viz the construction of two temples and the installation of the deities therein
In clear and unequivocal terms the trust deed imposes a distinct and independent trust in favour of a considerable section of the public for whose benefit the hospital 613 and the charitable dispensary are to be established
It is true that the establishment of the hospital and the charitable dispensary is to be taken in hand after the construction of the temples and the installation of the deities that circumstance however does not make the trust in relation to the hospital and the dispensary any the less important or even merely incidental or ancillary to the other trusts
It merely determines the priority of time when the different trusts created by the deed are to be given effect to
The High Court has placed reliance on the decision in Prasaddas Pal vs Jagannath Pal 1
That was a case in which by the deed of endowment were dedicated certain houses and premises to the  sheba of a family idol established in one of the said houses and for feeding the poor and carrying out other charitable objects the deity was installed inside one of the residential quarters the  shebaitship  was confined to the members of the family of the founder and the feeding of the poor and of students in case the income of the debutter property increased was found to be part and parcel of the debasheba  and in those circumstances it was held that the feeding of the poor etc
was not an independent charity but incidental to the main purpose of the endowment viz the  puja  of the deity
We are unable to hold that the same considerations apply to the trust before us
In Deoki Nandan vs Murlidhar 2 this Court considered the principles of law applicable to a determination of the question whether an endowment is public or private and observed  The cardinal point to be decided is whether it was the intention of the founder that specified individuals are to have the right of worship at the shrine or the general public or any specified portion thereof
In accordance with this theory it has been held that when property is dedicated for the worship of a familyidol it is a private and not a public endowment as the persons who are entitled to worship at the shrine of the deity can only be the members of the family and that is an ascertained group of individuals
But 1 Cal538
2   762
614 where the beneficiaries are not members of a family or a specified individual then the endowment can only be regarded as public intended to benefit the general body of worshippers
 One of the facts which was held in that case to indicate that the endowment was public was that the idol was installed not within the precincts of residential quarters but in a separate building constructed for that very purpose on a vacant site
We do not suggest that such a fact is by itself decisive of the question
The fact that the temple is outside the dwelling house is only a circumstance in favour of it being regarded a public temple particularly in Madras except Malabar there are however private temples in Bengal which are built outside the residential houses of donors see the Hindu Law of Religious and Charitable Trust Tagore Law Lectures by the late Dr B K Mukherjea 1952 edition p 188
In the case before us the two temples were constructed outside the residential quarters but that is only one of the relevant circumstances
We must construe the deed of trust with reference to all its clauses and so construed we have no doubt that the trusts imposed constitute a public endowment
There is one other point to be noticed in this connexion
The deed of trust in the presept case is in the English form and the settlor has transferred the properties to trustees who are to hold them for certain specific purposes of religion and charity that in our opinion is not decisive but is nevertheless a significant departure from the mode a private religious endowment is commonly made
It is necessary now to refer to a decision of the Calcutta High Court In re Charusila Dasi 1 relating to this very trust
The question for consideration in that case was the assessment of income tax on the income of this trust estate for the accounting year 193839
The trustees were assessed upon the whole income of the trust The trustees appealed against the assessment and contended that the entire trust was for public religious and charitable purposes and the whole income 1 ILR 615 fell within cl
1 of sub section
3 of section 4 of the Income tax Act
The contention of the Commissioner of Income tax was that the trust was no more than a private religious trust and the income did not enure for the public benefit save with respect to that part of the income which was to be devoted to the hospital and dispensary and to which the latter part of cl
1 applied
A reference was accordingly made to the High Court and the question framed was whether on a proper construction of the deed of trust so much of the income of the trust as was not applied for the purpose of constructing and maintaining the female hospital was exempt from tax under the provisions of section 43 of the Indian Income tax Act
It was pointed out before the High Court that no part of the income of the trust during the accounting year was devoted to the hospital and dispensary and it was conceded that part of the income which would be devoted to those institutions would fall within the exempting clause
It so happens that the learned counsel who argued the case on behalf of the trustees in the Calcutta High Court in the income tax reference is the same counsel who has argued the case before us on behalf of Srimati Charusila Dasi
The contention now is that the trust in its entirety is a private religious trust
Eleven circumstances were referred to by learned counsel in the income tax reference in support of his contention that the entire trust as ascertained from the trust deed was of a public nature
Gentle J with whom Ormond J agreed held that on a proper construction of the deed of trust so much of the income of the trust as was not applied for the purpose of constructing an maintaining the female hospital was not exempt from tax under the provisions of section 43 of the Indian Income tax Act
This decision it must be stated at once does not wholly support the present respondent
So far as the hospital and the dispensary are concerned the trust was held to be a public trust
We are of the view that having regard to the main clauses of the trust deed to which we have already made a reference the trusts in favour of the deity Iswar Srigopal and the image of Sri Balanand Brahmachari are also of a public nature
816 One of the points which was emphasised before the Calcutta High Court was the provision with regard to pronamis  and perquisites to be offered to the deity and the image
The High Court said  This provision does not indicate the creation of a trust in favour of the public but on the contrary it denies the right of any one which must include any member of the public
having a right to the pronamis
In its terms the deed negatives that benefit is conferred upon the public 
The aforesaid observations appear to us with respect to be based on a misconception
When a member of the public makes an offering to a deity he does not retain any right to what he has offered
What he offers belongs to the deity
When we talk of the right of members of the public or a considerable section thereof we refer to the right of worship or the right to make offerings in worship of the deity and not of the right to the offerings after they have been made
With regard to other clauses of the trust deed also we take a view different from that of the learned Judges who decided the income tax reference
We have already explained our view in the preceding paragraphs and it is unnecessary to reiterate it
The conclusions at which we have arrived on a construction of the deed of trust is that it creates a religious and charitable trust of a public nature
Now we proceed to a consideration of the second point
Section 3 of the Act says  This Act shall apply to all religious trusts whether created before or after the commencement of this Act any part of the property of which is situated in the State of Bihar 
The argument before us on behalf of the respondent is this
Under article 245 of the Constitution Parliament may make laws for the whole or any part of the territory of India and the legislature of a State may make laws for the whole or any part of the State
Clause 2 of the said Article further states that no law made by Parliament shall be deemed to be invalid on the ground that it would have extra territorial operation
Article 246 gives the distribution of legislative power 617 Parliament has exclusive power to make laws with respect to any of the matters enumerated in what has been called the Union List Parliament as also the legislature of a State have power to make laws with respect to any of the matters enumerated in the Concurrent List the legislature of a State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in the State List
Item 28 of the Concurrent List is charities and charitable institutions charitable and religious endowments and religious institutions 
Learned counsel for the respondent contends that by reason of the provisions in articles 245 and 246 of the Constitution read with item 28 of the Concurrent List the Bihar legislature which passed the Act had no power to make a law which has operation outside the State of Bihar he further contends that under section 3 the Act is made applicable to all religious trusts whether created before or after the commencement of the Act any part of the property of which is situated in the State of Bihar therefore the Act will apply to a religious institution which is outside Bihar even though a small part of its property may lie in that State
It is contended that such a provision is ultra vires the power of the Bihar Legislature and Parliament alone can make a law which will apply to religious institutions having properties in different States
Alternatively it is contended that even if the Act applies to a religious institution in Bihar a small part of the property of which is in Bihar the provisions of the Act can have no application to such property of the institution as is outside Bihar such as the Calcutta properties in the present case
It is necessary first to determine the extent of the application of the Act with reference to sections 1 2 and 3 of the Act read with the preamble
The preamble states  Whereas it is expedient to provide for the better administration of Hindu religious trusts in the State of Bihar and for the protection and preservation of properties appertaining to such trusts 78 618 It is clear from the preamble that the Act is intended to provide for the better administration of Hindu religious trusts in the State of Bihar
Section 1 2 states that the Act extends to the whole of the State of Bihar and section 3 we have quoted earlier
If these two provisions are read in the context of the preamble they can only mean that the Act applies in cases in which a the religious trust or institution is in Bihar and b any part of the property of which institution is situated in the State of Bihar
In other words the aforesaid two conditions must be fulfilled for the application of the Act
It is now well settled that there is a general presumption that the legislature does not intend to exceed its jurisdiction and it is a sound principle of construction that the Act of a sovereign legislature should if possible receive such an interpretation as will make it operative and not in operative see the cases referred to In re the Hindu Women s Right to Property Act 1937 and The Hindu Women s Rights to Property Amendment Act 1936 and In re a Special Reference under section 213 of The Government of India Act 1935 1 and the decision of this Court in R M D Chamarbaugwalla vs The Union of India 2
We accordingly hold that section 3 makes the Act applicable to all public religious trusts that is to say all public religious and charitable institutions within the meaning of the definition clause in section 2 1 of the Act which are situate in the State of Bihar and any part of the property of which is in that State
In other words both conditions must be fulfilled before the Act can apply
If this be the true meaning of section 3 of the Act we do not think that any of the provisions of the Act have extra territorial application or are beyond the competence and power of the Bihar Legislature
Undoubtedly the Bihar Legislature has power to legislate in respect of to use the phraseology of item 28 of the Concurrent List  charities charitable institutions charitable and religious endowments and religious institutions  situate in the State of Bihar
The question therefore narrows down to this in so legislating has it power to affect trust 1  27 30
2 619 property which may be outside Bihar but which appertains to the trust situate in Bihar  In our opinion the answer to the question must be in the affirmative
It is to be remembered that with regard to an interest under a trust the beneficiaries  only right is to have the trust duly administered according to its terms and this right can normally be enforced only at the place where the trust or religious institution is situate or at the trustees  place of residence see Dicey s Conflict of Laws 7th edition p 506
The Act purports to do nothing more
Its aim
 as recited in the preamble is to provide for the better administration of Hindu religious trusts in the State of Bihar and for the protection of properties appertaining thereto
This aim is sought to be achieved by exercising control over the trustees in personam
The trust being situate in Bihar the State has legislative power over it and also over its trustees or their servants and agents who must be in Bihar to administer the trust
Therefore there is really no question of the Act having extraterrestrial operation
In any case the circumstance that the temples where the deities are installed are situate in Bihar that the hospital and charitable dispensary are to be established in Bihar for the benefit of the Hindu public in Bihar gives enough territorial connection to enable the legislature of Bihar to make a law with respect to such a trust
This Court has applied the doctrine of territorial connection or nexus to income tax legislation sales tax legislation and also to legislation imposing a tax on gambling
In Tata Iron  Steel Co Ltd vs State of Bihar 1 the earlier cases were reviewed and it was pointed out that sufficiency of the territorial connection involved a consideration of two elements namely a the connection must be real and not illusory and b the liability sought to be imposed must be pertinent to that connection
It cannot be disputed that if the religious endowment is itself situate in Bihar and the trustees function there the connection between the religious institution and the property appertaining thereto is real and not illusory  indeed the religious institution I  620 and the property appertaining thereto form one integrated whole and one cannot be dissociated from the other
If therefore any liability is imposed on the trustees such liability must affect the trust property It is true that in the Tata Iron  Steel Co s case this Court observed   It is not necessary for us on this occasion to lay down any broad proposition as to whether the theory of nexus as a principle of legislation is applicable to all kinds of legislation
It will be enough for disposing of the point now under consideration to say that this Court has found no apparent reason to confine its application to income tax legislation but has extended it to sales tax and to tax on gambling
 We do not see any reason why the principles which were followed in The State of Bombay vs R M D Chamarbaugwala 2 should not be followed in the present case
In R M D Chamarbaugwala s case 2 it was found that the respondent who was the organiser of a prize competition was outside the State of Bombay the paper through which the prize competition was conducted was printed and published outside the State of Bombay but it had a wide circulation in the State of Bombay and it was found that  all the activities which the gambler is ordinarily expected to undertake took place mostly if not entirely in the State of Bombay
These circumstances it was held constituted a sufficient territorial nexus which entitled the State of Bombay to impose a tax on the gambling that took place within its boundaries and the law could not be struck down on the ground of extra territoriality
We are of the opinion that the same principles apply in the present case and the religious endowment itself being in Bihar and the trustees functioning there the Act applies and the provisions of the Act cannot be struck down on the ground of extra territoriality
We proceed now to consider some of the decisions on which learned counsel for the respondent has placed reliance
These are 1 Sirdar Gurdyal Singh vs The Rajah of Faridkote 3  2 Commissioner of Wakfs Bengal 1  21957 SCR 874
3 1894 21 IA 17r 185
621 V Narasingh Chandra Daw and Co 1 3 Madangopal Bagla vs Lachmidas 2 and 4 Maharaj Kishore Khanna vs Raja Ram Singh 3 
Those decisions in our opinion are not in point as they related to different problems altogether
In Sirdar Gurdyal Singh s case 4 a Faridkote court passed an ex parte money decree against a defendant who had been a treasurer of Faridkode but who at the time of suit had ceased to be such and was resident in Jhind of which State he was a domiciled subject it was held that the decree was a nullity by international law
The ratio of the decision was thus expressed by Lord Selborne Territorial jurisdiction attaches with special exceptions upon all persons either permanently or temporarily resident within the territory while they are within it but it does not follow them after they have withdrawn from it and when they are living in another independent country  
In a personal action to which none of these causes of jurisdiction apply a decree pronounced in absentem by a foreign Court to the jurisdiction of which the defendant has not in any way submitted himself is by international law an absolute nullity
 The decision in Commissioner of Wakfs Bengal vs Narasingh Chandra Daw  Co 1 proceeded on a construction of section 70 of the Bengal Wakf Act which also had a section similar to section 3 of the Act
Section 70 of the Bengal Wakf Act required notice to the Commissioner of Wakfs before any wakf property could be sold and the question was whether a court in Assam was under any obligation to send such a notice
It was held that the Bengal Act did not apply to Assam and section 70 stood in a different category from the other sections of the Bengal Act
The ratio of the decision was thus explained   So far as the status of the Commissioner is concerned it is conferred by the Bengal Act to operate even outside the province
Therefore the Commissioner may bring suits under section 72 or section 73 of the Bengal Act in courts outside the province
But section 70 lies 1 ILR 3 AIR 1954 Pat 164
2 ILR 4 1894 21 IA 171 185
622 in a different category because it imposes an obligation on the court to issue notice to the Commissioner in certain circumstances 
Section 701 refers to a suit or proceeding in respect of any wakf property etc and if this wakf property is situated outside the province so that the court having jurisdiction over it is also outside the province then the Act cannot operate beyond its extent that is to say outside the province of Bengal
 The decision in Madangopal Bagla vs Lachmidas and the decision in Maharaj Kishore Khanna vs Raja Ram Singh 1 both related to the interpretation of some of the provisions of the United Provinces Encumbered Estates Act U P Act 25 of 1934
In the former case the limited question for decision was if the decreeholder under a decree of the Original side of the Calcutta High Court was precluded from executing the decree by reason of certain proceedings which had taken place before the Special Judge Banaras under the United Provinces Encumbered Estates Act 1934
The answer given was that the decreeholder was not so precluded and the decision proceeded on a construction of section 18 of the United Provinces Encumbered Estates Act 1934 read with sections 7 13 and 147 of that Act
It was held that the exclusive jurisdiction intended to be conferred on the Special Judge in supersession of those of civil and revenue courts extended as indicated by section 7 only over debts enforceable through the courts within the province and the word  creditor  in section 10 must be limited to those of them who would have to enforce their rights through such courts alone
In the Patna case the question for decision was if section 147 of the U P Encumbered Estates Act 1934 should be construed to mean that the decree of a Special Judge is to be deemed to be the decree of a civil court of competent jurisdiction even beyond the territorial jurisdiction of the State Legislature
It was held that the decree passed by the Special Judge of Banaras had not the effect of a decree of a civil court outside the territorial limits of the United Provinces and the Sub 1 ILR 2 AIR 1954 Pat 164
623 ordinate Judge of Purnea in Bihar had no jurisdiction to execute such a decree or to direct that the properties of a judgment debtor in Purnea should be attach ed in execution of the decree
As we have said earlier these decisions relate to an altogether different problem namely the proper construction of certain sections of the Bengal Wakf Act or of the United Provinces Encumbered Estates Act
The problem before us is of a more general nature and the aforesaid decisions are no authorities for the solution of that problem
There is a decision of this Court to which our attention has been drawn Petition No 234 of 1953 decided on March 18 1953
A similar problem arose in that case where the head of a math situate in Banaras made an application under article 32 of the Constitution for a writ in the nature of mandamus against the State of Bombay and the Charity Commissioner of that State directing them to forbear from enforcing against the petitioner the provisions of the Bombay Public Trusts Act 1950 on the ground inter alia that the Bombay Act could have no application to the math situate in Banaras or to any of the properties or places of worship appurtenant to that math
In the course of the hearing of the petition the learned Attorney General who appeared for the State of Bom bay made it clear that there was no intention on the part of the Government of Bombay or the Charity Commissioner to apply the provisions of the Bombay Act to any math or religious institution situated outside the State territory
The learned Attorney General submitted that the Bombay Act could be made applicable if at all to any place of religious instruction or worship which is appurtenant to the math and is actually within the State territory
In view of these submissions no decision was given on the point urged
The case cannot therefore be taken as a final decision of the question in issue before us
For the reasons which we have already given the Act applies to the Charusila Trust which is in Bihar and its provisions cannot be struck down on the ground of extra territoriality
624 The result is that the appeal succeeds and is allowed with costs the judgment and order of the High Court dated October 5 1953 are set aside and the petition of Srimati Charusila Dasi must stand dismissed with costs
Appeal allowed


Summary:
The respondent was a banking company and the question was whether it was liable to pay excess profits tax on a sum of Rs 86000 received by it as rent in respect of the major part of a six storeyed building owned and constructed by it which it had let out the rest being occupied by its headquarters in Calcutta
The Department and the Income tax Appellate Tribunal found against the respondent but the High Court on a reference under section 661 of the Income Tax Act reversed their decision
The Memorandum of Association of the Company provided as one of its objects as follows  e To purchase take on lease or in exchange or otherwise acquire any moveable or immoveable property    which the company may think necessary or convenient for the purpose of its business and to construct maintain and alter any buildings or works necessary or convenient for the purpose of the Company  The question referred to the High Court for decision wag whether the said income was part of the business income taxable under section 25 read with r 44 of the Sch
I to the Excess Profits Tax Act 1940
The High Court held that although the income was derived from the holding of property since the functions of the assessee company did not consist wholly or mainly in the holding of investments or other property as required by the first proviso to section 25 Of the Act no question of the application of r 44 could arise
Held Per Sinha and Hidayatullah jj Kapur J dis senting that the question must be answered in the affirmative
Per SINHA J The High Court was fundamentally in error in overlooking the main provision Of section 25 of the Act for even though the first proviso might not apply that by itself would not render the main provision of the definition which was wider than that under the Indian Income tax Act inapplicable
Commissioners of Inland Revenue vs Desoutter Bros Ltd  applied
661 The term business  was of wide import and each case had to be determined with reference to the particular kind of acti vity or occupation of the person concerned
Though ordinarily it implied a continuous activity in carrying on a particular trade or avocation it might also include an activity which might be called  quiescent 
The Commissioners of Inland Revenue vs The South Behar Railway Co Ltd and Commissioners of Inland Revenue vs The Korean Syndicate Ltd 1921 12 T C 181 referred to
The Memorandum of Association of a company provided the key to its business objects and the relevant clause in the instant case clearly showed that the managing of property and realisation of rents therefrom were within the objects of the company and therefore such rents must be included in calculating its profits under r 44 of the Sch
I to the Act
It was not correct to suggest that the rule in substituting the word  partly  for  mainly  occurring in the first proviso to section 25 exceeded the provisions of the statute
Rule 44 did not derive its operative force from that proviso limited to an incorporated body of a particular type and was of wider application as evident from its own terms as also from the second proviso to section 25 of the Act
Punjab Co operative Bank Ltd vs  Commissioner of Income tax Punjab  1940 8 ITR 636 and Sardar lndra Singh and Sons Ltd vs Commissioner of Income tax West Bengal   referred to
It was not correct to say that if rental income were to be covered by the main clause of section 25 the first proviso to that section would become redundant
Commissioners of Inland Revenue vs The Tyre Investment Trust Ltd  referred to
Nor was it correct to say that  business  could not be said to include rental income
The United Commercial Bank Ltd Calcutta vs The Commis sioner of Income tax West Bengal   held inapplicable
Per KAPUR J The word business  could either mean what was contained in the main provision of section 25 or have the extended meaning given by the first proviso to that section
In either case it was inapplicable to the case of the respondent whose essential function was to deal in money and credit letting out of property being neither wholly or even partly its business
The income received by the respondent therefore by way of rent did not fall within the definition of the word profits  contained in section 219 of the Act and was not chargeable to excess profits tax under section 4 Of the Act
Salisbury House Estate Ltd vs Fry   662 Mellows vs Buxton Palace Hotel Ltd and Commissioners of Inland Revenue vs Buxton Palace Hotel Ltd  referred to
In construing the first proviso effect must be given to every word used
If the mere owning of immoveable property and the letting out of what was not needed for its own use by a company was intended to be covered by the definition the use of the words wholly  or  mainly  would be wholly redundant
Rule 44 Of the first Schedule to the Act did not modify the definition of business  so far as it related to holding of property and before it could apply the functions of the company which meant the activities appropriate to its business must fall within the definition of business  as given in the Act
Per HIDAYATULLAH J The rents realised by the respondent must be regarded as profits from property held as investment and included in the computation of profits under r 44 Of the first schedule
There was undeniably a difference between the wording of the schedule and the Act and the tendency of the schedule was to widen the definition of business so as to include letting of property for earning rents
It could not therefore be said that the definition contained in the Act wholly controlled the Schedule and r 44 must be given effect to
Inland Revenue Commissioners vs Gittus 192O 1 K B 563 applied
Gittus vs Commissioners of Inland Revenue  referred to