SCA/11433/2007 1/40 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 11433 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE JAYANT PATEL ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= DEVKRUSHNADASJI GURU DHARMADASJI & 3 - Petitioner(s) Versus THE STATE OF GUJARAT & 3 - Respondent(s) ========================================================= Appearance : MR SB VAKIL AND MR ND NANAVATI FOR DP KINARIWALA for Petitioner(s) : 1 - 4. GOVERNMENT PLEADER for Respondent(s) : 1, NOTICE SERVED BY DS for Respondent(s) : 1, MR YF MEHTA for Respondent(s) : 1, MR HARIN P RAVAL for Respondent(s) : 2, MR JJ YAJNIK for Respondent(s) : 2, MR RA MISHRA for Respondent(s) : 3, None for Respondent(s) : 4, ========================================================= CORAM : HONOURABLE MR.JUSTICE JAYANT PATEL Date : 24/01/2008 ORAL JUDGMENT SCA/11433/2007 2/40 JUDGMENT 1. The petitioners have preferred the petitioner for appropriate writ to quash and set aside the order dated 2.2.2007 passed by the Joint Charity Commissioner, Rajkot under Section 41A of the Bombay Public Trust Act (hereinafter referred to as “the Act”) below Application No.41/5/07. The petitioners have also prayed to issue appropriate writ of prohibition against the respondents from proceeding further upon the application filed by respondents No.2, 3, and 4 under Section 41A of the Act. 2. Heard Mr.S.B.Vakil and Mr.N.D.Nanavati, learned Sr. Counsel with Mr.Kinariwala, learned Counsel for the petitioners, Mr.Y.F.Mehta, learned Counsel for the Charity Commissioner, who is titled as State of Gujarat, Mr.P.M.Thakkar, learned Sr. Counsel for respondent No.2, Mr.K.S.Nanavati, learned Sr. Counsel for respondent No.3 and Mr.Yagnik, learned Counsel for respondent No.4. 3. It has been contended on behalf of the petitioners that the Charity Commissioner has no power under Section 41A of the Act to issue the SCA/11433/2007 3/40 JUDGMENT interim directions, which are issued as per Annexure “A”. It is also submitted that the petitioner No.1 had submitted change report under Section 22 of the Act, whereby respondent No.2 was removed as the Trustee and he also submitted another change report whereby petitioner Nos.2, 3, and 4 are appointed as the Trustees and in response to the said change report, the objections are filed and the matter is yet to be inquired under Section 22A of the Act. Therefore, the direction, if any, can be given by the competent officer namely; The Assistant or the Deputy Charity Commissioner, who has to exercise the power under Section 22 read with Section 22A of the Act and not the Joint Charity Commissioner or the Charity Commissioner under Section 41A of the Act. It has been further submitted that when there is express power under Section 22 read with Section 22A of the Act for deciding the question as to whether the Trustees are rightly appointed or rightly removed, the power under Section 41A cannot be resorted to, which can be said as SCA/11433/2007 4/40 JUDGMENT residuary power. In furtherance to the submission, Mr.Vakil contended that even if the powers under Section 41A of the Act are to be resorted to, then also such powers can be exercised only in cases, which are falling under Sections 32 to 41 of the Act and are not available in any other case and, therefore also, in his submission, the order can be said to be without authority or jurisdiction. In support of his submission, he relied upon the decision of this Court in case of “Syedna Mohamed Burhanuddi the 52nd Dai-ul-Multaq and Head of the Dawoodi Bohra Community v. Charity Commissioner, Gujarat State, Ahmedabad and Others”, reported in 1992(1) GLH, 331 and he mainly emphasized upon the observations made by the Division Bench in the said decision at para 36, where the language used is “the only purpose which, therefore, Section 41A serves is to empower the Charity Commissioner to issue directions in respect of matters failing under Section 32 to 41”. 4. He also contended that the aforesaid decision of SCA/11433/2007 5/40 JUDGMENT the Division Bench has subsequently followed by this Court in case of “Navinchandra Jasani & Ors. v. Pravinchandra Jasani & Ors.”, reported in 2003(1) GLR, 392 and, therefore, he submitted that in a matter where the subject matter is concerning to the change of Trustees, it would fall outside the scope and ambit of Sections 32 to 41 of the Act and, therefore, the order can be said as without jurisdiction. It was also submitted that when the application under Section 41A of the Act was filed before the Charity Commissioner, the petitioners did raise preliminary objections regarding the maintainability of the application and it was required for the Charity Commissioner to decide the preliminary points and he ought not to have examined the other merits of the matter. In spite of the same, the other aspects of the case are examined and, therefore also, the order is bad in law. He also contended that the other side is mainly relying upon the another decision of Division Bench (Coram: Mr.Justice R.K.Abichandani (as he then was) and Mr. Justice SCA/11433/2007 6/40 JUDGMENT D.H. Waghela) of this Court in case of “Navsari Taluka Halpati Shikshan Prachar Sangh v. Joint Charity Commissioner” (LPA No.2 of 2004 in SCA No.16051 of 2003), but, in his submission, the Coordinate Bench of this Court namely the other Division Bench could not have taken a different view, unless reference was made to Larger Bench and he also contended that the observations made by the Division Bench in the later judgement in case of Navsari Taluka Halpati (supra), more particularly at para 6 can be said as per incurium and, therefore, he submitted that this Court may not rely upon the later decision of the Division Bench of this Court in case of Navsari Taluka Halpati (supra). He submitted that as the order has been passed without jurisdiction, the same be quashed by this Court and appropriate writ of prohibition may be issued by this Court restraining the Charity Commissioner from proceeding with the proceedings under Section 41A of the Act. 5. Mr.Thakkar, learned Counsel appearing for respondent No.2 by relying upon the Trust Deed SCA/11433/2007 7/40 JUDGMENT contended that the petitioner No.1 was the Managing Trustee, however, vide Resolution dated 17.11.2006 of the meeting, copy whereof is produced at page 46, in which the petitioner No.1 was also present, in his place, as the Managing Trustee, Shri Balakrishnadas Swamy was appointed as the Managing Trustee and various businesses were transacted at the said meeting to ensure that the functioning of the Trust is transparent and is being made for the larger interest of the beneficiaries, including that of proper accounting of the income and expenditure, the constitution of the local committee for advice, etc. He submitted that based the said resolution change report was also submitted by the petitioner No.1 under his signature, which is subsequently withdrawn by him without there being any authorization by the resolution of the other Trustees. He submitted that thereafter the petitioner No.1 on his own, on 13.1.2007 based on the opinion of one Advocate Shri Thakkar, removed respondent No.2 as the Trustees and on 17.1.2007, he on his own, appointed SCA/11433/2007 8/40 JUDGMENT petitioners No.2, 3, and 4 as the Trustees of the Trust and the change reports without authority were filed, which are objected by respondents. Mr.Thakkar submitted that the action of the petitioner No.1 for removal of respondent No.2 and to appoint petitioners No.2, 3, and 4, can be said as not supported by any resolution of the Trustees, contrary to the Trust Deed and without there being any authority with him for such action. He also submitted that after the impugned order was passed – Annexure “A” by the Joint Charity Commissioner on 13.3.2007 pending the proceedings the application was submitted for extension of the interim order passed earlier and below the said application the learned Counsel for the petitioners did not object for extension and based on such declaration, the Charity Commissioner passed the order of concluding the pleadings and hearing of Ex.1 and only then the interim order is continued till further orders. He, therefore, submitted that in view of the aforesaid conduct on the part of the petitioners SCA/11433/2007 9/40 JUDGMENT in declaring before the Charity Commissioner no objection for extension, they would not be entitled to challenge the earlier order dated 2.2.2007 and in any case, would not be entitled to invoke the discretionary jurisdiction by this Court as they are estopped from assailing the order dated 2.2.2007 in view of the subsequent conduct on 3.3.2007 before the Jt. Charity Commissioner. Mr.Thakkar submitted that if the normal mode of removal is not followed or if the action is in contrary to the Trust Deed, there is power with the Charity Commissioner under Section 41A to issue directions. He submitted that such powers are read by the Division Bench Judgement of this Court in case of Navsari Taluka Halpati (supra). He also relied upon the provisions of Section 69A read with Section 3 of the Act to show that there are powers of General Superintendent over the administration of the Trust and, therefore, in any case, the Charity Commissioner will have power to issue the directions. He also relied upon another decision of this Court (Coram: N.N. Mathur, J.) SCA/11433/2007 10/40 JUDGMENT reported in 1997(1) GLH, 16 and he pressed in service the observations made by this Court in the above referred judgement, at para 11, 12, and 13. Mr.Thakkar also relied upon another judgement of the Single Judge of this Court reported at 2005(9) GJH, 613 and pressed in service, the observations made at para 30 of the said decision. He, therefore, submitted that the order cannot be said as without jurisdiction. 6. Mr.Thakkar, learned Counsel for the petitioners also contended that pending the petition the hearing before the Charity Commissioner below Ex.1 has proceeded and the petitioners have also participated in the said proceedings. However, in view of the oral direction of this Court, the Charity Commissioner has passed the order, but has put it in the sealed cover and, therefore, he submitted that in view of the subsequent change in the circumstances, this Court may consider the matter for declaring the petition as having become infurctuous since the petitioners may have the remedy to challenge the SCA/11433/2007 11/40 JUDGMENT final order and when this Court is to consider the matter, the view of the Charity Commissioner expressed finally below the main application may also be considered. 7. Mr.Nanavati, learned Counsel appearing for respondent No.3, while supporting the submissions made on behalf respondent No.2 contended that if this Court is considering that there is power with the Charity Commissioner to issue the directions, whether application is moved under Section 41A or the power is exercised by the Charity Commissioner under Section 41A or Section 69(a) would be irrelevant and it cannot be said that there is no power at all with the Charity Commissioner to issue such directions. He contended that the directions issued by the Charity Commissioner and the power conferred under Section 41A read with Section 69(a) be read, keeping in view the intention of the Legislature and the conferment of the general powers of Superintendence vested to the Charity Commissioner under Section 3 of the Act. He submitted that Section 41A can be segregated SCA/11433/2007 12/40 JUDGMENT into two parts for exercise of the power by the Charity Commissioner; first part deals with the proper administration and the second part deals with the proper accounting of the income and its due appropriation for the purpose of the Trust and, therefore, he submitted that if the first part of Section 41A is considered, the Charity Commissioner has power to issue the directions for proper administration of the Trust, which would include the question of removal or induction of the Trustees and to meet with the interim situation arising therein, either under Section 22A or other situations which are not contemplated or foreseen in under the Act. He also submitted that the business transacted at the meeting on 17.11.2006 were essentially to see that there is proper functioning of the Trust and the income is accounted and the proper record is maintained under the Supervision of the Trustees and there is also local committee appointed but the same was not acceptable to petitioner No.1, subsequently the change report is withdrawn and the action is taken for removal SCA/11433/2007 13/40 JUDGMENT and for induction of new Trustees. He, therefore, submitted that in such situation, the order cannot be said as without jurisdiction under Section 41A or the other provisions of the Act. 8. Mr.Yagnik, learned Counsel appearing for respondent No.4 mainly supported the submissions made on behalf of the respondents No.2 and 3 and he contended that there is power with the Charity Commissioner to issue interim directions. He contended that the direction issued by the Charity Commissioner under Section 41A(1) is binding under Sub-Section(2) of the said Section to all Trustees and, therefore, it is not open to the petitioners to challenge the said directions. 9. Mr.Mehta, learned Counsel appearing for the Charity Commissioner submitted that the preliminary point has been considered by the Charity Commissioner in the impugned order and directions have been issued for larger interest of the Trust. He also submitted that pending petition after hearing both the sides, the SCA/11433/2007 14/40 JUDGMENT Charity Commissioner has also passed the order, but since the oral direction was issued not to pronounce the order and to put it in a sealed cover, the Charity Commissioner has acted accordingly and he submitted that the Charity Commissioner may be permitted to pronounce the order. 10.Mr.Vakil and Mr.N.D.Nanavati, learned Counsel appearing for the petitioners, in response to the submissions made on behalf of the respondents, further contended that the petition cannot be said as having become infructuous, more particularly because pending the petition hearing has proceeded, but there was oral directions issued by this Court not to pronounce the order and to put it in sealed cover. He also submitted that the no objection below application for extension would not operate as a bar to the petitioners, if there is no power with the Charity Commissioner under the law and in his submission, in any case, the reliefs prayed in para 8(C) being the writ of prohibition cannot be said as barred if there is SCA/11433/2007 15/40 JUDGMENT no power with the Charity Commissioner to continue with the proceedings under Section 41A of the Act. He submitted that the equity cannot override the express provisions of law and, therefore, if there is no power with the Charity Commissioner under Section 41A of the Act, this Court may issue writ of prohibition. He also submitted that the later decision of the Division Bench of this Court in case of Navsari Taluka Halpati (supra) was in facts of the case that the Charity Commissioner had issued the directions for holding of the election of the Trustees and such fact situation cannot be said at par with the present case and, therefore, the observations made by the Division Bench in the judgement in the aforesaid case may not apply to the facts of the present case, whereas in his submission, the earlier decision of the Division Bench in case of “Syedna Mohamed Burhanuddi” (supra) would apply since it was a decision rendered by the Division Bench while examining the powers under Section 41A of the Act. However, he fairly submitted that as per the SCA/11433/2007 16/40 JUDGMENT observations made by the Division Bench in case of “Syedna Mohamed Burhanuddi” (supra) the Division Bench has not read down the provisions of Section 41A of the Act. He also submitted that the judgement of this Court (Coram: N.N. Mathur, J.) would not apply to the facts of the present case and more particularly when there is express provisions under the Act of deciding the dispute for appointment or removal of Trustees under Section 22 of the Act. He submitted that Section 69(a) would have no applicability when the Charity Commissioner is exercising the power under Section 41A of the Act and in any case, the powers under Section 69(a) of the Act would also have no applicability when there is express provisions under the Act and, therefore, he submitted this Court may issue appropriate directions. 11.For the scope and ambit of power under Section 22 of the Act, Mr.Vakil relied upon the judgement of this Court in case of “Shantilal Khimchand & Ors. v. Mulchand Dalichand & Ors.,” reported in 1962 GLR, 117 and more particularly SCA/11433/2007 17/40 JUDGMENT the observations made at page 121. It has been submitted on behalf of the petitioners by the learned Counsel that when there is express provisions under Section 22 of the Act, this Court may not expand the scope of Section 41A of the Act so as to enable the Charity Commissioner to exercise the power in all such matters, where the Trustees are appointed or removed. Therefore, it has been submitted that this Court may issue appropriate directions. 12.Section 41A of the Act for ready reference reads as under:- “Section 41A.:- For Gujarat only – Power of Charity Commissioner to issue directions to Trustees and other persons (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 SCA/11433/2007 18/40 JUDGMENT appropriated and applied to the objects and for the purpose 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).” 13.This Court had an occasion to consider the challenge made to Section 41A of the Act (“Syedna Mohamed Burhanuddi” (supra)) and after considering various provisions of the Act at para 36, the Division Bench of this Court observed as under:- “36. A quick glance at these provisions to which all religious trusts are subject makes it clear beyond any doubt that the three matters which Section 41A provides for – (a) proper administration of a public trust, (b) proper accounting of its income, and (c) due appropriation and application of the income to the objects and for the purposes of the trust – are abbreviated expressions of those very matters which Sections 32 to 41 provide for. The only SCA/11433/2007 19/40 JUDGMENT purpose which, therefore, Section 41A serves is to empower the Charity Commissioner to issue directions in respect of matters falling under Sections 32 to 41. It is, therefore, merely an enabling and ancillary provisions intended to make the implementation and enforcement of the provisions of Sections 32 to 41 more effective. In our opinion, therefore, by enacting Section 41, the Legislature has not introduced any new principle which is not there elsewhere but has merely filled in an lacuna in the effective implementation of the provisions of the said Act. We are, therefore, unable to countenance an argument that though Sections 32 to 41 are valid, Section 41 is not. Even though Section 41A is intended to confer upon the Charity Commissioner only such an ancillary power, the Legislature has been careful enough to circumscribe the power of the Charity Commissioner by subjecting it to the provisions of the said Act. The impugned SCA/11433/2007 20/40 JUDGMENT section, therefore, opens with the expression “Subject to the provisions of this Act”. In our opinion, therefore, it does not impinge upon any fundamental right of a person or a religious denomination and it does not suffer from any constitutional infirmity. In that view of the matter, it is not necessary for us to read it down so as to exclude its application to religious trusts. The first contention, raised by Mr.Sen, therefore, fails and we reject it.” 14.It is hardly required to be stated that the observations made by the Court in its judgement are to be read in facts of that case and cannot be read in piece meal, but are to be read keeping in view the other observations too. The first contention, raised before the Division Bench in the aforesaid decision, was that Section 41A is ultra vires Articles 25 and 26 and it was also alternatively contended that it be read down so as to hold that it has no application to the Public Trust of the religious denominations. The aforesaid aspect is apparent SCA/11433/2007 21/40 JUDGMENT on the last four lines of para 20 of the above referred decision of the Division Bench. Therefore, while examining the contents of Section 41A of the Act vis-a-vis the provisions of Article 25 and 26 of the Constitution of India, the aforesaid observations are made and second aspect is that the Court also considered the question as to whether the provisions of Section 41A should be read down or not. This Court in the aforesaid decision in view of the observations made, which are reproduced herein above, expressly negatived the contentions that Section 41A of the Act violates Article 25 and 26 of the Constitution of India to apply to the Trust of a religious domination and it also negatived the contention that Section 41A should be read down. Therefore, the consequential effect is that Section 41A of the Act exists on the statute book as it was and this Court itself has bifurcated Section 41A into three parts; (a) for proper administration of a Public Trust; (b) for proper accounting of the income and (c) for due appropriation and application of the income SCA/11433/2007 22/40 JUDGMENT to the objects and for the purposes of the Trust. Therefore, the subsequent observations, which are pressed in service by the learned Counsel for the petitioners can be said as for touching to proper accounting of the income and its due appropriation and application of the income to the objects and purpose of the Trust. 15.Therefore, such observations cannot be read as for curtailing the scope under Section 41A and more particularly, the above referred part (a) as sought to be canvassed. The aforesaid is supported by the subsequent order of the Division Bench of this Court in the case of Navsari Taluka Halpati(Supra) in which, at para 7, it was observed by the Division Bench as under: “The power of the Charity Commissioner to issue directions to ensure that the trust is properly administered is by its very nature a wide power. Administration of a trust would mean administration by a body which under the trust deed is required to administer the same. When the trust deed provides for a periodical election of the trustees for the purpose of administration of the trust and if the body is not SCA/11433/2007 23/40 JUDGMENT constituted as required by the terms of the trust deed, the Charity Commissioner would have powers to give directions for holding the election as contemplated by the trust deed which will have a direct impact on the aspect of administration of the trust, because, in absence of a properly elected body as required by the trust deed, a proper administration of the trust cannot be ensured. The direction requiring an election to be held as per the terms of the trust deed would, therefore, fall within the powers of the Charity Commissioner to ensure proper administration of the trust. The administration of the trust would include various aspects which would fall under the provisions of the Act and in absence of a properly constituted administrative body, the affairs of the trust can hardly be conducted in furtherance of its objects. It is, therefore, clear that the directions