1 C.A..No.10319 of 2011 IN THE HIGH COURT OF JUDICATURE AT BOMBAY, BENCH AT AURANGABAD. CIVIL APPLICATION NO.10319 OF 2011 IN FIRST APPEAL NO. 2032 OF 2011 1. Vishwas Raghunath Bagle (Patil), Age 42 years, Occu. Service, 2. Dhondu Soma Shinde, Age 53 years, occu. Service, 3. Khushal Sukdev Patil, Age : 60 years, Occu.Agril., 4. Hiraman Ratan Patil, Age : 61 years, Occu.Agril., 5. Babulal Maharu Patil, Age 63 years, Occu.Agril., Nos.1 to 5 R/o Arvi, Taluka and District Dhule 6. Somnath Goba Patil, Age : 63 years, Occu.Agril., R/o Chaugaon, Taluka and District Dhule 7. Arvind Gajmal Borse, Age : 58 years, Occu.Agril., R/o Chaugaon, Taluka and District Dhule ..APPLICANTS (Orig.Resp.Nos.4 to 12) VERSUS 1. Joint Charity Commissioner, Nashik Division, Nashik 2 C.A..No.10319 of 2011 2. The New Education Society, Arvi, Taluka and District Dhule Through its Chairman/Secretary 3. Hiraman Daga Patil, Age : 59 years, Occu. Business, R/o Arvi, Taluka and District Dhule 4. Trambak Kadu Patil (Died), 5. Narayan Namdeo Patil, Age : 48 years, Occu.Agril., 6. Barku Nima Patil, Age : 55 years, Occu.Agril., 7. Sanchalal Namdeo Patil, Age : 50 years, Occu. Agril., 8. Dilip Suwalal Kothari, Age : 51 years, Occu. Business, Nos.5 to 8 R/o Arvi, Taluka and District Dhule ..RESPONDENTS (Nos.3 & 4 - Orig.Applicants and Nos.5 to 7 - Intervenors No.8 - Orig. Opp.6) 9. Sakharam Bapu Wani, Age 72 years, Occu.Agril., 10. Nimba Gyanu Patil, Age 70 years, occu.Agril., 11. Uttam Punju Chaudhari, Age 75 years, Occu.Agril., 12. Yashwant Damu Chouhan, Age 60 years, Occu.Agril., 13. Pandurang Kadu Patil, Age 65 years, Occu.Agril., 14. Indubai Eknath Patil, Age 62 years, Occu. Agril., 3 C.A..No.10319 of 2011 15. Bismillah Hiraman Khatik, Age 55 years, Occu.Agril., 16. Ramdas Goba Patil, Age 75 years, Occu.Agril., 17. Ananda Vedu Patil, Age 70 years, Occu.Agril., 18. Sahebrao Eknath Bagle, Age 50 years, Occu.Agril., All R/o Arvi, Taluka and ..RESPONDENTS District Dhule (Appointed Trustees) Mr P.M. Shah, Senior Advocate with Mr Amol Sawant, Advocate for the applicants; Mrs V.A. Shinde, Asstt. Govt. Pleader for respondent no.1; Mr V.J. Dixit, Senior Advocate with Mr S.B. Yawalkar, Advocate for respondents no.2 & 8; Mr M.S. Deshmukh, Advocate for respondent no.3; Mr N.B. Khandare & Mr V.D. Salunke, Advocates for intervenors WITH CIVIL APPLICATION NO.10411 OF 2011 IN FIRST APPEAL ST. NO.23557 OF 2011 1. Pramod s/o Sitaram Bagale, Age : 26 years, Occu.Agril., R/o Chaugaon, Taluka and District Dhule 2. Rajaram s/o Lotan Patil, Age : 70 years, Occu.Agril., R/o Arvi, Taluka and District Dhule ..APPLICANTS VERSUS 4 C.A..No.10319 of 2011 1. Hiraman Daga Patil, Age : 59 years, Occu. Business, R/o Arvi,Taluka and District Dhule 2. Trimbak Kadu Patil (Died) 3. The New Education Society, Arvi, Taluka and District Dhule 4. Eknath Punjaram Patil (Died) 5. Yashwant Trambak Patil (Died) 6. Hiraman Ratan Patil, Age : 61 years, Occu.Agril., R/o Arvi, Taluka and Dist. Dhule 7. Dhondu Soma Shinde, Age : 53 years, Occu. Service, R/o Arvi, Taluka and Dist. Dhule 8. Dilip Suwalal Kothari, Age : 51 years, Occu. Business, R/o Arvi, Taluka and Dist. Dhule 9. Khushal Sukdev Patil, Age 60 years, Occu.Agril., R/o Arvi, Taluka and Dist. Dhule 10. Jibhau Khandu Patil (Died) 11. Vishwas Raghunath Bagale (Patil), Age : 42 years, Occu. Service, R/o Arvi, Taluka and Dist. Dhule 12. Babulal Maharu Patil, Age : 63 years, Occu.Agril., R/o Arvi, Taluka and Dist. Dhule 13. Somnath Goba Patil, Age : 63 years, Occu.Agril., R/o Chaugaon, Taluka and Dist. Dhule 5 C.A..No.10319 of 2011 14. Arvind Gajmal Borse, Age : 58 years, Occu.Agril., R/o Chaugaon, Taluka and Dist. Dhule 15. Narayan Namdeo Patil, Age : 48 years, Occu.Agril., R/o Arvi, Taluka and Dist. Dhule 16. Barku Nimba Patil, Age : 55 years, Occu.Agril., R/o Arvi, Taluka & Dist. Dhule 17. Sanchalal Namdeo Patil, Age : 50 years, Occu.Agril., R/o Arvi, Taluka & Dist. Dhule 18. Joint Charity Commissioner, Nashik Division, Nashik 19. Sakharam Bapu Wani, Age : 72 years, Occu.Agril., 20. Nimba Gyanu Patil, Age : 70 years, Occu.Agril. 21. Uttam Punju Chaudhari, Age : 75 years, Occu.Agril., 22. Yashwant Damu Chouhan, Age : 60 years, Occu.Agril., 23. Pandurang Kadu Patil, Age : 65 years, Occu.Agril., 24. Smt. Indubai Eknath Patil, Age : 62 years, Occu.Agril., 25. Bismillah Hiraman Khatik, AGe : 55 years, Occu.Agril., 26. Ramdas Goba Patil, Age : 75 years, Occu.Agril., 27. Ananda Vedu Patil, Age : 70 years, Occu.Agril., 6 C.A..No.10319 of 2011 28. Sahebrao Eknath Bagle, Age 55 years, Occu.Agril., Respondent Nos.19 to 28 All R/o Arvi, Taluka and District Dhule ..RESPONDENTS (Nos.1 & 2 - Orig. Applicants Nos.3 to 14 - Orig. Opponents Nos.15 to 17 - Orig.Interveners Nos.8, 19 to 28 - Appointed Trustees) Mr G.S. Rane, Advocate for the applicants; Mr M.S. Deshmukh, advocate for respondent no.6. CORAM : MRS. MRIDULA BHATKAR, J. (Date of reserving the order : 22.9.2011 Date of pronouncing the order :5.10.2011 ORDER In two appeals, applications for stay are preferred and they are decided by this common order. (1) Appeals are filed against the order dated 30.8.2011, passed by the Joint Charity Commissioner, in the application moved by the respondents for appointment of trustees under section 47 of the Bombay Public Trusts Act of 1950. The trust is running educational institution. There is a fraction in the group of the members of the trust. Three change reports were filed before the Assistant Charity Commissioner. (A) Election of Board of Trustees was held and the appointment of 7 C.A..No.10319 of 2011 trustees for five years, i.e. from 2003 to 2008 was made. The change report of the trustees of 2003-2008 was a subject-matter of C.R. No.641 of 2003. (B) Change in the office bearers of the year 2003-2008 was challenged before the Assistant Charity Commissioner by change report No.1108/2006. (C) By way of fresh election a Board of new trustees i.e. from 2008-2013 were elected and the said change report was subject-matter of C.R. No.241/2009. (2) By common order dated 25.1.2011 the Assistant Charity Commissioner allowed C.R. No.641 of 2003 and rejected C.R. No. 1108/2006 and 241/2009. The said order deciding all the three change reports is challenged in appeal before the Joint Charity Commissioner under section 70 of the Act. Rejection of change report of recording the newly elected trustees of the year 2008-2013 is a relevant issue in the present appeal, which is in C.R. No.241 of 2009. In the appeal against the said order, a stay was prayed. However, considering the nature of change report and the prayer of stay, it being a negative declaration, stay was rejected in appeal. As on today, all the three appeals are pending before the Joint Charity Commissioner. Thus, whether the newly elected trustees are the trustees or not is the issue before the appellate Court 8 C.A..No.10319 of 2011 and can they operate as trustees is a question to be decided in the appeal. (3) The Joint Charity Commissioner, while rejecting the stay in appeal preferred against the order in C.R. No.241 of 2009, appointed a Board of five trustees, which is an ad hoc committee to administer the management and functions of the trust. The said order of the appointment of the ad hoc trustees was struck down by this Court and the Assistant Charity Commissioner was directed to decide application under Section 47 of the Act, which was pending before it. (4) Persons having interest in trust and members of the trust have filed application under section 47 of the said Act. The said application was made for the appointment of new trustees by the Assistant Charity Commissioner. The Charity Commissioner allowed said application and appointed eleven trustees on hearing both the parties. The said order dated 30.8.2011 is a subject-matter of the present appeal and present stay applications are preferred therein. In course of hearing of these stay applications, two applications were filed to intervene in the matter and applicants supported the case of the opponents. The applications for intervention are allowed. (5) Learned Sr. Counsel Mr P.M. Shah argued that the application under section 47 of the Act cannot be made to the Assistant Charity 9 C.A..No.10319 of 2011 Commissioner when appeal rejecting to record the change of the elected trustees of 2008-2013 is pending before the Joint Charity Commissioner. Rejection of the change report is an appellable order and when appeal is provided under section 70 of the Act, then section 47 cannot be invoked by the Assistant Charity Commissioner. He submitted that the order passed by the Joint Charity Commissioner under section 47 of the Act is without jurisdiction, when a body of newly elected trustees for a period of 2008-2013 exists. When a body of trustees, i.e. applicants was elected unopposed by elections held on 25.1.2009 and 1.1.2009, then it cannot be said that there are no trustees or the post of trustees is vacant. The respondents ought to have challenged the said election by taking out appropriate proceedings under the Act, may be under section 22 of the Act, but making an application under section 47 for the appointment of the new trustees is not a remedy open to the respondents. Attention was drawn to the relevant provisions of section 47 of the Act. So, it is useful to reproduce the section for ready reference :- "47 (1) Any person interested in a public trust may apply to the Charity Commissioner for the appointment of a new trustee, where there is no trustee for such trust or the trust cannot be administered until the vacancy is filled, or for the suspension, removal or discharge of a trustee, when a trustee of such trust, - (a) disclaims or dies; (b) is for a continuous period of six months absent from India 10 C.A..No.10319 of 2011 without the leave of the Charity Commissioner or the Deputy or Assistant Charity Commissioner or the officer authorised by the State Government in this behalf; (c) leaves India for the purpose of residing abroad; (d) is declared as insolvent; (e) desires to be discharged from the trust; (f) refuses to act as a trustee; (g) becomes in the opinion of the Charity Commissioner unfit or physically incapable to act in the trust or accepts a position which is inconsistent with the position as trustee; (h) in any of the cases mentioned in Chapter III, is not available to administer the trust; or (i) is convicted of an offence punishable under this Act or an offence involving moral turpitude. Learned Counsel pointed out that if any trustee is to be removed or suspended, then the grounds (a) to (i) are mentioned and the opportunity 11 C.A..No.10319 of 2011 is given to the responding party to make out his or her case before passing order under section 47 (1) (a) to (i) of the Act. It would be anomalous, for rejection of every change report the party may apply to the Assistant Charity Commissioner under section 47 and new trustees can be appointed by the Assistant Charity Commissioner. Such position would lead to chaos, especially when statutory remedy of appeal provided under the Act. Learned Counsel alternatively submitted that assuming that Assistant Charity Commissioner has power under section 47 to appoint the trustee, yet the order of the Assistant Charity Commissioner in respect of appointment of eleven trustees is erroneous in the absence of compliance of clause (c), (d) and (e) of sub-section (3) of section 47 of the Act. Sub-section (3) of the Act states as under :- "(3) In appointing a trustee under sub-section (2), the Charity Commissioner shall have regard - (a) to the wishes of the author of that trust; (b) to the wishes of the persons, if any, empowered to appoint a new trustee; (c) to the question whether the appointment will promote or impede the execution of the trust; (d) to the interest of the public or the section of the public who 12 C.A..No.10319 of 2011 have interest in the trust; and (e) to the custom and usage of the trust. He argued that the Assistant Charity Commissioner should have either consulted or called report in respect of the competency of the trustees, whether they can fulfill the conditions under clause (c), (d) and (e) of sub- section 3. He relied on the portion of the scheme of the trust wherein the competency of the trustee or the person, who has interest in the trust, can be assessed by calling the report of the Inspector. A customary provision is laid down in the scheme itself. However, the Assistant Charity Commissioner has given a go-bye to the scheme of the trust. Provisions of section 41D empowering the Assistant Charity Commissioner to suspend, remove, dismiss or appoint the trustees were pointed out to show contrast that no norms are given under section 41D (4); section merely says that "Charity Commissioner shall appoint a fit person to discharge the duties and perform the function of the trust ." Thus, "fit person" is not explained under section 41D (4) of the Act, per contra it is described under sub-section (3) of section 47 of the Act. Learned Counsel advanced his submissions that the appointment of the eleven trustees, therefore, is not consistent with the provisions of the Act and the order is to be set aside. The trustees who are elected for a period of 2008-2013 are going to be affected by the relief sought under section 47 of the Act and thus, non-joinder of those trustees is against the principles of natural justice. 13 C.A..No.10319 of 2011 (6) Relying on sub-section (5) of section 47 of the Act, Learned Counsel argued that the authority of the Assistant Charity Commissioner assumes the power of the Civil/District Court and so the order is to be executed by following procedure as per Order XXI of the Code of Civil Procedure. While assailing the operative part of the order which is appearing on page 37 of the memo of appeal, he argued that the Assistant Charity Commissioner ought not to have passed the clause (2) of the order as it is an execution of its own order by the Assistant Charity Commissioner himself. He summed up that body of the trustees who are elected for the period of 2009-2011 exists and is functioning on one hand and on the other hand a board of eleven trustees appointed by Assistant Charity Commissioner if starts functioning, then there is a possibility of conflicting orders/decisions resulting great hardship to the management and the institution. In such circumstances the order passed by the Assistant Charity Commissioner of creating a body of trustees is to be set aside. (7) Learned Senior Counsel appearing for respondents no.2 & 8 and learned Counsel Mr M.S. Deshmukh for respondent no.3 vehemently opposed the prayers of injunction. Learned Counsel submitted that the applicants have earlier applied for stay twice. Such prayer of interim injunction was rejected by the appellate authority on 28.4.2011 and subsequently the second application for stay was rejected by this Court 14 C.A..No.10319 of 2011 on 5.5.2011 thus, the applicants were refused to work as trustees and carry out the functions as trustees. In Appeal No.643 of 2003 the change report of trustees for a period of 2003 and 2008 is the subject matter. The Joint Charity Commissioner by order dated 15.4.2005 has allowed the old trustees to continue to work and take decisions in the administration of the trust. The directions given in the said order were modified and substituted by the directions on 7.4.2007, which enabled the trustees of 2003-2008 to continue till 25.1.2011 when all the three change reports were decided. Learned Senior Counsel Mr Dixit argued that the appellants have made application for injunction to the Joint Charity Commissioner which came to be rejected and they moved Writ Petition No.5770 of 2011 wherein they contended that there is no trustee and due to vacancy they be allowed to function as trustees. Learned Senior Counsel elaborated his submissions that such prayer itself pre- supposes that there are no trustees and the posts of trustees are vacant and it justifies the reason for making application under section 47 of the Act for appointment of the trustees. It shows that there was contingency to take steps under section 47 of the Act. Mr Dixit argued that by way of section 47 of the Act the Assistant Charity Commissioner makes only a stop gap arrangement of a temporary nature and thus, Charity Commissioner had every jurisdiction to pass order under section 47 of the Act. He submitted that the Assistant Charity Commissioner has, in fact, applied the mind and has appointed the persons as per the scheme of section 47 of the Act. He submitted that the objections of the 15 C.A..No.10319 of 2011 appellants that the Assistant Charity Commissioner has exceeded the jurisdiction in view of sub-section (5) of section 47 of the Act are not correct, especially in the light of sub-section (4) of section 47 of the Act. He pointed out that sub-section (4) of section 47 of the Act is not considered by the applicants and which, in fact, enables the Assistant Charity Commissioner to give directions in respect of how the appointed trustees to take over the charge and start functioning. He argued that no prejudice will be caused if the injunction is refused. (8) Heard elaborate submissions of learned Counsel on both sides. Orders passed by Joint Charity Commissioner in the applications for stay in appeals and orders passed by this Court in Writ Petition No.5770 of 2011 are very relevant to decide the issue, whether there was no trustee or there is a vacancy in the present trust. Section 47 of the Act reads in two parts. It states that the trustees can be appointed if there is no trustee or there is a vacancy. In the later part, the power of the Assistant Charity Commissioner about removal, suspension and discharge l of the trustees under the circumstances which are enumerated in the clauses (a) to (i) is mentioned. Thus, under section 47 of the Act Assistant Charity Commissioner derives power to appoint the trustee. Any interested person in the trust may apply to the Assistant Charity Commissioner and point out either of the circumstances and pray for appointment of the trustees. The application under section 47 of the Act is to be tried like a summary proceedings. 16 C.A..No.10319 of 2011 (9) In the present matter a conflict arose as the appointment of newly trustees for a period of 2008-2013 is challenged by a group of members of the trust i.e. the respondents and the change report No.241 of 2009 submitted by those elected trustees was rejected by the Assistant Charity Commissioner. Appeal is filed and is pending before the Joint Charity Commissioner. It is true as submitted by learned Senior Counsel Mr Shah that on every rejection of change report if application to the Assistant Charity Commissioner under section 47 of the Act for the appointment of new trustees is made, then will lead chaos and will frustrate the object of the trust. So, such situation cannot be accepted as a routine. His submissions that the board of trustees are elected for a term of 2008-13 and they are holding the office as trustees and, therefore, this is not a case where there is no trustee in this trust or there is a vacancy of the trustee; would have been accepted, but in view of the orders passed earlier in connected matter, the submissions are not convincing. It is to be noted that when change report No.641 of 2003 about the trustees of 2003-08 was pending, they were allowed to work by the order till 25.1.2011 i.e. when all the change reports were decided by the Assistant Charity Commissioner. This is not the case of the newly elected trustees for the period of 2008-13. It is a matter of record that present applicants have moved application before the appellate authority and also before this Court in Writ Petition No.5770 of 2011 praying for stay and also prayed for mandatory injunction that the applicants be allowed 17 C.A..No.10319 of 2011 to run the trust to administer and take decisions in the trust. It is pertinent to note that these applications were rejected twice by order dated 5.5.2011 in the appeal and by the order dated 4.8.2011 in Writ Petition No.5770 of 2011. Second application was rejected on 2.6.2011 and the prayer for stay of the order of the Assistant Charity Commissioner was rejected twice in C.R. No.241 of 2009. It was also rejected in Writ Petition No.5777 of 2011 on 4.8.2011. Thus, when Court has rejected the prayer of the applicants of mandatory injunction that they may be allowed to work as trustees, take decisions in the administration and to run the trust, then can it be said that it is a state of non-existence of trustee or a vacancy of the trustee. The answer is in affirmative and hence it is a good ground to make application under section 47 of the Act. (10) Once it is held that there are no trustees may be for a temporary period till the appeal is decided, the application under section 47 of the Act is maintainable and Assistant Charity Commissioner is empowered to invoke his powers under the same. Therefore, the decision of the Assistant Charity Commissioner of appointment of the trustees under section 47 of the Act is not illegal. (11) Alternatively, an objection was raised that the Assistant Charity Commissioner has committed an error in appointing the trustees as he 18 C.A..No.10319 of 2011 has used the powers of the execution and decision making authority simultaneously. This objection cannot sustain unless the purport of section 47 as a whole. The power vests entirely with Assistant Charity Commissioner to give a notice and appoint trustees. It was further objected that the public at large should know about such application. In support of these submissions, learned Counsel for the appellants have relied on the judgment of this Court in Avinash Ganpatrao Shegaonkar & ors. vs. Jayawant @ Babasaheb s/o Vishwanath Uttarwar & ors., 2010 (4) Mh.L.J. 253. In the said judgment it was held that the appointment of trustee made under section 41-D and under section 47-H is different. Under Section 41-D of the Act the Charity Commissioner has to appoint a "fit person". However, under section 47 Assistant Charity Commissioner has to follow a particular procedure of inquiry to appoint a fit person. In short, the person who is appointed as a trustee under section 41-D and also 47 should be a fit person. How to select a fit person, that procedure is not specifically mentioned under section 41-D, but it is laid down under section 47. In paragraphs 8 and 9 of the said judgment Honourable Single Judge of this Court has considered at length how the procedure under section 47 of the Act is to be followed by the Assistant Charity Commissioner while appointing the trustees. In the said judgment the Honourable Single Judge has expressed a view that public notice is required to be given while deciding application under section 47 of the 19 C.A..No.10319 of 2011 Act. In the said case the Charity Commissioner had decided the application within a week's time with great haste and did not give any opportunity to the appellants i.e. other fraction of the group to participate. However, in the present case, the Assistant Charity Commissioner though has not issued a public notice, as roznama discloses, has given sufficient opportunity to all the opponents to participate and after hearing them, Assistant Charity Commissioner has passed the order and appointed the persons as trustees. It was argued by the appellants Rajaram Lotan Patil and Pramod Sitaram Bagle, who were elected trustees for the period 2008-13, that they were not made party i.e. opponents in the said application. It is pointed out by the respondents that these two trustees and other two i.e. Bismilla Hiraman Khatik and Sakharam Bapu Wani were elected