1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION SECOND APPEAL NO. 469 OF 2009 1] Mr. Ranjit L. Merchant, 2] Mr. Haren R. Merchant, Both R/o 14, Shreeji Kunj, 4th Floor, Joshi Lane, Ghatkopar, (E), Mumbai-400 077. 3] Mr. Viren S. Merchant, 5/B, Shreeji Kunj, 2nd Floor, Joshi Lane, Ghatkopar (E), Mumbai – 400 077. …...Appellants ...VERSUS... 1] Mr. Kishor Ved, Gheewala Building, R.No.8, 2nd Floor, Joshi Lane, Ghatkopar (E), Mumbai – 400 077. 2] Mr. Sanjay K. Kanani, 401, New Kailash Mansion, Darasar Lane, Ghatkopar (E), Mumbai – 400 077. 3] Mr. Ramesh Ashar, 242, Ashar Villa, Opp.Tamil Sangam Hall, Sion East Road, Mumbai – 400 022. 4] Mr. Vithaldas G. Udeshi, 13 A/B, Sett Minar, 16-A, Podar Road, Opp. Jaslok Hospital, Mumbai – 400 032. 5] Mr. Kalidas C. Lilani, 188, Neelkanth Cottage, Block No.8, 2 Garodia Nagar, Ghatkopar (E), Mumbai – 400 077. 6] Mr. Prithvish R. Ashar, 242, Ashar Villa, Opp. Tamil Sangam Hall, Sion East Road, Mumbai – 400 022. 7] The Charity Commissioner, Maharashtra State, Having office at 83, Dr. Annie Besant Road, Worli, Mumbai – 400 018. 8] Mr. Gordhandas B. Dutia, B-Wing, Block No. 7/8, 1st Floor, Amrut Dhara, Joshi Lane, Ghatkopar (E), Mumbai – 400 077. ....Respondents -------------------------- Mr. Y.H. Muchhala, Senior Advocate for the Appellants. Ms. Gauri Jadhav, Advocate for Respondents ------------------------- CORAM : Smt. R. P. SondurBaldota, J. Judgment Reserved on : 09/12/2009. Judgment Pronounced on : 25/01/2010 JUDGMENT 1] The appellants are some of the trustees of the public trust “Shree Bhatiawadi Trust”, which is functioning under the scheme framed by Deputy Charity Commissioner on 1st March, 1976. They file the present second appeal to challenge the order dated 12th October, 2009 passed by the Bombay City Civil Court on the application under Section 72 of The Bombay Public Trusts Act (hereinafter referred to as “the BPT Act”) by 3 respondents No.1 and 2, who are Members of Bhatia community. Respondents Nos.3 to 6 & 8 are the other trustees of the Trust. Respondent No.7 is the Charity Commissioner. Considering the nature of the order passed and the short question involved therein, both the counsel agreed that the appeal be disposed off finally at the stage of admission. 2] Appellant No.1 had filed application No. 10 of 2005 under Section 50-A of the BPT Act for modification of two of the Clauses of the Scheme i.e. Clause No.5 and Clause No.24 (ii). The same was allowed by the Asstt. Charity Commissioner by his order dated 17th March, 2005. Feeling aggrieved by the order, respondents No.1 and 2 filed application under Section72 of the BPT Act to challenge the same. This application came to be disposed of by the order impugned in this appeal. 3] Clause 5 of the Scheme, provides for the number of trustees to be appointed of the Trust. Prior to its modification, the number of trustees to be appointed under Clause 5 were not less than three and not more than Five. Clause 24 is about the Bank account. Clause 24(ii) allowed the trustees to ordinarily keep on hand not more than Five Thousand rupees. Over the passage of time, with substantial increase in the work of the trust, 4 the trustees felt the need for upward revision of both the clauses. Therefore, in the meeting dated 7th May, 2004, all the trustees unanimously decided that the two clauses be amended. The amendments sought to clause 5 was to increase maximum number of trustees from 5 to 8 and the amendment to clause 24(ii) was to increase the cash to be kept on hand from Rs.5000/- to Rs.50000/-. With this unanimous decision of the trustees, appellant no.1, one of the trustees, filed the application No. 10 of 2005 for modification of the Scheme. No objections were received to the application. The Asstt. Charity Commissioner, therefore, considered the application and allowed it by his order dated 17th March, 2005. Respondents No.1 and 2 challenged this order essentially on the ground of the procedure adopted for deciding the application. According to them, the learned Asstt. Charity Commissioner did not follow the procedure laid down in Rule 7 of the Bombay Public Trust Rules 1951 to conduct the enquiry under Section 50- A. They also contended that there is no justification for modification of the existing scheme. The appellants contested the application filed by respondents No.1 and 2 contending that these respondents have no locus standi to file the application as they cannot be said to be “persons aggrieved” by the order dated 17th March, 2005, passed by the Assistant Charity Commissioner. They also contended that in view of the unanimous 5 decision of all the trustees to seek modification of the Trust, no detailed hearing was required and hence no fault could be found on the procedural aspect. 4] It appears that the application filed by appellant No.1 under Section 50-A of the BPT Act was registered by the office of the Asstt. Charity Commissioner as an application under Section 50-A(1) of the BPT Act and not under Section 50-A(3) of the Act. An application under Section 50-A(1) is for framing of the scheme whereas, an application under Section 50-A(3) is for modification of the scheme. The learned Judge of the Bombay City Civil Court, after holding that respondents No.1 and 2 had locus standi to challenge the order of Asst. Charity Commissioner, disapproved the incorrect numbering of Application No.10 of 2005 and set aside the order dated 17th March, 2005 on this ground alone. He remitted the matter for fresh enquiry after correction in the registration. According to him, the entire proceedings conducted by the learned Asstt. Charity Commissioner had been vitiated because the application was registered by his office under Section 50-A(1) of the BPT Act, instead of under Section 50-A(3) of the BPT Act. 6 5] Mr. Muchhala, the learned Senior Counsel appearing for the appellants submits that the impugned decision is absolutely perverse, as an administrative function of numbering of an application by the office of the Asstt. Charity Commissioner can never be a ground for setting aside the order passed by him. He also reiterates the contentions of the appellants that respondents No.1 and 2 had no locus standi to file the application under Section 72 of the BPT Act as they cannot be said to be the persons aggrieved by the order. 6] In view of rival contentions, I find that the following substantial questions of law arise for consideration in the present appeal : (1) Whether Respondents no.1 and 2 have locus standi to file an application under Section 72 of the BPT Act to challenge the decision dated 17th March, 2005 of the Charity Commissioner under Section 50-A ? (2) Whether the procedure adopted by the learned Asstt. Charity Commissioner in deciding the application under Section 50-A(3) is in accordance with law ? 7] Mr. Muchhala, refers to Section 72 of the BPT Act, which provides for challenge to decision of the Charity Commissioner under 7 Sections 40, 41, 41-C, 43(2)(a) & (c), 50-A, 70 or 70-A etc. The portion of the Section after omitting the words not relevant for the present purposes reads : “Any person aggrieved by the decision of the Charity Commissioner …..... may …...... apply to the Court to set aside the said decision” (emphasys supplied). He submits that from plain reading of the section it is clear that unless a person is aggrieved by the decision of the Charity Commissioner, he cannot resort to Section 72. The expression “person aggrieved” is not defined under the BPT Act. The only definition thereunder is of “person having interest”, which is at Sections 2 (10). According to Mr. Muchhala, there is marked difference between the two expressions. The expression “person having interest”, is a much wider in its import, whereas the expression “aggrieved person” has much restricted meaning. He seeks to draw support for his submissions from two decisions, one of Chancery Division in In re SIDEBOTHAM , reported in Vol. XIV Chancery Division 458 and the other of the Apex Court in Jasbhai Motibhai Desai .vs. Roshamkumar/Haji Bashir and others, reported in AIR 1976 Supreme Court 578. 8] The consideration for meaning of the expression “aggrieved person” before Chancery Division arose out of bankruptcy proceedings, 8 where appeal had been filed by an undischarged bankrupt. It was contended that an undischarged bankrupt had no locus standi to file an appeal as he cannot be said to be a “person aggrieved”. The Chancery Division was of the opinion that - “But the words “person aggrieved” do not really mean a man who is disappointed of a benefit which he might have received if some other order had been made. A “person aggrieved” must be a man who has suffered a legal grievance, a man against whom a decision has been pronounced which has wrongfully deprived him of something, or wrongfully refused him something, or wrongfully affected his title to something.” 9] In the second decision, the Apex Court was considering the locus standi of the petitioner to file a petition to invoke the certiorari jurisdiction to get a “No-objection Certificate”, granted in favour of a rival in trade, quashed. The High Court had dismissed the petition on the ground that no right vested in the petitioner, had been infringed or prejudiced or adversely affected as a direct consequence of the order impugned by him and as such he was not an “aggrieved person”, having locus standi in the matter. It was contended before the Apex Court that the concept of an “aggrieved person” is very wide and is not confined to a person to grieved by an invasion of a legal right vested in him. The Apex Court considered 9 several Indian, English and American decisions on interpretation of expression “person aggrieved” to observe that in the context of locus standi to apply for a writ of certiorari, an applicant may ordinarily fall in any of these categories : (i) “person aggrieved”; (ii) “stranger” (iii) busybody of meddlesome interloper. The persons in the last category were immediately discounted, but as regards the distinction between the first and second category of the applicants, the Apex Court laid down broad tests, that were as follows : “Whether the applicant is a person whose legal right has been infringed ? Has he suffered a legal wrong or injury, in the sense, that his interest, recognized by law, has been prejudicially and directly affected by the act or omission of the authority, complained of ? Is he a person who has suffered as legal grievance, a person “against whom a decision has been pronounced which has wrongfully deprived him of something or wrongfully refused him something, or wrongfully affected his title to something ? Has he a special and substantial grievance of his own beyond some grievance or inconvenience suffered by him in common with the rest of the public ? Was he entitled to object and be heard by the authority before it took the impugned action ? If so, was he prejudicially affected in the exercise of that right by the act of usurpation of jurisdiction on the part of the authority ? Is the statute, in the context of which the scope of the words “person aggrieved” is being considered, a social welfare measure 10 designed to lay down ethical or professional standards of conduct for the community ? Or is it a statute, dealing with private rights of particular individuals ? 10] As against the above decisions, Ms. Gauri Jadhav, learned counsel for respondents No.1 and 2 relies upon decision of our High Court in President, Purohit Sangh ..vs. Prabhakar Ramkrishna Gokhale and others, reported in 2003(5) Mh.L.J. 73, where the learned Single Judge of our High Court had an occasion to discuss the definition of “person having interest” defined in Section 2(10). The matter before the learned Single Judge was pertaining to appointment of trustees. It was observed that a “person having interest” as defined in Section 2(10) of the Act, was an inclusive term and includes the beneficiaries. The person who can be said to have interest, must be a person, who has real interest in the trust property, but that does not make them persons, who are interested in the trust. This decision is hardly of any assistance in interpretation of the expression “person aggrieved” used in Section 72 of the BPT Act. I find much substance in the submission of Mr. Muchhala in drawing distinction between expressions “person having interest” and “person aggrieved”. The two decisions cited by Mr. Muchhala are sufficient guidance for interpretation of the expressions. The expression “person aggrieved” is 11 much narrower than the expression “person having interest”. The applicants as members of Bhatia community are undoubtedly “persons having interest” in the trust. However, they cannot be said to be persons, who have suffered a legal grievance by the order passed by the Asstt. Charity Commissioner. They cannot also be said to be wrongfully deprived of something by the said decision. Therefore, they cannot be said to be “persons aggrieved” to be able to resort to Section 72 of the BPT Act to challenge the order passed by the Asstt. Charity Commissioner under Section 50-A of the BPT Act. In the premises, the first substantial question of law is answered in the negative. 11] Ms. Gauri Jadhav submits that it was incumbent upon the Asstt. Charity Commissioner to follow the procedure laid down for enquiries under Rule 7 of the BPT Rules while deciding the application under Section 50-A(3) of the BPT Act. The procedure prescribed under the Rule is the procedure for the trial of suits under the Presidency Small Causes Courts Act, 1882 as far as the region of Greater Bombay is concerned, Mr. Muchhala submits in reply that Section 50-A(3) of the BPT Act requires that for the purpose of the modification of the scheme framed by the Charity Commissioner, hearing required to be given is only to the 12 trustees and not to any other person. In the instant case, since the decision taken by the trust to apply for modification was a unanimous decision of the trust, the question of hearing to them separately, did not arise at all and therefore, there was no scope for following the procedure prescribed for trial of suits under the Presidency Small Causes Courts Act, 1882. 12] Mr. Muchhala submits that this is a fit case for employment of “useless formality theory”. For this, Mr. Muchhala also relies upon the decision of Apex Court in Canara Bank ..vs.. Mr. V.K.Awasthi, reported in (2005) 6 S.C.C. 321. Mr. Muchhala also submits that in somewhat similar facts our High Court in Ramkrushna Appa S/o Vishweshwar Appa and others ..vs.. Krushna S/o Udaybhanji Ingle and others, reported in 2005 (3) Mh.L.J. 729 has held that no fruitful purpose would have been served by issuing notices to the trustees in the proceedings initiated suo motu by the Charity Commissioner for framing a scheme on being approached by the trustees themselves. Fresh notices to the trustees was not necessary in the facts of the case as the trustees themselves sought framing of the scheme. 13] A useful reference may be made here to the judgment of the Apex Court in the case of Saiyad Mohammad Bakar El-Edroos ..vs.. 13 Abdulhabib Hasan Arab and others, reported in AIR 1998 S.C. 1624, in which the Apex Court observes as under : “A procedural law is always in aid of justice, not in contradiction or to defeat the very object which is sought to be achieved. A procedural law is always subservient to the substantive law. Nothing can be given by a procedural law what is not sought to be given by a substantive law and nothing can be taken away by the procedural law what is given by the substantive law.” 14] With the above backdrop of legal position, it will be now necessary to see whether any fruitful purpose would have been served by strictly complying with the procedure under Rule 7 of the BPT Rules. The application was filed after unanimous decision of the trustees. Appellant no.1 had produced copies of decisions for both the modifications along with his application. Therefore, issuing notices, placing the matter for evidence and argument would have been a useless formality as it would not have served any fruitful purpose whatsoever and would have consumed time unnecessarily as there could be no opposition to the application. 15] Ms. Jadhav submits that one of the trustees, Mr. Gordhandas Bhagwandas Dutia was not present in the meeting of the trustees held on 7th May, 2004, he having been out of India at the relevant time. Therefore, 14 according to her, the Asstt. Charity Commissioner ought to have issued notice atleast to Mr. Dutia and heard him. Mr. Dutia himself has never complained that he has not been consulted or not heard in the matter. Even after filing of applications by respondents No.1 and 2 he has not chosen to come forward with any grievance. The contention of denial of an opportunity of hearing to Mr.Dutia cannot be available to respondents No.1 and 2. Ms. Jadhav then points out that the scheme provides that the trustees appointed under the scheme are appointed for life and submits that if the number of trustees is allowed to be increased, it will amount to giving an opportunity to the trustees presently in office to misuse their position and to appoint persons of their choice and perpetuate their own association with the trust. In that case there will hardly be any opportunity for other member of the community to serve as a trustee of the Trust. Clause 9 of the scheme provides for five contingencies of the office of the trustee falling vacant. Therefore, it cannot be said that though the tenure of trusteeship is for life, there will be no possibility for appointment of new trustees. In any case with the increase in the number of trustees infact probability of any outsider being appointed becomes better. Be that as it may, the modification of clause 5 cannot be opposed on the apprehension of any future possible misuse of powers by the present trustees in the matter of appointment of 15 trustees. In the circumstances, the second substantial questions of law is also answered in the affirmative. 16] The learned Judge of the Bombay City Civil Court set aside the order of the learned Asstt. Charity Commissioner on a ground as frivolous at its improper numbering by the office. There was no error in the application itself. Besides, the procedure to be applied as well as the scope of enquiry for both the applications i.e. application under Section 50-A(1) and under Section 50-A(3) is same. There is no difference at all. Ms. Jadhav, however, seeks reliance upon a decision of the Karnataka High Court in Adishayya Kadayya Kadadevaru and another ..vs.. Dundayya Gurushiddayya Hiremath, reported in A.I.R. 1983 Karnataka 79, in which an application for declaration of certain properties was filed by the public trust erroneously under Section 22 instead of under Section 22-A. The Karnataka High Court held that the application could be amended as under Section 22-A, but the learned Charity Commissioner could not treat the application given under Section 22 as one under Section 22-A. The decision cited is not applicable as no such defect is found in the application filed by appellant no.1. 16 17] In all the above circumstances, the Second Appeal is allowed. The impugned judgment and order passed by the Judge, Bombay City Civil Court at Bombay, dated 12th October, 2009, in Charity Application No. 15 of 2005 is set aside and the order passed by the Assistant Charity Commissioner, dated 17th March, 2005, in Application No. 10 of 2005 is confirmed. JUDGE Diwale