1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY, BENCH AT AURANGABAD SECOND APPEAL NO. 114 OF 2009 1 Pralhadrao Bhaurao Galdhar age 71 years, occ. agri. 2 Bhagwan s/o Barku Kumawat age major, occ. agri. 3 Krishna s/o Rangnathrao Ekbote age major, oc. agri. 4 Arjun s/o kondiba Galdhar age major, occ. agri 5 Barku s/o Bhonjiba Galdhar age major, occ. agri 6 Eknath s/o devrao devdhare age major, occ. agri 7 Govindrao s/o Bhyavrao Galhdar age major, occ. agri 8 Kishan s/o Bajirao Agale age major, occ. agri 9 Asaram s/o Bhanudas Dilwale age major, occ. agri 10 Baburao s/o Jija Bondare age major, occ. agi 11 Uttam s/o Shankar Dilwale age major, occ. agri 12 Subhsh s/o Bhavrao Mundlik 2 age major, occ. agri 13 Pandharinath s/o Eknath Klae age major occ. agri Appellant nos. 1 to 13 are r/o Warudi Tq. Paithan, Dist. Aurangabad. (M.S.) 14 Bhalchandra s/o Gamaji Galdhar (Deceased) 15 Janardhan s/o Rangnath Gladhar (Deceased) .. APPELLANTS VERSUS 1A State of Maharashtra 1 The Joint Charity Commissioner Aurnagabad. .. RESPONDENTS Mr. R.M. Sharma, Advocate for the appellants. Mr. B.V. Wagh, AGP for the State. ===== CORAM : R. M. BORDE, J. RESERVED ON : 20TH JANUARY, 2010 PRONOUNCED ON : 16TH FEBRUARY, 2010 ORAL JUDGMENT : 1 Appellants are the trustees of registered trust Pandurang Rukhmini Mandir, Varud (Bk), Tq. Paithan, Dist. Aurangabad bearing Registration no. 3 A-1437/A Aurangabad. One Ganesh Bhalchandra Galhdar filed complaint with the Charity Commissioner complaining the lapses committed by the trustees of the trust while managing the affairs. One Syed Abbas Hidat Hussain, inspector from the office of the Assistant Charity Commissioner was appointed to conduct the enquiry. The proceedings of enquiry were numbered as 54/2006. During the course of enquiry, the inspector recorded statement of Ganesh and some of the trustees and villagers of village Varud. The inspector found that there is substance in the allegations levelled by the complainant and, as such, submitted report to the Joint Charity Commissioner. Considering the report tendered by the inspector, the Jt. Charity Commissioner called upon the trustees of the trust to submit reply to the charges. It appears that the charges were framed against the trustees by the Jt. Charity Commissioner for the purpose of holding enquiry under section 41(D) of the Bombay Public Trust Act. The charges levelled against the trustees are as noted below : You trustees, 1 Have made persistent default in submitting accounting returns and reports. 2 Have committed breach of duty by not submitting 4 change reports bringing on record moveable property of the Trust in Schedule-I. 3 Have committed breach of duty by not taking steps for recovering compensation in respect of trust property at Taru Pimpalwadi, which was acquired, compulsory by the Government. 4 Have committed duty by not making any attempt to recover the land of the Trust at Dhorkin from Tahsildar. 5 Have committed act of malfeasance and breach of Trust by felling trees from the Inam land of the Trust illegally and thereby causing loss to the Trust. 2 The trustees submitted reply to the charges levelled against them and claimed that no case is made out for taking any drastic action of their removal from trusteeship. The Jt. Charity Commissioner during the conduct of enquiry recorded statement of the inspector. The trustees did not lead any evidence before the Jt. Charity Commissioner. After considering the material placed on record, the Jt. Charity Commissioner was pleased to direct removal of the trustees from trusteeship of the public trust. It was also further directed to the Deputy Charity Commissioner, Aurangabad to hold necessary enquiry under section 67 of the Bombay Public Trust Act and suggest names and submit a proposal for appointing new trustees under section 47 of the Act. The trustees of the trust were permitted to continue in the office as trustees until decision 5 is taken in respect of appointment of new trustees. 3 The order passed by the Jt. Charity Commissioner on 11-7-2008 was subject matter of challenge before the District Court in proceeding bearing MARJI no. 303/2008. Trustees presented application under section 72 of the Act to the District Court thereby extending request to set aside the order passed by the Jt. Charity Commissioner. The appellate authority, however, after hearing the argument of the applicants was pleased to dismiss the appeal in view of judgment and order dt. 1-12-2008. Order passed by the court below confirming the order passed by the Jt. Charity Commissioner is subject matter of challenge in the instant second appeal. 4 I have heard arguments advanced by Mr. R.M. Sharma, learned counsel for the appellants and Mr. B.V. Wagh, learned AGP for the State. The substantial questions of law those arise for consideration in the appeal are : A Whether the Jt. Charity Commissioner was justified in taking drastic action of removal of trustees by taking recourse of provisions of section 41(D) of the Bombay Public 6 Trust Act and whether the District Court was justified in confirming the said order ? B Whether the allegations made against the trustees are of such a grave nature amounting to any malfeasance or misfeasance requiring imposition of extreme penalty of removal from office of trusteeship ? 5 The first charge against the trustees is in respect of non-submission of accounts of the trust for a period between 1999-2006. It is pointed out by learned counsel for the appellants that during the conduct of proceedings, the accounts of the trust were got audited and the audit statements were tendered alongwith application exh. 24. The account statements are for a period between 1999-2008. The authorities below have recorded finding that there is no explanation for non-submission of account statements regularly. The fact remains, however, that the account statements are submitted and it is not borne out from record that the trustees have committed any mis-appropriation of funds or that they have tried to dispose of property of the trust unlawfully. 6 Another charge is in respect of failure to file change report thereby mentioning the moveable property belonging to the trust for recording the same in Schedule I. Moveable property is in the nature of brass instruments ( Ial/cymbal, loudspeaker set, palanquin and other Pooja 7 articles). The charge is not that the trustees have either caused damage to the moveable property or tried to dispose of the same. The property is also not valuable so as to draw any inference in respect of malafides of the trustees in their failure to disclose the existence of same by filing returns with the Charity Commissioner authority. The charge is not sufficient to warrant an extreme penalty. 7 Other allegations i in respect of failure of the trustees to recover compensation amount in respect of acquired property belonging to the trust. It is alleged that the immovable property belonging to the trust came to be acquired by the State Government for Jaikwadi project. Compensation amount was not received by the trust and it is alleged that no efforts were made for recovery of the amount. On consideration of the explanation tendered by the trustees, it transpires that the trustees have taken al the necessary steps for recovery of amount of compensation. It was pointed out that the scheme was framed on 16-4-1994 and the Board of Trustees have assumed the office. Prior to framing of the scheme, the Tahsildar was having control over the affairs of the trust. The trustees approached the Tahsildar on several occasions since 1994 requesting him to tender accounts and also to deposit the 8 amount recovered by way of rent in respect of landed property situate at Dhorkin, Tq. Paithan. However, the Tahsildar did not take any steps, as such, the trustees tendered application to the Assistant Charity Commissioner seeking directions against the Tahsildar. The application was registered as Enquiry no. 4/1995. The Tahsildar, however, did not contest the application and remained absent. The Assistant Charity Commissioner issued directions to the Tahsildar to submit detailed account in respect of the finances of the trust upto 13-6-1994 in the office of the Assistant Charity Commissioner. It was also further directed to the Tahsildar to invest the amount collected by him in Kisan Vikas Patra in the name of the trust and the certificates be handed over to the Board of Trustees. The order was passed by the Assistant Charity Commissioner on 28-5-1996. Inspite of the persistent efforts made by the trustees, the Tahsildar did not comply with the order. Ultimately, the property of the trust situate at village Dhorkin was taken over by the trustees and the same was given on rent basis to one Sachin Pathade for a period of five years. The trust secured income of Rs.50,000/-, Rs.10,000/- per year. The relevant documents are placed on record alongwith affidavit in reply tendered by the trustees. Thus, it is clear from the explanation tendered by the trustees that efforts are made by them for recovering the amount 9 of compensation as well as for securing possession of the landed property. There is no allegation that the trustees have committed mis- appropriation of funds of the trust or that they have mis-applied the funds for their personal gains. In these circumstances, it cannot be inferred that the acts of the trustees are prejudicial to the interest of the trust. The view taken by the Jt. Charity Commissioner as well as the appellate authority is erroneous and from the facts and circumstances placed on record, no inference can be drawn that the acts alleged against the trustees are of such a nature which call for extreme penalty of their removal from trusteeship. 8 In this regard reference can be made to the observations made in the judgment in the matter of Vijubhai Patel and another Vs. The Charity Commissioner, Maharashtra State and others reported in 1990(2) BCR 702. This court has observed thus : . Imputations reflecting on the integrity of the people have to be fortified by proof of high degree. Even if proceeding under section 41-D be not a criminal proceeding, the proof required to sustain charges therein must satisfy a higher standard than that normally required in cases governed by the rule of preponderance of probabilities. . This court while considering the similar case has observed that the 10 imputations reflecting on the integrity of the trustees have to be fortified by proof of higher degree which would be somewhere in between the standard of proof required in civil proceeding like a suit and criminal proceedings like a trial for offence of criminal breach of trust or that of cheating. . In the instant case, firstly, there are no charges levelled against the trustees reflecting upon their integrity nor there are allegations that the trustees have by their willful conduct either mis-appropriated the property of the trust or caused any damage to the property so as to cause loss to the trust. Certain observations made in the reported judgment in the matter of Mallikarjunappa s/o Sidramappa Bidve and others vs. Joint Charity Commissioner reported in 2008(1) Mh.L.J. 148 are apt to be quoted. Those are as under : 18 The legal position, which may be kept at back of the mind, is that removal of a trustee is a drastic action. The charge of malfeasance and/or misfeasance is serious one. The proceedings are of quasi civil and quasi criminal nature. Though the proceedings under section 41D is not criminal proceeding as such, yet, proof required to sustain the charges is of high standard. The standard of proof in such proceedings is somewhat more than normally required in cases governed by preponderance of probabilities and somewhat less than required in trials of criminal cases. The degree of proof required in 11 criminal case is such that would prove criminal charge beyond a reasonable realm of doubt. The imputation reflecting on integrity of trustees have to be fortified by proof of high degree which would be somewhere in between standard of proof required in civil proceedings like a suit and criminal proceedings like a trial for offence of criminal breach of trust, or that of cheating. Thus, unless the lapse on part of the trustee is proved to be actuated by dishonesty or active connivance with other trustees, who are guilty of misfeasance or malfeasance, the drastic action under section 41-D of the BPT Act, may not be warranted. 19 The expression “misfeasance” as used in clause (c) of section 41-D would imply commission of breach of trust. It is more than mere negligence of the trustee to perform his duty. “Misfeasance” includes breach of duty by the trustee which would result into loss to the trust or would cause unlawful gain to such a trustee, charged with act of misfeasance. 9 In view of the reasons recorded above, I am of the view that the Jt. Charity Commissioner has committed an error in taking extreme action of removal of trustees and the District Judge has further not applied his mind to the seriousness of the charges and has mechanically confirmed the order passed by the trust authority. In my view, the allegations levelled against the trustees are not sufficient to warrant the extreme penalty of removal. 10 A grievance is made in respect of failure to hold elections of the 12 Managing Committee consisting of President, Secretary and Treasurer etc. As per the scheme of the trust, the elections are required to be held every 5 years. The appellants have tendered an affidavit assuring that the trustees would hold elections within two months from the date of passing of the order. The trustees shall abide by the undertaking given to this court and tender change report after holding election in accordance with provisions of section 22 of the Bombay Public Trust Act. 11 For the reasons stated above, the appeal presented by the appellants deserves to be allowed and the same is accordingly allowed. Order passed by the Jt. Charity Commissioner, Aurangabad Region, Aurangabad on 11-7-2008 in enquiry no. 31/2006 and confirmed by the District Judge while dealing with MARJI No. 303/2008 is quashed and set aside. In the facts and circumstances of this case, there shall be no order as to costs. 12 Pending civil application, if any, does not survive and stands disposed of. ( R. M. BORDE, J.) dyb/office/sa114.09.odt