Taher Alimohohamad Poonawala vs Quizar Shaikh Nomanbhoy and others

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1994 Supreme(Bom) 354

IN THE HIGH COURT OF BOMBAY
D.R. Dhanuka, J.
Taher Alimohohamad Poonawala..... Appellant.
Versus
Quizar Shaikh Nomanbhoy and others..... Respondents.
First Appeal No. 2591 of 1983, decided on 22-7-1994.
Advocates appeared:
C.R. Dalvi with S.M. Gorwadkar, for appellant.
M.Y. Muchhala with Suresh Gupte i/b Mulla Mulla Craigie Blunt Caroe, for respondent Nos. 1 and 2.

Headnote:Section 50-A (1).
       See Civil Procedure Code, 1908-Section 11.
       Section 50-A (1) and (2)-Mandatory procedure-Non-compliance of Action held non est for.
       formation of prima facie opinion by the Charity Commissioner on these aspects and "reasons to believe" it the very jurisdictional condition attached to exercise of power concerning commencement of suo motu inquiry. Formation of such prime facie opinion leading to reasons to believe must be supported by a brief order recording reasons and prima facie formulation of grounds in support thereof at least brodly backed by statement of facts and summary of materials sought to be relied upon in support of the prima facie conclusion of the Commissioner to commence a suo motu inquiry. It has to be Borne in mind that the opportunity to be provided to the trustees to show cause be reasonable, effective and real and not an empty formality. In this case, the suo motu inquiry was commenced by at and at the instance of the Charity Commissioner and completed by Deputy Charity Commissioner (with appellate powers). Neither the order passed by the Charity Commissioner directing holding of a suo motu mqtl1ry nor the show cause notice issued to the trustees disclose "reasons" for starting of a suo motu inquiry or formulated grounds or the materials on basis of which the Charity Commissioner had formed the requisite prima facie opinion to the effect that the commencement and holding of a suo motif inquiry was necessary in the interest of the trusts or the trust. There is nothing on record to show as to on what materials the Charity Commissioner formed his requisite opinion in the matter, if any. Even the gist of materials relied upon by the Charity Commissioner before commencing the suo motu inquiry, if any, is available. Even if the Charity Commissioner be broadlies with the fundamental procedure and principles of natural justice or even briefly records reasons in support of his order directing commencement of Suo motu enquiry, it would be sufficient compliance of law. Having regard to facts of this case; it shall have to be held that the jurisdictional condition prescribed by Jaw for commencement of suo motu inquiry in the matter aforesaid is non-existent and the mandate of law in respect of procedure to be followed and observance of natural justice is clearly breached in this case. The very initiation of suo motu inquiry is liable to be treated as non est, on the ground of non-compliance with mandatory procedure and jurisdictional conditions.
       Section 11-Bombay Public Trusts Act, 1950, Section 50-A (1)-Principle of res-jndicata- Whether applicable in enquiry proceedings.
       Held, there is no material on record on the basis of which the High Court can infer that the Charity Commissioner had reason to believe that framing of the scheme was necessary in the interest of the trusts or either of them or for their better management or better administration. It is hereby clarified that if any fresh show cause notice is issued by the Charity Commissioner hereafter invoking Section 50-A (1) or Section 50-A (2) of the Act. it shall be open to the trustees to resist the proceedings on grounds available to them under the law. It is however necessary to clarify one more aspect of the matter. Since no findings are recorded on merits of the allegations made against the trustees concerning the management of the trusts or either of them the plea of bar of fresh proceedings as grounds analogous to res-judicata would not be available.

JUDGMENT -D.R. DHANUKA, J.:---This is an appeal against order dated 28th October, 1982 passed by the Court of 6th Extra Assistant Judge,. Pune in Miscellaneous Application No. 171 of 1979. This appeal is preferred by one Taher Alimohohamad Poonawala (original respondent No. 3 in Misc. Application No. 171 of 1979).

2. On 9th February, 1976, the Charity Commissioner, Maharashtra State, Bombay issued a notice under section 50A(2) of the Bombay Public Trusts Act, 1950 numbered as Misc. Proceeding No. 50A/185 of 1975. It was recited in the said notice that the learned Charity Commissioner was of the opinion that (1) Anjuman-e-Taheri Trust B-151 (Poona) and (2) Saifi Mahal Trust B-150 (Poona) ought to be amalgamated and a common scheme was necessary for such amalgamation and in the interest of the proper management and administration of the two trusts referred to therein. By the said notice, the trustees of the two trusts were called upon to show cause as to why the said trusts should not be amalgamated and as to why a common scheme should not be settled in the interest of the proper management and administration of the said trusts. No grounds in support of the proposed amalgamation or the relevant materials justifying issue of such notice were disclosed in the said notice. It appears that prior to issue of the said notice, the Charity Commissioner had passed an order. A copy of the said order is made available to this Court. A copy of the said order is at page 22 of the appeal paper book. The said order reads as under :---

"Since I find that it is necessary to exercise the power under section 50-A of the Bombay Public Trusts Act, 1950, and on going through the record and proceeding of the above trust, and the papers in this office put up by the Devasthan Branch, I, the Charity Commissioner do hereby order to start suo motu scheme framing proceeding under section 50-A of the Bombay Public Trusts Act, 1950. Notices be issued to the trustees of the both trusts. A public notice be issued and published in Government Gazette."

3. The said order also does not disclose any factual data or materials or formulated grounds on the basis of which the Charity Commissioner formed prima facie opinion for commencing suo motu inquiry for proposed amalgamation of the two trusts referred to herein above. The said proposal was vehemently opposed on behalf of the two trusts. The said proposal was supported by the appellant as well as Shri K.A. Poonawala, the respondent No. 4.

4. On 31st January, 1977, Shri M.G. Madan, Deputy Charity Commissioner (With Appellate Powers) passed his order disposing of suo motu Scheme Proceeding No. 185 of 1975 started with issue of above referred notice dated 9th February, 1976. It appears from the contents of the said order that Shri K.A. Poonawala had made a complaint to the Charity Commissioner to the effect that the administration of the two trusts was not satisfactory and a proper scheme should be framed. It is not necessary for this Court to go into the merits of the allegations made by Shri K.A. Poonawala or by the appellant. The fact remains that the Deputy Charity Commissioner decided to drop the proceedings for amalgamation of the two trusts. In para 8 of his order, the Deputy Commissioner observed as under:-

"Under the circumstances I think that it will not be proper to amalgamate both these trusts and they will serve a better purpose towards the beneficiaries if they are allowed to run separately."

5. It appears from the contents of the said order dated 31st January, 1977 that the Deputy Charity Commissioner settled a scheme in respect of Saifi Mahal Trust alone while deciding the proceedings for amalgamation of the two trusts referred to herein above. It appears that the said order for settlement of the scheme in respect of the said Saifi Mahal Trust was passed by the Deputy Charity Commissioner in purported exercise of its powers under section 50-A(1) of the Act. The said section obligates the Ch

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