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IN THE HIGH COURT OF BOMBAY
MALLIKARJUN BASVANAPPA MASUTE
Versus
DATTATRAYA KRUSHNATH WADANE
Decided on 10/1/2005
The distinction must be remembered between inadequacy of the scheme and non-execution of the scheme or behaviour of the trustees in disregard of the scheme, Act and Rules. If there is no provision in the scheme which is required for beneficial operation of the trust, the same is inadequacy of the scheme. But, if there is a provision that succession should be by election after every five years and there is no election held the same is an instance of omission on the part of Board of Trustees to execute the scheme and certainly not an instance of inadequacy or insufficiency in the scheme. The Charity Commissioner must be further slow in exercising the powers under Section 50-A either for modifying the existing scheme or for substituting the existing scheme by a totally new scheme if the complaints are only regarding non-execution/ disobedience of existing scheme. There are provisions in the Act, which empower the Charity Commissioner to appoint suspend remove or discharge the trustees as contained in Section 41-D as also Section 47 in case there is default on the part of trustees to execute the scheme or to abide by the rules and regulations incorporated in the scheme. He also has powers to issue directions for proper management of the trust under Section 41-A to institute enquiries with regard to charities under Section 41-B to act for protection of the charities under Section 41-E. Requirement of an action against erring trustees can seldom be a reason to believe that it is necessary and expedient to settle a new scheme.
Bombay Public Trusts Act, 1950 - Section 50-A - Settling a new scheme in lieu of existing one - Not permissible unless existing scheme is insufficient for the purpose or even after amendment to the existing scheme the purpose of the trust would not be served.
Bombay Public Trusts Act, 1950 - Section 50-A - Exercise of power under Section 50-A of Act, 1950. - Powers under Section 50 of Act for settling new scheme for administration of Public Trust for existing one, must be exercised in very-very exceptional circumstances.
Key Points: - The judgment discusses when Section 50-A allows settling a new scheme in lieu of an existing one and prohibits it where the existing scheme suffices or only non-execution is involved. (!) (!) - It distinguishes inadequacy of the scheme from non-execution/disobedience by trustees and emphasizes slow, cautious use of Section 50-A, reserving it for exceptional circumstances. (!) (!) - It analyzes whether substitution of trustees via a new scheme is permissible and contrasts Section 50-A with Sections 41-D/41-E (removal or discipline of trustees). (!) (!) (!) - The Gujarat and Bombay High Court discussions are cited to illustrate the boundaries and overreach concerns of Section 50-A. (!) (!) (!) - The appellate court ultimately holds that substitution of a new scheme was not sustainable here and quashes the orders, while noting potential for future action under proper procedure. (!) (!)
( 1 ) THE original respondent No. 5 and 9 in Enquiry application No. 53 of 2003 on the file of Assistant Charity Commissioner, osmanabad Region, have preferred this Second Appeal against the concurrent decisions of the Assistant Charity Commissioner and District Judge, Osmanabad.
( 2 ) APPLICATION under section 50-A of the Bombay Public Trusts Act, 1950 (henceforth referred as BPT Act for the sake of brevity) was filed before the assistant Charity Commissioner, Osmanabad by present respondents No. 2 and 3 praying for framing of a scheme for the trust named as Tryambakeshwar bahuuddeshiya Shikshan Prasarak Mandal, Tamalwadi, Taluka Tuljapur, District osmanabad, registered at P. T. R. No. F-1097 (Osmanabad ). A draft scheme was annexed to the petition as annexure "a". The grounds on which the fresh scheme was said to be necessary in spite of existing scheme, can be summarised as follows :
(I) The old scheme is ambiguous, incomplete and faulty and has become obsolete. (ii) Old scheme is against the principles of democracy. (iii) The trust instead of being a public trust is converted into a private hereditary property. (iv) There has been obstruction in the progress of the trust and there has been misappropriation in the financial matters. (v) There is no control over the employees of the trust for which clear rules are required to be framed. (vi) There have been incidents of financial transactions without sanction from the Charity Commissioner and taking disadvantage of the records in hands. (vii) Instead of having membership from all sources only relatives are being admitted as members. (viii) There is no provision for amendment and for transformation of the scheme into a scheme touching all aspects. (ix) Rules against the democratic principles provide a margin for actions against the interest of the trust. (x) There are no specific provisions for harmonized relations between the employees and the management. (xi) There is no definite plan for raising funds. (xii) There is no provision to remove the trustees in case of default in attending the meetings. (xiii) There is no provision for maintaining record of moveable and immovable properties.
( 3 ) THE application was opposed by the then existing trustees including the present appellants. Apart from denial of all the reasons for which scheme was prayed to be necessary by the applicants it was contended that there is provision in the existing scheme for all the purposes which are stated to be the reasons for framing new scheme in the application. It was also added that applicant No. 1 nagnath was desirous of being appointed as a Secretary of the trust but he could not assume that position by election and hence the application is filed for satisfying the said ambition. He is serving as a teacher with Osmanabad Zilla parishad school, and therefore, he cannot be even a member of the trust. Needless to say that the then existing trustees prayed for dismissal of the application.
( 4 ) THE Assistant Charity Commissioner, Osmanabad, allowed the application by his judgment and order dated 26-12-2003. By the said decision he has adopted the scheme annexed to the petition by certain modifications observing that settlement of a scheme for better management and smooth administration of the trust was necessary. He has also appointed nine persons including two applicants as initial trustees under the new scheme and those initial trustees were expected to hold elections within six months for constitution of new board of Trustees for a period of five years. In order to arrive at a conclusion that new scheme was necessary for better management and smooth administration of the trust, the learned Charity commissioner, after considering the evidence that was led before him; has recorded the following conclusions : the first Executive Committee was still on record, and therefore, possibly there were no elections after every five years as per the old scheme. The trustees had failed to submit ac
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