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In the High Court of Bombay at Aurangabad
THE HONOURABLE MR. JUSTICE K.U. CHANDIWAL
Bhanudas s/o Madhavrao Deshmukh & Another
Versus
The Joint Charity Commissioner & Others
Second Appeal No.207 of 2008
Decided On : 03-03-2009
Public Trust - Scheme Modification - Bombay Public Trusts Act, Section 50-A
Fact of the Case:
The case involved a dispute over the modification of a trust scheme under the Bombay Public Trusts Act. The trust had faced mismanagement and legal violations by the trustees, leading to the application for a new scheme.
Finding of the Court:
The court found that the existing scheme had failed and was crippled due to mismanagement by the sole surviving trustee. It held that there was no bar for the Charity Commissioner to frame a new scheme when an existing scheme is in place. The court also emphasized that in the event of a breach by the trustee, the remedy of modification of the existing scheme is available.
Issues: The key issues revolved around the guidelines for framing a new scheme under Section 50-A of the Bombay Public Trusts Act and the appropriate remedy in case of breach of the existing provisions of a scheme by the trustees.
Ratio Decidendi: The court's decision was based on the interpretation of Section 50-A of the Bombay Public Trusts Act, which empowers the Charity Commissioner to frame a new scheme for the proper management of a public trust. The court emphasized the wide powers of the Charity Commissioner and the availability of the remedy of modifying the existing scheme in case of trustee breaches.
Final Decision: The appeal was dismissed, with the parties instructed to bear the expenses of litigation. The Assistant Charity Commissioner was directed to take action against the trustee within six months and provide a compliance report to the court.
1. Modern Education Society, Parli Vaijnath, was formed on 7.8.1971. There were 12 trustees and the Trust Scheme, by amendment dt.1.9.1984, put a cap & ceiling on number of General Body members to be 12. It is a matter of record, now only one Trustee Shri Bhanudas (appellant) is alive. One of the applicant Rajesaheb expired in Nov.,2007 and another Trustee Shamrao expired on 6.11.2005.
The Scheme of Trust provides for coram of 5 trustees, if changes are to be effected in the Trust.
2. Rajesaheb Deshmukh, Shamrao Deshmukh and Nandkishore Jaju made the application to Assistant Charity Commissioner on 24.6.2005, vide enquiry number 722/2005. Bhanudas and others filed objection to the change report. On hearing, the Assistant Charity Commissioner, by order dt.9.3.2006, allowed the application Enquiry No.722/2005 and framed new scheme and appointed new committee. These orders were tested by Bhanudas and others before Additional District Judge, Ambejogai, in Miscellaneous Civil Application No.22 of 2006. The learned Additional District Judge, on hearing both the sides, by his order dated 15.12.2007, dismissed the application. This gave rise to file Second Appeal on 10.3/2008. On hearing the Counsel, by order dated 7th July, 2008, this Court admitted the appeal by formulating following substantial questions of law:
(I) What are the guidelines for framing of the scheme under Section 50-A of Bombay Public Trusts Act, when already a scheme is in existence?
(II) Whether in case of breach of existing provisions of a scheme by existing Board of trustees, the proper remedy is to apply for removal of trustees or to apply for
modification of the existing scheme, without proving the necessity and expediency for modification of the scheme?
3. In Civil Application No.3138/2008, ad interim relief in terms of prayer clause ‘B’ was granted with notice to respondents. This situation gave rise to numerous proceedings. I do not wish to advert to them, since such proceedings and orders have no decisive bearing to the appeal.
4. The respondent no.3 Rajesaheb (since deceased) and others made application (No.1807/2009) on 3.2.2009 to vacate the ad interim reliefs in C.A. No.3138/2008 in S.A. No.207/2008. During the extensive submissions of said applications, both the learned Counsel urged to hear and dispose the Second Appeal, which prompted to give audience accordingly.
5. Mr. Dhorde would contend, there was no legal requirement for new scheme, as old scheme would absorb, accept amendment to it. The mismanagement or illegalities, by any of the trustees would not invite drastic action to invite a new scheme, as law will take its own course. Section 50A cannot be invoked. But for mismanagement by Trustees, the Charity Commissioner will not be able to accept new scheme. He has relied to the judgment in the matter of Mallikarjun Basvanappa Masute and another Vs. Dattatraya Krushnath Wadane and others ( 2005(2) Mh.L.J.266) and Vasantrao s/o Vishwanathrao Mane and others V. Apparao s/o Baibanna Sidore and others (2008 242
(3) Mh.L.J. 242).
6. Mr. Deshmukh, Counsel for respondent Nos. 3 to 6 canvassed about the inadequacy of present scheme of Trust to cope up with change of circumstances and impediments in force by virtue of old scheme. He has read the judgment in the matter of Ramkrushna-appa Vishweshwar-appa Versus Krushna Udaybhanji Ingale and others (2006(2) Bom.C.R. 294), Saiyad Mohammad Bakar Eledroos Vs. Abdulhabib Hasan Arab 1624) ( 1998 DGLS(Soft.) 409 = 1998 AIR (SC 1624).
7. The Hon’ble Lordships of the Supreme Court, in Saiyad Mohammad Bakar Eledross V. Abdulhabib 343) Hasan Arab (1998 (4) SCC 343), while dealing with scope of Section 50-A of Bombay Public Trusts Act, observed:
"7. Section 50-A infuses the Charity Commissioner with power in addition to Section 50 to frame, amalgamate or modify any scheme in the interest of proper management of a public trust. This is exercised either suo motu when he has reason to believe it is necessar
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