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1996 Supreme(Bom) 722
BOMBAY HIGH COURT AT NAGPUR BENCH
B.U. Wahane, J.
PRABHAKAR – Appellant
Vs.
DR. JAMNADAS – Respondent
First Appeal No. 478 of 1993
Decided on : 04-11-1996
The court reiterated the principles of judicial inquiry, natural justice, and fair hearing in the context of trust management and the induction of new members, emphasizing the importance of following proper procedures and giving all parties an opportunity to be heard.
Headnote:
BOMBAY PUBLIC TRUST ACT, 1950 - SECTION 22 - JUDICIAL INQUIRY - SCOPE - LEGAL PRINCIPLES - INTERPRETATION - APPLICATION - TRUST MANAGEMENT - ELECTION - INDUCTION OF NEW MEMBERS - LEGALITY - PROCEDURE - NOTICE - HEARING - EVIDENCE - JUDICIAL DUTY - POWERS OF GOVERNING BODY - REMOVAL OF MEMBERS - ENROLMENT OF MEMBERS - GENERAL COUNCIL - MEMBERSHIP - CRITERIA - VALIDITY OF MEETINGS - RESOLUTION - OBJECTIONS - DUTY OF ASSISTANT CHARITY COMMISSIONER - JUDICIAL DECISION - REQUISITES - LEGAL PRINCIPLES - INTERPRETATION - APPLICATION - SUBSEQUENT EVENTS - COURT'S CONSIDERATION - REMAND - WHEN NOT WARRANTED - PUBLIC TRUST - MISMANAGEMENT - MAL-ADMINISTRATION - MISDIRECTION - INDUCTION OF NEW MEMBERS - CONSEQUENCES - INTEREST OF SOCIETY - JUDICIAL INTERVENTION - LEGALITY OF MEETINGS AND RESOLUTIONS - SETTING ASIDE - TRUSTEES - INDUCTION - ILLEGALITY - CHANGE REPORT - ACCEPTANCE - SETTING ASIDE - ELECTIONS - ILLEGALITY - BINDING EFFECT - FIRST APPEAL - ALLOWANCE - COSTS - NO ORDER.
Fact of the Case:
The appellants challenged the findings of the District Judge, Chandrapur, who allowed two Misc. Civil Applications and set aside an order in favor of the appellants. The dispute arose from the induction of three new members into the Governing Body of a trust without following proper procedures and without giving notice to the appellants. The appellants contended that the Assistant Charity Commissioner erred in accepting the change report without conducting an inquiry and that the District Judge erred in allowing the respondents to produce documents at the hearing stage without giving the appellants an opportunity to rebut them.
Finding of the Court:
The court held that the Assistant Charity Commissioner failed to conduct a proper inquiry before accepting the change report and that the District Judge erred in allowing the respondents to produce documents at the hearing stage without giving the appellants an opportunity to rebut them. The court also held that the induction of the three new members was illegal as they were not members of the General Council and that the meetings and resolutions held after their induction were also illegal. The court further held that the subsequent election held with the participation of the three inducted members was also illegal and not binding on the appellants.
Issues: 1. Whether the Assistant Charity Commissioner erred in accepting the change report without conducting an inquiry? 2. Whether the District Judge erred in allowing the respondents to produce documents at the hearing stage without giving the appellants an opportunity to rebut them? 3. Whether the induction of the three new members was illegal? 4. Whether the meetings and resolutions held after the induction of the three new members were illegal? 5. Whether the subsequent election held with the participation of the three inducted members was illegal?
Ratio Decidendi: 1. The court held that the Assistant Charity Commissioner erred in accepting the change report without conducting an inquiry, as it was a judicial duty that required the use of discretion, examination of evidence, and the decision of questions of law and facts. 2. The court held that the District Judge erred in allowing the respondents to produce documents at the hearing stage without giving the appellants an opportunity to rebut them, as it violated the principles of natural justice and fair hearing. 3. The court held that the induction of the three new members was illegal as they were not members of the General Council, which was a prerequisite for becoming a member of the Governing Body. 4. The court held that the meetings and resolutions held after the induction of the three new members were illegal as they were not properly convened and did not comply with the provisions of the trust's constitution. 5. The court held that the subsequent election held with the participation of the three inducted members was illegal as it was not conducted in accordance with the trust's constitution and the principles of natural justice.
Final Decision: The court allowed the appeal, quashed and set aside the order of the District Judge, and declared the meeting and resolution of 19.1.1991, the order of the Assistant Charity Commissioner accepting the change report, and the subsequent meetings, resolutions, and elections held with the participation of the three inducted members as illegal and not binding on the appellants.
B.U. Wahane, J.
In this First Appeal u/s 72(4) of the Bombay Public Trusts Act, 1950 (hereinafter referred as "Act"), the appellants questioned the findings recorded by the District Judge, Chandrapur by the common Judgment in Misc. Civil Application No. 58 of 92 and Misc. Civil Application No. 64/92 dtd. 18.8.93 allowing the same and setting aside the order declared in favour of the Appellants in Appeal No. 8 of 92 passed on 7.10.1992.
2. After hearing the learned Counsel of the parties at length, a fair proposal came from the learned Counsel of the parties that the Society being in the name of Dr. Babasaheb Amedkar, running an educational institution, in the interest of the Society, the parties settle their dispute amicably in stead of washing their dirty linen in public. It being a bona fide expression came from the learned Counsel of the parties, the members/trustees instead to be at logger-head and thereby to continue hurdles in the Management and administration of the Trust or Society, accepted the proposal and adjourned matter to persuade their clients to settle the matter amicably in the interest of the Society. The matter was thereafter adjourned day to day today to know the developments in the matter. Ultimately on 29.10.1996, both the learned Counsel of the parties informed the Court that there is no likelihood of amicable settlement.
The learned Counsel of the parties were allowed to make additional submissions. Consequently, heard Shri Charde, the learned Counsel for the appellant and Dr. Advocate Kulkarni for the respondents 1 to 5 and 8. The learned Counsel were directed to place on record the subsequent events. On 1.11.1996, Shri Charde, the learned Counsel for the appellants filed on record the synopsis giving subsequent events. The copy of the synopsis was served on other side on 1.11.1996, On behalf of the Respondents no such synopsis as regards the subsequent events came to be filed but during the course of argument the subsequent event i.e. election held on 15.11.1992 was specifically brought to the notice of the court
3. The facts, in brief, enumerated from the Memo of Appeal and the submissions made by the learned Counsel of the rival parties are as under:
That Dr. Babasaheb Ambedkar Memorial trust is registered under the provisions of the Bombay Public Trusts Act, 1950, bearing No. PTR No. F-106(C). The Trust is governed by it's Rules and Regulations accepted and registered with the Assistant Charity Commissioner, Chandrapur.
No elections being conducted of the Trust, as per the Constitution of the Trust, the appellants were constrained to move an application u/s 41-A of the Act. The case was registered as Case No. 1/91 and was on the file of the Assistant Charity Commissioner, Chandrapur. During the pendency of the above proceedings, it is alleged by the Appellants that a bogus and false change report came to be filed before the same Authority. It is the case of the Appellants that without any enquiry, the said change report was accepted by the learned Assistant Charity Commissioner, Chandrapur by it's order dtd. 2.12.1991. It is revealed from the change report that there being three vacancies in the Governing Body, three new persons were inducted in the meeting alleged to have been held on 19.1.1991.
3. A. According to the Appellants, no legal notice was issued to the Appellants. The Appellants submitted that as they learnt about the meeting of 19.1.1991, they attended the venue of the meeting. The meeting being illegal not in accordance with the provisions of the Constitution of the Trust, they took objection and to that effect they made an endorsement in the Proceedings Book of the Society and thereafter they left the venue of the meeting. On the very day, the Appellants submitted a letter to the Chairman of the Society and requested to cancel the illegal meeting conveyed on 19.1.1991 (document no.7 on page No. 77 of the case).
4. The Assistant Charity Commissioner, Chandrapur prior to the passing of
