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2024 Supreme(Online)(Bom) 594
HIGH COURT OF BOMBAY
G. S. Kulkarni, FIRDOSH P. POONIWALLA, JJ
OSHO INTERNATIONAL FOUNDATION A PUBLIC TRUST – Appellant
Versus
KISHOR RAVAL ALIAS SWAMI ANANDI AND ORS. – Respondent
WP/63/2024
The Joint Charity Commissioner has the authority to order a special audit under the Maharashtra Public Trusts Act when substantial evidence of financial mismanagement is presented.
Headnote:(A) Maharashtra Public Trusts Act, 1950 - Sections 33 and 36 - Application for alienation of trust property - Joint Charity Commissioner denied application citing lack of compelling necessity for sale and ordered a special audit due to allegations of financial mismanagement - Trust's claims of financial distress during the pandemic were found unsubstantiated. (Paras 24, 49, 52)
(B) Jurisdiction of Charity Commissioner - The scope of the Joint Charity Commissioner's powers under Sections 33 and 36 is broad enough to include ordering special audits when necessary, ensuring transparency and accountability in trust management. (Paras 26, 44)
Facts of the case:
The Osho International Foundation applied for permission to sell property citing financial difficulties exacerbated by the pandemic, but faced objections from followers alleging mismanagement and misappropriation of funds. (Paras 5, 7, 14)
Findings of Court:
The Joint Charity Commissioner found no genuine need for the sale, with evidence suggesting funds were being siphoned off to private companies. (Paras 26, 49)
Issues: Whether the Trust demonstrated a legitimate necessity for the sale of property and whether the Joint Charity Commissioner had the authority to order a special audit. (Paras 24, 34)
Ratio Decidendi: The court upheld the Joint Charity Commissioner's findings that the Trust's financial crisis was exaggerated and that a special audit was warranted given the allegations of mismanagement. (Paras 52, 54)
Result: Petition rejected; no costs.
ORDER
1. Application No. 2 of 2021 is rejected.
2. Applicant Trust is directed to refund the earnest amount of Rs.50 Crores received from offeror Mr. Rajivnayan Rahulkumar Bajaj and Rishab Family Trust without interest.
3. The Special Audit of the Osho International Foundation (OIF) bearing P.T.R. No. F-14570 (Mumbai) shall be conducted for the period from 2005 to 2023 by a team of two Special Auditors to be appointed by concerned Ld. Assistant Charity Commissioner, Greater Mumbai Region, Mumbai within one month from the date of this order.
4. The fees for the Special Audit shall be fixed for Rs.25,000/- per year or 1% of the gross Annual Income of OIF as per Rule 20 of the Maharashtra Public Trusts Rules, 1951, whichever is less.
5. The trustees of OIF are directed to deposit an amount of Rs.2,25,000/- provisionally in the P.T.A. Fund to meet the cost thereof within 15 days from the date of this order.
6. The trustees, managers and/or any other person looking after the accounts of OIF shall make available all the record and Books of Accounts, Receipt Books, Vouchers, Ledgers etc to the Special Auditors during the said period and shall co-operate the Auditors in all respects.
7. The Special Auditors shall submit their consolidated report to this Authority within a period of six months from the date of their appointment.”
3. Insofar as the direction No.2 (supra) of the operative part of the impugned order is concerned, it is stated on behalf of the petitioner that the advance amount of Rs.50 crores received by the petitioner, as an earnest money from the purchaser, namely, Rajivnayan Rahulkumar Bajaj and Rishab Family Trust through Rajivnayan Rahulkumar Bajaj, was refunded on 15 December 2023.
4. With the aforesaid preface, the relevant facts can be noted.
5. The petitioner was registered as a public trust under the MPT Act, and was granted a certificate of registration on 16 April 1991. In the year 2008, for better administration and management and for carrying out common activities of the petitioner, it was decided to amalgamate one Abhilasha Foundation with the petitioner. This was permitted by an order dated 31 December 2008 passed by the learned Assistant Commissioner, Greater Mumbai Region. By virtue of amalgamation, the movable and immovable properties of Abhilasha Foundation became the properties of the petitioner including leasehold rights of Abhilasha Foundation in Plot No.15 bearing CTS no.15 and Plot No.16 bearing CTS No.16 totally admeasuring 11764 sq. yards equivalent to 9836.20 sq. meters together with the bungalow and other structures admeasuring 4032.56 sq.ft. situated at Koregaon Park, Pune (“the said property”). In pursuance of such amalgamation order, the petitioner was absolutely seized and possessed of the said property. There was a similar amalgamation with one Dhyan Foundation in the year 2011.
6. The main objects of the petitioner are inter alia to spread, impart education by formal training in the field of arts, science and humanities and conducting courses in yoga, meditation, physiotherapy, physic healing and various forms of ancient medicine and to disseminate knowledge of ancient and contemporary philosophies, study of comparative religions etc. to grant scholarships and other educational assistance to deserving students for study of ancient and contemporary philosophers and other fields etc. It is also the case of the petitioner that majority of the participants in the mediation activities travel to India from around the world.
7. It is the case of the petitioner that the finances of the petitioner had depleted in or around the period when the country was hit by the Covid -19 pandemic. The regular activities of the petitioner were adversely affected. A situation prevailed that it was not possible to immediately restart the meditation activities in the near future. This severely affected the cash flow of the petitioner resulting into an inability of the petitioner to meet its financial obligations for maintain
