1. Dissolution of a society registered under the Societies Registration Act, 1860, and creation of a new corporate board via state legislation — challenge to legislative competence and constitutionality. (Para 1 , 2 , 3 , 4 )
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1961 Supreme(SC) 347
SUPREME COURT OF INDIA
23rd October, 1961.
B.P. SINHA, C.J.I., S.K. DAS, A.K. SARKAR, N. RAJAGOPALA AYYANGAR AND J.R. MUDHOLKAR, JJ.
Board of Trustees, Ayurvedic and Unani Tibia College, Delhi, Petitioner
Versus
State of Delhi (Now Delhi Administration) and another, Respondents.
Petition No. 96 of 1955.
Advocates appeared
Mr. Purushottam Trikamdas, Senior Advocate (M/s. J. B. Dadachanji, Ravindra Narain and Onkar Chand Mathur, Advocates of M/s. J. B. Dadachanji and Co. with him), for Petitioner; Mr. C. K. Daphtary, Solicitor General of India (M/s. B. R. L. Iyengar and T. M. Sen, Advocates with him), for Respondents.
Advocates:
B.R.L.Iyengar, C.K.DAFTARY, J.B.DADACHAN, OMKAR CHAND MATHUR, PURSHOTTAM TRIKAMDAS, Ravindra Narayan, T.M.SEN
B.R.L.Iyengar, C.K.DAFTARY, J.B.DADACHAN, OMKAR CHAND MATHUR, PURSHOTTAM TRIKAMDAS, Ravindra Narayan, T.M.SEN
A society registered under the Societies Registration Act, 1860, is an unincorporated society, not a corporation. Consequently, state legislatures have the competence to dissolve such societies and create new corporate bodies under Entry 32 of List II of the Seventh Schedule to the Constitution.
Headnote:(A) Societies Registration Act, 1860 - Sections 5, 6, 7, 8, 13, 14 - Constitution of India - Articles 14, 19(1)(f), 31 - Government of Part C States Act, 1951 - Sections 21, 22 - Seventh Schedule - List I Entry 44, List II Entry 32, List III Entries 10 and 28 - Whether a society registered under the Societies Registration Act, 1860, is a corporation - A society registered under the Societies Registration Act, 1860, is not a corporation in the legal sense. While it enjoys privileges analogous to a corporation, such as the ability to sue and be sued in the name of its officers and the vesting of property in trustees, it lacks the essential characteristic of an intention to incorporate (Paras 11-14).
(B) Legislative Competence - Entry 32, List II - Legislation dissolving an unincorporated society and creating a new corporate body with objects confined to a single state falls within the legislative competence of a state legislature under Entry 32 of List II (Paras 16-19).
(C) Fundamental Rights - Articles 14, 19, 31 - The dissolution of a charitable society and transfer of its management to a new body does not violate Article 14 if the entity exhibits exceptional features, such as gross mismanagement, justifying specific legislation. It does not violate Article 19(1)(f) or Article 31 if the members possess no beneficial interest in the property and only a right to ensure its use for charitable purposes (Paras 21-24).
(D) Colourable Legislation - The doctrine of colourable legislation relates to the competency of the legislature to enact a law; if the legislature is competent, the motives behind the enactment are irrelevant (Para 27).
Facts of the case:
A society registered under the Societies Registration Act, 1860, managing a medical college and pharmaceutical institute, was dissolved by a state act. A new corporate board was created to take over the management and assets of the institutions. The petitioners challenged the validity of the act on grounds of legislative competence, conflict with a central act, and violation of fundamental rights.
Findings of Court:
The state legislature had the competence to enact the law under Entry 32 of List II. The act did not violate Articles 14, 19, or 31 of the Constitution. The act was not repugnant to the central registration act nor was it colourable legislation.
Issues: Whether a society registered under the Societies Registration Act, 1860, is a corporation; whether the state legislature had the competence to dissolve such a society and create a new corporate body; and whether the act violated fundamental rights.
Ratio Decidendi: Registration under the Societies Registration Act, 1860, does not result in incorporation; thus, the society remains an unincorporated association falling under the second part of Entry 32, List II. The creation of a new corporate body with localized objects falls under the first part of Entry 32, List II. Members of a charitable society have no proprietary right to the assets upon dissolution, only a right to ensure the assets are used for similar charitable purposes, which does not constitute a right to property under Article 19(1)(f).
Result: Petition dismissed with costs.
Judgement Key Points
The provided legal document does not explicitly contain a paragraph that states or discusses that the registrar is different from the charity commissioner. The document mainly focuses on the legal status of the society, the legislative competence, and the constitutional validity of the legislation affecting the society, but it does not specify or differentiate the roles of the registrar and the charity commissioner.
Legal Category Hierarchy
- constitutional law
- administrative law
- practice and procedure
Table of Contents
2. Challenge to legislative competence based on corporate status and objects, alleged violations of Articles 14, 19, and 31, and claims of repugnancy and mala fides. (Para 5 , 8 )
3. Registration under the Societies Registration Act, 1860, does not confer corporate status; the society remains unincorporated, falling within the state's legislative competence under List II. (Para 9 , 10 , 11 , 13 , 14 , 18 , 21 , 23 , 26 , 27 )
4. A society registered under the Societies Registration Act, 1860, is an unincorporated society, not a corporation, regardless of privileges analogous to corporate status. (Para 19 )
6. Does registration under the Societies Registration Act, 1860, make a society a corporation?
No. Registration does not result in incorporation but entitles the society to certain privileges. It remains an unincorporated society, as the Act lacks words indicating an intention to incorporate and utilizes trustees for property vesting. (Para 9 , 10 , 11 , 13 , 14 , 19 )
7. How is legislative competence determined for dissolving an unincorporated society and creating a corporate board?
Dissolution of an unincorporated society falls under the second part of Entry 32, List II. Incorporation of a new board whose objects are confined to the state falls under the first part of Entry 32, List II. (Para 18 , 19 )
8. Do members of a society registered under the Societies Registration Act, 1860, have a right to property under Article 19(1)(f) upon dissolution?
No. Section 14 of the Act prohibits distribution of assets among members upon dissolution. Since members have no right to hold the property, there is no infringement of the right to property. (Para 23 )
9. What is the legal test for determining colourable legislation?
The doctrine of colourable legislation focuses solely on the legislative competence of the body to enact the law. If the legislature is competent, the motives or bona fides of the action are irrelevant. (Para 27 )
Judgment
S. K. DAS, J. (For himself and B. P. Sinha, C.J.I. and A. K. Sarkar and Rajagopala Ayyangar, JJ.) : This is a writ petition on behalf of two petitioners. The first petitioner is the Board of Trustees. Ayurvedic and Unani Tibbia College Delhi, through Hakim Mohammad Jamil Khan, stated to be its properly elected Secretary. The second petitioner is Hakim Mohammad Jamil Khan himself, who states that he is still one of the trustees or members of the said Board. The petition was initially filed on, behalf of the first petitioner. Subsequently, an amendment petition was moved which was allowed by us. As a result of the amendments allowed petitioner No. 2 was added as one of the petitioners, and certain new grounds of attack were added in para. 14 of the petition. To these grounds we shall advert later.
2. The short facts giving rise to the petition are these. One Hakim Muhammad Ajmal Khan was a physician (of Unani medicine) of all-India repute. He lived in Delhi and started a pharmaceutical institute in the town known as Hindustani Dawakhana in the year 1903. He also established a medical college known as the Tibbia College. He died in the year 1927. But before his death, in the year 1911, he along with certain other persons formed a society styled Anjuman-i- Tibbia and had it registered under the Societies Registration Act, 1860 (Act XXI of 1860). The name of the society was changed in 1915, and it became known as the Board of Trustees, Ayurvedic and Unani Tibbia College, Delhi. For convenience we shall refer to it as the Board. The Board ran the Tibbia College and an attached hostel. The pharmaceutical institute was also managed by it, though at one stage petitioner No. 2 claimed the institute as his private property. Certain rules and regulations were made for the functioning of the Board, which were amended from time to time. The main objects of the Board were thus stated in the rules :-
(a) to establish colleges for the purpose of imparting higher education in the Unani and Ayurvedic systems of medicine to the inhabitants of India;
(b) to improve the indigenous systems of medicine on scientific lines and for that purpose to establish one or more pharmaceutical institutes (dawakhanas); and
(c) to have medical books compiled and translated and to adopt other means which might enhance the popularity of those systems and add to the information of the people in general on hygiene etc.
The maximum number of members (called trustees in the rules) was 35 to be elected from all the then Provinces of India. It was stated in R. 5 that one-third of the members of the Board should be Hakims and Vaids. Tile financial year of the Board was to be from April 1 to March 31 of each year, and the subscription to be paid by a member of the Board was fixed at Rs. 12 per annum payable in advance before April 30 of each year. Rule 6 laid down the circumstances in which the office of a member should be deemed to be vacant and one of such circumstances was the failure of a member to pay his annual subscription before the date fixed for such payment. There were also rules regarding (a) powers of inspection of the college, hostel etc., (b) ordinary meetings of the Board of Trustees, and (c) matters which could be dealt with by the Board and its sub-committees. It is not necessary to state these rules in detail. Rule 13 provided for the formation of a Managing Committee consisting of nine members and six officials for a period of three years and the functions of the Managing Committee were also prescribed in the rules. The office-bearers of the Board and the Managing Committee were to be the same and consisted of (i) a President, (ii) a Senior Vice-President, (iii) a Junior Vice-President, (iv) a Secretary, (v) a Financial Secretary, and (vi) a Joint Secretary. It was laid down in R. 26 that the office-bearers of the Board were to be elected for three years by the members. The rules also laid down the powers and duties of the President. Secretary, Financ
