Dhanraj Natthuji Kale and Others vs Govindrao Laxmanrao Choudhary and Others

A.B. Chaudhari, J.—Heard, Admit. Taken up for final disposal with consent of counsel for the rival parties. I have gone through the impugned judgments and orders recorded by the Courts below. I have also heard the Learned Counsel for the rival parties at length. Upon hearing them, I find that the following substantial questions of law arise in the present second appeal.

(I) Whether the Joint Charity Commissioner committed an error in not understanding that the proceedings u/s 41-D of the Bombay Public Trust Act result into serious civil consequence and cause damage to the integrity of the trustees and therefore in the light of the law laid down by this Court in the case of Mallikarjuanappa Bidve and Others Vs. Joint Charity Commissioner and Others, and Vajubhai Patel and Another Vs. Charity Commissioner, Maharashtra State and Others, rules of natural justice are required to be adhered to strictly and the findings are required to be based on reliable evidence even if the delinquent trustees did not participate in the proceedings against them?

(II) Whether the Joint Charity Commissioner before removing or suspending the trustees in the instant case ought to have exercised his power of collecting the evidence to find out whether the appellants/trustees were guilty of acts of misconduct, misfeasance etc. by ordering seizure of relevant record of the trust and making required investigation?

In Vajubhai Patel and another vs. Joint Charity Commissioner, Maharashtra State, Mumbai and others, a Single Judge of this Court after looking at the nature of the proceedings u/s 41-D of the Bombay Public Trust Act held thus in para 11 --

Imputations reflecting on the integrity of people have to be fortified by proof of a high degree. Even if a proceeding u/s 41 -D be not a criminal proceeding, the proof required to sustain charges therein must satisfy a higher standard than that normally required in cases governed by the rule of preponderance of probabilities.

Similarly, in Mallikarjuanappa Sidramappa Bidve and others vs. Joint Charity Commissioner, Maharashtra State, Mumbai and others, another Single Judge of this Court held thus in para 18 --

The legal position, which may be kept at back of the mind, is that removal of a trustee is a drastic action. The charge of malfeasance and/or misfeasance is serious one. The proceedings are of quasi civil and quasi criminal nature. Though the proceedings u/s 41-D is not criminal proceeding as such, yet, proof required to sustain the charges is of high standard. The standard of proof in such proceedings is somewhat more than normally required in cases governed by preponderance of probabilities and somewhat less than required in trials of criminal cases. The degree of proof required in criminal case is such that would prove criminal charge beyond a reasonable realm of doubt. The imputation reflecting on integrity of trustees have to be fortified by proof of high degree which would be somewhere in between standard of proof required in civil proceedings like a suit and criminal proceedings like a trial for offence of criminal breach of trust, or that of cheating. Thus, unless the lapse on part of the trustee is proved to be actuated by dishonesty or active connivance with other trustees, who are guilty of misfeasance or malfeasance, the drastic action u/s 41-D of the BPT Act, may not be warranted.

Respectfully agreeing with and keeping in mind the above view, I have examined the impugned judgment and order made by the Joint Charity Commissioner, the first authority, and the manner of conduct of proceedings by him, to say the least, in my opinion, the learned Joint Charity Commissioner has dealt with the matter in a casual way and has not followed the law laid down by this Court as aforesaid. The allegations which were levelled against the appellant trustees were -

(a) No audited accounts were submitted from 1980 to 2008.

(b) Some of the appellants/trustees have sold certain agricultural land of the trust without permission of the Joint Charity Commissioner.

(c) The trustees have received donations without maintaining account.

(d) Vacant seats were not filled in respect of the trustees who had expired.

It appears that the appellants engaged an advocate Shri P. N. Shende who had filed their reply before the Joint Charity Commissioner. According to the appellants, Shri P. N. Shende advocate thereafter never appeared before the Joint Charity Commissioner and when he was asked about the dates of the proceedings before the Joint Charity Commissioner, he used to say that he was attending the proceedings and the appellants need not bother about it. According to them, it was a negligence on the part of their counsel not to inform or call the appellants on any date which resulted into passing of ex parte orders against them and therefore they have filed a complaint before the Consumer Forum at Nagpur narrating all the above facts against the said advocate which is pending consideration. Needless to say that the reasons for not appearing before the Joint Charity Commissioner were shown by the appellants before the District Judge and have also been shown to this Court in this appeal. Even though appellants did not appear before the Joint Charity Commissioner, it was incumbent on the part of the Joint Charity Commissioner to find out the materials in support of the charges. However, the Joint Charity Commissioner has neither performed his duty nor has understood the seriousness of the proceedings u/s 41D of the Bombay Public Trust Act before removing or suspending the trustees. In the first place, the properties of the trust are some Ashram buildings and agricultural lands which are dry crop agricultural lands in Karanja Tahsil of District Wardha. The Learned Counsel for the appellants stated before me that the trustees had sold 14 acres of land and purchased almost equal area of land with the sale proceeds because the land sold was not convenient for management by the trust and the land purchased is convenient. Looking to the property owned by the trust namely the agricultural property, the issue about non-submission of audited accounts for the last 28 years was required to be viewed and investigated by the Joint Charity Commissioner by seizing the entire record of the trust to find out the income and expenditure and the effect of non-submission of audited accounts for the last 28 years and thus find out the gravity of the charge. Unless all these records were examined, it was not proper on the part of the Joint Charity Commissioner to hold that the charge of non-submission of accounts was proved. Even if such a charge is proved, the same should not automatically result into suspension/ removal of the trustees, but would depend upon the gravity of the situation as to what punishment should be imposed on the trustees. All this has not been taken into consideration by the Joint Charity Commissioner.

The charge regarding sale of land without the permission of Joint Charity Commissioner is said to have been proved. Ignoring the contention raised by Shri Thakre, the Learned Counsel for the appellants, that the trust had in fact purchased equal area of land after sale of the land of the trust for convenience, in my opinion, it was the duty of the Joint Charity Commissioner to make an investigation about the sale and purchases, if any, of the land either by sending inspector of the trust or by some other mode to find out the correct position. Whether the sale price of the land sold was, accounted for or not was again a matter of investigation since it is contended before me that with the said amount some other land was purchased. In the absence of any investigation, merely relying on the copies of the sale deeds filed on record before him and straightway holding that the charge about sale of land of the trust was proved, the Joint Charity Commissioner could not have made the impugned order. It is true that the charge that the land of the trust was sold without permission of the Joint Charity Commissioner, is a serious charge. But then upon investigation if it is found that some other land has been purchased, which is convenient for the management by the trust, the gravity of the charge would certainly differ and some workable arrangement could have been made by the Joint Charity Commissioner in that situation by issuing direction u/s 41-A of the Bombay Public Trust Act. Further, it is settled legal position that sale of the land without prior permission of the Joint Charity Commissioner becomes void-abinitio and does not bind the trust. That being so, in the absence of any proper investigation and taking into consideration all the above factors, I do not think that it could be said that the Joint Charity Commissioner followed the required procedure before making the order of removal of trustees. It is seen that the Joint Charity Commissioner has held that appellants/trustees have received donations without maintaining accounts. Except writing one sentence that the trustees have received donations without maintaining accounts, there is absolutely no material indicated to the said effect in the order of the Joint Charity Commissioner. In other words, the Joint Charity Commissioner did not make any investigation, did not record any statement of donors or found out any accounts or the amount of donations received and so on and so forth. The Joint Charity Commissioner could have made a regular inquiry into the matter by sending his inspector, by examining the persons concerned, whether the donations were given/received or not. By merely stating in the impugned order that donations were received and were not accounted for without any materials in support, show how casually the proceedings u/s 41-D were conducted. Similar is the position regarding charge of not filling the vacant seats of the trustees who had expired. Again investigation was required to be made from the record as to how many were the vacancies and as to why the vacant posts were not filled in, what were the reasons. Are there any good reasons for not filling the vacant posts, whether the vacant seats were required to be filled in or not and so on. Still it was held that the charge was proved. The District Judge also committed an error in not considering the fact that the appellants did not participate in the proceedings and had no chance to defend for whatever reason. To sum up, it was necessary for the Joint Charity Commissioner to have the entire conspectus of the matter before taking a decision to remove the trustees which, as held by this Court, is the drastic action. For these reasons, therefore, I find that the present case is a fit case for making remand of the matter to the Joint Charity Commissioner for making a legal and proper inquiry in accordance with the law and by granting opportunity to the persons who are to be removed and to the persons who have made complaint before the Joint Charity Commissioner i.e. respondents. In that view of the matter, I am inclined to make the following order but subject to the payment of heavy cost to be saddled on the appellants, since they did not appear before the Joint Charity Commissioner but merely relied upon their counsel. In the result, I make the following order.

ORDER.

i) Second Appeal No. 181/2011 is partly allowed.

ii) The impugned judgment and order made by Joint Charity Commissioner in Application No. 5/2009 dated 23-4-2010 and Judgment and Order dated 15-2-2011 in Trust Appeal No. 03/2010 passed by the District Judge-1, Wardha, are set aside.

iii) The proceedings namely Application No. 5/2009 u/s 41-D on the file of Joint Charity Commissioner, Nagpur, are remanded to the Joint Charity Commissioner, Nagpur, for fresh hearing and disposal in accordance with law in the light of the above observations.

(iv) The appellants shall pay cost of Rs. 40,000/- to the original complainants within a period of four weeks from today. They are at liberty to claim the said amount of cost from the person whom they think is responsible in accordance with law.

(v) The Joint Charity Commissioner, Nagpur, shall now take up the matter and dispose it of within a period of six months from today.

(vi) During the pendency of the proceedings before the Joint Charity Commissioner, Nagpur, the appellants are restrained from dealing with the property of the trust and shall maintain statuesque in relation to said property and maintain accounts of the income and expenditure of the trust.

(vii) Parties to appear before the Joint Charity Commissioner, on 17-8-2011.

(viii) Steno copy is allowed.