State of Gujarat Vs. Acharya Shri
Devendraprasadji [1968] INSC 163 (26 July 1968)
26/07/1968 GROVER, A.N.
GROVER, A.N.
SIKRI, S.M.
BACHAWAT, R.S.
CITATION: 1969 AIR 373 1969 SCR (1) 466
ACT:
Bombay Public Trusts Act (Bom. 29 of 1950),
ss. 37, 67 and 69--"Statement" and "report"--Meaning of.
HEADNOTE:
Section 67 of the Bombay Public Trusts Act,
1950 provides that the contravention of an order or direction made under the
Act by the Charity Commissioner is an offence. Section 69 relates to the
duties, functions and powers of the Charity Commissioner. Under s. 69(H), the
Charity Commissioner can, under s. 37, call for a "statement" or
"report" from a trustee of a public trust.
The respondent was one of the trustees of a
public trust. In respect of certain constructions made with the funds of the
public trust, without the Charity Commissioner's permission, the Charity
Commissioner wrote to the respondent asking him to furnish information
regarding, g the purpose of the constructions and when they were stated, the
amount spent and to be spent, the income expected, and details and particulars
regarding the contracts. For failure to comply with the notice, the respondent
was prosecuted. He was convicted by the Magistrate under ss. 37 and 67 of the
Act. In revision. he was acquitted by the High Court. In appeal to this Court,
HELD: The items mentioned by the Charity
Commissioner only involve calling of "information" on various matters
and did not fall within the meaning of the words "report" or
"statement" used in s. 37(1)(c), and the Charity Commissioner is not
empowered to call for such "information". [463 C] From the context in
which the word "report" has been used in s. 37(1)(c) the word can
have reference only to a formal report which a trustee may be required to make
under the provisions of the Act or the rules if any framed under s. 84(1)(b).
Similarly, the word "Statement" has been employed in rr. 17, 22 and
23 of the rules, and this word, appearing in s. 37(1)(c) has to be construed
with reference to them. So construed, it cannot be equated with the word
"information" which would have a much wider sweep than the word
"statement". The distinction between the words "statement"
and "information" is recognised by the Legislature itself by the use
of the words "other information" in s. 56(N) (2) (h) of the Act and
r. 18 of the Rules made there under, which take in the answering of all
inquiries and giving all kinds of information. [462 E-G]
CRIMINAL APPELLATE JURISDICTION: Criminal.
Appeal No. 150 of 1966.
Appeal from the judgment and order, dated
June 21, 1965 of the Gujarat High Court in Criminal Appeal No. 906 of 1963.
H.R. Khanna and R.N. Sachthey, for the
appellants.
1. M Nanavati, B. Datta and O.C. Mathur, for
the respondent.
457 The Judgment of the Court was delivered
by Grover, J. This is an appeal by certificate against the judgment of the High
Court of Gujarat setting aside an order of a Magistrate by which the respondent
was convicted of an offence under s. 67 read with s. 37 of the Bombay Public
Trusts Act 1950 (as adapted and applied to the State of Gujarat), hereinafter
referred to as the Act, and sentenced to pay a fine of Rs. 300, in default of
payment of which he was to suffer rigorous imprisonment for two months.
The respondent is one of the trustees of a
trust known as "Shri Swami Narayan Mandir" at Ahmedabad which is
registered as a public trust in the office of the Charity Commissioner. The
trust is managed under a scheme prepared by the High Court of Bombay. It
appears that the Charity Commissioner learnt about certain constructions having
been made by the respondent trustee without permission from him.
On March 22, 1962 a letter (Ext. 3) was
addressed from his office to the respondent the material part of which may be
reproduced:
"An information is received of the
Charity Commissioner that opposite the temple near the New Narnarayan building
the blocks are being constructed in which shops are constructed on the ground
floor of that building.
1. For what purpose it is constructed ?
2. From when its construction work is started
?
3. What amount is spent till today in
construction of the same ?
4. What amount is to be spent still ?
5. How much income will accrue from it ?
6. By which No. and on what date the
permission of the Charity Commissioner is taken for constructing the same.
7. To which contractors are given the
contracts for constructing the same ? His name, address, amount of the contract
and other details and a copy of the contract.
8. If the committee has passed a resolution
for constructing the same, its true copy.
9. If a contract is given to any contractor,
then whether that contractor is related or acquainted to any member of the
committee. All these necessary information may please be sent before 15th
April, 1962.
Queries on similar lines were made regarding
the constructions near the respondent's bungalow in Girdharnagar.
458 As no reply was received from the
respondent reminders were sent to him on April 20, 1962 and May 10, 1962
followed by a telegram dispatched on May 23, 1962. A reply was sent by the
respondent giving the particulars of the buildings which had been constructed.
Reference was made to the resolutions of the Committee relating to these
constructions together with the ,amount spent on them.
The Inspector appointed under the Act made a
report dated May 4, 1963 giving the result of the enquiry made by him relating
to the aforesaid constructions. According to him 8 shops had been constructed
adjoining the Narnarayan building opposite the Swammarayan temple, the
estimated cost of which was more than Rs. 2 lacs. On plot No. 98A shops were
being built in four blocks. Construction was also being made on another plot
No. 98A-2 opposite the railway crossing. On May 30, 1962 the Charity
Commissioner instituted a complaint in the court of the City Magistrate at
Ahmedabad giving most of these facts and stating inter alia that under the
provisions of the Act a trustee who desired to invest trust funds in
construction of buildings was bound to obtain permission of the Charity
Commissioner which had not been done in the present case. According to him the
respondent had deliberately committee a breach of the relevant provisions of
the Act and had omitted to comply with the notice dated May 22, 1962. The
gravamen of the charge was contained in paragraph 7 according to which the
respondent had, without reasonable cause, failed to comply with the order and
the directions issued to him under the provisions of s. 37 of the Act.
The respondent filed an application (Ext. 6) before
the Magistrate submitting that the investment of the trust funds made in the
construction of the building adjacent to the Narnarayan Bhavan was legal and
had been done in good faith. It was for the benefit of the institution. The
scheme committee had given its consent by passing resolutions. By an order,
dated June 10, 1963, the City Magistrate held that the respondent had not shown
the purpose of the new constructions nor had he furnished the date of
commencement of the work as also the details amount already spent and to be
spent on the said constructions. He was accordingly convicted under s. 37 read
with s. 67 of the Act. The respondent moved the High Court on the revisional
.side.
It was quite clear that the respondent was
not being prosecuted for failure to obtain permission from the Charity
Commissioner in the matter of investment of funds but the case for the
prosecution, as urged by the Assistant Government Pleader before the High
Court, was that in the letter dated March 22, 1962, Charity Commissioner had
called for a "statement' or "report" regarding certain
construction work which was being carried on 459 by the respondent in his
capacity as a trustee and since the same had not been complied with the
respondent had been rightly convicted. The High Court was of the view that the
words used in el. (c) of s. 37(1) namely, return, statement, account or report
have to be interpreted or construed with reference to the other provisions of
the Act and the Rules framed there under where those words had been employed or
used. As regards the word "statement" reference was made to Rules 17,
22 and 23. Similarly the word "report" was mentioned in ss. 34, 37
and 38. It was finally held that the Charity Commissioner had not called for any
"statement" or "report" but for particulars and detailed
information regarding the various items set out in his letter which he was not
empowered to do.
The Act was enacted to regulate and. to make
better provisions for the administration of public, religious and charitable
trusts in the State of Bombay. Section 2(13) define.s. public trust. Section
2(18) defines the word "trustee" as a person in whom either alone or
in association with other persons, the trust property is vested and includes a
manager. Section 2(20) says that words and expressions used but not defined in
the Indian Trusts Act 1882 shall have the meanings assigned to them in that
Act.
Chapter ii of the Act provides for the
appointment of the Charity Commissioner, Joint Deputy and Assistant Charity
Commissioners as also the subordinate officers and assessors. Chapter HI gives
charitable purposes and validity of certain trusts. Chapter IV relates to
registration of public trusts. Under s. 17 a duty has been cast on the Deputy
or Assistant Charity Commissioner in charge of the public trust registration
office to keep and maintain such books, indices and other registers as may be
prescribed which have to contain the prescribed particulars.
Under s. 22 where any change occurs in any of
the entries in the register kept under s. 17 the trustee shall, within 90 days
from the date of the occurrence of such change, report the same in the
prescribed form to the Deputy or Assistant Charity Commissioner in charge of
the public trust registration office. Chapter V deals with accounts and audit.
Section 32 makes it the duty of every trustee to keep regular accounts in the
approved form containing the prescribed particulars. Under s. 34 it is the duty
of every Auditor to prepare balance sheet and to report irregularities etc.
Section 35 relates to investment of public trust money and provides inter alia
that the Charity Commissioner may permit a trustee to invest money in any
manner other than that provided in that section. Section 3 6 prohibits
alienation of immovable property of a public trust without the previous
sanction of the Charity Commissioner.
Chapter V/which contains ss. 37 to 41 is
headed "control".
Section 37 gives powers of inspection and
supervision to the Charity Commissioner etc. These officers have been given,
under subs. ( 1 ), the power 460 (a) "to enter on and inspect or cause to
be entered on and inspected any property belonging to a public trust;
(b) to call for or inspect any extract from
any proceedings of the trustees of any public trust and any rocks of account or
documents in the possession, or under the control, of the trustees or any
person on behalf of the trustees.
(c) to call for any return, statement,
account or report which he may think fit from the trustees or any person
connected with a public trust." Sub-section (2) says that it shall be the
duty of every trustee to afford all reasonable facilities to any officer
exercising any of the powers under sub-s. (1 ) and to comply with any order or
direction made by him. Sections 38 and 39 provide for calling of an explanation
from the trustee or any other person concerned on the report of the Auditor and
the making of a report by the Deputy or the Assistant Charity Commissioner to
the Charity Commissioner about the gross negligence, breach of trust etc., of
the trustee.
Under s. 40 the Charity Commissioner after
considering the report submitted under s. 39 and giving an opportunity to the
person concerned and holding such enquiry as he thinks fit can determine the
various matters set out in that section and under s. 41 if he decides that any
person is liable to pay to the public trust any amount for the loss caused to
the trust he may direct that amount shah be surcharged on that person. Section
54 provides for what is called Dharmada and an account is to be submitted in
the prescribed form. Section 56(N)(2)(h) includes among the general duties of a
Committee in which the management of certain endowments vests under s. 56(D) to
supply such returns, statistics, accounts and other information with respect to
such endowments as the State Government may, from time to time, require. It is
unnecessary to notice the other.r sections with the exception of ss. 67 and 69.
Section 67 provides for contravention inter
alia of any order or direction made under the Act by the Charity Commissioner.
Section 69 relates to the duties, functions and powers of the Charity
Commissioner. Under cl. (h) he can enter on and inspect any trust property and
call for and inspect any proceedings of a trust. He can further call for any
return, statement, books of account, document or report from trustees or any
person connected with a public trust under s. 37.
The relevant rules in the Bombay Public Trust
(Gujarat Rules 1961) may next be examined. Rule 17 is to the effect that every
trustee shall keep regular accounts of all receipts and of movable and
immovable property and of. all encumbrances created on the trust property and
of all payments, alienations etc. made on behalf 4 61 of the trust. The
accounts have to contain all such particulars as in the opinion of the Charity
Commissioner will facilitate preparation of the balance sheet and income and
expenditure account in the Form of Schedules VII/and IX and the preparation of
a Statement of income chargeable to contributions in the Form of Schedule IXC.
According to the proviso to r. 17 where the trustees of a public trust are
entitled to file statements in the Form of Schedules IXA and IXB by virtue of
any exemption granted under s. 33(4)('b) the accounts may contain particulars
which shall facilitate the preparation of statements in the aforesaid Form of
Schedules IXA and IXB. Schedule IXC is headed "statement of income liable
to contributions" and has reference to sub r.
(3) of r. 32 which provides for contributions
to the Public Trust Administration Fund by every public trust other than a
trust exclusively for the purpose of advancement and propagation of secular
education or exclusively for the-purpose of medical relief or veterinary
treatment of animals; certain deductions specified therein shall be allowed in
calculating the gross annual income of a public trust or where the public trust
is a Dharmada, its gross annual collection by receipts for the purpose of
assessing the contribution. Schedules/XA and IXB are headed "statements of
income and expenditure" respectively and have as stated before reference
to s. 33(4)(b) which provides that the Government may, by general or special
order, exempt any public trust or class of public trusts from the provisions of
sub-s. (2) of s. 33 according to which the accounts shall be audited annually
in such manner as may be prescribed and by a person who is a Chartered'
Accountant or by such persons as may be authorised by the State Government.
Rule 18 which relates to the powers in respect of audit empowers the Deputy or
the Assistant Charity Commissioner inter alia to require the production before
the auditor of any book, deed, account etc. by the trustee or to give such
information as may be necessary regarding the same. Rule 22 and 23 provide for
inspection and grant of entries in the public trust register and other
documents.
Thus inspection and grant of copies can be
obtained of any entry or portion thereof in the register of public trust or any
statement, notice intimation, account, audit report or any other document filed
under the Act.
In other similar legislation on public trusts
the expressions. which have been used may be noticed. In the (English)
Charitable Trusts Act 1853 it was provided by s. 10 that the Board (consisting
of the Charity Commissioners) may require all trustees or persons acting or
having any concern in the management or administration of any charity or the
estate, funds or property thereof to render to the said Board accounts and
statements in writing in relation to such charity or the funds, estate,
property, income or monies thereof or may also require such trustee to return
answers in writing to any questions or enquiries sup. C I/68-15 463 or
statement" but in addition answers have to be returned to any questions or
enquiries and the refusal to do so is punishable with contempt of court. In the
Act itself the legislature was fully aware of the true import of the word
"information" as is clear from s. 56(H)(2)(h) and r. 18. It is
difficult, therefore, to equate the word "statement" as used in s. 37
(1 ) (c) with the word "information" or answering of enquiries etc.
which would have a much wider sweep than the word "statement" when
considered from the point of view of statutory provisions -and the rules in
which it appears.
In view of the above discussion it is
difficult to hold that any of the items mentioned in the letter, dated March
22, 1962 fall within the meaning of the words "report" or
'statement". The enquiries which have been made can only involve the
calling of information on various matters mentioned in the letter which could
hardly be said to fall within the aforesaid expressions used in s. 37(1)(c).
The view of the High Court, therefore, must
be upheld, with the result that the appeal fails and is dismissed.
Y.P.
Appeal dismissed.
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