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CASE NO.: Appeal (civil)  2409 of 2006

PETITIONER: Nautam Prakash DGSVC, Vadtal & Ors.

RESPONDENT: K.K. Thakkar & Ors.

DATE OF JUDGMENT: 02/05/2006

BENCH: S.B. Sinha & P.K. Balasubramanyan

JUDGMENT: J U D G M E N T [Arising out of SLP (Civil) No.4529 of 2003]

S.B. SINHA, J.

       Leave granted.

Jurisdiction of the Assistant Charity Commissioner of Bombay in  relation to the administration of the Appellant-Trust is in question in this  appeal which arises out of a judgment and order dated 25th September, 2002  passed by the High Court of Judicature of Bombay in Writ Petition No. 1519  of 2002.   The appellant herein is a religious trust. A scheme for management of  the temple of Swami Narain Vadtal and other temples subordinate to it, was  framed by the High Court of Bombay in the year 1922.  The said scheme  contained provisions as to how accounts should be maintained.  Clauses 26  to 29 thereof, which are relevant as under:   

"26. At each temple proper accounts of all receipts and  expenditure shall be kept and for such purposes the  following books of account shall be kept:-

       i) Cash Book (Rukad)         ii) Auro (Monthly Rozmel)         iii) Nondh (Daily Journal)         iv) Ledger containing separate Khatas for each  head of income and expenditure including all  expenditure on account of Tyagis.

The ledger kept at the Vadtal Temple shall also contain  separate khatas of          (a)     Name Vero and Bhets; (b)     The household expenditure on account of  the Acharya; (c)     Any expenditure incurred on account of the  Acharya on official tours and other official  occasions; and  (d)     What may be paid to the Acharya on  account of the personal expenditure but not  of such personal expenditure

27.     \005\005\005\005. 28.     At the close of each Samvat year a separate  Financial Statement and Balance Sheet shall be  drawn up in regard to each temple and in regard to

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the whole Institution.  Copies of such Statements  and Balance Sheets shall be furnished to each  member of the Committee by the Kothari  (Manager) before the first quarterly meeting of the  following year and such Balance Sheets and  Statements shall be checked and passed by the  Committee at such Meeting.  

29.     In terms of Clause 29, all books of accounts and  vouchers were to be opened to for inspection of  each member of the Committee or all Satsangies  appointed by the Committee."

         Upon coming into force of the Bombay Public Trust Act, 1950 (‘the  Act’), the Trust was to be governed thereunder.   

An application for registration of the Trust was filed, pursuant  whereto a certificate of registration in respect of the temple of Lakshmi  Narayan Devasan and properties of the temples subordinate thereto was  issued by the Assistant Charity Commissioner, Greater Bombay.   

The Parliament enacted The Bombay Reorganization Act, 1960 in  terms whereof the State of Gujarat was carved out of the State of Bombay.   In anticipation of such reorganization, the Legislature of the State of  Bombay enacted the Bombay Statutory Corporations (Regional Act XXI of  1960). Section 3(1) hereof read as under:-

"3(1)  If it appears to the State Government expedient  that any existing corporation which is operating and  functioning immediately before the commencement of  this Act, should be dissolved or that it should be  reconstituted and reorganized so that there are established  or functioning separate corporations for the Maharashtra  and Gujarat regions, that Government may by order make  provision for such dissolution or reconstitution and  reorganization of such existing corporation."

The said provision was intended to apply to the institution of Charity  Commissioner.

The State of Gujarat was formed with effect from 1st May, 1960.   However, immediately prior thereto, an Order known as the Bombay Charity  Commissioner (Regional Reorganisation) Order, 1960 was issued which  came into force with effect from 28th April, 1960, the relevant provisions  whereof are as under:-   "The Bombay Charity Commissioner (Regional  Reorganisation) Order, 1960: On the bifurcation of the  former State of Bombay with effect from 1st May, 1960,  the State of Gujarat and the State of Maharashtra, have  their own Charity Organisations for public trusts within  their respective States.  In view of the bifurcation of the  Bombay State, it was proposed to provide for the  reorganization of such statutory corporate bodies into two  intra-regional bodies before bifurcation of the State as  also for distribution of their assets and liabilities etc., and  allocation of their employees.  By virtue of the Legal  Department Order No. 12921/E, dated the 28th April,  1960, the Charity Commissioner, Bombay, a corporation  sole, was reconstituted and reorganized so as to constitute  a new corporation for Gujarat Region and to reconstitute  the existing corporation to function for Maharashtra  Region."

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        Clauses 4 (b) & (c), 5 and 6 (a) & (b) read thus:-  

"4.     Registration of public trusts where property or  office is situate \026 In the case of a public trust duly  registered under the Act before the appointed day, or  deemed to be so registered, if, immediately before that  day, -  

(a)     \005\005\005\005\005\005\005.

(b)     the trust property is situated partly in the  Maharashtra region and partly in the Gujarat region, then  in respect of so much of the said property as is situate in  the Maharashtra region or the Gujarat region, the trust  shall, whether the office for the administration of the  trust is or is not situate in that region, be deemed to be so  registered in that day without further inquiry, charge or  fee in the Maharashtra region or, as the case may be, the  Gujarat region.

(c)     The trust property is situate in the Maharashtra  region and the office for the administration of the trust is  situate in the Gujarat region or vice versa, then the trust  shall be deemed to be so registered on that day without  further inquiry, charge or fee in each of the two regions."

"5.     Payment from Public Trusts Administration Fund of  existing Corporation to new Corporation. \026 From the  balance standing to the credit of the Public Trusts  Administration Fund of the existing Corporation  (including the investment made therefrom), immediately  before the appointed day, and struck after taking into  account all outstanding liabilities upto that date, there  shall be paid to the new Corporation in respect of the  Gujarat region an amount in the ration which the income  from all sources including any sums specified in clauses  (a) to (c) of sub-section (2) of Section 57 of the Act,  court fees and miscellaneous receipts other than deposits  received in respect of that region during the period  between the establishment of the Public Trusts  Administration Fund for the first time under the Act and  the 30th November, 1959, bears to the total income from  those sources credited to that fund during the said period  from the Maharashtra as well as Gujarat regions."

"6.             Recovery of outstanding contributions and dues. \026  The right to recover contributions and other dues,  payable before the appointed day in respect of any public  trust but not recovered, shall belong-

(a)     Where the trust under paragraph 4 is deemed to be  registered exclusively in the Maharashtra or the Gujarat  region, to the Corporation having jurisdiction over that  region.

(b)     Where the trust is deemed to be registered in both  the regions, to the Corporation having jurisdiction over  the region within which the Public Trusts Registration  Office in which the trust was registered is, on that day,  situate."

In the year 1961, despite the 1960 Act and 1960 Order, presumably, in  view of the fact that one of the temples was situate in the State of

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Maharashtra, the appellant herein filed an application for registration thereof  to the Assistant Charity Commissioner, Bombay and the same was granted.   The appellant indisputably also filed Statements of Accounts in respect of  the said trust up to 1973 before the Maharashtra Charity Commissioner’s  office.  It is not in dispute that the office of the trust had been situate in the  State of Gujarat. In the meanwhile, having regard to the fact that the office  of the trust was situate in the State of Gujarat, an application was filed for  modification of the said scheme in the City Civil Court at Ahmedabad.  A  contention raised in the suit that the Courts of Gujarat had no jurisdiction  was negatived.  Ultimately, the said scheme was modified by the Gujarat  High Court by a judgment and Order dated 20th June, 1974, clause 30(c ) of  the Scheme as mentioned is as under:-

"30(c)  The Board shall within nine months after  the close of every financial year, prepare a balance  sheet and the statement of income and expenditure  for the said year and forward the same together  with the Auditor’s report to every person whose  name is entered in the Voters’ list and also to  Acharya."

According to the appellant, the Trust had been rendering its accounts  to the Assistant Charity Commissioner in Gujarat at Nadiad and had also  been filing other documents and changed reports from time to time therein.   Respondent No. 1 herein claiming himself to be a member of the trust, filed  an application before the Assistant Charity Commissioner of Greater  Bombay purportedly under Section 41A and 41B of the Act praying, inter  alia, for appointment of proper persons and trustees of the said trust.   

By an order dated 31.12.2001, the said application was allowed.  The  Assistant Charity Commissioner in the said order directed:-

"1.     The application No. 5924/2000 is partly  allowed.

2.      The opponents are hereby directed to submit  the audited statement of Account from years 1973  to 2001 within fortnight.

3.      The opponents are further directed to submit  the change report of changes occurred from time to  time in trustees, properties etc. U/s. of the B.P.T.  Act, 1950 within fortnight.

4.      The opponents are further directed to take  the steps for amendment of the scheme framed by  Hon’ble High Court of Bombay, in Civil  Application No. 690/1937."

A writ petition filed there-against by the appellant herein was  dismissed by the Bombay High Court by reason of the judgment impugned  herein opining that as the appellant never challenged the vires of the  provisions of the Act or the 1960 Order and having itself filed an application  for registration and furthermore having filed the statement of accounts  before Assistant Charity Commissioner after 1973, they have disentitled  themselves from contending that the provisions of the Act, 1960 or the  Order, 1960 are unconstitutional.  The appellants are thus before us.

The short question which arises for consideration in this appeal is as  to whether the Assistant Charity Commissioner, Greater Bombay had  jurisdiction to interfere with the administration of the Appellant-trust.  

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The trust was registered at Baroda in the State of Gujarat. Some  proceedings in relation to the said trust were also initiated in the State of  Gujarat.  However, after the Reorganisation Act came into force, an  application for registration of the property situate in Gujarat was filed.  The  audited statements of accounts admittedly were also filed till 1973.   

But as would appear from the discussion hereinafter, the same by  itself would not be determinative of the jurisdictional question raised before  us. The High Court had proceeded to dismiss the writ petition of the  appellant herein only on the ground that the jurisdiction of the Assistant  Charity Commissioner could not have been questioned by the appellant as  the vires of 1960 Act or the 1960 Order had not been questioned by them.  If  by reason of the provisions of the said Act or the 1960 Order, the jurisdiction  of the Assistant Charity Commissioner, Bombay was confined only to the  properties situate within the State of Maharashtra, having regard to the  doctrine of lex-sites, the said authority could not have assumed jurisdiction  in respect of the entire trust.  The Assistant Charity Commissioner, Bombay  derived his jurisdiction from the provisions of the Bombay Public Trust Act.   Upon reorganisation of the State, he had a limited jurisdiction to exercise.   All the provisions of the said Act were indisputably also not applicable to  both the State of Maharashtra and the State of Gujarat.   

The Assistant Charity Commissioner exercised his jurisdiction in  terms of Section 41A and 41B of the Act.   

Section 41A of the Act reads thus:- "41A.  Power of Commissioner to issue directions  (for proper administration of the trust) \026 (1)  Subject to the provisions of this Act, the Charity  Commissioner may from time to time issue  directions to any trustee of a public trust or any  person connected therewith, to ensure that the trust  is properly administered, and the income thereof is  properly accounted for or duly appropriated and  applied to the objects and for the purposes of the  trust; and the Charity Commissioner may also give  directions to the trustees or such person if he finds  that any property of the trust is in danger of being  wasted, damaged, alienated or wrongfully sold,  removed or disposed of.

(2)     It shall be the duty of every trustee or of  such person to comply with the directions issued  under sub-section (1).                                                           

Section 41B of the Act indisputably is not applicable in the State of  Gujarat.   

The jurisdiction of the Assistant Commissioners of Greater Bombay  and State of Gujarat is required to be determined primarily on a construction  of Clauses 4(b) and 4(c) of the 1960 Order.

Indisputably, the office for administration of the trust is situate in the  State of Gujarat i.e. Gujarat region.  Only some properties of the trust are  situate in the Maharashtra region.  Clause 4(c) creates a legal fiction in terms  whereof the trust shall be deemed to be registered in Gujarat region  whereafter no other or further inquiry is required to be conducted.  The trust  was already registered having its office at Baroda. The said registration,  therefore, continued to have force.   

The trust has properties both in Maharashtra and Gujarat regions.  In  terms of clause 4(b) of the order, only so much of the property which was  situate in the Maharashtra region would be deemed to be so registered in  Bombay.  The jurisdiction of the Assistant Charity Commissioner, Greater  Bombay was, therefore, confined to only the property which was situate

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within the Maharashtra region.   

The High Court, therefore, in our opinion, committed a manifest error  insofar as it proceeded to hold that the appellants in view of their conduct  could not question the jurisdiction of the Assistant Charity Commissioner of  Bombay.

The contentions raised in this appeal should have been determined  having regard to the doctrine of lex-situs.  The law in this behalf, in view of  the provisions of the Act and the Order, are clear and explicit. Whether in  the area of International law or the domestic law, lex-situs has to be  determined in the context of the proper law applicable therefor, be it in the  realm of contract or otherwise.  [See Delhi Cloth & General Mills v. Surnam  Singh, AIR 1955 SC 950]

The Legislature of a State while enacting a law is required to maintain  the territorial nexus.  Only in certain cases, extra-territoriality provided for in  the Act is accepted.  The field of legislation in respect of religious  endowments and religious institutions is referable to Item 28 of List III of  the Seventh Schedule of the Constitution.  Ordinarily, therefore, the  Legislation enacted by a State will be applicable only within the territorial  limits thereof.  There is a general presumption that the Legislature does not  intend to exceed its jurisdiction.  An Act relating to religious and charitable  institutions would be presumed to be applicable only in respect of the  properties or any part thereof situate in the State.  The 1960 Act, however,  makes the provisions explicit, clear and unambiguous.  The property of the  Trust situate within the Maharashtra region in terms of Clause 4(b) of the  1960 Order is to be deemed to be registered with the Charity Commissioner,  Bombay.  The said authority could thus have exercised its jurisdiction only  in respect of that property.  It had no jurisdiction in relation to the  administration of the entire trust as the office of the trust is situate within the  State of Gujarat.  The Assistant Charity Commissioner, therefore, could not  have issued any direction as prayed for in the application filed before it by  the first respondent herein.  A statutory authority, as is well known, must  exercise its jurisdiction within the four corners of the statute. It cannot act  beyond the same.  Any order which is passed by an authority which lacked  inherent jurisdiction would be ultra vires. [See Kiran Singh & Ors. v.  Chaman Paswan & Ors, (1955) 1 SCR 117]

In Anant Prasad Lakshminiwas Ganeriwal v. State of Andhra Pradesh  [AIR 1963 SC 852], this Court relying on its earlier decision in State of  Bihar v. Charusila Dasi [AIR 1959 SC 1002], opined:

"\005This decision, in our opinion, makes it abundantly  clear that where the trust is situate in a particular State,  the law of that State will apply to the trust, even though  any part of the trust property whether large or small, is  situate outside the State where the trust is situate."

In Charity Commissioner, Bombay v. Administrator of the Shringeri  Math and its properties [AIR 1969 SC 566], this Court embarked on a  discussion of the question as to how situs of the trust is required to be  determined and opined:

"It seems to us that in view of the above authorities, in  order to determine the situs of the trust which consists of  a math and a subordinate so called math or maths, it is  the situs of the principal math which will determine the  applicability of the Act.  We need not here decide the  position of an independent real math though connected  with another math.  The High Court has found in this  case that in the Nasik math no religious instructions are  imparted and no spiritual service is rendered to any body  of disciples.  Further, no member of the body is allowed  to enter the place of worship without permission although

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worship is carried out by the pujaries according to vedic  usage.  In view of these findings, the Nasik math cannot  be held to be a real math or temple within the definitions  set out above.  In our opinion, the High Court was right  in holding that the Nasik math is not liable to be  registered under the Act."

Yet again, dealing with almost an identical question, this Court in  Ramswarup Guru Chhote Balakdas v. Motiram Khandu Patil & Ors. [AIR  1968 SC 422] opined that two different authorities cannot exercise the right  to supervise and control the management of the trust properties, holding:-

"\005The curious result of such a construction would be  that though the trust is situate and is administered at  Burhanpur in Madhya Pradesh, the authorities under the  Bombay Act can claim to control its management."

It was categorically held:

"\005The fact that a part of its property is situate in  Maharashtra State though the trust is within Madhya  Pradesh State, would not mean that the trust would be  governed partly by the Madhya Pradesh Act and partly by  the Bombay Act.  Such a division of the trust and its  administration is not contemplated by either of the two  Acts.  It is, therefore, clear that the present trust does not  fall within the ambit of Section 28 and is not one of those  trusts which can be deemed to be registered under the  Bombay Act.  That being so, it is obviously not a trust  which fulfils the second condition of Section 88B of the  Bombay Tenancy and Agricultural Lands Act and the  appellant cannot be said to be entitled to the certificate  under that Section."                      In the premises above-mentioned, the jurisdiction of the Charity  Commissioner, Bombay must be held to be confined only to the  management of the property situate within the State of Maharashtra and not  in relation to the entire trust.    The Charity Commissioner did not find that the allegations relating to  mismanagement had any foundation.  It has been clearly held that the said  allegations are not proved.  The Charity Commissioner also declined to pass  an order in terms of Section 41A as regards the prayer for appointment of an  administrator.  The first respondent was only given liberty to file an  appropriate application under the Act.  In the event, such an application is  filed, indisputably the same has to be determined on its own merit.  We  would, however, observe that any such application alleging to  mismanagement of the trust, if filed, may be forwarded to the Assistant  Charity Commissioner, Gujarat who shall deal with it.  It is further made  clear that the respondent would be at liberty to inspect the audited accounts  in the office of the Assistant Charity Commissioner in terms of the scheme  framed by the Gujarat High Court.

In view of the aforementioned observations and directions, the  impugned judgment cannot be sustained.  The appeal is, therefore, allowed.   In the facts and circumstances, the parties shall bear their own costs.