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PETITIONER: STATE OF GUJARAT

       Vs.

RESPONDENT: ACHARYA SHRI DEVENDRAPRASADJI

DATE OF JUDGMENT: 26/07/1968

BENCH: GROVER, A.N. BENCH: 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

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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 thereunder, which  take in the answering of  all inquiries and giving  all kinds of  information. [462 E-G]

JUDGMENT:     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

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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  thereunder  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

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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

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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

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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. 464