Charitable society title and revenue jurisdiction: community property vested in the society, and third-party rights could not be bound.
A genuine religious-cum-charitable society registered under the Societies Registration Act remains valid even if its governing clauses give the Sant Satguru overriding authority, because its existence, objects, and dealings show a real juristic entity rather than a sham. Property standing in the society's name is prima facie its own, and offerings made to the Sant Satguru were found to be held for the community's benefit, so they vested in the society rather than in him personally. The income-tax officer's treatment of the property as belonging to the Sant Satguru could not bind third parties outside the assessment machinery, and the civil court could question that excess of jurisdiction. The declaration was upheld and the appeal failed with costs.
Issues: (i) Whether the Sabha was a sham or benami body and whether it could be validly registered as a charitable society; (ii) Whether the property and cash offerings in dispute vested in the Sabha or in the Sant Satguru personally; (iii) Whether the Income-tax Officer's treatment of the property as belonging to the Sant Satguru gave rise to a cause of action against the Secretary of State.
Issue (i): Whether the Sabha was a sham or benami body and whether it could be validly registered as a charitable society.
Analysis: The Sabha was formed to administer the affairs and property of a genuine religious community that had developed educational, industrial, and charitable institutions. Its existence, activities, records, and transactions showed that it functioned as a real juristic entity and not as a mere fac ade for the Sant Satguru. The objects of the society were religious and charitable, and the dominant purpose was charitable within the meaning of the Societies Registration Act. The clauses giving the Sant Satguru overriding authority did not destroy the validity of the registration.
Conclusion: The Sabha was not a sham or benami body and its registration as a charitable society was valid.
Issue (ii): Whether the property and cash offerings in dispute vested in the Sabha or in the Sant Satguru personally.
Analysis: Property standing in the Sabha's name was prima facie its property, and the earlier bye-law providing reversion to the Sant Satguru had been withdrawn. As to offerings made personally to the Sant Satguru, the evidence showed that he treated them as not available for his personal use and as meant for the community's benefit. On the facts, he had no beneficial interest in them, and they came to be held by the Sabha for the objects of the society. It was unnecessary to decide whether a public trust in the strict sense arose.
Conclusion: The disputed property and offerings vested in the Sabha and not in the Sant Satguru personally.
Issue (iii): Whether the Income-tax Officer's treatment of the property as belonging to the Sant Satguru gave rise to a cause of action against the Secretary of State.
Analysis: The statutory powers of assessment and recovery under the income-tax and land revenue laws did not extend to binding strangers who were not assessees or defaulters. The officer's denial of the Sabha's title, so far as it affected the Sabha's rights, was beyond jurisdiction and could be questioned in civil court.
Conclusion: The plaintiff had a cause of action against the Secretary of State.
Final Conclusion: The declaration granted by the trial court was upheld and the appeal failed, with costs.
Ratio Decidendi: A genuine religious-cum-charitable society is a valid juristic person under the Societies Registration Act, and where the evidence shows that offerings or property were intended to be held for the community and not for the office-holder's personal use, title vests in the society; statutory revenue powers do not authorise binding or defeating the rights of third parties without jurisdiction.