TaxTMI 
TaxTMI 
1971 (9) TMI 102
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....e order under appeal held that the mandal was a public trust and as such was liable to be registered under section 18 of the Bombay Public Trusts Act, 1950 (hereinafter referred to as "the Public Trusts Act"), as a public trust notwithstanding the fact that it was a corporation. A few facts leading to this litigation may be briefly stated. The mandal applied for and obtained a licence under section 26 of the Indian Companies Act, 1913, to register itself under the said Act without the word "Limited" added to its name on the representation that it was a non-profit making concern and charitable institution. The mandal was incorporated on 3rd April, 1939, as a company limited by guarantee without the word "Limited" added to its name. It appears between 1939 and 1961, the mandal acquired some property for the objects set out in its memorandum of association. On 12th October, 1961, the mandal made an application to the Charity Commissioner for its registration as a public trust under the Public Trusts Act. It is alleged on behalf of the mandal that this application was made under protest and to find out whether it was liable to be registered under the Public Trusts Act so that it may....
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....n to a corporation acting as a trustee provided its objects clause in the memorandum of association so permits. On behalf of the mandal my attention was drawn to the definition of "trust" in section 3 of the Indian Trusts Act, 1882. This Act does not apply to public trusts, but the definition of "trust" contained in it is nonetheless a proper definition of the word "trust". Section 3 provides that a "trust" is an obligation annexed to the ownership of property and arising out of a confidence reposed in and accepted by the owner or declared and accepted by him for the benefit of another. . . . The person who reposes or declares the confidence is called the "author of the trust". The person who accepts the confidence is called the "trustee", and the person for whose benefit the confidence is accepted is called the "beneficiary" and the subject-matter of the trust is called "trust property". In my opinion if a corporation is capable of accepting the ownership of property with an obligation annexed to the ownership for the benefit of another which may be a class of persons, there can be no objection to a corporation acting as a trustee. The only question is whether in this case the ....
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....Deshastha Rigvedi Brahman Community, providing a lecture hall, educational and religious classes, industrial workshops and hospitals, etc. The objects also include rendition of medical aid to the members of the said community, scholarships for the education of the members of the said community and provision for gymnasiums, gymkhanas and other recreation. Sub-clauses (11), (12) and (13) of clause 3 provide as under; "(11) To accept and undertake any trust and to act as sole trustee or executor in respect of any estate if such acceptance and undertaking is conducive to the attainment of the above objects or any of them. (12) To accept donations for the purposes aforesaid in cash or in kind. (13) To hold the property and funds of the mandal in trust and to apply the same and/or the income thereof in promoting the above objects or any one or more of them". It will thus appear that the object clauses contained in the memorandum of association of the mandal expressly provide that the mandal shall act as a trustee in respect of its property for the attainment of the objects of the mandal, and that it shall hold such property in trust and apply the same for the said purposes. T....
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.... public trust and was not liable to be registered under the Public Trusts Act. In this case, however, the memorandum of association of the mandal expressly provides for holding property in trust for the objects specified in the memorandum, and the beneficiaries are the members of a particular community irrespective of whether they are or are not the members of the mandal. The Division Bench decision has no application to the facts of this case Another contention taken on behalf of the mandal was that if the mandal was compelled to register itself under the Public Trusts Act it will come under dual control and such dual control will create conflict the dual control being of the Companies Act and of the Public Trusts Act. 7 my opinion there is no substance in this contention. The mandal is a trustee. With regard to its own constitution, it may be governed by the provisions of the Companies Act. But with regard to property held by it trustee for public religious and charitable purposes, it will be liable to comply with the provisions of the Public Trusts Act. A company incorporated under the Companies Act has to comply with the other laws of the land applicable to its activites. Th....