TaxTMI 
TaxTMI 
2025 (10) TMI 1374
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....n Society (R2) is a Society registered under the Societies Registration Act, 1860 and a Trust under the Trust Act, 1950. The petitioner claims to be a member of respondent No.2 Trust and also a member of the Board of Control (BOC) of respondent No. 2. The petitioner was the Chairman of the BOC of the Trust (R2) from the year 1999 to 2007. The respondent No. 2 is a well-known charitable institution, which runs educational institutions including reputed Medical and Engineering Colleges. 3.2 In the wake of the disputes in regard to the management of the affairs of respondent No. 2 Trust, numerous proceedings have been initiated by and on behalf of the petitioner and the rival faction. The petitioner was removed from the BOC and, eventually, as a member of respondent No. 2 Trust. The proceedings instituted at the instance of the petitioner and others assailing those decisions are sub-judice. 3.3 The Secretary of respondent No.2 Trust filed an application being loan Application No.58 of 2023, under Section 36A(3) of the Trust Act, 1950 seeking permission for availing loan of Rs.10 Crore from Janata Sahakari Bank, to be repaid in seven years, alongwith interest at the rate of 9% p.....
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....dinary General Body Meeting held on 3rd August, 2011. The legality of all those actions is sub-judice. Therefore, till the contentious issues are finally decided, it cannot be said that the petitioner is not an interested person. 7. Inviting the attention of the Court to an order dated 10th September, 2023 in an application for intervention in Change Report No.850 of 2010, whereby the petitioner and Mr. Vijay Pusalkar were allowed to intervene under Section 73A of the Trust Act, 1950, Mr. Kanetkar would urge the locus of the petitioner to be heard in the matter could hardly be questioned. 8. Mr. Apte, the learned Senior Advocate for respondent No.2 - Trust, would urge that, the endeavour of the petitioner has been to put hindrances in the smooth management of the affairs of respondent No.2 - Trust. The petitioner has been resorting to unwarranted litigation so as to derail the activities of the Trust and prevent the Trust from achieving its object. The petitioner has been removed by passing a resolution in Extraordinary General Body Meeting in view of the illegal acts and gross misconduct on the part of the petitioner and the other members of the BOC. Attention of the Court w....
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....lution removing the petitioner from the very membership of the Trust dated 3rd December, 2016 has nowhere been challenged. In these circumstances and especially having regard to the proceedings in which intervention is sought, the learned Joint Charity Commissioner cannot be said to have exercised the discretion in such a manner as to warrant interference in exercise of the writ jurisdiction. 13. Mr. Apte strenuously submitted that each day's delay in availing the loan is causing grave prejudice to the respondent No.2 Trust. Mr. Apte would urge, recognizing the urgency in such matters, the legislature has provided that an application for loan shall be decided expeditiously and preferably within a period of 15 days if the Bank or financial institution has provisionally sanctioned the loan. 14. I have given careful consideration to the submissions canvassed across the bar. Evidently, two factions are at loggerheads. Numerous proceedings making allegations and counter allegations have been filed. Though the challenge to the removal of the petitioner and the then co-members of the BOC in a suit is sub-judice, yet, the fact remains that there is no restraint on execution, oper....
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....ds or property. Sub-section (3) of Section 36A contains an interdict against borrowing money for the purpose or on behalf of the Trust, by its trustee, except with the previous sanction of the Charity Commissioner, and subject to such conditions and limitations as may be imposed by the Charity Commissioner. 17. The aforesaid restriction in the matter of borrowing is necessary because, though the property of the public trust vests in the trustees, yet, they are not the owners of the trust property. The property vests in them for the purpose of discharge of the object of the Trust or for the benefits of the beneficiaries. It is, therefore, imperative that the trustees of a public trust do not have unfettered power to borrow the money on the credit of the property of the Trust and thereby encumber the property of the Trust. The legislature, therefore, considered it imperative to put restrictions in the matter of borrowing for the purpose or on behalf of Trust and vest authority in the Charity Commissioner to accord sanction for such borrowing as the Charity Commissioner exercises parens petrie jurisdiction. 18. The text of sub-section (3) of Section 36A would indicate that, the ....
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.... (c) in the case of a Waqf, a person who is entitled to receive any pecuniary or other benefit from the Waqf and includes a person who has right to worship or to perform any religious rite in a mosque, idgah, imambara, dargah, maqbara or other religious institution connected with the Waqf or to participate in any religious or charitable institution under the Waqf, (d) in the case of a society registered under the Societies Registration Act, 1860, any member of such society, and (e) in the case of any other public trust, any trustee or beneficiary." 22. Sub section (2A) of section 2, which was inserted by Maharashtra Act No. 55 of 2017 with effect from 10th October, 2017, defines "beneficiary" as under :- "Section 2(2A) - "beneficiary" means any person entitled to any of the benefit as per the objects of the trust explained in the trust deed or the scheme made as per this Act and constitution of the trust and no other person". 23. Evidently, under Section 2(10) of the Act, the definition, "the person having interest" is inclusive. It would be contextually relevant to note that the word, "includes" in section 2(10) came to be substituted for the wo....
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.... view of the Full Bench of the Karnataka High Court. It was, inter alia, observed as under :- "12] ... . .... The definition of the words "person having interest" in section 2(10) of the Bombay Public Trust Act, as amended in 1953 was made inclusive to set at rest all doubts and difficulties as to the meaning of these words, which were intended and meant to be used in a generic sense so as to include not only the trustees but also the beneficiaries and other persons interested in the trust. The definition of the expression person having interest in section 2(10) is wide enough to include not merely the beneficiaries of a temple, math, Waqf etc. but also the trustees. Therefore appellants Nos. 2 and 3 who undoubtedly are members of the founder's family i.e. beneficiaries, are entitled to attend at performance of worship or service in the Distribution of offering to the also entitled to partake in the distribution of offering to the deity and thus answer the description "person having inter" as defined in Section 2 (10) of the Act." (emphasis supplied) 26. In the case at hand we are primarily concerned with clause (e) of section 2(10) of the Act, under which "perso....
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....n of "person having interest" is inclusive and thus of wide import. However, where the public trust is covered by the clause (e) of section 2(10), the person who is to be included in the definition, ought to be either a trustee or beneficiary. The definition of "beneficiary", in turn, as noted above, is precise and confined to a person who obtains benefit under the object of the trust. Even if the expression "person having interest" is construed rather generously, there is an essential distinction between the interest in the public trust and interest in the property of the trust. In the latter case, an inquiry into the nature of the interest is warranted. If it turns out that such interest is adverse to, or in conflict with, the interest of the trust, the person propounding such interest, cannot be said to be a person having interest." 29. Reverting to the facts of the case in the light of the nature of the proceedings in which the intervention is sought, it may be apposite to consider the premise on which intervention was sought, which becomes evident from the averments in the application (Exhibit-52). A careful perusal of the said application would indicate that the entire thr....