SHAH CHHOTALAL LALLUBHAI Vs. CHARITY COMMISSIONER BOM BAY

JUDGEMENT

(1.) One Jhaverchand Dahyabhai Shah died in1916, leaving a will dated August 6, 1915. He was a resident of Vejalpore in the suburbs of Broach and a Ladva Shrimali Bania by caste. He professed the Jain religion and believed in the tenants of the Swetember Murti Pujak sect of Jains, By cl. (7) of the will he directed his executors to spend out of the earnings of his shop every year during the life-time of his niece, Bai Jakore, the amounts mentioned below on the fol1owing religious objects:

(2.) On the death of Bai Jakore on May 20, 1928, the estate vested in the residuary legatee, Bai chanchal, daughter of Bai Jakore. Mulchaudbhai, husband of Bai Chanchal, set apart Rs. 75,000 on trust for the purposes mentioned in cl. (7) of the will, and began to manage the trust estate. Out of the trust moneys, he invested Rs. 8,000 in 5 per cent tax-free Government Loan, 1944-45, yielding an annual income to Rs. 400, and pursuant to the directions given in cl. (15) of the will, handed over loans of the face value of Rs.4,000, Rs.1,000, Rs. 1.,000 and Rs. 2,000, respectively, to four religious and charitable institutions in full discharge of the obligation of the trust for expending annually the sums of Rs. 200, Rs. 50, Rs. 50 and Rs. 100 on items 2, 4, 5 and 6 of the religious purposes mentioned in cl. (7) of the will. On December 8, 1947, Bai Chanchal executed a trust deed in respect of the investment representing the balance amount of Rs. 67,000 and an accumulation of surplus or unexpended income amounting to Rs. 25,796-6-8. The trust is registered as a public trust under the Bombay Public Trusts Act, 1950, hereinafter referred to as the Act. The trust deed provided that the unexpended accumulation of Rs. 25,796-6-8 should be applied for establishing, maintaining and supporting a Nivas for housing the poor and middle-class Ladva Shrimati Jains at low and cheap rents. The trust deed also provided that after setting apart the aforesaid sum of Rs. 25,796-6-8 the balance funds would be held in trust for applying its income to the charities mentioned in cl. (7) of the aforesaid will other than items 2, 4, 5 and 6. Now, the trustees had no authority to divert any part of the trust fund for the purposes of the Nivas scheme. The establishment of a Nivas for housing the poor and middle-class Ladva Shrimati Jains is not one of the original objects of the trust. As a matter of fact, the Nivas scheme was not carried into effect. The Charity Commissioner, Bombay, challenged the validity of the Nivas scheme. The Court below rightly proceeded on the footing that the Nivas scheme is invalid. Subsequent to the execution of the trust deed, there were further accumulations of unexpended income. The swamivatsal feasts were given, and the fixed annual payments to all the charities were duly met up to samvat year 1999 corresponding to 1942-1945 A.D. During the subsequent years, the fixed annual payments to the charities were duly made, but on account of rationing restrictions, the feasts could not be given up to Samvat year 2010 corresponding to 1053-1954 A.D. During the Samvat year 2011 corresponding to 1954.1055 A.D., the feast was not given in spite of the removal of rationing restrictions. The trustees allege that the current income of the trust fund after disbursing the fixed annual payments is not sufficient to meet the usual expenses of annual feasts. On June 3, 1955, the Charity Commissioner filed an application before the District Judge, Broach under S. 55 (1) (b) and S. 56 of the Act for suitable directions for the utilisation of the accumulations of the unexpended income of the trust for some educational purpose. The trustees were impleaded as respondents to this application. Pursuant to a general notice issue by the Court, the appellants and four other members of the Ladva shrimali Shravak Bania community in Broach and Surat Districts appeared, and interyened in the application. On their behalf, it was contended that the trust was for religious purposes and its funds could not be diverted for other purposes trader Sections 55 (1) (b) and 56 of the Act, and that the accumulations should be utilised year after year for meeting the deficit amount required for the annual Swamivatsal feasts.

(3.) The District judge held that the provisions of S. 56 of the Act did not apply to the funds of a public religious trust, and if the accumulations were held for a religious purpose, the Court could not give any directions for its utilisaton under that section, that the swamivatsal feast confers religious benefits and objects Nos. 2, 3, 4, 5, 6, 8 and 11 are also religious in character, while the remaining objects are charitable, and therefore the entire feast was not of a religious character, but assuming that the trust was wholly religious, the accumulation was not held for religious purposes, and was subject to the directions of the Court as to its utilisation under S. 56 read with S. 55 (1) (b) of the Act. He also held that the trustees could not save any moneys in future by simply refusing to give the swamivatsal feasts but it was not in the public interest to provide for the expenses of the feast out of the accumulation, and the accumulation should be spent for educational and medical purposes. The District judge passed final orders on October 25, 1956. On that date, the accumulation of unexpended income amounted to Rs. 15,019-14-0, besides another sum of Rs. 107-2-0. The District Judge directed the trustees to hand over a sum of Rupees 22,509-15-0 to an institution known as the Sad Vidya Mandal for giving four freeships every year to deserving students, who should preferably be pains of Broach District and failing such deserving cases, to other Hindu students. Subject to the condition of giving freeships, the Sad Vidya Mandal would be at liberty to spend the amount for purposes of the building of the college or its hostel or in providing other educational facilities to the students. He also directed the trustees to pay another sum of Rupees 22,509-15-0 to the trustees of the Sevashram Hospital at Broach on condition that the amount be invested in any approved trust security and its income be utilised in providing maintenance, food and medicine to poor and deserving patients. He directed the payment of the remaining sum of Rs. 107-2-0 towards costs.