Murlidhar Janrao Kale & Others v. State of Maharashtra & Others (2010)

Introduction

The Bombay High Court in Murlidhar Janrao Kale & Others v. State of Maharashtra & Others considered an important dispute concerning the administration of a public trust and the educational institutions run by it when rival groups of trustees were claiming authority over the management.

The Court examined whether the Deputy Director of Education or any other education authority could decide which group of trustees was entitled to administer the Trust and its schools while rival change reports were pending before the Assistant Charity Commissioner.

The Court also considered the powers available under Section 41-A of the Bombay Public Trusts Act, 1950 and whether the education authorities could withdraw the administrative and financial powers of the Head of a school under Rule 3(6) of the Maharashtra Employees of Private Schools (Conditions of Service) Rules, 1981.

Background of the Case

Sategaon Education Society, Sategaon was a registered Society and Public Trust under the Societies Registration Act as well as the Bombay Public Trusts Act, 1950.

The Society was running two Government-recognised grant-in-aid schools, namely J.D. Patil High School and Junior College, Sategaon and Smt. Kokilabai Gawande High School, Turkhed.

According to the entries in the Public Trust Register, there were originally eight trustees. The Secretary of the Trust, Shri Vasant Mankar, died on 11 November 2008, after which seven trustees remained as per the P.T.R. entries.

Out of those seven trustees, three belonged to the group of the President, Shri N.N. Mankar, while the remaining four belonged to the group of the Vice-President, Shri M.G. Kale.

Rival Groups and Change Reports

The Vice-President’s group admitted Smt. Rekha Mankar, widow of the deceased Secretary Shri Vasant Mankar, to the Trust on the post of Secretary and filed a change report before the Assistant Charity Commissioner.

The President’s group, on the other hand, claimed to have held an election on 16 March 2008. It filled the vacant post of Secretary, replaced certain trustees by other persons and filed Change Report No. 119/2008.

The Court noticed that under Change Report No. 119/2008, five out of the earlier six trustees were shown as having been removed and replaced by new trustees.

The Vice-President’s group also relied upon a resolution dated 13 December 2008 by which Smt. Rekha Vasant Mankar was inducted as trustee and Secretary. This change was disputed by the rival group.

Thus, both rival groups had placed their respective changes before the Assistant Charity Commissioner, and both change reports were pending for decision.

Dispute Regarding the Headmistress

The dispute between the two groups became more serious when the Vice-President’s group questioned the legality and validity of the promotion of Ku. U.P. Khadse to the post of Headmistress.

According to the Vice-President’s group, the resolution appointing her was false and fabricated. They contended that the majority group consisting of four trustees, including Vice-President M.G. Kale, was not a party to the alleged resolution and had not approved her appointment.

Their contention was that the trustees who had appointed Ku. U.P. Khadse were not legally competent or entitled to make the appointment.

The Vice-President and his group thereafter passed a resolution to withdraw the administrative and financial powers of Ku. U.P. Khadse and temporarily assign those powers to the Supervisor of the school. A proposal dated 13 July 2009 was submitted to the Education Officer for that purpose.

Orders of the Education Officer

The Education Officer accepted the proposal of the Vice-President’s group and, by an order dated 15 July 2009, approved the resolution withdrawing the administrative and financial powers of Ku. U.P. Khadse.

Thereafter, on 11 August 2009, the Education Officer cancelled the order dated 15 July 2009 and again restored the same order on that very date.

Earlier Writ Petition and Remand

The matter earlier reached the Bombay High Court in Writ Petition No. 3983 of 2009.

By its decision dated 11 January 2010, the High Court found that Ku. U.P. Khadse had not been heard before the Education Officer withdrew her administrative and financial powers.

The Court therefore directed the Deputy Director of Education to hear all the concerned parties and pass an appropriate order.

Decision After Remand

After the remand, the Deputy Director of Education heard the parties and held that the trustees allegedly elected in the election dated 16 March 2008 and shown in Change Report No. 119/2008 were the authorised trustees.

Accordingly, the Deputy Director recognised the group led by the President as entitled to administer the school until the Assistant Charity Commissioner decided the pending change report.

The Deputy Director mainly relied upon the fact that the Vice-President’s group did not claim to have held any election, whereas the President’s group claimed an election dated 16 March 2008.

Consequently, the proposal submitted by the Vice-President’s group seeking withdrawal of the administrative and financial powers of Ku. U.P. Khadse was rejected.

A review application filed before the same authority was also rejected. The petitioners thereafter approached the Bombay High Court in Writ Petition No. 3034 of 2010.

Questions Before the High Court

The High Court formulated two questions for determination.

The first question was as to which authority could decide which trustee, Board of Trustees, group of trustees or persons connected with the Trust were entitled to administer the Trust and its institutions, schools or colleges, particularly when change reports were pending before the Assistant Charity Commissioner.

The second question was whether the Deputy Director of Education or any other education authority had power to withdraw the administrative or financial powers of the Head of an institution and authorise another person or the senior-most teacher to exercise those powers, and if so, in what circumstances.

Jurisdiction Under Section 22

The Court examined Section 22 of the Bombay Public Trusts Act, 1950, which requires changes in the entries recorded in the Public Trust Register to be reported to the Deputy or Assistant Charity Commissioner.

A change in the Board of Trustees or in the trustees of a public trust is therefore required to be reported under Section 22. After holding the necessary inquiry, the Assistant Charity Commissioner has authority either to accept or reject the reported change.

The Court held that the authority to determine who are the trustees of the Trust, which persons should constitute its Board of Trustees and consequently which trustees or Board of Trustees should administer the institutions of the Trust lies with the Assistant Charity Commissioner under the Bombay Public Trusts Act.

Section 22, Section 80 and the Scope of the Assistant Charity Commissioner’s Jurisdiction

The Court also referred to Section 80 of the Bombay Public Trusts Act, which bars the jurisdiction of the Civil Court in respect of questions which are required under the Act to be decided by an officer or authority under the Act.

In this context, the Court relied upon Jagatnarayansingh Swarupsingh Chithere and Others v. Swarupsingh Education Society and Another, 1980 Mh.L.J. 372. The Court noted that the jurisdiction of the Assistant Charity Commissioner under Section 22 is not confined merely to deciding the factum of a change. The inquiry also extends to examining the legality and validity of the change.

Therefore, where rival groups claim that different elections or changes have taken place in the Board of Trustees, it is for the Assistant Charity Commissioner to examine not only whether the alleged change occurred, but also whether that change is legal and valid.

This principle was directly relevant to the present case. The Deputy Director of Education had recognised the President’s group on the basis of the alleged election dated 16 March 2008 and Change Report No. 119/2008. However, the legality and validity of that very change were matters falling within the statutory jurisdiction of the Assistant Charity Commissioner.

The Deputy Director could therefore not decide, directly or indirectly, that the President’s group constituted the authorised management while the legality and validity of the disputed change remained for determination under Section 22.

Finding on the Authority to Decide the Management Dispute

The High Court held that the Deputy Director of Education had no authority, power or jurisdiction to decide which Board of Trustees or which trustees should manage the Trust and its schools.

That jurisdiction belonged to the Assistant Charity Commissioner.

Accordingly, the Deputy Director’s order dated 30 January 2010, recognising the management led by the President on the basis of the alleged election dated 16 March 2008 and Change Report No. 119/2008, was held to be without authority and without jurisdiction.

The Court also specifically noted that when Writ Petition No. 3983 of 2009 was remanded on 11 January 2010, the High Court had never directed the Deputy Director of Education to decide which group should run the Trust and its institutions.

Power Under Section 41-A

The Court thereafter considered how the administration of the Trust and its institutions could be dealt with while disputes regarding the trustees remained pending.

For this purpose, the Court examined Section 41-A of the Bombay Public Trusts Act, which empowers the Charity Commissioner to issue directions to trustees or persons connected with a public trust to ensure its proper administration.

Since public trusts may run schools, colleges and other institutions, the Court held that directions under Section 41-A may also ensure proper administration of those institutions during the pendency of disputed change reports.

Earlier Decisions Considered on Section 41-A

The Court referred to Nathmal Kisanlalji Goenka and Another v. Assistant Charity Commissioner, Akola and Another, 1994 Mh.L.J. 303, where it was held that powers under Section 41-A could be exercised to direct trustees or persons connected with a Trust to hold elections, even by secret ballot.

The Court also considered Asaram Bhimrao Shinde and Others v. State of Maharashtra and Others, 2001 (4) Mh.L.J. 548 and Dattatraya s/o Mahadeo Hiware and Others v. Arjun s/o Sambhaji Shinde and Others, 2007 (1) Mh.L.J. 48.

Those decisions held that while exercising powers under Section 41-A, the Assistant Charity Commissioner does not have power to remove trustees or appoint new trustees or a new Board of Trustees.

Whether Only Persons Named in Schedule I Can Manage the Trust

The Court also considered an earlier judgment in First Appeal No. 354 of 1998, decided on 28 August 1999, which stated that during the pendency of inquiries, unless an order under Section 41-A placed somebody else in charge, persons whose names were entered in the register could continue to manage the Trust.

The Division Bench did not agree with this proposition in absolute terms.

It held that an order under Section 41-A can direct or recognise a trustee, trustees, a Board of Trustees or persons connected with the Trust whose names may either be entered or not entered in the Public Trust Register during a pending dispute or otherwise.

At the same time, the Court clarified that Section 41-A refers to trustees or persons connected with the Trust. It does not authorise an unrelated “somebody” to be placed in charge.

The Court therefore disagreed with the proposition that, in the absence of an order under Section 41-A, only persons whose names appear in the register must necessarily continue to manage the affairs of the Trust.

Why Schedule I Is Not Conclusive During Every Management Dispute

The Court observed that names may continue to appear in Schedule I even though the tenure of those trustees under the bye-laws, memorandum of association, rules or regulations may have expired years earlier.

In some cases, only one or two such persons may remain, or they may be unable to run the Trust for other reasons. Fresh elections may also have taken place while the corresponding change report remains pending.

The Court therefore held that persons cannot claim an automatic and exclusive right to continue managing a Trust merely because their names remain in Schedule I. Each case must be decided on its own facts, materials and evidence and by applying the law.

Course to Be Followed During Pending Change Reports

The Court observed that every endeavour should be made by the Assistant Charity Commissioner to decide change reports concerning elections, filling of vacancies of trustees and schemes expeditiously.

Where disputes arise amongst trustees, powers under Section 41-A can be invoked for directions concerning the administration of the Trust and its institutions.

Such powers may be invoked suo motu or on an application by trustees, persons connected with the Trust, or even by an education or other authority.

In the present case, the Court held that the Deputy Director of Education ought to have directed the parties either to obtain a decision on the pending change reports or to obtain appropriate directions under Section 41-A regarding the persons or trustees authorised to manage the Trust and its institutions.

Power of Education Authorities Regarding the Head of the School

While answering the second question, the Court considered the powers of the education authorities concerning the Head of a private school.

The Assistant Government Pleader placed before the Court two departmental circulars concerning the exercise of such powers, one dated 24 February 1986 and the other dated 8 January 1988.

The Court examined those circulars together with Rule 3 of the Maharashtra Employees of Private Schools (Conditions of Service) Rules, 1981.

Scope of Rule 3(6) of the MEPS Rules

Rule 3(1) to (5) of the MEPS Rules prescribe the qualifications, experience and procedure for appointment of the Head of a school.

Rule 3(6) empowers the Education Officer or Deputy Director to direct the management to cancel an appointment made without following the procedure prescribed under Rule 3.

The High Court held that this power can be exercised only when the procedure prescribed under Rule 3 has not been followed.

The education authorities do not have power under Rule 3(6) to cancel, suspend or withdraw the approval or the administrative and financial powers of a Headmaster or Headmistress for reasons other than those connected with Rule 3(1) to (5).

Therefore, where the real dispute is between rival trustees regarding the legality of their status or their authority to make the appointment, Rule 3(6) cannot be used to resolve that dispute.

Application to the Appointment of Ku. U.P. Khadse

In the present case, there was no allegation that the appointment of Ku. U.P. Khadse was contrary to the qualifications, experience or procedure prescribed under Rule 3(1) to (5) of the MEPS Rules.

The dispute was instead about the legality and validity of the status of the rival trustees and Board of Trustees and consequently their authority in relation to her appointment.

The Court therefore held that Rule 3(6) and the departmental circulars could not be invoked in such circumstances.

Ratio Decidendi

Final Order

The Bombay High Court partly allowed Writ Petition No. 3034 of 2010.

The impugned order dated 30 January 2010 passed by the Deputy Director of Education was quashed and set aside.

The Court directed that Ku. U.P. Khadse shall continue to function as Headmistress until any direction is made under Section 41-A of the Bombay Public Trusts Act, 1950 or until the change reports concerning the Board of Trustees or trustees of the parent Society are decided.

The Court made no order as to costs.

Conclusion

The Bombay High Court held that the Deputy Director of Education cannot decide rival claims concerning which trustees or Board of Trustees are legally entitled to manage a public trust and its educational institutions.

Such disputes fall within the jurisdiction of the authorities under the Bombay Public Trusts Act. Importantly, the inquiry under Section 22 is not restricted merely to determining whether a change has taken place. It also extends to determining the legality and validity of the disputed change. The Deputy Director therefore could not recognise the President’s group by relying upon the alleged election dated 16 March 2008 while the legality and validity of that change remained for determination by the Assistant Charity Commissioner.

The Court further held that during the pendency of disputed change reports, appropriate directions concerning administration may be sought under Section 41-A, and the mere appearance of names in Schedule I does not create an absolute right to continue managing the Trust in every case.

At the same time, Rule 3(6) of the MEPS Rules is confined to cases where the prescribed procedure for appointment of the Head has not been followed. It cannot be used by the education authorities to determine the legal status or authority of rival trustees.

Case Details

Case: Murlidhar Janrao Kale & Others v. State of Maharashtra & Others

Court: Bombay High Court, Nagpur Bench

Bench: S.A. Bobde & A.B. Chaudhari, JJ.

Case No.: Writ Petition No. 3034 of 2010

Reserved on: 18-08-2010

Pronounced on: 29-10-2010

Petitioners: Murlidhar Janrao Kale & Others

Respondents: State of Maharashtra & Others

Judgment: Per A.B. Chaudhari, J.

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