Bom HC | Is there an effective mechanism provided under the Trust Act to ensure that working of charitable trust does not go haywire? HC explains in PIL filed for PM Cares Fund

Bombay High Court: A Division Bench of Sunil B. Shukre and Anil S. Kilor, JJ., while addressing the present public interest litigation held that,

“…no insistence can be made by a person donating his money in his discretion upon making of public disclosures of utilization of the fund money on a public platform bypassing the proper platform provided under the Trust Act applicable to a charitable trust like the “P.M. CARES Fund”.

Petitioner makes it clear that the purpose of the present petition is not to challenge and dispute the creation of the P.M. CARES Fund, the only concern put forward by the petitioner is the presence of an element of seclusion in the fund in its functional and operational dynamics.

Right to know the exact position of the fund

Petitioner submits that as a citizen of India as well as a small donor to the P.M. CARES Fund, he has every right to know the exact position of the account of the fund and as to why all the trustees on the Board of Trustees as per the scheme of the fund have not been nominated by the Hon’ble Chairperson of the fund.

Transparency

Further, the petitioner contends that in the interest of transparency, it is necessary to direct the Board of Trustees to make public all the money received in the fund as of date and also disbursements made from the fund from time to time.

Decision

Bench states that even though the power has been conferred upon Chairperson to nominate three trustees, the power is of enabling nature only making it possible for the Authority to nominate three trustees to the Board, and that there is no further mandate that the power must also be exercised in order to fully constitute the Board of Trustees.

Hence the said submission was rejected by the Court in view of the above-stated reasons.

Transparency

Another point raised by the petitioner was with regard to the issuance of direction to the Authority of the fund to nominate at least two out of three Trustees in the category of eminent persons.

He submitted that it is an admitted fact that the fund so set up is a dedicated national endeavour to provide relief to the persons in a distressed situation, and so there would be a requirement of maintaining high transparency in the operation of the fund and this would be possible if at least from amongst three trustees of eminence, two trustees are nominated and appointed from opposition parties of national character.

Bench for the above-stated contention said that it has no mooring in law.

If there is no provision made in the Trust Deed for inducting some members of the opposition political parties into Board of Trustees by nomination, and there is also no such requirement of law, which is the case here without any dispute, there is no way that an outsider like the petitioner in person would knock at the doors of this Court to invoke the extraordinary jurisdiction of this Court to seek the direction to the trust to amend its Trust Deed.

Audit of the Fund

Issuance of a direction to quash and set aside the unilateral decision taken by the fund, without there being full Board of Trustees, to appoint SARC Associates as Chartered Accountant for conducting the audit of the fund.

Bench observed that it has already been established that the power of the Hon’ble Chairperson of the fund to nominate three eminent persons as trustees is enabling in its nature, not mandating. 

For the purpose of appointment of M/S SARC Associates, Court stated that,

“…an enabling provision confers a discretion on the enabled Authority and that being so, no writ can lie to compel the Authority to exercise the discretion and that too the way it is desired by a party.”

Ensure receipts into the fund are from proper sources and the outgoing from the fund are consistent with funds object.

Why the public disclosure rather than why not the public disclosure?

Court stated that the very object can be seen to be more than fulfilled in the present case by registration of the fund as a charitable trust under the Registration Act, 1908, and making of an appointment of a Chartered Accountant as Auditor who would be bound to balance and audit accounts of the fund in accordance with the provisions contained in the Trust Act.

Bench observed that various statutory provisions contained in the applicable Trust Act provide an effective mechanism to ensure that the working of the charitable trust does not go haywire and that its affairs and properties are managed in a way as to fulfill the objects of the trust.

Judicious use of public interest jurisdiction

Hallmark of public interest litigation is that a class of persons, unable to pursue individual rights, is indirectly before the Court through a person who moves the Court, having no personal interest in the outcome of the proceedings.

Court cited the decision of Supreme Court in Bandhua Mukti Morcha v. Union of India, (1984) 3 SCC 161 for the purpose of public interest jurisdiction.

Through various decisions, Supreme Court has also held that, it is only when there is an injury to the public because of the dereliction of constitutional obligations on the part of the government, Court can perhaps scrutinize the impugned action.

Further, having considered the nature and purpose of the public interest litigation jurisdiction and also its perils and pitfalls, a doubt immediately arises whether or not a prayer asking for public disclosure of the receipts into and outgoings from the fund could be looked into even cursorily and on a deeper contemplation on the issue?

Court answered in negative for the above-raised question. It stated that in the Trust Act there is already a mechanism provided to achieve the purpose for which public disclosure has been sought.

Secondly, the Court noted that, the very matter of public interest or curiosity cannot be the subject matter of PIL and that the Constitutional Courts are not expected to conduct the administration of the country, or to be more precise, of a charitable trust.

“When statutory provisions comprehensively covering all aspects of the administration and management of the trust and its properties exist and they also provide a mechanism for effective redressal of grievances in a specific manner, there is no room left for hearing the very grievances by way of a PIL.”

In the case of invoking exceptional public interest jurisdiction, a case raising the points for gross violation of constitutional or statutory provisions must be made out.

While concluding, Court held that no insistence can be made by a person donating his money in his discretion upon making of public disclosures of utilization of the fund money on a public platform bypassing the proper platform provided under the Trust Act applicable to a charitable trust like the “P.M. CARES Fund”.

Hence in view of the above petition was dismissed. [Arvind K. Waghmare v. PM Cares Fund, 2020 SCC OnLine Bom 879, decided on 27-08-2020]


A.K. Waghmare, Advocate and petitioner in person; Anil Singh, Additional Solicitor General of India for respondent 1 to 8; N.P. Mehta, Addl. Government Pleader for Respondents 6 to 8 and S.M. Puranik, Advocate for Respondent 9.

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