Sowcar Gopaldas Dwarakadas Private Family Trust v. Tamil Nadu

an extent of 30 standard acs and and situate at Kamarasavalli,Ariyalur Taluk Trichy district of extend of 25-806 standard acresrespectively and the quash the same.For Petitioner : Mr.K.C.RajappaFor R2: Mrs.Malarvizhi Udayakumar Special Govt. PleaderC O M M O N O R D E RT.S.SIVAGNANAM J.The above writ petitions have been filed challenging a commonorder passed by the Tamil Nadu Land Reforms, Special AppellateTribunal in SRP Nos. 21 and 26 of 1999. 2. SRP No. 21 of 1999 was filed by Sowcar Welfare Fund FamilyTrust (hereinafter referred to as Welfare Fund Family Trust)challenging the order passed by the Land Tribunal Chennai dated30.10.1998 in LTCMA No 39 of 1997. 3. SRP No. 26 of 1999 was filed by Sowcar Gopaldas DwarakadasPrivate Family Trust (hereinafter referred to as Private FamilyTrust) challening the order passed by the Land Tribunal, Chennaiin LTCMA No. 29 of 1998 dated 30.04.1999.4. The common issue which arises for consideration in thesewrit petitions is as to whether the Welfare Fund Family Trust andPrivate Family Trust are "Private Trust" as defined under Section3 (36)-A of the Tamil Nadu Land Reforms or whether both the Trustsare to be considered as "Trusts" within the definition underSection 3 (36)-AAA of the Act.5. The factual background in SRP No. 21 of 1999, is that theWelfare Fund Family Trust held agriculture lands at Srirangam toan extent of 46.24 ordinary acres equivalent to 25.806 standardacres as on 01.03.1972. Since the total holdings of the Trustexceeded the ceiling limit, notice in Form No. 4 was issued to theland owner Trustee together with a statement showing the totalholding by the Trustee as on the crucial date 01.03.1972,informing them to file objections, if any, on or before28.10.1973 and also to appear for enquiry on 31.10.1973. On14.12.1973, objections were filed stating that the Trust is aReligious Trust of public nature. Accordingly, an order waspassed by the Authorised Officer on 03.09.1974. The land owner https://hcservices.ecourts.gov.in/hcservices/ filed an appeal before the Land Tribunal, Thanjavur in LTCMA No.130 of 1974 and the Tribunal, in its order dated 28.04.1976, setaside the order of the Authorised Officer and remanded the matterto the Authorised Officer for fresh consideration. The land ownerdid not appear for enquiry on remand. Therefore, an order waspassed under Section 9 (2)(b) of the Act on 30.08.1978, treatingthe trust as Public Charitable Trust. An appeal was filed beforethe Land Tribunal, Thanjavur against such order in LTCMA No. 146of 1980 which came to be dismissed on 27.11.1981. The Trust fileda Revision before this Court in CRP No. 2306 of 1985 which wassubsequently transferred to Tamil Nadu Land Reforms SpecialAppellate Tribunal. The Special Appellate Tribunal, in TRP No. 148of 1991, by order dated 16.10.1992 remanded the matter to theAuthorised Officer with a direction to conduct a detailed enquiry,after giving an opportunity to the petitioner Trust to produceoral and documentary evidence and to decide the nature of theTrust. As per the direction, notices were issued by the AuthorisedOfficer to the Trustee of the Welfare Fund Trust and an enquirywas conducted. After giving sufficient opportunity and based onthe documents produced, an order was passed on 07.10.1997 underSection 9(2)(b) of the Act. This order was challenged by the landowner by filing an appeal in LTC RA/39/97 which was dismissed byan order dated 30/10/1998. This order is the subject matter of SRPNo. 21 of 1999. 6. The factual background in SRP No. 26 of 1999 is that anextent of 30 standard acres was allowed to be retained by theFamily Trust as on 06.04.1960. A notice in Form No. 2 was issuedto the Family Trust and was asked to submit their objections on orbefore 25.05.1982, furnishing the particulars of the land, held bythe Trust as on 01.03.1972. The Trust did not file their Form 2return as directed and hence notice in Form No. 4 was issued witha statement showing the total extent of lands held by them as on01.03.1972 and called upon them to file objections on or before20.10.1982. The 2nd respondent herein posted the enquiry to25.10.1982 which was adjourned to 27.12.1992. The representativeof the petitioner appeared on the adjourned date and requestedthree months time for production of their records. Subsequently,the Trust was called upon to produce the original Trust Deed andnotices were issued to appear for enquiry before the AuthorizedOfficer. Though the representatives of the Trust appeared forenquiry, the document was not produced. The Authorised Officerdeclared that the Trust is of charitable nature and as per Section5(d)(i) of the Act, it is eligible to hold 5 standard acres andaccordingly passed order dated 29.09.1998 under Section 9(2)(b) ofthe Act. Aggrieved by the said order, the Trust filed an appeal inLTCMA No. 29 of 1998 before the Land Tribunal, Chennai, which wasdismissed on 30.04.1999. This order is the subject matter of SRPNo. 26 of 1999. https://hcservices.ecourts.gov.in/hcservices/

7. Based on the above facts, the Special Appellate Tribunalframed the following question for consideration: "Whether the petitioner in SRP. 21/99 viz. Sowcar GopaldasDwarakadas Welfare Fund Family Trust and the petitioner in SRP.26/99 viz. Sowcar Gopaldas Dwarakadas Private Family Trust areprivate trusts as defined in Section 3(36-A) of the Act or whetherboth the petitioner-trusts are public trusts as mentioned inSection 3(36-AAA) of the Act". 8. On the above question, the Tribunal by common order dated17.07.2000 held that both the Trusts are public Trusts, as suchthey are not entitled to any relief and both the revisionpetitions were dismissed. The correctness of the decision of theSpecial Appellate Tribunal is assailed before this court in theabove writ petitions. 9. Mr. K.C. Rajappa, learned counsel for the petitioner wouldsubmit that the impugned order calls for interference by thiscourt on the following grounds: (a). The Special Appellate Tribunal committed a patent errorin mixing up the definition of 'Private Trust' in Section 3(36A)of the Act. The said definition of 'Private Trust' is in twoparts. The main section defines a 'Private Trust' under which thebeneficiaries are persons, who are ascertained or capable of beingascertained. Section 3(36A), deals with a public trust andprovides that "where the income of such public trust issubstantially appropriated for the benefit of the founder or hisheirs or the family of the founder or his heirs, such trust shallbe deemed to be private trust." It is stated that the Tribunal,instead of examining the applicability of the main definition,wrongly confined whether the petitioner as a public trust, couldbe deemed to be a private trust. (b). That the Tribunal committed error which is apparent onthe face of the record that, the agreement among the members ofthe petitioner's family dated 05.06.1955 being an unregisteredagreement, the sanction or permission of this Honourable Courtought to have been obtained before modifying the terms of theScheme Decree. The said agreement dated 05.06.1955 was a result ofa consensus reached among the members of the family and the samewould be valid in the eye of law. Further, the said agreementdated 05.06.1955 has been given effect to and acted upon by themembers of the petitioner's family for more than four decades andcannot be called in question in the Land Ceiling proceedings.(c). The observation of the 1st respondent is that there is adiscrepancy in the number of families branching out since the https://hcservices.ecourts.gov.in/hcservices/ creation of the private trust is wrong and unfounded. The Tribunalacted in excess of jurisdiction in putting certain statements madeby the previous learned counsel for the Managing Trustee againstthe interest of the petitioner in order to negative the contentionof the petitioner as a private trust.(d). The Tribunal committed a palpable error in the impugnedorder dated 17.07.2000 by giving a finding that the petitionerought to have moved the court under Section 59 of the Trust Act1882 before embarking on modification of the Trust by theagreement dated 05.06.1955.10. Per contra, Mrs. Malarvizhi Udayakumar, learned SpecialGovernment Pleader, appearing for the respondents would submitthat the impugned order calls for no interference since theTribunal has gone into the oral and documentary evidence placed onrecord and come to a conclusion that the trusts are the "publictrust" and those factual findings cannot be re-appreciated in aproceeding under Article 226 of Constitution of India, especiallywhen the reasoning is cogent and based on the documents; that theclaim made by the petitioner is that it is a public trust only forthe purpose of getting over rigour of the Act. The ManagingTrustee of the petitioner / Trust had, in fact, given adeclaration to the effect that it is a public trust. The schemedecree passed by the Civil Court cannot be set aside by anunregistered instrument where all the parties of the scheme decreewere signatories. 11. We have carefully considered the submissions made by thelearned counsel appearing on either side and perused the materialsavailable on record.12. The question which arises for consideration in the aboveWrit Petitions, is that whether the two trusts in question arePrivate Trust or Public Trusts. For deciding this question, it isnecessary to refer to certain provisions of the Act for thepurpose of appreciating the respective contention of the Acts:i)Section 3(36-A):"Private trust" includes a trust under which the beneficiaries arepersons who are ascertained or capable of being ascertained.Explanation: Notwithstanding anything contained in this Act, forthe purpose of this clause, where the income from a public trustis substantially appropriated for the benefit of the founder ofthe trust or his heirs or of the family of the founder or of hisheirs, such trust shall be deemed to be a private trustnotwithstanding the terms of the trust." ii) Section 3(36-AAA):"Public Trust" means a trust for a public purpose of religioius,charitable or of an education nature." https://hcservices.ecourts.gov.in/hcservices/ iii) Section 5(1)(a):"The ceiling area in the case of every person other than theinstitutions referred to in Clauses (c) and (d) shall be 15standard acres. Section 3(34) states that "person" includes anyprivate trust or public trust and so according to the definitionin Section 3(34) read with Section 5(1)(a) of the Act, a privatetrust can hold 15 standard acres."iv) Section 5(d)(i):"The ceiling area in the case of a public trust of a charitablenature in existence on the date of the commencement of this Act(other than such trusts under which the institutions referred toin clause (c)(i) are the beneficiaries) shall be 5 (five)standards acres; provided that such extent of land is held by suchtrust on the date of commencement of this Act." v) Section 5(3-A)(i):"For the purposes of this Act, the land owned by a private trustshall be deemed to be the land owned by the beneficiaries underthe private trust and each such beneficiary shall be deemed to bethe owner of the land to the extent of the share of his beneficialinterest in the said trust."Therefore, in terms of the above provisions, it is to be seen thatwhere the income from a public trust is substantially appropriatedfor the benefit of the founder or his heirs or the family of thefounder or his heirs, and such trust shall be deemed to be privatetrust. On the other hand, public trust is a trust established forthe purpose of religious charity or of educational nature. Theceiling area in respect of the private and public trusts arementioned in Section 5(1)(a) and Section 5(d)(i) respectively. Todecide the matter in controversy, it is necessary to look into thefacts of the case. The Managing Trustee of Welfare Fund FamilyTrust filed a statement before the Authorised Officer on14.12.1973 wherein the Managing Trustee has stated that the trustis a religious trust of a public nature since a portion of incomeis utilized for the pooja in Samayapuram Mariamman Kovil in themonth of Purattasi and since another portion of the income isutilized for the daily pooja of Sri Balaji and Sahasranama Archanato the said deity called Keela Veettu Pooja. Therefore, theManaging Trustee requested that further proceedings initiatedunder Act may be dropped. After a lapse of around 6 years, anotherpetition was filed before the Authorized Officer by the trust, on04.06.1979, stating that the trust in SRP No. 21 of 1999, theWelfare Fund Family Trust, is a private trust. The said statementis signed by the Managing Trustee as well as the learned counsel https://hcservices.ecourts.gov.in/hcservices/ appearing for the trust. In the said petition, it has been statedthat the Trust is a private trust, the beneficiaries are only themembers of 16 Trustee's families, the number of beneficiaries arewell defined and it is not a public trust to attract the provisionof the Act 37 of 1972 and therefore the private trust is entitledto hold 15 standard acres and is requested to revise the orderdated 30.08.1978. 13. The Authorized Officer, by a memo dated 28.01.1992 calledupon the land owner to produce the Trust Deed of the above Trust.In response to the said memo, learned counsel for the Trust, by areply on 28.01.1992 said that there is no Trust Deed that can nowbe traced and the Trust is governed by the Scheme framed by thisCourt in C.S. No. 721 of 1923, if the same is required, 8 weekstime may be granted as the document has to be traced. Therefore,it was admitted that no Trust deed was available and the Trust wasgoverned by a Scheme in C.S. No. 721 of 1923. The Tribunal perusedthe copy of the scheme Decree and observed that there are only 3plaintiffs and 5 defendants and nowhere in the Scheme Decree inC.S. No. 721 of 1923, it is stated that the beneficiaries of thepetitioner/Trust in SRP No. 21 of 1999 are members of 16 trusteefamilies. In fact, the Tribunal extracted relevant portions of theScheme Decree dated 17.02.1925. The Tribunal analyzed the evidenceon record i.e. the Scheme Decree and the statement given beforethe Authorized Officer. On perusal of the statement given by theManaging Trustee before the Authorised Officer on 08.06.1978, nofamily has claimed that the income of the Trust properties isutilised for their sustenance or for means of support orlivelihood, and instead the income from the trust properties wasbeing spent towards daily pooja, festival expenses and otheradministrative work and in the statement given by the ManagingTrustee on 08.06.1979, there was no reference to the beneficiariesof this trust. Further, there is no whisper among beneficiariesand the share of the beneficiaries in the trust property is notascertained. 14. Presumably, to get over such factual hurdle, anunregistered agreement dated 05.06.1955 entered into by the maledescendants of the Trust was produced before the Officer. TheTribunal, after elaborately going through the terms and conditionsof the agreement, held that it is an unregistered agreement whichwas executed after the passing of the Scheme Decree and therefore,it is not valid. Even if it is assumed that this unregisteredagreement is valid, on facts, the Tribunal held that theunregistered agreement has not mentioned about the beneficiariesof the trust who can be identified and nothing has been statedabout the share of the beneficiaries with the Trust andaccordingly, on facts, the Tribunal came to a conclusion that twotrusts are only public trusts and not a private trust. https://hcservices.ecourts.gov.in/hcservices/

15. Further, it is to be noted that in the statement given bythe Managing Trustee in an enquiry held on 01.03.1972, it has beenstated that the Trust is religious trust and the income from thetrust properties are fully utilized for religious matters. Thisstatement was not objected at any point of time. Therefore, theTribunal held against the petitioner / Trust. 16. Learned counsel for the petitioner Mr. K.C. Rajappa, byrelying on a decision of the Division Bench reported in 1970Vol.II MLJ Pg. 555 (K.M. Senthilvel Pillai and KkulandaivelPillai) contended that if all the members agree to put an end tothe trust and share the properties among themselves, the same waspermissible and by consensus of members of the private trust, theycan modify the terms and conditions of the Trust to suit theirconvenience. The question which arose before the HonourableDivision Bench in the above judgment was whether the Trust createdby one Ammani Ammal was valid and whether it was put to an end,but not in the manner stated by the 1st defendant therein. In fact,the Honourable Division Bench held that there appears to be noroom for doubt that the dedication in the said case, if it can becalled such, was in the nature of a private trust and thatposition is not seriously controverted by the plaintiff/appellanttherein. Thereafter, the Honourable Division Bench proceeded toanalyze the broad distinction between the public and privatetrusts and held that public trusts are trusts constituted for thebenefit of either the public at large or of some considerable partof it answering to a public description, while private trusts aretrusts wherein the beneficial interest is vested absolutely in oneor more individuals who are or who may be definitely ascertained.Therefore, we find that the decision in the case of "K.M. SenthilPillai Vs. Kulandaivel Pillai" cannot be made applicable to thefacts of the present case and it does not advance the case of thepetitioner.17. Learned counsel for the petitioner also placed relianceon a judgment in "Commissioner of Income Tax V. Kamla Town Trust(1996 Vol.217 ITR, Pg.699" wherein, the Honourable Supreme Courtwas considering the case of Kamla Town Trust as to whether theywere entitled to exemption from the payment of income tax as perthe provisions of Section 4(3)(i) of the Indian Income-tax Act,1922 and under Section 11(1)(a) r/w Section 256(1) of the Incometax Act 1961.One of the questions which are framed forconsideration was whether on the facts and in the circumstances ofthe case, the Income-tax Officer was entitled to go beyond thecivil court decree and adjudge the validity of the rectification.While deciding that question, the Honourable Supreme Court,considering the facts and circumstances on the said case held that https://hcservices.ecourts.gov.in/hcservices/ the rectified Trust Deed of 1995 did create a public charitabletrust as held by the High Court.18. As noted above, in the case on hand, the petitioner hasmiserably failed to establish that the trust would fall within thedefinition of 3(36A) of the Act as there was no evidence on recordto establish that income from the trust is substantiallyappropriated for the benefit of the founder or their heirs ortheir families. Further, there was no evidence to show that therewas group of identified beneficiaries. Hence, we are of the viewthat the above referred judgement in "Commissioner of Income TaxV. Kamla Town Trust (1996 Vol.217 ITR, would not render anyassistance to the case on hand. 19. A Division Bench of this court in "V. Krishnakumari Vs.Authorised Officer (2002) LW 134 Pg. 813, while considering theorder passed by the Special Tribunal, has held that the fiction,which was created by Section 5(3-A) of the Tamil Nadu Land Reforms(Fixation of Ceiling on Land) Act, is only in order to see thatthe beneficiaries do not defeat the provisions of the Act and itsmain objectives. Under this Section, if the lands are owned by aprivate trust and are being enjoyed by the beneficiaries, then,fictionally it is deemed that the lands are owned by thosebeneficiaries, thereby the beneficiaries are made liable to filethe returns. It was further held that the deeming fiction wascreated so that the beneficiaries do not take undue advantage bydividing the whole lands of the deity into small pockets andthereby claim the lands to be under the ceiling limit. The Schemeof the Section is that if the lands are actually owned by theprivate trust, even then, they will be deemed to be lands of thebeneficiaries, thereby the beneficiaries and such other personswho are enjoying the benefit of the land should file their returnsand face the proceedings.20. The Hon'ble Supreme Court in (1979) 3 Supreme Court Cases466 (AUTHORISED OFFICER, THANJAVUR AND ANOTHER Vs. S.NAGANATHAAYYAR AND OTHERS) was considering the scope and construction of1961 Act. The Hon'ble Supreme Court in the following paragraphshas held as follows: "7. When a whole legislation is geared to deprivation ofproperty, subject to payment of compensation, rules which havefrowned upon confiscatory legislation cannot apply at all. We areconcerned with a Republic created by the people of India, with asocial transformation where the State is not antagonistic to thecitizen but harmonises individual interest with community good.The jurispridential principles in such a situation cannot be thesame as have been inherited from a culture which postulates theState versus the subject. We do not explore the aspect of the law https://hcservices.ecourts.gov.in/hcservices/ further as we are satisfied that the answer to the specificquestion raised before us flows directly from a reading of theSection in the light of well-established rules of interpretation.14.Moreover, when the whole purpose of the section is toprevent any alienation which defeats any of the provisions of theAct, it is impermissible to introduce any requirement, other thanis mentioned in the Section, as a condition for its operation.Obviously, the provision seeks to provide social justice for thelandless and it defeats the purpose if, by the interpretativeprocess, soft justice to large landholders is brought about. Weconsider the 'literal' meaning of the section to be that anytransfer of other alienation mentioned in the section whichreduces or impairs the otherwise available extent of surplus landbeyond the ceiling "defeats ..... the provisions of this Act."This is the plain meaning of the Section which give no room fordoubt or justification for importation of any further conditionlike sham, bogus, etc.16.In the interpretation of Section 22 we too are Portia me.For this reason we reverse the view of the High Court that Section22 will not apply nullify any transaction of transfer or partitionunless it is further shown that it is sham, nominal or bogus. Nordo we agree with Shree Ramamurthi that even if a transactiondefeats the ceiling provisions, it may still be valid if thetransfer is, from an individual point of view bona fide. The shortreply is that from the community's angel, especially the landlesscommunity's angle hungering for allotment, the alienation, howevernecessary for the individual, is not bona fide vis-a-vis thecommunity." 21. This Court in A. Venkataswami Naidu Vs. The State ofTamil Nadu and others, reported in (1973)(I) MLJ 410, whileconsidering the scope of recitals in a Trust Deed to determinewhether the Trust was "Public" or "Private" held as follows: "7. According to the trust deed, dated 13th September, 1956, thepetitioner has clearly endowed the properties for the purpose ofperformance of certain charities. The predominant intention andpurpose of creating the trust is only to perform the charitieswhich the petitioner's ancestors were doing prior thereto.Incidental honours which the trustee gets by reason of suchperformance of charities cannot be construed as the purpose forwhich the trust was created. The main intention of the founder ofthe trust is to do certain mandagapadis to feed the bakthas whocollect there. Both in the A schedule dharmam, and the B Scheduledharmam, mentioned in the deed of trust, the main object is toperform necessary mandagapadis to do deities mentioned there andalso to the charity with the residual funds." https://hcservices.ecourts.gov.in/hcservices/ "8. Thus it is clear that the main purpose of the trust is onlya public purpose of a religious and charitable nature. If it is apublic purpose of a religious and charitable nature, the exemptiongranted under Section 73 will squarely apply." "11. For construction of a trust deed as a deed for publicpurpose of a religious or charitable nature, it is not necessaryto take into account certain immaterial recitals in the deed whichconfer benefits to the trustee or members of his family. For thisposition, Thiru S.V. Jayaraman, the learned Counsel for thepetitioner, cited the decision in Nirmala Bala V. Balai Chand,wherein the Supreme Court has held that provision for maintenanceand residence of the shebaits is an ordinary incident of such adedication and could not therefore be interpreted as restrictiveof the estate of the deity and that the deed consequently createdan endowment for the benefit of the deity absolutely but subjectto certain charges in favour of the shebaits and the descendantsof the settlor." "14. The description that it is a 'private' trust and that theHindu Religious and Charitable Endowments Board has no voice inthe trust and like recitals in a trust deed cannot give it thecharacter of a 'private' or 'public' trust to the trust created.It is the duty of the Court to read the recitals in the deed oftrust and spell out the intention of the founder of the trust forthe purpose for which it is created." 22. As could be seen from the facts of the case on hand, theTribunal went into the factual aspects and found that there isabsolutely no material to establish that the trust in question wasa private trust as there were no specified beneficiaries, whowould be entitled to enjoy the benefits as mentioned in the deedof trust. 23. The Honourable Supreme Court in Valivalam Desikar ChatramTrust Vs. Assistant Commissioner (Land Reforms) (2000) 9 SupremeCourt Cases 374 was considering the effect of corrigendum appendedto the trust deed after the 3rd amendment to the Land Reforms Act.The Honourable Supreme Court held as follows: "1. The Tamil Nadu Land Reforms Special Appellate Tribunalconstituted under Section 77-C of the Tamil Nadu Reforms (Fixationof Ceiling on Land) Act categorically held that the Trust inquestion was not a public religious trust as defined under Section2 of the Act as on 01.03.1972 on which date the Tamil Nadu LandReforms (Fixation of Ceiling on Land) (Third Amendment) Act cameinto force. https://hcservices.ecourts.gov.in/hcservices/

2. The Tamil Nadu Land Reforms Special Appellate Tribunal lookedinto the oral and documentary evidence and considered thestatement of the Manager of the Trust recorded by the LandTribunal. The Manager had stated that there were no entries in therecords of the Trust to show that the paddy grown by it was beingused for the performance of the puja or for other religiouspurposes. The account-books maintained by the Trust for the periodfrom 1.4.1986 to 31.3.1989, and for the period from 1985-86 to1988-89 as also from 1989-90 to 1991-92 were examined. It wasthereafter held that there was no evidence to prove that theincome was being spent on charity or that the trust in questionwas a public religious trust. 3. The corringendum appended to the deed of trust was executed on1.7.1981 in which the charities for which the income of the Trustwas to be utilized were specified. This was done after the thirdamendment to the Act which came into force in 1972. Thecorrigendum cannot, therefore, be taken note of particularly inview of the finding of fact recorded by the Tribunal that no partof the income of the Trust was used for charities.4. The appeals are, therefore, dismissed."24. In view of the above, we find that the trusts in questionare the "Public Trusts" and the Tribunal, after analyzing thefactual and legal contention, has rightly come to a conclusion anddismissed both the petitions. We, therefore, see no reason tointerfere with the order passed by the Tribunal. Accordingly,these writ petitions are dismissed. Consequently, connectedmiscellaneous petitions are closed. However, there will be noorder as to costs. Sd/- Asst.Registrar. /true copy/ Sub Asst.Registrar.ar https://hcservices.ecourts.gov.in/hcservices/ To1.The Tamil Nadu Land Reforms Special Appellate Tribunal Santhome High Road, Chennai – 600 004.2.The Assistant Commissioner of Land Reforms (Authorised Officer) Land Reforms Trichy W.P.Nos.15125 & 15126 of 2000MBS (CO)kk 19/11