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PETITIONER:

RATILAL PANACHAND GANDHI

Vs.

RESPONDENT:

THE STATE OF BOMBAY AND OTHERS.(and connected appeal)

DATE OF JUDGMENT:

18/03/1954

BENCH:

MUKHERJEA, B.K.

BENCH:

MUKHERJEA, B.K.

HASAN, GHULAM

MAHAJAN, MEHAR CHAND (CJ)

DAS, SUDHI RANJAN

BOSE, VIVIAN

CITATION:

1954 AIR 388 1954 SCR 1035

CITATOR INFO :

R 1958 SC 731 (13)

D 1959 SC 942 (14)

R 1961 SC 459 (11,14)

D 1963 SC1638 (62,75)

R 1965 SC1107 (48,50)

R 1965 SC1611 (5,7)

RF 1971 SC 344 (6)

R 1971 SC1182 (6)

R 1975 SC 706 (4,25,29)

R 1975 SC 846 (14)

F 1977 SC 908 (20)

F 1978 SC1181 (5)

R 1980 SC1008 (11)

RF 1981 SC1863 (24)

MV 1983 SC 1 (15)

R 1984 SC 51 (11)

R 1987 SC 748 (19)

ACT:

Constitution of India, arts. 25 and 26-Bombay Public

Trust Act, 1950 (Act XXIX of 1950), ss. 44, 47(3) (4) (6)

(6), 55(c) and 56(1) -Whether ultra vires the Constitution-

Section 68 of the Act--Whether ultra vires the State

Legislature.

HEADNOTE:

Held, that the provision of a. 44 of the Bombay Public

Trust Act, 1950, relating to the appointment of -the Charity

Commissioner as a trustee of any public trust by the court

without any reservation in regard to religious institutions

like temples and Maths is unconstitutional and must be held

to be void.

The provisions of el. (3) to (6) of a. 47 of the Act to

the extent that they relate to the appointment of the

Charity Commissioner as a trustee of a religious trust like

temple and Math are unconstitutional and must be held to be

void.

A religious sect or denomination has. the undoubted right

guaranteed by the Constitution to manage its own affairs in

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matters of religion and this includes the right to spend the

trust property or its income for religion and for religious

purposes and objects indicated by the founder of the trust

or established by ussage

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obtaining in a particular institution. To divert the trust

property or funds for purposes which the Charity

commissioner or the court considers expedient or proper,

although the original objectes of the founder can still be

carried out, is an unwarrantable encroachment on the freedom

of religious institutions in regard to the management of

their religious affairs.

Therefore cl. (3) of s. 55, which contains the offending

provision and the corresponding provision relating to the

powers of the court occurring in the latter part of s.

56(1), must be held to be void.

Section 58 of the Act is not ultra vires of the State

Legislature because the contribution imposed under the

section is not a tax but a fee which comes within the

purview of entry 47 of List III in Schedule VII of the

Constitution.

Commissioner, Hindu Religious Endowments, Madras v. Sri

Lakshmindra Thirtha Swamiar, ( [1954] S.C.R. 1005) Davis v.

Beason (133 U.S. 333), Adelaide Company v. The Commonwealth

(67 C.L.R. 116, 124) and Tamshed Ji v. Soonabai [1919]

(I.L.R 33 Bom. 122) referred to.

JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1 of

1954, and Civil Appeal No. 7 of 1954.

Appeals under article 132(1) of the Constitution of India

from the Judgment and Order dated the 12th September, 1952,

of the High Court of Judicature at Bombay in Civil

Application No. 880 of 1952 and Miscellaneous Application

No. 212 of 1952 respectively.

N.C. Chatterjee and U. M. Trivedi (H. H. Dalal and I.

N. Shroff -with them) for the appellants in Appeal No., I of

1954.

Rajinder Narain for the appellants in Civil Appeal. No.

7 of 1954.

M. C. Setalvad and C.K. Daphtary (G. N. Joshi and

Porus A. Mehta, with them) for the respondents in both the

appeals.

1954. Mach 18. The Judgment of the Court was delivered by

MUKHERJEA J.-These two connected appeals are directed

against a common judgment of a division Bench of the Bombay

High Court, dated the 12th of September, 1952, by which the

learned Judges dismissed two petitions under article 226 of

the Constitution presented respectively by the appellants in

the two appeals.

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The petitioners in both the cases assailed the consti-

tutional validity of the Act, known as the Bombay Public

Trusts Act, 1950 (Act XXIX of 1950), which was passed by the

Bombay Legislature with a view to regulate and make better

provisions for the administration of the public and

religious trusts in the State of Bombay. By a notification,

dated the 30th of January, 1951, the Act was brought into

force on and from the 1st of March, 1951, and its provisions

were made applicable to temples, maths and all other trusts,

express or constructive, for either a public, religious or

charitable purpose or both. The State of Bombay figures as

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the first respondent in both the appeals and the second

respondent is the Charity Commissioner, appointed by the

first respondent under section 3 of the impugned Act to

carry out the provisions of the Act throughout the State of

Bombay. In one of the appeals, namely, Appeal No. 1 of

1954, the Assistant Charity Commissioner for the region of

Baroda has been impleaded as the third respondent.

The appellant in Appeal No. I of 1954 is a Swetamber

Murtipujak Jain and a resident of Vejalpar in the district

of Punchmahals within the State of Bombay. He is a

Vahivatdar or manager of a Jain public temple or Derasar

situated in the same village and the endowed properties

appertaining to the temple are said to be of the value of

Rs. 5 lakhs. The petition, out of which this appeal arises,

was filed by the appellant on the 29th of May, 1952, before

the High Court of Bombay, in its Appellate Side, against the

three respondents mentioned above, praying for the issue of

a writ in the nature of mandamus or direction ordering and

directing the respondents to forbear from enforcing or

taking any steps for the enforcement of the Bombay Public

Trusts Act, 1950,,or of any of its provisions and parti-

cularly the provisions relating to registration of public

and religious trusts managed by the appellant and payment of

contributions levied in respect the same. The grounds urged

in support of the petition were that a number of provisions

of the Act convicted with the fundamental rights of the

petitioner guaranteed under articles 25 and 26 of the

Constitution and that the

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contribution levied on the trust was a tax which it was

beyond the competence of the State Legislature to impose.

A similar application under article 226 of the Consti-

tution and Praying for almost the identical relief was filed

by the appellants, in the other appeal, namely, Appeal No. 7

of 1954 before the High Court in its Original Side on the

4th of August, 1952. The petitioners in this case purport

to be the present trustees of the Parsi Punchayet Funds and

Properties in Bombay registered under the Parsi Public

Trusts Registration Act of 1936. These properties

constitute one consolidated fund and they are administered

by the trustees for the benefit of the entire Parsi

community and the income is spent for specified religious

and charitable purposes of a public character as indicated

by the various donors. The petitioners, challenged the

validity of the Bombay Public Trusts Act, 1950,

substantially on the grounds that they interfered with the

freedom of conscience of the petitioners and with their

right freely to profess, practise and propagate religion and

also with their right to manage their own affairs in matters

of religion and thereby contravened the provisions of

articles 25 and 26 of the Constitution. The levy of

contribution under section 58 of the Act was also alleged in

substance and effect to be a tax on public, religious and

charitable trusts, a legislation upon which it was beyond

the competency of the State Legislature to enact.

As practically the same questions were involved in both

the petitions, the learned Chief Justice of Bombay directed

the transfer of the later petition from the Original Side to

the Appellate Side of the High Court and both of them were

heard together by a Division Bench consisting of the Chief

Justice himself and Shah J. Both the petitions were disposed

of by one and the same judgment delivered on the 12th of

September, 1952, and the learned Judges rejected all the

contentions put forward on behalf of the respective

applicants and dismissed the petitions. The petitioners in

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both the cases have now come before us in appeal on the

strength of certificates granted

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by the High Court under article 132(1) of the Constitution.

To appreciate the points that have been canvassed before

us by the parties to these appeals, it may be convenient to

refer briefly to the scheme and salient features of the

impugned Act.

The object of the Act, as stated in the preamble, is to

regulate and make better provisions for the administration

of public, religious and charitable trusts within the State

of Bombay. It includes, within its scope, all public trusts

created not merely for religious but for purely charitable

purposes as well and extends to people of all classes and

denominations in the State. The power of superintendence

and administration of public trusts is vested, under the

Act, in the Charity Commissioner, who is to be appointed by

the State Government in the manner laid down in Chapter II.

The State Government may also appoint such number of Deputy

and Assistant Charity Commissioners as. it thinks fit and

these officers would be placed in charge of particular

regions or particular trusts or classes of trusts as may be

considered necessary. Section 9, with which Chapter III of

the Act beigins, defines what 'charitable purposes' are, and

sections 10 and 11 lay down that a public trust shall not be

void on the ground of uncertainty, nor shall it fail so far

as a religious and charitable purpose is concerned, even if

a non-charitable or non-religious purpose,- which is includ-

ed in it,. cannot be given effect to. Chapter IV provides

for registration of public trusts. Section 18 makes it

obligatory upon the trustee of every public trust to which

the Act applies, to make an application for the registration

of the trust, of which he is the trustee. In case of

omission on the part of a trustee to comply with this

provision, he is debarred under section 31 of the Act from

instituting a suit to enforce any right on behalf of such

trust in a court of law. Chapter V deals with accounts and

audit. Section 32 imposes a duty upon every trustee of a

public trust, which has been registered under the Act, to

keep regular accounts. Under section 33, these accounts are

to be audited annually, in such manner as may be prescribed.

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Section 34 proscribes it to be the duty of the auditor

to prepare balance-sheets and to report all irregularities

in the accounts. Section 35 lays down how trust money has

to be invested, and section 36 prohibits alienation of

immovable trust property except by way of leases for

specified periods, Without the previous sanction of the

Charity Commissioner. Section 37 authorises the Charity

Commissioner and his subordinate officers to enter on and

inspect or cause to be entered on and inspected any

property belonging to a public trust. A proviso is added to

the section laying down that in entering upon any such

property, the officers making the entry shall give

reasonable notice to the trustee and shall have due regard

to the religious practices and usages of the trust. Among

other powers and functions of the Charity Commissioner,

which are detailed in Chapter VII, section 44 enables a

Charity Commissioner to be appointed to act as a trustee of

a public trust by a court of competent jurisdiction or by

the author of the trust. Section 47 deals with the powers

of the court to appoint new trustee or trustees and under

clause (3) of this section, the court, after making enquiry,

may appoint the Charity Commissioner or any other person as

a trustee to fill up the vacancy. Section 48 provides for

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the levy of administrative charges in cases where the

Charity Commissioner is appointed a trustee. Section 50

appears to be a substitute for section 92 of the Civil

Procedure Code and contains provisions of almost the same

character in respect to suits regarding public trusts. One

of the reliefs that can be claimed in such a suit is a

declaration as to what proportion of the trust property or

interest therein shall be allocated to any particular object

of the trust. Section 55 purports to lay down the rule of

cy pres in relation to the administration of religious and

charitable trusts; but it extends that doctrine much further

than is warranted by the principles laid down by the

Chancery Courts in England or recognised by judicial

pronouncements in this country. Section 56 deals with the

powers of the courts in relation to the application of -the

cy pres doctrine. Section 57 provides for the establishment

of a fund to be called "The

1061

Public Trusts Administration Fund which shall vest in the

Charity Commissioner and clause (2) lays down what sums

shall be credited to this fund. Section 58 makes it

obligatory on every public trust to pay to this fund a

contribution at such time and in such manner as may be

Prescribed. Under the, rules prescribed by the Government

on this subject, the contribution has been fixed at the rate

of 2 per cent. per annum upon the gross annual income of

every public trust. Failure .to pay this contribution will

make the trustee liable to the penalties provided for in

section 66 of the Act. Section 60 provides that the Public

Trusts Administration Fund shall, subject to the provisions

of the Act and subject to the general and special orders of

the State Government, be applicable to the. payment of

charges for expenses incidental to the regulation of public

trusts and generally for carrying out the provisions of the

Act. Sections 62 to 66, which are comprised in Chapter IX

of the Act, deal with the appointment and qualifications of

assessors. The function of the assessors is to assist and

advise the Charity Commissioner or his subordinate officers

in the matter of making enquiries which may be necessary

under the provisions of the Act. Chapter X prescribes the

penalties that will be inflicted on trustees in case of

their violating any of the pro visions of the Act. Chapter

XI deals with procedural matters in connection with

jurisdiction of courts and rights of appeal, and the twelfth

or the last chapter deals with certain miscellaneous

matters. These, in brief, are the provisions of the Act

which are material for our present purpose.

The contentions that have been raised by the learned

counsel, who appeared in support of the appeals, may be

considered under two heads. In the first place, a number of

provisions of the Act have been challenged as invalid on the

ground that they conflict with freedom of religion and the

right of the religious denominations or sects, represented

by the appellants in each case, to manage their own, affairs

in matter of religion guaranteed under articles 25 and 26 of

the Constitution. The sections of the Act, the validity of

which has been challenged on this ground are sections 18, 31

to 37, 44,

1062

47, 48 50, clauses (e) and (g), 55, 58 and 66. The second

head of the appellants argument relates to the levy of

contribution as laid down in sections 57 and 58 of the Act

and the argument is that this being in substance the levy of

a tax, it was beyond the competence of the State Legislature

to enact-such a provision.

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As regards the first branch of the contention, a good

deal of argument has been advanced before us relating to the

measure and extent of the fundamental rights guaranteed

under articles 25 and 26 of the Constitution. It will be

necessary to address ourselves to this question at the

outset, because without a clear appreciation of the scope

and am bit of the fundamental rights embodied in the two

articles of the Constitution, it would not -be possible to

decide whether there has been a transgression of these

rights by any of the provisions of the Act. This identical

question came up for consideration before this court in

Civil Appeal No. 38 of 1953 (The commissioner, Hindu

Religious Endowments, Madras v. Sri Lakshmindra Tirtha

Swamiar(1) and it was discussed at some length in our

judgment in that case. It will be sufficient for our

present purpose to refer succinctly to the main principles

that this court enunciated in that judgment.

Article 25 of the Constitution guarantees to every

person and not merely to the citizens of India the freedom

of conscience and the right freely to profess practise and

propagate religion. This is subject, in every case, to

public order, health and morality. Further exceptions are

engrafted upon this right by clause (2) of the article.

Sub-clause (a) of clause (2) saves the power of the State to

make laws regulating or restricting any economic

financial, political or other secular activity which may be

associated with religious practice; and sub-clause (b)

reserves the State's power to make laws providing for social

reform and social welfare even though they might interfere

with-religious practices. Thus, subject to the restrictions

which this article imposes, every person has a fundamental

right under our Constitution not merely to entertain such

religious belief as may be approved of by his judgment or

conscience but to exhibit his belief and ideas in such

(1) [1954] S.C.R. 1005.

1063

overt acts as are enjoined or sanctioned by his religion and

further to propagate his religious views for the edification

of others. It is immaterial also whether the propagation is

made by a person in his individual capacity or on behalf of

any church or institution. The free exercise of religion by

which is meant the performance of outward acts in pursuance

of religious belief, is, as stated above, subject to State

regulation imposed to secure order, public health and morals

of the people. What sub-clause (a) of clause (2) of article

25 contemplates is not State regulation of the religious

practices as such which are protected unless they run

counter to public health or morality but of activities which

are really of an economic, commercial or political character

though they are associated with religious practices.

So far as article 26 is concerned, it deals with a

particular aspect of the subject of religious freedom.

Under this article, any religious denomination or a section

of it has the guaranteed right to establish and maintain

institutions for religious and charitable purposes and to

manage in its own way all affairs in matters of religion.

Rights are also given to such denomination or a section of

it to acquire and own movable and immovable properties and

to administer such properties in accordance with law. The

language of the two clauses (b) and (d) of article 26 would

at once bring out the difference between the two. In regard

to affairs in matters of religion, the right of management

given to a religious body is a guaranteed fundamental right

which no legislation can take away. On the other hand, as

regards administration of property which a religious

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denomination is entitled to own and acquire, it has

undoubtedly the right to administer such property but only

in accordance with law. This means that the State can

regulate the administration of trust properties by means of

laws validly enacted but here again it should be remembered

that under article 26 (d), it is the religious denomination

itself which has been given the right to administer its pro-

perty in accordance with any law which the State may validly

impose. A law, which takes away the right of

138

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administration altogether from the religious denomination

and vests it in any other or secular authority, would amount

to violation of the right which is guaranteed by article 26

(d) of the Constitution.

The moot point for consideration, therefore, is where is

the line to be drawn between what are matters of religion

and what are not ? Our Constitution-makers have made no

attempt to define what 'religion' is and it is certainly not

possible to frame an exhaustive definition of the word

'religion' which would be applicable to all classes of

persons. As has been indicated in the Madras case referred

to above, the definition of religion given by Fields J. in

the American case of Davis v. Beason(1), does not seem to us

adequate or precise. "The term 'religion"', thus observed

the learned Judge in the case mentioned above, "has refer-

ence to one's views of his relations to his Creator and to

the obligations they impose of reverence for His Being and

character and of obedience to His Will. It is often

confounded with cultus or form of worship of a particular

sect, but is distinguishable from the latter". it may be

noted that 'religion' is not necessarily theistic and in

fact there are well known religions in India like Buddhism

and Jainism which do nor believe in the existence of God or

of any Intelligent First Cause. A religion undoubtedly has

its basis in a system of beliefs -and doctrines which are

regarded by those who profess that religion to be conducive

to their spiritual well being, but it would not be correct

to say, as seems to have been suggested by one of the

learned Judges of the Bombay High Court, that matters of

religion are nothing but matters of religious faith and

religious belief. A religion is not merely an opinion,

doctrine or belief. It has its outward expression in acts

as well. We may quote in this connection the observations

of Latham C. J. of the High Court of Australia in the case

of Adelaide Company v. The Commonwealth(2), where the extent

of protection given to religious freedom by section 116 of

the Australian Constitution came up for consideration.

(1)133 U.S. 33

(2) 67 C.L.R, 116, 124.

1065

"It is sometimes suggested in discussions on the subject

of freedom of religion. that, though the civil Government

should not interfere with religious opinions, it

nevertheless may deal as it pleases with any acts which are

done in pursuance of religious belief without infringing the

principle of freedom of religion. It appears to me to be

difficult to maintain this distinction as relevant to the

interpretation of section 116. The section refers in

express terms to the exercise of religion, and therefore it

is intended to protect from the operation of any

Commonwealth laws acts which are done in the exercise of

religion. Thus the section goes far beyond protecting

liberty of opinion. It protects also acts done in pursuance

of religious belief as part of religion.,

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In our opinion, as we have already said in the Madras

case, these observations apply fully to the provision

regarding religious freedom that is embodied in our

Constitution.

Religious practices or performances of acts, in

pursuance of religious belief are as much apart of religion

as faith or belief in particular doctrines. Thus if the

tenets of the Jain or the Parsi religion lay down that

certain rites and ceremonies are to be performed at certain

times and in a particular manner, it cannot be said that

these are secular activities partaking of commercial or

economic character simply because the involve expenditure of

money or employment of priests or the use of marketable

commodities. No outside authority has any right to say that

these are not essential parts of religion and it. is not

open to the secular authority of the State to restrict or

prohibit them in any manner they like under the guise of

administering the trust estate. Of course, the scale of

expenses to, be incurred in connection with these religious

observances may be and is a matter of administration of

property belonging to religious institutions; and if the

expenses on these heads are likely to deplete the endowed

properties or affect the stability of the institution,,

proper control can certainly be exercised by State agencies

as the law provides. We may refer in this connection to the

observation of

1066

Davar J. in the case of Jamshedji v. Soonabai(1), and

although they were made in a case where the question was

whether the bequest of property by a Parsi testator for the

purpose of perpetual celebration of ceremonies like Muktad

baj, Vyezashni, etc., which are sanctioned by the

Zoroastrian religion were valid charitable gifts, the

observations, we think, are quite appropriate for our

present purpose. "If this is the belief of the community"

thus observed the learned Judge, "and it is proved

undoubtedly to be the belief of the Zoroastrian community,-a

secular Judge is bound to accept that belief-it is not for

him to sit in judument on that belief, he has no right to

interfere with the conscience of a donor who makes a gift in

favour of what he believes to be the advancement of his

religion and the ,Welfare of his community or mankind".

These observations do, in our opinion, afford an indication

of the measure of protection that is given by article 26(b)

of our Constitution.

The distinction between matters of religion and those of

secular administration of religious properties may, at

times, appear to be a thin one. But in cases of doubt, as

Chief Justice Latham pointed out in the case(2) referred to

above, the court should take a common sense view and be

actuated by considerations of practical necessity. It is in

the light of these principles that we will proceed to

examine the different provisions of the Bombay Public Trusts

Act, the validity of which has been challenged on behalf of

the appellants.

We will first turn to the provisions of the Act which

relate to registration of trusts. Under section 18, it is

incumbent on the trustee of every public, religious or

charitable trust to get the same registered. Section 66 of

the Act makes it an offence for a trustee not to comply with

this provision and prescribes punishment for such offence.

Section 31 provides for further compulsion by laying down

that no suit shall lie on behalf of a public trust to

enforce its right in any court of law unless the trust is

registered. A compulsory payment

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(1) 33 Bom. I22.

(2) Vide Adelaide Company v. The commonwealth, 67 C.L.R.

116, i29.

1067

of a fee of Rs. 25 has also been prescribed by the rules

framed by the Government for registration of a trust. The

provisions of registration undoubtedly have been made with a

view to ensure-due supervision of the trust properties and

the exercise of proper control over them. These are matters

relating to administration of trust property as contemplated

by article 26(d) of the Constitution and cannot, by any

stretch of imagination be held to be an attempt at

interference with the rights of religious institutions to

manage their religious affairs. The fees leviable under

section 18 are credited to the Public Trust Administration

Fund constituted under section 57 and are to be spent for

meeting the charges incurred in the regulation of public

trusts and for carrying into effect the provisions of the

Act. The penalties provided are mere consequential

provisions and involve no infraction of any fundamental

right. It has been argued by the learned counsel for the

appellants that according to the tenets of the Jain religion

the property of the temple and its income exist for one

purpose only, viz., the religious purpose, and a direction

to spend money for purposes other than those which are

considered sacred in the Jain scriptures would constitute

interference with the freedom of religion. This contention

does not appear to us to be sound. These expenses are

incidental to proper management and administration of the

trust estate like payment of municipal rates and taxes,

etc., and cannot amount to diversion of trust property for

purposes other than those which are prescribed by any

religion.

The next group of sections to which objections have

been taken comprises sections 32 to 37. Section 32 compels

a trustee of a public trust to keep accounts in such form as

may be prescribed by the Charity Commissioner. Section 33

provides for the auditing of such accounts and section 34

makes it the duty of the auditor to prepare balance-sheets

and to report irregularities, if any, that are found in the

accounts. These are certainly not matters of religion and

the objection raised with regard to the validity of these

provisions seem to be altogether baseless Section 35 relates

to investment of money belonging to trusts. It is a well

1068

settled principle of law that trustees in charge of trust

properties should not keep cash money in their hands which

are not necessary for immediate expenses; and a list of

approved securities upon which trust money could be invested

is invariably laid down in every legislation on the subject

of trust. There is nothing wrong in section 36 of the Act.

Immovable trust properties are inalienable by their very

nature and a provision that they could be alienated only

with the previous sanction of the Charity Commissioner seems

to us to be a perfectly salutary provision.

Section 37 has been objected to on the ground that an

unrestricted right of entry in any religious premises might

offend the sentiments of the followers of that religion; but

the section has expressly provided that the officers making

the entry shall give reasonable notice of their intended

entry to the trustees and shall have due regard to the

religious practice and usages of the trust. Objection has

next been taken to sections 44 and 47 of the Act. Section

44 lays down that the Charity Commissioner can be appointed

to act as trustee of a public trust by a court of competent

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jurisdiction or by the author of the trust. If the author

of the trust chooses to appoint the Charity Commissioner a

trustee, no objection can possibly be taken to such action;

but if the court is authorised to make such appointment, the

provisions of this section in the general form as it stands

appear to us to be open to serious objection. If we take

for example the case of a religious institution like a Math

at the head of which stands the Mathadhipati or spiritual

superior. The Mathadhipati is a trustee according to the

provisions of the.Act and if the court is competent to

appoint the Charity Commissioner as a superior of a Math,.

the result would be disastrous and it would amount to a

flagrant violation of the constitutional guarantee which

religions institutions have under the@ Constitution in

regard to the management of its religious affairs. This is

not a secular affair at all relating to the administration

of the trust property. The very object of a Math is to

maintain a competent line of religious teachers for

propagating and strengthening the religious

1069

doctrines of a particular order or sect and as there could

be no Math without a Mathadhipati as its spiritual head, the

substitution of the Charity Commissioner for the superior

would mean a destruction of the institution altogether. The

evil is further aggravated by the provision of clause (4) of

the section which says that the Charity Commissioner shall

be the sole trustee and it shall not be lawful to appoint

him as a truste along with other persons. In our opinion,

the provision of section 44 relating to the appointment of

the Charity Commissioner as a trustee of any public trust by

the court without any reservation in regard to religious

institutions like temples and Maths is unconstitutional and

must be held to be void. The very same objections will

apply to the provisions of clauses (3) to (6) of section 47.

The court can certainly be empowered to appoint a trustee to

fill up a vacancy caused by any of the reasons mentioned in

section 47(1), and it is quite a -salutary principle that in

making the appointment the court should have regard to

matters specified in clause (4) of section 47 ; but the

provision of clause (3) to the extent that it authorises the

court to appoint .the Charity Commissioner as the trustee-

and who according to the provisions of clause (5) is to be

the sole trustee-cannot be regarded as valid in regard to

religious institutions of the type we have just indicated.

To allow the Charity Commissioner to function as the Shebait

of a temple or the superior of a Math would certainly amount

to interference with the religious affairs of this

institution. We hold accordingly that the provisions of

clauses (3) to (6) of section 47 to the extent that they

relate to the appointment of the Charity Commissioner as a

trustee of a religious trust like temple and Math, are

invalid. If these provisions of section 47 are eliminated,

no objection can be taken to the provision of section 48 as

it stands. This section will in that event be confined only

to cases where the Charity Commissioner has been appointed a

trustee by the author of the trust himself and the

administrative charges provided by this section can

certainly be levied on the trust.

1070

We now come to section 50 and exception has been taken

to clauses (e) and (g) of that section. It is difficult to

see how these provisions can at all be objected to. Section

50, as has been said above, is really a substitute for

section 92 of the Civil Procedure Code and relates to suits

in connection with public trusts Clause (e) of section 50

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is an exact reproduction of clause (e) of section 92 of the

Civil Procedure Code and clause (g) also reproduces

substantially the provision of clause (g) of section 92 of

the Civil Procedure Code. There is no question of

infraction of any fundamental right by reason of these

provisions.

A more serious objection has been taken by the learned

counsel for the appellants to the provisions of sections 55

and 56 of the impugned Act and it appears to us that the

objections are to a great extent well founded. These

sections purport to lay down how the doctrine of cy pres is

to be applied in regard to the administration of public

trust of a religious or charitable character. The doctrine

of cy pres as developed by the Equity Courts in England, has

been adopted by out Indian courts since a long -time past.

The provisions of sections 55 and 56, however, have extended

the doctrine much beyond its recognised limits and have

further ,introduced certain principles which run counter to

well established rules of law regarding the administration

of charitable trusts. When the particular purpose for which

a charitable trust is created fails or by reason of certain

circumstances the trust cannot be carried into effect either

in whole or in part, or where there is a surplus left after

exhausting the purposes specified by the settlor, the court

would not, when there is a general charitable intention

expressed by the settlor, allow the trust to fail but would

execute it cy pres, that is to say, in some way as nearly as

possible to that which the author of the trust intended. In

such cases, it cannot be disputed that the court can frame a

scheme and give suitable directions regarding the objects

upon which the trust money can be spent. It is we 11

established, however, that where the donors intention can be

given effect to, the court has no authority to sanction any

deviation from the intentions expressed

1071

by the settlor on the grounds of expediency and the court

cannot exercise the power of applying the trust property or

its income to other purposes simply because it considers

them to be more expedient or more beneficial than what the

settlor had directed(1). But this is exactly what has been

done by the provision of section 55(c) read with section 56

of the Act. These provisions allow a diversion of property

belonging to a public trust or the income thereof to objects

other than those intended by the donors if the Charity

Commissioner is of opinion, and the court confirms its

opinion and decides, that carrying out wholly or partially

the original intentions of the author of the trust or the

object for which the trust was created is not wholly or

partially expedient, practicable, desirable or necessary;

and that the property or income of the public trust or any

portion thereof should be applied to any other charitable or

religious object. Whether a provision like this is

reasonable or not is not pertinent to our enquiry and we may

assume that the legislature, which is competent to legislate

on the subject of charitable and religious trust, is at

liberty to make any provision which may not be in consonance

with the existing law; but the question before us is,

whether such provision invades any fundamental right

guaranteed by our Constitution, and we have no hesitation in

holding that it does so in the case of religious trusts. A

religious sect or denomination has the undoubted right

guaranteed by the Constitution to manage its own affairs in

matters of religion and this includes the right to spend the

trust property or its income for the religious purposes and

objects indicated by the founder of the trust or established

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by usage obtaining in a particular institution. To divert

the trust property or funds for purposes which the Charity

Commissioner or the court considers expedient or proper,

although the original objects of the founder can still be

carried out, is to our minds an unwarrantable encroachment

on the freedom of religious institutions in regard to the

management of their religious affairs. It is perfectly

true, as has been stated

(1) Vide Halsbury, 2nd Edn., VOl. IV, P. 228,

139

1072

by the learned counsel for the appellants, that it is an

established maxim of the Jain religion that Divadraya or

religious property cannot be diverted to purposes other than

those which are considered sacred in the Jain scriptures.

But apart from the tenets of the Jain religion, we consider

it to be a violation of the freedom of religion and of the

right which a religious denomination has under our

Constitution to manage its own affairs in matters of

religion, to allow any secular authority- to divert the

trust money for purposes other than those for which the

trust was created. The State can step in only when the

trust fails or is incapable of being carried out either in

whole or in part. We hold, therefore, that clause (3) of

section 55, which contains the offending provision and the

corresponding provision relating to the powers of the court

occurring in the latter part of section 56(1), must be, held

to be void.

The only other section of the Act to which objection has

been taken is section 58 and it deals with the levy of

contribution upon each public trust, at certain rates to be

fixed by the rules, in proportion to the gross annual income

of such trust. This together with the other sums specified

in clause (2) of section 57 makes up the Public Trusts

Administration Fund, which is to be applied for payment of

charges incidental to the regulation of public trusts and

for carrying into effect the provisions of this Act. As

this contribution is levied purely for purposes of due

administration of the trust property and for defraying the

expenses incurred in connection with the same, no objection

could be taken to the provision of the section on the ground

of its infringing any fundamental rights of the appellants.

The substantial, contention that has been raised in regard

to the validity of this provision comes, however, under the

second head of the appellants' arguments indicated above.

The contention is that the contribution which is made

payable under this section is in substance a tax and the

Bombay State Legislature was not competent to enact such

provision within the limits of the authority exercisable by

it under the Constitution. This raises a point of some

importance which requires to be examined carefully.

1073

It is not disputed before us that if the contribution

that is levied under section 58 is a tax, a legislation

regarding it would be beyond the competence of the State

Legislature. Entries 46 to 62 of List II in Schedule VII of

the Constitution specify the different kinds of taxes and

duties in regard to which the State Legislature is empowered

to legislate and a tax of the particular type that we have

here is not covered by any one of them. It does not come

also under any specific entry in List III or even of List I.

The position, therefore, is that if the imposition is held

to be a tax, it could come either under entry 97 of List I,

which includes taxes not mentioned in Lists II and III or

under article 248 (1) of the Constitution and in either case

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it is Parliament alone that has the competency to legislate

upon the subject. If, on the other hand, the imposition

could be regarded as "fees", it can be brought under entry

47 of the Concurrent List, the Act itself being a

legislation under entries 10 and 28 of that List. The whole

controversy thus centers round a point as to whether the

contribution leviable under section 50 is a fee or tax and

what in fact are the indicia and characteristics of a fee

which distinguish it from a tax. This identical question

came up for consideration before this court in Civil Appeal

No. 38 of 1953 referred to above, in, connection with the

provision of section 76 of the Madras Religious and

Charitable Endowments Act, and the view which we have taken

in that case regarding the proper criterion for determining

whether an imposition is a fee or tax is in substantial

agreement with the view taken by the Bombay High Court in

the present case.. As the matter has been discussed at some

length in the Madras case, it will not be necessary to

repeat the same discussions 'over again. It will be enough

if we indicate the salient principles that were enunciated

by this court in its judgment in the Madras case mentioned

above.

We may start by saying that although there is no

generic difference between a tax and a fee and in fact they

are only different forms in which the taxing power of a

State manifests itself, our Constitution has, in fact, made

a distinction between a tax and a fee for,

1074

legislative purposes. While there are various entries in

the three legislative lists with regard to various forms of

taxation, there is an entry at the end of each one of these

lists as regards fees' which could be levied in respect of

every one of the matters that are included therein .This

distinction is further evidenced by the provisions of the

Constitution relating to Money Bills which areembodied in

articles 110 and 199. Both these articles provide that a

bill should not be deemed to be a Money Bill by reason only

that it provides for the imposition of fines or for the

demand or payment of fees for licences or fees for services

rendered, whereas a bill relating to imposition, abolition

or regulation of a tax would always be recckoned as a Money

Bill. There is no doubt that a fee resembles a tax in many

respects and the question which presents difficulty is, what

is the proper test by which the one could be distinguished

from the other? A tax is undoubtedly in the nature of a

compulsory exaction of money by a public authority for

public purposes, the payment of which is enforced by law.

But the other and equally important characteristic of a tax

is, that the imposition is made for public purpose to meet

the general expenses of the State without reference to any

special advantage to be conferred upon the payers of the

tax. It follows, therefore, that although a tax may be

levied upon particular classes of persons or particular

kinds of property, it is imposed not to confer any special

benefit upon individual -persons and the collections are all

merged in the general revenue of the State to be applied for

general public purposes. Tax is a common burden and the

only return which the taxpayer gets is participation in the

common benefits of the State. Feees on the other hand, are

payments primarily in the public interest, but for some

special service rendered or some special work done for the

benefit of those from whom the payments are demanded. Thus

in fees there is always an element of quid pro quo which is

absent in a tax. It may not be possible to prove in every

case that the fees that are collected by the Government

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approximate to the expenses that are incurred by it in

rendering any particular kind of services or in

1075

performing any particular work for the benefit of certain

individuals. But in order that the collections made by the

Government can rank as fees, there must be co-relation

between the levy imposed and the expenses incurred by the

State for the purpose of rendering such services. This can

be proved by showing that on the face of the legislative

provision itself, the collections are not merged in the

general revenue but are set apart and appropriated for

rendering these services. Thus two elements are essential

in order that a payment may be regarded as a fee. In the

first place, it must be levied in consideration of certain

services which the individuals accepted either willingly or

unwillingly and in the second place, the amount collected

must be ear-marked to meet the expenses of rendering these

services and must not go to the general revenue of the State

to be spent for general public purposes. As has been

pointed out in the Madras case mentioned above, too much

stress should not be laid on the presence or absence of what

has been called the Coercive element. It is not correct to

say that as distinguished from taxation which is compuslory

payment, the payment of fees is always voluntary, it being a

matter of choice with individuals either to accept the

service or not for which fees are to be paid. We may cite

for example the case of a licence fee for a motor car. It

is argued that this would be a fee and not a tax, as it is

optional with a person either to own a motor car or not and

in case be does not choose to have a motor car, he need not

pay any fees at all. But the same argument can be applied

in the case of a house tax or land tax. Such taxes are

levied only on those people who own lands or houses and it

could be said with equal propriety that a man need not own

any house or land and in that event he could avoid the

payment of these taxes. In the second place, even if the

payment of a motor licence fee is a voluntary payment, it

can still be regarded as a tax if the fees that are realised

on motor licences have no relation to the expenses that the

Government incurs in keeping an office or bureau for the

granting of licences and the collections are not

appropriated for that purpose but

1076

go to the general revenue. Judging by this test, it appears

to us that the High Court was perfectly right in holding

that the contributions imposed under section 58 of the

Bombay Public Trusts Act are really feEs and not taxes. In

the first place, the contributions, which are collected

under section 58, are to be credited to the Public Trusts

Administration Fund as constituted under section 57. This

is a special fund which is to be applied exclusively for

payment of charges for expenses incidental to the regulation

of public trusts and for carrying into effect the provisions

of the Act. It vests in the Charity Commissioner and the

custody and investments of the moneY belonging to the funD

and the disbursement and pAyment therefrom are to be

effected not in the manner in which general revenues are

disbursed, but in the way prescribed by the rules made under

the Act. The collections, therefore, are not merged in the

general revenue, but they axe earmarked and set apart for

this particular purpose. it is true that under section 6A of

the Act, the officers and servants appointed under the Act

are to draw their pay and allowances from the Consolidated

Fund of the State but we agree with what has been said by

Mr. Justice Shah of the Bombay High Court that this

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provision is made only for the purpose of facilitating the

administration and not with a view to mix up the fund with

the general revenue, collected for Government purposes.

This would be clear from the provision of section 6B which

provides that out of. the Public Trusts Administration Fund

all the costs, which the State Government may determine on

account of pay, pension, leave and other allowances of all.

the officers appointed under this Act, shall ' be paid. It

is the Public Trusts Administration Fund, therefore, which

meets all the expenses of the administration of trust

property within the scheme of the Act, and it is to meet the

expenses of this administration that these collections are

levied. As has been said by the learned Judges of the High

Court, according to the concept of a modern State, it is

-not necessary that services should be rendered only at the

request of particular people, it is enough that payments are

demanded for

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rendering services which the State considers beneficial in

the public interests and which the people have to accept

whether they are willing or not. Our conclusion, therefore,

is that section 58 is not ultra vires of the State

Legislature by reason of the fact that it is not a tax but a

fee which comes within the purview of entry 47 of List III

in Schedule VII of the Constitution.

The result, therefore, is that in our opinion the appeals

are allowed only in part and a mandamus will issue in each

of these cases restraining the State Government and the

Charity Commissioner from enforcing against the appellants

the following provisions of the Act to wit :-

(i) Section 44 of the Act to the extent that it

relates to the appointment of the Charity Commissioner as a

trustee of religious public trust by the court,

(ii) the provisions of clauses (3) to (6) of section

47, and

(iii) clause (c) of section 55 and the part of clause

(1) of section 56 corresponding thereto.

The other prayers of the appellants stand dismissed.

Each party will bear hi own costs in both the appeals.