Mumbai, Jan 31: Holding that the Charity Commissioner’s powers are meant for supervision and not for enforcing moral accountability, the Bombay High Court quashed an order directing a Nashik-based school to publish a public apology in two widely circulated newspapers.
Complaint over CBSE affiliation
The apology had been ordered after parents accused the school of misleading them by claiming that it was affiliated with the Central Board of Secondary Education (CBSE).
Limits of Charity Commissioner’s powers
Justice Amit Borkar, on January 29, ruled that Section 41A of the Maharashtra Public Trusts Act gives the Charity Commissioner limited powers to oversee the financial and proprietary administration of public trusts. These powers, the court said, do not extend to addressing grievances that are unconnected with trust property or income.
Justice Borkar explained that Section 41A allows the authority to ensure proper administration of trust property, correct accounting of income, and application of funds towards trust objects. It also permits directions where trust property is in danger of being wasted, damaged, alienated or wrongly disposed of.
‘Proper administration’ clarified
“The phrase ‘proper administration’ cannot be given an unguided meaning. Administration refers to management of trust property, funds, and statutory duties attached thereto. It does not extend to every activity carried on by a trust or every grievance raised against its management,” the judge observed.
He added that if “proper administration” were interpreted in a moral sense, Section 41A would become “an open-ended source of authority, which the legislature has consciously avoided”.
Grievance not linked to trust property
The court noted that in the present case, the complaint before the Charity Commissioner did not allege misuse of trust funds, illegal alienation of property, improper investments, failure to maintain statutory records or breach of fiduciary duties. Instead, the grievance concerned the school’s alleged misrepresentation about CBSE affiliation and its impact on parents and students.
“However serious such grievance may be, it does not touch upon trust property, trust income or statutory financial administration…,” Justice Borkar held.
Apology order set aside
The judge further said that directing the school to issue a public apology did not protect trust property, regulate trust income or ensure statutory compliance. “Section 41A is thus a power of supervision and not of moral correction. Its purpose is to preserve the financial and proprietary aspect of public trusts,” the court said, stressing that any direction under the provision must have a “clear and direct nexus” with trust property or income.
Background of the case
According to the school, its managing body, RB Bohora Educational & Welfare Trust, was registered in 1998 and permitted to establish New Era English School in 1999. The school obtained SSC Board affiliation in 2002. In 2004, following requests from parents, the trust sought CBSE affiliation, but the CBSE rejected the application after an inspection in February 2009, as well as a subsequent appeal.
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Based on these facts, some parents approached the Charity Commissioner, Nashik. The High Court, however, quashed the June 28, 2010 order directing the school to publish a public apology.
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