TMI Blog1971 (9) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... now under the Companies Act, 1956, under a licence from the Central Government under section 26 of the Indian Companies Act, 1913, corresponding to section 25 of the Companies Act, 1956, dispensing with the word "Limited" in the name of the mandal. The respondent No. 1 is the Joint Charity Commissioner, State of Maharashtra. The respondent No. 2 was formerly the chairman of the mandal. The order under appeal held that the mandal was a public trust and as such was liable to be registered under section 18 of the Bombay Public Trusts Act, 1950 (hereinafter referred to as "the Public Trusts Act"), as a public trust notwithstanding the fact that it was a corporation. A few facts leading to this litigation may be briefly stated. The mandal app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs on the remaining statutory issues provided for in section 19 of the Public Trusts Act. Against the decision of the Joint Charity Commissioner the mandal appealed to the Bombay City Civil Court. By its order dated 3rd March, 1966, the Bombay City Civil Court dismissed the appeal and upheld the decision of the Joint Charity Commissioner. It is against the said decision that the present appeal has been filed. As I have stated above the mandal is a company limited by guarantee registered under a licence under section 26 of the Indian Companies Act, 1913, corresponding to section 25 of the Companies Act, 1956. It is a corporation and, therefore, a juristic person and a distinct legal entity. This is a well-established proposition from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fidence reposed in and accepted by the owner or declared and accepted by him for the benefit of another. . . . The person who reposes or declares the confidence is called the "author of the trust". The person who accepts the confidence is called the "trustee", and the person for whose benefit the confidence is accepted is called the "beneficiary" and the subject-matter of the trust is called "trust property". In my opinion if a corporation is capable of accepting the ownership of property with an obligation annexed to the ownership for the benefit of another which may be a class of persons, there can be no objection to a corporation acting as a trustee. The only question is whether in this case the mandal has accepted such trust. Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. We must also see if there are other circumstances, if any, pointing to the existence of a public trust. Under section 26 of the Indian Companies Act, 1913, and under section 25 of the Companies Act, 1956, a licence can only be granted by the Central Government if the company is formed for promoting commerce or science, religion, charity or any other useful purpose and intends to apply its profits, if any, or other income in promoting its objects and to prohibit the payment of any dividend to its members. In the case of the mandal the licence granted to it by the Central Government provides that the memorandum of association shall prohibit payment of any dividend to its members. Now, we come to the objects clause in the memorandum of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he property it holds for carrying out the said public religious and charitable purposes and there is in existence a public trust which is liable to be registered under the Public Trusts Act. On behalf of the mandal it was contended that at the time of incorporation of the mandal in 1939, there was no property and, therefore, there could be no public trust. It is true that there is no evidence that in 1939 there was any property of the mandal and it may be that at that time the objects clauses in the memorandum of association only contained an intention that when the property came into existence, it would be held by the mandal in trust for the members of the said community for charitable purposes. But the moment the property came into exis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stered under the Public Trusts Act. In this case, however, the memorandum of association of the mandal expressly provides for holding property in trust for the objects specified in the memorandum, and the beneficiaries are the members of a particular community irrespective of whether they are or are not the members of the mandal. The Division Bench decision has no application to the facts of this case Another contention taken on behalf of the mandal was that if the mandal was compelled to register itself under the Public Trusts Act it will come under dual control and such dual control will create conflict the dual control being of the Companies Act and of the Public Trusts Act. 7 my opinion there is no substance in this contention. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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