1. Introduction :
Various types of organisations are regulated by various
authorities established under the respective legislations. Each regulator’s
office has its own style of functioning. Trusts are governed basically under
two legislations — Indian Trusts Act, 1882 and Bombay Public Trusts Act, 1950
(BPT Act). The regulatory authority is the Charity Commissioner. So also, the
Registrar under the Societies Registration Act, 1860 is the same authority,
viz. Charity Commissioner. In Maharashtra, every society under the
Societies Registration Act is also required to get itself registered as a
trust. This write-up proposes to bring out a peculiar system in the Charity
Commissioner’s (CC) office which causes enormous hardship to the honest social
organisations.
2. The ‘unfair’ practice :
Readers are aware that in respect of other organisations
like companies, partnership firms, etc. the changes in the names, addresses,
etc. of directors, partners as the case may be, are intimated to the ROC/ROF
and in due course of time, the changes get updated in the records of those
regulators. In the CC’s office, even if you submit the changes, etc. in the
particulars of trustees; or any other information about the trust — such as
addresses, alterations in rules and regulations; there is no system or
practice of updating the records. At the same time, when there are occasions
where you need a specific permission from the CC’s office — e.g.,
alienation of immovable property; borrowings, etc. you are required to first
ensure that your record in their office is updated. Thus, if there is a change
in the trustees or managing committee and the changes are duly intimated to
the CC’s office; and if the new trustees approach the CC’s office, they are
not entertained at all, on the ground that their names do not appear in CC’s
records. There were instances where the trusts had to do the exercise for 10
to 35 years ! That is the reason why such permissions may take an inordinately
long time — may be even a couple of years ! It is indeed a herculean task,
often very difficult if not impossible !
3. Reasons :
The probable reasons for such a situation may be numerous :
3.1 Innumerable trusts : Although the formation
process is a little cumbersome and time consuming, the cost of formation is
very meagre. Many people are overenthusiastic in forming such trusts with high
dreams. The initial corpus may be even less than a thousand rupees. Hence,
there is a mushrooming growth. The CC’s office does not have adequate
infrastructure and manpower.
3.2 No filing fee : The intimations to the offices
of ROC & ROF are accompanied by a filing fee. Thus, the administrative cost of
updating the records is largely taken care of. In the CC’s office there is a
yearly contribution payable by every trust — at 2% of its receipts. It is a
separate issue as to how the enormous amount collected so far by the CC’s
office is utilised. The accumulation may be in the vicinity of a few hundred
crores of rupees.
3.3 No incentive to staff : Most of the persons
dealing with the CC’s office on behalf of the trusts are supposed to be
‘social workers’. Many of them may not have resources and willingness to spend
on paperwork, etc. The staff may not have motivation to render service.
4. Some thoughts :
4.1 A few of the states have taken a practical and sensible
decision not to regulate the charities at all. I am told, the Karnataka State
does not have any legislation parallel to our BPT Act.
4.2 Since the year 2000, all companies were required to
have a minimum paid-up capital — i.e., Rs. one lakh for private limited
and Rs. five lakhs for public limited companies. A similar requirement may be
brought in respect of the basic corpus.
4.3 A small filing fee may be introduced for registering
all the changes.
4.4 Weeding out process may be carried out on a mass scale.
The trusts who have not sent any communication to the CC’s office for past,
say, 10 years, may be de-registered.
4.5 There are many trusts which were registered 30 to 40
years ago and have been defunct for 10 to 15 years. The trustees may be
planning to revive the activities. The present system is a serious deterrent
for the well-intentioned trustees. An amnesty scheme may be introduced and
only the present position may be taken on record by prescribing some
procedures — like affidavits, indemnity bonds, etc.
