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Act amendment plan irks charitable trusts

Our Banking Bureau  |  Mumbai 

Charitable trusts which run hospitals, and educational and religious institutions have raised a hue and cry over the proposed amendments to the Bombay Public Trusts Act,
What has got them worked up is that the state will be empowered to appoint executive officers in trusts, whose annual income is over Rs 5 lakh.
Besides interference in their functioning and diversion of funds, the trusts fear that their lands may be appropriated by the state.
M L Bhakta, senior advocate, said: "The recommendation of the State Law Commission for the appointment of an executive officer with supreme veto power could prove detrimental to the trusts. Some rich religious trusts are even contemplating of challenging the recommendations or moving their headquarters to other states."
Speaking on behalf of public charitable trusts in the state, Indian Merchants' Chamber president said, "If the recommendations of the commission are accepted, the government could assume direct control over the public charitable trusts, which is undemocratic."
"This is a negative signal for those who want to do charity work like opening schools, colleges and hospitals," he said and added that the possibility of any hidden agenda could not be ruled out.
The Maharashtra Law Commission's 13th report on the Act to the government recommends that every public trust will be required to adopt a constitution on the lines of the model constitution suggested by the commission.
Such constitution will override the provisions of the 'Instrument of Trust'.
The Indian Merchants' Chamber, which has taken up cudgels on behalf of the trusts, has taken the stand that having a constitution or by-laws may be desirable only where the trust deed is poorly drafted and/or is silent on key issues concerning trust administration and governance.
However, in cases where the trust deed is properly drafted it would be meaningless and superfluous to have an additional constitution.
"Moreover, such constitution cannot override the Instrument of Trust, which gives effect to the original intentions of the founders or the settlers of the Trust," said Rupani.

First Published: Fri, June 11 2004. 00:00 IST