Supreme Court clarifies the distinction between Wakf and Public Trust: Maharashtra State Board of Wakfs vs. Shaikh Yusuf Bhai Chawla & Ors. (20 October 2022)

Introduction

Date of the Judgment: 20 October 2022
Citation: (2022) INSC 925
Judges: K.M. Joseph J. and Hrishikesh Roy J.

Can a property dedicated by a Muslim for charitable purposes be automatically classified as a Wakf, or can it also be considered a Public Trust? The Supreme Court of India addressed this complex question in a recent judgment, clarifying the differences between these two types of endowments. This case arose from a series of appeals challenging a High Court decision that had questioned the validity of the Maharashtra State Board of Wakfs and its actions in classifying various properties. The Supreme Court bench consisted of Justices K.M. Joseph and Hrishikesh Roy.

Case Background

The case originated from a series of events following the enactment of the Wakf Act, 1995. The State of Maharashtra appointed a Survey Commissioner in 1997 to identify Wakf properties. A Wakf Tribunal was established in 2000, and the Maharashtra State Board of Wakfs was formed in 2002. The core dispute emerged from the question of whether certain properties registered as Public Trusts under the Bombay Public Trust Act, 1950, were actually Wakfs under Muslim law. The Charity Commissioner issued a circular in 2003 stating that Wakfs registered as Public Trusts should not be tried under the Bombay Public Trust Act. This led to several writ petitions challenging the circular and the constitution of the Wakf Board. The High Court eventually stayed the circular, leading to further legal proceedings.

Timeline

Course of Proceedings

The High Court considered four main issues: the legality of the Board’s incorporation, the legality of its constitution, the validity of the published list of Wakfs, and the impact of the Bombay Public Trust Act, 1950. The High Court found that the Board’s incorporation was illegal because it was not preceded by a proper survey of Wakfs. It also noted that the Board was not properly constituted, as it had only two members instead of the required minimum of seven. The High Court also criticized the publication of the list of Wakfs, citing a report from the Joint Parliamentary Committee (JPC) that highlighted flaws in the survey. The High Court also took into account the formation of a Bifurcation Committee, which identified certain public trusts as being distinct from Wakfs. The High Court also ordered a resurvey, allowing the writ petitioners to present the committee’s report to the Survey Commissioner, and made observations on the impact of the 1950 Act.

Legal Framework

The case primarily involves the interpretation of the Wakf Act, 1995, and its interaction with the Bombay Public Trust Act, 1950. The Wakf Act, 1995, defines a Wakf as a permanent dedication of movable or immovable property by a person professing Islam for any purpose recognized by Muslim law as pious, religious, or charitable. This includes Wakfs by user, grants, and Wakf-alal-aulad. Section 4 of the Wakf Act, 1995, provides for a preliminary survey of auqaf (Wakf properties) by a Survey Commissioner. Section 5 mandates the publication of a list of auqaf based on the survey report. Section 13 of the Wakf Act, 1995 provides for the incorporation of the Board of Auqaf. Section 40 of the Wakf Act, 1995, empowers the Board to decide if a property is Wakf property. Section 43 of the Wakf Act, 1995, states that Wakfs registered before the commencement of the Act are deemed to be registered under the Act. The Bombay Public Trust Act, 1950, defines a Public Trust as an express or constructive trust for a public religious or charitable purpose, including a Wakf.

Section 43 of the Wakf Act, 1995 states:

“Sec. 43 Wakfs registered before the commencement of the Act demand to be registered – Notwithstanding anything contained in this Chapter, where any wakf has been registered before the commencement of this Act, under any law for the time being in force, it shall not be necessary to register the Wakf under the provisions of this Act and any such registration made before such commencement shall be deemed to be a registration made under this Act.”

Arguments

Appellant’s Arguments:

• The Board’s incorporation was valid and did not need to be preceded by a survey.
• Section 13(2) of the Wakf Act, 1995, does not mandate separate boards for Sunni and Shia Wakfs even if the percentage of Shia Wakfs exceeds 15%.
• The Wakf Act, 1954, being a self-contained code, impliedly repealed the Bombay Public Trust Act, 1950, due to repugnancy.
• The survey was conducted as per law, and the JPC report did not invalidate the list of Wakfs.
• The issue of whether an institution is a Wakf or a Public Trust should be decided by the Wakf Tribunal, not the High Court.
• The corrigendum issued on 05.05.2005, which reduced the number of Wakfs included in the original list, was wrongly done and was rightly rectified.
• Section 112 of the Wakf Act, 1995, repeals the law in relation to Wakfs in the 1950 Act.
• The report under Section 4 of the Wakf Act, 1995, is purely preliminary and does not affect any legal rights.
• The amendment to the definition of ‘beneficiary’ in Section 3(a) of the Wakf Act, 1954, and its continuation in the 1995 Act, removed the basis for distinguishing between Wakfs and Public Trusts.
• Natural justice was not violated as questionnaires were dispatched during the survey.
• Wakfs registered under any law are deemed registered under Section 43 of the Wakf Act, 1995.

Respondent’s Arguments:

• The Board’s incorporation was illegal as it was done before the survey, which is required to determine the need for separate Sunni and Shia Boards.
• The Wakf Board was not properly constituted, as it did not have the minimum seven members.
• The list of Wakfs published on 13.11.2003 was flawed, based on the JPC report and the flawed survey.
• The Bifurcation Committee, which had the Government’s blessings, correctly identified some Public Trusts as distinct from Wakfs.
• The survey report did not have a separate list of Shia Wakfs in 21 out of 34 districts.
• Several Muslim Trusts governed by common law were wrongly included in the survey report as Wakfs.
• The survey report failed to indicate the gross income of 15,436 out of 19,987 Wakfs under survey.
• A clear distinction exists between a Public Trust and a Wakf, with different legal attributes.
• A Muslim can create a public charitable trust, and not all trusts created by Muslims are Wakfs.
• The Mutawalli has no ownership rights in Wakf property, unlike a Trustee.
• The 1950 Act is a secular law, and a person cannot be compelled to follow customary law and be deprived of his rights under secular law to create charity.
• Section 43 of the Wakf Act, 1995, only provides that a Wakf already registered does not need to register again, not that a Muslim Public Trust becomes a Wakf.
• The survey report failed to indicate the gross income in respect of 15436 Wakf out of 19987 Wakfs under survey.
• The list notified on 13.11.2003 was afflicted with various discrepancies.
• The Board was not functional, as on the date of the Notification dated 13.11.2003, the Board consisted of only Government nominees.
• There must be a proper finding about the institution being a Wakf, even at the hands of the surveyor.
• The Act does not aim at codifying of the Muslim personnel law relating to Wakf at all. The Act merely provides for the creation of an administration or the machinery for proper administration of Wakfs.
• Charity is permissible and possible for a Muslim without the creation of a Wakf.

Submissions Table:

Issues Framed by the Supreme Court

The Supreme Court considered the following issues:

1. Whether the incorporation of the Wakf Board was illegal.
2. Whether the constitution of the Board was in accordance with the law.
3. Whether the list of Wakfs published by the Board was valid.
4. Whether the High Court was right in interfering with the proceedings and the list of Wakfs.
5. Whether the High Court was right in holding that the 1950 Act would continue to apply to Public Trusts.
6. Whether the survey which was conducted in the case under Section 4 was valid.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered several cases and legal provisions:

Legal Provisions:

• Wakf Act, 1995: Sections 2, 3(a), 3(c), 3(r), 4, 5, 6, 7, 8, 9, 13, 14, 15, 16, 17, 19, 20, 22, 32, 36, 39, 40, 41, 43, 51, 52, 97, 102, 103, 104, 104A, 104B, 112
• Bombay Public Trust Act, 1950: Sections 2(13), 2(19), 9, 28, 36, 37, 38, 41A to 41E, 79, 85, 86, 87
• Indian Trusts Act, 1882: Sections 1, 37
• Charitable Uses Act 1601
• Charities Act, 1993

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Supreme Court relied on Nawab Zain Yar Jung (Since Deceased) and Others v. Director of Endowments and Another [AIR 1963 SC 985]* to emphasize the distinction between a Wakf and a Public Trust.
• The Supreme Court followed Mohd. Khasim v. Mohd. Dastagir and Others [(2006) 13 SCC 497]* to further cement the distinction between a Wakf and a Public Trust.
• The Supreme Court referred to Board of Muslim Wakfs, Rajasthan v. Radha Kishan and Others [(1979) 2 SCC 468]* to understand the scope of a survey under the Wakf Act.

What weighed in the mind of the Court?

The Supreme Court’s reasoning was primarily influenced by the need to balance the regulatory framework of the Wakf Act, 1995, with the established legal principles differentiating a Wakf from a Public Trust. The Court emphasized that a survey is not a prerequisite for the incorporation of a Wakf Board and that Section 13(2) does not impose a mandatory duty to form separate boards for Sunni and Shia Wakfs. The Court also recognized the flaws in the survey but upheld the list of Wakfs subject to certain directions, acknowledging the need for a balance between the need for regulation and the rights of those registered as Public Trusts. The court was also concerned about the long passage of time and the need to bring closure to the litigation.

Fact:Law:

Logical Reasoning:

Final Decision

The Supreme Court partially allowed the appeals, setting aside the High Court’s judgment in part. The Court upheld the incorporation of the Wakf Board and did not find its constitution to be illegal. The Court upheld the lists of Wakfs dated 13.11.2003 and 30.12.2004, subject to the following directions:

• The Wakf Board is to make a list of all Wakfs registered under the Wakf Act, 1995.
• The Wakf Board is to make a list of all Public Trusts registered under the Bombay Public Trust Act, 1950, which are also claiming to be Wakfs.
• The Wakf Board is to issue notices to the Public Trusts mentioned in the second list, requiring them to file applications before the Wakf Tribunal within six months for a declaration that the property is Wakf property.
• The Wakf Tribunal is to decide the applications filed by the Public Trusts after giving them an opportunity to be heard.
• The High Court was directed to dispose of the pending cases expeditiously.

The Court clarified that the Bombay Public Trust Act, 1950, would continue to apply to Public Trusts, and not all trusts created by Muslims are Wakfs.

Key takeaways:

• The Supreme Court clarified that a survey is not a prerequisite for the incorporation of a Wakf Board.
• The Supreme Court emphasized the distinction between a Wakf and a Public Trust, and that not all trusts created by Muslims are Wakfs.
• The Supreme Court upheld the lists of Wakfs published by the Board but directed the Wakf Board to allow Public Trusts claiming to be Wakfs to approach the Wakf Tribunal for adjudication.
• The Supreme Court clarified that the Bombay Public Trust Act, 1950, would continue to apply to Public Trusts.