State of Bihar v. Charusila Dasi, AIR 1959 SC 1002

Bench:

• Chief Justice S.R. Das
• Justice S.K. Das
• Justice P.B. Gajendragadkar
• Justice K.N. Wanchoo
• Justice M. Hidayatullah

Facts:

Charusila Dasi, the widow of Akshaya Kumar Ghose, created the “Srimati Charusila Trust” in 1938 through a trust deed. She owned several properties, including land and buildings in Deoghar, Bihar (Schedules B and C), and properties in Calcutta (Schedule D), amounting to an estimated value of ₹8,50,000, generating an annual income of about ₹87,839. The trust was primarily aimed at constructing and maintaining two temples—one for Lord Shiva and another for Goddess Lakshmi Narayan—as well as a charitable hospital for Hindu women in Deoghar.

The trust deed provided specific instructions:

1. Completion of temple construction and installation of the deity “Iswar Srigopal” and a marble image of Sri Balanand Brahmachari.
2. Conduct of religious rituals and festivals for the deities with an annual expenditure of ₹13,600.
3. Establishment of the “Akshaya Kumar Female Hospital” and an outdoor dispensary in Deoghar, with an annual expenditure of ₹12,000 for healthcare services.

The Bihar State Board of Religious Trusts, under the Bihar Hindu Religious Trusts Act, 1950, issued a notice under Section 59 of the Act, requiring Charusila Dasi to submit details regarding the trust. She refused, claiming that the trust was private and outside the jurisdiction of the Act. The Board insisted that the trust was public and subject to the Act. Subsequently, a demand was made under Section 70 to levy a fee on the trust. Charusila Dasi filed a writ petition in the Patna High Court under Article 226, seeking to quash the proceedings, arguing that:

1. The trust was private and beyond the scope of the Act.
2. The Act itself was unconstitutional as it interfered with her fundamental rights under Article 19.

The Patna High Court ruled in her favor, quashing the Board’s proceedings and holding that the trust was private and not subject to the Act. The State of Bihar appealed to the Supreme Court.

Issues:

1. Whether the Srimati Charusila Trust was a private or a public religious trust.
2. Whether the Bihar Hindu Religious Trusts Act, 1950, could regulate trusts with properties located outside Bihar.

Arguments:

• Petitioner’s (State of Bihar) Arguments: The trust was created for religious and charitable purposes and had a public element, making it a public religious trust under the Act. Since the temples were located in Bihar and served the local Hindu community, the trust was subject to state regulation. The Act could be applied based on the doctrine of territorial nexus since a significant portion of the trust’s assets were in Bihar.
• Respondent’s (Charusila Dasi) Arguments: The trust was established solely for the worship of a family deity and was, therefore, a private trust. The Act could not apply to the trust since its properties extended beyond Bihar, making it extra-territorial and beyond the Bihar Legislature’s power. The Act violated her fundamental rights by interfering with private religious endowments.

Ratio Decidendi:

• Public vs. Private Religious Trusts: The Supreme Court held that a trust intended for the benefit of the public, particularly for religious and charitable purposes, is a public trust. Since the temples and hospital were intended for public use, the Srimati Charusila Trust was classified as a public religious trust.
• Application of the Bihar Hindu Religious Trusts Act, 1950: The Court ruled that the Act applied to all religious trusts with properties in Bihar, even if they owned assets outside the state. The doctrine of territorial nexus justified Bihar’s authority to regulate the trust.
• Legislative Competence: The Bihar Legislature had the power under Article 245 of the Constitution to legislate for matters within its territory. Since the trust’s main religious endowments were in Bihar, the Act validly applied to it.

Observations:

• The Court emphasized that Hindu religious trusts are often intended for public purposes, even if they originate as family endowments.
• The doctrine of territorial nexus applies when a trust has substantial assets or activities within a state’s jurisdiction.
• The Court distinguished between private trusts for family worship and public trusts that involve community participation in religious or charitable activities.

Decision:

The Supreme Court reversed the Patna High Court’s ruling, holding that the Srimati Charusila Trust was a public religious trust and was subject to the Bihar Hindu Religious Trusts Act, 1950. The appeal was allowed, and the Board’s actions were upheld.

Important Terms:

1. Private vs. Public Religious Trusts: A private religious trust serves a specific family, while a public religious trust benefits a wider religious community.
2. Bihar Hindu Religious Trusts Act, 1950: Legislation to regulate Hindu religious trusts in Bihar, ensuring transparency and accountability.
3. Doctrine of Territorial Nexus: A legal principle allowing a state to regulate entities with a substantial connection (nexus) to its territory, even if parts of their assets lie outside the state.
4. Article 245 of the Constitution: Grants legislative power to Parliament and State Legislatures within their respective territories.
5. Certiorari and Prohibition: Writs used to quash illegal administrative actions and prevent overreach by authorities.