Supreme Court: The present appeals filed upon a certificate granted by the Allahabad High Court (‘the High Court’), arose out of three suits which were filed by certain residents of the town of Amroha against respondent-Syed Mehdi Raza, the mutawalli of three trusts created by three different persons and the following reliefs were claimed (i) respondent’s removal from mutawalliship, (ii) appointment of new mutawallis, (iii) framing of a scheme of management of the waqf and (iv) rendition of accounts. The 4-Judges Bench of M.C. Mahajan*, CJ., and S.R. Das, N.H. Bhagwati, and T.L. Venkatarama Ayyar, JJ., held that the estate of the deceased mutawalli was responsible for any sums misappropriated by him, however, in the present case, in the absence of proof of such misappropriation, estate was not held responsible. It was further held that merely because the tenant sub-lets the property of wakf at a higher price, it could not be inferred that the mutawalli misappropriated the funds.
Background
The District Judge decreed the suits for respondent’s removal from mutawalliship and for the framing of a scheme of management. The claim for rendition of accounts was dismissed and a decree for Rs 2500 was passed against respondent for the amount that was misappropriated by him. Against these decrees, appeals were preferred before the High Court and by a judgment dated 18-04-1941, the High Court allowed the appeals filed by respondent and dismissed the three suits in their entirety and held that none of the charges against respondent had been established. Thereafter, an application was made before the High Court for leave to appeal to the Privy Council, which was granted but before the record could be transmitted to the Privy Council, respondent died on 18-08-1948.
On 05-11-1948, appellant made an application to the High Court for substitution of the names of his heirs, stepbrothers-Syed Hakim Raza and Syed Imam Raza, stepsister-Amina Khatun, and deceased’s widow-Sabira Khatun. One of the heirs filed an affidavit stating that the said stepbrothers had succeeded respondent as mutawallis and the succeeding mutawallis should be impleaded in place of respondent and that the heirs were unnecessary parties in the appeals. Thus, the HIgh Court granted the applications and directed the heirs and the new mutawallis to be brought on the record. Thereafter, an appeal was filed before the Supreme Court.
Analysis, Law, and Decision
The Supreme Court noted that during the pendency of the present case, the United Provinces Muslim Waqfs Act, 1936 (‘the 1936 Act’) came into force. The Supreme Court stated that under the 1936 Act vast powers were given for management of waqfs in the United Provinces to a Central Board (‘the Board’) that had to be constituted under Section 8 of the 1936 Act and the Board was given wide powers to manage or supervise the trusts under Section 18 of the 1936 Act.
The Supreme Court stated that the two new mutawallis who claimed to have been appointed according to the terms of the waqf deeds were managing the waqfs since their appointment date.
The Supreme Court stated that if there was any flaw in appellant’s appointment then the matter could be agitated in a fresh suit. The Supreme Court further opined that in the absence of any allegation that the trust was being mismanaged by these persons or that there existed any grounds to deprive them of their management, especially when a statutory authority was charged with the supervision of these trusts and that the authority had lodged no complaint before this Court, it was not a fit and proper case for framing a scheme for these trusts at the present stage. The Supreme Court thus rejected the contention that even if breaches of trust were not proved against the new trustees, a scheme could be framed.
The Supreme Court accepted the contention that the estate of the deceased mutawalli was responsible for any sums misappropriated by him but opined that he could only succeed when it was proved that he misappropriated any sums. The Supreme Court noted that the High Court was satisfied that the deceased mutawalli could not be held guilty of misappropriation in respect of any money belonging to the three waqfs.
The Supreme Court took note of the contention made by counsel for appellants that by creating occupancy rights in trust properties in favour of Imam Raza and in favour of Syed Farzand Husain, namely, in 2148 bighas of land for a yearly rent of Rs 1400 in the years 1932 and 1933, the deceased mutawalli caused loss to the trust to a very large extent. The Supreme Court noted that the High Court opined that the rents for land during that period were very low, and the land was not profitable. It was held that the tenants in possession of the lands were not paying the rents to the mutawalli, and he found it difficult to recover arrears of rent and that he acted fairly in exercising his powers of management to lease these lands to Imam Raza and to Farzand Husain.
The Supreme Court opined that the mere circumstance that they sub-let the land to the same tenants on more favourable terms did not prove that the act of the mutawalli was not an act of proper management or that it amounted to misappropriation. The Supreme Court stated that the material on the record was not sufficient to find that the creation of the occupancy rights in favour of Imam Raza and Farzand Husain, amounted to breach of trust or that on this account the trust lost certain sums of money.
The Supreme Court did not accept the contention that the deceased mutawalli drew salary in excess of the amount fixed in the three waqf deeds for him, i.e., he was supposed to draw a salary of Rs 58 a month, but he drew Rs 125 and thus committed breach of trust. The Supreme Court stated that regarding this contention there was no finding given either by the trial court or by the High Court. The Supreme Court also stated that respondent’s statement from which the counsel sought to draw an inference was also not clear and unambiguous and no such charge was levelled against him.
The Supreme Court further took note of the contention that in the accounts produced by the mutawalli he had only shown the income from nine items of land which were in his possession as a mutawalli and that from the list of properties annexed to the tauliatnama it appeared that the income derived by him from large number of lands was not accounted for. The Supreme Court stated that in respect to this contention, the only evidence in support were certain khatauni papers filed by appellants and the person who prepared those papers had not come into the witness box to depose to the correctness of the papers and their relevancy on the point of the income actually drawn by the mutawalli.
The Supreme Court opined that no question regarding this was put to the mutawalli when he was in the witness box and an enquiry could easily be made from him in the witness box as to what happened to the lands of which mention was not made in the accounts. Further, appellants led no evidence as to the amount of income that these lands of which mention was not made in the accounts produced and this matter was not specifically raised or agitated in the trial court nor in the court of appeal.
The Supreme Court thus dismissed the appeals with costs.
[Syed Jamil Hassan v. Syed Mehdi Raza, , decided on 02-11-1954]
*Judgment authored by: Chief Justice M.C. Mahajan
Advocates who appeared in this case :
For the Appellants: Achhru Ram, Senior Advocate (Rameshwar Nath and Rajinder Narain, Advocates, with him), for the Appellants;
For the Respondent: Nurruddin Ahmad, Senior Advocate (B.P. Maheswari, Advocate, with him), for the Respondent.
**Note: Misappropriation of funds by Mutawalli
One of the key figures in the administration and management of waqf properties is Mutawalli, who is the person appointed to oversee the waqf and ensure that the terms of the waqf deed are fulfilled. A Mutawalli is essentially the manager or caretaker of a waqf and is entrusted with managing the property, maintaining it, and ensuring that the beneficiaries receive the intended benefits. Their powers and duties are extensive but are also limited by the fact that they do not have ownership rights over the property. One of the grounds for removal of mutawalli is misappropriation of funds, that is, if the Mutawalli uses the waqf’s funds for personal purposes or engages in other forms of financial misconduct, they can be removed by the Waqf Board.
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