Expressing concern over instances of individuals and private firms collecting funds in the name of social causes, the Bombay high court (HC) has directed the state government to come up with a mechanism to regulate such activities.
A division bench of justice AS Oka and justice AS Gadkari also directed the state to ensure the public is made aware of the law regarding such collections, and of the penal provisions in case of misappropriation of the funds, through circulars, advertisements, and other means.
The court’s orders followed a PIL seeking action against a private unregistered trust, Warana Bhartiya Sena Madat Nidhi, which had been collecting funds on pretext of rehabilitating Kargil war widows but had failed to appropriate the funds.
According to the PIL, the trust had put up banners calling for donations and collected over Rs90 lakh. However, only around Rs6 lakh reached some of the war widows.
After the matter was brought to court, it directed the trust to deposit the remaining amount with the court. It also directed the registrar to issue a cheque of the amount for a welfare fund set up by the defence ministry for Kargil martyrs and widows. The court also asked the charity commissioner to hold an audit of the trust’s accounts, which did not detect misappropriation.
The court ruled there were several instances where unauthorised trusts collect money from the public and the state failed to take appropriate action. It also directed the state to amend the provisions of the Bombay Public Trusts Act, 1950, to incorporate stringent penalties for offenders.
“Citizens should be made aware of the control retained by charity organisations on such donations. A circular informing the public about the legal implications of such collections must be issued and be given wide publicity. The state shall constitute a committee to suggest amendments to the Bombay Public Trusts Act,” the court said.
The state has been directed to file a compliance report in the matter by July 31.