Maharashtra State’s Charity Commissioner, Mr. Shivkumar. G. Dige has issued show cause notices to 130,000 trusts and De-registered 60,000 trusts for “blatant violation of the Maharashtra Public Trust Act 1950”. The violations mainly include not filing Annual Financial Reports for the last five years and not filing periodic Change Reports in case of change in address, change in properties, change in the trustees governing the trust etc.
Nagpur leads the list of De-registered trusts at 14,853, followed by 8,613 from Latur, 7,528 in Nashik, 6,966 in Aurangabad and 5,167 in Pune. In Mumbai, 4,498 trusts have been de-registered.
Show cause notices have been given to 10,627 in Mumbai, 10,500 in Ahmednagar, 16,280 in Amravati and 10,059 in Pune.
Maharashtra has about 800,000 registered trusts and societies and according to the Charity Commissioner’s office, nearly 300,000 of these are either non-functional, have wound up operations or have remained dormant.
The crackdown seems justifiable
The crackdown began sometime around September 2017 and which came in the wake of a 2016 amendment to the Maharashtra Public Trusts Act 1950 (2016) which authorized the Charity Commissioner to De-register non-functional trusts. Reportedly, nearly half of the organisations whose registrations have been cancelled had applied for closure voluntarily.
Earlier when trustees of small and virtually defunct trusts would approach the Charity Commissioner for voluntary de-registration, the department used to drive them away saying there is no enabling provision under the Maharashtra Public Trusts Act or the Rules there under to windup or dissolve or to de-register a trust. The department used to direct the trustees to a court to obtain an order directing the charity commissioner to windup, dissolve or de-register the defunct trust.
According to Mr. Dighe, who was earlier Principal District Judge at Ratnagiri and Joint Charity Commissioner in Pune and took charge as State Charity Commissioner in August 2017, “the campaign is under way to identify educational, social and other trusts that either do no work or have failed to file their audited accounts”.
In the meanwhile the Charity Commissioner’s office is also digitizing records and has made most if not all compliance, including new registrations, filing of accounts and filing change reports online.
The Charity Commissioner, Maharashtra State, vide Notification: DGIPR/2016-2017/4109 had notified the ‘Special Drive, 2017 Scheme’ for speedy disposal of all Change Reports (Change in Trustees / Properties) during the period 1st January to 31st January 2017. This was a huge success and reportedly around 70,000 Change Reports were speedily disposed.
Thereafter, by Circular dated 22/06/2017, the Charity Commissioner made it mandatory for all the Trusts to submit Trust Accounts online on the website: https://charity.maharashtra.gov.in
Later, vide Circular Notification No. 4082/2017 (Serial 506) dated 01/08/2017, the Charity Commissioner, started a De-Registration Drive of all the non-compliant and erring Trusts. Many regional Dy. / Asst. Charity Commissioner Offices have been given a final opportunity to clear the compliance of Trusts under their jurisdiction during the period 1st October to 31st December 2017.
In the year 2018 we may see many more trusts de-registered. However, the object of this scheme seems to be good. What’s the point having 800,000 trusts with almost fifty per cent not even filing their audited statements of account? This appears to be an exercise in weeding out defunct and non-compliant trusts from those which are active and legally compliant. Genuine and compliant trust need not worry or fear that they will be targeted.
It is pertinent to note that recently even the Ministry of Corporate Affairs (MCA) has cancelled the registration of over 200,000 companies (including quite a few Section 8 companies) which had failed to file their accounts for three years and failure to meet other statutory compliance.