RATILAL PANACHAND GANDHI vs THE STATE OF BOMBAY AND OTHERS.(and connected appeal)

The Supreme Court held that Section 44 of the Bombay Public Trust Act, 1950, which allows the appointment of the Charity Commissioner as a trustee of any public trust without reservations for religious institutions, is unconstitutional. Additionally, clauses (3) to (6) of Section 47, concerning the appointment of the Charity Commissioner as a trustee of religious trusts, were also deemed unconstitutional. The Court affirmed that religious sects have the constitutional right to manage their own affairs, including the use of trust property for religious purposes, thus invalidating provisions that allow for diversion of trust funds by the Charity Commissioner or courts. However, Section 58 of the Act was upheld as it imposes a fee, not a tax, falling within the legislative competence of the State Legislature under Entry 47 of List III of the Constitution.