Court rules that internal trust disputes and administrative delays cannot justify withholding social welfare grants, directs payment for 2000-2013 period
In a significant judgment dated August 12, 2026, the Bombay High Court (Aurangabad Bench, Division Bench) directed the Union of India to disburse withheld grant-in-aid funds to Balaji Yuvak Mandal, a trust running a residential school for Scheduled Caste students under a central social welfare scheme. The court held that a dispute between office bearers of the trust and delays caused by state authorities were not valid reasons for withholding grants, which frustrated the very purpose of the scheme aimed at uplifting Scheduled Caste students.
Background:
Balaji Yuvak Mandal, registered under the Maharashtra Public Trusts Act and the Societies Registration Act, was identified as a project operator under the ‘Aid to voluntary organizations working for Scheduled Caste for residential schools’ scheme of the Union of India. The trust successfully operated the ‘Central Scheduled Caste Residential Ashram School’ initially in Osmanabad and later at Loha, Nanded. The Union of India had been releasing grants to the petitioner for several years until 1999-2000 but withheld payments for the years 2000-2001, 2001-2002, 2002-2003, and from 2005-2006 onwards, citing a dispute between two office bearers of the trust and procedural delays.
Key Findings of the Court:
- The dispute between two office bearers, Mr. Ashok Dhondiram Kandgire and Mr. Tukaram Arjun Rao Buddhe, was the sole ground stated for withholding the grants. The petitioner demonstrated through official communications that no such dispute persisted. The Charity Commissioner had also clarified the absence of any ongoing dispute.
- Inspection reports by the District Social Welfare Officer from 2006 to 2013 consistently found the school functioning satisfactorily and recommended grant disbursement every year. No deficiencies or adverse remarks were reported against the institution.
- The petitioner continued to run the school despite non-receipt of funds, even taking loans on private property to maintain operations, until closure in December 2022 due to financial constraints.
- The State Government’s role was limited as a nodal agency to recommend proposals to the Union of India. Delay in forwarding recommendations or procedural lapses by the State authorities could not penalize the petitioner.
- The Union of India’s defense that the claims were time-barred under the General Financial Rules, 2017 was rejected since the delay was attributable to administrative processes beyond the petitioner’s control.
- The court distinguished the present case from precedents where grants were denied due to non-eligibility or non-compliance, emphasizing that the scheme itself mandates grant disbursement for running such residential schools.
- Relying on the Supreme Court’s decision in Andi Mukta Sadguru Shree Muktajee VSSJMST v. V.R. Rudani (1989 AIR SC 1607), the court exercised its writ jurisdiction under Articles 12 and 226 of the Constitution to ensure the petitioner’s entitlement to the grant.
Order Passed:
The Bombay High Court partly allowed the writ petition and directed the Union of India to disburse the pending grants for the periods 2000-2001, 2001-2002, 2002-2003, and from 2005-2006 to 2012-2013 within 12 weeks from the date of the order. The court observed that the petitioner had complied with all requirements and that withholding funds on the ground of internal trust disputes was unjustifiable.
Significance:
This judgment reinforces the principle that administrative or internal organizational disputes cannot be used as a pretext to deny public welfare benefits intended for vulnerable communities. It underscores the judiciary’s proactive role in safeguarding the interests of Scheduled Caste students and ensuring that social welfare schemes achieve their intended objectives without undue procedural hurdles.
Bottom Line:
Grant-in-Aid - Delay in disbursement of grant-in-aid for residential school under social welfare scheme for Scheduled Caste students - Dispute inter-se office bearers not a justifiable ground to withhold grants - Recommendations and inspection reports duly forwarded by State authorities - Grant claims cannot be discarded due to delay caused by State authorities.
Statutory provision(s):
Article 12, Article 226 of the Constitution of India, Maharashtra Public Trusts Act 1950, Societies Registration Act 1860, General Financial Rules 2017
This report captures the essence of the judgment, highlighting the legal reasoning, facts, and the court’s directive, while providing context on the scheme and its beneficiaries.
Balaji Yuvak Mandal v. Union of India, (Bombay)(Aurangabad Bench)(DB) : Law Finder Doc Id # 2960180
