SUPREME COURT OF INDIA
(From the High Court of M.P at Indore)
UDAY UMESH LALIT, S. RAVINDRA BHAT, BELA. M. TRIVEDI, JJ.
Parsi Zoroastrian Anjuman, Mhow - Appellant
Versus
The Sub Divisional Officer/The Registrar Of Public Trusts & Anr. - Respondents
Civil Appeal No. 490 of 2022 (Arising Out Of SLP (C) No. 1150 of 2019)
Decided on : 28-01-2022
(1) Public Trusts Act, 1951 (M. P.) -- S. 14 -- previous sanction of Registrar for sale -- discretion to grant or refuse sanction is relatable to directions in Trust document, or any provision of Act, or any other law as ordered (or directed) by any Court -- Registrar not empowered to read into it her own notions of what is beneficial and what is prejudicial to Trust -- refusal has to be specific to requirement of law wherever such law clearly stipulates so, or any specific provision of Trust document. [Para 20
(2) Trust Rules, 1962 (M. P.) -- R. 9 (3) -- power to impose conditions -- Registrar may impose conditions if instrument of Public Trust, or any law relating to public trusts, results in Court direction to such effect -- in absence of these objective factors, Registrar cannot unilaterally impose conditions which in her or his opinion would inure to interest of Public Trust. (1986) 3 SCC 391, (2001) 5 SCC 305, (2013) 11 SCC 531 and (2018) 14 SCC 761 distinguished.
[Para 21
(3) Public Trust -- State control -- object and extent -- aim of public control is to ensure that Trust is administered efficiently and smoothly -- State interest is that far, and no more -- State cannot dictate what decisions can or cannot be taken -- in specific context of alienation of properties, State's interest is to ensure that valuable assets of public trusts are not frittered away -- any organization which is self-governed, cannot be subjected to overarching State control -- as long as its decisions are well informed and grounded on relevant considerations, interests of Trust are those defined by its members -- any measure of public control enacted through express stipulations in law should not be expanded to such extent that right to freedom of association under Art. 19 (1) (c) is reduced to empty husk, bereft of meaningful exercise of choice. [Para 27
(4) Public Trusts Act, 1951 (M. P.) -- S. 14 -- previous sanction of Registrar for sale -- decision to sell Trust properties was consequence of two-layered process, where all members participated and decided to dispose of property -- decision based on realistic assessment of Trust's existing and future liabilities and obligations imposed by Trust instrument -- proposed spending from returns earned through investment made from consideration arising from sale also outlined and clearly disclosed -- properties were valued, and proposed to be sold by public tender -- disregarding all this disclosed transparency, Registrar, on basis of her subjective notion of what constituted best interests of Trust, could not have rejected application -- High Court fell into error in endorsing that rejection. [Para 28
ORDER :
S. RAVINDRA BHAT, J.
1. Leave granted. This appeal by special leave is directed against the judgment of a Division Bench of the Madhya Pradesh High Court at Indore, dismissing an appeal1[Dated 29.09.2018 in W.A. 1325/2018.]. The judgment confirmed an order of the learned Single Judge, who in turn, had affirmed the rejection of the application filed by the appellant, Parsi Zoroastrian Anjuman, Mhow (hereafter referred to as “the trust”), seeking sanction for the disposal of its trust property.
2. The appellant was registered as a public trust on 29.01.1973 under the provisions of the Madhya Pradesh Public Trusts Act, 1951 (hereafter “the Act”). The trust’s membership was made up exclusively of members of the Parsi community at Mhow. On 15.05.2011, at the behest of the trust and on its application, a revisited final scheme in relation to the trust was approved by the District Judge, Mhow2[Order dated 15.05.2011 in Case No.3/2010.]. The revisited scheme contained the following clause:
3. In a meeting held on 14.12.2014, the members of the trust’s Managing Committee unanimously agreed that five of its immovable properties should be sold. This decision was consented to by the individual members of the Managing Committee which included representatives of the Parsi Zoroastrian Anjuman community, i.e., the apex body of the Parsi community in the country. As a followup, the proposal was placed before a general meeting of all members of the trust on 19.01.2015 in which a majority of members supported the Managing Committee’s decision to sell the five items of property. The trust had circulated what was termed as a “Vision Document” which listed the existing income, expenditure, and the likely projection in the event the properties were sold and the proposed use for which the funds received from such transaction were to be utilized.
4. As was required of it, the trust applied under Section 14 of the Act to the Registrar of Public Trusts for previous sanction for the sale of the five said properties. The application languished before the Registrar, for a while. Resultantly, the trust approached the M.P. High Court by filing a writ petition3[W.P. 2903/2017.]. This petition was disposed of by an order4[Dated 10.07.2017.] requiring the Registrar to take a decision preferably within 45 days. The trust approached the Registrar on 17.07.2017 with a request to dispose of its pending application; it filed relevant documents and a more detailed application in which it was contended inter alia that:
5. The trust contends that the copy of the Vision Document (which was circulated to its members and formed the basis of majority opinion confirming the sale) was also filed with the Registrar. The Registrar notified Ms. Pervin Rumi Jehangir, the second respondent (hereafter referred to as “Ms. Jehangir”), asking her to respond to the trust’s application seeking previous sanction - apparently in view of her previous objection to the proposal. Accordingly, detailed objections were filed
SupremeToday
The main legal point established in the judgment is the need for objective consideration of the trust's decision to sell property under section 36(1)(a) of the Maharashtra Public Trust Act, 1950, and....
The central legal point established in the judgment is that the Charity Commissioner must consider the interest, benefit, and protection of the trust when granting permission for property disposal, a....
The registrar's refusal to grant permission for trust property sale must be supported by evidence of prejudice to public interest; arbitrary denials are against statutory provisions.
The paramount consideration in permitting the alienation of trust property is the interest, benefit, and protection of the Trust, and the transparent utilization of the sale proceeds for the betterme....
Trustees must ensure any alienation of trust property is justified by genuine necessity and conducted transparently, safeguarding the trust's interests.
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.