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2013 Supreme(Mad) 1750
In the High Court of Madras (Madurai Bench)
R.S. Ramanathan, J.
R. Gopalakrishnan - Petitioner;
Versus
Tiruparankundam Arumuga Nainar Trust, represented by its Trustees and others - Respondents
C.R.P. (NPD) No. 398 of 2011 and M.P.(MD) No. 2 of 2011
Decided on : April 26, 2013
R. Devaraj, Advocate for Petitioner.
S. Karunakar, Advocate for Respondent Nos. 1 to 3; K.K. Senthil, Advocate for Respondent No. 4; M.V. Venkataseshan for K. Prabhu, Advocate for Respondent Nos. 5 to 9.
Trust properties must be jealously guarded and sold only through public auction, regardless of whether the trust is public or private.
Headnote:TRUST - SALE OF PROPERTIES - Trust Act - Section 34 - The court discussed the applicability of Section 34 of the Trust Act to the sale of properties belonging to a public trust. The court held that even if the trust is a private trust, the properties cannot be sold through private negotiations and must be sold through public auction. PUBLIC NOTICE - The court emphasized the importance of issuing a public notice for the sale of trust properties, specifically mentioning the prospective purchasers and the agreed price. The court held that a general notice calling for objections is not sufficient to justify the sale. PROTECTION OF TRUST PROPERTIES - The court cited precedents that emphasized the need to protect trust properties and prevent any underhand deals or secret understandings between trustees and purchasers. The court held that trust properties must be jealously guarded and sold only through public auction. Final Decision: The court set aside the order of the lower court allowing the sale of trust properties through private negotiations. The court held that the properties must be sold through public auction. The revision petition was allowed, and no costs were awarded.
Fact of the Case:
The revision petitioner challenged the order of the lower court allowing the sale of trust properties through private negotiations. The petitioner argued that the trust is a public trust and the sale was not maintainable under Section 34 of the Trust Act.Finding of the Court:
The court found that the trust is a private trust, but regardless of its nature, the properties cannot be sold through private negotiations. The court emphasized the need to protect trust properties and prevent any underhand deals.Ratio Decidendi:
Trust properties must be sold through public auction, and a general notice calling for objections is not sufficient to justify the sale. Public notice must specifically mention the prospective purchasers and the agreed price. [FINAL DECISION] The court set aside the order allowing the sale of trust properties through private negotiations and held that the properties must be sold through public auction. The revision petition was allowed, and no costs were awarded.1. The Revision Petitioner is the third party and filed the Revision after getting the leave of this Court challenging the order passed in Tr. O.P. No. 2 of 2009 on the file of the Principal District Judge, Madurai.
2. The Respondents 1 to 3 filed Tr. O.P. No. 2 of 2009 seeking permission of this Court to sell the properties mentioned in the Petition, which admittedly belonged to the First Respondent-Trust and permission was granted by the Court below to sell the properties to the Respondents 4 to 9 herein and the same is challenged in this Revision.
3. Mr. R. Devaraj, the learned Counsel appearing for the Revision Petitioner submitted that the Suit Trust is a Public Trust and therefore, the Petition filed under Section 34 of the Trust Act for the sale of the properties was not maintainable and the Court below ought not to have entertained the Application, when admittedly the Trust is a Public Trust.
4. The learned Counsel further submitted that even assuming that the Trust is a Private Trust, having regard to the nature of the properties, namely the Trust properties, the Court below should not have allowed to sell the property by private negotiations without conducting Public Auction and therefore, on that ground the order of the Court below directing the sale is liable to set aside.
5. The learned Counsel further submitted that sale was ordered in Tr. O.P. No. 2 of 2009 on 4.8.2010 and till date, the purchasers, who entered into an Agreement with the Trustees for the sale of the properties have not paid the consideration and as per the order, the sale consideration ought to have been deposited within two months and though, more than two years was over, the sale consideration was not paid and the sale consideration offered by the Respondent 4 to 9 was also very low compared to the market value and therefore, the sale ordered by the Court below in favour of the Respondents 4 to 9 is liable to be set aside.
6. Mr. K.K. Senthil, the learned Counsel appearing for the another party, who also got leave of this Court to get himself impleaded in this Revision submitted that no Public Notice was issued calling for Public Auction to sell the properties belonging to the Trust and a Public Notice was issued seeking objection, if any for the sale of the property and thereafter, the trustees entered into a private transactions with the Respondents 4 to 9 and the properties are allowed to be sold in favour of the Respondents 4 to 9 and therefore, in the absence of any Public Auction in respect of the sale of Religious and Charitable properties, the sale is liable to be set aside.
7. On the other hand, Mr. M.V. Venkateseshan, the learned Counsel for the purchasers submitted that necessary Applications were filed before the Court below seeking for extension of time to pay the sale consideration and the purchasers have also agreed to pay the interest from the date of the order of this Court till date and therefore, no prejudice would be caused to the Trust by selling the properties in favour of the purchasers and the Court below after taking into consideration of the guideline value and after being satisfied that the price quoted by the purchasers, represented the correct market value and granted permission to sell the property in favour of the purchasers and therefore, the present Revision filed by the Revision Petitioner cannot be entertained. He further submitted that the Trust is a Private Trust and therefore, the procedure contemplated for selling Public Trust properties cannot be applied to the sale of Private Trust properties.
8. It is admitted that under a Settlement Dated, dated 10.4.1930, the suit properties were settled for some Religious and Charitable purposes. The Settlement Deed was executed by one Arumugathammal and as per the recitals in the Settlement Deed, she has directed performance of conducting abishekam and do Maheswara Pooja and to take Milk Pot and perform Abishekam for Arumuga Nayanar on the Vaikasi Visak
