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2025 Supreme(Mad) 4460

IN THE HIGH COURT OF JUDICATURE AT MADRAS
P.B.BALAJI, J.
S.Kalliappan - Appellant 
Versus 
NIL - Respondent 
CRP.No.4658 of 2024
Decided on : 04-07-2025

Advocates:
Advocate Appeared:
For the Appellant : Mr.A.K.Sriram Senior Counsel for Mr.A.Kowshik Raghu Rajaa

Conditions for trust property sale should facilitate, not hinder, the trust's objectives; unnecessary burdens are impermissible.

Headnote:(A) Trusts Act - Public Charitable Trust - Sale of properties - The petitioner trust sought permission to sell its properties to expand its school, with the Trial Court permitting the sale but imposing conditions that affected the trust's interest - The Court ruled that the imposition of conditions was unwarranted and reversed such conditions. (Paras 8-10)

(B) Sale Conditions - Public auction - Conditions including sale by Advocate Commissioner and depositing sale consideration in a Nationalized Bank unnecessarily burdened the trust and hindered fair market value - The learnt Judge ought not to have imposed impractical conditions. (Paras 6-10)

Facts of the case:
The petitioner trust, established in 2007, operates a school with approximately 4500 students, sought permission to sell its 60 cents property to fund expansion. Trial Court's conditional permission led to this revision. (Paras 4-5)

Findings of Court:
Conditions imposed by the Trial Court were unnecessary and impractical, hindering the trust's purpose of expanding educational facilities. (Paras 8-10)

Issues: The main issues were the legality and necessity of the conditions imposed on the sale of trust properties, specifically the appointment of an Advocate Commissioner and the requirement for depositing sale consideration in a Nationalized Bank. (Paras 6-10)

Ratio Decidendi: The Court held that while the trust required permission to sell, unnecessarily burdensome conditions were impractical and detrimental to the trust's objectives. The court emphasized the necessity for conditions that enable rather than hinder the trust's mission. (Paras 8-10)

Result: The order in Trust O.P.No.256 of 2019 was set aside and the Civil Revision Petition was allowed.

Table of Content
1. petitioner trust's application for property sale (Para 1 , 2 , 4)
2. arguments against sale conditions imposed (Para 5 , 6)
3. court's analysis of the sale conditions (Para 7 , 8 , 9 , 10)
4. permitted modifications for the sale (Para 11)

ORDER

P.B.BALAJI, J.

This revision has been filed by the petitioner in the Trust O.P.No.256 of 2019, on the file of the Principal District Judge, Kancheepuram.

2. The revision petitioner had sought for permission to sell the trust properties. The Trial Court though permitted sale, has imposed conditions for the sale and the petitioner trust, aggrieved by some of the conditions, has approached this Court by way of this civil revision petition.

3. Heard Mr.A.K.Sriram, learned Senior Counsel for the petitioner. I have also gone through the records.

4. It is seen that the petitioner trust is a public charitable trust which is also duly registered in the year 2007. The petitioner trust runs a School where about 4500 students are studying. With a view to expand the School, the petitioner seeking to augment funds, decided to sell its property measuring 60 cents at Mudichoor Villagae, Tambaram Taluk. Being a public charitable trust, the petitioner thought it fit to approach the District Court to seek permission for sale of the said property. The learned District Judge, by order dated 28.10.2021, has granted permission to sell the said property. However, the petitioner is aggrieved by the imposition of certain conditions for the sale.

5. The learned Senior Counsel, Mr.A.K.Sriram would submit that though the learned Judge has directed sale by public auction, the Court has directed the sale to be conducted by an Advocate Commissioner which would seriously prejudice the interest of the petitioner trust. The learned Senior Counsel would further state that, firstly, if an Advocate Commissioner is bringing the property for sale, it would invariably sent out a wrong signal to the general public that there is some litigation connected with the property and therefore, the property will not fetch a fair market price. Secondly, he would state that unnecessary expenses would be mulcted on the petitioner for meeting the remuneration and incidental charges of the Advocate Commissioner.

6. With regard to the condition requiring the trust to deposit the sale consideration in a Nationalized Banks and withdraw the interest alone, learned Senior Counsel would submit that the very decision of the petitioner trust to sell the property was only to meet the costs of expansion of the School and therefore, no useful purpose would be served by directing deposit of the sale consideration in a Nationalized Bank. He would therefore pray for the order of the Principal District Judge to be suitably modified.

7. I have paid my anxious and careful consideration to the arguments advanced by the learned Senior Counsel. I have also gone through the order passed by the learned Principal District Judge.

8. As rightly pointed out by the learned Senior Counsel, when the petitioner approached the Court seeking permission to sell its property, being a public charitable trust, the Court has to either grant permission or refuse permission for such sale. There is no necessity for supervising the sale transaction by the Court. Moreover, I find force in the submission of the learned Senior Counsel that if an Advocate Commissioner is going to advertise for sale of the property, the general perception in the minds of the public would be that the property is under cloud and litigation and it is very likely that the property would not fetch the fair market value, which is otherwise would fetch.

9. Further, the expenses to meet the Advocate Commissioner's remuneration and other incidental expenses that the Commissioner may claim is again an additional burden to the trust and therefore, the said conditions are also not warranted. The deposit of the sale consideration before the Court and thereafter, the expenses to be deducted and balance amount to

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