The court found collusion and suppression of material facts regarding property ownership and debts, establishing that a Trust must comply with procedural requirements in property sales, particularly under Section 92 of the CPC.

JUDGMENT

ANITA SUMANTH, J.

Phoenix ARC Private Limited (appellant) has, in this appeal, challenged an order passed in OP No.260 of 2022 and connected applications. They are aggrieved by the allowing of the Original Petition, wherein the prayer by Samarpana Charitable Trust/R1 (hereinafter referred to as R1/Trust) for according permission to the Trust to vest property admeasuring 299 sq. mts. in TS No. 6179/2 and another extent of 10 sq.mts. in TS No. 6179/1 in item Nos. 1 and 2 of Schedule A properties extracted below, in favour of Chennai Metro Rail Project (hereinafter referred to as R2/CMRL) as per the prevailing market rate for compulsory acquisition. The prayer was made in terms of Section 7 of the Charitable and Religious Trust Act, 1920 (CRT Act) read with Section 34 of the Indian Trust Act, 1882 (Trust Act). This is prayer A.

2. Prayer B seeks a direction to the Trust to retain all other properties of the Trust in Schedule A i.e., item No. 1 to item 3 properties, and not to alienate any of the remaining properties in violation of the provisions of either the CRT Act or the Trust Act without the leave of the Court.

3. The application was allowed on 05.09.2022, the Court noting the consensus between R1 and R2 for sale and acquisition of the property. The Court also noted that resolutions have been passed by the Trust on 11.10.2021 and 02.12.2021 for sale of the property and authorizing individuals to conduct cases on behalf of the Trust. The parties had been relegated to learned Master for marking of documents. Learned Judge notes that there was no necessity for cross-examination and that exercise was otiose since O.P.No. 260 of 2022 had been filed to advance the case mutually propounded by the Trust and CMRL for execution of the property. The Court hence granted permission to sell the property, permitting execution of sale deeds and presentation of the same for registration.

4. The second prayer, that the remaining of the Schedule A properties after the sale of the Schedule B property be directed to remain in the custody, control and possession of the Trust was also ordered. The appellant sought leave to challenge the above order, and, as the request was rejected, approached the Hon’ble Supreme Court by way of an appeal that was disposed on 09.04.2025.

5. At the hearing on 19.07.2024, the Supreme Court granted a stay of operation of order dated 05.09.2022 passed in OP No. 260 of 2022. The appeal came to be allowed being of the view that the appellant should have been granted leave to challenge order dated 05.09.2022. That order reads as follows:

1. Heard Mr. Ranjit Kumar, learned senior counsel appearing for the petitioner(s).

2. The counsel would refer to the Settlement Deed dated 29.01.2021 to say that the two brothers – P.J.K. Sairam and P.K.S. Prashath were the mortgagors for the loan, secured from the Andhra Bank. The petitioner – Company is an assignee of the loan under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002