A Trust property cannot be alienated unless it is for the benefit of the Trust and/or its beneficiaries.

Case details

Khasgi (Devi Ahilyabai Holkar Charities) Trust Indore vs Vipin Dhanaitkar |  2022 LiveLaw (SC) 623 | SLP (CIVIL) No. 12133 of 2020] | 21 July 2022 | Justices AM Khanwilkar, Abhay S. Oka and CT Ravikumar

Headnotes

Trust - A Trust property cannot be alienated unless it is for the benefit of the Trust and/or its beneficiaries. The Trustees are not expected to deal with the Trust property, as if it is their private property. It is the legal obligation of the Trustees to administer the Trust and to give effect to the objects of the Trust. (Para 45)

Madhya Pradesh Public Trusts Act, 1951 ; Section 14 - Powers of Registrar - When a Trust property is transferred without prior sanction of the Registrar under Section 14 and/or without following a fair and transparent process, it can be always said that the Trust property is not being properly managed or administered - The Registrar can refuse sanction only when he is satisfied that the transactions will be prejudicial to the interests of the Public Trust. (Para 43 - 47)

Madhya Pradesh Public Trusts Act, 1951 ; Section 36 - Sub-Sections (1) and (2) of Section 36 operate in different fields. When sub-Section (1) is applicable to a Public Trust, none of the provisions of the Public Trusts Act is applicable to the Trust. Sub-Section (2) is an independent power of the State Government to issue a notification exempting certain Public Trusts from all or any of the provisions of the Public Trusts Act. (Para 39)

Summary : SC set aside the direction issued by MP HC for an investigation by the Economic Offences Wing (EOW) against the trustees of the Khasgi (Devi Ahilyabai Holkar Charities) Trust of Indore over alleged misappropriation of government properties - Madhya Pradesh Public Trusts Act 1951 will apply to the Khasgi trust and directed the trustees to get the Khasgi Trust registered under the Public Trusts Act by making the necessary application within a period of one month - Registrar under the Public Trusts Act, having jurisdiction over Khasgi Trust, to call for the record of the Trust relating to all the alienations made by the Trustees.