Case title:
Khasgi (Devi Ahilyabai Holkar Charities) Trust Indore Vs Vipin Dhanaitkar
Date of Order:
21/07/2022
Bench:
Justice AM Khanwilkar, Justice Abhay S. Oka, and Justice CT Ravikumar
Parties:
Khasgi (Devi Ahilyabai Holkar Charities) Trust Indore – Petitioner
Vipin Dhanaitkar – Respondent
SUBJECT
The Supreme Court overturned the Madhya Pradesh High Court's order directing the Economic Offences Wing (EOW) to look into allegations of misuse of public property by the trustees of the Khasgi (Devi Ahilyabai Holkar Charities) Trust of Indore. The Madhya Pradesh Public Trusts Act of 1951 will, however, apply to the Khasgi Trust, and the Court ordered the trustees to register the Khasgi Trust under the Public Trusts Act by filing the requisite paperwork within one month of the ruling date.
FACTS
- The trust was established in connection with some properties belonging to the former monarchy of Indore. In 1962, the nominee of the Indian President and Maharani Usha Devi of Indore, the daughter and heir apparent of Yashwantrao Holkar (the Maharaja of Indore at the time of entering India), signed a trust deed.
- The Madhya Pradesh High Court ordered an EOW investigation into the suspected illegal sale of the Khasgi properties in 2020 after finding that state-owned government properties had been transferred.
- In an aforementioned letter to the Chief Minister of the Government of Madhya Pradesh, Smt. Sumitra Mahajan, a Member of Parliament, argued that the land stated in the Trust Deed belonged to the former State of Madhya Bharat.
- A significant property listed in the trust deed that is located in Haridwar was indicated as having been transferred by the trustees without the registrar's consent in accordance with the Public Trusts Act. Consequently, she asked the Chief Minister to launch an investigation.
- After that, the Indore Collector issued an order on November 5, 2012, declaring that the Trust Deed's listed properties belonged to the State Government. According to him, the trustees illegally alienated property without first receiving government approval. The alienations were deemed to be invalid as a result.
- Subsequent appeal in the Madhya Pradesh High Court in front of a Single Judge proved futile as it was ordered by the learned single Judge that the Board of Trustees shall be reconstructed.
ARGUMENTS ADVANCED BY PETITIONERS
- When the former State of Indore and the newly formed State of Madhya Bharat merged, three categories of properties were present, according to the learned senior counsel representing the appellants: (A) State Properties protected by Article VI(1)(c) and Article XII of the Covenant; (B) Private Assets of the Ruler of Indore; and (C) Charitable organizations and Trust Properties held by the Ruler of Indore's family. The claim made by the petitioners is that the state government could not inherit the charities that were already committed to serving the public.
- The learned senior counsel called the Court’s attention to the conclusions made in the contested judgment of the Division Bench and argued that the Division Bench of the High Court of Madhya Pradesh utterly disregarded the communications on file and the Trust Deed's stipulations.
- He emphasized that all of the Trustees, including the nominees of the State Government and the Central Government, signed the Supplementary Deed of Trust on March 8, 1972. Despite the fact that the legitimacy of the aforementioned Supplementary Deed was not directly contested, the Division Bench has examined it.
ARGUMENTS ADVANCED BY THE RESPONDENT
- The learned counsel representing the respondent argued that the petitioner (trustee of the Khasgi Trust) lacked the ability to speak on behalf of the Khasgi Trust alone and not in conjunction with the other Trustees. He claimed that the property covered by Part "B" of the Trust Deed's Schedule was deemed as having lapsed in favor of the former Madhya Bharat Government.4
- The Trust Deed expressly stated that the Trustees' exclusive authority was to care for and protect the aforementioned properties. He emphasized that it was acknowledged in both the written declaration the Trustees submitted in Civil Suit No. 15 of 1973 and the writ petition they filed before the High Court that the Khasgi property that was the subject of the Trust Deed had dissolved in the advantage of the State Government.
ISSUES
- Whether the Khasgi Trust was subject to the Public Trusts Act's requirements?
JUDGMENT
- The trust was established with the goal of preserving and maintaining its assets, which include charities and endowments, the court said. "As a result, it may be claimed that the Khasgi Trust was created specifically for governmental, spiritual, and humanitarian objectives. Every one of these Trusts must be registered, per Section 4(1) of the Public Trusts Act" the Court said.
- The court pointed out that Section 14 prohibits the sale, mortgage, gift, or leasing of any immovable property held by the Public Trust for a term longer than seven years in the case of farming land or for a period longer than three years in the case of non-agricultural land or a structure.
- The court observed that, with the exception of one, all alienations made by the Trustees of the Khasgi Trust were done so without getting the prior sanction as required by Section 14's subsection (1).
CONCLUSION
The Court instructed the Public Trusts Act Registrar, who had authority over the Khasgi Trust, to request the Trust's record of all alienations made by the Trustees. After conducting the investigation outlined in Section 23, the Registrar will decide whether any loss to the Public Trust resulted from the Trustees' alienations after providing each of the 70 parties with an opportunity to be heard.
If he determines that the Public Trust suffered such a loss, he will determine and determine the amount that the involved Trustees are required to pay to the Khasgi Trust. If it is required, he may use the power to file an application with the Court pursuant sub-Section (2) of Section 26 after conducting the aforementioned inquiry. The Registrar can take any additional measures and begin any other actions that are required by law.
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