Supreme Court

Parsi Zoroastrain Anjuman Mhow Vs. The Sub Divisional Officer/ The Registrar of Public Trusts & Anr.

MANU/SC/0107/2022

28.01.2022

Trusts and Societies

Any self-governed organization cannot be subjected to overarching state control

Present appeal by special leave is directed against the judgment of a Division Bench of the High Court, dismissing an appeal. The judgment confirmed an order of the learned Single Judge, who in turn, had affirmed the rejection of the application filed by the Appellant, Parsi Zoroastrian Anjuman, Mhow ( “the trust”), seeking sanction for the disposal of its trust property.

The aim of public control is to ensure that the trust is administered efficiently and smoothly. The state interest is that far, and no more; it cannot mean that the state can dictate what decisions can or cannot be taken. Any organization which is self-governed, cannot be subjected to overarching state control. As long as its decisions are well informed, and grounded on relevant considerations, the interests of the trust are those defined by its members. Any measure of public control enacted through express stipulations in law, should not be expanded to such an extent that the right to freedom of association, under Article 19 (1) (c) of the Constitution of India, 1950 is reduced to an empty husk, bereft of meaningful exercise of choice.

In the facts of the present case, the record shows that the decision to sell the properties was a consequence of a two layered process, where all members participated and decided to dispose of the property. The decision was based on a realistic assessment of the trust’s existing and future liabilities, the obligations towards charity, aid to senior citizens, education, medical aid, and religious ceremonies, imposed by the trust instrument.

Furthermore, the proposed spending from the returns earned through the investment made from the consideration arising from sale, were also outlined and clearly disclosed. Most crucially, the properties were valued, and proposed to be sold by public tender. Disregarding all this disclosed transparency, the Registrar, on the basis of her subjective notion of what constituted best interests of the trust, could not have rejected the application, as she did. The High Court, in present Court’s opinion fell into error, in endorsing that rejection.

Present Court is of the opinion that the trust may proceed to implement its decision, but subject to fresh valuation of each of the properties, which is proposed to be sold. This valuation should be disclosed to the Registrar, who can facilitate the implementation of the decision to sell to the highest bidder, through public tender. The impugned judgment and the decision of the Registrar are set aside. Appeal allowed.

Tags : Trust property Sanction Grant

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