THE KHASGI (DEVI AHILYABAI HOLKAR CHARITIES) TRUST, INDORE & ANR. versus VIPIN DHANAITKAR & ORS.

Citation: [2022] 17 S.C.R. 173 · Decided: 21-07-2022 · Supreme Court of India · Bench: A.M. KHANWILKAR · Disposal: Case Partly allowed

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Judgment (excerpt)

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   [2022] 17 S.C.R. 173
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THE KHASGI (DEVI AHILYABAI HOLKAR CHARITIES)
TRUST, INDORE & ANR.
v.
VIPIN DHANAITKAR & ORS.
(Civil Appeal No. 4839 of 2022)
JULY 21, 2022
[A.M. KHANWILKAR, ABHAY S. OKA AND
C.T. RAVIKUMAR, JJ.]
Trusts and Charities:
Madhya Pradesh Public Trusts Act, 1951:ss. 2 (4), 4 (1), 14,
36 (1) – Registration of Public Trusts – Alienation of trust property
–Previoussanction of Registrar – On facts, matter pertaining to
illegal alienation of appellant trust-Khasgi Trust by the trustees –
Trust deed of the appellant trust executed in 1962 and is traced to
Holkar rulers – Alienations were made by the trustees in relation to
at least six properties –Collector held that the properties mentioned
in the Trust Deed were the properties of the State Government; that
the trustees made illegal alienations without prior permission from
Government, thus the alienations held to be invalid–Collector
directed that the name of the State Government to be entered in
revenue records to prevent further alienations– Said order
challenged by the appellant Trust and its trustee – Single Judge of
the High Court disposed of the petition by issuing diverse directions
for the administration of Khasgi Trust - Another writ petition filed
by the appellant-Khasgi Trust disposed of by directing the authorities
to correct the revenue record – Appeals before the Division Bench,
wherein it was held that the Appellant- Khasgi Trust was governed
by the Public Trusts Act; that the Trustees had no authority to alienate
the Khasgi properties as the same was vested in the State
Government; and that the Single Judge had virtually re-written the
Trust Deed and therefore, the judgment could not be sustained –
On appeal, held: Khasgi (Devi Ahilyabai Holkar Charities) Trust,
Indore, is a Public Trust governed by the provisions of the 1951 Act
–Khasgi Trust, is an express Trust for public, religious and charitable
purposes –Trustees have a duty to safeguard the interests of the
beneficiaries of the Public Trust – Thus, the trustees directed to get
the Khasgi Trust registered under the Public Trusts Act by making
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SUPREME COURT REPORTS
[2022] 17 S.C.R.
the necessary application– Properties described in Part ‘B’ of the
Schedule to the Trust Deed, are properties of the said Public Trust–
Alienationof the said properties can be made only by taking recourse
to s.14 – Supplementary Trust Deed is also valid – Issuance of the
direction by the High Court to Economic Offences Wing of the State
Government to hold an inquiry was not warranted–Registrar having
jurisdiction over Khasgi Trust, to call for the record of the Trust
relating to all the alienations made by trustees and after holding an
inquiry to determine if any loss was caused to the Public Trustby
alienation – Subjectto the said directions, the judgment of the
Division Bench as well as the Single Judge set aside.
Partly allowing the appeals, the Court
HELD: 1.1 The properties described in Part ‘B’ of the
schedule to the Trust Deed which were vested in the State
Government were transferred to the autonomous Khasgi Trust
on its incorporation.In fact, till 2012, the State Government never
disputed that the Khasgi properties listed in Part ‘B’ of the
Schedule to the Trust Deed were the Trust properties of the
Khasgi Trust. Therefore, to that extent, the Division Bench of
the High Court is not right when it concluded that the properties
incorporated in Part ‘B’ of the Schedule to the Trust Deed
continue to be the Government properties even after 16th July
1962. The said properties are vesting in the Khasgi Trust.[Para
33][205-E-F]
1.2 The High Court proceeded on the erroneous footing
that as there was no notification issued under sub-section (2) of
section 36, clause (a) of sub-section (1) of section 36 will not
apply. 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][208-E-G]
1.3 The Supplementary Trust Deed which enables the
Trustees to alienate the Trust Property cannot be illegal. However,
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alienation of the Trust property can be made only in accordance
with Section 14. The Trustees by executing such a document

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