Public Trust : A trustee cannot file a suit of recovery against another trustee without consent of Charity Commissioner

Bombay High Court Rejects Suit Against Trustee for Unauthorized Occupation of Trust Properties Court Upholds Requirement for Charity Commissioner’s Consent under Maharashtra Public Trusts Act

In a significant ruling, the Bombay High Court has rejected a suit filed by the Lilavati Kirtilal Mehta Medical Trust against Niket Mehta, a former trustee, for the recovery of compensation amounting to Rs. 17.20 crores for alleged unauthorized occupation of trust properties. The judgment, delivered by Justice Milind N. Jadhav, emphasized the mandatory requirement of obtaining prior consent from the Charity Commissioner under Sections 50 and 51 of the Maharashtra Public Trusts Act, 1950, before initiating such legal proceedings.

The case revolved around the alleged misuse of trust properties by Niket Mehta, who was described in the plaint and supporting documents as a trustee, permanent trustee, or erstwhile trustee of the trust. The trust claimed that Mehta had illegally occupied a flat and office space within the trust’s hospital premises from 2007 to 2015, seeking compensation for the unauthorized use.

Mr. Atul Damle, representing the plaintiffs, argued that the suit did not require the Charity Commissioner’s consent, asserting that Mehta was a trespasser and not a validly appointed trustee during the contentious period. However, the court found that the suit’s framing clearly identified Mehta as an erstwhile trustee, invoking the applicability of the Maharashtra Public Trusts Act’s provisions.

Mr. Pankaj Sawant, counsel for the defendant, contended that the suit was barred due to the plaintiffs' failure to obtain the necessary statutory consent, as the defendant’s role as a trustee was acknowledged in various documents and correspondences presented in court. The court agreed, citing multiple exhibits where Mehta was referred to as a trustee, which solidified his status during the period in question.

Justice Jadhav concluded that the lack of consent from the Charity Commissioner rendered the suit non-maintainable, leading to the rejection of the plaint under Order VII Rule 11(d) of the Civil Procedure Code. The court’s decision underscores the importance of adhering to procedural requirements when dealing with public trust-related disputes, ensuring that legal actions are grounded in compliance with statutory mandates.

Bottom Line:

A suit filed by a public trust for recovery of compensation from a trustee for misuse of trust properties requires prior consent of the Charity Commissioner under Sections 50 and 51 of the Maharashtra Public Trusts Act, 1950.

Statutory provisions: Maharashtra Public Trusts Act, 1950 Sections 50 and 51, Civil Procedure Code, 1908 - Order VII Rule 11(d)

Niket Mehta, (Bombay) : Law Finder Doc Id # 2817066