[MP Public Trusts Act] No Mandate On Registrar To Send Matter For Transfer Of Trust Property To Civil Court: MP High Court

The Madhya Pradesh High Court has set aside an order by the Registrar of Public Trusts, which denied permission to transfer immovable properties from one trust to another owned by the same person.

The Court was presided over by Justice Subodh Abhyankar and discussed Section 14 of the M.P. Public Trusts Act, 1951 which enumerates that the Registrar's refusal to approve the transaction should only be based on whether the transfer would be detrimental to the public trust. The Court held that referring the matter by the Registrar to the Civil Court for permission was not legally required.

“It is apparent from the aforesaid provision that there is no mandate in the aforesaid section that in case if the Registrar, Public Trusts does not agree with the request to transfer the property belonging to a public trust, he is required to send the matter to the Civil Court for its permission.”

Justice Abhyankar examined the provisions of Section 14 of the M.P. Public Trusts Act, 1951 and stated that the provision does not distinguish between sale, mortgage gift of any immovable property when transferred to a person or a trust with similar objectives.

“This Court is also of the considered opinion that Section 14 does not distinguish between the sale, mortgage, exchange or gift of any immovable property to any person or to any trust having similar objectives, and in such circumstances, the learned Registrar, Public Trusts was not correct in holding that the matter is required to be sent to the Civil Judge for its sanction to the gift the property”

The Court further emphasized that the Registrar could only refuse the transaction if it were deemed prejudicial to the interest of the public trust.

In this case the petitioner, a public trust wanted to transfer its immovable properties to Shri Kund Kund Kahaan Digambar Jain Shasan Prabhawna Trust, another trust with the same objectives and trustees. However, the Registrar declined the application and referred it to a Civil Court.

The petitioner contended that the Registrar had not provided substantial reasons for the refusal and did not demonstrate how the transfer would harm the trust. The trust's internal clauses 11, 19, and 21 already granted it the inherent power to align with or transfer property to another trust with similar objectives.

Justice Abhyankar stated that “It was not necessary that the objectives of the Trust shall also include that the trust can also gift its properties to another Trust, as the aforesaid power is inherent in the Trust which also flow from Clauses 11, 19, and 21.”

The court thus set aside the Registrar's order and directed the Registrar, Public Trusts, to give permission to the trust for the transfer. “This Court has no hesitation to hold that the impugned order dated 20.01.2020 cannot be sustained in the eyes of law, and the same is hereby set aside.”

Case title: Swa. Shrimati Santoshben W/O Dr. Rajesh Jain Charitable Trust Thr. Smt. Sonal Jain W/O Late Mayank J Versus The State Of Madhya Pradesh Thr. Registrar Public Trust

Case No.: W.P. No.3787-2020

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