logo

This Product is Licensed to ,

Change Font Style & Size  Show / Hide

24

  •            

 
CDJ 2026 MHC 6692 print Preview print Next print
Court : High Court of Judicature at Madras
Case No : CS. No. 138 of 2026
Judges: THE HONOURABLE MRS. JUSTICE K. GOVINDARAJAN THILAKAVADI
Parties : Sri Kanchi Kamakoti Medical Trust (A Public Charitable Trust), Represented by its Trustee Seetha Chandrasekhar, Coimbatore & Others Versus Nil
Appearing Advocates : For the Petitioners: Kuberan, M/s. Rank Associates, Advocates. For the Respondent: ------.
Date of Judgment : 15-09-2026
Head Note :-
Civil Procedure Code - Section 92 -
Summary :-
1. Statutes / Acts / Rules / Orders / Regulations, and Sections Mentioned:
- Order IV Rule 1 of O.S. Rules
- Section 92 CPC
- Section 80G of the Income Tax Act 1961

2. Catch Words:
- Trust property alienation
- Public charitable trust
- Sale of property
- Utilisation of proceeds

3. Summary:
The plaintiffs, trustees of a public charitable trust running Sankara Eye Hospital, filed a suit under Order IV Rule 1 of O.S. Rules read with Section 92 CPC seeking court permission to sell a flat in Chennai. The trust argues that maintaining the property away from its base in Coimbatore is financially burdensome and that sale proceeds will be used exclusively for its charitable objectives. The court examined the board resolution, gift deed, prior permission granted for another property, and public notices. It emphasized that alienation of trust property must serve the welfare of the trust. Satisfied with the necessity and safeguards, the court granted permission subject to valuation, transparent sale process, and proper utilization of proceeds. The suit was decreed accordingly without costs.

4. Conclusion:
Suit Allowed
Judgment :-

(Prayer : Plaint filed under Order IV Rule 1 of O.S. Rules, read with Section 92 CPC praying to a) Grant permission to the Trustee of the 1st plaintiff to sell and transfer the schedule B property , as may be found possible in the interest of the 1st plaintiff Trust, b) Grant permission to the 1st plaintiff Trust to utilize the proceeds realized through sale, transfer, exchange or otherwise of the schedule B property for carrying out of the objects of the trust.)

1. The suit has been filed by the plaintiffs seeking to permit the Trustees of the 1st plaintiff to sell and transfer the schedule ‘B’ property, and to utilize the proceeds realized through sale, transfer, exchange or otherwise of the schedule ‘B’ property for carrying out of the objects of the trust.

2. 1st Plaintiff Trust is a Public Charitable Trust, having its registered office at Coimbatore, declared under a Deed of Declaration of Trust dated 27.12.1981. The 2nd and the 3rd Plaintiffs are the Trustees in the 1st Plaintiff Public Charitable Trust. The present Suit has been filed praying for permission of this Court to sell the 1st Plaintiff Trust property situated at Chennai.

3. The plaint averments are as follows :

                     3.1. The 1st Plaintiff Trust is a Public Charitable Trust running a charitable medical institution under name and style 'Sankara Eye Hospital', which is a premier provider of eye care, committed to clinical excellence and personalized and best patient care to the general public. The 1st Plaintiff Trust has also been approved under Section 80G of the Income Tax Act 1961.

                     3.2. The objects of the Trust amongst others are:

                     (a) To afford medical relief to the poor, needy, down-trodden and economically backward sects of people free of cost (but recovering only the outof- pocket expenditure incurred in this respect) by constructing. endowing, maintaining, operating, or hiring hospitals, dispensaries, maternity and children homes.

                     (b) To construct, establish and conduct medical, educational institutions, researches, and to lay foundation with a view to help the poor, needy, downtrodden and economically backward sects of people to run free (recovering only the out-of-pocket expenditure incurred in this respect) patient wards, surgical immunization diagnostic, Ophthalmic, kidney, cancer, X-ray, other wards or wings and to conduct free health projects, special health projects.

                     (c) To run free (recovering only out of pocket expenses) patient wards, surgical, immunisation diagnostic, ophthalmic, kidney, cancer, X-ray and other wards or wings and to conduct free health projects, special health projects, health camps, health-check-ups in rural and urban areas.

                     (d) To provide medicines, drugs, injections, etc., to the poor, needy, downtrodden and economically backward sects of people free of cost (but recovering only the out-of-pocket expenditure incurred in this respect).

                     (e) To educate public on the subjects of personal hygiene, nutrition, sanitary upkeep and civic consciousness for maintenance of good and sound health.

                     (f) To render high-quality free medical aid in rural areas by conducting periodical comprehensive health camps.

                     (g) To render free voluntary medical help in the event of national calamity or accident.

                     3.3. The 1st Plaintiff Trust has been running Eye Care Hospital/s in Coimbatore and has been rendering charitable eye care services. Appreciating the same and coming to know of the altruistic services, philanthropic and benevolent donors gift properties or other kind of donations to enable the Trust to continue with its laudable objectives. One of the donors had gifted a Flat of an extent of 1430 sq.ft. situated at Old door No. 3, then Door No. 17, present Door No. 22, Dhandapani Street, T.Nagar, Chennai 17. The gift was voluntary and was donated under Gift Deed dated 24.04.2025.

                     3.4. The 1st Plaintiff Trust has been in possession of the said Flat along with another such Flat, which was also gifted by a philanthropic donor. However, the Trust being situated at Coimbatore was finding it difficult to maintain the properties away from Coimbatore. Apart from maintaining them, managing the Tenant affairs was also proving difficult. Further the rental returns were also not commensurate to the value of the Flats. After meeting the everrising tax demands and electricity charges, the Trust was only spending more than getting revenue for its activities.

                     3.5. Though the aforesaid difficulties existed, the properties had considerable value and, if the same were sold, the sale proceeds could be effectively utilised for fulfilling the objects of the Trust. This aspect was discussed and considered appropriate by the Board of Trustees at its meeting held on 27.11.2025. A necessary resolution to that effect was also passed unanimously. The resolution categorically recorded that any such sale would be subject to an order of this Court permitting the same.

                     3.6. The another Flat which was also received as a gift by the Plaintiff Trust was brought up for sale. The necessary petition seeking permission of this court was filed in O.P. No.337 of 2019 and by order dated 31.07.2019, this Court permitted the 1st Plaintiff to sell the same by inviting offers from public with further directions to invest the proceeds in a proper security/or utilised in providing infrastructure facility for eye care facility offered by the Plaintiff Trust.

                     3.7. Hence it is prayed that the other property mentioned should also be dealt with in a like manner, in the best interest of the Trust. The proceeds of the sale can well be utilised for providing eye care to the needy and to other charitable dispensations. The 1st Plaintiff Trust being managed by the Board of Trustees who have been efficiently managing and administrating the activities of the Trust and have also been utilising the valuable funds of the Trust including gifts etc., in the most prudent and beneficial manner to the Trust. The Trust accounts are also being duly audited by a qualified Chartered Accountant year after year, since the same is governed by the provisions of the Income Tax Act, 1961.

                     3.8. In the circumstances, it is necessary that this Court permit the sale of the property, namely, Flat No.4, situated on the 2nd Floor at Old Door No.3, then Door No.17 and present Door No.22, Dhandapani Street, T. Nagar, Chennai-17, measuring an extent of 1,430 sq. ft., more fully described in the Schedule hereunder, in such manner as may be prescribed by this Court.

4. On the side of the plaintiffs, the 3rd plaintiff has been examined as P.W.1 and 5 documents were marked as Ex.P1 to Ex.P5, as detailed hereunder :

                     Ex.P1 – Original Board Resolution dated 07.03.2026.

                     Ex.P2 – Photocopy of the deed of declaration of Trust, dated 27.12.1981 (original produced, verified and returned).

                     Ex.P3 – Photocopy of the supplemental cumm Rectification deed, dated 24.06.1991 (original produced, verified and returned.

                     Ex.P4 – Photocopy of the order passed in O.P.No.337/2019 dated 31.07.2019.

                     Ex.P5 – Photocopy of the gift deed executed by the donor in favour of the 1st plaintiff Trust in Doc. No.2289/2025, dated 24.04.2025 (original produced, verified and returned)

5. Heard Mr. Kuberan, learned counsel for the plaintiffs and records perused.

6. Points for consideration

                     “Whether the plaintiffs have established that the proposed selling of the schedule mentioned property is necessary and beneficial for the proper administration and advancement of the objects of the public charitable trust ?

7. The case of the plaintiffs is that the subject property is a Trust property; that since the Trust is being situated at Coimbatore, they find it difficult to maintain the properties away from Coimbatore and that the Trust was only spending more than getting revenue for its activities. It is further stated that the proposed sale is necessary and expedient in the interests of the Trust and that the sale proceeds would be utilised exclusively for the purposes and objects for which the Trust has been constituted.

8. The power of the Court, while considering a suit for alienation of Trust property, has to be exercised keeping in view the paramount consideration, namely, the welfare, interests and benefit of the trust. Therefore permission for sale of Trust property can be granted only when the Court is satisfied that the proposed alienation is necessary, beneficial and in the overall interest of the Trust.

9. This Court has considered the averments contained in the plaint and the materials placed on record. The plaintiffs have also effected publication in the newspapers, pursuant to the order of this Court dated 22.06.2026, inviting objections, if any, from the public. The plaintiffs have also enclosed proof of such publication. Having regard to the necessity projected by the plaintiff and the proposed utilisation of the sale proceeds for the objects of the Trust, this Court is of the view that permission may be granted, subject to adequate safeguards to ensure transparency and to secure the best possible consideration for the Trust property.

10. Accordingly, the suit is allowed and the plaintiffs / trustees are permitted to sell the Trust property described in the schedule to the plaint, subject to the following conditions:

                     (1) The plaintiffs shall obtain a valuation of the subject property from an approved independent valuer and place the valuation report before this Court.

                     (2) The property shall be sold only through a transparent process by giving adequate public notice and inviting offers from intending purchasers.

                     (3) The plaintiffs shall endeavour to secure the best possible market price and the property shall not be sold for a consideration less than the fair market value / reserve price determined on the basis of the valuation report.

                     (4) The proposed sale and acceptance of the highest offer shall be placed before this Court for confirmation, if required, before execution of the sale deed.

                     (5) The entire sale consideration shall be deposited in a separate bank account maintained in the name of the Trust.

                     (6) The sale proceeds shall be utilised strictly and exclusively for the objects and purposes of the Trust.

                     (7) The plaintiffs / Trustees shall maintain proper accounts regarding the receipt and utilisation of the sale proceeds and produce the same before this Court whenever directed.

                     (8) The plaintiffs shall file a report before this Court upon completion of the sale transaction.

11. Accordingly, the suit is decreed as prayed for on the above terms. No costs.

 
  CDJLawJournal