(Prayer: a) To permit the 1st plaintiff Trust to enter into a joint development agreement with a reputed builder/developer for redevelopment of the Trust property situated at No.25(12), West Mada Koil Street, Royapuram, Chennai-600 013 more fully described in the schedule hereunder, to execute the necessary Joint Development Agreement, POA and Ancillary Documents with the proposed builder/developer, and to alienate part or most of the property to the builder who develops the property and to utilise the proceeds or share of built-up area exclusively for its charitable objects on the broad terms set forth above or such terms as this Hon’ble Court may deem fit and proper.
1. The suit has been filed by the plaintiffs seeking to permit the 1st Plaintiff- Trust to enter into a Joint Development Agreement with a reputed builder/developer for redevelopment of the Trust property situated at No.25(12), West Mada Koil Street, Royapuram, Chennai - 600 013 more fully described in the schedule hereunder, to execute the necessary Joint Development Agreement, Power of Attorney and ancillary documents with the proposed builder/developer, and to alienate part or most of the property to the builder who develops the property and to utilise the proceeds or share of built-up area exclusively for its charitable objects on the broad terms set forth above or on such terms as this Hon’ble Court may deem fit and proper.
2. The 1st Plaintiff-Trust, known as “Roopchand Chabildass Charitable Trust,” is a public charitable Trust which was founded by Late Sri.Punamchand Roopchand Shah and Late Sri.Milapchand Roopchand Shah, partners of M/s.Roopchand Chabildass & Sons, by a Trust Deed dated 14.10.1957, registered as Document No.1044/1957, on the file of SRO Madras-Chengalpet.
3. It is submitted that as per the Trust Deed, the principal objects are:
a. Founders endowing a fund to be devoted to the educational, religious, medical, social and cultural needs of the public throughout the whole of India and also for giving scholarships to deserving students in schools, colleges and in industrial and technical educational courses in whatever branch it be and further also to help such people as are affected by flood, drought, earthquake and fire etc., by giving donations and whereas the Trustees have agreed to act as trustees for the management of the said endowment in the manner provided.
b. To establish a fund for the purpose of educational, religious, medical, social and cultural needs and also endowing scholarships to deserving persons for industrial and technical education and to help such people as are affected by vis major in any part of India.
c. To establish colleges, hospitals, dispensaries, maternity homes, nursing homes and to conduct the same.
d. To establish and conduct libraries and reading rooms, Shivan Sala (tailoring Schools), Dharmasalas (Choultries) or cheap rent rooms, blocks etc.
e. To do all other acts and things as may be necessary or conducive to the attachment of the object of the Trust.
4. The Plaintiffs submit that the Trust continues to function as a public charitable institution, devoted to educational, religious, medical, social, and cultural purposes.
5. It is submitted that in furtherance of its objects mentioned above, the Trust purchased. After the purchase, all revenue records, patta and other records were duly mutated in the name of the Plaintiff Trust. The Plaintiff Trust had constructed small dwelling units, in three blocks, in the year 1965 after obtaining necessary approvals from the authorities concerned. All the utility services such as, Property Tax, Water and Sewage Tax and Electricity Charges are duly assessed in the name of the Plaintiff Trust and the same has been paid by the Plaintiff Trust till date. Therefore, the Plaintiff Trust is in absolute possession and uninterrupted enjoyment of the Schedule mentioned property as its owner.
6. Further, it is submitted that the Plaintiff Trust had rented out the above said dwelling units to various individuals, who did not have any permanent residences at Chennai and to poor people, for a meagre rent. Since the above dwelling units were constructed as early as in the year 1965, now a predominant portion of the said dwelling units is in a dilapidated condition and not fit for human habitation. The Plaintiff Trust had been spending the above-mentioned meagre rental income over the years, only to carry out minor repairs and maintenance of the said property. The Plaintiff Trust is unable to use the said income for the objects of the Trust. The Plaintiff submits that the Trust Property more fully described in the schedule hereunder is situated in a prime locality and densely populated area and if the same is converted into a residential or commercial complex, the same would fetch considerable financial income to the Trust in the long run and make it more sustainable and meaningful to carry on the objects of the Trust. The Trust’s financial position is very low and is not in a position to develop the schedule mentioned property on its own. The Board of Trustees in their meeting held on 14.08.2025, have decided to proceed with a joint venture with one of the reputed builders in the market, after due scrutiny.
7. Further, it is submitted that when the said Trust was incorporated, the larger joint family who founded the Trust were having a vibrant business of running a flour mill and other related businesses. Over time, the said businesses have become defunct, and the family has disintegrated and the core businesses have been shut down. Hence, the younger generation of the said family who are now mostly self-employed are unable to pump in the required finances to rejuvenate the Trust and its property. Hence, it has become necessary to take a long-term decision to keep the Trust going. The Plaintiff most respectfully submits that the proposed Joint Venture is not merely beneficial but is, in fact, a critical necessity for the very survival and functional efficacy of the Trust. The Plaintiff respectfully submits that the proposed transaction would involve parting with and transfer of a part of the Trust property, but in return the Trust would gain valuable built-up area which it may continue to own and would be able to generate much needed income to meaningfully carry on the objects of the Trust.
8. It is submitted that the broad terms of the proposed Joint Venture, as negotiated, are as follows:
i)The Trust shall contribute its land, as per the Schedule.
ii) The Developer shall be responsible for obtaining all necessary approvals and licenses, bearing the entire cost of construction, and undertaking the marketing and sale of part of the property.
iii) Upon development, the Trust shall be entitled to a specific number of residential/commercial units or a combination of built-up area and a lump sum payment.
iv) The terms and conditions are fair, reasonable, and beneficial to the Trust, ensuring a significant and long-term benefit for its charitable objectives.
9. The Plaintiff respectfully submits that the proposed joint development involves sale of a major part of the Trust property and constitutes alienation in favour of the proposed builder and the Plaintiff Trust would also be benefited by receiving substantial constructed area which may be continued to be held by the Trust or alienated as required. Under Section 92 CPC, no such transaction can be effected without prior permission of this Court. The Plaintiffs therefore seek the permission and sanction of this Court, to ensure the transaction can be proceeded with in a bona fide, fair, and beneficial manner for the Trust and its objects and all concerned.
10. It is submitted that the Plaintiff seeks the sanction of this Hon’ble Court for the following reasons:
(a) The proposed Joint development and sale of the Trust property is a complex and significant act of administration concerning the core Trust property, creating long-term rights and obligations and even alienation.
(b) The Plaintiff wishes to act with utmost prudence and in strict conformity with law, seeking the Court’s opinion to ensure the transaction is for the benefit of the Trust and its objects.
(c) The transaction, while not a simple sale, involves permitting a third party to use and develop Trust property. The Court’s sanction is sought to ensure the terms are fair and that the arrangement will ultimately advance the charitable purposes of the Trust by creating a valuable income-generating asset.
11. On the side of the plaintiff, one Gaurang Shah has been examined as P.W.1 and documents were marked as Exs.P1 to P10.
12. Heard Mr.Krishna Ravindran, learned counsel for the plaintiffs and records perused.
Points for consideration
“Whether the plaintiffs have established that the proposed redevelopment and consequential alienation of the Trust property is necessary and beneficial for the proper administration and advancement of the objects of the public charitable trust and whether the plaintiffs are entitled to the sanction sought under Section 92(1)(f) of the Code of Civil Procedure?”
13. The Trust deed dated 14.10.1957 discloses that the Trust was established for public charitable purposes extending to education, medical relief, religious, social and cultural activities, scholarships and relief to persons affected by natural calamities. The objects are plainly charitable and are intended to benefit members of the public. The 1st plaintiff is therefore a public charitable Trust and its property is required to be administered in accordance with the objects for which the Trust was created.
14. Section 92(1) of the Code of Civil Procedure applies where there is a public charitable or religious Trust and the direction of the Court is deemed necessary for its administration. Among the reliefs expressly contemplated by Section 92(1) is authorisation for the whole or any part of the Trust property to be let, sold, mortgaged or exchanged under Clause (f).
15. The Division Bench of this Court in M/s.A.R.R.Charitable Trust Vs. Amrita Vishwa Vidya Peetham, O.P.Nos.211, 252 & 183 of 2023 decided on 12.10.2023 has considered the scope of Section 92 in the context of a public charitable Trust seeking permission for dealing with Trust property. The Division Bench held that invocation of Section 92 is not restricted to cases involving an alleged breach of Trust and that it can be invoked where a direction of the Court is necessary for administration of the Trust. The Court specifically held that an application seeking permission to sell Trust property is maintainable under Section 92(1)(f).
16. The present suit is therefore maintainable under Section 92 of the Code of Civil Procedure.
17. The evidence placed before this Court establishes that the existing structures were constructed as early as in 1965. The plaintiffs have stated that the structures have substantially deteriorated and that the rental income derived from the property is meagre. The property is situated in a developed and densely populated locality. It is, therefore, reasonable to accept that redevelopment, if undertaken on commercially prudent terms, would have the potential to substantially enhance the productive capacity of the Trust property.
18. The object of a charitable Trust is not merely to preserve its corpus in a static form. The Trust property must be administered in such a manner as to advance the charitable purposes for which the Trust was established. Where an old and substantially unproductive property can, by prudent redevelopment, be converted into a valuable income-generating asset, such redevelopment can constitute a legitimate act of administration, provided the interests of the Trust are adequately protected. At the same time, the Court cannot grant a blanket and unrestricted authority to alienate a substantial portion of the Trust property merely on the basis of a general proposal.
19. The proposed transaction involves a valuable immovable property belonging to a public charitable Trust. Any development agreement, power of attorney, sale or other transfer must therefore be transparent, commercially reasonable and demonstrably beneficial to the Trust. The Court has to ensure that the Trust does not part with its property for inadequate consideration and that the charitable corpus is not dissipated.
20. The Hon’ble Supreme Court has emphasised, in the context of statutory sanction for disposal of public Trust property, the necessity of objectively considering the interest, benefit and protection of the Trust, including the commercial value of the property and the conditions attached to the transaction. The same principle is applicable while exercising jurisdiction under Section 92 CPC.
21. The sanction, therefore, cannot be understood as an unconditional permission to sell or transfer the property to any developer on any terms. The Trust shall first obtain an independent valuation of the entire property from a qualified Government-approved valuer or other competent valuer acceptable to the Court.
22. The Trust shall also obtain and consider at least two or more competitive offers from reputed developers, unless there are compelling reasons to proceed otherwise. The selection of the developer shall be made only after comparison of the financial and development terms and after recording reasons for accepting the particular proposal.
23. The plaintiffs have stated that the proceeds generated from the proposed development and sale would be utilised exclusively for the objects of the Trust. Such a condition is essential. Therefore, on the materials placed before this Court, this Court is satisfied that the existing condition of the property, its meagre rental yield, the substantial age of the structures and the financial inability of the Trust to independently redevelop the property constitute sufficient circumstances warranting redevelopment.
24. The proposed development, if carried out on commercially prudent and transparent terms, would preserve and enhance the Trust corpus and generate a sustained source of income for carrying out the charitable objects of the Trust.
25. Accordingly, this Court is satisfied that the direction of the Court is necessary for the administration of the Trust and that the proposed transaction falls within the scope of Section 92(1)(f) of the Code of Civil Procedure.
26. Further, the plaintiffs submit that the existing dwelling units in the suit property were occupied by various persons and presently only a few persons are in occupation of the units. Since the proposed redevelopment requires the existing structures to be vacated, the plaintiffs have fairly undertaken before this Court that the Trust shall make all reasonable and necessary arrangements for the peaceful relocation of all the remaining occupants before requiring them to vacate the premises. The plaintiffs have further undertaken that, wherever any rental advance, security deposit or other refundable amount has been received from such occupants, the same shall be duly refunded in accordance with law, before or at the time of requiring the concerned occupants to vacate, subject to lawful adjustment, if any. The said undertaking is accepted and is made a part of this decree. The redevelopment shall not be undertaken by forcibly evicting or otherwise unlawfully dispossessing the existing occupants. The Trust shall take all reasonable steps to secure their peaceful relocation and shall comply with the applicable provisions of law governing their occupation and eviction.
27. In the result, the suit is decreed and the 1st plaintiff Trust is permitted and authorised to undertake redevelopment of the suit schedule property by way of a joint development agreement with a reputed builder / developer, and to execute the necessary joint development agreement, power of attorney and other ancillary documents subject to the following conditions:
(1) The Trust shall obtain an independent valuation of the suit property from a qualified valuer before finalising the transaction.
(2) The developer shall be selected only after obtaining and considering competitive offers and after the trustees record reasons for selecting the successful developer.
(3) The consideration and development terms shall be fair and commensurate with the prevailing market value and development potential of the property.
(4) The Trust shall not alienate or transfer the entire property to the developer merely on the basis of this decree. Any sale, transfer or conveyance shall be strictly confined to the portion and extent necessary for implementing the approved development arrangement.
(5) The Trust shall retain its agreed share in the developed property and/or receive the agreed monetary consideration, as may be specified in the final joint development agreement.
(6) The Trust shall not execute any document creating an unrestricted or perpetual power in favour of the developer to deal with the entire Trust property.
(7) The developer shall bear the expenses relating to approvals, planning, construction and development, except such expenses as may be specifically agreed upon in the joint development agreement in the interest of the Trust.
(8) All sale consideration, development consideration and other amounts received by the Trust shall be deposited in the bank account of the Trust and shall be duly accounted for.
(9) The proceeds shall be utilised exclusively for the charitable objects of the Trust as contained in the Trust deed dated 14.10.1957.
(10) No part of the sale proceeds or other consideration shall be distributed to the Trustees, their relatives, founders or any private individual. (11) The Trust shall maintain separate and proper accounts of all receipts and expenditure arising from the development transaction.
(12) The final joint development agreement shall contain appropriate safeguards for the Trust in the event of delay, default, abandonment or breach by the developer.
(13) The Trust shall not create any mortgage, charge or encumbrance over its retained share except with the prior sanction of the competent Court.
(14) The Trustees shall ensure that the charitable activities of the Trust continue without interruption and that the redevelopment does not result in diversion of Trust assets for private purposes.
(15) Any subsequent alienation of the Trust’s retained built-up area or other substantial Trust property shall be dealt with in accordance with law and shall not be treated as automatically authorised by this decree.
(16) The trustees shall place before the competent authority of the Trust a complete statement of the transaction, including valuation, developer selection, consideration received, construction details and utilization of the proceeds.
(17) Before requiring any of the remaining occupants of the existing dwelling units to vacate the premises for the purpose of redevelopment, the Trust shall make all reasonable and necessary arrangements for their peaceful relocation and shall ensure that the occupants are dealt with in accordance with law.
(18) The Trust shall refund to the concerned occupants any rental advance, security deposit or other refundable amount received from them, in accordance with law and subject to any lawful adjustment, before or at the time of requiring them to vacate.
(19) The Trust shall not resort to forcible or unlawful dispossession of any occupant. Any requirement to vacate shall be implemented only in accordance with law and after making the aforesaid arrangements.
28. It is made clear that this decree is a sanction for redevelopment and consequential alienation strictly for the purpose of protecting and advancing the charitable objects of the Trust. It shall not be construed as approval of any particular developer or of any undisclosed commercial terms. The trustees shall act as fiduciaries of the Trust and shall ensure that the transaction is concluded only on terms demonstrably beneficial to the Trust. The undertaking given by the plaintiffs before this Court shall form part of the decree and shall be binding upon the 1st plaintiff Trust and its trustees. The suit is accordingly decreed with the above conditions. There shall be no order as to costs.
