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Structured Summary of the Provided Opinion

Factual and Procedural Background

The petition challenges an order permitting the sale of the petition property by the 1st respondent at the rate of Rs. 2,000 per cent. The 1st respondent filed Trust O.P. No. 4 of 1994 concerning the "Tirunavukkarasu Madalayam Trust" under Section 34 of the Indian Trusts Act seeking permission to sell the property on the ground that rental income was insufficient and the agricultural lands were under cultivating tenants; certain purchasers had offered to negotiate with tenants. The petition property had been the subject of a Will dated 21.2.1951 (Ex.P1) executed by one Arumugam Pillai, who endowed specified properties in favour of Thirunavukkarasu (Apparswamy) Madalayam for performance of religious and charitable acts (including feeding devotees and poor, and processions connected with the Thayumanaswamy temple festival).

The learned Principal District Judge, Tiruchirappalli considered oral and documentary evidence (including a V.A.O. certificate valuing the property at about Rs. 2,000 per cent) and evidence that purchasers were willing to deposit sale consideration into Court. Publication was effected and, finding no one else came forward, the District Judge granted permission for sale. The petitioner challenged that order by filing the present revision petition (C.R.P.), alleging the property is trust property/specific endowment and should not have been sold by private negotiation at a low price; further allegations included subsequent alienations by purchasers pending proceedings.

Legal Issues Presented

  1. Whether the petition property, as described in the Will (Ex.P1), constitutes a "specific endowment" under the H.R. & C.E. Act and therefore attracts special protection when dealing with alienation of trust property.
  2. Whether the petitioner (the Thayumanaswamy temple) is a person "interested" in the trust and has locus to object to the sale.
  3. Whether the District Judge's permission to sell the trust property by private negotiation at the stated consideration (and with the publicity and procedures followed) complied with the legal standards and safeguards required in sales of trust/endowment property (including adequacy of price, publicity, fixation of reserve price and mode of sale).
  4. If the sale was improper, what remedial directions should be given (e.g., setting aside the sale, ordering public auction with reserve price, refunding amounts with interest, costs)?

Arguments of the Parties

Petitioner's Arguments

  • The petition property is trust property under the Will dated 21.2.1951 and was endowed for specific religious and charitable purposes; hence it ought not to have been sold.
  • The petitioner is a "person interested" in the trust because the Will endowed the property for performance of services connected with the petitioner's temple festival and feeding of devotees and the poor; therefore the petitioner should have been heard before sale permission was granted.
  • The sale consideration was very low; the sale was effected by private negotiation and not by open auction with proper publicity; the District Judge should not have accepted the stated grounds (tenants occupying land and low rentals) at face value without ensuring maximum realisation for the trust.
  • Purchasers proceeded to alienate the property further during pending proceedings and the C.R.P., allegedly to nullify potential adverse orders.

1st Respondent's / Trustee's Position (as described in the record)

  • The 1st respondent claimed to be the sole trustee and filed Trust O.P. seeking permission to sell because the annual rental income was insufficient and the agricultural lands were in cultivating tenants' occupation; purchasers were willing to negotiate with the cultivating tenants and deposit sale consideration into Court; without permission, the Trust would suffer hardship.

Arguments on Behalf of Mr. A. Saravanan (Respondent represented by Mr. Loganathan)

  • The petitioner is not a necessary party and lacks locus standi to object to the sale or to maintain the revision petition; the Thayumanaswamy Madalayam (the trustee) and the 1st respondent (as sole trustee) safeguard the trust's interests.
  • The endowment was not a specific endowment and therefore not governed by the provisions of the H.R. & C.E. Act; no divesting in favour of the petitioner exists and hence petitioner has no say in the sale decision.
  • Respondents 3 and 4 were served but did not enter appearance.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
R. Venugopala Naidu v. Venkatarayulu Naidu Charities, A.I.R. 1990 S.C. 444 Followed the principles in C. Rami Reddy — directed that properties should be sold by public auction with wide publicity and a reserve price fixed after ascertaining market value. The Court relied on this decision to require compliance with auction, publicity and reserve-price safeguards when selling trust/endowment properties; failure to follow these principles led to setting aside the impugned order and remanding for fresh consideration and public auction.
C. Rami Reddy v. Government of A.P., A.I.R. 1986 S.C. 1158 Authorities must jealously protect endowment property; be vigilant; not allow sale by private negotiation unless special reasons exist; fix reserve price after ascertaining market value; guard against underhand deals and ensure visibility (public auction preferred). The Court invoked these cautionary principles to conclude that private negotiations without safeguards were not acceptable and that reserve price and public auction procedures should be followed to protect the trust's interest.
Executive Officer, Arthanareswarar Temple v. R. Sathyamoorthy & Ors., 1999 (3) L.W. 227 Arose under Section 34 of the Trusts Act; held that courts have a general parens patriae jurisdiction over trusts for charitable and religious purposes (supporting judicial vigilance in trust property alienations). The Court cited this authority to reinforce the principle that courts exercise protective jurisdiction in matters of sale of religious/charitable trust property and should guard the trust's interest before permitting alienation.
Raje Anandrao v. Shamrao, A.I.R. 1961 S.C. 1206 In representative suits under the relevant provision, the decision binds all those interested in the trust, including worshipers/pujaris, even if they were not parties. The Court relied on this principle to hold that the Thayumanaswamy temple (as an interested entity) cannot be denied the right to object to the sale of endowed properties and that representative proceedings bind those interested.
Commissioner, H.R. & C.E. Administration Dept. v. C.V. Sundarsan, 2000 (3) L.W. 468 Applied in relation to characterization and treatment of specific endowments under the H.R. & C.E. Act (as referenced by the Court). The Court stated that this decision applies to the present case in confirming that the Will-created endowment is a "specific endowment" and hence governed by the relevant protective principles.

Court's Reasoning and Analysis

The Court proceeded in a step-by-step analysis grounded in the Will (Ex.P1), statutory definition, and cited precedents:

  1. Characterization of the endowment: The Court examined the recitals of the Will and the expressed purposes (performance of specified religious services and charitable feeding in connection with the Chithirai Avittam festival and procession of the Apparswamy idol alongside Thayumanaswamy). Relying on the statutory definition of "specific endowment" in Section 6(19) of the H.R. & C.E. Act (quoted in the opinion), the Court concluded that the A-schedule property was endowed for a specific religious and charitable service and therefore constituted a "specific endowment." The Court noted that the 1st respondent had effectively admitted this characterization in the petition.
  2. Status of the petitioner as an interested party: The Court considered authorities on who is an "interested" person in a public or religious trust. Referring to Raje Anandrao and R. Venugopala Naidu, the Court held that where properties are endowed for specific actions in connection with a temple, the temple (here, Thayumanaswamy) is necessarily interested in any alienation of those properties. Consequently, the petitioner could not be denied the right to object to the sale.
  3. Standards for alienation of trust property: The Court reviewed the jurisprudence (notably C. Rami Reddy and the decisions following it) stressing vigilance in protecting endowment property, the dangers of private negotiations (possible underhand deals), the need for public visibility, fixing a reserve price after ascertaining market value, and preference for public auction with wide publicity. The Court also referred to Executive Officer, Arthanareswarar Temple v. R. Sathyamoorthy & Ors. to emphasize the protective jurisdiction exercised by courts over charitable and religious trusts.
  4. Application to facts: The Court examined the facts: sale by private negotiation to named individuals, sudden substitutions of purchasers, subsequent alienations to third parties, and a valuation reference (V.A.O certificate) indicating Rs. 2,000 per cent. Finding that the guidelines established by the Supreme Court were not followed (private negotiation, inadequate safeguards to ensure market value/reserve price and publicity), the Court concluded that the District Judge's order permitting the sale could not stand.
  5. Remedies and directions: The Court set aside the District Judge's order and remanded the matter to the Principal District Court, Tiruchirappalli. It directed that the District Judge reconsider the propriety of sale after hearing parties, and if satisfied, fix a reserve price after ascertaining market value, give wide publicity regarding date/time/place, and conduct sale by public auction. The Court provided for refund with 10% interest to the 3rd and 4th respondents (who claimed to have purchased) from the date of payment until the date of auction. The Court allowed the revision petition and awarded costs of Rs. 3,000 to be paid by the 1st respondent; connected miscellaneous petitions were closed.

Holding and Implications

Holding:

The revision petition (C.R.P.) is allowed: the order permitting sale by the District Judge is set aside and the matter is remanded to the Principal District Court, Tiruchirappalli for fresh consideration in accordance with the directions stated.

Direct implications (orders made in the opinion):

  • The District Judge shall reconsider whether the sale is in the interest of the trust after hearing the parties.
  • If the District Judge grants permission to sell, he is to fix a reserve price after ascertaining market value and conduct the sale by public auction with wide publicity regarding date, time and place.
  • The 3rd and 4th respondents (who claim to have purchased) are entitled to refund of the price paid by them with 10% interest from the date of payment until the date of auction of the property.
  • The revision petition is allowed with costs of Rs. 3,000 to be paid by the 1st respondent; connected miscellaneous petitions are closed.

Broader implications: The opinion reiterates and enforces established protective principles concerning sale of trust/endowment property (as articulated in the cited precedents). The opinion does not purport to set a new legal precedent beyond applying and following those existing authorities; its immediate effect is the set-aside and remand with the procedural safeguards and monetary directions specified above.

    The Idol Of Arulmighu Thayumanaswami By Executive Officer, Rockfort, Tiruchi Petitioner v. K. Arumugham And 3 Others S

    1. The petitioner is aggrieved by the order permitting sale of the petition property by the 1st respondent herein at the rate of Rs. 2,000 per cent. According to the petitioner, the property is Trust property and ought not to have been sold. The 1 respondent filed Trust O.P No. 4 of 1994 (in the matter of ‘Tirunavukkarasu Madalayam Trust’) under Section 34 of the Indian Trusts Act. The brief facts of the matter are necessary for appreciation of this revision:

    One Arumugam Pillai executed a Will dated 21.2.1951, Ex.P1 The properties mentioned in the Will were endowed in favour of Thirunavukkarasu alias Apparswami Madam, an idol installed by the testator in one of the properties mentioned in the will. It was also called the Thirunavukkarasu Madalayam. The testator himself performed Kumbabishekam to the said Madalayam. He created “specific endowments” for performance of certain religious and charitable acts in connection with the Trichy Rockfort Thayumanaswamy temple. The devotees and poor people had to be fed and the deity viz. Thayumanaswami along with the Apparswamy idol mentioned above had to be taken in procession around the Rockfort temple streets. The petition property was endowed for performance of various religious charities including this. The Will provided for appointment of trustees and devolution of trusteeship. The 1 respondent claimed to be the sole trustee. He filed the above Trust O.P seeking permission to sell, on the ground that the annual rental from the property is not sufficient, and the land being agricultural lands are in the occupation of cultivating tenants and that certain purchasers have approached the 1 respondent agreeing to negotiate with the cultivating tenants themselves if the properties are sold to them. According to the 1 respondent, if permission was not granted, the Trust would be put to great hardship. The E.O of the idol of Thayumanaswamy filed his counter claiming that he was interested in the petition properties since the properties had been endowed for the performance of the oneday festival in the month of Chithirai on Avitta Nakshathiram. The learned Principal District Judge, Tiruchirappalli considered the oral and documentary evidence. The evidence of R.W.1, who gave evidence on behalf of the H.R & C.E Department, was that Apparswamy Madalayam is not under the control of the department. The V.A.O certificate was produced to the effect that the property would be worth about Rs. 2,000 per cent. It is the evidence of the 1 respondent that one Unni Krishnan and Rajesh were willing to purchase the property and to deposit the sale consideration into Court. From the order of the District Judge, it is seen that publication was effected and since no one came forward, the learned Principal District Judge was satisfied that permission should be granted for sale.

    2. Mr. R. Subramanyam, learned counsel for the petitioner submitted that this matter related to trust property and sale cannot be permitted merely for the asking. He also brought to the notice of this Court that pending the proceedings and the C.R.P, the purchasers have proceeded to make further alienation of the property with a view to nullify any orders that may be passed against the sale by this Court. He referred to the Will dated 21.2.1951 and to the various clauses thereof which would show that the testator had endowed the property in favour of the petitioner. He also referred to the definitions of specific endowment as given in the H.R & C.E Act and to Section 34 which makes alienation of the trust property subject to the provisions of the Act. He also referred to the following decisions: Commissioner, H.R & C.E Administration Dept. v. C.V Sundarsan, 2000 (3) L.W 468, C. Rami Reddy v. Govt. of A.P, A.I.R 1986 S.C 1158 R. Venugopala Naidu v. Venkatarayulu Naidu Charities, A.I.R 1990 S.C 444 and Executive Officer, Arthanareswarar Temple v. R. Sathyamoorthy & Ors., 1999 (3) L.W 227 He submitted that when the Will clearly states that the A schedule property must be utilised for the performance of poor feeding as well as processions of the deity of the Thayumanaswamy temple, the petitioner was definitely a “person interested” in the trust and his objections ought to have been heard by the learned Principal District Judge. He also submitted that in the matter of religious trusts and properties relating to them, Courts have to be extra vigilant especially when it comes to sale of trust property. It was further submitted that the consideration for which the property had been sold was very low and it was done by private negotiation. Though in the petition, it would appear that the property was sold as agricultural land, subsequently, it has been plotted out. He would submit that it should be the endeavour of the persons in control and management of trust properties to realise the maximum price in the event of sale of the trust property. A mere statement that these properties were in the occupation of cultivating tenants and therefore, will not fetch a high price ought not to have been taken at face value.

    3. Mr. Loganathan appearing for Mr. A. Saravanan submitted that the petitioner is not at all a necessary party and had no locus standi either to object to the sale or to maintain the revision petition. If at all a person is interested in the proper management of the petition property, it is the Thayumanaswamy Madam and the 1 respondent being the sole trustee of the Thayumanaswamy Madam, the interest of the Trust was well safe guarded. He would further submit that the endowment is not a specific endowment and therefore, is not governed by the provisions of H.R & C.E Act and since there is no divesting in favour of the petitioner, the petitioner has no say in the matter. Respondents 3 and 4 though served, did not enter appearance.

    4. The relevant extracts of the Will are as follows:

    5. It appears from a reading of these recitals that the testator had endowed these properties in favour of Thirunavukkarasu Apparswamy Madalayam and in addition to all that had to be done in the Madalayam, these properties were also to be used for the Kainkaryams on the day of Avitta Nakshathiram in the month of Chithirai when the idol of Tirunavukkarasu alias Apparswamy would be taken along with the idol of Thayumanaswamy in procession in the streets of Rockfort and the poor and the devotees had to be fed both at the Pushpamandapam near Thayumanaswamy temple as well as the trust Madalayam. In fact, in the petition itself, it is stated as follows:

    “He also created specific endowments connected to the festival of Trichy Rockfort Sri Thayumanavaswamy Temple and feeding devotees at the time of the said festival besides taking the deity along with Apparswamy Idol in procession around the streets of Rockfort Temple. For the purpose of the said Trusts and Charities, he endowed the properties set out in the A Schedule to the said Will.” (Emphasis supplied)

    6. In the decision reported in R. Venugopala Nadidu v. Venkatarayulu Naidu Charities, A.I.R 1990 S.C 444, the question as to who were interested parties in a public trust came up for consideration. A reference was made in that decision to the case reported in Raje Anandrao v. Shamrao, A.I.R 1961 SC 1206wherein it was held as follows:

    “……..It is true that the pujaris were not parties to the suit under S. 92 but the decision in that suit binds the pujaris as worshipers so far as the administration of the temple is concerned, even though they were not parties to it, for, a suit under S. 92 is a representative suit and binds not only the parties thereto but all those who are interested in the trust.”

    7. It is futile to urge that the Thayumanaswamy temple is not a party interested in the trust properties. When the testator had endowed the trust properties for performance of certain specific deeds in connection with the petitioner, any alienation of the said properties is definitely a matter that would interest the petitioner temple. Therefore, the petitioner cannot be denied the right to object to the sale of the endowed properties on the ground that it is not beneficial to the trust.

    8. The definition of “specific endowment”' in the H.R & C.E Act reads thus:

    “Section 6(19): “Specific endowment” means any property or money endowed for the performance of any specific service or charity in a math or temple, or for the performance of any other religious charity, but does not include an inam of the nature described in Explanation (1) to clause (17).”

    9. In this case, the A-schedule property Ex.P1 Will, was endowed to the Thirunavukkarasu Madalayam for the performance of specific service and charity in connection with the festival of Chithirai Avittam in Thayumanaswamy temple. Therefore, what was created under the Will was definitely “specific endowment” and it has been so admitted by the 1 respondent as seen from the extract of petition referred above. The deed refers to beneficiaries of the endowment who are the devotees and poor people. The endowment is with relation to an observance of religious and charitable character; ‘charitable’ since the poor are fed, ‘religious’ since the idol of Thayumanaswamy is worshipped and thereafter taken in procession. For this amongst others the founder had set apart the property and had intended that the income therefrom should be utilised for their performance. Therefore, definitely a “specific endowment” was created in favour of the petitioner and the decision reported in Commissioner, H.R & C.E Administration Dept. v. C.V Sundarsan, 2000 (3) L.W 468 applies to this case.

    10. Now, we come to the question of whether the sale to two private parties was in order. The grievance raised by the petitioner is four fold: (1) That the consideration is too law; (2) sufficient publicity was not given for the sale; (3) the sale was effected by private negotiation; and (4) after selling the property as agricultural land, the land has been plotted out which would necessarily mean that a higher value would be realised and this was denied to the trust. In this regard, we may refer to the following decisions cited by the counsel for the petitioner.

    11. The case reported in Executive Officer, Arthanareswarar Temple v. R. Sathyamoorthy & Ors. 1999 (3) L.W 227 also arose under Section 34 of the Trusts Act where the District Judge had declined to grant permission to sell the properties in which it was held that courts have a general parence partria jurisdiction over trusts for charitable and religious purposes.

    12. In the decision reported in C. Rami Reddy v. Govt. of A.P, .A.I.R 1986 S.C 1158, the Supreme Court held thus:

    “We cannot conclude without observing that property of such institutions or endowments must be jealously protected. It must be protected, for, a large segment of the community has beneficial interest in it (that is the raison d'etre of the Act itself). The authorities exercising the powers under the Act must not only be most alert and vigilant in such matters but also show awareness of the ways of the present day world as also the ugly realities of the world of today. They cannot afford to take things at their face value or make a less than the closest-and- best-attention approach to guard against all pitfalls. The approving authority must be aware that in such matters the trustees, or persons authorised to sell by private negotiations, can, in a given case, enter into a secret invisible underhand deal or understanding with the purchasers at the cost of the concerned institution. Those who are willing to purchase by private negotiations can also bid at a public auction. Why would they feel shy or be deterred from bidding at a public auction? Why then permit sale by private negotiations which will not be visible to the public eye and may even give rise to public suspicion unless there are special reasons to justify doing so? And care must be taken to fix a reserve price after ascertaining the market value for the sake of safeguarding the interest of the endowment. With these words of caution, we close the matter.”

    13. In R. Venugopala Nadidu v. Venkatarayulu Naidu Charities, A.I.R 1990 S.C 444 also, the Supreme Court following the above decision, i.e,C. Rami Reddy v. Govt. of A.P, A.I.R 1986 S.C 1158 directed the properties in question to be sold by public auction by giving wide publicity regarding the date, time and place of public auction and directed that a reserve price should also be fixed after ascertaining the market value.

    14. In this case, in the petition, there is reference to one Sundari and Sulochana to purchase the suit property. Thereafter suddenly, one Unnikrishnan and Rajesh appear to have offered to purchase the property pending the trust O.P These two persons were also impleaded in the revision by order dated 19.10.2000 Thereafter admittedly the properties had again passed hands to third parties. Since the guidelines laid down by the Supreme Court in matters where the trust properties are sold have not been followed in the instant case, I have no hesitation in setting aside the order of the court below. The matter is remanded to the file of the Principal District Court, Tiruchirappalli. The learned District Judge shall again consider whether the sale is in the interest of the trust after hearing the parties and if the District Judge is satisfied that permission should be granted, he shall fix the reserve price after ascertaining the market value so that the interest of the trust is safeguarded and thereafter, conduct the sale by public auction by giving wide publicity regarding the date, time and place. The 3rd and 4th respondents who claim to have purchased the property shall be entitled to refund of the price paid by them with 10% interest from the date of payment of the amount till the date of auction of the property. The C.R.P is allowed with costs of Rs. 3,000 to be paid by the 1 respondent. Connected CMPs are closed.

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    The Idol Of Arulmigh... v. K. Arumugham And 3 O...
    (Sep 13, 2001)