Dismissed¶51

Vishal S.Ved v. The Official Trustee of Tamil Nadu

Madras HC6 Feb 2025A/487/2025

Case brief

AI extract

What is this about?

Doctrine of public trust; lease of trust property by public auction; maximum market rent; AG&OT directions; minimum upset price fixed by private valuer; modification of lease proposal dated 13.07.2022 refused; Sowcarpet/Kothavalchavadi shops; A.No.487 of 2025 in A.No.3211 of 2022; Madras High Court; S. S. Sundar, J.

What did the court decide?

No relief to the applicant; application dismissed. Directions issued to the learned AG&OT to lease the seven shops by public auction without delay, with wide publication through all modes, lease terms protecting the Trust's interest in all exigencies, and any minimum upset price to be fixed after fair assessment of market value by engaging a private valuer; the applicant to cooperate with the learned AG&OT in identifying prospective lessees. ¶51

Vishal S.Ved Vs The Official Trustee of Tamil Nadu — Madras HC (2025) — LawSathi Research

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the proposal dated 13.07.2022 should be modified to permit the applicant to enter into lease agreements with the tenants for the seven shops at Door No.64, Perumal Mudali Street, Kothavalchavadi, Sowcarpet, Chennai 600 001. +1 more

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Court's answer

There is no necessity for granting modification of the proposal dated 13.07.2022; the application is dismissed.

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Ratio / Principle

Invoking the doctrine of public trust reiterated by the Hon'ble Supreme Court for properties of religious institutions and public charitable trusts, the Court holds that administrators of public trusts must obtain maximum market rent when selling or leasing trust property, and expresses confidence that the Trust will get more income only if the property is put to public auction in a fair and transparent manner.

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Key takeaways

The learned AG&OT is directed to go for public auction without delay; before fixing the auction, the lease terms and conditions must protect the interest of the Trust in all exigencies; there shall be wide publication through all modes; and any minimum upset price shall be fixed after fair assessment of the market value by engaging a private valuer. The applicant has undertaken to cooperate with the learned AG&OT in identifying prospective lessees.ratio¶46
Since the construction has been completed in accordance with the building Rules, the applicant shall be liable in case of any problem with the Development authorities or enforcement authorities for violation of the Rules, which authorities are entitled to take action in accordance with the respective Statutes.ratio¶45

Detailed headnote1 paragraphs

Madras High Court (S. S. Sundar, J.), A.No.487 of 2025 in A.No.3211 of 2022, order dated 06-02-2025: The applicant, in relation to a reconstructed trust property at No.151-A, Mint Street, Sowcarpet vested with the Administrator General & Official Trustee (AG&OT), sought modification of the proposal dated 13.07.2022 to enable himself to enter into lease agreements with the tenants of the seven shops at Door No.64, Perumal Mudali Street, Kothavalchavadi. Applying the doctrine of public trust governing properties of religious institutions and public charitable trusts — under which administrators must secure maximum market rent when selling or leasing trust property — the Court held that the Trust will get more income only through a fair and transparent public auction, and dismissed the application seeking modification. Directions issued: the learned AG&OT to conduct the public auction without delay with wide publication through all modes; lease terms and conditions to protect the Trust's interest in all exigencies; any minimum upset price to be fixed after fair assessment of market value by engaging a private valuer; and the applicant to cooperate in identifying prospective lessees. The applicant remains liable to Development/enforcement authorities for any violation of the building Rules; the Court declined, for the present, to examine the reduction in the number of shops from the agreed nine to the seven actually constructed.

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A.No.487 of 2025 in A.No.3211 of 2022

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED: 06-02-2025

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CORAM

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THE HONOURABLE MR JUSTICE S. S. SUNDAR A NO. 487 of 2025 in A NO. 3211 OF 2022

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Vishal S.Ved

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residing at Flat No.1602, 16th Floor, K Block, KLP Abhinandan Apartment, No.30, Perambur Barracks Road, Pattalam, Chennai 600 012.

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... Applicant

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The Official Trustee of Tamil Nadu High Court, Chennai 600 104.

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.... Respondent

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A NO. 3211 of 2022

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Vishal S.Ved

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residing at Flat No.1602, 16th Floor, K Block, KLP Abhinandan Apartment, No.30, Perambur Barracks Road, Pattalam, Chennai 600 012.

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Applicant(s)

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The Official Trustee of Tamil Nadu High Court, Chennai 600 104.

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Respondent(s)

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A NO. 487 of 2025

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For Applicant : Mr.N.Baaskaran For Respondent(s): Mr.D.Lingeshwaran Administrator General & Official Trustee of Tamil Nadu

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https://www.mhc.tn.gov.in/judis

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A.No.487 of 2025 in A.No.3211 of 2022

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ORDER

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This petition is filed to modify the proposal dated 13.07.2022 permitting the applicant to enter into lease agreements with the tenants for the seven (7) shops at Door No.64, Perumal Mudali Street, Kothavalchavadi, Sowcarpet, Chennai 600 001.

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The facts are not in dispute. The property bearing No.151-A, Mint Street, Sowcarpet, Chennai -600 079 is a Trust property vested with the learned AG&OT. Since the building was more than 130 years old and was in a highly dilapidated condition, originally the applicant, his father and his uncle filed an application praying to permit them for demolition and reconstruction of the property.

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Thereafter, another application was filed in A.No.4174 of 2012 praying for directions to the tenants to vacate their respective portions under their occupation to facilitate demolition and reconstruction. After the demise of his father and uncle, the applicant himself filed A.No.283 of 2021 praying to permit

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https://www.mhc.tn.gov.in/judis

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A.No.487 of 2025 in A.No.3211 of 2022

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him to effect demolition and reconstruction of the building in the property and thereafter, apportionment of the rental income derived from lease of the portions in the property in the reconstructed building in a fair and equitable manner.

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Another application in A.No.3211 of 2022 was filed to consider certain proposals regarding the development of the property. This Court passed a detailed order on 22.02.2023 in the following lines:

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“ 3. In view of the submission made by the parties, this application is ordered as prayed for. The parties have agreed for the terms and conditions as per the proposal dated 13.07.2022. The learned AG&OT is expected to make an application for planning permission before the authority concerned, who shall process and sanction the plan within a period of one month from the date of making such application. On getting proper sanction, the applicant is expected to complete the construction without any deviation/violation within a period of 15 months from the date of sanction of the plan. It is reiterated that the construction should be in accordance with the plan that will be sanctioned.”

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Learned AG&OT is not disputing the agreement entered into between

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https://www.mhc.tn.gov.in/judis

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A.No.487 of 2025 in A.No.3211 of 2022

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them. It is also not in dispute that the applicant himself has agreed to certain proposals, wherein he has undertaken for construction of a new building at his own cost. Though the right of the residence in the property is reserved to the applicant and Mrs.Bina Subash to do pooja and seva to the deity, by putting up two residential units in the first floor, the parties have mutually agreed that the lease deeds in respect of the shop portions shall be executed by the learned AG&OT specifying that 50% of the lease amount be deposited in a designated bank account in the name of AG and OT.

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It is to be noted that the Hon'ble Supreme Court has reiterated certain principles while dealing with the properties belonging to religious institutions or Public Charitable Trusts. The doctrine of Public Trust reiterated by the Hon'ble Supreme Court in several cases envisages certain guidelines to be followed by the administrators of Public Trusts to get maximum market rent for the property whenever a decision is taken to sell or to lease out such a property.

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In this case, this Court is confident that the Trust will get more income only if the property is put to public auction in a fair and transparent manner.

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https://www.mhc.tn.gov.in/judis

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A.No.487 of 2025 in A.No.3211 of 2022

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Even though the applicant has agreed to put up 9 shops, the total number of shops that has now been put up is only 7. Though the property has now been constructed with certain deviations from the original agreement, learned AG&OT does not complain that there is reduction of extent. This Court, for the present, is not inclined to go into the wisdom of the applicant in restricting the number of shops constructed and to be leased out as he has invested huge amount.

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Since the construction has been completed in accordance with the building Rules, the applicant shall be held liable in case of any problem with the Development authorities or enforcement authorities in case of violation of the Rules, who are entitled to take action for such violations in accordance with the respective Statutes. For the present, there is no necessity for granting modification of the proposal dated 13.07.2022. Therefore, the application stands dismissed.

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However, the learned AG&OT is directed to go for public auction without delay and before fixing the auction, the terms and conditions of lease

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https://www.mhc.tn.gov.in/judis

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A.No.487 of 2025 in A.No.3211 of 2022

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should protect the interest of the Trust in all exigencies. There shall be wide publication through all modes. The applicant has given an undertaking that he will cooperate with the learned AG&OT in identifying prospective lessees. The minimum upset price, if any, required to be fixed will be after fair assessment of the market value by engaging a private valuer by the learned AG & OT.

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