An Unregistered Charitable Trust Is Still A Trust: AP High Court

"All Public Charitable Institutions, Whether Registered Or Not, Fall Within The Contours Of The Endowments Act" — In a ruling of significant consequence for charitable institutions across Andhra Pradesh, the High Court of Andhra Pradesh at Amaravati — in its judgment dated March 6, 2026 — held that a Public Charitable Trust comes into existence the moment it is validly created, and that the absence of registration under the Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1987 does not prevent its coming into existence, does not render it non-functional as a legal entity, and does not bar it from instituting legal proceedings to protect its properties.

The Division Bench of Justice R. Raghunandan Rao and Justice T.C.D. Sekhar declared that registration under the Endowments Act is a regulatory consequence — not a condition precedent — to the existence of a Public Charitable Trust.

The finding arose in the context of a vigorous challenge to the very existence of the "Muppavarapu Chowdary and Leela Rama Krishna Prasad Trust" — a charitable trust constituted under the Wills of late Dr. M. Leela Rama Krishna Prasad, an NRI physician who passed away in Georgia, USA on April 19, 1999. The Trust had filed writ petitions challenging fraudulently obtained Lok Adalat awards and subsequent sale deeds in respect of the estate properties of Dr. Prasad. Its opponents argued, as a threshold objection, that the Trust had never come into existence at all — and therefore had no locus to file any petition or proceeding whatsoever.

The Challenge — Trust Said To Be "Stillborn"

Sri Krishna Grandhi, Senior Counsel appearing for Sri Chadalavada Koteswara Rao, pressed a multi-pronged attack on the very existence of the Trust. His contentions, as summarised by the Court, were threefold.

First, that the Trust is a Public Trust governed by the Endowments Act, and since it had never registered itself with the Endowments Department, it had not come into legal existence. Second, that the Trust was "stillborn and never functioned" — it had no office, had never discharged any of its stated charitable functions, and had not come into existence either by operation of law or by actual functioning. Third, and in the alternative, that even if the Trust existed, it was not a juristic entity but merely a compendium of its trustees, and since all trustees had not joined as parties in the writ petitions, the proceedings were liable to fail for non-joinder of necessary parties.

In support of the registration argument, Sri Grandhi also placed before the Court a reply received under the Right to Information Act from the Endowments Department, stating that the Trust had no entry in their records — urging that this official response confirmed the Trust's non-existence.

The Trust's Defence

Sri O. Manohar Reddy, Senior Counsel appearing for the Trust, countered that the Trust was created by a valid Will — which the Court was simultaneously upholding — and that a Public Charitable Trust, unlike a private trust, is governed by a special statutory regime under the Endowments Act which itself contemplates the existence of unregistered charitable institutions. He further contended that the principles applicable to private trusts under the Indian Trusts Act, 1882 — which require all co-trustees to join in proceedings — do not apply to Public Charitable Trusts governed by the Endowments Act, which has its own mechanism for institutional representation.

What the Endowments Act Actually Says — The Savings Clause That Changes Everything

The Court began its analysis with Section 1 of the Indian Trusts Act, 1882, which contains a critical savings clause: "nothing herein contained... applies to public or private religious or charitable endowments." By virtue of this exclusion, the Indian Trusts Act — and its requirement that all co-trustees must join in proceedings — does not govern Public Charitable Trusts at all. The Endowments Act of 1987 is the applicable statute for such trusts in Andhra Pradesh.

The Court then turned to the definitional provisions of the Endowments Act. Section 2(3) defines "charitable endowment" as "all property given or endowed for any charitable purpose," with an Explanation that property which was given or used for a charitable purpose shall continue to be deemed a charitable endowment even if the charitable institution has subsequently ceased to exist or ceased to be used for charitable purposes. Section 2(4) defines "charitable institution" as "any establishment, undertaking, organisation or association formed for a charitable purpose," which includes a specific endowment and dharmadayam.

Applying these definitions to the Trust created under Dr. Prasad's Will of April 17, 1999, the Court noted that the Will initially provided for the benefit of Dr. Prasad's mother and thereafter for the education and health of deserving candidates both within and outside Dr. Prasad's family. The Court held: "The provisions of Section 2 of the Endowments Act stipulate that any Trust which provides education or medical relief would be a charitable Trust, which falls within the ambit of the Endowments Act. The grant of the initial benefit of the Trust to the mother of Dr. Prasad would not make any difference to the ultimate character of the Trust." Dr. Prasad himself had described it as a "Private Charitable Trust" in the Will — but the Court held that the savings clause of the Indian Trusts Act excludes private charitable trusts as well, and the character of the trust must be determined by the Endowments Act definitions, not by the testator's own label.

The Core Finding — Registration Is Regulatory, Not Constitutive

The decisive provision was Section 1(3) of the Endowments Act, which the Court extracted and applied directly. This sub-section makes clear that all public charitable institutions — "whether registered or not" — fall within the contours of the Act. The Court held this language to be unambiguous and conclusive: "The first contention has to be rejected, in the light of Section 1(3) of the Endowments Act, which states that all public charitable institutions, whether registered or not, fall within the contours of the Endowments Act."

The Court further reinforced this conclusion by reference to Section 44 of the Endowments Act, which empowers the Commissioner to direct registration of charitable and religious institutions even where the persons in management have not done so voluntarily. The very existence of this power of compulsory registration presupposes that there can be — and commonly are — Public Charitable Institutions which are not registered with the Endowments Department. If registration were a condition precedent to legal existence, Section 44 would be rendered otiose: there would be nothing to compulsorily register if non-registration meant non-existence. The Court observed: "Section 44 of the Endowments Act also empowers the Commissioner to get charitable and religious institutions to be registered, if the persons in management do not get such institutions registered. This would only mean that there can be Public Charitable Institutions, which are not registered with the Endowments Department."

The RTI reply from the Endowments Department showing no record of the Trust was therefore of no legal consequence. The absence of a registration record proves only the absence of registration — which the Court held to be legally immaterial to the question of existence.

Non-Functionality Is Not Non-Existence

The second limb of the challenge — that the Trust had never functioned, had no office, and had discharged no charitable activities — was rejected with equal firmness. The Court pointed to the voluminous documentation filed by the very party challenging the Trust's existence. Sri Chadalavada Koteswara Rao had himself produced a large number of documents showing the Trust's continued and active engagement in litigation over its claimed properties — fighting possession disputes, filing writ petitions, and defending its rights in court from the very inception of the estate litigation. The Court held: "The second contention, that the Trust has not been functional, cannot be accepted, in view of the voluminous documentation filed by Sri Ch. Koteswara Rao himself. The said documentation shows the continual fight, between the Trust and Sri Ch. Koteswara Rao and Smt. Parvathi, over the possession of the lands which are claimed to have been purchased by Sri Ch Koteswara Rao and Smt. Parvathi."

There was a certain irony in the argument: the very party who had been litigating against the Trust for years — and had produced reams of documents to that effect — was simultaneously arguing in the same proceedings that the Trust did not exist. The Court evidently found this untenable.

The Trust Has A Juristic Personality — Section 14 of the Endowments Act

On the third limb — whether all trustees must join in proceedings — the Court held that the Endowments Act fundamentally alters the structure of a Public Charitable Trust in comparison to a private trust. Section 14 of the Endowments Act provides that all properties of a Charitable Institution shall vest in that institution. The effect of this vesting, the Court held, is to confer juristic personality on the institution itself — making it a legal entity distinct from its trustees, capable of suing and being sued in its own name.

This was reinforced by Section 29(3)(b)(iii) of the Endowments Act, which stipulates that in all legal proceedings, it is the Executive Officer who shall sue or be sued in the name of the institution or endowment. "By virtue of the provisions of the Endowments Act, the aforesaid judgments would not be applicable to the Trust, which is a charitable Institution, governed by the Endowments Act," the Court held, distinguishing the Supreme Court's judgment in Sk. Abdul Kayum v. Mulla Alibhai, AIR 1963 SC 309 and the Gujarat High Court's Full Bench judgment in Atmaram Ranchhodbhai v. Gulamhusein Gulam Mohiyaddin, AIR 1973 Guj 113 — both of which dealt with private trusts under the Indian Trusts Act and required all co-trustees to join in proceedings.

Can A Single Trustee File Proceedings On Behalf Of The Trust?

The Court addressed the practical question: in the absence of an appointed Executive Officer, can a single trustee file writ petitions on behalf of the Trust? The answer was yes. The Court noted that Section 29 of the Endowments Act envisages a situation where no Executive Officer has been appointed, and the Proviso to Section 29(1) permits a Trustee — in the absence of an Executive Officer — to institute proceedings with the authorisation of the Commissioner, subject to the Trust's annual income exceeding Rs. 2 lakhs. In the present case, the Trust had been unable to earn any income at all, given that its properties were the subject of ongoing disputes with Sri Koteswara Rao and Smt. Parvathi. The Court held: "In such a situation, the Writ Petitions filed by a trustee, on behalf of the trust would be maintainable."

The Trust's locus was thus fully established — both as a legally existing entity and as an entity capable of being represented by one of its trustees in the absence of an Executive Officer and in circumstances where income had been suppressed by the very parties against whom the proceedings were filed.

The ruling carries practical importance well beyond the facts of this case. Across Andhra Pradesh — and by analogy across other states with similar endowments legislation — large numbers of charitable trusts, schools, hospitals, and community institutions operate without formal registration with the relevant endowments authority. Many such trusts come into existence through Wills, trust deeds, or long-standing practice, and function for years or decades before any question of registration arises. Their ability to sue, defend their properties, and seek legal remedies has sometimes been challenged on the ground that non-registration renders them legally invisible.

This judgment firmly closes that avenue of challenge. A Public Charitable Trust in Andhra Pradesh exists from the moment of its valid creation. Registration is a regulatory obligation that the Endowments Act imposes — and can compel — but it is not a condition precedent to legal existence or to the capacity to litigate. The Trust's opponents cannot, by preventing registration or by denying the Trust access to its own properties, simultaneously argue that the Trust does not exist because it has not been registered or functioned.

"Hence, it is held that the Trust has come into existence and is a Public Charitable Trust," the Court concluded — finding that upheld not only the Trust's legal existence but the entire testamentary scheme of a doctor who, while battling cancer thousands of miles away, sought to ensure that his properties in India would serve the public good.

The Division Bench ultimately allowed the appeals and writ petitions filed by the Trust, upholding the Will of April 17, 1999 of Dr. Prasad as proved and valid, setting aside the fraudulent Lok Adalat awards, and directing that Dr. Prasad's Indian properties shall devolve in accordance with his Will upon the Trust. The finding on the Trust's existence was a necessary foundation for every other relief granted — and stands independently as an authoritative statement of the law governing unregistered Public Charitable Trusts under the Andhra Pradesh Endowments Act.

Date of Decision: March 6, 2026