Suit Against Trustee Without Charity Commissioner’s Consent Is Statutorily Barred: Bombay High Court

“Once a Person Is Acknowledged as Trustee, He Cannot Be Branded a Trespasser to Bypass Statutory Procedure”, In a significant ruling reaffirming the mandatory procedural safeguards enshrined in the Maharashtra Public Trusts Act, 1950, the Bombay High Court rejected a ₹17.2 crore recovery suit filed by Lilavati Kirtilal Mehta Medical Trust against its former trustee Mr. Niket Mehta, holding that any action seeking recovery against a trustee, even an “erstwhile” one, must be preceded by prior consent of the Charity Commissioner under Sections 50 and 51 of the MPT Act.

Justice Milind N. Jadhav, deciding on Interim Application under Order VII Rule 11(d) of the Civil Procedure Code, concluded that “the suit, on a plain reading of the plaint and documents annexed, is squarely covered under Section 50 of the MPT Act and is, therefore, barred for want of statutory consent.”

The Trust had attempted to argue that Mr. Mehta was a “trespasser,” but the Court observed that the plaintiffs’ own pleadings and exhibits repeatedly described him as a ‘Trustee’, ‘Permanent Trustee’ or ‘Erstwhile Trustee’, defeating their own stand.

“A Trustee Cannot Be Labelled a Trespasser to Evade Section 50” — Plaint’s Own Admissions Prove Fiduciary Status of Defendant

At the heart of the controversy was whether the recovery of compensation for unauthorized use of two Trust-owned premises by the Defendant during his tenure was a simple civil claim or a statutory action requiring compliance with Section 50 of the MPT Act.

The Plaintiffs — the Lilavati Kirtilal Mehta Medical Trust and its current trustees — filed the suit on 19th December 2024, alleging that Mr. Niket Mehta, who was admittedly a Trustee from 2001 until 14th December 2023, had illegally occupied a residential flat and office space within the Trust’s hospital premises from 2007 to 2015, causing significant loss to the Trust.

The suit sought ₹17.2 crore as compensation. However, the Defendant, through Senior Advocate Mr. Sawant, filed an application under Order VII Rule 11(d) CPC seeking rejection of the plaint, citing Sections 50 and 51 of the MPT Act, which mandate prior consent of the Charity Commissioner for any suit relating to alleged breach or misconduct by a trustee.

Justice Jadhav agreed, holding that:

“Once Plaintiffs have described the Defendant as a Trustee / Permanent Trustee / Erstwhile Trustee in the Suit plaint itself as also on the basis of the supporting documents referred to and relied upon in the Suit plaint, there can be no manner of doubt that the Suit filed by the Plaintiffs is on behalf of Plaintiff No.1 – Trust for recovery of compensation from Defendant in his capacity as the erstwhile Trustee.”

Court Finds “Clear and Unambiguous” Pleadings That Trigger Statutory Bar Under Order VII Rule 11(d)

The Court referred to multiple paragraphs in the plaint — particularly paragraphs 2, 4, 6, 10, 15, and 51 — and noted that the plaintiffs themselves described Mr. Mehta as having misused his position as a trustee to occupy the premises.

The Court observed that:

“Though it is argued that the occupation was as a trespasser, the averments made in the Suit plaint and the various exhibits do not justify the submission that it is the case of Plaintiffs that Defendant was a rank trespasser.”

Citing Exhibit D (a 2009 letter from the Trust addressing Mehta as “Permanent Trustee”) and other correspondence from 2017–2018, the Court held that Mr. Mehta’s position as a trustee during the period of occupation was consistently acknowledged, and therefore the action could not be framed as one against a mere trespasser.

Further, the Court clarified that:

“If the averments in the Suit plaint are read holistically along with the Exhibits appended thereto, it is prima facie clear and evident… the Suit is filed by Plaintiffs for recovery of compensation… from the Defendant in his capacity as a Trustee.”

Thus, the Court concluded that the case squarely attracted the reliefs enumerated under Section 50, particularly clauses (a) (recovery of trust property), (f) (compensation for loss due to breach or misconduct by trustee), and (q) (consequential reliefs).

Mandatory Compliance with Section 51 of MPT Act Ignored, Renders Suit Incompetent

Referring to Section 51, which requires written consent of the Charity Commissioner prior to instituting a suit under Section 50, the Court ruled that the Trust’s failure to seek such consent was fatal:

“Once it is prima facie seen from the averments in the Suit plaint that Plaintiff No.1 – Trust have described Defendant as a Trustee / Ex-Trustee / Permanent Trustee… then in the same breath, Plaintiffs cannot contend that Defendant will have to be construed as a rank trespasser.”

The Court rejected the argument that since the Assistant Charity Commissioner had, in a December 2023 order, held Mr. Mehta to be an ‘illegally appointed trustee’, he could be retrospectively treated as a trespasser. The judgment emphasized that the pleadings and documents as they stood at the time of filing controlled the determination under Order VII Rule 11(d), not subsequent characterizations or defences.

“Defendant May Have Acted Illegally, But the Legal Framework to Prosecute Must Be Followed”: Court Reiterates Role of Charity Commissioner

Justice Jadhav reiterated that the Charity Commissioner is a necessary party to any such suit under Section 51(3), and no action seeking recovery against a trustee — whether current, former, or allegedly illegal — can bypass this framework.

The judgment stated:

“Consent of the Charity Commissioner is a jurisdictional prerequisite. Its absence renders the suit non-maintainable at inception.”

Further rejecting the Trust’s claim that the suit was only for “compensation” and therefore outside the purview of administrative reliefs under Section 50, the Court held:

“Merely because no prayer is made for removal of a trustee or settlement of a scheme does not mean the suit escapes Section 50. Recovery from a trustee for acts committed while in office clearly falls within its sweep.”

Plaint Rejected for Want of Statutory Consent, Suit Deemed Non-Maintainable

Allowing Interim Application No. 3243 of 2025, the Court rejected the plaint under Order VII Rule 11(d) of the CPC and held the suit non-maintainable for want of compliance with Sections 50 and 51 of the MPT Act.

In a succinct conclusion, the Court said:

“The Suit ought to have been filed only after obtaining permission of the Charity Commissioner under Sections 50 and 51 of the MPT Act. In its absence, it stands barred at inception.”

Pending Interim Application No. 4005 of 2025 was also disposed of.

Date of Decision: 3rd December 2025