The Division Bench affirms the decision against declaring a trust property transfer as illegal, citing procedural and substantive issues.
In a significant legal decision, the Jharkhand High Court has upheld the dismissal of a suit challenging the legality of a trust property transfer. The case, involving the Santal Mission of Northern Churches (SMNC), revolved around the alleged mismanagement and unauthorized transfer of trust properties by existing trustees. The Division Bench, comprising Chief Justice M. S. Sonak and Justice Rajesh Shankar, delivered the judgment on July 23, 2026, affirming the previous appellate court's ruling.
The dispute originated from a Title Suit filed in 1971 by Dilip David Hansda and others, claiming to be beneficiaries of the SMNC trust. They sought relief under Section 92 of the Civil Procedure Code (CPC) for the formulation of a management scheme, removal of trustees, and a declaration that a 1968 transfer of trust property to Northern Evangelical Lutheran Church (NELC) Pvt Ltd was illegal. The trial court initially granted some relief, declaring the transfer deed as illegal. However, on appeal, the Patna High Court reversed this decision, a stance now upheld by the Jharkhand High Court.
The Division Bench meticulously examined several key issues, including the maintainability of the suit under Section 92 CPC, the bar of limitation, and the non-joinder of necessary parties. It concluded that the suit could not proceed solely on the basis of the alleged breach of trust after the principal reliefs were denied. The court emphasized that the relief sought for declaring the transfer illegal was barred by limitation, as the suit was filed beyond the permissible period. Additionally, it highlighted the procedural oversight of not including NELC Pvt Ltd as a defendant, despite being a necessary party.
The judgment also clarified that the Instrument of Transfer dated February 10, 1968, did not contravene the provisions of the Indian Trusts Act, 1882, as alleged by the plaintiffs. The court found no evidence of fraud or collusion among the trustees, further noting that a trust cannot sue or be sued in its name, but must do so through its trustees.
The decision reaffirms the principle that suits under Section 92 CPC must be based on clear allegations of breach of trust and must comply with procedural requirements, such as timely filing and proper party joinder. This ruling sets a precedent for future cases involving trust property disputes, emphasizing the importance of procedural correctness and adherence to statutory limitations.
Bottom line:-
Trust Law - A suit under Section 92 of the CPC is maintainable if the allegations in the plaint pertain to breach of trust or mismanagement of trust properties. However, once the principal reliefs relating to trust administration are denied, the suit cannot proceed to seek other reliefs not falling under Section 92.
Statutory provision(s): Civil Procedure Code, 1908 Section 92, Limitation Act, 1963 Article 58, Indian Trusts Act, 1882 Sections 47 and 48.
Dilip David Hansda v. Mr. Oddvar Holmedal, (Jharkhand)(DB) : Law Finder Doc id # 2946766
