Bombay High Court rejects Lilavati Trust suit against former trustee

The Bombay High Court has rejected a suit filed by the Lilavati Kirtilal Mehta Medical Trust seeking over ₹17.2 crore from former trustee Niket Mehta for alleged unauthorised use of a flat and office space in the Bandra hospital complex [Lilavati Kirtilal Mehta Medical Trust v. Niket Mehta].

In a judgment delivered on December 3, Justice Milind N Jadhav noted that the trust failed to obtain mandatory consent from the Charity Commissioner before approaching the court and, on this ground, allowed an application moved by Mehta under Order VII Rule 11(d) of the Code of Civil Procedure (CPC) seeking rejection of the plaint.

The trust and its current trustees had filed the suit claiming compensation from Mehta for allegedly using trust properties including a flat as his residence between 2007 and 2015 and an office between 2007 and 2009.

According to the plaint, Mehta allegedly caused substantial loss to the trust by occupying these premises which the plaintiffs described as that of an erstwhile “illegal trustee”.

Mehta sought rejection of the suit on the ground that he was treated and addressed as a trustee or permanent trustee from 2001 to 2023, including in correspondence, internal opinions and pleadings before higher courts.

He submitted that the suit squarely attracted Sections 50 and 51 of the Maharashtra Public Trusts Act, which require prior written consent of the Charity Commissioner before filing of proceedings and make the Commissioner a necessary party in such proceedings.

The trust opposed the application, pointing out that Mehta was a trespasser on the trust’s property as his appointment as trustee had later been held invalid by the Assistant Charity Commissioner in December 2023.

It was argued that where a trust sues a trespasser, no consent is needed, and that the present suit was a straightforward claim for compensation for wrongful use, not an administrative challenge to trust management.

However, the Court held that a holistic reading of the plaint and its exhibits showed Mehta was unequivocally treated as trustee, ex‑trustee or permanent trustee in relation to the period for which recovery was sought.

“Considering in the present case Mehta has unambiguously been described as Trustee / erstwhile Trustee / permanent Trustee for occupation of the suit properties and [the] trust is desiring recovery of compensation from Mehta for his occupation of the suit properties, the consent of [the] Charity Commissioner is required and, without that having been obtained, there is non-compliance with the provisions of [the] MPT Act by the trust,” the order said while rejecting the suit.

Senior Advocate Atul Damle with advocates Dakshesh Vyas, Abhishek Prabhu, Jyoti Ghag, Shailesh and Ankit Singhal briefed by Dua Associates appeared for Lilavati Trust.

Senior Advocate Pankaj Sawant with advocates Aloukik R Pai, Saharsh Sakhare and Priyanka Rammurthy appeared for Mehta.

[Read Judgment]