A dispute over the management of a small religious society can look, at first, like an internal disagreement. A member questions the accounts, challenges the office-bearers and asks the court to replace the management. But where the society collects donations, holds property for charitable or religious purposes, and serves a wider community, the dispute may be about more than who controls the organisation. It may concern property held for people who have no practical way of protecting it themselves.

That distinction matters under Section 92 of the Code of Civil Procedure, 1908 (CPC). The provision creates a special route for proceedings concerning public charitable and religious trusts. It allows the court to protect the purpose for which property is held, while also guarding charitable institutions against vexatious litigation. The Supreme Court's decision in Operation Asha v. Shelly Batra, reported as 2025 LiveLaw (SC) 775 gives important guidance on how this balance applies to societies registered under the Societies Registration Act, 1860. The Supreme Court's subsequent decision in S. Panchalingu v. People's Education Trust (R), reported as 2026 LiveLaw (SC) 955, clarifies the scope of court's powers before leave to institute a Section 92 suit is granted.

The central lesson is that registration as a society does not, by itself, answer whether Section 92 applies. The court must look at the organisation's purpose, the way its property was received and used, and whether the suit genuinely seeks to protect public beneficiaries. Equally, a claim of mismanagement does not automatically convert an internal dispute into a public-interest action.

A society is not automatically a trust so when can a constructive trust arise?

Section 92 applies to a breach of an express or constructive trust created for public purposes of a charitable or religious nature. A constructive trust does not necessarily depend on a formal trust deed or on an organisation being registered as a trust. It may arise by operation of law where the circumstances impose an obligation to hold or apply property/funds for the benefit of others rather than personal gain. However, the existence of such an obligation must be assessed from the facts & it cannot be presumed merely because an organisation is charitable or registered as a society.

In Young Mens Christian Assn. of Ernakulam v. National Council YMCAS of India, the Delhi High Court explained that an organisation may satisfy the test of a constructive trust where property is held under an accepted confidence for the benefit of others. The Supreme Court's decision in Ashok Kumar Gupta v. Sitalaxmi Sahuwala Medical Trust, likewise emphasised on the public purpose of the institution and the substance of the relief claimed.

Operation Asha v. Shelly Batra brought this question directly into focus. Operation Asha being a charitable organisation providing medical assistance, particularly to people affected by tuberculosis who cannot afford treatment. Its co-founder and former president, Dr. Shelly Batra, and her mother alleged financial mismanagement and misuse of donations. They sought, among other reliefs, an inquiry into accounts and changes to the organisation's management. The Delhi High Court had permitted the Section 92 suit to proceed, and the organisation challenged that decision before the Supreme Court. The Supreme Court upheld the decision permitting the suit to proceed, but its reasoning is more nuanced than a broad statement that every society is a trust. The Court explained that registration under the Societies Registration Act does not automatically turn all property acquired by a society into trust property. The circumstances surrounding the organisation and its property must be examined. Section 5 of the Societies Registration Act provides that, where property is not vested in trustees, it is deemed to vest in the society's governing body. The governing body does not hold that property for its own beneficial enjoyment. It must use and preserve it for the society's stated objects, and members cannot divide the assets among themselves merely because they are members. This statutory arrangement reflects fiduciary responsibilities, but it does not mean that every society's asset automatically become trust property for Section 92. The distinction is therefore between the society's legal form and the obligations attached to particular property. A society may have been formed as a society from the outset and may acquire property in that capacity without creating an express trust over every asset. Yet a constructive trust may arise where the facts establish that a person holding property or money is obliged to apply it for beneficiaries and cannot divert it for personal advantage.

The decision in Kuldip Chand v. Advocate-General to Government of Himachal Pradesh, discussed in Operation Asha v. Shelly Batra, provides an illustrative example. Dharamshala that had been used by the public for approximately 125 years, its property remained under the control of its owners, who used the rental income from its shops for their personal benefit and maintained the property from their own funds. The Court clarified that long-standing public use, by itself, does not establish the existence of a public trust. What matters is whether the property was dedicated to a public charitable or religious purpose.

Essential Requirements under Section 92 CPC?

In Operation Asha, the Supreme Court restated three essential conditions for a suit under Section 92 CPC: (i) the existence of an express or constructive trust created for a public charitable or religious purpose; (ii) an alleged breach of trust or a need for the court's directions for its administration; and (iii) relief falling within Section 92(1) CPC. All three conditions must be satisfied for the suit to be maintainable. In addition, Section 92 requires the suit to be instituted by the Advocate-General or by two or more persons having an interest in the trust, after obtaining the court's leave. The beneficiaries need not necessarily be the public at large, but they must at least be a classified section of it and not a pre-ascertained group of specific individuals. Donations made to a charitable medical organisation, for example, may be intended to support patients who need treatment and cannot afford it. Where the surrounding facts show that the funds were given for that public purpose, the court may infer that the organisation holds them subject to corresponding obligation/fulfilment of object.

At the stage of seeking permission under Section 92 CPC, the court does not conduct a full-fledged trial or require the plaintiff to prove the allegations through detailed evidence. However, a mere allegation, without a prima facie basis, is not automatically sufficient. In Operation Asha v. Shelly Batra, the Supreme Court observed that the allegations of diversion of funds could prima facie justify allowing the suit to proceed, while their truth and the existence of a constructive trust would require further examination. If the allegations are ultimately found to be false or unsupported, the suit may fail. Similarly, in S. Panchalingu v. People's Education Trust (R), the Supreme Court described the leave application as a “threshold proceeding” and clarified that the court does not adjudicate the merits of the controversy at this stage. It must, however, record prima facie cogent reasons for granting leave.

Public interest cannot be a label for a Private Quarrel

In Operation Asha v. Shelly Batra, the Supreme Court clarified that Section 92 CPC cannot be used merely to turn a personal dispute into a matter of public interest. Disagreements concerning day-to-day management, elections or office-bearers do not, by themselves, establish a breach of trust. The court must examine the real purpose of the suit, the capacity in which the plaintiffs approach the court, and the nature of the relief sought. However, the existence of personal grievances does not automatically defeat a suit where genuine issues concerning public rights are also raised. The decisive question is whether the suit, viewed as a whole, seeks to protect public charitable or religious interests, rather than merely resolve a private dispute.

Is Leave under Section 92 CPC a pre-condition to the suit?

This issue was considered by the Supreme Court in S. Panchalingu v. People's Education Trust (R), reported as 2026 LiveLaw (SC) 955. The appellants challenged an order constituting an ad hoc committee to manage the Trust's day-to-day affairs while their application for leave under Section 92 CPC remained pending. The Karnataka High Court set aside that order, holding that interim relief could not be granted before leave was obtained. The matter then reached the Supreme Court.

What did the Supreme Court hold?

The Supreme Court dismissed the appeals and held that obtaining leave under Section 92 CPC is a mandatory precondition to instituting the suit. Until such leave is granted, the court cannot entertain interlocutory applications or pass protective interim orders in the proposed proceedings by invoking Section 151 CPC. The Court explained that Section 92 CPC creates a special procedure for representative suits brought to protect public charitable and religious institutions. The provision strikes a balance between allowing action against mismanagement and protecting such institutions from frivolous or vexatious litigation. The following principles were emphasised:

1. Prior leave is mandatory: The court's permission must be obtained before the Section 92 suit is instituted.

2. Essential conditions must be satisfied: The trust must serve a public charitable or religious purpose; there must be an alleged breach of trust or a need for judicial directions; and the relief sought must fall within Section 92(1) CPC.

3. The suit must protect public interest: The provision enables interested persons to act in the interests of public beneficiaries, but cannot be used merely to settle personal disputes.

4. No interim orders before leave: The court cannot circumvent the requirement of prior leave by invoking its inherent powers under Section 151 CPC.

However, the judgment recognises an important exception. Where there is genuine urgency, the court may grant leave without first issuing notice to the proposed defendants, provided it records reasons in writing. Once leave is granted, the court may consider interim relief in accordance with law.

Taken together, Operation Asha and S. Panchalingu strike a balance. Section 92 CPC may apply to a society where the circumstances establish that its property is subject to public charitable or religious obligations, but it is not a general remedy for every internal dispute or allegation of mismanagement. The court must examine the purpose for which the property is held, the alleged breach, the relief sought and whether the suit genuinely seeks to protect public rights. The underlying principle is to safeguard charitable property and its intended beneficiaries without allowing Section 92 to become a tool for personal disputes or vexatious litigation. Lastly, a society's charitable character or its registration under the Societies Registration Act, 1860 alone does not automatically make all its property trust property. Equally granting leave under Section 92 CPC does not amount to a finding that a breach of trust has occurred.

Author is an Advocate practicing at Delhi. Views are personal.