Reiterating that a 'trust' being not a juristic person, and cannot sue or be sued, the Supreme Court has quashed a criminal proceeding against a Trust, who has been arrayed as an accused in a financial irregularity case in Karnataka.

“…a Trust does not have a separate legal existence of its own, making it incapable of suing or being sued, since it is only an obligation annexed to the ownership of the property arising out of a confidence reposed in and accepted by the owner or declared and accepted by him, for the benefit of the another, or of another and the owner. The obligation to maintain or defend suits is placed on the shoulders of a Trustee and not on the Trust itself.”, a bench of Justice J.B. Pardiwala and Justice K. Vinod Chandran endorsed the judgment passed in Pratibha Pratisthan v. Manager, Canara Bank (2017).

The Court set aside the Karnataka High Court's judgment which refused to quash the criminal proceedings against the Appellant-trust.

“…the Trust is not liable to be arrayed as an accused, it being a concept not capable of being termed as a juristic person.”, the Court said.

Before the Supreme Court, the State argued against the non-arraignment of the appellant-trust in the criminal proceedings. It contended that the decision in Sankar Padam Thapa v. Vijaykumar Dineshchandra Agarwal, 2025 LiveLaw (SC) 991, cited by the appellant-trust to permit cheque dishonour proceedings against the trustees despite the trust not being arrayed as an accused, cannot be applied to the present case, which involves alleged offences under the Indian Penal Code as well as the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004.

Rejecting the State's argument, the Supreme Court said that even though the question of whether a Trust is a juristic person or not is pending in reference with a larger bench, the position of law laid down in Pratibha Pratisthan, later followed in Sankar Padam Thapa, leads to an irresistible conclusion that the trust is not a juristic person, which can neither be sued nor sue.

In terms of the aforesaid, the appeal was allowed, to the extent that the proceedings against the Appellant-trust was quashed, without disturbing the proceedings continuing against the trustees.

Cause Title: Madasa Masih-UI-Uloom Educational and Charitable Trust Versus State of Karnataka & Ors.

Citation : 2026 LiveLaw (SC) 936

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Appearance:

For Petitioner(s) : Mr. Nagamuthu, Sr. Adv. Mr. Gotham Polanki, Adv. Ms. Niti Richhariya, AOR

For Respondent(s) : Mr. Kanakamedla Ravindra Kumar, A.S.G. : Mr. Mukesh Kumar Maroria, AOR Mr. Devraj Bhattacharjee, Adv. Mr. Purnendu Bajpai, Adv. Ms. Disha Thakkar, Adv. Mr. Raman Yadav, Adv. Mr. S.N.Terdal (AOR), Adv.