A governance dispute brewing within the Bai Hirabai J N Tata Navsari Charitable Institution has resurfaced a fundamental question in Indian public trust law – does a restrictive clause in a trust deed remain enforceable when a legal opinion, in this case, that of a former Chief Justice of India, has already deemed it bad in law?
The controversy centres on objections raised by former trustee Mehli Mistry against the appointments of Venu Srinivasan and Vijay Singh to the board of the institution, on the grounds that neither is a Zoroastrian nor a Mumbai resident, conditions allegedly prescribed in the original trust deed. The matter has now reached the Maharashtra Charity Commissioner.
The ‘restrictive clause’ and the ‘judicial opinion’
“Non-Zoroastrians have been continuously appointed to the Trust since the year 2000, following a legal opinion obtained from a former Chief Justice of India,” said Tata Trusts in a press release.The most immediate legal question is that can a restrictive clause that has never been struck down by a court be ignored simply because a distinguished opinion finds it objectionable.
Even as Tata Trusts has announced that the Bai Hirabai trustees intend to approach the appropriate authority to alter “restrictive clauses” barring non‑Zoroastrians and tightening residence conditions, those provisions continue to stand in the deed until a competent authority modifies or strikes them down.
“In order to correct anomalies in the Trust Deed and to align it with the values that the Tata Trusts have always epitomised, the Trustees have decided to adopt proceedings before the appropriate authority for alteration of restrictive clauses in respect of eligibility of Trustees,” said Tata Trusts.
“The mere existence of a legal opinion, however eminent, that characterises a clause in a trust deed as ‘bad in law’ does not, ipso facto, denude such a clause of enforceability,” said Tushar Kumar, Advocate, Supreme Court of India. “In the absence of a judicial pronouncement setting it aside, the clause continues to operate with presumptive validity.”
Rahul Hingmire, managing partner at Vis Legis Law Practice, noted that under the Maharashtra Public Trusts Act, a clause “continues to sit in the deed unless a competent court or the Charity Commissioner interprets it differently, reads it down, or alters the scheme.” He described the current legal position as the clause being “operative, but clearly open to challenge.”
Mistry’s objection application, according to reports, argues that the 1923 Bai Hirabai trust deed imposed Parsi Zoroastrian and residency-based eligibility restrictions, even though the trust today functions within a much broader Tata philanthropic framework and its objectives were expanded in 2015.
“In the year 2015, the objects of the Bai Hirabai Trust were enlarged to also cover the general public as beneficiaries of the activities of the Trust. There are no such restrictions as to qualifications for Trusteeship of SRTT nor of the Sir Dorabji Tata Trust (SDTT) nor of any other Tata Trust,” noted Tata Trusts.
Whether a public charitable trust can validly restrict trusteeship to members of a specific religion or community is a notable policy question this dispute brings to the fore.
“Where such rules form part of the trust deed itself, they cannot be removed merely on the ground that they allegedly limit the original purpose, the deed will ordinarily prevail. However, in the case of a public trust that is not community-oriented, such restrictions may still be open to challenge on grounds of public policy and arbitrary exclusion,” said Surekha Kant Baxy, Associate Partner at Aekom Legal.
Alay Razvi, Managing Partner at Accord Juris, pointed to Article 14 and Section 23 of the Indian Contract Act as potential grounds for challenge, noting that “expansive public trusts must prioritise inclusivity.” He observed that a religion-based eligibility clause might survive judicial scrutiny only if it is “narrowly tied to religious administration, not general charity.”
Kumar said, “Courts in India have consistently recognised a doctrinal distinction between private or denominational religious trusts and large public charitable trusts. The former enjoy greater latitude in confining trusteeship to adherents of a particular faith, whereas the latter, particularly those wielding significant public influence, are subjected to a more exacting standard of scrutiny.”
Hingmire brought the question back to the Bai Hirabai deed specifically, noting that the institution functions within the broader Tata Trusts structure and has a wide public character. “The court is more likely to test the exclusionary condition against the trust’s wider objects, its public role, and the quality of administration,” he said.
The alleged concealment
Srinivasan and Singh have reportedly alleged that the legal opinion rendered by former Chief Justice of India M.H. Kania, which is said to have concluded that the restrictive clauses were bad in law in light of a codicil to the original deed, was concealed from them when efforts were made to have them step down. The question this raises is whether such non-disclosure can constitute a breach of fiduciary duty.
“Even persuasive opinions demand disclosure; suppression breaches fiduciary duty under Trusts Act Sections 11-13, requiring trustees to act prudently and disclose material information for informed collective decisions,” said Razvi. “Courts assess reasonableness: withholding expert views undermines good faith, risking personal liability. Lack of candor equates to uninformed governance, voidable via beneficiary suits.”
“At best, it may provide a cause of action to challenge the decision-making, which would require establishing deliberate concealment, resulting prejudice to the trust, and mala fides; it does not, by itself, constitute a technical legal violation,” said Baxy.
“The question is less about whether the opinion itself decides the law, and more about whether withholding it deprived the board or individual trustees of a fair chance to assess their own legal position. According to the current reporting, if the allegation gains factual support, it can become a governance issue framed as lack of informed decision-making, and possibly as a fiduciary concern,” said Hingmire.
For now, the restrictive clauses stand because they have not yet been formally struck down, even as Tata Trusts signals its intent to have them altered. The Charity Commissioner’s proceedings may determine whether that changes.
