Duly authorized Managing Trustee entitled to operate Trust bank account upon establishing legal authority and KYC compliance.

The Petitioner is the Chairman/Managing Trustee of the Bhawani Sao Ramlal Sao Dharmada Trust, a registered public charitable trust established in 1961

He was appointed to this position via an order dated 16.10.2019 following a resolution and previous litigation in the High Court which attained finality

The Trust maintains a savings account (No. 10950604235) with the State Bank of India (SBI). Due to prior internal disputes regarding the appointment of trustees, the Bank froze the account

Despite the resolution of these disputes and the Petitioner submitting documentation of his authority, the Bank refused to de-freeze the account, insisting on the consent of all trustees

The Petitioner approached the High Court seeking a writ to remove the freeze and allow him to operate the account for the Trust's functions

1. Whether the Respondent-Bank's continued freezing of the Trust’s account, despite the Petitioner providing evidence of his legal appointment as Chairman/Managing Trustee, is arbitrary and sustainable in law

The Court relied on the regulatory principles governing Public Trusts and banking KYC (Know Your Customer) norms. It emphasized the authority of the Registrar of Public Trusts under relevant state legislation to record changes in trust management (Form No. 1), which serves as official recognition of a trustee's status

The court also applied the principle of administrative reasonableness, suggesting that banks should seek clarifications or affidavits rather than summarily obstructing the essential functions of a public charitable trust when prima facie evidence of authority exists

The Court examined the documents presented by the Petitioner, specifically Annexures P-2 and P-3, noting that the Registrar of Public Trusts had recorded a categorical finding in Form No. 1 acknowledging the Petitioner's appointment

This appointment followed a High Court order dated 30.08.2019 and a subsequent trust meeting on 16.10.2019

The Court reasoned that these official records were prima facie sufficient to establish the Petitioner's authority to operate the account

While the Bank contended that the Petitioner failed to appear or satisfy KYC requirements, the Court determined that the Bank’s refusal to act on the registered documents was unjustified

The Court balanced the Bank's risk concerns by suggesting that any lingering doubts could be mitigated through an indemnity affidavit or declaration from the Petitioner rather than a total freeze on the account

The Court directed Respondent-SBI to consider the Registrar's records for KYC compliance and pass an appropriate order to de-freeze the account. The Court further ordered that if the Bank retains any doubt, it may obtain an affidavit and declaration from the Petitioner undertaking responsibility for future disputes; subject to this, the Petitioner must be permitted to operate the account