On December 17, 2025, the Madras High Court overturned a previous decision allowing the sale of properties owned by the Pachaiyammal Educational Trust. The sale was deemed invalid due to mistakes during the auction process.
The case involved Sri Lakshmi Homes Private Limited challenging the sale of properties owned by the Pachaiyammal Educational Trust. The properties, located in Kancheepuram District, were initially sold for Rs.16 Crore to Mr. D.C. Elangovan after a court-conducted auction.
The Pachaiyammal Educational Trust, managed by Mr. S. Venkateshwaran, aimed to sell the properties to fund new educational projects. The properties' market value was initially reported as Rs.12.34 Crore, but there were differences in opinions about their real worth.
Sri Lakshmi Homes Private Limited argued that the properties' market value was much higher than reported. A valuation report suggested the properties were worth Rs.54.46 Crore, while another claim set the value at Rs.72.88 Crore. The auction was criticized for not being widely advertised and for not having a minimum price set.
"The appellants argued that the plaintiffs submitted a valuation report showing the total value as Rs.54.46 Crore, contrary to the Rs.12.34 Crore stated in the claim."
The court, led by Justices S.M. Subramaniam and Mohammed Shaffiq, found that the auction was wrongly conducted inside the court hall, which is not the usual way. The process lacked openness and did not follow the correct legal steps.
"Court halls are not places to conduct public auctions. If Court takes on the role of auctioneer, then those involved in the auction will be treated unfairly."
The court canceled the previous decision and invalidated the sale, ordering that a new auction be conducted following proper procedures. This decision aims to ensure that the properties are sold for a fair price and that the process is open and fair.
This case shows the importance of following legal rules in property sales, especially those involving public trust assets.
