High Court May Order Criminal Probe in Testamentary Suit to Protect Estate in Custodia Legis

A Supreme Court bench of Justices Pankaj Mithal and Prasanna B. Varale holds that a High Court retains plenary powers to direct criminal investigation even while exercising testamentary jurisdiction.

The Supreme Court on 25 May 2026 dismissed three civil appeals filed by Bai Avabai Hormusji Tata Trust and associated parties, upholding a Bombay High Court direction for a court-monitored criminal investigation into the alleged siphoning of funds from the estate of a deceased Parsi testator valued at over Rs. 100 crores. The Court held that a High Court exercising testamentary jurisdiction does not shed its constitutional character as a court of record under Article 215 of the Constitution, and retains full inherent and plenary powers to order a police investigation when civil remedies prove inadequate to protect an estate in custodia legis. The judgment settles a contested question about the outer limits of a Probate Court's powers when an executor is found to have engaged in deceit and non-cooperation with a court-appointed administrator.

The Disputed Estate and Rival Wills

Purvez Burjor Dalal, a bachelor Parsi Zoroastrian resident of Mumbai, died on 7 December 2011, leaving behind substantial movable and immovable properties estimated at over Rs. 100 crores. Two rival Wills surfaced after his death.

The first Will, dated 22 November 2010, was propounded by Shernaz Faroukh Lawyer and her mother, the late Villy Pirojsha Avasia, who claimed to be executrices and beneficiaries. The second Will, dated 8 September 2011, was propounded by Manek Dara Sukhadwalla, purportedly bequeathing the entire estate to charitable purposes and naming him sole executor. Both parties filed testamentary petitions, which were converted into Testamentary Suit No. 29 of 2012 and Testamentary Suit No. 25 of 2012 respectively before the Bombay High Court.

In June 2012, the High Court granted ad-interim relief restraining Sukhadwalla and directing him to disclose all movable and immovable assets of the estate. On 24 December 2013, a learned Single Judge appointed Mr. Jonathan Solomon as Administrator pendente lite under Section 247 of the Indian Succession Act, 1925. Sukhadwalla challenged this appointment up to the Supreme Court, but his Special Leave Petition was dismissed on 5 September 2014.

What the Administrator Uncovered

Following his appointment, the Administrator discovered that Sukhadwalla had opened a bank account in the name of the “Estate of Purvez Burjor Dalal” with Kotak Mahindra Bank. Two substantial transfers had been made from this account shortly after the testator's death and before the Administrator's appointment.

The first transfer of Rs. 17,08,147 was made on 24 March 2012 to M/s. Amoha Traders Private Limited. The second transfer of Rs. 15,00,000 was made on 11 April 2012 to Bai Avabai Hormusji Tata Trust — the appellant before the Supreme Court. The Administrator filed Report No. 1 of 2016 and a supplementary report, alleging these transfers constituted a diversion of estate funds and seeking directions for their return with interest.

Further investigation revealed that the appellant Trust, Amoha Traders, and several other entities including Kratos Energy and Canos Trading shared common addresses, telephone numbers, and email contacts, all leading back to one Jamsheed Minocher Panday. The Administrator also found that Canos Trading, a company in which Sukhadwalla held shares, had purportedly advanced a loan of over Rs. 69 lakhs to the deceased testator in 2015 — nearly four years after his death.

A scrutiny of the Trust's background added to the suspicion. While Sukhadwalla claimed it was a well-known charity established by industrialist Naval Tata in 1954, the respondents produced documents suggesting it was actually a Parsi family trust created in 1943 that had long been inactive, and was revived in 2011 — coinciding with the execution of the rival Will.

The Single Judge's Direction and the Division Bench's Affirmation

On 21 December 2018, the Single Judge found the conduct of Sukhadwalla and the associated parties to be “obstructive” and “deceitful.” Concluding that standard civil remedies were insufficient to protect the estate, the Judge invoked the High Court's inherent and plenary jurisdiction under Article 215 of the Constitution. The direction required the Administrator to draw up a criminal complaint, submit it to the Prothonotary and Senior Master, who would then forward it to the Commissioner of Police, Mumbai. The police were directed to nominate a suitable team and report investigation progress to the High Court on a fortnightly basis.

The appellant Trust, Sukhadwalla, and Amoha Traders filed intra-court appeals before the Division Bench. They argued that a Testamentary Court's jurisdiction is confined to the genuineness of a Will, that the Indian Succession Act, 1925 is a self-contained code, and that the High Court could not bypass the procedure under Section 340 of the Code of Criminal Procedure.

The Division Bench dismissed the appeals on 16 July 2024. It held that the impugned order was not a stand-alone direction but part of a series of orders aimed at safeguarding the estate. It found no actual prejudice to the appellants, observing that the criminal investigation would operate in a different field and that any information gathered would merely assist the Testamentary Court. The Division Bench also held that the Single Judge had exercised caution by ordering an inquiry rather than issuing a straight recovery direction.

The Appellants' Case Before the Supreme Court

Before the Supreme Court, the appellants pressed several grounds. They argued that a Testamentary Court's jurisdiction is strictly confined to examining the genuineness and due execution of a Will, relying on Kanwarjit Singh Dhillon v. Hardyal Singh Dhillon, (2007) 11 SCC 357. They contended that the Indian Succession Act, 1925 is a complete and self-contained code, as held in Fuerst Day Lawson Ltd. v. Jindal Exports Ltd., (2011) 8 SCC 333, and that specific statutory remedies under Sections 192, 208, or 269 of the Act ought to have been invoked instead.

The appellants further argued that under Sections 211, 227, and 307 of the Indian Succession Act, an executor is competent to deal with the estate even before the grant of probate, making the transfers to Amoha Traders and the Trust not illegal. They also contended that the High Court had bypassed the mandatory preliminary inquiry under Section 340 of the Code of Criminal Procedure without recording a finding of a cognizable offence, and that police machinery cannot be used to collect evidence in a civil testamentary dispute. The Trust additionally submitted that it had already admitted to the Rs. 15 lakh transaction and provided details of its utilisation for charitable medical aid, leaving nothing to investigate.

The Supreme Court's Reasoning

The Court, speaking through Justice Prasanna B. Varale, rejected each of the appellants' contentions.

On the question of jurisdiction, the Court held that while the primary function of a Probate Court is to adjudicate the execution and genuineness of a Will, a High Court sitting in testamentary jurisdiction does not shed its constitutional powers. Relying on M.V. Elisabeth v. Harwan Investment & Trading Pvt. Ltd., 1993 Supp (2) SCC 433, the Court affirmed that High Courts are superior courts of record with inherent and plenary powers that are unlimited unless expressly or by necessary implication barred. The Court also drew on the Delhi High Court's judgment in H.P.S. Chawla v. N.P.S. Chawla, 2005 SCC OnLine Del 1006, which held that a High Court exercising testamentary jurisdiction does not cease to be a court of equity.

The Court held that once an estate is brought under the protective umbrella of the court through the appointment of an Administrator pendente lite under Section 247, the estate is in custodia legis and the court is duty-bound to ensure it is not plundered. It drew on Anthony C. Leo v. Nandlal Bal Krishnan, (1996) 11 SCC 376, which holds that a court officer such as a receiver is under an obligation to take all reasonable steps for preservation and maintenance of the property, and that if criminal action is necessary for such preservation, the officer must draw the court's attention and seek leave to institute appropriate proceedings.

On the self-contained code argument, the Court said the ratio of Fuerst Day Lawson Ltd. pertains to the exclusion of general appellate remedies where a special statute provides a specific appellate mechanism. It does not stand for the proposition that a constitutional court cannot order a criminal investigation when a crime is committed in relation to the subject matter of a civil suit. The Indian Succession Act governs the administration of estates but does not grant immunity to individuals who commit criminal breach of trust, forgery, or conspiracy to siphon off an estate in medio.

The Court emphatically rejected the argument that Sukhadwalla had authority under Sections 211 and 307 of the Act to transfer funds to the appellant Trust. It held that where two rival Wills are propounded and the estate is in custodia legis, an executor of a disputed Will cannot unilaterally dispose of cash assets to dormant trusts connected to his associates. Section 247 specifically empowers the court to appoint an Administrator pendente lite, whose appointment suspends the executor's powers. The Court observed that the Trust had been inactive since 1943 and was suspiciously revived in 2011 around the time the rival Will was allegedly executed, and that transferring large sums to such an entity under the guise of charity while a probate dispute is pending is a hallmark of intermeddling and siphoning.

On the Section 340 argument, the Court held that the Single Judge's direction was not passed strictly under Section 340 of the Code of Criminal Procedure for offences affecting the administration of justice. Rather, the court exercised its broader inherent powers to investigate a larger conspiracy of siphoning estate funds through fraudulent banking transactions and shell entities. The procedural bars under Section 341 of the Code were therefore inapplicable. The Court also noted that under Section 340(3)(a), where the court making a complaint is a High Court, an officer of that court may be appointed to make the complaint, making the procedure adopted permissible.

On the question of prejudice, the Court agreed with the Division Bench that no actual or substantive prejudice is caused to the appellants by the mere initiation of an investigation. A criminal investigation operates in an entirely different paradigm. If the Trust genuinely utilised the funds for bona fide charitable purposes, it would have every opportunity to place its accounts and records before the investigating agency. The Court also noted that an investigation by the police does not, by itself, infringe upon the personal liberty of a corporate or trust entity.

Outcome

The Supreme Court dismissed all three civil appeals as devoid of merit. It found no infirmity or illegality in the Division Bench's judgment dated 16 July 2024 or in the Single Judge's underlying order dated 21 December 2018.

The Court directed that pursuant to the High Court's directions, if a report is drawn by the Prothonotary and submitted for investigation, the competent investigation authority shall proceed with the investigation expeditiously and submit progress reports as directed by the High Court. Pending applications, if any, were also dismissed. No order as to costs was made.