Public trusts in Maharashtra — including temples, mosques, madrasas, churches, schools, hospitals, orphanages and charitable societies — are governed by the Maharashtra Public Trusts Act, 1950 and are administered through the Office of the Charity Commissioner. Almost every significant act of a trust, from appointing a new trustee to selling a piece of land, passes through that office. This page sets out the proceedings most often required and what each of them involves.
Registration of a public trust
A public trust is registered under Section 18 of the Act with the Deputy or Assistant Charity Commissioner having jurisdiction, on an application accompanied by the instrument of trust, the particulars of the trustees and a description of the trust property. An enquiry follows under Section 19 into whether a public trust exists, what its property is and who its trustees are, and the entries are then made in the Public Trust Register.
In Maharashtra a charitable body is commonly registered twice over — as a society under the Societies Registration Act, 1860 and as a public trust under the Act of 1950 — and the two registrations are kept in step with each other thereafter.
Change reports under Section 22
Where there is a change in any of the entries recorded in the Public Trust Register — a trustee dies, resigns or is appointed, the trust acquires or parts with immovable property, the name or the objects are altered — a change report must be filed under Section 22 with the Deputy or Assistant Charity Commissioner within ninety days of the change. An enquiry follows, and the entries are then varied.
Change reports are the most common reason a trust in Mumbai comes to an advocate, and the most common source of avoidable difficulty. A trust that has not filed for several years finds that a sale cannot be completed, that a bank will not act on a resolution, or that a grant cannot be drawn, because the register still names trustees who are no longer there. Where reports have been missed, they are filed with an explanation for the delay and the trust’s records are reconstructed to match the register.
Section 36 — sanction to deal with trust property
Immovable property of a public trust cannot be sold, exchanged, gifted, mortgaged or leased beyond the periods specified without the prior sanction of the Charity Commissioner under Section 36. An application sets out the property, the proposed transaction, the consideration, and the reason the transaction is in the interest, benefit or protection of the trust. Valuation and public notice ordinarily follow, and the sanction, when granted, may carry conditions as to price and as to how the proceeds are to be held or invested.
A transaction entered into without this sanction is void. Where a trust has already dealt with property without sanction, what can be done about it depends entirely on the facts, and should be discussed before any further step is taken.
Enquiries concerning trustees — Section 41D
The Charity Commissioner may hold an enquiry under Section 41D into the conduct of a trustee and, on the grounds set out in that section, suspend, remove or dismiss the trustee. These enquiries arise from disputes within a board of trustees, from allegations of misapplication of trust funds, or from a failure to account. Both the trustee complained against and the trustees moving the application need representation, and the record made at the enquiry stage tends to decide the outcome of everything that follows.
Directions, accounts and audit
The Charity Commissioner may issue directions under Section 41A for the proper administration of a trust. Separately, every registered public trust must keep regular accounts, have them audited, and file the audited accounts together with the annual contribution payable under Section 58, in the forms prescribed by the Rules. Trusts whose accounts are in arrears are assisted in regularising them, since arrears in filing tend to surface at the worst possible moment — usually in the middle of a transaction.
Suits, applications and appeals
Suits of the kind described in Section 50 — for the removal of a trustee, for directions, for a scheme, for accounts and enquiry — require the consent of the Charity Commissioner under Section 51 before they can be instituted. Findings and orders of the Deputy or Assistant Charity Commissioner are open to appeal to the Charity Commissioner, and decisions of the Charity Commissioner may in turn be carried to the Court under Section 72.
Where these matters are heard
Office of the Charity Commissioner, Maharashtra, Dharmaday Ayukt Bhavan, Sasmira Marg, Worli, Mumbai, and the Joint Charity Commissioner, Greater Mumbai Region.
Common questions
How long does registration of a public trust take?
It depends on the enquiry under Section 19 and on whether the application and the instrument of trust are complete when filed. Most of the delay in practice comes from incomplete papers rather than from the office.
What happens if a change report was never filed?
It can still be filed, with an explanation for the delay. The difficulty is usually not the report itself but everything the trust did in the meantime on the strength of a register that did not reflect reality.
Can trust property be sold without the Charity Commissioner’s sanction?
No. Section 36 requires prior sanction, and a transaction made without it is void.
Is an advocate needed to file a change report?
Not as a matter of law. Trusts commonly file themselves, and commonly return when the enquiry raises an objection they were not expecting.