A large number of old buildings and chawls in Mumbai, especially in Girgaon, Kalbadevi, Dadar, Byculla and the older suburbs, stand on land owned by public charitable trusts. When such a building is redeveloped, an extra authority comes into the picture alongside the BMC and MHADA: the Charity Commissioner. Tenants and trustees alike are often unsure how this works. This guide explains it.
Why the Charity Commissioner is involved
Section 36 of the Maharashtra Public Trusts Act, 1950 provides that a sale, exchange or gift of immovable property of a public trust, or a lease beyond the period set in the section (three years for non-agricultural land or a building), is not valid without the previous sanction of the Charity Commissioner. A development agreement, a development-cum-sale agreement, or a long lease to a developer therefore needs sanction. See what Section 36 permission is and leasing trust property. Borrowing against trust property needs separate sanction under Section 36A.
Two kinds of application
| Situation | Application |
|---|---|
| The trust deed permits sale or development, and the trustees seek sanction for a specific transaction | Section 36(1)(a) |
| The trust deed does not permit alienation, or prohibits it | Section 36(1)(c), where the Charity Commissioner may authorise alienation if it is necessary or beneficial to the trust |
The Bombay High Court has set aside a sanction where the Joint Charity Commissioner granted it under Section 36(1)(a) while an application under Section 36(1)(c) was pending and never decided. The right provision matters.
What the Charity Commissioner looks at
- Whether redevelopment or alienation is necessary or in the interest of the trust, for example where the building is old, earns little rent and is expensive to repair.
- Whether the consideration and terms are the best obtainable; valuation reports are examined.
- Whether the process was transparent. In Cyrus Rustom Patel v. Charity Commissioner ((2018) 14 SCC 761), concerning a trust property at Tardeo, the Supreme Court held that public notice of a proposed sale cannot be waived and that the Charity Commissioner may invite outside offers before sanctioning it.
- The interests of occupants and tenants, particularly where redevelopment is under Regulation 33(7) of the Development Control and Promotion Regulations for cessed buildings, which depends on tenants’ cooperation and gives them rehabilitation entitlements.
After the transaction is completed, the trustees must report the change in the trust’s property to the Assistant or Deputy Charity Commissioner under Section 22.
Where tenants fit in
- Rehabilitation entitlement: tenants of cessed buildings have entitlements under the DCPR and MHADA framework that a developer must honour. Sanction under Section 36 does not take those away.
- Being heard: tenants and other interested persons have applied to intervene in Section 36 proceedings, and the Charity Commissioner has allowed such interventions in appropriate cases.
- Information: the trust’s entry in the public trust register and Section 36 orders can be inspected or obtained, helping tenants know what has been proposed. See getting an extract of the trust register.
- Challenging a sanction: a sanction granted without proper enquiry or transparency has been set aside by the High Court in several cases.
What trustees should do
- Pass a proper resolution of the board with the required quorum, after obtaining a structural report and valuation.
- Check whether the deed permits alienation, to choose between Section 36(1)(a) and 36(1)(c).
- Run a transparent process, preferably inviting offers through advertisement.
- Document the tenants’ position: list of tenants, rent records, consent where required by the DCPR.
- Apply for sanction with complete papers, comply with any conditions imposed, and report the change under Section 22 after completion.
Frequently asked questions
The trust signed a development agreement without sanction. Is it valid?
A transaction requiring sanction under Section 36 is not valid without previous sanction. Take advice before acting on such an agreement.
Can tenants stop the redevelopment?
Tenants cannot simply veto it, but their statutory rehabilitation rights must be respected, and they can raise objections in the sanction proceedings.
How long does Section 36 sanction take?
It depends on the case, objections and the completeness of the papers. Contested matters take longer.
See also: Section 36 sanction and property matters.
Consultations are by appointment. To fix a time, telephone +91 99301 50560 or send a message on WhatsApp.
This guide describes general law as understood in October 2026. It is not legal advice; redevelopment involves several laws and authorities, so take advice on the specific property.