Suits About Public Trusts and the Charity Commissioner’s Consent

When something goes badly wrong inside a public trust — property being dealt with improperly, funds unaccounted for, a board that has stopped functioning — the instinct is to go straight to court. In Maharashtra there is a step before that. A suit of this kind ordinarily requires the consent of the Charity Commissioner, and starting without it is one of the commonest reasons such proceedings fail at the threshold.

The scheme of Sections 50 and 51

Section 50 of the Maharashtra Public Trusts Act, 1950 deals with suits relating to public trusts — proceedings raising questions that affect the charitable or religious purpose, and seeking relief of the kind a court can give in respect of a trust: directions, accounts, the removal of a trustee, the settlement of a scheme for administration, a declaration about trust property, and similar relief.

Section 51 is the gateway. It requires the consent of the Charity Commissioner before such a suit is instituted. The consent is not a formality and it is not automatic; it is a decision taken after the office has looked at what is alleged.

Why the requirement exists

Public trusts are answerable to the public rather than to identifiable owners, and litigation about them is expensive and paid for, one way or another, out of charitable funds. The consent requirement is a filter. It keeps genuine grievances moving and stops the trust’s resources being drained by proceedings brought out of personal rivalry — which, in practice, is what a good many intra-board disputes are.

What this means in practice

• Apply for consent first. A suit filed without it is liable to be met with a preliminary objection, and time spent on the plaint is often time wasted.
• The application itself has to be made out. Vague allegations that the trust is being mismanaged rarely get anywhere. What works is specific: this property was transferred on this date without the sanction Section 36 required; these accounts have not been filed since this year; these amounts appear in the balance sheet and are unexplained.
• Documents matter more than adjectives. The register extract, the trust deed, the audited accounts, the correspondence with the office and any minutes are what the application stands on.
• Consent may be refused, and a refusal has its own consequences for what can be done next. That possibility should be weighed before starting.

Other routes that are sometimes more appropriate

A suit is not always the right instrument, and it is worth being honest about what the complaint really is:

• If the problem is that the register is out of date because appointments and resignations were never reported, the answer is a change report, not litigation.
• If the problem is a trustee whose conduct warrants removal, the Act contains its own machinery for the suspension, removal and dismissal of trustees, and proceedings before the Charity Commissioner may be the more direct route.
• If the problem is that the trust cannot work its deed — objects that have become impossible, machinery that has broken down — the relief being sought is really a scheme for administration.
• If the problem is simply that one faction has lost a vote, there may be no legal grievance at all, and saying so early saves everyone a great deal of money.

Choosing the wrong forum is expensive. Much of the early work in a matter of this kind is deciding, on the documents, which of these the situation actually is. There is more on how these disputes tend to run on the trustee disputes page.

Appeals and the 2017 changes

The Maharashtra Public Trusts (Second Amendment) Act, 2017 made significant changes to the appellate structure under the Act, including redirecting certain challenges to the High Court rather than to the District or City Civil Court. Where an order of the Charity Commissioner is to be challenged, the route and the limitation period depend on which provision the order was made under and on the position after those amendments. This is a point on which the current text of the Act should be checked in every matter; the route that applied a few years ago may no longer be the right one.

This note sets out general information about procedure under the Maharashtra Public Trusts Act, 1950. It is not legal advice, and the position in any particular matter depends on its own facts and on the law as it stands at the time. Statutory references should be checked against the current text of the Act and Rules.