A public trust in Maharashtra cannot simply sell, exchange, gift or lease its immovable property the way an individual owner can. Section 36 of the Maharashtra Public Trusts Act, 1950 requires the prior sanction of the Charity Commissioner before a sale, exchange or gift, and before a lease beyond the periods the section fixes. Borrowing on behalf of the trust, including by mortgage of trust property, is governed separately by Section 36A and also needs prior sanction.
Key facts
- Needs prior sanction
- Sale, exchange or gift of trust immovable property (Section 36)
- Leases
- More than 10 years for agricultural land, more than 3 years for other land and buildings
- Mortgage or loan
- Separate sanction under Section 36A
- Process
- Resolution, application with title papers and draft deed, then valuation, public notice and inquiry
- Without sanction
- The transaction is not valid
Why the law requires this
Trust property is not the personal property of its trustees — it is held for the objects of the trust, often for a religious, educational or charitable purpose that outlasts any particular trustee. Section 36 exists so that an outside authority checks that a proposed sale or lease is genuinely in the trust’s interest before it happens, rather than after.
What the application involves
The trust sets out the property concerned, the proposed transaction and consideration, and why it is in the trust’s interest. Valuation and public notice generally follow, so that anyone with an objection has an opportunity to raise it.
What happens without it
A transaction entered into without the required sanction is void — it does not simply carry a penalty, it does not legally take effect. This is why a buyer’s advocate will always check for Section 36 sanction before a trust property purchase goes through.
Frequently asked questions: Section 36
Does Section 36 apply to movable property?
Section 36 is concerned with immovable property of the trust. Investment and handling of trust funds are governed by other provisions of the Act.
Who applies?
The trustees apply, after passing a resolution describing the property, the proposed transaction and the reasons.
What does the Charity Commissioner look at?
Whether the transaction is in the interest of the trust, the valuation of the property, the price and terms, and whether objections have been raised. Sanction can be granted with conditions.
What if the sale is made without sanction?
A transaction that requires previous sanction is not valid without it, which is why sanction is obtained before the deed is signed and registered.
What is the order of the steps?
- Trustees’ resolution and valuation
- Application with title documents and draft deed
- Notice and inquiry
- Order of sanction and execution of the deed on its terms
- Change report and Schedule III-A for the change in property
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This page describes general procedure and does not constitute legal advice. What applies to a particular matter depends on its own facts.