Introduction: 

A trust is a legal entity with separate and distinct rights, similar to a person or corporation. In trust, a party known as a trustor gives another party, the trustee, the right to hold title to and manage property or assets for the benefit of a third party, the beneficiary.  It is generally formed by obligation annexed to the ownership of a property. If the objective is to benefit a few individuals, it becomes a private trust and if it uses the property for the common public or the community at large, It is called a public trust.

 

Section 2(13) of the Bombay Trust Act, 1950, the definition of public trust is laid down as, means an express or constructive trust for either a public religious or charitable purpose or both and includes a temple, a math, a wakf, [a dharmada] or any other religious or charitable endowment and a society formed either for a religious or charitable purpose or for both and registered under the Societies Registration Act, 1860.

Section 18 of the act lays down the definition of Trustee, which means a person in whom either alone or in association with other persons, the trust property is vested and includes a manager. 

Historical Background Of The Act: 

The pre-1950 legal position in Bombay province witnessed the co-existence of a diversity of community-specific laws. Continuing this legal policy, the Justice Tendulkar committee recommended that the government of Bombay enact a law centred around the charity commissioner’s role. Hence, The Bombay Public Trust Act, of 1950 came into existence to regulate and make better provisions for the administration of public religious and charitable trusts in the state of Bombay.  

Right Of The Alienation Of Immovable Property Of Public Trust: 

Section 36 lays down the right of the trustee to 

  1. Sell, mortgage, exchange, or gift or any immovable property; and 
  2. No lease for a period exceeding 10 years in the case of agricultural land or for a period exceeding three years in the case of non-agricultural land or building.

However, this can be done only if the permission of the charity commissioner is taken. 

According to Section 2(3) of the Act, the Definition of a Charity Commissioner is given as a charity commissioner appointed under Section 3. According to Section 3, the State government may appoint via a notification in the official gazette, a charity commissioner, who shall exercise powers as conferred by the notification. 

Duties, Function And Powers Of Charity Commissioner- 

Section 69 lays down the duties, functions and powers of the Charity Commissioner. 

However, Section 69(g) of the Act specifically gives power to the charity commissioner to sanction a sale, mortgage, exchange, gift, or lease of immovable property belonging to a public trust as laid down in Section 36. 

In Eknath Tukaramji Pise v. Rama Kawaduji Bhende, the court held that Section 41D(1)(c) gives the Charity Commissioner the power to wither on the application of a trustee or any person interested in the trust, or on receipt of a report under Section 41B or suo moto suspend, remove or dismiss any trustee of public trust, if he continuously neglects his duty or commits any malfeasance or misfeasance, or breach of trust in respect of the trust under clause (c) of Subsection 1 of Section 41D of the Act, 1950. 

 

In Akhil Deshastha Rigvedi Brahmin Madhyawarti Mandal v. The joint Charity Commissioner, Maharastra State, the court held that the company was a public trust and as such was liable to be registered under Section 18 of the Bombay Public Trusts Act, 1959, as a public trust notwithstanding the feet that it was a corporation. The court further held that if the company registered under the Companies Act of 1956 is authorised by its object clause in its Memorandum of Association to hold the property for public, religious or charitable purposes, its ownership of property for such purposes forms a public trust and as such the trust is liable to be registered under the Bombay Public Trust Act, 1950 and the Company as trustee. 

Registration Of The Public Trusts

Section 18 lays down the procedure for the registration of public trusts. 

  1. The trustee has to apply for the registration 
  2. The application has to be made to the Deputy or Assistant Charity Commissioner of the region or sub-region 
  3. The application must be in writing, and form as prescribed 
  4. In case of public trust created before the act- the application has to be made within 3 months, 
  5. In the case of Public trust created after the act- then within 3 months of its creation 
  6. Shall contain the following particulars- The name and addresses of the trustee and the manager, the mode of succession of the office, the list of movable and immovable trust property etc. 
  7. Copy of attachment of instrument of trust. 
  8. Duty of the trustee to send a memorandum prescribing the particulars 

Conclusion: 

The companies registered under the Companies Act, 2013 can also register themselves with the Trust Act, provided it was given in the memorandum of association of the company, and vice-versa. Thus, they can sell, mortgage, exchange or gift their property, with the due consent of the charity commissioner. However, if the charity commissioner believes that there is a potential threat to the property or there seems a mala fide intention of the person of the trustee, then the charity commissioner may deny the permission after giving a reasonable opportunity of being heard to the parties.

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