Madhya Pradesh explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Sections 13 and 14 of the Madhya Pradesh Public Trusts Act, 1951 govern two decisions of every public trust in Madhya Pradesh. Section 13 says where trust money must be kept; section 14 says that no sale, mortgage, exchange or gift of immovable property, and no lease beyond the printed periods, is valid without the Registrar's previous sanction.
This article explains sections 13 and 14 of the Madhya Pradesh Public Trusts Act, 1951 (M.P. Act No. 30 of 1951) as amended up to the date of the English text consulted on 3 October 2026 (published without amendment footnotes; bracketed words show that the State has amended it). Check the current text with the State's Devasthan Department or Registrar of Public Trusts before relying on it.
Under section 13, all trust money, other than money needed for day-to-day expenditure, must be kept in a scheduled bank, a Post Office Savings Bank, a co-operative bank registered under the Act named in the text, or, with the Registrar's approval, with a banker who has given sufficient security; the Registrar may permit other investment by general or special order. Under section 14, no sale, mortgage, exchange or gift of immovable property, and no lease over seven years for agricultural land or three years for non-agricultural land or a building, is valid without the Registrar's previous sanction, which he must not refuse unless the transaction will be prejudicial to the trust.
Section 13: investment of public trust money
"All monies belonging to a public trust other than monies required for the day-to-day expenditure of the trust shall be kept in a scheduled bank or a Post Office Savings Bank or in any bank registered under the , or with the approval of the Registrar with any banker or person acting as a banker who has given such security for the safe custody and repayment on demand of the monies so deposited as the Registrar may in each case think sufficient".
The permitted places, as printed:
| Place | Condition |
|---|---|
| A scheduled bank | None stated |
| A Post Office Savings Bank | None stated |
| A bank registered under the Co-operative Societies Act, 1912 (words in square brackets in the copy) | None stated |
| Any banker or person acting as a banker | With the Registrar's approval, and security the Registrar thinks sufficient for safe custody and repayment on demand |
Proviso. "The Registrar may, by general or special order, permit the trustee of any public trust or class of such public trust to invest the money in any other manner." The orders of the Registrar, if any, are not part of the text consulted, so no class of trusts is named. The Co-operative Societies Act, 1912 is quoted as printed in the bracketed words; check the Co-operative Societies law now in force. A trust that keeps its funds in an unlisted place without the Registrar's approval is in breach: section 33(1) provides that contravention of section 13 is punishable with a fine up to one thousand rupees, as printed in the published copy. The auditor also reports on investments made contrary to section 13; see rule 13(1)(j) in the Rules article on rules 10 to 14.
Section 14: previous sanction of the Registrar
Sub-section (1). "Subject to the directions in the instrument of trust or any direction given under this or any other law by any Court":
- (a) "no sale, mortgage, exchange of gift of any immovable property" (the printed word "of" is read as "or"); and
- (b) "no lease for a period exceeding seven years in the case of agricultural land or for a period exceeding three years in the case of non-agricultural land or building";
"belonging to a public trust, shall be valid without the previous sanction of the Registrar."
Three features stand out. First, the section applies to immovable property for sale, mortgage, exchange and gift; it prints no rule on movable property, and no value limit. Second, the lease periods are seven years for agricultural land and three years for non-agricultural land or a building. Third, the consequence of acting without sanction is that the transaction is not valid.
Sub-section (2). "The Registrar shall not refuse his sanction in respect of any transaction specified in sub-section (1) unless such transaction will, in his opinion, be prejudicial to the interests of the public trust." The test is likely prejudice to the trust. The section as printed does not say that the trustee is to be heard before a refusal, and it does not contain a deemed sanction if the Registrar does not decide. Read the Rules (rule 9) for the process.
What the Rules say. Rule 9 of the Madhya Pradesh Public Trusts Rules, 1962 requires an application to give information on whether the trust instrument has directions on alienation, the necessity for the proposed alienation, how it is in the interest of the trust, and, for a lease, the terms of past leases; it must be accompanied by an expert's valuation report. The Registrar may make inquiry and may impose conditions in giving sanction. Details are in the rules 6 to 9 article. A trust's sale deed must also be registered in the usual way; see How to Register a Trust Deed with the Sub-Registrar. A trust that is planning a sale can ask our legal due diligence team to check title and the application first.
The two sections at a glance
| Section | Subject | Rule in short |
|---|---|---|
| 13 | Where trust money is kept | Scheduled bank, Post Office Savings Bank, co-operative bank, or an approved banker with security; day-to-day money excepted; Registrar may permit other investment |
| 14(1)(a) | Alienation | Sale, mortgage, exchange or gift of immovable property needs previous sanction |
| 14(1)(b) | Leases | Over seven years (agricultural) or three years (non-agricultural or building) needs previous sanction |
| 14(2) | Refusal | Only if the transaction will be prejudicial to the interests of the trust |
Worked example
An invented trust, Shri Bhopal Vidya Mandir Trust, has a surplus of money after a festival. Its working trustee, Mr Sanjay Khare, keeps what is needed for day-to-day expenses and deposits the rest in a scheduled bank. The trust wishes to lease a shop for five years and sell a plot. The five-year lease of a building is over the three-year limit and needs sanction, as does the sale. Mr Khare applies in the form the Rules prescribe, with an expert's valuation report, and states the reasons. The Registrar may refuse only if he thinks the transaction will be prejudicial to the trust; he may also give sanction on conditions.
Practical points
- Keep only day-to-day money outside the listed places.
- Get the Registrar's approval before depositing with a banker not in the list.
- Check the lease period before granting a lease: more than three years for a building needs sanction.
- Attach an expert's valuation report to the sanction application.
- Do not complete a sale, mortgage, exchange or gift before sanction; the transaction is not valid without it.
Need help with a sale or lease of trust property?
A transaction without sanction can be void, and a refusal can be avoided with a well-prepared application. We can check title, read the trust deed and draft the application. Contact us through legal due diligence to begin.
Key takeaways
- Trust money above day-to-day needs must be kept in a scheduled bank, Post Office Savings Bank, co-operative bank or an approved banker (section 13).
- The Registrar may permit other investment by general or special order.
- Sale, mortgage, exchange or gift of immovable property needs the Registrar's previous sanction (section 14(1)(a)).
- Leases over seven years for agricultural land or three years for non-agricultural land or a building need sanction.
- Sanction may be refused only if the transaction will be prejudicial to the trust (section 14(2)).
Read next
- Sections 10 to 12 of the Madhya Pradesh Public Trusts Act, 1951: property in other districts, trusts by will and notice
- Sections 15 to 17 of the Madhya Pradesh Public Trusts Act, 1951: accounts, audit and the auditor's report
- Rules 6 to 9 of the Madhya Pradesh Public Trusts Rules, 1962: changes, registers and sanction applications
Disclaimer: Based on the English texts of the Madhya Pradesh Public Trusts Act, 1951 and Madhya Pradesh Public Trusts Rules, 1962, as consulted on 3 October 2026; those copies do not state the date of their last amendment. Later amendments, State notifications and current fees should be checked with the State authorities. This article is general information, not legal advice; check the official text before acting.