Section 35 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.
This article explains the Maharashtra Public Trusts Act, 1950 as it applies in the State of Maharashtra, formerly the Bombay Public Trusts Act, 1950. Section 35 tells a trustee what to do with trust money that cannot be applied to the trust's purposes at once or soon: deposit it in a Scheduled Bank, the Postal Savings Bank or an approved Co-operative Bank, or invest it in public securities, with limited exceptions and a route for the Charity Commissioner's permission to invest otherwise.
This article explains section 35 as amended up to Maharashtra Act No. XXXVI of 2018 (in force 21 May 2018), per the official text of the Law and Judiciary Department modified up to 19 December 2018. Maharashtra amended the Act again in 2019, 2020, 2024 and 2025; the amending texts consulted do not change this section, but the current text should be checked on the Charity Commissioner's website before relying on it.
Where trust property consists of money that cannot be applied immediately or at any early date to the trust's purposes, the trustee is bound, notwithstanding any direction in the trust instrument, to deposit it in a Scheduled Bank, the Postal Savings Bank or an approved Co-operative Bank, or invest it in public securities. Two provisos allow a first mortgage of immovable property on stated conditions and investment in any other manner with the Charity Commissioner's permission, which he must decide within three months or record the reasons.
The main rule (section 35(1))
The rule applies where "the trust property consists of money and cannot be applied immediately or at any early date to the purposes of the public trust". Only then is the trustee bound to use the listed avenues. Money that is needed now for the trust's purposes is not caught. Trustees who are unsure whether an investment is within the section can ask for compliance advisory support before they invest.
The trustee is bound "notwithstanding any direction contained in the instrument of the trust". So a trust deed that says "invest in shares" or "lend to members" cannot override the section; the footnote records that this portion was substituted for the original by Bom. 59 of 1954, s. 3(1). The permitted avenues are:
| Avenue | Words of the section |
|---|---|
| Bank deposit | "any Scheduled Bank as defined in the Reserve Bank of India Act, 1934" |
| Post office | "the Postal Savings Bank" |
| Co-operative bank | "a Co-operative Bank approved by the State Government for the purpose" |
| Securities | "public securities" |
The Reserve Bank of India Act, 1934 is named as printed. Check the law now in force on what a Scheduled Bank is and which institutions the postal savings and public securities references cover today. The section does not define "public securities" or list the approved Co-operative Banks; the State Government's approval is by its own act.
First proviso: first mortgage of immovable property
"Provided that such money may be invested in the first mortgage of immovable property situate in any part of India if the property is not leasehold for a term of years and the value of the property exceeds by one-half the mortgage money."
Three conditions, therefore: the mortgage must be a first mortgage; the property must not be leasehold for a term of years; and the value of the property must exceed the mortgage money by one-half. The words "any part of India" were substituted for "a Part A State or Part C State" by the Bombay Public Trusts (Corporations) Order, 1959, as the footnote prints. The text does not explain how value is to be assessed; a trust relying on this proviso should keep a valuation on file.
Second proviso: permission to invest otherwise
"Provided further that the Charity Commissioner may by general or special order permit the trustee of any public trust or classes of such trusts to invest the money in any other manner." The permission can be general (for a class of trusts) or special (for one trust). The section prints no list of other investments and sets no conditions in the sub-section itself; any conditions are in the order granting permission.
Third proviso: three months to decide
The proviso was added by Mah. 55 of 2017, s. 5, as the footnote prints. If a public trust has applied to the Charity Commissioner for permission to invest in any other manner, "the Charity Commissioner shall decide such application within three months from the date of receipt of such application and where it is not practicable so to do, the Charity Commissioner shall record the reasons for the same."
So there is a clock on the officer: three months from receipt. The section does not say what follows if he does not decide in time; it does require him to record reasons where deciding in the period is not practicable. A trust applying for permission should keep proof of the date of receipt.
Sub-section (2): old investments saved
Sub-section (2) was inserted by Bom. 59 of 1954, s. 3(2). It saves investments and deposits already made before the Bombay Public Trusts (Amendment) Act, 1954 came into force, in accordance with a direction in the trust instrument. As printed, it says "Nothing in sub-section (2) shall affect any investment or deposit already made"; the reference to sub-section (2) inside sub-section (2) is a drafting slip, and sub-section (1) is clearly meant. Its proviso says that interest or dividend received or accruing on or after the coming into force of the said Act, and any sum so invested or deposited on maturity, "shall be applied or invested in the manner prescribed in sub-section (1)". The words "so invested or deposited" replaced "realized" by Bom. 6 of 1960, s. 19.
Illustration. A school trust in Aurangabad receives a donation of money for a new wing that will be built in about two years. The money cannot be applied at an early date, so the trustees deposit it in a Scheduled Bank. Later, they would prefer to invest part of it in a different kind of instrument. They apply to the Charity Commissioner for permission under the second proviso, keep the acknowledgment, and wait for the order, which the Charity Commissioner is to decide within three months or record why not. Another trust holds an old investment made under a direction in its deed; its trustees check whether the savings in sub-section (2) protect it.
Related reading
The Indian Trusts Act, 1882 has its own rules for private trustees, which are a different law; see investment rules for trusts under section 20 of the Indian Trusts Act. For the wider duties of a public-trust trustee, see Section 36A. Sale, exchange, gift and long leases of immovable property of a public trust need the previous sanction of the Charity Commissioner: see section 36, which is not set out in this article.
Need help with the trust's investments?
If your trust holds idle funds, or an old investment may not fit the section, our team can review the position and, where permission is needed, prepare the application. Speak to us about compliance advisory.
Key takeaways
- Section 35 applies to trust money that cannot be applied immediately or at an early date.
- The trustee must deposit it in a Scheduled Bank, the Postal Savings Bank or an approved Co-operative Bank, or invest it in public securities, whatever the trust instrument says.
- A first mortgage of immovable property is allowed on stated conditions.
- The Charity Commissioner may permit other investments by general or special order and must decide an application within three months or record reasons (proviso added in 2017).
- Sub-section (2) saves earlier investments made under directions in the instrument; it contains a printed slip referring to "sub-section (2)".
Read next
- Section 36A: powers, duties and restrictions on trustees
- Section 36B: register of movable and immovable property
- Investment rules for trusts under section 20 of the Indian Trusts Act
- Section 41A: directions for proper administration of a trust
Disclaimer: Based on the Maharashtra Public Trusts Act, 1950 as modified up to 19 December 2018 in the official text of the Law and Judiciary Department, Government of Maharashtra, as consulted on 3 October 2026. Maharashtra amended the Act again in 2019, 2020, 2024 and 2025; the current text, the Maharashtra Public Trusts Rules and the Charity Commissioner's circulars should be checked. This article is general information, not legal advice; check the official text before acting.