Section 36A 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 36A states what a trustee of a public trust must do (administer the trust with the care of a prudent person), what he may do (all powers incidental to prudent management), and what he must not do (borrow for the trust without the Charity Commissioner's previous sanction, or borrow trust money for his own use).
This article explains section 36A 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.
A trustee must administer the trust and apply its funds and property for its purposes according to the terms of the trust, the usage of the institution and lawful directions of the Charity Commissioner or a court, with the care of a man of ordinary prudence dealing with his own affairs (s.36A(1)). He has all powers incidental to prudent and beneficial management (s.36A(2)). No trustee may borrow for the trust without the Charity Commissioner's previous sanction (s.36A(3)), though ex-post-facto sanction is possible in exceptional cases (s.36A(3A)), and no trustee may borrow money for his own use from trust property (s.36A(4)).
Origin
Sections 36A and 36B were inserted by Mah. 20 of 1971, s. 23, as the footnote prints. Sub-sections (3) proviso and (3A) came later: the proviso was added by Mah. 9 of 2016, s. 3, and sub-section (3A) was inserted by Mah. 55 of 2017, s. 7. Trustees weighing a loan or a dealing with the trust can take legal consultation before they sign anything.
Sub-section (1): the duty of administration and care
| Element | Words of the section |
|---|---|
| Who | "A trustee of every public trust" |
| Duty | "shall administer the affairs of the trust and apply the funds and properties thereof for the purpose and objects of the trust" |
| By what standard | "in accordance with the terms of the trust, usage of the institution and lawful directions which the Charity Commissioner or court may issue in respect thereof" |
| Care | "exercise the same care as a man of ordinary prudence does when dealing with such affairs, funds or property, if they were his own" |
Three sources guide a trustee: the trust instrument ("the terms of the trust"), the way the institution has always been run ("usage of the institution"), and "lawful directions". The care standard is objective: ordinary prudence, as if the property were the trustee's own. This is the Maharashtra Act's own standard; the Indian Trusts Act, 1882 is a different law that does not apply to public charitable or religious trusts, though readers may compare it in duties of trustees under the Indian Trusts Act.
Sub-section (2): powers
"The trustee shall, subject to the provisions of this Act and the instrument of trust, be entitled to exercise all the powers incidental to the prudent and beneficial management of the trust, and to do all things necessary for the due performance of the duties imposed on him." The power is wide but bounded twice: by the Act and by the trust instrument. It does not enlarge what the Act forbids, for example the rules on investment (see Section 35).
Sub-section (3): borrowing for the trust
"No trustee shall borrow moneys (whether by way of mortgage or otherwise) for the purpose of or on behalf of the trust of which he is a trustee, except with the previous sanction of the Charity Commissioner, and subject to such conditions and limitations as may be imposed by him in the interest or protection of the trust."
So borrowing needs previous sanction, in every form ("by way of mortgage or otherwise"), and the Charity Commissioner may impose conditions and limitations.
Proviso (Mah. 9 of 2016). For borrowing from a bank or financial institution that has provisionally sanctioned the loan, "the Charity Commissioner or the Joint Charity Commissioner, as the case may be, shall decide the application ... forthwith and preferably within a period of fifteen days". The proviso says "forthwith and preferably within" fifteen days; it is a direction on speed, and the text does not say what follows if the period passes.
Sub-section (3A): ex-post-facto sanction
Notwithstanding sub-section (3), "in exceptional and extraordinary situations where the absence of previous sanction contemplated under sub-section (3) results in hardship to the trust, beneficiary or bona fide third party, the Charity Commissioner may grant ex-post-facto sanction to borrow moneys from any nationalized bank or the Scheduled Bank, by the trustees". Four limits are visible: the situation must be exceptional and extraordinary; the absence of prior sanction must cause hardship to the trust, a beneficiary or a bona fide third party; the lender must be a nationalized bank or a Scheduled Bank; and the Charity Commissioner "may" grant, not "shall". A trust that borrowed without sanction cannot assume that sanction will follow. The section does not say that borrowing without sanction is valid without it.
Sub-section (4): no borrowing from the trust for own use
"No trustee shall borrow money for his own use from any property of the public trust of which he is a trustee." The proviso says: "in the case of a trustee, who makes a gift of debentures or any deposit in his business or industry the trustee shall not be deemed to have borrowed from the trust for his own use." The proviso is worded awkwardly; read it as printed, and get advice before relying on it for any arrangement between a trustee's business and the trust.
Other restrictions to remember
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. Records of movable and immovable property are covered in Section 36B. Removal and suspension of trustees who breach duties are dealt with in Section 41D.
Illustration. A hospital trust in Kolhapur wants to take a loan from a Scheduled Bank to buy equipment. The bank has provisionally sanctioned it. The trustees apply to the Charity Commissioner before signing the loan documents, enclosing the bank's provisional sanction, and ask for a decision under the proviso. A trustee separately asks to take a short advance from the trust's funds for his own shop; sub-section (4) forbids it, and the trustees decline.
Need help with trustee duties or a loan?
Our team can advise trustees on their duties under the Maharashtra Act, prepare an application for sanction to borrow, and review dealings between trustees and the trust. Start with legal consultation.
Key takeaways
- A trustee must administer the trust with the care of a man of ordinary prudence dealing with his own affairs (s.36A(1)).
- He follows the terms of the trust, the usage of the institution and lawful directions of the Charity Commissioner or court.
- Borrowing for the trust needs the Charity Commissioner's previous sanction; a proviso (2016) asks for a decision on bank loans forthwith and preferably within fifteen days.
- Ex-post-facto sanction is possible only in exceptional and extraordinary situations and only for a nationalized or Scheduled Bank (s.36A(3A), 2017).
- A trustee may not borrow trust money for his own use (s.36A(4)).
Read next
- Section 36B: register of movable and immovable trust property
- Section 41D: suspension, removal and dismissal of trustees
- Section 35: investment of public trust money
- Duties of trustees under the Indian Trusts Act
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.