Charity Commissioner NOC for Property Deals in Maharashtra

There is no separate Charity Commissioner NOC under Maharashtra law; what practitioners call by that name is the sanction granted under Section 36 of the Maharashtra Public Trusts Act, 1950, the statutory permission a public trust must obtain before it can sell, mortgage, exchange, gift, or grant a long lease of its immovable property. Section 36A imposes a parallel requirement for mortgages and borrowing. This article explains how that sanction is obtained, what documentation a bank or purchaser should verify, and which related clearances sometimes get bundled into the same request.

What People Mean When They Ask for a Charity Commissioner NOC

There Is No Separate NOC Procedure Under the MPT Act

The MPT Act does not use the term "No Objection Certificate" anywhere in its text. What it does is prohibit trustees from alienating trust property without prior permission. Section 36 provides that no sale, exchange, or gift of immovable property belonging to a public trust, and no lease of such property exceeding three years for non-agricultural land (ten years for agricultural land), can take effect without the previous sanction of the Charity Commissioner. Section 36A imposes a parallel restriction on borrowing. A trust cannot mortgage its property, or otherwise borrow against it, without the Commissioner's prior approval, except in narrow circumstances where the Commissioner later condones the omission for loans taken from nationalised or scheduled banks.

So when a bank's legal team, a housing society's advocate, or a purchaser's conveyancer asks for the "NOC," what they are really asking for is proof that Section 36 (or Section 36A, for mortgages) sanction has been obtained. There is no shortcut form or certificate that substitutes for it, and a trust cannot walk into the Charity Commissioner's office and request an NOC as a distinct application. The only route is the substantive sanction application. The order granting that sanction is the document that functions, in commercial parlance, as the NOC.

What Banks and Purchasers Actually Rely On

Given that no separate NOC exists, a bank financing a purchase, or a purchaser buying property from (or through) a trust, needs to verify a handful of things. First, the certified copy of the Charity Commissioner's or Joint Charity Commissioner's order granting sanction under Section 36, or Section 36A where the transaction involves a mortgage or borrowing. Second, that the sanction order has attained finality, meaning the appeal period has expired without a challenge, or any challenge has already been resolved. Third, the trust's registration certificate (the Schedule I extract) together with the change register (Schedule II), to confirm the trustees executing the transaction are actually the persons authorised on the Charity Commissioner's records. And where a redevelopment is involved, and the trust operates as, or holds property jointly with, a co-operative housing society, confirmation that the redevelopment agreement and the developer's appointment were themselves covered within the scope of the sanction. A sanction limited to sale does not automatically extend to a development arrangement.

A bank that lends against trust property, or takes trust property as collateral, without confirming valid Section 36 or 36A sanction is taking on real risk. A transaction concluded without the required sanction does not bind the trust, and any dispute over it cannot simply be dragged into an ordinary civil suit. In Church of North India v. Lavajibhai Ratanjibhai [(2005) 10 SCC 760], the Supreme Court held that Section 36 bars alienation of trust property without the Charity Commissioner's previous sanction, and that questions touching the administration, possession, and disposal of trust property fall within the Charity Commissioner's exclusive statutory domain rather than the ordinary jurisdiction of a civil court. The practical lesson for a bank or purchaser is straightforward: the sanction order is not a formality that can be waived for convenience. It is the only instrument that gives the transaction legal effect, and no amount of comfort from the trustees can substitute for it.

The Section 36 Application: What the Trust Must File

Who Applies for Section 36 Sanction, and to Which Authority?

The application under Section 36 is made by the trustees, not by the purchaser or the bank, before the Charity Commissioner, or in practice before the Joint Charity Commissioner or Deputy Charity Commissioner exercising delegated powers for the relevant region. In Mumbai this ordinarily means the office of the Charity Commissioner, Maharashtra, or the Assistant or Deputy Charity Commissioner with territorial jurisdiction over the trust's registration. Because it is the trustees who must apply, a purchaser negotiating with a trust would do well to build the sanction timeline into the agreement for sale itself, usually as a condition precedent to completion, rather than assume sanction can be procured after the deal is signed.

What Documents Does a Section 36 Sanction Application Require?

The Bombay Public Trusts Rules, 1951 and the Charity Commissioner's administrative practice require a defined set of documents to accompany the application. The exact checklist varies a little between regional offices, but the table below sets out what is ordinarily called for.

The Public Notice and Objection Step

A defining feature of the Section 36 process, and the reason it takes longer than an ordinary conveyancing transaction, is the invitation of objections. Where the Commissioner considers it appropriate, particularly for sales of any significant value, a public notice is issued inviting offers or objections from interested parties within a stipulated period, commonly fifteen to thirty days. This step exists because the Charity Commissioner's job is not to rubber-stamp a private arrangement between trustees and a chosen buyer. It is to satisfy the Commissioner that the trust is getting the best available terms, and that no person with a legitimate interest in the trust's affairs has been overlooked. Only once any objections are considered, and the Commissioner is satisfied that the proposed sale (or mortgage or lease) serves the interest, benefit, and protection of the trust, does the sanction order issue, usually subject to conditions such as a minimum price, deposit of sale proceeds in a specified manner, or utilisation of proceeds for a stated trust purpose.

Timeframes and Appeal

There is no fixed statutory timeline for deciding a Section 36 application. In practice the process, including the notice period, runs anywhere from a few months to over a year, depending on the office's caseload and whether objections actually come in. Once an order is passed, an appeal lies under Section 70 of the MPT Act within the prescribed period, and a transaction should not be treated as final until that appeal window has closed, or any appeal filed has been disposed of. This is exactly why banks insist on finality, not merely existence, of the sanction order before releasing funds.

Distinct Clearances That Sometimes Get Bundled Into the "NOC" Request

Confirming No Pending Section 41A Inquiry

Section 41A of the MPT Act gives the Charity Commissioner power to issue directions to trustees to ensure proper administration, including where trust property risks being wasted, damaged, or wrongfully alienated. A pending inquiry or direction proceeding under this section can complicate or delay a transaction even where valid Section 36 sanction otherwise exists. Banks financing a purchase, and cautious purchasers generally, sometimes ask for confirmation, typically by way of a search or a letter from the trust's advocate, that no Section 41A proceeding, and no pending change report dispute concerning the trustees under Section 22, is outstanding. This is not a separate NOC either. It is simply a due diligence step confirming that the trust's internal governance is not itself contested in a way that could unsettle the transaction later.

Trusts Acting as Redevelopers or Co-Developers of Housing Societies

A more specific situation arises where a public trust owns the land on which a co-operative housing society's building stands, or where the trust itself proposes to redevelop property jointly with a society. Here, the Charity Commissioner's sanction under Section 36 has to cover not just the fact of development but the specific terms: the developer's identity, the consideration or rehabilitation component offered to the trust, and any conditions attached to safeguard the trust's beneficial interest. A redevelopment agreement signed before this sanction is obtained, or one that departs materially from the sanctioned terms, leaves both the society and the incoming purchasers of redeveloped units exposed: the trust's title component of the project remains unperfected.

Change Reports and the Interval Between Trustee Changes and Property Transactions

Where a transaction is proposed shortly after a change in trustees, whether due to death, resignation, or removal, it is worth confirming that the change report required under Section 22 of the MPT Act has been filed and recorded before the Section 36 application proceeds. An application for sanction filed by trustees whose change has not yet been recorded on the trust's registered particulars can itself become a ground for the Charity Commissioner to defer or query the application, which adds avoidable delay to an already lengthy process.

Practical Steps for Purchasers and Lenders

When Should Section 36 Sanction Be Built Into a Property Transaction?

Given how long the Section 36 process can take, the more workable approach in most Mumbai transactions is to make execution of the agreement for sale conditional upon, or run parallel to, the trust's application for sanction, with completion (and, where relevant, disbursement of loan funds) tied to production of the final, unappealed sanction order. Completing a sale first and regularising the sanction afterwards is not a viable strategy. A sale executed without sanction has no legal effect against the trust, regardless of how the parties choose to label their agreement.

Verifying the Order Itself, Not Just Its Existence

Seeing that some order exists is not enough. The order should be checked to confirm it actually sanctions the specific transaction at hand (the correct property description, the correct consideration, the correct counterparty), that any conditions attached to the sanction, such as a minimum price or restrictions on the use of proceeds, have been or will be complied with, and that the order has not been stayed or set aside in any pending proceeding. Title due diligence for a trust property deal is, in this sense, an extension of ordinary property due diligence, with the Charity Commissioner's sanction treated as one more document in the title chain that has to be examined on its own terms rather than accepted at face value.

Frequently Asked Questions

Is there a separate application form for an "NOC" from the Charity Commissioner?

No. The MPT Act does not provide for a standalone NOC application. What is required is an application for sanction under Section 36, for sale, exchange, gift, or long lease, or Section 36A, for mortgage or borrowing. The order granting that sanction is the document commonly referred to as the NOC in commercial practice.

How long does it take to get Section 36 sanction?

There is no fixed statutory period. Depending on the regional office, whether a public notice inviting objections is issued, and whether objections are actually received, the process can take anywhere from a few months to well over a year. Parties should build this into their transaction timelines rather than treat it as a quick formality.

Can a bank rely on an in-principle assurance from the trustees instead of the final sanction order?

No. An assurance from trustees that sanction "will be obtained" or "is in process" does not bind the trust and does not protect the bank's security interest. Only a final, unappealed sanction order under Section 36 or Section 36A gives the underlying transaction legal effect against the trust.

Does Section 36 sanction cover redevelopment agreements automatically?

Not necessarily. Where a trust's property is being redeveloped, whether independently or jointly with a co-operative housing society, the sanction must specifically address the redevelopment terms, including the developer's identity and the consideration or rehabilitation offered to the trust. A sanction obtained for an outright sale does not automatically extend to a development arrangement with different terms.

What happens if trust property is sold without Section 36 sanction?

A sale, exchange, gift, or long lease executed without the Charity Commissioner's previous sanction does not bind the trust. The transaction can be challenged, and the purchaser or lender is left without effective title or security despite having paid consideration. That is exactly why verifying the sanction order before completion is essential, not optional.

Is the Charity Commissioner's sanction the same as the trust's registration certificate?

No. The registration certificate confirms the trust is registered under the MPT Act and identifies its registered trustees. It says nothing about permission for a specific sale, mortgage, or lease. Section 36 sanction is a separate, transaction-specific approval that must be obtained each time the trust proposes to alienate or encumber its immovable property.

Who can object during the public notice period, and what happens to those objections?

Any person with an interest in the trust or its property, including beneficiaries, other trustees, or members of the public who consider the terms unfavourable to the trust, may respond to the public notice. The Charity Commissioner weighs these objections before deciding whether to sanction the transaction as proposed, modify its terms, or direct a fresh invitation of offers if the original process appears to have undervalued the property.

Related reading

A Due Diligence Checklist Before Buying Commercial Property · Evicting a Tenant for Non-Payment of Rent in Mumbai · Rent Increase Limits for Pre-2000 Tenancies in Mumbai

Vikrant D. Shetty | Vikrant D. Shetty is the Founder of the law firm Vikrant D. Shetty & Associates, Advocates & Solicitors at Mumbai.

How can a purchaser confirm a Section 36 sanction order has become final?

A Section 36 sanction order becomes final once the appeal period under Section 70 of the Maharashtra Public Trusts Act, 1950 has expired without a challenge, or any appeal filed has been finally disposed of. A purchaser or lender should obtain a certified copy of the order together with confirmation, typically from the trust's advocate or a search of the Charity Commissioner's file, that no appeal is pending. Relying on an order still within its appeal window risks the sanction being reversed.

What conditions might the Charity Commissioner attach to a Section 36 sanction order?

A Section 36 sanction order commonly carries conditions such as a minimum acceptable sale price, a requirement to deposit sale proceeds in a specified manner, or a direction that the proceeds be used for a particular trust purpose. A purchaser or lender should read the operative part of the order carefully, since completion is only safe once these conditions have been satisfied or are capable of being satisfied as part of the transaction.

Does a mortgage of trust property need the same sanction as a sale?

No. A mortgage or other borrowing against trust property is governed by Section 36A of the Maharashtra Public Trusts Act, 1950, a provision separate from Section 36, which covers sale, exchange, gift, and long lease. A trust cannot mortgage its property without the Charity Commissioner's prior approval under Section 36A, except in narrow circumstances involving loans from nationalised or scheduled banks that the Commissioner later condones.

What is a Section 41A inquiry, and why should a purchaser or bank check whether one is pending?

Section 41A of the Maharashtra Public Trusts Act, 1950 empowers the Charity Commissioner to issue directions to trustees where trust property risks being wasted, damaged, or wrongfully alienated, as part of the Commissioner's oversight of proper trust administration. A pending Section 41A inquiry can delay or complicate an otherwise valid Section 36 sanction, since it signals that the trust's management is itself under scrutiny. Purchasers and banks typically ask the trust's advocate to confirm, by a search of the Charity Commissioner's file or a written statement, that no Section 41A proceeding is outstanding before completing the transaction.

Does a public trust need Section 36 sanction for a lease shorter than the statutory threshold (three years for non-agricultural land)?

No. Section 36 of the Maharashtra Public Trusts Act, 1950 requires the Charity Commissioner's prior sanction only for a lease of non-agricultural trust property exceeding three years, or of agricultural trust property exceeding ten years. A shorter lease within those limits, such as a standard three-year commercial tenancy, can generally be granted by the trustees without approaching the Charity Commissioner, provided the trust deed itself does not impose a stricter internal requirement. Trustees should still ensure the lease terms serve the trust's interests, since the Commissioner's other supervisory powers, including under Section 41A, remain available if the terms appear improvident.

Can trust property be sold to one of the trust's own trustees, and does that transaction face extra scrutiny?

A sale to a sitting trustee is not prohibited outright, but it raises an obvious conflict of interest, and the Charity Commissioner scrutinises such applications for Section 36 sanction more closely than an arm's length sale to an unconnected buyer. The Commissioner will typically expect clear valuation evidence and may require a wider public notice process to test whether a better price is available from an independent purchaser, precisely because the trustee-purchaser cannot be relied upon to negotiate against the trust's interest in the ordinary way. Trustees contemplating such a transaction should expect a longer and more contested sanction process.

Does the Section 36 sanction order need to specify the exact sale price, or can trustees finalise the price after sanction is granted?

In practice, the Charity Commissioner sanctions a specific transaction on specific terms, and the price is ordinarily fixed, or a minimum price condition is attached, as part of the sanction order itself, based on the valuation report and any offers received during the public notice period. Trustees cannot treat the sanction as a general permission to sell at whatever price they later negotiate; a materially different price from what was sanctioned can take the transaction outside the scope of the order. Where negotiations change the price significantly after filing, it is safer to inform the Commissioner and seek a fresh or amended sanction.

This article is for general informational purposes only and does not constitute legal advice. For advice specific to your situation, please seek direct consultation with an advocate.