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CHARITABLE TRUST

(Querist) 19 July 2009 This query is : Resolved 
I want to know whether any permission is required from court/Govt/ Charitable Commissioner, when a charitable trust wants to mortgage its property for raising a loan from a commercial bank(though the trust deed & resolution empowers it to do so).I may add that there are several opinions among my collegues & many of the advocates are unable to give a definite answer to the same.
A V Vishal (Expert) 19 July 2009
IMMOVABLE PROPERTY (SEC. 36)

Investment in immovable property requires Charity Commissioner’s permission. Prior permission of Charity Commissioner is required for sale, exchange, gift of any immovable property, lease exceeding a period of 3 years in case of non-agricultural land/building, lease exceeding 10 years in case of agricultural land

BORROWING POWERS OF TRUSTEES (SEC. 36A)

No trustees shall borrow money for the purpose of or on behalf of trust except with previous sanction of the Charity Commissioner.

SHASHANK SHEKHAR DASH (Querist) 19 July 2009
Dear Sir,

Will you please quote the concerned act under which the section 36 or 36A fall.
SHASHANK SHEKHAR DASH (Querist) 19 July 2009
If the section falls under BOMBAY PUBLIC TRUSTS ACT, 1950, will it be applicable throughout India.I need clarification about State of Karnataka
Harinarayan R. Tripathi (Expert) 20 July 2009
Dear Shri Shashankbhai

In reply of your Query, I state that, as per Section 29 of THE MADRAS HINDU RELIGIOUS AND CHARITABLE ENDOWMENTS ACT, 1951, permission of the Commissioner is necessary prior to inter alia the mortgage of any immovable trust property in the manner as given under Section 29, which reproduced hereinbelow:-

29. Alienation of immovable trust property.-(1) Any exchange, sale or mortgage and any lease of any immovable property belonging to, or given or endowed for the purposes of, any religious institution shall be null and void unless it is sanctioned by the Commissioner as being necessary or beneficial to the institution:

Provided that before such sanction is accorded, the particulars relating to the proposed transaction shall be published in such manner as may be prescribed, inviting objections and suggestions with respect thereto; and all objections and suggestions received from the trustee or other persons having interest shall be duly considered by the Commissioner.

[Provided further that the Commissioner, if he is satisfied that owing to any emergency or for some other reason to be specified in the order according sanction, it is not reasonably practicable to follow the procedure prescribed in the foregoing proviso, may, with the previous sanction of the Government dispense with such procedure.]

(2) When according such sanction, the Commissioner may impose such conditions and give such directions as he may deem necessary regarding the utilization of the amount raised by the transaction, the investment thereof and in the case of mortgage, regarding the discharge of the same within reaonable period.

(3) A copy of the order made by the Commissioner under this section shall be communicated to the Government and to the trustee and shall be published in such manner as may be prescribed.

(4) The trustee may within three months from the date of this receipt of a copy of the order, and any person having interest may within three months from the date of the publication of the order, appeal to the Government to modify the order or set it aside.

(5) Nothing contained in this section shall apply to the inams referred to in section 35.

I hope this will meet with your requisitions.
vinjamuri ranga babu (Expert) 20 July 2009
sir.
no, not all there is no need getting permission from any of governamental autority in obtaining loan to the trust to the welfare of the trust.
vr
Y V Vishweshwar Rao (Expert) 26 July 2009
The Charity institue's properties mortgage or sale reuire the permission from Commissioner of Charities .
SHASHANK SHEKHAR DASH (Querist) 26 July 2009
Dear Tripathi,

Thanks for the clarification posted on 20-07-2009. Can you please clarify the applicablity of THE MADRAS HINDU RELIGIOUS AND CHARITABLE ENDOWMENTS ACT, 1951 in the state of Karnataka.
SHASHANK SHEKHAR DASH (Querist) 26 July 2009
Dear Sh Rao,

Thanks for the clarification posted on 26-07-2009. Can you please quote the concerned act & its applicability in the state of Karnataka.
SHASHANK SHEKHAR DASH (Querist) 26 July 2009
Can anyone comment on the appicability of Section 62 of THE KARNATAKA HINDU RELIGIOUS INSTITUTIONS AND CHARITABLE ACT, 1997, on seeking permission from State Govt for mortgage of immovable property belongng to a charitable trust?


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