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Section 36 a of bombay public trust act,1950

(Querist) 05 February 2019 This query is : Resolved 
Dear Sir,
One of trustee of our community has taken loan for her daughter for education. The constitution of our trust allows loan to all members of our community. The trustee has taken loan after becoming trustee of trust for her daughter. My question is simple whether the trustee can get loan as per Section 36 A or any other section of Bombay Public Trust Act,1950 or not ? Section 36 A sub clause 3 restricts the loan by trustees only for objects of trust or also for personal use o use of family members ?

Please reply containing legal grounds and latest cases which allows or disallows to get loan ? If allow whether the prior permission of charity commissioner is required or not.
P. Venu (Expert) 07 February 2019
What are the objects of the Trust as specified in the Trust Deed?
Snehal Parikh (Querist) 07 February 2019
Dear Sir,
My query is that trustee can get loan or not after becoming trustee. The trust allows all persons of the community to get loan. Sub clause (3) of Section 36A allows trustees to get loan only for objects of trust with previous approval of trustee. Sub clause (4) indicates No trustee shall borrow money for his own use from any property of the public trust of which he is a trustee:

Provided that, 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.

Now please clarify whether the trustees can get loan for his daughter for education purpose or not ? If yes, under as per what section of BPTA,1950 or on the basis of judgements of charity commissioner or any court ? If yes, please provide judgement no. of the same.

Snehal Parikh (Querist) 07 February 2019
Dear Sir,
My query is that trustee can get loan or not after becoming trustee. The trust allows all persons of the community to get loan. Sub clause (3) of Section 36A allows trustees to get loan only for objects of trust with previous approval of trustee. Sub clause (4) indicates No trustee shall borrow money for his own use from any property of the public trust of which he is a trustee:

Provided that, 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.

Now please clarify whether the trustees can get loan for his daughter for education purpose or not ? If yes, under as per what section of BPTA,1950 or on the basis of judgements of charity commissioner or any court ? If yes, please provide judgement no. of the same.

kavksatyanarayana (Expert) 11 February 2019
No. Any amount whether borrowed or Gifted to the Trust, it shall be used for the benefit of Trust only but not for trustees.


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