Presentation by: CS Girish G Paralikar Sunday, 27 th November, 2011. Alienation of Property. Alienation – Meaning separation, estrangement or disaffection. Where property belonging to a Trust is disposed of by any ways prescribed under the Law. Alienation of Property.
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This is an obligation caste on the Trustees to ensure that they take decisions that are most advantageous to the Public Trust for which they are Trustees.
The Section applicable in these matters are 36 and 36 A of the Bombay Public Trusts Act, 1950.
Section 36 says “Notwithstanding anything contained in the Instrument of Trust” , thus, it does override the provisions of the Trust Deed and overpowers the powers vested in the Trustees.Alienation of Property
Alienation can be by way of sale, exchange or gift of any immovable property.
Alienations as specified above shall be valid ONLY with a PREVIOUS sanction of the Charity Commissioner.
Invariably, now a days, a Public Notice is required to be published to bring in more transparency in the transaction and make enable the public at large to benefit from the same.Alienation of Property
The CC MAY , on application made, authorise any Trustee and also may revoke the sanction if it was obtained by fraud / misrepresentation or by concealing the facts material to the deal.
Typically, the application should contain the type of alienation sought, the necessity, valuation report, utilisation of the proceeds, clarification as to how the proposal is in the interest of the Trust, the title deeds and the Schedule I entries of the property, details of the powers vested in the Trustees by the Trust Deed, Resolutions passed by the Trustees.Alienation of Property
Generally, the Trustees can not make such transactions with themselves, they being in a fiduciary capacity towards the Trust. However, if it can be established that the said alienation is in the interest of the Trust, the CC may grant the permission with conditions as he may impose.
The previous approval is not necessary when the alienation is by Court itself or by operation of Law.
Similar provisions apply for alienation of property by way of its mortgage of while availing any Loan from any Bank / financial institution on its security.