A Maharashtra government ordinance has stipulated that only a fourth of the trustees on the board of a trust can be permanent. Urvi Malvania explains how this impacts public trusts registered under the Maharashtra Public Trusts Act. The Tata Trusts have already revised the tenure of their new trustees in line with this
What is the Maharashtra Public Trusts Act?
The Maharashtra Public Trusts Act is the state’s primary law governing how public charitable trusts are created, managed and monitored. It gives the Charity Commissioner powers to register trusts, scrutinise their documents, oversee trustee appointments and step in when disputes arise.
The Act aims to ensure that trusts — which handle public or donor funds — operate in a transparent manner, maintain proper records, and remain accountable to beneficiaries. It also outlines how trustees are appointed, how long they can serve, and what responsibilities they carry while running a trust.
Over the years, the Act has become central to preventing conflicts around succession, tenure, and control within trust boards, especially when governing documents are unclear. The Maharashtra government recently brought in an ordinance, effective September 1, 2025, amending the Act, thus reshaping the way charitable trusts in the state appoint trustees and structure their boards.
What changes has the Ordinance brought about?
The ordinance focuses on trustee appointments and board structure. It restricts the number of perpetual or life trustees a trust can have at any point of time to only 25% of the board’s strength. This limit applies even if a trust had earlier operated with more permanent positions or passed internal resolutions to make trustees permanent.
The Ordinance also inserts Section 30A, which distinguishes between perpetual and tenure trustees and lays down a uniform way to appoint them. A key trigger for the change was widespread confusion in trust deeds, many of which had no explicit rules on life or tenure appointments. This led to litigations before the Charity Commissioner and the courts.
The Ordinance seeks to end these inconsistencies by setting a standard framework that all trusts must follow. Although temporary until ratified, it carries full legal force during its effective period.
What about trusts whose deeds do not specify trustee categories?
For many public trusts, the governing document does not define whether trustees are to be appointed for life or only for fixed terms. The Ordinance directly addresses this gap. It says that if a trust’s deed is silent on perpetual trustees, then earlier board decisions — including resolutions declaring someone a permanent trustee — cannot override the statutory one-fourth cap. In simple terms, the law takes precedence over past internal decisions. Trusts in this position must review their board composition against the new limit and make changes where required.
The Ordinance also makes it clear that the absence of a deed clause is no longer a grey area; it automatically triggers compliance with Section 30A. This approach is meant to prevent concentration of control, reduce disputes over succession, and ensure that trustee appointments are predictable and legally sound. Until the legislature formally ratifies or lets the Ordinance lapse, this rule applies to all trusts uniformly.
Rejig of boards in the works
Com a straightforward audit: trusts must examine how many perpetual trustees they currently have and whether this exceeds the one-fourth limit. If it does, they need to restructure the board. This may involve converting some perpetual positions into tenure-based roles, introducing fixed-term appointments and creating clear reappointment cycles.
Trusts may also need to update their deeds to reflect the definitions laid out in Section 30A so that future appointments are unambiguous. Earlier resolutions that attempted to create permanent positions without amending the deed must be re-evaluated, because the Ordinance overrides them. Since the rule took effect on September 1, compliance is immediate and not dependent on future legislative approval. Trusts must therefore align their documents and practices with the new framework.
Can trusts go to court on this?
For now, the ordinance is a temporary legal measure. Ordinances are issued when the legislature is not in session and must be ratified within six months plus six weeks of the legislature’s first sitting after reconvening. If this timeline is not met, the ordinance lapses automatically. Until that point, however, it carries the full force of law. If ratified, these provisions will permanently amend the Maharashtra Public Trusts Act.
Trusts that believe the Ordinance goes beyond constitutional limits or conflicts with the original legislative intent can challenge it in the High Court. Legal experts point out that courts usually balance the need for urgent regulation with procedural safeguards when assessing the validity of an ordinance. Importantly, filing a challenge does not pause compliance unless the court grants specific relief.