Maharashtra Ordinance introduces concept of ‘tenure trustee’ and ‘perpetual trustee’

The Governor of Maharashtra State vide Ordinance No. VII OF 2025 has amended the Maharashtra Public Trusts Act 1950 which has come into effect from 1^st September 2025. The amendments only affect trusts registered in the state of Maharashtra under the Maharashtra Public Trusts Act 1950.

Link to read or download the ordinance:

https://prsindia.org/files/bills_acts/bills_states/maharashtra/2025/Ord7of2025MH.pdf

Types of trustees

Under Section 2(18) of the Maharashtra Public Trusts Act 1950 “trustee” means “a person in whom either alone or in association with other persons, the trust property is vested and includes a manager.”

Section 2(18) is now amended by the ordinance as: “trustee means a person in whom either alone or in association with other persons, the trust property is vested and includes a tenure trustee and perpetual trustee.”

Thus, the ordinance has introduced the concept of two types of trustees:

1. ‘Tenure trustee’ or a trustee who can serve for a limited term of office and
2. ‘Perpetual trustee’ or a trustee who can serve permanently (for life.)

The Ordinance has added new Section 30A (1), (2) & (3)

30A (1) When the specific period of appointment of a tenure trustee expires, then notwithstanding anything contrary contained either in the instrument of trust or any decision taken by the trustees, such tenure trustee shall cease to perform functions and discharge the duties as a trustee, unless and until he is re-appointed:

Provided that, if the instrument of trust is silent or does not expressly provide for any specific period for appointment or re-appointment of a trustee, then notwithstanding anything contrary contained in the instrument of trust, or any decision that may have been taken by the trustees, it shall be lawful for the continuing or surviving trustees to unanimously appoint a trustee for a period up to five years at a time.

Interpretation

The new Section 30A (1) specifically deals with ‘appointment of a tenure trustee.’

If the trust deed is silent with regard to tenure of office for appointing either a new ‘tenure trustee’ or reappointing the ‘tenure trustee’ whose term of office has expired, the proviso to Section 30A (1) requires that the continuing or surviving trustees must unanimously (not by majority) appoint a new trustee or unanimously reappoint the ‘tenure trustee’ whose term of office has expired for a period up to five years.

30A (2) If the instrument of trust does not contain any specific provision for appointment of trustee as perpetual trustee, then notwithstanding anything contrary to the usage of the trust or any decision that the trustees may have taken, the number of perpetual trustees at any point of time in the trust shall not exceed one-fourth of the total number of trustees.

Provided that, the continuing or surviving trustees may, unanimously appoint a tenure trustee whose period has expired to be a perpetual trustee only against the vacancy of the perpetual trustee arising on account of any of the following reasons:

• death;
• insolvency;
• becoming incapable or unfit to discharge the functions and duties of his office by reason of extreme old age, disease whether of body or mind;
• leaving India with an intention of permanently residing abroad;
• conviction for any offence involving moral turpitude

Interpretation

The new Section 30A (2) specifically deals with appointment of trustee as ‘perpetual trustee.’ This new section requires that if the trust deed does not have specific provision for appointment of trustee as ‘perpetual trustee’ then notwithstanding anything contrary to the usage of the trust or any decision that the trustees may have taken, the number of perpetual trustees at any point of time in the trust shall not exceed one-fourth of the total number of trustees. In other words, if the trust has a Board of four trustees only one out of the four can be a ‘perpetual trustee.’

30A (3) Notwithstanding anything contrary contained in the instrument of trust, or any decision that may have been taken by the trustees, the tenure trustees or the perpetual trustees shall always be appointed within the limit of maximum number of trustees expressly or by necessary implication laid down in the instrument of trust. Accordingly, the continuing or surviving trustees shall not either upon expiry of the period of the tenure trustee or on happening of any event specified in clauses (a) to (e) of sub-section (2), appoint any trustee or trustees over and above the maximum number of trustees so laid down in the instrument of trust.”.

Interpretation

The number of the trustees on the Board of the trust cannot be less or more than what is specified in the trust deed and those appointed or reappointed as ‘tenure trustee’ or ‘perpetual trustee’ must be as per requirements stipulated under Section 30A (1) and 30A (2).

Rationale

The ‘Statement’ in the Ordinance explains the rationale:

“It is noticed that in various instruments of trusts there is no clarity about appointment of perpetual or permanent trustees and tenure trustees and their tenure, which leads to multiple litigations before the Charity Commissioner and the court. This affects the working of the trusts, welfare of beneficiaries and the public. It is considered expedient to provide in the Act, by inserting new section 30A, for appointment of tenure trustees and perpetual trustees where the instrument of trusts does not contain any specific provision thereof.”

Impact

1. The ordinance restricts the number of perpetual or life trustees a trust can have at any point of time to only twenty-five per cent of the board’s total strength. This limit applies to all trusts in Maharashtra which prior to this amendment have been operating with all trustees or more than twenty-five percent of the total number of trustees on the Board serving the trust as life-time trustees.
2. In the case of several public trusts, the trust deed does not state whether trustees are to be appointed for life or only for fixed terms. In fact, most trust deeds state nothing in this regard and accordingly when surviving trustees appoint new trustees, such newly appointed trustees are deemed to be trustees for life (i.e., till such time as they voluntarily resign at some stage or die.) The Ordinance ostensibly addresses this gap and states that if a trust deed is silent on this matter, then earlier board decisions, including resolutions declaring some trustees as ‘permanent trustee,’ cannot override the now statutory ‘not more than one-fourth’ cap. In other words, the law (the amendments as per the ordinance) takes precedence over past internal decisions.
3. Until the Maharashtra State Legislature formally ratifies this Ordinance or perhaps allows the Ordinance lapse, this amendment shall uniformly apply to all public charitable trusts registered in Maharashtra state from November 1, 2025.

What all trusts in Maharashtra should do?

1. All Public Charitable Trusts registered in the state of Maharashtra under the Maharashtra Public Trusts Act 1950 should review their board composition against the new limit and make changes where required. 
2. The trustees 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.
3. Since the amendment has come into effect on 1^st September2025 compliance requirement is immediate.

Ordinance has force of law

The Governor of a state has the power to issue ordinances under Article 213 of the Constitution of India when the state legislature is not in session.

For now, the ordinance is a temporary statutory measure. This Ordinance must be ratified within six months plus six weeks of the state’s legislature’s first sitting after reconvening. If this timeline is not met, the ordinance shall automatically lapse. Until that point, however, it carries the full force of law.

If ratified, by the legislature when in session, these provisions will permanently amend the Maharashtra Public Trusts Act 1950.

Option to challenge in court

Trusts that believe the Ordinance goes beyond constitutional limits or conflicts with original legislative intent can challenge it in the High Court. Courts usually balance the need for urgent regulation with procedural safeguards when assessing the validity of an ordinance.

However, challenging the Ordinance will not pause compliance, unless the court grants specific relief.