Revocation of Sanction under Section 36(2) requires strict proof of fraud, not merely subsequent disagreement on valuation.

Respondent No. 3 (Trust) owned a property originally leased in 1917. After terminating the previous lease in 2016, the Trust obtained sanction from the Joint Charity Commissioner on May 24, 2018, under Section 36(1) of the Maharashtra Public Trusts Act ("the Act") to lease the property to the Petitioner for 29 years with renewal and reversionary rights.

Following the execution of a Lease Deed and a Conveyance Deed, Respondent No. 2 (heir of the previous assignee) challenged the sanction under Section 36(2) of the Act.

On January 29, 2020, Respondent No. 1 (Joint Charity Commissioner) revoked the sanction on grounds of fraud and suppression, citing non-disclosure of the 2016 termination notice, lack of transparency in the advertisement regarding renewal/reversionary rights, and inadequate valuation.

The Court applied Section 36 of the Maharashtra Public Trusts Act, 1950, which governs the alienation of immovable trust property. Under Section 36(1), prior sanction is mandatory for sale or long-term lease.

Section 36(2) empowers the Commissioner to revoke a sanction only on grounds of fraud, misrepresentation, or concealment of material facts.

The Proviso to Section 36(2) mandates that once a conveyance is executed, revocation is permissible only on the ground of fraud practiced upon the Charity Commissioner before the grant of sanction.

The Court noted that this jurisdiction is not appellate and requires strict proof of fraudulent intent rather than mere procedural irregularity or suspicion.

The Court reasoned that since the conveyance deed had already been executed, the only available ground for revocation was "fraud," which requires specific pleadings and proof of intent to deceive.

The Court found that the Charity Commissioner was already aware of the property's encumbrances and pending litigations during the initial sanction process; thus, the non-production of one termination notice did not constitute material concealment.

Regarding the advertisement's lack of detail on renewal rights, the Court held that since the full terms were available in the tender documents reviewed by the Commissioner, this was at most a procedural irregularity, not fraud.

The Court further held that a subsequent difference of opinion regarding property valuation or the "prudence" of granting reversionary rights does not meet the threshold of fraud under Section 36(2).

The Commissioner erred by converting a limited revocation inquiry into a merit-based appellate review of the original sanction.

The High Court allowed the Writ Petition and quashed the order dated January 29, 2020, restoring the original sanction dated May 24, 2018.

The Court clarified that this judgment does not adjudicate on the underlying title or tenancy disputes between Respondent No. 2 and the Trust, leaving those issues open for appropriate civil forums.