CHARITABLE AND RELIGIOUS TRUSTS

Act

The Charitable and Religious Trusts Act was enacted during the year 1920 (‘Act’ for short).  The objectives of this Act are-

• to provide facilities for the obtaining of information regarding trust created for public purposes of a charitable or religious nature,
• to enable the trustees of such trusts to obtain the directions of a Court on certain matters; and
• to make special provision for the payment of the expenditure incurred in certain suits against the trustees of such trusts

Applicability of the Act

This extends to the whole of India except the State of Jammu and Kashmir.  The Government at any State may, be notification in the Official Gazette, direct that this Act, or any specified part thereof, shall not extend to that State or any specified area therein, or to any specified trust or class of trusts.

Court

The term ‘Court’ for the purposes of this Act means the Court of the District Judge or any other Court empowered in that behalf by the State Government and includes the High Court in the exercise of its ordinary original civil jurisdiction.

Jurisdiction of civil court

Any person, having an interest in any express or constructive trust created or existing for a public purpose of a charitable or religious nature, may apply by petition to the Court within the local limits of whose jurisdiction any substantial part of the subject-matter of the trust is situate to obtain an order embodying all or any of the following directions-

• directing the trustee to furnish the petitioner through the Court with particulars as to the nature and objects of the trust, and of the value condition, management and application of the subject-matter of the trust, and of the income belonging thereto, or as any of these matters, 
• directing that the accounts of the trusts shall be examined and audited.

No person can ask for the accounts of the trust for a period more than 3 years.

Petition

The petition to be filed a person asking for the directions of the Court shall be in writing and signed and verified as per the provisions of the Code of Civil Procedure. The petitioner shall show in the petition about his interest in the interest and the particulars of audit which he wants to obtain.

Procedure

On receipt of the petition from the petitioner, the Court shall take such enquiries and taking such evidences required.  The Court shall consider as to whether the trust is applicable to the act and the petitioner is having an interest on the trust. Then the Court shall fix at date for hearing the petition.  The copy of the notice for hearing shall be served on the trustee and the persons to whom the notice should be given, in the opinion of the Court.

On the hearing date or at the adjourned date, the Court shall hear the petitioner and the trustee.  During the hearing the petitioner or the trustee may submit before the Court a written statement which shall be signed and verified by the petitioner /trustee and verified the pleadings. 

If any person appears at the hearing of the petition and either denies the existence of the trust or denies that it is a trust to which this Act applies, and undertakes to institute within 3 months a suit for a declaration to that effect and for any other appropriate relief, the court shall order a stay of the proceedings and, if such suit is so instituted, shall continue the stay until the suit is finally decided.  If no undertaking is given or the suit is not filed after the expiry of 3 months, the Court shall decide the question.  If the suit is filed  no order shall be passed by the Court which conflicts with the final decision therein.

On completion of the inquiry, the Court may dismiss the petition or pass any order as it thinks deem fit. The Court shall not try or determine any question of title between the petitioner and any person claiming title adversely to the trust.

Failure to comply with the order of Court

If a trustee without reasonable excuse fails to comply with an order, such trustee shall, without prejudice to any other penalty or liability which he may incur under any law for the time being in force, be deemed to have committed a breach of trust affording ground for a suit under the provisions of section 92 of the Code of Civil Procedure, 1908 and any such suit may, so far as it is based on such failure, be instituted without the previous consent of the Advocate General.

Application by trustee

Any trustee of an express or constructive trust created or existing for public purpose of a charitable or religious nature may apply by petition to the Court, having jurisdiction, for the opinion, advise or direction of the Court on any question affecting the management or administration of the trust property.  The Court shall give its opinion, advice or direction thereon. The Court may either give its opinion, advice or direction thereon forthwith, or fix a date for the hearing of the petition, and may direct a copy thereof, together with notice of the date so fixed, to be served on such of the persons interested in the trust, or to be published for information in such manner, as it thinks fit.  The Court, before giving any opinion, advice or direction, shall afford a reasonable opportunity of being heard to all persons appearing in connection with the petition.

The Court shall not be bound to give such opinion, advice or direction on any question which it considers to be a question not proper for summary disposal.  If the trustee acts on the opinion of the Court, he shall be deemed, as far as his own responsibility is concerned, to have discharged his duty as such trustee in the matter in respect of which the petition was made.

Cost

The costs, charges and expenses of and incidental to any petition, and all proceedings shall be in the discretion of the Court, which may direct the whole or any part of any such costs, charges and expenses to be met from the property or income of the trust in respect of which the petition is made, or to be borne and paid in such manner and by such persons as it thinks fit.  No such order shall be made against any person (other than the petitioner) who has not received notification of the petition and had a reasonable opportunity of being heard thereon.

Non entertainment of suit

No petition shall be filed by any trust in any of the following circumstances-

• if a suit instituted in accordance with the provisions of section 92 of the Code of Civil Procedure, 1908,  is pending in respect of the trust in question;
• If the trust property is vested in the Treasurer of Charitable Endowments, the Administrator-General, the Official Trustee, or any Society registered under the Societies Registration Act, 1860; or
• if a scheme for the administration of the trust property has been settled or approved by any Court of competent jurisdiction, or by any other authority acting under the provisions of any enactment.

Applicability of Civil Procedure Code

The provisions of the Code of Civil Procedure, 1908 relating to ‑   

• the proof of facts by affidavit,
• the enforcing of the attendance of any person and his examination oath
• the enforcing of the production of documents, and
• the issuing of commissions,

shall apply to all proceedings under this Act, and the provisions relating to the service of summonses shall apply to the service of notice thereunder.  The provisions of the Code relating to the execution of decrees shall, so far as they are applicable, apply to the execution of orders under this Act.

No appeal

No appeal shall lie from any order passed or against any opinion, advice or direction given under this Act.