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Tax India ›› Indian Law ›› Corporate Law ›› Trusts
Trusts
Public Charitable And Religious Trusts
- As regards the public trusts, there is no Central Act applicable in all theStates. But various states such as Bihar, Madras, Madhaya Pradesh Orissa,etc, have enacted their own acts prescribing conditions and procedure forthe administration of public trusts. These Acts are more or less similar innature though there may be certain variations.
- For instance, the Bombay Public Trusts Act, 1950 provides machinery ofcharity commissioners to regulate the administration of public religiousand charitable trusts. It makes registration of all the public religiousand charitable trusts including the religious trusts created under HinduMuslim and Christian personal laws mandatory and prescribes certain normsfor the maintenance and audit of budget, and accounts of such trusts andfurther empowers the charity commissioners to inspect and supervise theproperty belonging to a public trust and as well the proceedings of thetrustees and books of accounts of such a trust.
- That apart, the act also creates certain restrictions on the investment ofpublic trust money and as well alienation of immovable property of such atrust.
Public Supervision And Regulation
The working of the public trust and its trustees can be regulated andclosely supervised by the state and/or the beneficiaries of such a trust.In the case of any alleged breach of a public trust or where the directionof the court is deemed necessary for the administration of such trust,either the Advocate General or two or more persons having an interest inthe trust and having obtained the leave of the court can institute a suitto seek:
- removal of a trustee
- appointment of a new trustee
- for vesting any property in a trustee
- for directing a trustee who has been removed or a person who has ceased to be a trustee to deliver possession of any trust property in his possession to the person entitled to the possession of such property
- For directing accounts enquiries
- for seeking of declaring what proportion of the trust property or of theinterest therein shall be allocated me any particular object of the trust.
- In such a suit, the court may alter the original purpose of the trust andallow the property or income of such trust or any portion thereof to beapplied to different purpose or in a different manner for a similarpurpose, as nearly as possible according to the intentions of the author.
- Such an alternation can be sought where either the original purpose of thetrust is fulfilled or can not be carried out or where the original purposeof the trust provides a use for only part of the trust property or wherethe property of the trust can be used more effectively for another similarpurpose.
- The Court can also make alternation if the original purpose, inwhole in part, has been adequately provided for by other means or hasceased to be charitable or has become useless or harmful to community orhas ceased to provide a suitable and effective method of using the trustproperty as per the spirit of the trust.
Religious Trusts
The creation of religious charitable trusts is governed by the personal laws of the religion. The administration of these religious trusts can either be left to the trustees as per the dictates of the religious names or it can be regulated to a greater or lessee degree by statute such as the Bombay Public Trusts Act, 1950 discussed above.
In case of Hindus, the personal law provisions regulating the religious trusts have not been codified and are found dispersed in various religious books and epics.
Essentials Of Religious and Charitable trust under Hindu Law
There are four essential requirements for creating a valid religious or charitable trust under Hindu Law:
- Valid religious as charitable purpose of the trust as per the norms ofHindu Law.
- Capability of the author of the trust to create such a trust.
- The purpose and property of the trust must be indicated with sufficient precision.
- The trust must not violate any law of the country.
The religious and charitable purpose are neither delineated nor defined with precision under the Hindu Law.
However, acts of piety and benevolence such as gifts to idols, establishment of Dharmasala, mutts or monasteries, performance of 'Sradhs' of the author of the trust or his family excavation of tanks, wells etc, establishment of hospitals, educational institute etc. qualify as religious and charitable under the Hindu Law.
No document in writing is necessary to constitute valid religious and charitable trust by a Hindu. Only there has to be a clear and unequivocal manifestation of an intention on the part of the author to create such a trust.
Such intention may be manifested by performing the ceremonies of sankalpa and samarpan. But these ceremonies are not essential for the Validity of the trust.
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