Statutory Regulation of Public Trusts: State Acts and Central Endowment Laws

Because public trusts are outside the Indian Trusts Act, their regulation has developed through a patchwork of central and State statutes. Some States have comprehensive public trusts Acts administered by a Charity Commissioner; many have special laws for Hindu religious institutions; and several old central Acts provide vesting, information and supervision mechanisms that apply across the country. This note maps that framework and the constitutional limits within which it operates.

1. Constitutional Background

"Charitable institutions, charitable and religious endowments and religious institutions" and "trusts and trustees" are in the Concurrent List (Entries 28 and 10, List III), so both Parliament and the States may legislate. Laws on religious institutions must also respect Articles 25 and 26: religious denominations have the right to manage their own affairs in matters of religion, and to own, acquire and administer property in accordance with law.

📖 Commissioner, Hindu Religious Endowments, Madras v Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (Supreme Court, 1954)

Held: The State may regulate the secular administration of religious institutions, such as the management of their property and finances, but may not interfere with matters of religion, which include essential religious practices. Provisions that effectively took away the head of the math's control over administration were struck down.

📖 Ratilal Panachand Gandhi v State of Bombay (Supreme Court, 1954)

Held: The Bombay Public Trusts Act, 1950 was upheld as a law regulating the administration of trust property, but provisions permitting the diversion of religious trust property to purposes other than those of the trust were held to violate Articles 25 and 26.

2. State Public Trusts Acts

Several States have comprehensive laws covering public religious and charitable trusts of all communities (subject to exclusions such as waqfs):

Maharashtra: Maharashtra Public Trusts Act, 1950 (formerly the Bombay Public Trusts Act), administered by the Charity Commissioner.
Gujarat: Gujarat Public Trusts Act, 1950, administered by the Charity Commissioner.
Rajasthan: Rajasthan Public Trusts Act, 1959, administered by the Devasthan Commissioner and Assistant Commissioners.
Madhya Pradesh: Madhya Pradesh Public Trusts Act, 1951, administered by the Registrar of Public Trusts.

Typical features (taking the Maharashtra Act as the model)

Compulsory registration of every public trust with the Charity Commissioner, with details of trustees and property.
Change reports whenever trustees, property or other registered particulars change.
Accounts and audit: annual accounts, audit by a chartered accountant, and submission to the authority.
Prior sanction for alienation of immovable property by sale, mortgage, exchange, gift or long lease.
Inquiries and supervision: the Charity Commissioner may inquire into the management of a trust, frame schemes, and take action against defaulting trustees.
Exclusion of Sections 92 and 93 CPC for trusts governed by the Act, with suits brought instead under the Act's own provisions.

3. State Hindu Religious Endowments Laws

Many States regulate Hindu temples and maths through dedicated statutes, typically with a Commissioner or department that supervises administration, appoints executive officers or trustees, approves budgets, and audits accounts. Examples include the Tamil Nadu Hindu Religious and Charitable Endowments Act, 1959, the Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1987, the Karnataka Hindu Religious Institutions and Charitable Endowments Act, 1997, the Odisha Hindu Religious Endowments Act, 1951, and the Bihar Hindu Religious Trusts Act, 1950. Sikh gurdwaras in Punjab and neighbouring areas are governed by the Sikh Gurdwaras Act, 1925, and waqfs by the Waqf Act, 1995 (Topic 45).

4. Central Endowment Statutes

Religious Endowments Act, 1863: Withdrew the government from direct management of religious endowments, transferring them to committees and trustees, and gave persons interested a right to sue for misfeasance with the court's leave; now of limited, largely historical, application.
Charitable Endowments Act, 1890: Allows property held for a charitable purpose (excluding purely religious purposes) to be vested in a Treasurer of Charitable Endowments by government notification on the trustees' application, and a scheme for its administration to be settled; the Treasurer holds title while the trustees manage.
Official Trustees Act, 1913: Creates an Official Trustee for each State who may be appointed trustee of private or public trusts by the court or by settlors, providing a permanent, accountable public trustee.
Charitable and Religious Trusts Act, 1920: Allows any person interested in a public charitable or religious trust to apply to the court for an order directing the trustee to furnish particulars of the trust and its accounts, or to have the accounts examined and audited, and lets trustees seek the court's directions; does not apply where a State Act covers the field.

5. Interaction with Other Regimes

Income tax: registration and conditions for exemption apply in addition to State law (Topic 48).
Foreign contributions: registration or prior permission under the FCRA, 2010 is needed to receive foreign funds (Topic 49).
Societies and companies: charities may instead use a society or a Section 8 company, each with its own regulator (Topic 46).
Courts: where no State Act applies, Section 92 CPC and the general law of public trusts govern (Topic 41).

⚠ Note

The content and coverage of State laws differ considerably and are amended frequently. The relevant State statute and rules should be checked for each trust, including registration requirements, contribution levies and investment rules.

⚠ Key point

Public trusts are regulated by a patchwork of laws within the Concurrent List and subject to Articles 25 and 26: the State may regulate secular administration but not matters of religion (Shirur Mutt, 1954) or divert religious trust property to other purposes (Ratilal Panachand Gandhi, 1954). State public trusts Acts (Maharashtra, Gujarat, Rajasthan, Madhya Pradesh) require registration, change reports, audited accounts and sanction for alienation, and often exclude Section 92 CPC; State Hindu endowment laws supervise temples and maths. Central statutes provide vesting in a Treasurer of Charitable Endowments (1890), an Official Trustee (1913), and a right to seek information and audit (1920); the Religious Endowments Act, 1863 is largely historical.

6. Related Topics and Provisions

Section 92 CPC and public trust litigation (Topic 41)
Hindu religious endowments (Topic 44)
Waqf and trust compared (Topic 45)
Taxation of charitable and religious trusts (Topic 48)