Law of Trusts
Public, Charitable and Religious Trusts: Complete Notes (Part J)
Part J covers the law of public, charitable and religious trusts, which Section 1 of the Indian Trusts Act leaves outside the Act: the private and public distinction, Section 92 CPC, statutory regulation, the cy-près doctrine, Hindu religious endowments, waqf, and the choice of charitable vehicle. This consolidated note covers Topics 40 to 46.
1. Private and Public Trusts; Charity
A trust is private if its beneficiaries are specific individuals and public if they are the public or a section of it (Deoki Nandan v Murlidhar, 1956), judged by the instrument, public rights of use, public user and contributions, and management. Public trusts may be perpetual, are enforced under Section 92 CPC or statute, and are applied cy-près on failure. Charity covers relief of poverty, education, religion and other purposes of public benefit (Pemsel, 1891); Indian statutes list relief of the poor, education, medical relief, yoga, environment, monuments and general public utility, the last limited as to commercial activity (AUDA, 2022). Dedication may be proved without writing but must be complete.
2. Section 92 CPC
A representative suit concerning a trust for public charitable or religious purposes may be brought, on an alleged breach of trust or where directions are needed, by the Advocate General or two or more persons interested with leave of the court, in the District Court, for removal or appointment of trustees, vesting, delivery of possession, accounts, allocation, authority to deal with property, a scheme, or other relief; no such suit lies otherwise (Section 92(2)). The suit must vindicate public rights (Parmatmanand Saraswati, 1974; Vidyodaya Trust, 2008); notice before leave is desirable (Narayana Chettiar, 1991); suits against third parties fall outside (Bishwanath, 1967). Some State Acts exclude Section 92.
3. Statutory Regulation
- Constitution: Concurrent List Entries 10 and 28; Articles 25 and 26. The State may regulate secular administration but not matters of religion (Shirur Mutt, 1954), nor divert religious trust property (Ratilal Panachand Gandhi, 1954).
- State public trusts Acts (Maharashtra, Gujarat, Rajasthan, Madhya Pradesh): registration, change reports, audited accounts, sanction for alienation, inquiries and schemes.
- State Hindu endowment laws (Tamil Nadu, Andhra Pradesh, Karnataka, Odisha, Bihar and others), the Sikh Gurdwaras Act, 1925 and the Waqf Act, 1995.
- Central statutes: Religious Endowments Act, 1863 (largely historical); Charitable Endowments Act, 1890 (vesting in the Treasurer of Charitable Endowments); Official Trustees Act, 1913; Charitable and Religious Trusts Act, 1920 (court orders for information and audit).
4. Cy-près
Property of a public charitable or religious trust whose purpose fails or becomes unsuitable is applied to the nearest suitable purpose. For initial failure a general charitable intention is needed; for subsequent failure it is not. Section 92(3) CPC (1976) lists the grounds: purposes fulfilled, impossible or impracticable, using only part of the property, better combined, tied to an obsolete area or class, provided for otherwise, or no longer charitable or effective, always regarding the spirit of the trust. Courts apply it liberally (Bansi Dhar, 1974) while respecting the religious character of religious trusts.
5. Hindu Endowments and Waqf
Point | Hindu religious endowment | Waqf |
|---|---|---|
Holder of property | The deity, a juristic person (Pramatha Nath Mullick, 1925; Yogendra Nath Naskar, 1969) | Ownership treated as passing to God |
Manager | Shebait (office with property, Angurbala, 1951) or mahant of a math (Vidya Varuthi, 1921) | Mutawalli |
Alienation | Only for legal necessity or benefit of the deity | Inalienable, save as law permits |
Kinds | Public or private; complete or partial dedication | Public or family (validated 1913) |
Regulation | State endowment laws; worshippers may sue (Bishwanath, 1967) | Waqf Act, 1995, as amended in 2025; Waqf Boards and Tribunals; interim stay of some provisions, 15 September 2025 |
6. Choosing a Vehicle
A public trust is simplest and founder controlled but lacks legal personality and is hard to change; a society is membership based and democratic; a Section 8 company has full legal personality, the highest compliance burden and the greatest credibility with institutional donors. All three can obtain tax exemption, FCRA registration and CSR eligibility, and none may distribute surplus to members.
⚠ Key point Part J in one line: public trusts serve the public or a section of it, are governed outside the Trusts Act by Section 92 CPC, State public trust and endowment laws and central statutes within Articles 25 and 26, survive the failure of their purposes through cy-près, and include the distinct Indian institutions of Hindu endowments vested in the deity and waqf dedicated to God; founders may alternatively choose a society or Section 8 company. |
7. The Topics of This Part
- Topic 40: Private and public trusts; what counts as a charitable purpose
- Topic 41: Section 92 CPC and litigation over public trusts
- Topic 42: Statutory regulation: State Acts and central endowment laws
- Topic 43: The cy-près doctrine
- Topic 44: Hindu religious endowments and the deity as a juristic person
- Topic 45: Waqf and trust compared
- Topic 46: Choosing a vehicle: trust, society or Section 8 company