The Charitable and Religious Trusts Act, 1920

Scope and Tamil Nadu status

The Charitable and Religious Trusts Act, 1920 applies to express or constructive trusts created or existing for a public charitable or religious purpose. It was designed to improve access to trust information, allow trustees to obtain court guidance and address expenditure in certain proceedings against trustees.

The source states that the Act ceased to be in force in the State of Madras under Madras Act 22 of 1959. A buyer or professional examining trust property in Tamil Nadu should therefore not treat these procedures as a current Tamil Nadu route without identifying the law that now applies.

Applications by interested persons

The Charitable and Religious Trusts Act, 1920 permits a person with an interest in a qualifying trust to petition the court where a substantial part of the trust property is situated. The person may seek directions requiring the trustee to provide information or have the trust accounts examined and audited.

Key provisions include:

• Information may cover the trust's nature, objects, property value and condition, management, use of property and income.
• An application cannot seek account directions for a period more than three years before the petition date.
• The petition must explain the applicant's interest and identify the information or audit requested.
• The court may notify the trustee and other relevant persons, hear them and conduct inquiries.
• If the existence or qualifying nature of the trust is disputed, proceedings may be stayed while a declaration suit is filed and decided.
• The court generally cannot decide competing title claims through this procedure.

Trustee applications and responsibility

The Charitable and Religious Trusts Act, 1920 allows a trustee to ask the court for an opinion, advice or direction about managing or administering trust property. The court may decline a question that is unsuitable for summary disposal.

A trustee who states the facts in good faith and follows the court's guidance is treated, regarding personal responsibility, as having discharged the relevant duty. A trustee who lacks a reasonable excuse for disobeying an order may be treated as committing a breach of trust.

Costs, exclusions and finality

The Charitable and Religious Trusts Act, 1920 gives the court discretion over petition costs. Costs may be paid from trust property or income, or allocated among persons, but a person other than the petitioner must receive notice and an opportunity to be heard before costs are imposed.

Petitions are excluded in specified situations, including where relevant proceedings are pending, property is vested in listed public offices or a registered society, or an administration scheme has already been settled or approved. No appeal lies from an order, opinion, advice or direction given under the Act.