Public Charitable Trust in Himachal Pradesh
Ratthapala
(Querist) 03 October 2010
This query is : Resolved
Dear All,
I am an American Buddhist monk currently meditating in the Himalaya. Our Sangha is considering to establish a Public Charitable Trust in HP and establish a meditation centre for public good.
1.What are the Acts and relevant laws involved ? We went online and it is said that "It may, however, be noted that the Indian Trusts Act does not apply to public trusts which can be formed by any person under general law. Under the Hindu Law, any Hindu can create a Hindu endowment and under the Muslim law, any Muslim can create a public wakf. Public Trusts are essentially of charitable or religious nature, and can be constituted by any person." How should we proceed ?
2. What are the necessary considerations ? We have received inconsistent legal advice from local lawyers who showed us The Indian Trust Act,1882 as guidelines.
3. Can we establish a Public Charitable Trust first with a sum of money and purchase land for the meditation centre afterwards ?
Thank you very much. Looking forward to your advice.
Yours sincerely,
Ratthapala Bhikshu
s.subramanian
(Expert) 03 October 2010
You can create a trust with a nominal corpus fund and get it registered under the Indian Trust Act by the provisions of which your trust would be bound. The purchase of lands can be made at any point of time of your choice in the name of the trust. There is no bar in laws of India for the same.
Ratthapala
(Querist) 03 October 2010
Dear Subramanian,
Thank you for such a prompt reply.
We read online that Indian Trust Act 1882 does not apply to Public Charitable Trusts.
Even if it applies in some way, we have a query.
In India Trust Act 1882 S 6 Creation of Trust , it is stated that "Subject to the provisions of section 5, a trust is created when the author of the trust indicates with reasonable certainty by any words or acts, (a) an intention on his part to create thereby a trust, (b) the purpose of the trust, (c) the beneficiary, and (d) the trust, property, and (unless the trust is declared by will or the author of the trust is himself to be the trustee) transfers the trust-property to the trustee.
As in our case the subject matter is immovable property -- the land, some lawyers read the lines to mean that the author of the trust must have first acquired the land and transfers it to the trustees for the creation of the trust to take effect. However, can we establish the Public Charitable Trust with movable property-- a sum of money , and then use the money to purchase the land in the name of the Trust straightaway ?
The money to establish the Trust is supposed to be from overseas. If it is transferred to a private person's bank account, the would-be Trustee in our case, will he face any income tax for the transferred money when he has not been able to act in the capacity of a Trustee before the Public Charitable Trust is created ?
Is it convenient to speak with you directly by phone?
Thank you very much. We look forward to hearing from you soon.
Yours Sincerely,
Ratthapala Bhikshu
J K Agrawal
(Expert) 04 October 2010
Dear Sir
Respectfully it is not necessary to interpret section 6 of The Indian Trusts act so complex.
Section 5 says that trust may be of movable property as well as immovable property.
Section 3 says that trust is always of some property.
Section 6 is very simple it says that the author of trust should be certain about every thing and the trust property should be certain. Every thing should be clear in trust deed. And if the deed is accepted by somebody He is called trustee and the trust is created at that very moment.
Now it is clear that it makes no difference that property is purchased previously or after that.
It not necessary that the quantum of property should be certain. it may be present or future so you not need to call for funds first.
As far as it relates to funds from foreign country you should consult a lawyer who practice in Foreign Exchange Management Act. I think first transfer to individual and then to transfer the fund to the Trust may create some trouble in FEMA to you.
Regards advocatejk@yahoo.co.in 9414054426
