Religious, charitable institutions accumulating wealth under guise of charity; bring in central law to regulate: Kerala High Court

Religious and charitable institutions are accumulating of wealth and property under the guise of charity and a strong central legislation applicable across the country is required to regulate the activities of such institutions, the Kerala High Court said on Thursday [Cardinal Mar George Alencheryy v State of Kerala].

Single-judge P Somarajan, therefore, urged the Central government to consider the possibility of enacting a central regulation to regulate religious and charitable institutions.

"Now the term 'charity' is largely used to accumulate wealth and property under that guise and to give away the same without accounting the same to any responsible authority. Article 19(1)(c) of the Constitution of India guarantees the right of all citizen to form association or union, but that does not mean that it should be without any legal status or legal recognition, when involves acquisition and accumulation of large quantity of wealth and assets under the guise of charity," the Court observed in its order.

The Court was considering petitions relating to the 2018 Church land scam in which it had previously ordered the State government to conduct an enquiry as to whether one of the pieces of land sold by the cardinal was originally government land that was later illegally encroached.

With regard to lack of regulation of charitable organisations, the Court took note of a study conducted by the Ministry of Statistics & Programme in 2012 that took into consideration only those entities which were registered under the Societies Registration Act, 1816, the Bombay Trust Act, 1950 and companies registered under the Companies Registration Act, 1956. The result indicated the existence of 31,74,420 non-profit institutions across India.

Pertinently, the Court emphasised the need for a uniform central legislation as the study further revealed that the number of unregistered organizations is much more than the registered or formally registered.

It then referred to the Directive Principles of State Policy laid down in Part IV of the Constitution of India.

Since the subject of charities, charitable institutions, charitable and religious endowments and religious institutions is listed as entry No. 28 in the concurrent list of the 7th schedule to the Constitution of India, the Court concluded that both the Central and State legislatures are competent to legislate and regulate charitable organizations

It further noted that the legal framework governing charitable organizations in India is quite complex due to the multiplicity of legislations.

"This would show the unavoidable necessity for a central legislation in order to regulate charitable organizations and its working," the Court noted.

Therefore, the Court deemed it appropriate to ask the Central government to explore the possibility of enacting a central uniform legislation to regulate the functioning of such institutions as well as the possibility of constituting a central agency for the same purpose.

"I may also request the Central Government to explore the possibility of a uniform central legislation to regulate the functioning of charitable organization/institution and religious institutions listed in entry No.28 of concurrent list of VIIth schedule of the Constitution of India including the constitution of a centralized body to address the issues pertaining to the income, expenditure, acquisition and disposal of assets of such bodies. The possibility of constitution of a centralized force/body for that purpose may be explored by the Central Government" the order stated.

[Read Order]