Section 3 of CART Act : Section 3: Power To Apply To The Court In Respect Of Trusts Of A Charitable Or Religious Nature

Explanation using Example

Imagine a scenario where a group of local residents in a town have concerns about the management of a historic town hall that was entrusted to a charitable trust for the purpose of community activities and preservation. The residents suspect that the funds are being mismanaged and that the building is not being properly maintained, which could lead to its deterioration. One active member of the community, who regularly donates to the trust and participates in its activities, decides to take action.

Under Section 3 of The Charitable and Religious Trusts Act, 1920, this concerned resident can file a petition to the local court, requesting that the trustee provide detailed information about the trust's objectives, management, and financial status, including the condition and application of its assets and income. Specifically, the resident asks for:

1. A report detailing the trust's purposes, the current state of the town hall, how the trust's funds are being used, and the income it generates.
2. An audit of the trust's accounts to ensure that the financial activities are transparent and in line with the trust's charitable objectives.

However, the resident must remember that they can only request an audit of the accounts for the past three years, as the law does not allow for scrutiny of financial records older than that.