Section 5 of CART Act : Section 5: Procedure On Petition

Explanation using Example

Imagine a scenario where a group of individuals who are beneficiaries of a trust that supports education for underprivileged children suspect that the trust's funds are not being properly used. One of the concerned individuals, Mr. Sharma, decides to take action and files a petition under section 3 of The Charitable and Religious Trusts Act, 1920, to the local court.

The court reviews the petition and, after preliminary examination, believes that the trust in question falls under the Act and that Mr. Sharma has a legitimate interest as a beneficiary. The court then schedules a hearing and notifies the trustee of the trust, along with Mr. Sharma and any other parties that may be affected, about the date of the hearing.

On the hearing day, Mr. Sharma presents his concerns to the court. The trustee also appears and submits a written statement defending the management of the trust's funds. The court listens to both sides and decides to conduct further inquiries to ascertain the facts.

During the proceedings, a third party, Mrs. Gupta, claims that the trust does not actually exist or, if it does, it is not governed by the Act. She commits to filing a lawsuit within three months to seek a judicial declaration to that effect. The court, acknowledging her intention, stays the proceedings pending the outcome of Mrs. Gupta's promised lawsuit.

If Mrs. Gupta fails to file the lawsuit within the stipulated time, or if she does and the court ultimately rules in favor of the trust being legitimate and covered by the Act, the court will then proceed to make a final decision regarding Mr. Sharma's petition, either dismissing it or issuing orders to rectify the management of the trust as appropriate.

Throughout this process, the court avoids making any decisions that would resolve disputes over the ownership of the trust property, leaving such matters to be settled separately if necessary.