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Section 5 of The Charitable Endowments Act, 1890

(1)On application made as hereinafter mentioned, and with the concurrence of the person or persons making the application, the 1[appropriate Government] if it thinks fit, may settle a scheme for the administration of any property which has been or is to be vested in the treasurer of Charitable Endowments, and may in such scheme appoint, by name or office, a person or persons, not being or including such treasurer, toad minister the property.
(2)On application made as hereinafter mentioned, and with the concurrence of the person or persons making the application, the 1[appropriate Government] may, if it thinks fit, modify any scheme settled under this section or substitute another scheme in its stead.
(3)A scheme settled, modified or substituted under this section shall, subject to the other provisions of this section come into operation on a day to be appointed by the 1[appropriate Government] in this behalf, and shall remain in force so long as the property to which it relates continues to be vested in the treasurer of Charitable Endowments or until it has been modified or another such scheme has been substituted in its stead.
(4)Such a scheme, when it comes into operation, shall supersede any decree or direction relating to the subject-matter thereof insofar as such decree or direction is in any way repugnant thereto, and its validity shall not be questioned in any court, nor shall any court give, in contravention of the provisions of the scheme or in any way contrary or in addition thereto, a decree or direction regarding the administration of the property to which the scheme relates: 2[Provided that nothing in this sub-section shall be construed as precluding a court from inquiring whether the Government by which a scheme was made was the appropriate Government].
(5)In the settlement of such a scheme effect shall be given to the wishes of the author of the trust so far as they can be ascertained, and, in the opinion of the 1[appropriate Government], effect can reasonably be given to them.
(6)Where a scheme has been settled under this section for the administration of property not already vested in the treasurer of Charitable Endowments, it shall not come into operation until the property has become so vested.3

Summary

The appropriate Government can create a scheme to manage the property that is or will be vested in the treasurer.
This scheme requires an application and the agreement of the applicants.
The scheme can appoint specific people or officeholders to run the property, but the treasurer cannot be appointed as an administrator.
The government can also modify an existing scheme or replace it with a new one if the applicants agree and apply for it.
A scheme starts on a day chosen by the government and stays active as long as the property is vested or until modified or replaced.
Once active, the scheme overrides any previous court decrees or directions that conflict with it, and its validity cannot be questioned in court.
The government must respect the wishes of the original trust creator as far as they can be figured out and are reasonable.
If a scheme is made for property not yet vested in the treasurer, it will not start until the property actually vests.

Practical examples

1In 1915, the founders of an orphanage in Lucknow applied to set up an administration scheme, and the government appointed the local doctor and school principal to manage it, while the building itself was held by the treasurer.

2In 1945, the managers of a hospital trust realized the original rules were outdated, so they jointly applied to the government to modify the scheme, which was then updated and became active on a date fixed by the government.

FAQ

1. Who can be appointed to administer the property under a scheme?

The scheme can appoint any person or persons by name or office, but it cannot appoint or include the treasurer to administer the property.

2. Can a settled scheme be modified or replaced?

Yes, on a proper application and with the agreement of the applicants, the appropriate Government can modify the scheme or substitute another one.

3. What happens if a court decree conflicts with a scheme?

Once a scheme comes into operation, it supersedes (overrides) any court decree or direction that conflicts with it.

4. Can a court question the validity of an active scheme?

No, its validity cannot be questioned in any court, nor can any court give directions contrary to the scheme. However, a court can inquire whether the government that made the scheme was the correct appropriate Government.

5. Whose wishes must the government respect when settling a scheme?

The government must give effect to the wishes of the author of the trust, as far as they can be ascertained and are reasonable in the government's opinion.

6. When does a scheme for unvested property start?

It will not come into operation until the property is actually vested in the treasurer.

Test yourself

Q1.Can the treasurer of Charitable Endowments be appointed to administer the property under a scheme?

Q2.Whose concurrence is required for the appropriate Government to settle or modify a scheme under Section 5?

Q3.What must the government try to give effect to when settling a scheme?

Q4.What is a court permitted to inquire about regarding a scheme under Section 5(4)?

Q5.When does a scheme settled for property not already vested in the treasurer come into operation?

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