Surplus Temple Funds Cannot Be Used For Constructing Shopping Complexes: Madras High Court Restrains HR&CE

Commenting that temples should be kept out of litigation as much as possible, the bench of Chief Justice KR Shriram and Justice Senthilkumar Ramamoorthy observed that if the commercial complexes are permitted, there was a possibility that it could lead to further complications like return of investments, eviction of licensees/ tenants, recovery of unpaid rents, and preventing further encroachments.

“Moreover, if such commercial complexes are constructed, it would add further complications inasmuch as: (i) return of investment will be much less than what returns should be if the amount had been deposited in a fixed deposit; (ii) how to evict the licensees or tenants who are occupying the premises; (iii) how to recover in case of non-payment of rent or utility charges; (iv) how to prevent further encroachments by the licensees or tenants. Certainly, temples should be kept out of litigations as far as possible,” the court said.

More importantly, the court noted that as per the HR & CE Act, the surplus temple funds could be used only for the purposes specified in Section 66(1) or under Section 36A or Section 36B of the Act and for no other purpose. Noting that the purpose for which the shopping complex sought to be constructed by the HR & CE did not fall under any of the categories, the court observed that the decision had to be quashed and set aside.

“We make it clear that surplus funds of temple, which is a religious institution defined under the HR & CE Act, can be used only for the purposes specified in sub-section (1) of Section 66 or provided under Section 36-A or Section 36-B and for no other purpose. Since the shopping complex does not fall within the category of items (a) to (l) of sub-section (1) of Section 66 or Sections 36-A and 36-B, the decision to construct a shopping complex has to be quashed and set aside,” the court said.

The court made the order in a plea filed by P Bhaskar, who said he was devotee of the temple and thus a person with interest as defined under Section 6(15)(b) of the Act. The petitioner challenged the HR&CE's decision by submitting that the endowments could be appropriated only as per the provisions of the Act.

To this, the HR & CE submitted that the endowments were not being utilised and it was only the surplus funds belonging to the temple that was being used for constructing the shopping complex. Though the Special Government pleader accepted that construction of shopping complex was not provided as an object under Section 66 (1) of the Act, he submitted that as per first proviso to Section 36 of the Act, the trustees shall give preference to the purpose specified, but could use the surplus funds for any purpose they deem fit, including constructing shopping complex.

The court, however, was not ready to accept this contention. The court noted that the construction of the shopping complex using temple funds did not indicate propagation of the religious tenets of the institution, which was the purpose of the entire provisions.

Though the HR & CE claimed that the shopping complex would bring in more revenue for the temple and assured that the shops will be given to only Hindus and those believing in Hinduism, the court remarked that no project study had been made till date to substantiate the claim.

While discussing on what could be done with the excess land, the court suggested that the department could consider planting native trees to improve the environment. Since it was informed that part of the construction has already been made in the property and the same could go to waste, the court ruled that the remaining construction could be done in such a manner that it could be used as a center for feeding the poor. The court also noted that the building could be utilized that the building could be utilized for conducting Hindu marriages among Hindus who are in poor and needy circumstances. The court however underlined that in every case, surplus funds could not be utilized for constructing marriage halls.

Counsel for the Petitioner: Mr. B. Jagannath

Counsel for the Respondent: Mr. Habeeb Rahman Government Advocate, Mr. N. R. R. Arun Natarajan Spl. Govt. Pleader (HR & CE)

Case Title: P Bhaskar v The District Collector and Others

Citation: 2025 LiveLaw (Mad) 11

Case No: W.P.No.19084 of 2024