A Sanctuary of Trust: HP High Court’s Landmark Verdict Restricts Use of Temple Funds

In a ruling that underscores the sacred fiduciary duty of temple management, the Himachal Pradesh High Court has issued extensive directions to safeguard the proper utilisation of funds donated to religious institutions. This landmark judgment, which meticulously defines the boundaries of permissible expenditure and asserts the accountability of temple trustees, establishes a new, rigorous standard for the administration of religious trusts across the state.

The case, titled Kashmir Chand Shadyal v/s State of H.P. and others, was adjudicated under Case No. CWP No. 1834 of 2018. The decision, reserved on October 8, 2025, and pronounced on October 10, 2025, by a Division Bench comprising Justice Vivek Singh Thakur and Justice Rakesh Kainthla, serves as a powerful reminder that religious offerings are not public exchequer funds but rather sacred assets belonging to the deity. The petitioner, Kashmir Chand Shadyal, was represented by Mr. Nitin Thakur and Mr. Udit Shaurya Kaushik, Advocates, while the State was represented by Mr. Anup Rattan, Advocate General, along with his team of Additional and Deputy Advocates General. The citation for this case is 2025:HHC:34567.

The Sanctity of the Devotee’s Belief

The impetus for this legal action stemmed from a fundamental concern regarding the diversion and misuse of public donations. The Petitioner approached the High Court seeking a writ of mandamus, a judicial directive compelling the state authorities to ensure strict compliance with the core provisions of the Hindu Public Religious Institutions and Charitable Endowments Act, 1984. Specifically, the petition highlighted the non-adherence to provisions related to budget preparation (Section 22), maintenance of accounts (Section 23), and the proper regulation of expenditure (Section 17). The Court’s analysis began by acknowledging the profound belief system underpinning the act of donation itself. The Bench unequivocally held that devotees contribute money to temples with the deeply held faith that these donations are intended to support the care of the deities and facilitate the maintenance and upkeep of the sacred temple spaces.

This belief places an ultimate restriction on the nature of the funds. The Court remarked with clarity and force that “Every rupee of temple funds must be used for the temple's religious purpose or dharmic charity… It cannot be treated like general revenue for the State or general public exchequer… nor diverted to any welfare schemes of the Government.” This statement is the philosophical and legal cornerstone of the entire judgment, isolating religious endowments from general public funds and political appropriations. Justice Vivek Singh Thakur and Justice Rakesh Kainthla further remarked: “Devotees offer donations to temples—and through them, to the Divine—with the clear belief that these will support the care of deities, maintain temple spaces, and promote Sanatana Dharma. When the government appropriates these sacred offerings, it betrays that trust.” The judiciary, in this instance, stepped in as the vigilant protector of the devotees' trust and the sanctity of the religious purpose.

The True Purpose of Temple Governance

The Court meticulously reiterated that the very objective of the Hindu Public Religious Institutions and Charitable Endowments Act, 1984, was to ensure the better administration of Hindu Public Religious Institutions and Charitable Endowments, to safeguard their properties, and, most crucially, to ensure that funds are used only for religious and charitable purposes defined by the faith. To provide context, the Court delved into the expansive nature of the Hindu religion. It remarked that, unlike other major global religions, the Hindu religion does not restrict itself to the worship of any one God, one book, or one singular belief system. Rather, it is fundamentally a "way of life". The essence of this religion, the Court noted, does not lie in a single prophet or scripture, but in a profound way of understanding life, consciousness, and the universe. This inclusive, foundational definition of the religion served to widen the scope of permissible charitable activities while simultaneously narrowing the scope of what constitutes an acceptable 'diversion' of funds.

The judgment further highlighted the historic role of temples in Indian society. It was stated that temples in India have played an important role even in the nation's freedom movement, serving as critical centres for social reform and mass mobilisation. This recognition of the temple’s socio-cultural importance reinforced the need to protect the institution's integrity and financial stability. The Court was careful to balance this freedom with constitutional obligations, reiterating that the “Freedom of conscience and free profession, practice and propagation of religion, as provided in Article 25, is subject to public order, morality and health… all citizens and institutions are bound to take initiative for establishment of healthy, harmonious, progressive Bhartiya society.” This constitutional mandate frames the specific directions issued, ensuring that all funds are utilized in a manner that is beneficial and contributes positively to the moral and social fabric of the community.

Directives for Purposeful Expenditure and Financial Integrity

Stemming from these legal and spiritual principles, the High Court issued a set of specific and enforceable directions aimed at defining and regulating the use of temple funds. The funds are now explicitly directed towards activities that align with the promotion of Sanatana Dharma and the welfare of its followers.

The Court mandated that temple funds must be used for:

Promoting education in Vedas and Sanskrit, thereby preserving and propagating ancient knowledge.
Maintaining temples and goshalas (cow shelters), supporting both the religious infrastructure and the protection of sacred animals.
Organising yoga and cultural programs, promoting physical and spiritual well-being within the community.
Supporting the poor and elderly, ensuring that the charitable aspect of Dharma is fully met.
Eliminating social discrimination, using the temple as a force for social equality and harmony among all sections of society.

In a move to explicitly curb misuse and personal benefit, the Court detailed a comprehensive list of prohibited expenditures, many of which were inferred from the comprehensive documentation presented to the Court, including the previously submitted article and the underlying PDF evidence:

Political and Social Diversion: The most significant prohibition is against funding religious events of other faiths, or inter-faith, social, or political programs. This strict separation ensures the funds remain dedicated to the stated religious purpose of the Hindu trust.
Personal and Protocol Expenditure: Temple funds are strictly barred from being used for personal gifting or donations to employees, trustees, or their relatives, eliminating the potential for patronage and nepotism.
VIP and Official Gifting: Expenses incurred for purchasing items such as Chunni, Prasadam, almonds (Kaju), cashews, or dried fruits (Dakh) specifically for presenting them to VIPs or government officials are now strictly disallowed. Similarly, expenses related to foreign trips or tours for officials or trustees, which do not directly serve the core religious function, are prohibited.
Administrative Overheads: The Court also restricted the use of funds for non-essential administrative items, such as the printing or distribution of temple photographs or pictures, unless integral to the religious activity.

The Ultimate Accountability: Personal Liability and Criminal Breach

To ensure these directives are not merely symbolic, the judgment established a robust mechanism for enforcement and recourse. The Court powerfully reiterated the juristic status of the deity, confirming that the deity is a legal person and that the funds belong to the deity, not to any governmental entity or management committee. The trustees are defined as mere custodians with a fiduciary duty.

The most forceful deterrent in the judgment relates to accountability for misuse. The Court mandated that any instance of misutilisation or misappropriation of temple funds will be treated as a criminal breach of trust. Furthermore, the judgment introduced the severe sanction of personal responsibility, stating unequivocally that “Where it is found that any trustee has misutilised or cause to misutilize the funds of the temple, it will be recovered from him and he will be personally held liable for the misutilisation of such funds.” This provision ensures that trustees can be held personally responsible for financial malfeasance, providing a significant safeguard against corruption.

Finally, the High Court issued non-negotiable directions regarding transparency:

Mandatory Audit and Public Display: Every temple must maintain proper accounts of income and expenditure, which will be audited annually. The result of this audit must be immediately published.
Real-Time Disclosure: Temples are required to publicly display their monthly income and expenditure, along with the details of all projects and welfare activities funded by the donations, on notice boards and their official websites. This public display is intended to “instil confidence in the devotees that their donations are being utilised for the propagation of the religion and welfare of Hindus.”

In disposing of the petition, the Himachal Pradesh High Court has not only enforced the law but has also redefined the moral compass of temple administration, ensuring that the devotion of the followers is matched by the integrity of the custodians. The judgment is a landmark step towards securing financial purity and purpose-driven governance within Hindu Public Religious Institutions and Charitable Endowments.