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By Kiran Bettadpur

The neutrality of the State towards religion though cannot be violated. Neutrality would clearly imply that the State cannot do anything which discriminates in favour of or against a particular religion. Any such discrimination would infringe upon Article 25(1), which bestows the fundamental right to ‘freely practice, profess and propagate religion

The draft “Gold Monetisation Scheme”, announced by the Finance Ministry, is aimed at mobilizing gold holdings of households and institutions. The objective is to productively deploy hitherto idle, privately-held gold assets and valuables. Despite quite a few lacunae and loopholes, it is undeniable that the scheme makes tremendous economic sense. Gold monetisation will reduce the import burden and drive economic growth.

Religious endowments and charitable institutions― regardless of denomination― do come under the ambit of the scheme. Religious trusts and charities can open gold deposit accounts and earn interest under the scheme. The gold offerings of devotees so monetized will help in the nation building process.

So then, should our temples, mosques and churches look to monetize gold jewelry, artifacts, ornaments and other movable properties? What are the legal, political and constitutional ramifications of utilising such valuables for productive purposes?

I will look to answer the questions from the perspective of Hindu temples and then generalise.

Religious Activities under the Constitution

Gold-Monetization-Scheme.mov.00_00_20_05.Still001As is well known, India is a sovereign democratic republic that adheres to socialist and secular principles. With socialism ingrained in the Constitution, India― a welfare state― is duty-bound to disperse benefits and burdens equitably in society. The Supreme Court has held in the (D.S. Nakara case (AIR 1983 SC 130) that the basic framework of socialism is to “…eliminate inequality of income, status and standard of life,” and “to end poverty, ignorance, disease and inequality of opportunity.” Hence, the socialistic tenets enshrined in the Constitution encourage the monetisation of not just gold, but all assets (including land and buildings)that religious entities and establishments own and possess.

Secularism― a basic feature of the Constitution, as held in the Kesavananda Bharti case (AIR 1973 SC 146)― is essentially the separation of state from religion. In other words, the state has no religion; it can neither get involved in religious affairs nor interfere with religious freedom. Therefore, any attempt or opportunity for monetising assets and properties cannot be confined to a particular sect, class, religion or community.

As is well known, sovereignty is about the supreme power of law-making. While recognizing that the State cannot intervene in religious matters of its citizens, the Constitution does confer wide legislative powers on the State. Surely there can be no State within a State. Consequently, it is constitutionally valid for the secular Indian State to regulate religious activities. The neutrality of the State towards religion though cannot be violated― as held in the SR Bommai case (AIR 1994 SC 1918). Neutrality would clearly imply that the State cannot do anything which discriminates in favour of or against a particular religion. Any such discrimination would infringe upon Article 25(1), which bestows the fundamental right to ‘freely practise, profess and propagate religion’, when read with the rights to ‘equality before the law and equal protection of the laws’ under Article 14 of the Constitution.

The Constitution originally provided for the fundamental right to property under Article 31, which was repealed and made a constitutional right under Article 300-A. Such power of government to take private property for public use is enjoyed by the State under the Doctrine of Eminent Domain. Surely the hand that giveth can be hand that taketh too.

Legal Aspects of Property Belonging to Religious Entities

An offering to the deity of a temple does so as an expression of the right to practice, profess and propagate religion under Article 25. The purpose of the offering is religious in nature. The administrators have a fiduciary responsibility to utilize the offerings made and properties bequeathed by devotees for propagation of the faith that the deity represents 

A religious endowment is a dedication of property, which has for its object, establishment, maintenance or worship of an idol, deity or any other object or purpose subservient to religion. The Supreme Court has held in the Yogendra Nath Naskar case (AIR 1969 SC 1089) that the Hindu idol is “a juristic entity capable of holding property and of being taxed through its shebaits who are entrusted with the possession and management of its property…the deity stands as the representative and symbol of the particular purpose…it can figure as a legal person and… the dedicated property vests in it.”

Any property gifted, offered or bequeathed to a deity vests in that deity; all such property offered to a deity is irrevocable. Any mahant, shebait, dharmakarta, muttwalli, muntazim or mathadipati looking after the affairs of the endowment enjoys limited powers of alienation. The status of such religious trusteeship is similar to that of a manager or guardian of an infant heir. Hence, the property vested in a Hindu deity or idol is inalienable, except in cases of unavoidable necessity and absolute exigency. Put differently, the power of alienation must be exercised for purposes of defence and not of aggrandizement.

Any devotee or worshiper who makes an offering to the deity of a temple does so as an expression of the right to practise, profess and propagate religion under Article 25. The purpose of the offering is religious in nature. The administrators of and the performers of worship (e.g., archakas, pujaris, purohits, etc.) at the temple are in a position of trust. They have a fiduciary responsibility and are duty bound to utilise the offerings made and properties bequeathed by devotees for propagation of the faith that the deity represents, besides the denomination of Hinduism that the deity is belongs to. This obligation applies even in cases where the temple is administered by government under appropriate enactments.

Some specific nuances or variations notwithstanding, the above legal ties or bonds― connecting a devotee and his offerings with the religious purpose and the beneficiary of his devotion― apply universally regardless of the deity, divinity or denomination. Any legislative attempt to alter this sacred relationship between the divine and the devoted violates the Constitution of India.

Religious Gold Monetisation

How does all this translate in the context of gold monetisation?

F802563E-F28C-4E18-A17C-DB1F7C44CF60_cx0_cy7_cw0_mw1024_s_n_r1Well, any religious institution― Hindu or otherwise― has no legal impediments per se with regard to the deposit of temple gold under the Gold Monetisation Scheme, provided there is no alienation of such deposited gold. Yet, participation in the scheme has to be voluntary and subject entirely or exclusively to the discretion of the trustees, administrators or religious heads of the entities and endowments. The usufructs of the deposit though should be used ONLY for the purpose for which the religious institution exists.

Nevertheless, foolproof measures must be in place to ensure the safety, sanctity and security of the gold deposited is not compromised. Suitable mechanisms must also be worked into the initiative to ensure that ancient coins and antique jewelry are not deposited, for such artifacts are likely to be priceless as collector items. Their market prices are typically much higher than the equivalent gold value.

A guarantee, sovereign or otherwise, is necessarily needed too to ensure that the gold so deposited neither depreciates in value nor gets diminished in purity or quantity. Besides,adequate deposit insurance against all risks (including, but not limited to, insolvency of banks, fluctuations of gold prices, etc.) must be provided for all gold deposits of religious institutions under the gold monetisation scheme.

Typical contractual clauses that restrict liability of banks towards the deposits, such as force majeure, must be waived under the gold deposit scheme. The scheme has to be made suitably watertight to protect deposits against losses and safeguard the interests of religious institutions.

Conclusions

Monetisation of gold of religious establishments not only has legal angles to it, but also entails deeply emotional elements. Hence, there is a need for complete openness and transparency. TheReserve Bank of India has to make public the contractual terms under which religious institutions would be required to deposit gold.

Religious entities under government control, such as those administered by the Endowments Department, must necessarily notify / publicly announce the details of all endeavours to deposit gold. Gold articles and artifacts that government-managed religious institutions plan to deposit with banks must be subject to public scrutiny. As a general rule, no gold item dating back more than 25 years should be accepted in deposit, because all articles get melted and converted to bullion.

It must be remembered that all gold belonging to religious institutions is sacred. The title and ownership of the gold vests in the deity or divine embodiment/manifestation, which is the beneficiary of the offering made. Hence, the government has an obligation to ensure that there are appropriate checks and balances introduced in the scheme to eliminate loot of the wealth by fraudsters and scamsters.

Forewarned is forearmed! Indeed, we need to be extra vigilant with regards to any and every attempt to monetize any of the “divine gold”.

(Author is a lawyer, Entrepreneur and founder of Cylive Corporation. Views expressed are the author’s own)

 

Source: Gold Monetisation Scheme: Should Hindu Temples be wary? – Aseema