This article is based on the provisions of Section 55 of The Gujarat Public Trusts Act, 1950 ( herein after referred as the Act). I make an attempt to elaborate and interpret the said section in this article as under.
'CY-PRES' is French legal term which means 'nearer or closer' or 'near enough is good enough'. The 'Doctrine of Cy-pres' is the root of the provisions of section 55 of the Act. It is essential to know that meaning of this doctrine as it is mother of invocation of section 55. The doctrine is used when something feeble is required to be altered, instead of getting it dead. This term has been used in the context of Charitable Trust since ages. The English Courts used to apply this term for the Charitable Trust when the purpose of the Trust was about to be no longer survive or the intention of the settler or author of the said Trust was frustrated.
The Indian laws are highly influenced by the English laws due to the political scenario being prevailed before independence of India. The enactment for Public Trust is no longer an exception from them. Thus, Cy-Pres is one of the sections of the Act. Now let me explain the provisions of section 55 of the Act about the importance of this section in detail.
The two requisites are considered for the applicability of Section 55 of the Act. (1) an application is made in this regard to the Charity Commissioner or (2) the Charity Commissioner is of the opinion that
(a) the original object for the creation of the public trust is failed,
(b) the income or any surplus balance of the public trust has not been used or is not likely to be utilized,
(c)(1) it is not expedient, practicable, desirable, necessary or proper to carry out the original intention, whether partly or fully, of the author of the public trust in the interest of public or(2) the object of the public trust was created and that the property or the income of the public trust or any portion thereof should be applied to any other charitable or religious object, ( public trust for religious purpose is not considered as public trust for the application of the provisions of section 55 of the Act.)
The exclusion of public trust for religious purpose is amended and inserted in this provision after the decision of Hon'ble Supreme Court in the case of Ratilal Panachand Gandhi vs. State of Bombay reported in AIR 1954 SC 388 wherein Hon'ble Supreme Court held that, "A more serious objection has been taken by the learned counsel for the appellants to the provisions of sections 55 and 56 of the impugned Act and it appears to us that the objections are to a great extent well founded. These sections purport to lay down how the doctrine of cy pres is to be applied in regard to the administration of public trust of a religious or charitable character. The doctrine of cy pres as developed by the Equity Courts in England, has been adopted by out Indian courts since a long -time past. The provisions of sections 55 and 56, however, have extended the doctrine much beyond its recognised limits and have further ,introduced certain principles which run counter to well established rules of law regarding the administration of charitable trusts. When the particular purpose for which a charitable trust is created fails or by reason of certain circumstances the trust cannot be carried into effect either in whole or in part, or where there is a surplus left after exhausting the purposes specified by the settlor, the court would not, when there is a general charitable intention expressed by the settlor, allow the trust to fail but would execute it cy pres, that is to say, in some way as nearly as possible to that which the author of the trust intended. In such cases, it cannot be disputed that the court can frame a scheme and give suitable directions regarding the objects upon which the trust money can be spent. It is we 11 established, however, that where the donors intention can be given effect to, the court has no authority to sanction any deviation from the intentions expressed by the settlor on the grounds of expediency and the court cannot exercise the power of applying the trust property or its income to other purposes simply because it considers them to be more expedient or more beneficial than what the settlor had directed(1). But this is exactly what has been done by the provision of section 55(c) read with section 56 of the Act. These provisions allow a diversion of property belonging to a public trust or the income thereof to objects other than those intended by the donors if the Charity Commissioner is of opinion, and the court confirms its opinion and decides, that carrying out wholly or partially the original intentions of the author of the trust or the object for which the trust was created is not wholly or partially expedient, practicable, desirable or necessary; and that the property or income of the public trust or any portion thereof should be applied to any other charitable or religious object. Whether a provision like this is reasonable or not is not pertinent to our enquiry and we may assume that the legislature, which is competent to legislate on the subject of charitable and religious trust, is at liberty to make any provision which may not be in consonance with the existing law; but the question before us is, whether such provision invades any fundamental right guaranteed by our Constitution, and we have no hesitation in holding that it does so in the case of religious trusts. A religious sect or denomination has the undoubted right guaranteed by the Constitution to manage its own affairs in matters of religion and this includes the right to spend the trust property or its income for the religious purposes and objects indicated by the founder of the trust or established by usage obtaining in a particular institution. To divert the trust property or funds for purposes which the Charity Commissioner or the court considers expedient or proper, although the original objects of the founder can still be carried out, is to our minds an unwarrantable encroachment on the freedom of religious institutions in regard to the management of their religious affairs. It is perfectly true, as has been stated (1) Vide Halsbury, 2nd Edn., VOl. IV, P. 228, by the learned counsel for the appellants, that it is an established maxim of the Jain religion that Divadraya or religious property cannot be diverted to purposes other than those which are considered sacred in the Jain scriptures. But apart from the tenets of the Jain religion, we consider it to be a violation of the freedom of religion and of the right which a religious denomination has under our Constitution to manage its own affairs in matters of religion, to allow any secular authority- to divert the trust money for purposes other than those for which the trust was created. The State can step in only when the trust fails or is incapable of being carried out either in whole or in part. We hold, therefore, that clause (3) of section 55, which contains the offending provision and the corresponding provision relating to the powers of the court occurring in the latter part of section 56(1), must be, held to be void."
Hon'ble Supreme Court considered the religious purpose of the public trust qua cy-pres is ultra vires in view of the provisions of Article 26 of the Constitution of India and therefore, the words a public trust ''other than a trust for a religious purpose'' is amended and inserted in the provisions of 55(c) of the Act.
(d) in any of the cases mentioned in sections 10 to 13 or in regard to the appropriation of the dharmada sums held in trust under section 54 the directions of the court are necessary, The Charity Commissioner shall require the trustees for application under Section 55 for the directions of the competent Court. As provided in Rule 31 of The Bombay Public Trusts (Gujarat) Rules, 1961, the trustees have to apply to the Court having jurisdiction for directions within three months from the date of the receipt of the Court Commissioner, provided that the Charity Commissioner may allow a longer time or grant extension of time for the purpose as per his discretion.
It is noted that the provisions of sections 10 to 13 of the Act are pertaining to the grounds for not a public trust to be void. Section 10 says that a public trust is not void on the ground of uncertainty of persons or for whose benefit, it is created. Section 11 speaks that a public trust is not void on the ground of non-charitable or non-religious purpose. Section 12 informs that a public trust is not void if no obligation is annexed with disposition or statement requiring a person in whose favour it is made to hold it for the benefit of a religious or charitable object. Section 13 provides that a public trust is not void on failure of specific object or society ceasing to exist.
Section 55(2) says that if a trust does not make any application in respect of the purpose mentioned in section 55(1) of the Act, or there is no trustee or the Charity Commissioner himself is s trustee, he has to apply to the Court.
Limitation of Cy-Pres doctrine :
It is a question that under which circumstances, the Cy-pres is applied or is not applied. The doctrine of Cy-pres is applicable to both testamentary and non-testamentary gifts, A Will for public charitable purposes.
There are two limitations on the cypres doctrine which come into play here. Where the donor has determined with specificity a special object or mode for the course of his benefaction the Court cannot innovate and undo, but where a general charitable goal is projected and particular objects and modes are indicated the Court, (2) A.I.R. 1960 A.P. 605.
Conditions for applicability of Cy-pres under Section 55 of the Act:
Whether section 55 is applicable to the case or not is a question of fact, however, I reply upon the judgement of Hon'ble Supreme Court in the case of State Of Uttar, Pradesh vs Bansi Dhar And Others on 11 December, 1973 reported in 1974 AIR 1084, wherein Hon'ble Supreme Court held as under.
"The judges have set this restraint on their power to resurrect, or rather to vary and validate. The twin conditions to be satisfied are "(1) The settler must, in general, have shown a general charitable intention .... It will only apply where the original trust has failed ab initio. The absence of a general charitable intention will not be fatal to those trusts which have taken affect but have failed .... Once money has been effectively and absolutely dedicated to charity, whether in pursuance of a general or a particular charitable intent, the testator's next of-kin or residuary legatees are for ever excluded. This will mean that the material date for the purpose of deciding whether the cypres doctrine is applicable is the date when the trust came into effect (e.g. in a will, on 'the death of the testator ) ."
(2) The second condition for the application of the cypres doctrine used to be that it was or had become "impossible" to carry out the settler's intention or alternatively that a surplus remained after fulfilment of the purpose......
In short. there must be a larger intention to give the. property, in the first instance; secondly, there must be impossibility not in the strict physical sense but in the liberal. diluted sense, of impractibility. Even here it must be mentioned, however, that the cypres application of the gift funds assumes a completed gift. It is essential that a gift has been made, effectively before, its actual implementation by application of the funds, literally or as nearly as may be, arises."
In another case between Potti Swami And Brothers vs Rao Saheb D. Govindarajulu ...reported in AIR 1960 AP 605, it was held that," The doctrine of "cypres" connotes that if the wishes of the testator cannot be carried out literally they will be carried out as nearly as possible to what he desired.That is, where a testator shows a general charitable intention, but the object of his charity turns out to be impracticable or when there is surplus money after the trust has been performed, the cy- pres doctrine will operate to enable the Court to apply the whole fund or the surplus as the case may be to another charity as merely as the testator's intention. But where the prescribed mode of doing the charitable act is the only one the testator has at all contemplated, the Court cannot apply the doctrine of cy-pres, but there will be a resulting trust for the testator's estate."
Conclusion:
To conclude, it can be said that the purpose of incorporation of the provisions of section 55 is to protect the original object of the public trust in case the same is frustrated. Further, this section becomes safeguard to the public trust in respect of not utilizing the the income or any surplus balance of it. It is to save the original intention of the author of the public trust. The Charity Commissioner requires the trustees to apply to the Court having jurisdiction for direction of the Court for the protection of the original object and intention of the author of the public trust. Sometimes it happens that it is due to any known or unknown reason, the object of the public trust is failed or is not carried out practically in the manner provided in the Act, at that time the provisions of Section 55 play the role as a safeguard with the help of Judicial Order in the form of directions to the trustees of the public trust.
The Court, having heard the parties and having made such inquires as it thinks fit, shall give directions protecting the original intention of the author of the public trust or the object of the public trust. If the Court is of the opinion that carrying out intention of the author or object of the trust is not wholly or partly practicable, expedient or desirable or necessary or proper in the interest of public, it is the discretionary power of the court to apply cy-pres to any other charitable or religious object by way of altering any scheme already settled or by way of varying the terms of any decree or order which is already passed in respect of the public trust or conditions contained in the instrument of the public trust. Such decision or order passed by the Court is decree and the same can be challenged by way of filing appeal before Hon'ble High Court.
Chirag Bhatt
Advocate
9824025041
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