Doctrine of cypres - Explained

 

Doctrine of cy pres applies in the matter of construction of the intention of the settlor. Cy pres means as nearly as possible to the testator’s or donor’s intention when these cannot be properly followed.

Where there is a gift of trust for a charity which can be substantially but not literally, fulfilled, it will be effectuated by moulding it so that as nearly as practicable the intention of the benefactor may be carried out. The doctrine of cy pres, thus, makes possible the application of funds to purposes as nearly as possible to those selected by the donor.

The application of the doctrine, however, has its own limitations. The Court has no power, authority of jurisdiction to deviate from the intention expressed by the settler on the ground of expediency or on what the Court considers to be much more beneficial than what the settler directed.

    The doctrine of Cy-pres as noticed by Supreme Court in Ratilal vs. State of Bombay (AIR 1954 SC 388)  Justice B.K. Mukherjea, explained in the following words:-

“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 settler the Court would not when there is a general charitable intention expressed by the settler, 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.”

                             

    Subsequently, in N.S. Rajabathar Mudaliar vs. M.S. Vadivelu Mudaliar and Ors. (1970 (1) SCC 12) it was observed:

“The cy-pres doctrine applies where a charitable trust is initially impossible or impracticable and the Court applies the property cy-pres, viz., to some other charities as nearly as possible, resembling the original trust”.

 

    In Abid Hatim Merchant  Vs. Janab Salebhai Saheb Shaifuddin & Ors. (2000)

Justice S.B. Majmudar opined, the primary rule to be observed in the application of the cy-pres doctrine is that the donor’s intention must be observed as far as possible. Thus, if the donor names a particular object which is capable of taking effect, any application cy-pres that becomes necessary must be restricted within the limits of that object, and the mode of application must as far as possible coincide with his wishes.

 

    The doctrine of cy pres is a part of English trusts law, the law derived from English Charities Act, 1960 that deals with charitable trusts. In Indian law, Doctrine of cy pres was incorporated in Section 92 (3) by the Code of Civil Procedure (Amendment) Act, 1976, which is similar to section 13 of English Charities Act.

        Section 92 of the Code provides for filing of suit in respect of breach of trust created for public purposes of a charitable or religious nature by the Advocate general or two or more persons having an interest in the trust with the leave of the Court.

        A suit under section 92 of the Code is of special nature for the protection of public rights in public trusts and charities. The provision of the section does not pertain to private rights. The suit under the section is basically on behalf of the all the persons interested in the trust. The suit is represented by two or more persons chosen by the beneficiaries, who are called as plaintiff. The suit is thus called the representative suit.

        According to sub-section 3 of section 92, the Court may alter the original purposes of an express or constructive trust created for public purposes of a charitable or religious nature and allow the property or income of such tryst or any portion thereof to be applied cypress in one or more of the following circumstances:

            a) where the original purposes of the trust, in whole or in part have been fulfilled or cannot be carried out at all or cannot be carried out according to the directions given in the instrument creating the trust or where there is no such instrument, according to the spirit of the trust; or

            b) where the original purposes of the trust provide a use for a part only of the property available by virtue of the trust; or

            c) where the original purposes, in whole or in part, were laid down by reference to an area which then was, but has since ceased to be, a unit for such purposes; or

            d) where the original purposes, in whole or in part, have, since, they were laid down have been adequately provided for by other means, or ceased, as being useless or harmful to the community, or ceased to be in law, charitable, or ceased in any other way to provide a suitable and effective method of using the property available by virtue of the trusts.

 

Therefore in event of filing of section 92, the courts in India use the doctrine to determine the issue relating to public trusts and charities. The doctrine does not apply to private trusts.