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Civil Law

Doctrine of Cy pres

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 18-Apr-2024

Introduction

  • The phrase "cy pres" comes from the Norman French term "cy pres comme possible," which means "as near as possible."
  • The doctrine of cy pres allows a court to interpret or modify the terms of a charitable trust when it becomes impossible or impractical to carry out the original intent of the trust.

What is the Concept of Doctrine of Cy pres under CPC?

  • Section 92(3) of the Civil Procedure Code (CPC) states the circumstances under which a court may alter the original purposes of a charitable or religious trust and allow the property or income of the trust to be applied “cy pres”.
  • This means that if the original purposes of the trust cannot be fulfilled, either wholly or in part, due to various reasons outlined in the section (such as being adequately provided for by other means, becoming useless or harmful, or no longer being charitable in nature), the court can modify the terms of the trust to ensure that the property or income is used for purposes as close as possible to the original intent, considering the spirit of the trust and its applicability to common purposes.
  • Essentially, the doctrine of cy pres allows the court to ensure that the charitable or religious purposes of the trust are still served, even if the original terms of the trust cannot be fully implemented

What is Section 92(3) of CPC?

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 trust or any portion thereof to be applied cy pres in one or more of the following circumstances, namely:—

(a) where the original purposes of the trust, in whole or in part:—

(i) have been, as far as may be, fulfilled; or

(ii) 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 property available by virtue of the trust and other property applicable for similar purposes can be more effectively used in conjunction with, and to that end can suitably be made applicable to any other purpose, regard being had to the spirit of the trust and its applicability to common purposes; or

(d) 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

(e) where the original purposes, in whole or in part, have, since they were laid down:—

(i) been adequately provided for by other means, or

(ii) ceased, as being useless or harmful to the community, or

(iii) ceased to be, in law, charitable, or

(iv) ceased in any other way to provide a suitable and effective method of using the property available by virtue of the trust, regard being had to the spirit of the trust.

What are the Landmark Judgments Related to Doctrine of Cy pres?

  • Ratilal v. State of Bombay (1954):
    • In this case, the Supreme Court applied the doctrine of cy pres by mandating restrictions on certain provisions of the Bombay Public Trusts Act, 1950, affirming protection for religious trusts while allowing limited interference for administrative purposes in the public interest.
    • The court held that “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”.
  • N.S. Rajabathar Mudaliar v. M.S. Vadivelu Mudaliar and Ors. (1970):
    • In this case, the Supreme Court applied the cy-pres doctrine, redirecting charitable trust funds when the original purpose becomes impossible or impractical.
  • Abid Hatim Merchant v. Janab Salebhai Saheb Shaifuddin & Ors (2000):
    • The Supreme Court took note of Halsburys Laws of England and explained the doctrine of cy pres in following points:
      • An application cy-pres results from the exercise of the courts ordinary jurisdiction to administer a charitable trust of which the particular mode of application has not been defined by the donor. Where he has in fact prescribed a particular mode of application and that mode is incapable of being performed, but he had a charitable intention which transcended the particular mode of application prescribed, the court, in the exercise of this jurisdiction, can carry out the charitable intention as though the particular direction had not been expressed at all.
      • The primary rule to be observed in the application of the cy-pres doctrine is that the donors 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.
      • A charity may by cy-pres to the original object even though it seems to have no trace of resemblance to it, if no other can be found which has a nearer connection, but objects nearer the donors intention will always be selected in preference to those more remote.