Case: Shah Chhotalal Lallubhai &amp; Others Vs. Charity Commissioner, Bombay &amp; Others

as far as that intention can be carried out. If the method indicated by the founder cannot be carried out, the court will substitute another method cy pres, that is to say, as nearly as possible to the method specified by the founder. The application of to cy pres principle is explained in Storys Equity Jurisprudence, 3rd Edn. Article 1178, p. 494 thus:"The doctrine of cy pres as applied to charities was formerly pushed to a most extravagant length. But this sensible distinction now prevails that the Court will not decree the execution of the trust of a charity in a manner different from that intended, except so far as it is seen that the intention cannot be literally executed. In that case another mode will be adopted, consistent with the general intention, so as to execute it, although not in mode, yet in substance. If the mode should become by subsequent circumstances impossible, the general object is not to be defeated, if it can in any other way be attained."9. In the instant case, the overriding intention of the founder of the trust is that the sum of Rs. 75,000 set apart by him should be devoted to the objects mentioned in cl. (7) of the will, so that those objects may be continued and carried out for ever. His intention was that fixed sums should be expended annually for the 12 items of charity mentioned and reasonable sums should be expended annually in giving Swamivastal feasts to members of his caste. The sum spendable annually for the feast was necessarily of a fluctuating character. In accordance with the directions given in cl. (15) of the will, the obligations of the trust for the charities mentioned in items 2, 4, 5 and 6 of cl. (7) of the will have been fully discharged by donating Rs. 8,000 out of the corpus of the trust. The expenses of the annual Swamivastal feasts were met, and the payments to other charities were duly made out of the income of the balance funds every year up to Samvat 1999 corresponding to 1942-43 A.D., and the accumulations of the unexpended income up to that year represent a true surplus. In accordance with the intention of the founder of the trust, the surplus should be applied as nearly as possible to the original uses and purposes of the trust. In all the circumstances of the case, the surplus should be applied to increase the amounts spendable for the surviving objects of the trust. During the subsequent years up to Samvat year 2010 corresponding to 1953-54 A.D., the annual feasts could not be given due to rationing restrictions, but the expenses of the other charities were duly met. The savings of the income spendable during those years for the feasts should be applied suitably for carrying out the same object in future. The balance savings, if any, should be devoted towards increasing the amounts spendable for the other objects of the trust. The savings during Samvat year 2011 corresponding to 1954-55 A.D., were due to the fact that the annual feast was not given in spite of the absence of rationing restrictions. The savings for this year should be devoted towards the giving of the Swamivatsal feasts. The trustees cannot be allowed to defeat the objects of the trust by refusing to carry, them out. It is said that the giving of a Swamivatsal feast on the scale given in the past would now cost about Rs. 3,000. But if the income at the disposal of the trustees will not permit the spending of such a large amount, there is no reason why the trustees would not spend a smaller amount and give the feast to a smaller number of guests. In view of the enormous rise in prices since the creation of the trust, an increase of the amounts spendable for the charities would be in accordance with general intention of the founder. This is an additional reason for applying the unexpended income for the original objects of the trust instead of diverting them for other purposes. It is desirable that instead of spending the accumulations, the same should be invested and its income should be applied towards the original objects. In the light of all these considerations, we propose to give the directions set out in our order.10. The scheme framed by the Courts below is objectionable in several ways. In framing the Scheme, the Courts below erroneously disregarded one of the main objects of the trust, viz., the giving of the annual Swamivatsal feast on the ground that it is not expedient, desirable, necessary or proper in the public interest to carry out this object. The scheme disregards the basic principle that the trust funds should be applied for effectuating the intention of the founder of the trust as far as possible. The direction for payment of one half of the accumulations to the Sad Vidya Mandal on the ground that its object is analogous to the object of the Jain Gyan Fund mentioned in item 8 of, Cl.10 of the will is objectionable on the ground that the freeship are not restricted to the Jains and also on the ground that subject to giving the freeships the donee is entitled to spend the corpus for other purposes. Moreover the purposes of the Sad Vidya Mandal and its freeships are not analogous to the purposes of the Jain Shastras. The which is religious fund for imparting knowledge of Jain religion and Jain Shastras. The direction for payment of one half of the accumulated amount to the Sevashram Hospital is objectionable on the ground that medical treatment of the poor and deserving is not one of the objects specifically mentioned in cl. 7 of the will. Both these directions are also objectionable on the ground that they do not take into account the original objects of the trust. For all these reasons, the directions given by the Courts below must be set aside.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]7. In this view of the matter, it is not necessary to decide whether the trust is a trust for religious purposes, and if so, whether, having regard to Ratilal Panachands case, 1954 SCR 1055 : (AIR 1954 SC 388 ), its income or surplus balance spendable for the purposes of the trust can be diverted for other purposes, thought the original object of the trust can still be carried out. The question whether or not objects mentioned in cl. (7) of the will are religious objects is not raised in the pleadings. No issues were framed and no evidence was led on this point by either party.What are religious purposes must be decided according to the tenets and religious beliefs of the Murti Pujak Swetambara sect of Jains, to which the testator belonged.It is difficult to decide the point in the absence of relevant pleadings, issues and evidence. The District Judge held that the Swamivatsal feast and many other objects are religious objects. The High Court too lightly brushed aside this finding. Chapter IX of the Report of the Hindu Religious Endowments Commissioncontains an interesting discussion of Jain endowments. Paragraphs 7 to 11 of Chap. IX of the Report refer to seven types of religions funds specifically recognised by the Jain scriptures concerning (1) Jeena Bimba, (2) Jeena Chaitya, (3) Gyan Fund. (4) Sadhu, (5) Sadhvi, (6) Shravak and (7) Shravika. The Jains recognise numerous other endowments or funds for general or specific purposes, the corpus or interest of which is to be utilised as per the donors intentions. The question whether the several objects of the trust including the giving of a Swamivatsal feast Are religious in their character must be left open for future decision.In the instant case, the overriding intention of the founder of the trust is that the sum of Rs. 75,000 set apart by him should be devoted to the objects mentioned in cl. (7) of the will, so that those objects may be continued and carried out for ever. His intention was that fixed sums should be expended annually for the 12 items of charity mentioned and reasonable sums should be expended annually in giving Swamivastal feasts to members of his caste. The sum spendable annually for the feast was necessarily of a fluctuating character. In accordance with the directions given in cl. (15) of the will, the obligations of the trust for the charities mentioned in items 2, 4, 5 and 6 of cl. (7) of the will have been fully discharged by donating Rs. 8,000 out of the corpus of the trust. The expenses of the annual Swamivastal feasts were met, and the payments to other charities were duly made out of the income of the balance funds every year up to Samvat 1999 corresponding to 1942-43 A.D., and the accumulations of the unexpended income up to that year represent a true surplus. In accordance with the intention of the founder of the trust, the surplus should be applied as nearly as possible to the original uses and purposes of the trust. In all the circumstances of the case, the surplus should be applied to increase the amounts spendable for the surviving objects of the trust. During the subsequent years up to Samvat year 2010 corresponding to 1953-54 A.D., the annual feasts could not be given due to rationing restrictions, but the expenses of the other charities were duly met. The savings of the income spendable during those years for the feasts should be applied suitably for carrying out the same object in future. The balance savings, if any, should be devoted towards increasing the amounts spendable for the other objects of the trust. The savings during Samvat year 2011 corresponding to 1954-55 A.D., were due to the fact that the annual feast was not given in spite of the absence of rationing restrictions. The savings for this year should be devoted towards the giving of the Swamivatsal feasts. The trustees cannot be allowed to defeat the objects of the trust by refusing to carry, them out. It is said that the giving of a Swamivatsal feast on the scale given in the past would now cost about Rs. 3,000. But if the income at the disposal of the trustees will not permit the spending of such a large amount, there is no reason why the trustees would not spend a smaller amount and give the feast to a smaller number of guests. In view of the enormous rise in prices since the creation of the trust, an increase of the amounts spendable for the charities would be in accordance with general intention of the founder. This is an additional reason for applying the unexpended income for the original objects of the trust instead of diverting them for other purposes. It is desirable that instead of spending the accumulations, the same should be invested and its income should be applied towards the original objects. In the light of all these considerations, we propose to give the directions set out in our order.10. The scheme framed by the Courts below is objectionable in several ways. In framing the Scheme, the Courts below erroneously disregarded one of the main objects of the trust, viz., the giving of the annual Swamivatsal feast on the ground that it is not expedient, desirable, necessary or proper in the public interest to carry out this object. The scheme disregards the basic principle that the trust funds should be applied for effectuating the intention of the founder of the trust as far as possible. The direction for payment of one half of the accumulations to the Sad Vidya Mandal on the ground that its object is analogous to the object of the Jain Gyan Fund mentioned in item 8 of, Cl.10 of the will is objectionable on the ground that the freeship are not restricted to the Jains and also on the ground that subject to giving the freeships the donee is entitled to spend the corpus for other purposes. Moreover the purposes of the Sad Vidya Mandal and its freeships are not analogous to the purposes of the Jain Shastras. The which is religious fund for imparting knowledge of Jain religion and Jain Shastras. The direction for payment of one half of the accumulated amount to the Sevashram Hospital is objectionable on the ground that medical treatment of the poor and deserving is not one of the objects specifically mentioned in cl. 7 of the will. Both these directions are also objectionable on the ground that they do not take into account the original objects of the trust.