Subject: Equity and Trust
Topic: Analysing the Doctrine of Cy-près in Indian Trust Law: Its Evolution
and Application
Submitted to: Dr. J.Lalith Kumar
Submitted by: Dinesh Gandhi D 20BLA1004
Analysing the Doctrine of Cy-près in Indian Trust Law: Its Evolution and
Application
The Cy-près doctrine, with roots in English common law, serves as a
pivotal mechanism in trust law, allowing courts to modify the purpose of a
charitable trust when its original objective becomes impossible,
impractical, or illegal. This analysis focuses on its historical development,
application in India, judicial interpretations, challenges, and future
prospects, highlighting its significance in preserving the essence of
charitable intentions.
1. Introduction
Overview of Cy-près Doctrine
Derived from the French term “cy-près,” meaning “as near as possible,”
the Cy-près doctrine provides a legal framework to adjust a trust’s
purpose to align closely with the original intent of the settlor when the
stated purpose cannot be achieved. The doctrine ensures the preservation
of charitable endowments, allowing courts to adapt trusts to changing
societal conditions while maintaining their foundational intent.
Relevance to Indian Trust Law
In India, the Cy-près doctrine is integral to ensuring that charitable trusts
remain operational despite challenges such as societal evolution,
impractical objectives, or legal constraints. The doctrine is embodied in
Section 92 of the Code of Civil Procedure, 1908 (CPC) and judicial
interpretations of the Indian Trusts Act, 1882, which collectively aim to
balance the settlor’s intent with practical realities.
2. Historical Background of Cy-près
Origin of Cy-près
The doctrine originated in English trust law, evolving to address issues
where the original purpose of charitable trusts became untenable. English
courts, through equitable principles, allowed modifications to ensure the
continued benefit of charitable endeavours.
Early Influence in India
Introduced during British colonial rule, the Cy-près doctrine was
incorporated into Indian legal practice through judicial interpretations and
the transplantation of English legal principles. By the late 19th century,
Indian courts adapted the doctrine to local conditions, enabling the
survival of charitable trusts despite societal and economic changes.
3. Legal Framework of Trusts in India
The Indian Trusts Act, 1882
The Act primarily governs private trusts but indirectly influences
charitable trusts. Provisions under this Act grant courts the authority to
intervene when the administration or purpose of a trust becomes
unsustainable.
Section 92 of the CPC
Section 92 allows courts to modify or supervise charitable trusts in cases
of mismanagement, failure of purpose, or legal disputes. This section
provides a statutory basis for the Cy-près doctrine in India, empowering
courts to uphold public interest while modifying the trust’s objectives.
Judicial Interpretations
Judicial decisions have progressively shaped the application of Cy-près in
India. Courts often rely on precedents from English law and local statutes
to adapt charitable purposes to modern societal needs.
4. The Doctrine of Cy-près Explained
Concept of Cy-près
The doctrine permits courts to reinterpret the original intent of the settlor
to preserve the charitable nature of a trust. The primary goal is to modify
the purpose in a way that aligns with the settlor’s intent while addressing
current realities.
Conditions for Application
The Cy-près doctrine is applied when:
1.The original purpose becomes impossible, impractical, or illegal.
2.The court determines a new purpose that aligns with the settlor’s
original intent.
Mechanisms for Application
Courts assess the settlor’s intent through extrinsic evidence, such as trust
deeds and historical context, to identify a substitute purpose. Judicial
creativity plays a critical role in ensuring alignment with contemporary
societal needs.
5. Judicial Application and Case Laws in India (Expanded)
Case studies of Indian judicial interpretations of the Cy-près doctrine
reveal its practical challenges and its flexibility in preserving charitable
objectives. Below are additional key cases with their facts, issues, and
judicial rulings:
**1. Ratanlal Fulchand v. Administrator General, Bombay (1947)
Facts:
•A charitable trust was established to provide scholarships to students of
a particular caste.
•Over time, caste-based scholarships became controversial and opposed
public policy.
•The funds remained unutilized as the original purpose could no longer be
fulfilled.
Issues:
•Could the trust’s objective be modified under the Cy-près doctrine to
broaden the scope of beneficiaries beyond caste lines?
Judgment:
The court applied the Cy-près doctrine, holding that the trust could be
modified to provide scholarships to students based on merit rather than
caste. This ensured the trust’s intent of promoting education was upheld
while aligning with modern principles of equality.
2. Tandon v. Amma Lal (1932)
Facts:
•A trust was created to build a temple. Due to lack of funds and public
interest, construction of the temple became impossible.
•The trustees sought court intervention to redirect the funds to charitable
activities benefiting the community.
Issues:
•Could the trust’s purpose be modified to benefit the public without
violating the settlor’s intent?
Judgment:
The court applied Cy-près, allowing the funds to be used for constructing a
school in the same locality. The court emphasised that while the specific
objective (building a temple) could not be achieved, the overarching
intent of serving the public interest was preserved.
3. Trustees of the Port of Madras v. Commissioner of Income Tax (1977)
Facts:
•A trust was established for the welfare of dock workers in Madras Port.
Over time, changes in labor welfare laws rendered the trust’s activities
redundant.
•The trustees sought permission to use the funds for broader welfare
schemes.
Issues:
•Could the funds be redirected for welfare programs that were not
explicitly mentioned in the trust deed?
Judgment:
The Supreme Court invoked the Cy-près doctrine, allowing the trust to
extend its scope to broader welfare schemes for workers. The court held
that the trust’s primary purpose—to improve workers’ lives—remained
relevant and aligned with the revised objectives.
4. Vidhya Varuthi Thirtha v. Balusami Ayyar (1922)
Facts:
•A religious trust was established for the maintenance of a mutt (monastic
institution).
•Due to dwindling resources, the mutt could no longer sustain itself.
•The trustees sought court intervention to repurpose the trust for
community welfare.
Issues:
•Could the Cy-près doctrine be applied to modify the religious trust into a
secular one benefiting the public?
Judgment:
The court ruled that the Cy-près doctrine could not alter the fundamental
religious character of the trust. However, it allowed modifications to the
management structure to ensure efficient use of remaining resources,
preserving the religious purpose while ensuring its practical viability.
5. Advocate General of Bengal v. Ranee Surnomoye (1872)
Facts:
•A trust was created for providing funds to a now-defunct charitable
institution.
•With no alternative institution serving the same purpose, the funds
remained unutilized.
Issues:
•Could the funds be directed to a different charitable institution with a
similar purpose under the Cy-près doctrine?
Judgment:
The court held that the funds could be transferred to another institution
serving a similar charitable purpose. It emphasised that the settlor’s
primary intent—charitable benefit—must guide the decision, even if the
original institution no longer existed.
Analysis of Judicial Approach
Indian courts have demonstrated flexibility in applying the Cy-près
doctrine to preserve charitable trusts. However, judicial rulings often
balance:
1.Preservation of the settlor’s intent: Courts strive to maintain the original
objective as closely as possible.
2.Public welfare: Trust modifications must align with contemporary social
and legal norms.
3.Practicality: Courts consider current feasibility and relevance of trust
purposes while repurposing funds.
By examining these cases, the evolving nature of the Cy-près doctrine in
India is evident, reflecting its adaptability to changing societal needs.
6. Challenges in the Application of Cy-près in India
1.Interpretation of Charitable Purpose
The definition of “charitable” evolves with societal needs, creating
ambiguities in judicial decisions.
2.Judicial Discretion
Excessive judicial discretion may lead to inconsistent outcomes,
potentially diverging from the settlor’s original intent.
3.Conflicts with Public Policy
Aligning trust purposes with modern public policy sometimes contradicts
traditional objectives.
4.Practical Difficulties
Identifying alternative purposes that align with the original intent can be
challenging due to limited historical guidance.
7. Comparison of Cy-près in Indian and International Jurisprudence
Common Law Jurisdictions
In jurisdictions like the UK and the US, Cy-près emphasises preserving
charitable objectives through well-established principles. Indian courts,
influenced by these jurisdictions, often adapt the doctrine to the country’s
unique socio-economic conditions.
Influence of International Legal Principles
Global frameworks, such as the UN Sustainable Development Goals
(SDGs), encourage aligning charitable trusts with pressing global
challenges like environmental sustainability and social justice.
8. The Future of Cy-près in India
Reforms and Suggestions
1.Clearer Guidelines: Codifying principles for applying Cy-près to reduce
judicial discretion.
2.Enhanced Monitoring: Introducing mechanisms to track and review
modified trust purposes.
Role of Technology
Blockchain and digital tools can increase transparency in trust
administration and streamline judicial processes.
Improving Effectiveness
Collaborative efforts between judiciary, legislature, and charitable
organizations can enhance the relevance and effectiveness of trusts in
addressing modern challenges.
9. Conclusion
The Cy-près doctrine is vital in preserving charitable trusts in India,
ensuring their relevance amidst evolving societal and legal landscapes.
While judicial flexibility enables practical application, reforms are
necessary to maintain consistency and uphold the settlor’s intent. Moving
forward, balancing adaptability with legal certainty will be crucial for the
doctrine’s continued success in fostering public welfare.
Footnotes
1.Indian Trusts Act, 1882: Provides the foundational legal framework for
trusts in India.
2.Code of Civil Procedure, 1908: Section 92 explicitly addresses issues
related to charitable trusts.
3.T. T. Krishnamachari Trust Case: An example of judicial creativity in
adapting trust purposes.
4.UN SDGs: Global standards influencing the evolution of charitable
objectives.
