Delhi High Court
Lala Diwan Chand Trust And Ors. vs State Of Delhi on 11 August, 2006
Author: Anil Kumar
Bench: Anil Kumar
JUDGMENT Anil Kumar, J.
1. This order shall dispose of suit under Section 92 of the Code of Civil Procedure for alteration and enlargement of the objectives of Lala Diwan Chand Trust.
2. The suit is filed by the trust through its trustees Sh. Vishwa Nath, Chairman and Trustee; Sh. Rajendra Kumar Gupta, Secretary and Trustee; Sh. Vineet Virmani, Sh. S.P. Puri, Sh. Anil Kumar Jauhar and Sh. T.N. Chaturvedi trustees. The plaintiffs contended that they were authorized vide resolution dated 8.2.2003 passed by the board of trustees to institute the present suit for enlarging/amending the scope of objects and purpose of Lala Diwan Chand Trust.
3. The plea of the plaintiffs is that Lala Diwan Chand was a successful businessman/civil contractor who died on 4.2.1930 leaving behind a Will dated 28.7.1929 bequeathing his properties for charitable purposes. It was stated that upon the demise of Lala Diwan Chand, a trust deed was executed and registered on 7.6.1930 to carry out the charitable activities as per the donor's wishes and his Will which included constructing a big hall named Diwan Hall in Chandni Chowk and to start charitable institutions which were to be run under the supervision of Arya Prathindhi Sabha; to establish political information bureau to set up industrial, technical and commercial scholarship for the poor and orphan students and to carry out political samajik and social works.
4. According to the plaintiffs the trust has served the aforesaid objectives diligently over the years. Even the widow of Late Lala Diwan Chand, Smt. Prakash Wati Awal bequeathed her properties which comprised of agricultural lands and a commercial property at Jor Bagh, New Delhi and some jewellery to the trust with direction to utilize these proceeds for charitable purposes. The trust also have funds to carry out charitable activities in furtherance of the desires of the declarant/donor of the trust.
5. Some of the purposes and objects which were laid down in the will and the trust deed referred to an area which was earlier part of India, but has since ceased to be a part of India such as village Saedpur, Tehsil Chakwal, District Jhelum. This area has upon partition ceased to be part of India and forms a part of Pakistan and it is not possible to give effect to or carry out any work there.
6. According to the plaintiffs, trust has substantial income and after spending monies in accordance with the objectives of the trust, a substantial surplus is left which funds can be used to carry out charitable works in accordance with the spirit of the trust. As some of the purposes for which the trust was established have been achieved and some have become redundant or unachievable due to change in circumstances the trustees wish to carry out enlargement/amendment/alteration of the objective and purpose of the original trust cypress.
7. The plaintiffs contended that the trustees are eminent people and in order to dedicate the income for more charitable purposes, the trustees in their meeting of board of trustees held on 8.2.2003 have recommended that the objectives of the trust be enlarged and amended which includes establishing multipurpose community development projects; relief and help to the aged, physically or mentally challenged; orphans, slum dwellers, widows and destitute and persons otherwise disabled or incapable of earning livelihoods by grants; and establishment, maintenance and support of orphanage, widow homes, old people homes; homes for poor and destitute and to give financial aid, scholarships, prizes, stipends, loans and to provide medical aid to needy and sick persons through establishment of hospitals, dispensaries, nursing homes and to promote awareness of value and need for protection of the eco system and ecological balance and to give financial aid, loans or grants to any needy person and or any society, trust or institution.
8. In these circumstances the plaintiffs have sought an order permitting them to enlarge/amend/alter the objectives and purpose of original trust.
9. Pursuant to the notice of the suit, a reply has been filed on behalf of State of Delhi contending inter-alia that the trust was not connected with any public charity created for any public purposes of a charitable or religious nature and consequently the relief claimed in the instant suit is not covered under Section 92 of the Code of Civil Procedure. The suit has also been opposed on the ground that had it been a public trust no question could have arisen for enlargement and alteration of the objectives of Lala Diwan Chand Trust and consequently there is no cause subsisting qua the defendant for filing the instant suit and the plaint is liable to be rejected as per provisions of Order 7 Rule 11 of the Code of Civil Procedure.
10. The averments made by the defendant were refuted on behalf of plaintiffs in the replication and Along with the replication the plaintiffs filed copy of the registration certificate under Section 12A(a) of the Income Tax Act, 1961 disclosing that the trust is registered with the tax authorities and the plaintiffs also filed copies of income tax returns for various years.
11. On the basis of the pleadings and documents of the parties, the issues were framed which are as under:
1. Whether plaintiff is entitled to enlarge/amend/alter the objective and purpose of original trust as contended in the plaint? OPP
2. Whether the relief claimed by the defendant are not within the scope of Section 92 of the Code of Civil Procedure and can not be allowed in the facts and circumstances? OPD
3. Whether the plaint is liable to be rejected as per provision of Order VII Rule 11 of Code of Civil Procedure?
4. Relief.
12. The issue regarding rejection of the plaint under Order 7 Rule 11 of the Code of Civil Procedure was decided by order dated 4.1.2006 holding that the plaint is not liable to be rejected. On the remaining two issues parties lead evidence by affidavit. On behalf of plaintiffs the deposition of Sh. Rajendra Kumar Gupta, Secretary and Trustee was filed which was exhibited as exhibit PW.1/A. The said witness of the plaintiff was also cross examined by the defendant. The witness of the plaintiffs proved the copy of resolution dated 8.2.2003 passed by the board of trustees as exhibit PW.1/1. The English translation of the copy of the Will of the plaintiff was marked as exhibit PW.1/2 whereas the English translation of the trust deed was marked as exhibit PW.1/3. The registration of the trust under Section 12A(a) of the Income Tax Act was also proved as exhibit PW 1/4 and the copies of the income tax return for the assessment year 2004-2005 along with the annexure was marked as exhibit PW1/5. The copies of balance sheets for the years 1998-99 till 2003-2004 were collectively marked as Exhibit PW1/6. The relevant portion of the minutes of the meeting of board of trustees held on 8.2.2003 agreeing and recommending that the objectives of the trust be enlarged and amended were also marked as Exhibit PW1/7.
13. The said witness of the plaintiffs was cross examined, however, the English translation of Will of Late Lala Diwan Chand dated 28.7.1929 and the trust deed dated 7.6.1930 were not refuted by the defendants. No suggestions were given that Late Lala Diwan Chand did not execute a Will and consequently no trust was created. It was rather suggested to the witness that the properties vest with the trust, however the management is with the trustees. A specific suggestion was given to the witness that the affairs of the trust are regulated as per the will of Late Lala Diwan Chand, thereby admitting the will of rather denying it or refuting it.... The other documents produced and proved and exhibited by the plaintiffs were also not refuted nor any questions were put to the witness about them. It was also suggested to the witness that there is hardly any contribution from the general public to the trust. Mr. Rajender Kumar Gupta, Secretary/Trustee of the plaintiff trust in his cross examination admitted that there is hardly any contribution by the general public to the trust as the revenue is generated from the estate of the trust.
14. Issue No. 1:- The main objectives as per the wishes of Late Lala Diwan Chand which have been established by the plaintiffs are as under:
i) To construct a big hall named Diwan Hall in Chandni Chowk, with rooms attached thereto in such a way that Arya Updeshaks, Arya Sanyasis, Sadhus, Mahatmas may stay and the necessities of their stay be completed. The said hall and the construction after completion will be transferred by means of a registered deed in the name of the Arya Pratinidhi Sabha, Punjab and will be entrusted to the management of Arya Samaj, Gurukul Section, Delhi and the same will be used as Arya Samaj Mandir. The said hall was also used for holding adult literacy classes, Womens Tailoring and Embroidery classes, promotion of womens education and family welfare.
ii) To start charitable institutions, viz. Mathura Devi Arya Kanya Pathshala, Gokul Chand Arya Hospital and Jan Ghar/ Barat Ghar at Saedpur, Tehsil Chakwal, District Jhelum. The three institutions were to be run under supervision of the Arya Pratindhi Sabha for which a sum of Rs. 1 lakh was given to it.
iii)To establish a political information bureau wherein all sorts of political books and up to date information will be collected so that Assembly members may study the same and represent their view points and put forward the problems of the country in a proper way. A sum of Rs. 500/- per month be spent for the office expenses and for the payment of staff.
iv)To set up industrial, technical and commercial scholarships that may be assigned to the value of Rs. 1000/- ranging from Rs. 10/- and Rs. 50/- per month. These scholarships may be given to poor and orphan students.
v)To carry out other political, samajik and social works.
15. The plaintiffs are the trustees of the trust and they have taken a decision to enlarge/amend and alter the objectives and purposes of the original trust. The decision taken by the board of trustee by resolution dated 8.2.2003 has been produced and proved. The amended objectives and purposes of the trust which are to be incorporated are as under:
i) to construct, establish, set up, promote, carry on multipurpose community development projects through community centres fully equipped to serve as library cum reading rooms, vocational training centres and social and family welfare centres, public places for marriage, centres for diffusion of moral values and arrangement for the stay of Updeshaks, Sanyasis, Mahatmas and Sadhus;
ii) To set up political information bureau(s) with library and facilities to discuss and study issues of national and public interest;
iii)Relief and help to the aged, physically or mentally challenged, orphans, slum dwellers, widows and destitute and persons otherwise disabled or incapable of earning livelihoods by grants; and establishment, maintenance and or support of orphanages, widow homes, old people homes, homes for poor and destitute, nari kalyan kendras and care homes for menatlly and physically challenged persons.
iv)To establish, maintain, support and/or promote the spread of Vedic knowledge and practices through ministers, prayer halls, Arya Samaj Centers, Yagya Shalas or through other organisations working in the field for raising moral and ethical standards and welfare of humanity in general without any distinction on the basis of caste, creed or religion;
v)To give financial aid, scholarships (refundable or non refundable), prizes, stipends, loans or grants to any person, society, trust, institution or organization or authority for the promotion of education or any other field pertaining to the original objectives of the Trust;
vi)Advancement, promotion and spread of education, science, art, literature and sports by establishing and/or giving financial aid (such as donations, loans, scholarships, prizes, etc.) to colleges, schools, educational institutions, hostels, libraries, reading rooms and stadia;
vii)To provide medical aid to infirm and sick persons through establishment of hospitals, dispensaries, nursing homes, medical centres, etc. and/or through donations;
viii)To promote awareness of value and need for protection of the eco-system and ecological balance; and to assist, promote, support or undertake programmes and projects relating to protection of environment, flora, fauna, geological features and water bodies of any description;
ix)Construction and maintenance of water related structures like wells, tubewells, tanks, and facilities for making provisions for supply of water to general public; promoting awareness of value and need for protection of clean environment including fresh water and its conservation, augmentation and management including rain water harvesting through various means; promoting campaigns for conservation of energy and use of non conventional energy resources;
x)To undertake, carry out, promote, establish, set up, conduct, aid, help or otherwise support, rural and urban development projects, including any programme for promoting social and economic welfare of the public and to assist and help execution of promotion thereof directly or through an independent agency;
xi)To publish, promote or assist in the publication of educational, spiritual, moral value based books, tracts or periodicals, audio and audi-visual software for diffusion of useful knowledge to the public;
xii)To give financial aid, loans or grants to any needy person and/or any society, trust, institution, organization or authority providing relief, education or medical treatment to the poor and to carry out any other work for the relief and advancement of the general public;
xiii)To assist , promote, support or implement programmes to provide relief and help to stray and domestic animals including old and abandoned cattle, wildlife and birds through veterinary services, hospitals and shelters;
xiv)Generally to take up and support any charitable and/ or public cause;
xv)To do all such things as are incidental to and in furtherance of attainment of the above objects or any one of them.
16. With the objects as originally contemplated by Late Lala Diwan Chand in his Will and the trust deed executed on 4.2.1930 and 28.7.1929 respectively which has not been denied, whether the trust will be a trust for charitable purpose. The dedication for public purposes and for the benefit of general public would involve cessation of ownership on the part of the founder and vesting of the property for religious object. The character and the nature of dedication can be determined on the basis of the history of the institution and the conduct of the founder and his heirs where the document is available to prove the nature and origin of endowment.
17. The petitioner has relied on , Sole trustee Loksikshana v. CIT , CIT v. Surat Art Silk Cloth and , MCD v. Children Book Trust to contend that the concept of charity denotes altruistic thought and action and its object must necessarily be to benefit others rather than one's self. It was contended that in a truly charitable activity any possible benefit to the person who does the charitable act is merely incidental or even accidental and immaterial and the action flows from charitable thinking and is not directed towards benefiting one's self and in case of plaintiff trust there is not even incidental of accidental benefit to the settler of the trust and after his demise to his legal representatives, rather his widow had also donated her personal assets to the trust.
18. The trust deed executed in respect of Lala Diwan Chand Trust categorically stipulates that it has to carry out charitable activities. It specifically states that the object is to start charitable institutions, viz. Mathura Devi Arya Kanya Pathshala, Gokul Chand Arya Hospital and Jan Ghar/Barat Ghar at Saedpur, Tehsil Chakwal, District Jhelum and to set up industrial, tehcnical and commercial scholarship to be given to the poor and orphan students and to carry out political, samajik and social works.
19. The Apex Court in Surat Arts Silk Cloth Mfrs, Assn (Supra) had dealt with the legislative history of definition of 'charitable purpose' in the income tax law of this country. In the income tax Act of 1992 charitable purpose is defined in Section 4 Sub-section (3) as including 'relief of the poor, education, medical relief and advancement and of any object of general public utility'. It was held that the definition of 'charitable purpose' in Indian law goes much further than the definition of charity to be derived from the English cases because it specifically includes medical relief and embraces all objects of general public utility. The Supreme Court has held as under:
9. It would be convenient at this stage to refer briefly to the legislative history of the definition of 'charitable purpose' in the income tax law of this country, as that would help us to understand the true meaning and import of the words 'not involving the carrying on of any activity for profit'. These restrictive words, it may be noted, were not to be found in the definition of 'charitable purpose' given in Sub-section (3) of Section 4 of the Indian Income Tax Act, 1922 and they were added for the first time when the present Act was enacted. What were the reasons which impelled the legislature to add these words of limitation in the definition of 'charitable purpose' is a matter to which we shall presently advert, but before we do so, we may usefully take a look at the definition of 'charitable purpose' in Section 4 Sub-section (3) of the Act of 1922. There, 'charitable purpose' was defined as including 'relief of the poor, education, medical relief and the advancement of any other object of general public utility' without the additive words 'not involving the carrying on of any activity for profit'. Now it is interesting to compare this definition of 'charitable purpose' with the concept of 'charity' under English Law. The English Law of charity has grown round the Statute of Elizabeth, the Preamble to which contained a list of purposes regarded as worthy of protection as being charitable. These purposes have from an early stage been regarded merely as examples and have through the centuries been considered as guide-posts for the courts in the differing circumstances of a developing and fast changing civilization and economy. Whenever a question has arisen whether a particular purpose is charitable, the test has always been whether it is or is not within the spirit and intendment of the Preamble to the Elizabeth Statute. The law has been developed by analogy upon analogy and it is to be found in the large mass of case law that has been built up by the courts over the years. The result is that the concept of charity in English Law is as vague and undefined as it is wide and elastic and every time there has to be a search for analogy from the Preamble to the Statute of Elizabeth or from decided cases. An early attempt to simplify this problem by a classification under main heads was made by Sir Samuel Romilly when he tried to subsume charitable purposes under four heads in the following summary submitted by him in the course of arguments in Morice v. Bishop of Durhama 'relief of the indigent, the advancement of learning, the advancement of religion and the advancement of objects of general public utility'. This classification was adopted in substance by Lord Macnaghten in his classic list of charitable purposes in Special Commissioners v. Pemsel, where the learned Law Lord pointed out that charity in its legal sense comprises four principal divisions: 'trusts for the relief of poverty, trusts for the advancement of education, trusts for the advancement of religion and trusts for other purposes beneficial to the community not falling under any of the preceding heads'. It will be noticed that the first head in the definition of 'charitable purpose' both in the Act of 1922 and in the present Act is taken from the summary of Sir Samuel Romilly; the second from the classification of Lord Macnaghten after omitting the word 'advancement'; the third is a new head not to be found either in the summary of Sir Samuel Romilly or in the classification of Lord Macnaghten while the fourth is drawn from the last head in the summary of Sir Samuel Romilly. The definition of 'charitable purpose' in Indian law thus goes much further than the definition of charity to be derived from the English cases, because it specifically includes medical relief and embraces all objects of general public utility. In English Law it is not enough that a purpose falls within one of the four divisions of charity set out in Lord Macnaghten's classification. It must also be within the spirit and intendment of the Preamble to the Statute of Elizabeth if it is to be regarded as charitable. There is no such limitation so far as Indian Law is concerned: even if a purpose is not within the spirit and intendment of the Preamble to the Statute of Elizabeth, it would be charitable if it falls within the definition of 'charitable purpose' given in the statute. Every object of general public utility would, therefore, be charitable under the Indian Law, subject only to the condition imposed by the restrictive words 'not involving the carrying on of any activity for profit' added in the present Act. It is on account of this basic difference between the Indian and English law of charity that Lord Wright uttered a word of caution in All-India Spinners' Association v. CIT against blind adherence to English decisions on the subject. The definition of 'charitable purpose' in the Indian statute must be construed according to the language used there and against the background of Indian life. The English decision may be referred to for help or guidance but they cannot be regarded as having any binding authority on the interpretation of the definition in the Indian Act.
20. In Children Book Trust (supra) the Apex Court had held that for a charity an element of public benefit or philanthropy is to be present. It is only where the predominant object is to subserve charitable purpose and not to earn profit, it would be a charitable purpose. The Apex Court had also held that the definition of 'charitable purpose' is narrower in scope in Delhi Municipal Corporation Act than in the Income Tax Act. The purpose of the plaintiff trust is educational, relief to poor and to subserve the charitable purpose and not to earn profit. Applying these guidelines it is apparent that the plaintiff trust is a trust created for public purpose of a charitable nature.
21. If the plaintiffs' trust was created for public purpose and is of a charitable nature then whether the trustees are entitled to enlarge/amend/alter the objects and purpose of original trust.
22. Where the objectives of trust are not suited to modern condition and some of them have become redundant with the passage of time and there is a general charitable intention in terms of the endowment, the Court is competent to apply the funds of the charity cypress. The principle of this doctrine of construction is that where a testator has two objects, one primary or general and another secondary or particular, which are incompatible, the particular must be sacrificed in order that effect may be given to the general object, as near as may be to the testator's intention according to law. This doctrine is thus applicable where because of lapse of time and change of circumstances, it is no longer possible beneficially to apply the property left by the founder or donor in the exact way in which he has directed it to be applied; but it can only be applied beneficially for similar purposes by different means. In such cases the Court deviates from the letter of the settlor's intention, so long as it can keep within the spirit of the intention.
23. Sub Section 3 of Section 92 which was inserted by amendment 104 of 1976 incorporates the doctrine of cypress. Section 92 sub Section 3(d) categorically stipulates that where the original purpose, 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 purpose, the Court may alter the original purpose of an express or constructive trust created for public purpose of a charitable nature and allow the property or income of such trust or any portion thereof. In the plaintiffs case the original trust categorically stipulated to start charitable institutions at Saedpur, Tehsil Chakwal, District Jhelum which properties are now in Pakistan and the plaintiffs want to amend objectives so as to include construction and setting up of multi purpose community development projects through community centres fully equipped to serve as library/reading rooms, vocational training centres, social and family welfare centres and to help the aged, physically and mentally challenged, orphans, slum dwellers and destitute and to give financial aid, scholarships, prizes, stipends or grants and to provide medical aid to infirm, sick persons through establishment of hospitals, dispensaries, nursing homes, medical centres etc, it will be appropriate to allow the plaintiffs to enlarge/amend and alter the objectives and purpose of original trust deed so as to incorporate the objectives as decided by the trustees of plaintiff in the meeting of the Board of Trustees held on 8.2.2003. Consequently, this issue is decided in favor of plaintiff holding that the plaintiff is entitled to enlarge/amend/alter the objective and purpose of original trust in present facts and circumstances. Issue No. 1 is thus decided in favor of plaintiff
24. Issue No. 2:- The onus of this issue was on the defendant. On behalf of defendant no evidence has been lead nor it has been established that the relief claimed by the plaintiff are not within the scope of Section 92 of the Code of Civil Procedure. The issue as framed on 12.12.2005 is 'Whether the relief claimed by the defendant are not within the scope of Section 92 of the Code of Civil Procedure and can not be allowed in the facts and circumstances? OPD' which however, seems to have a typographical mistake as the issue should have been 'Whether the relief claimed by the plaintiffs are not within the scope of Section 92 of the Code of Civil Procedure and can not be allowed in the facts and circumstances? OPD'
25. There is no doubt in the facts and circumstances that the plaintiff trust was created for public purpose of charitable nature. This has also been established that the original purpose of the trust created for public purpose of a charitable nature can be allowed to be altered in the present facts and circumstances. If that be so it cannot be inferred that the relief claimed by the plaintiff are not within the scope of Section 92 of the Code of Civil Procedure. Thus this issue is decided against the defendant. In the circumstances the suit of the plaintiff under Section 92 of the Code of Civil Procedure for alteration and enlargement of the objective of Lala Diwan Chand Trust is maintainable. The issue is thus decided against the defendant.
26. Consequently plaintiff shall be entitled to amend/alter or enlarge the objectives and purpose of original trust as stipulated in para 12 of the plaint in terms of the decision of the board of trustees dated 8.2.2003.
27. Therefore, the suit of the plaintiffs under Section 92 of the Code of Civil Procedure is decreed entitling them to to amend/alter or enlarge the objectives and purpose of original trust as stipulated in para 12 of the plaint in terms of the decision of the board of trustees dated 8.2.2003. Considering the facts and circumstances the parties are, however, left to bear their own cost. Decree sheet be drawn accordingly.