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(1) Establishing and running a school or college for the teaching of journalism;

(2) Establishing and/or running or helping to run schools, colleges or other educational institutions for teaching arts and science;

(3) Establishing scholarships for students of journalism, art and science;

(4) Establishing and/or running or helping to run hostels for students;

(5) Establishing and/or running or helping to run orphanages, and (6) Other educational purposes. There cannot be any dispute that the above objects which are referred to in the supplementary deed are charitable purposes. In the supplementary deed the founder of the trust has specifically stated that since the newspaper, Daily Thanthi, had been placed on a footing of permanency and had been enlarged and improved as contemplated by the founder in the original trust deed and as the trust was in possession of sufficient surplus funds, he was directing the trustees to defray the surplus income for the said charitable purposes. He has purported to execute a supplementary deed in exercise for the power reserved in c. 3(j) of the original trust deed. There was controversy between the parties as to whether the founder of the trust had or had not the power to add to or modify the objects of the trust. As already pointed out, that question has not been specifically referred to us. However, it should be noted that the supplementary deed proceeds on the basis that the objects set out in the original trust deed, that is, maintaining the newspaper and its press in an efficient condition and improving and enlarging the same and placing the same on a footing of permanency, had been carried out and that, as there was still surplus income, the necessity has arisen to specify the objects for which the surplus income has to be spent. After the execution of the supplementary deed the trustees had approached this court in C.S. No, 90 of 1961 under order 13 of the Original Side Rules and the court has in fact passed a decree directing the trustees to utilise the surplus income and funds of the Thanthi Trust after defraying all expenses in connection with the newspaper business for one or more of the six objects set out in the schedule therein. A perusal of the decree of this court in C.S. No. 90 1961 indicates that the court had proceeded on the basis that the objects mentioned in the original trust deed had been substituted by the objects mentioned in the original trust deed had been substituted by the objects set out in the supplementary deed. This is presumably for the reason that in the supplementary deed it has been specifically stated that the newspaper Dina Thanthi has already been established as an organ of educated public opinion for the Tamil reading public, that it has been disseminating news and ventilating opinion on all matters of public interest, that the paper and its press have been maintained in an efficient condition, enlarged and improved and placed on a footing of permanency and that, as the said three objects set out in the original deed having been already achieved, the necessity has arisen to give directions to the trustees to spend the surplus income after meeting the expenses of the newspaper business of the charitable objects referred to therein. Admittedly the decree in the said suit creates a legal obligation on the trustees to spend the entire surplus income for the six charitable objects referred to in the schedule to the decree. Section 11 contemplates a property held under trust or under other legal obligation. It is in this connection, the learned counsel for the Revenue submits, that no property is held under a legal obligation for the new objects set out in the set out in the supplementary deed or in the schedule to the decree in C.S. No. 90 of 1961, and that the legal obligation is only in respect of the surplus income and not in respect of the property yielding income, and, therefore, s. 11 cannot stand attracted. It is pointed out that s. 11 can have no application unless the source of the income is held under trust or other legal obligation, wholly or partly, for a religious or charitable purpose and that in this case the property itself is not held under trust or legal obligation and the surplus income has not directly or substantially arisen from the property. Reference has also been made to the decision in Raja P. C. Lall Chaudhary v. CIT [1957] 31 ITR 226 (Pat), Ganpatrai Sagarmal (Trustees) for Charity Fund v. CIT [1963] 47 ITR 625 (Cal) and CIT v. P. K. Barooah [1970] 77 ITR 967 (Assam), in support of the said stand taken by the Revenue. In Raja P. C. Lall Chaudhary v. CIT [1957] 31 ITR 226 (Pat), the assessee had not created a trust or obligation on any property, but had only created a charge over a part of the income accruing to him from a particular source and it was in those circumstances that s. 4(3)(i) was held as not applicable. In Ganpatrai Sagarmal (Trustees) for Charity Fund v. CIT [1963] 47 ITR 625 (Cal), it was found that there was no, transfer of property as such top the trust and the property remained the property of the settlor and 1/4th of the income from the properties had alone been directed to be spent for charitable purposes. It was, in those circumstances, held that, as there was no property which is held under trust, s. 4(3)(i) cannot come into play. In CIT v. P. K. Barooah [1970] 77 ITR 967 (Assam), a case where the trust deed envisaged the surplus funds from a particular source to be spend on charitable and non-charitable purposes and the trustees had a discretion to apply the income to any of the objects, charitable or non-charitable objects. The court held that as the source from which the income was derived had not been held under trust or under a legal obligation and the trust was only in relation to a portion of the surplus income, s. 4(3)(i) cannot stand attracted. We do not see how the above decisions can be called in aid by the Revenue. In this case the entire newspaper business including its assets and liabilities and goodwill are held in trust for the objects set out in the original trust deed and under a legal obligation for the objects set out in the decree in C.S. No. 90 of 1961. We are not inclined to agree with the learned counsel for the Revenue that the property having been directed to be held in trust for the objects referred to in the original trust deed, the same property cannot be held under trust for the additional objects referred to in the supplementary deed and in the schedule to the decree in C.S. No. 90 of 1961. The supplementary deed as well as the decree in C.S. No. 90 of 1961 proceed on the basis that as the original objects had since been achieved, new objects had been substituted for them. The new objects are purely charitable. If the new objects have been substituted for the original objects set out in the original trust deed, then the property held for the original objects should be taken to have been held for the new objects. As a matter of fact the decree in C.S. No. 90 of 1961 specifically states that the trustees are bound to carry out the objects set out in the Schedule to the decree with the income from the Thanthi Trust. Therefore, it is not possible to say that no property is held under trust or other legal obligation for the new objects set out in the supplementary deed.

"The doctrine of 'cy-pres', as developed by the equity courts in England, has been adopted by our Indian courts since a long time past.... 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."