2003 (3) KLT  901

Hon'ble Mr.Justice K.S. Radhakrishnan & Hon'ble Mr.Justice Pius C. Kuriakose

Shanmughan v. Vishnu Bharatheeyan

A.S. No.415, cross objection & A.S. No.419 of 2000.

Decided on 22nd September, 2003.

 

Trusts Act 1882, S.49 - Private religious trust falls outside the purview of the Trusts Act - Trust and endowment are not unanimous concepts.

 

When the Legislature used the expression public or private religious charitable endowment, the word "trust" as such is not used.  But the words "religious" or "charitable" are to be noted.  The expression "charity" has not been defined in the Indian Trusts Act.  Charity in its legal sense comprises four principal divisions; trusts for relief or poverty; trusts for the advancement of education, trusts for the advancement of religion and trusts for other purposes beneficial to the community.  The element of trust is embedded in the word "charity" and various enactments like the Charitable Endowment Act, 1890, the Charitable and Religious Trust Act, 1920, the Religious Endowment Act, 1863, Travancore Cochin Literary, Scientific and Charitable Societies Registration Act etc.  Besides the above legislations, S.18 of the Transfer of Property Act says that restrictions in Ss.14, 16 and 17 thereof shall not apply in the case of transfer of property for the benefit of public in the advancement of religion.  We are of the view, the words "private religious endowment" used in the saving clause of the Indian Trusts Act have th e imprint of a trust without which private religious endowment would not fall in the categories of cases excluded through the saving clause.  The expression "private religious endowment" used in the saving clause has got the imprint of a trust and hence a private religious trust and the properties endowed are dedicated to Private Religious Trust.  Since the trust created by Ext.A1 is private religious trust it falls outside the purview of the Indian Trusts Act.            (paras. 7 & 8)

 

AIR 1987 SC 2064; AIR 1949 Mad. 721;

AIR 1922 PC 123 & AIR 1932 Cal. 129                       Referred to

 

Hindu Law - Under Hindu Law it is not only permissible but also very common to have private endowments.

 

There can be religious trust of a private character under the Hindu Law which is not possible in English Law.  It is well settled that under the Hindu Law it is not only permissible but also very common to have private endowments which though are meant for charitable purposes yet the dominant intention of the founder is to instal a family deity in the temple and worship the same in order to effectuate the spiritual benefit to the family of the founder and his descendants and to perpetuate the memory of the founder.   The question as to whether religious endowment is of a private nature or of a public nature has to be decided with reference to the facts proved in each case and it is difficult to lay down any test or tests which may be of universal application. 

 

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From the recitals of Ext .A1 it can be seen that the trust created by Ext.A1 is a private religious trust and the properties are that of the Trust.  Therefore the direction of the court below that appropriate action is necessary under S.92 C.P.C. is illegal, unwarranted and hereby set aside.           (paras. 9)

 

AIR 1981 SC 798                                                                                   Referred to

 

 K.T. Sankaran, Preethy Karunakaran, R. Rajesh Kormath,

Anish S. Ambady & Bijimol Jose                                                        For Appellant

 

K.M.C. Kurup, P.V. Chandramohan & K.P. Dandapani                  For Respondent

 

 

JUDGMENT

 

K.S. Radhakrishnan, J.

 

These appeals arise out of the judgment and decree in O.S. No.3 of 1996 on the file of the District Court, Thrissur.  First defendant is the appellant in A.S. No.415 of 2000 and the second defendant is the appellant in A.S. No.419 of 2000.

 

2.  Suit was instituted by respondents 1 to 3 in these appeals under S.26 and O.VII, R.1 of the Code of Civil Procedure and S.49 of the Indian Trust Act seeking modification of some of the stipulations in Ext.A1 trust deed giving exclusive rights to the first defendant and to place fetters with regard to the rights of the first defendant to manage the affairs of the properties of the "Sakshal Chathan Seva Madom" and also for a direction to the effect that the first defendant shall function as trustee only along with the first plaintiff and also for other consequential reliefs.

 

3.  We may deal with the facts in detail in the latter part of the judgm ent, after dealing with some of the legal questions raised for consideration.  Admittedly the trust created under Ext.A1 document is a private religious trust.  Interlocutory application, I.A. No.1388 of 1996, was moved by the plaintiffs to appoint a receiver to manage the affairs of the trust pending suit.  The court below allowed the said prayer by order dated 7.9.1998 and issued certain directions.  Maintainability of the suit was also considered by the court at that time and found that the court has got jurisdiction to proceed with the matter.  That order was challenged before this Court in C.M.A. No.336 of 1998.  Though Division Bench of this Court approved the order directed the court below to consider the question of jurisdiction afresh at the final stage of the proceedings.  The court below examined the said question and took the view that the suit is not maintainable under S.49 of the Indian Trust Act.  However, the court proceeded to resolve the dispute holding that since District Court is the principal civil court of original jurisdiction in the district it has got jurisdiction to entertain the suit when no prejudice is caused to the parties and disposed of the suit.  The court below decreed the suit in part and a preliminary decree was passed by order dated 1.6.2000 with certain directions and those directions are under challenge in these appeals.

 

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4.  We may first examine whether suit is maintainable and if it is not maintainable, whether the c ourt below is justified in disposing of the suit as a principal civil court of original jurisdiction?  We have already indicated that it is the common case of the parties that the trust created under Ext.A1 is a private religious trust.  Counsel appearing for defendants 1 and 2, Sri. K.T. Sankaran, submitted that the suit is not maintainable under S.49 of the Indian Trust Act since private religious trust is excluded from the purview of the said Act.  Counsel further submitted that having found so by the court below, court was not justified in entertaining the suit rather than relegating the parties to approach the court of lowest jurisdiction as per S.15 of the Code of Civil Procedure.  Counsel appearing for respondents 1 to 3, plaintiffs in the suit, Sri. K.M.C. Kurup, submitted that the suit is perfectly maintainable under S.49 of the Indian Trust Act and what is excluded from the purview of the Act is private religious endowments and not private religious trust and consequently the suit is maintainable.  In any view of the matter, counsel submitted that, even if it is found that the suit is not maintainable, the District Court being the principal civil court of original jurisdiction in the district can entertain the suit when no prejudice has been caused to the parties.

 

5.  Indian Trust Act, 1882 was enacted to define and amend the law relating to private trusts and trustees.  Legislature has introduced saving clause in S.1 of the Act, which reads as follows:

 

"But n othing herein contained affects the rules of Mohammedan Law as to wakf, or the mutual relations of the members of an undivided family as determined by any customary or personal law, or applies to public or private religious, or charitable endowments, or to trusts to distribute prizes taken in war among the captors; and nothing in the second chapter of this Act applies to trusts created before the said day."

 

Contention was raised before the court below that the trust covered under Ext.A1 is a private religious trust and that what is excluded from the provisions of the Act is only private religious endowments and not private religious trust and hence suit is maintainable under S.49 of the Indian Trust Act.  Learned District Judge concluded as follows:

 

"An "endowment" is a wider concept than a trust.  I have been taken through the commentaries.  A mere dedication oral or written is sufficient to constitute and create  a religious or charitable endowment.  But to constitute a trust in the strict sense it has to answer the definition under S.3.  Endowments are the genus of which trust is a specie.  All trusts must necessarily be endowments as there must be an obligation annexed to ownership of property.  But all endowments need not be a trust and they would become trust only if the other requirements of S.3 are satisfied.  Suffice to say that "endowment" is a larger concept and trust in the strict sense falls within the sweep of the concept of "endowment".  The Indian Trust Act is applicable only to Trusts.  If that be so I am unable to understand why there should be a savings clause to exclude all charitable or religious "endowments" from the applicability of the statute.  If the Act is

 

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applicable only the specie of trusts in the strict sense what is the meaning of excluding the genus of endowments itself under the savings clause?"

 

The court below further concluded as follows:

 

"Considerable amount of time and efforts was devoted by this Court and counsel to evolve the principles to identify and exclude the category "private or public religious endowments" from the category of "private trusts".  Such efforts proved to be futile as it was found impossible to ascertain and formulate specific principles or rational criteria to identify such "private or public religious endowments" which can be culled out for exclusion from the category of private trusts.  The safer and the most prudent course to be followed is to conclude that all religious and charitable trusts whether private or public would not fall within the sweep of the Indian Trusts Act as they would certainly be "religious or charitable endowments".  I agree with the view that the Legislature by enacting such a savings clause was only giving expression to its anxiety to leave untouched all religious endowments - whether they be trusts strictly so called or not.  I uphold this objection raised by the first defendant and hold that the suit is not maintainable under S.49 of the Indian Trusts Act."

 

The object of the Indian Trusts Act is to define and amend the law relating to trusts and trustees.  Reason for exempting various types of trusts mentioned in the saving clause is the fundamental difference between juridical conceptions on which English Law relating to trusts is based and those which formed the foundation of Hindu and Mohammedan system.  Reference may be made to the Full Bench decision of the Madras High Court in Sankaranarayana Iyer v. Shri. Poovananthaswami Temple Koilpatti (AIR 1949 Madras 721).  Judicial Committee of the Privy Council in Vidya Varuthi Thirtha v. Balusami (AIR 1922 PC 123) and 32 Cal. 129 held that the trust in the sense in which it is mentioned is unknown to Hindu Law.

 

6.  The court below attempted to define the term "endowment" as a wider concept than a trust and took the view that endowment is the genus and trust is the specie.  Further it was also pointed out that endowment is a larger concept and trust in the strict sense falls within the sweep of the concept of "endowment".  We are of the view the reasoning is unsound.  Trust and endowment are not unanimous concepts, they are different nomenclatures.  Trust is not required for creating an endowment.  All that is necessary is that the religious and charitable purpose is to be clearly spelt out and that the property intended for endowment is to be set apart.

 

7.  The trust and endowment are different concepts altogether.  Trust is an obligation a nnexed to ownership.  The word "trust" is defined in Underhill's Law of Trust and Trustees to mean equitable obligation binding a person to deal with property for which he has control for the benefit of persons for whom he may himself be one.  In order to understand the meaning of the expression "private religious" or "charitable endowment" used in the saving clause of S.1 of the Indian Trust Act, we may examine

 

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the categories excluded from the provisions of Indian Trusts Act through the saving clause.  First category is Mohammedan Law as to wakf.  The word "trust" as such is not used when Legislature used the expression Mohammedan Law as to wakf.  "Wakf" means the permanent dedication by a person professing the Muslim faith of any property for any purpose recognised by the Mussalman Law as religious, pious or charitable.  Wakf is a trust for the purpose of S.92 of the Code of Civil Procedure.  Though the expression "Trust" as such is not used, while dealing with Mohammedan Law as to wakf the concept of trust is inbuilt therein.  Second category of cases excluded by the saving clause is "mutual relations of an undivided family as determined by customary or personal law.  The word "Trust" is not employed by the Legislature but the element of Trust is embedded in the relationship between the members of an undivided family.  Joint and undivided family is normal condition of Indian society.  Senior member of the joint undivided family is entitled to manage th e family properties including even charitable properties and is presumed to be the Manager.  Manager as the head of the joint family has control over the income and expenditure and the decision is that of a trustee.  Though the word "trust" or "trustee" as such is not used in the saving clause when the expression "mutual relations of undivided family as determined by customary or personal law" is used the element of Trust is inbuilt in that category of cases.  Next category of cases excluded from the Indian Trust Act is public or private religious or charitable endowments.  When the Legislature used the expression public or private religious charitable endowment, the word "trust" as such is not used.  But the words "religious" or "charitable" are to be noted.  The expression "charity" has not been defined in the Indian Trusts Act.  Charity in its legal sense comprises four principal divisions; trusts for relief or poverty; trusts for the advancement of education, trusts for the advancement of religion and trusts for other purposes beneficial to the community.  The element of trust is embedded in the word "charity" and various enactments like the Charitable Endowment Act, 1890, the Charitable and Religious Trust Act, 1920, the Religious Endowment Act, 1863, Travancore Cochin Literary, Scientific and Charitable Societies Registration Act etc.  Besides the above legislations, S.18 of the Transfer of Property Act says that restrictions in Ss.14, 16 and 17 thereof shall not apply in the case of transfer of property for the benefit of public in the advancement of religion.  We are of the view, the words "private religious endowment" used in the saving clause of the Indian Trusts Act have the imprint of a trust without which private religious endowment would not fall in the categories of cases excluded through the saving clause.

 

8.  The word "endowment" defined in the Legal Thesaurus to mean aid, allotment, allowance, protection, assistance, award, benefit, bestowment, contribution, presentation etc.  Endowment is also defined in Aiyar's Judicial Dictionary to mean any property kept or money invested with the intention of any particular service or particular charity connected therewith and includes temples and any offerings made to the idols therein. 

 

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"Endowment" is also defined in Black's Law Dictionary, Seventh edition, to mean "A gift of money or property to an institution (such as a University) for a specific purpose, esp. one in which the principal is kept intact indefinitely and only the interest income from that principal is used.  It is only a dedication of properties to a public or private religious trust.  The reasoning that "endowment" is the genus and "trust" is specie, as we have already said, is unsound.  The Apex Court in Pratapsinhji N. Desai v. Deputy Charity Commissioner (AIR 1987 SC 2064) held that endowment is dedication of property for purpose of religion or charity having both the subject and object certain and capable of assessment.  We therefore hold that the expression "private religious endowment" used in the saving clause has got the imprint of a trust and hence a private religious trust and the properties endowed are dedicated to Private Religious Trust.  Since the trust created by Ext.A1 is private religious trust it falls outside the purview of the Indian Trusts Act.

 

9.  The court below had directed a copy of the judgment be given to the Advocate General for consideration whether the trust constituted under Ext.A1 is a public religious trust or endowment or whether the legislative powers of the State ought to be invoked to control this or/and similar religious institutions and to explore the possibility of taking appropriate action under S.92 of the C.P.C.  We are of the view, the above mentioned directions are unnecessary and unwarranted.  We have found that the trust created under Ext.A1 is a private religious trust and therefore the application of S.92 C.P.C. does not arise.  The court below has indicated that it had found any incidents of private religious trust in Ext.A1.  In our view the said reasoning is faulty and would be clear on a reading of the recitals in Ext.A1.  Counsel on either side are also in agreement that the trust created under Ext.A1 is a private religious Trust.  We may extract relevant portion of the trust deed.

 

" tkhmaTw F¶ t£{X¯nse \nXy]qP IÀ½mZnIfpw B­phntij§fpw aäpw F¶pw apS¡p IqSmsX \St¯­Xnte¡p th­n Xmsg ]«nIhlIfpw taÂ]dª Nm¯³ tkhmaThp w t£{Xhpw \½psS hI Hcp kzImcy {SÌv kz¯mbn cq]oIcn¡p¶Xn\v \½Ä sFIyIWvtT\ k½Xn¨v XoÀ¨s¸Sp¯nbX\pkcn¨v  ]«nIhlIfpw AXnepw s]« taÂ]dª Nm¯³tkhmaThpw t£{Xhpw \½psS hI Hcp kzImcy {SÌmbn {]Jym]n¨psIm­v Cu {SÌm[mcw FgpXn h¨ncn¡p¶p. Cu {SÌnsâ t]cv km£m Nm¯³ tkhmaTw F¶mbncn¡pw ................taÂ]dª Nm¯³tkhmaT¯ntebpw t£{X¯ntebpw \nXy]qPIÀ½mZnIfpw B­phntij§fpw aäpw apS¡wIqSmsX \St¯­Xpw taÂ]dª sNehpIÄ Ign¨v BZmb¯n an¨ap­mbncp¶m BbXv taÂ]dª Nm¯³tkhmaT¯ntâbpw t£{X¯ntâbpw A`nhr²n¡pth­n sNehp sNt¿­XpamIp¶p. '' 

 

 

The religious purpose has been clearly spelt out in the document.  The Apex Court in Radhakanta Deb v. The Commissioner of Hindu Religious Endowments (AIR 1981 SC 798) held that there can be religious trust of a private character under the Hindu Law which

 

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is not possible in English Law.  It is well settled that under the Hindu Law it is not only permissible but also very common to have private endowments which though are meant for charitable purposes yet the dominant intention of the founder is to instal a family deity in the temple and worship the same in order to effectuate the spiritual benefit to the family of the founder and his descendants and to perpetuate the memory of the founder.  The Apex Court also held that the question as to whether religious endowment is of a private nature or of a public nature has to be decided with reference to the facts proved in each case and it is difficult to lay down any test or tests which may be of universal applica tion.  From the recitals of Ext.A1 it can be seen that the trust created by Ext.A1 is a private religious trust and the properties are that of the Trust.  Therefore the direction of the court below that appropriate action is necessary under S.92 C.P.C. is illegal, unwarranted and hereby set aside.

 

(Ed. Note : Paras 10 to 17 omitted being statement of facts)

 

18.  Before the court below counter claim was raised by the first defendant.  No discussion has been made on the counter claim by the court below.  Since we have already examined the rival contentions and also the oral and documentary evidence no further directions are necessary and no further relief is to be granted on the counter claim.  Consequently preliminary decree is passed on the following terms.

 

(a)  A scheme be framed for proper management and administration of the trust under Ext.A1 trust deed.  Third plaintiff and first defendant would function as joint trustees who would manage the affairs of the trust till a scheme is framed.  They would submit a draft scheme before the court below for approval within two months from today.

 

(b) The court below can make appropriate provisions in the Scheme for the joint trusteeship for the temple and the properties covered by Ext.A1.  To that extent the terms in Ext.A1 that first defendant alone would function as a trustee would stand modified.

 

(c) Trustees will furnish monthly reports on the first of every month before the court below.  They will open a cu rrent account in a nationalised Bank and will account for all the receipts.  Proper statement of accounts would also be maintained by them with regard to the receipts and expenditure.

 

(d) The statement of accounts submitted by the joint trustees would be examined by the court and ascertain whether the trust funds have been diverted by the first defendant for his personal gains and whether he had acquired any property with the trust funds and appropriate orders would be passed.

 

(e) Until a scheme is framed by the court below, trustees shall not part with any property.  So also first defendant shall not part with the properties covered by Exts.A5 to A12, A15 and A22. 

 

(f)   The receiver is declared functus officio from today and his request for discharge would be considered by the court below on his furnishing the statement of accounts.

 

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Counsel appearing for the Receiver submitted that he has not claimed any remuneration and does not propose to claim any remuneration.  Considering the entire facts and circumstances of the case, we feel it would be appropriate that a consolidated amount of Rs.20,000/- be granted for the services rendered by the Receiver.  The amount would be paid by the joint trustee from the account of the Trust.  The court below would pass final decree within six months from the date of receipt of a copy of this judgment.  The appeals and cross objection are disposed of accordingly.

 

 

 

 
 
 

 

 

 

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