ORDER SHEET

IN THE HIGH COURT OF SINDH, KARACHI

        J.M. No.24 of 2012

   Date                     Order with signature of Judge

 

For hearing of main application

 

 

Kandawalla Trust & another……………………Petitioners

 

 

 

Date of hearing :                  05.07.2012 & 02.11.2012

 

 

Mr.Mushtaque A. Memon, Advocate for the Petitioners.

 

                                -------

 

MUHAMMAD ALI MAZHAR,J:- The petitioners have brought this Judicial Miscellaneous Application under Sections 77 and 78 of the Trusts Act for the extinction of Seth H.M.Khajurina Technical Trust Fund and amalgamation of its funds and assets into Kandawalla Trust.

 

2. The brief facts of the case are that the petitioner No.1 (Kandawalla Trust) was settled through Deed of Settlement dated 9th December, 1964 executed between Godrej Merwanji Kandawalla  of the one part and Trustee (i) Godrej Merwanji (ii) Housing Merwanji Kandawalla and (iii) Eddie Minocher N.E. Dinshaw of the other part.

 

3. That the petitioner No.1 (Kandawalla Trust) was established, created and constituted for the relief of poverty, sickness and to promote the welfare of poor and relief of distress, to assist education and/or scientific institutions as well as individual students and/or scientists by providing them with scholarships, loans contributions or other   means; to provide poor and needy persons with all necessary amenities; to maintain shelters and places for refuge of poor and needy persons; to establish and maintain hospitals, clinics, orphanage, libraries, etc.; and, generally to apply trust funds for relief and benefit of mankind.

 

4. The petitioner No.2 was established, created and constituted through an indenture dated 23rd December, 1937 between (i) Bai Jerbai Nadirshah Naoroji, (ii) Dinshaw Hormusji Daruwalla and (iii) Trustees of the second part and (i) Jamshed Nusserwanji, (ii) Sheriar Dadabhoy Contractor, (iii) Shiavax Manekji Talati,  (iv) Dinshaw Hormusji Daruwalla, (v) Merwanji Edulji Kandwalla and (vi) Hormusji Manekji Khajurina of the third part.

 

5. The petitioner No.2 (Seth H.M. Khajurina Technical Trust Fund) was created and established, inter alia, to promote the culture of technical education either by starting technical institution at Karachi or to promote in young Parsi Zoroastrian men love for technical education and to apply its income and funds towards promotion of Parsi Zoroastrian institution imparting technical education to young men of Parsi Zoroastrian community and to utilize the income and funds of the trust for the purpose of scholarships to be given to deserving and energetic young Parsi Zoroastrian men. Both the trusts were set-up, essentially, by members of the same family and have certain common trustees.

 

 

6. The present trustees of petitioner No.1 and 2 are as follows:-

 

 

I.    Petitioner No.1

 

 

a)           Mrs.Franey N. Irani.

 

        b)     Mr.Darius B.Kandawalla.

 

        c)     Mr.Kaikobad J. Dinshaw.

 

        d)     Ms.Beroze G. Kandawalla.

 

        e)     Mrs.Dhumai P.Dalal.

 

        f)      Mr.Feroze J. Cawasji.

 

 

II. Petitioner No.2.

 

a)       Mrs.Dhumai P. Dalal.

 

b)      Mrs.Mani C. Cowasjee.

 

c)       Mrs.Franey N.Irani.

 

d)      Mrs.Vera N. Dastur.

 

e)       Mrs.Yasmin F. Mehta.

 

f)        Mr.Adi Jehangir Cawasji.

 

g)       Mr.Kaikobad J. Dinshaw.

 

7. The learned counsel for the petitioners argued that both the petitioners are performing their duties as set-out in the deeds of trust. It was further averred that on account of migration of some Zoroastrian families from Pakistan, since February, 2005 no Parsi Zoroastrian Student has approached the petitioner No.2 for availing loan or scholarship to pursue higher education. The funds of petitioner No.2 cannot be used or applied for any other purpose thus the fulfillment of the purpose for which petitioner No.2 trust was setup cannot be fulfilled. Hence the trustees of petitioner No.2 with one voice resolved to utilize the funds for allied matters by widening the class of beneficiaries. It is further contended that one of the objects of the petitioner No.1 is to assist education and/or scientific institutions as well as individual student by providing them with scholarships, loans, etc. The trustees of petitioner No.1 have also unanimously resolved to take over the assets of petitioner No.2. The petitioner No.2,  has no outstanding liability. The amalgamation of petitioner No.2 with petitioner No.1 will promote welfare of poor and relief of distress besides assisting the needy students for pursuing higher and technical studies and the object of petitioner No.2 shall better be fulfilled through its merger/amalgamation with petitioner No.1 instead of its revocation, altogether. The beneficiaries of petitioner No.2 shall not be deprived from any benefit nor shall adversely be affected by its merger/amalgamation.

 

8. The learned counsel relied on the case of “State of Uttar Pradesh v. Bansi Dhar & others” reported   in AIR 1974 Supreme Court 1084, in which Section 83 of “The Trusts Act” was under discussion. It was held that the said Act relates only to private trusts, public charitable trusts having been expressly excluded from its ambit. But while these provisions proprio  vigore do not apply, certainly there is a common area of legal principles which covers all trusts, private  and public, and merely because they find a place in the Trusts Act, they cannot become ‘untouchable’ where public trusts are involved. “Care must certainly be exercised not to import by analogy what is not germane to the general law of trusts, but we need have no inhibitions in administering the law by invoking the universal rules of equity and good conscience upheld by the English Judges, though also sanctified by the statute relating to private trusts. The Courts below have drawn inspiration from Section 83 of the Trusts Act and no fault with them on that score because the provision merely reflects a rule of good conscience and of general application”. He then referred to case of  “Kanagavelu Nadar  & others v. Sooravali Subbier & others” reported in  205 IC Madras High Court 407, in which it was held whether the transaction is void or voidable but whether a trust is entitled  not only to recover the trust property which has been wrongfully conveyed but also retain any benefit it had from the transaction. Why the principle in Section 62 of the Trusts Act should not be held applicable to the case of public religious trusts. The court held that the principle is an equitable one which would apply to the case of a trust whether public or private. The learned counsel also referred to the case of Phulchand v. Hukumchand, reported in  AIR 1960 Bombay 438, in this case the court held that by section 1  the provisions of the Indian Trusts Act are not made applicable to public trusts. Even so, the provisions of the Trusts Act are founded on general principles, and Rules of English Law. In matters which are not provided for, the Courts in India apply the principles and Rules, of English Law on the subject unless they are inconsistent with the Rules and practice of this Court. (See Shivrandas v. B. V. Nerurkar, 39 Bom LR 633 at p.644: (AIR 937 Bom 374 at p.380), Rambabu v. Committee of Rameshwar, 1 Bom LR 667 and Mathiri Menon v. Gopalan Nair, 39 Mad 597: (AIR 1916 Mad 692).

 

9. Heard the arguments of the learned counsel. The record reveals that on 30.05.2012, the learned Judge of this court observed that the aims and objects of the petitioner No.1 are broadly stated and applied to any person who comes within the class of beneficiary as therein specified. However, petitioner No.2 is more limited trust and prima facie appears to be limited to Parsi institution. The object of the later trust are given on typed page-5 of the copy of the trust deed, but there appears also through the proviso, which prima facie seems to have the effect of preventing the amalgamation of the trust with any other trust. Learned Judge also raised query to satisfy that how public charitable trust can be extinguished/amalgamated and whether in particular section 92 of CPC would be applicable in such circumstances, whether keeping in mind the proviso, the petitioner No.2 can at all be extinguished and or amalgamated with petitioner No.1.

 

For ready reference the aforesaid proviso is reproduced as under:-

 

“Provided always that the Trustees should not amalgamate the institution founded with the money of the purchaser and with his name on it with any larger   institution, that may hereafter be founded by any large donor, but to allow such institution first associated with the name of the purchaser and work in its own humble ways to serve the objects for which it has been founded provided always and it is hereby declared that the management and control of the property and affairs of Trust aforesaid shall be vested in the Trustees with full power and authority at their discretion at any time to appoint or make provision for the appointment of any persons (including all or any of the Trustees) as Committee-men or otherwise for the purpose of the administration of the Trust aforesaid in such manner and subject to such rules and regulations (including regulations admitting to the benefit of the Trust, any person or persons on payment) as the Trustees may prescribe.

 

 

10. For ready reference, the Section 77 and 78 of the Trusts Act 1882 in which this petition has been filed are reproduced as under:-

 

 

77.   Trust how extinguished :- A trust is extinguished--

 

(a)       when its purpose is completely fulfilled; or

(b)      when its purpose becomes unlawful; or

(c)       when the fulfillment of its purpose becomes impossible by destruction of the trust-property or otherwise; or

 

(d)      when the trust, being revocable, is expressly revoked.

 

 

78.   Revocation of trust:- A trust created by will may be revoked at the pleasure of the testator.

 

 

        A trust otherwise created can be revoked only:-

 

(a)       where all the beneficiaries are competent to contract by their consent;

 

(b)      where the trust has been declared by a non-testamentary instrument or by word of mouth in exercise of a power of revocation expressly reserved to the author of the trust; or

 

(c)       where the trust is for the payment of the debts of the author of the trust, and has not been communicated to the creditors at the pleasure of the author of the trust.

 

 

11. At this juncture it is also necessary to look into and reproduce Section 92 of C.P.C:

 

Section 92. Public Charities (1) In the case of any alleged breach of any express or constructive trust created for public purposes of a charitable or religious nature, or where the direction of the court is deemed necessary for the administration of any such trust, the Advocate General, or two more persons having an interest in the trust and having obtained the consent in writing of the Advocate General, may institute a suit, whether contentious or not, in the principal Civil Court of original jurisdiction or in any other Court empowered in that behalf by the (Provincial Government) within the local limits of whose jurisdiction the whole or any part of the subject matter of the trust is situate, to obtain a decree :-

 

(a)       removing any trustee;

(b)      appointing a new trustee;

(c)       vesting any property in a trustee;

(d)      directing accounts and inquiries;

(e)       declaring what proportion of the trust-property or of the interest therein shall be allocated to any particular object of the trust;

 

(f)        authorizing the whole or any part of the trust-property to be let, sold, mortgaged or exchanged;

 

(g)       settling a scheme; or

 

(h)      granting such further or other reliefs as the nature of the case may require.

 

 

(2)    Save as provided by the Religious Endowments Act, 1863, no suit claiming any of the reliefs specified in sub-section(1) shall be instituted in respect of any such trust as is therein referred to except in conformity with the provisions of that sub-section.

 

 

12. Though it is clear from the preamble of the Trusts Act 1882 that it applies to private trusts and trustees. A preamble is the key to open the minds of the framers of the statutes. Though it is not an enacting part, it may have to express the scope, object and purpose of enactment. The policy and purpose of a given measure may be deduced from the title and preamble thereof. So it is clear that the Trusts Act does not apply to the public trusts, however the case law cited by the learned counsel for the petitioners from the Courts of Indian jurisdiction deduced that the provision of Section 83 of Trusts Act Proprio Vigore do not apply. There is a common area of legal principles which cover all trusts private and public and merely because they find a place in the Trusts Act, they cannot become untouchable where public trusts are involved. The dictionary meaning of “Proprio Vigore” is “by its own force, by its intrinsic meaning”. (Black’s Law Dictionary 6th Edition). 

 

13. There is no doubt that in the aforesaid case the provisions of Section 83 of the Trusts Act was made applicable even in the case of public trusts but at the same time one cannot ignore or overlook Section 92 of CPC which gives full powers to the Court for the proper administration of the public trusts however in order to initiate proceedings under section 92 CPC certain conditions are to be fulfilled which include that there must exist a trust for public purpose, the plaint must either alleged that there is a breach of trust or direction of the Court are necessary for the administration of trusts, the suit must be representative one on behalf of the public and not for the personal rights of the plaintiff and the relief claimed must be one of the reliefs enumerated in section 92 CPC. Section 92 CPC is designed for protection and administration of trusts created for public purpose and required consent of Advocate General before filing suit to obtain reliefs mentioned therein in which public at large would be interested. The learned counsel pointed out the consent of Advocate General Sindh communicated to the petitioners counsel on 05.04.2012. The letter conveys that permission was applied for the merger of petitioners and the learned Advocate General Sindh granted consent in the following words:-

      

        “We have examined the case and observed that two trusts are for public purpose and charitable in nature where the direction of the Court is necessary for merger and Administration of Trust. As per Order/Judgment reported at 2003 CLC Kar. 1156 (H,S & X), where number of judgments of Superior Courts including 1989 SCMR 1052, were relied upon, it has been held that “ there is no cavil with the proposition that the proceedings involving the Trust or its property, the permission of Advocate General in terms of Section 92 CPC is mandatory.”

        

        In view of the above legal position consent / permission under Clause (h) Sub Section (1) of Section 92 is granted as prayed.

                                                       

                                                               Sd/-

                                            Advocate General Sindh”    

 

14. This Court vide order dated 27.4.2012, directed that since both petitioners are public charitable trusts let notice be published in press for inviting objections if any. In view of the Court order the public notice was published in the newspaper on 17.5.2012 and since no objections were received the matter was placed in Court on 30.5.2012 for hearing of petition.  For all intents and purposes the petitioners have complied with the requirement of NOC from Advocate General Sindh and in the larger public interest a notice was also published in the newspaper for inviting objections but no objections have been raised or lodged against this petition for opposing the extinction and or amalgamation of funds of the Petitioner No.2 in Petitioner No.1.

 

15. Under section 92 CPC, different eventualities and conditions are mentioned which include removal of trustee, appointment of new trustee, vesting property in a trustee, directing accounts and inquiries, declaration as to what proportion of the trust property shall be allocated to any particular object of the trust, authorizing the whole or any part of the trust property to be let, sold, mortgaged or exchanged, settling a scheme or granting such further or other reliefs as the nature of the case. Though the relief claimed by the petitioners does not fall within the scope and ambit of Clause (a) to (g) of Section 92 CPC. However, it may be considered in clause (h) which relates to the powers of the Court to grant such further or other reliefs as the nature of the case may require. So for all intent and purpose the scope of clause (h) is left with a broad scope and spectrum to deal with the cases for the relief which are otherwise not provided or possible in clause (a) to (g) of Section 92 CPC.

 

16. Zoroastrianism is an ancient pre-Islamic religion of Iran.  The descendants of Zoroastrian Iranian (Persian) immigrants are known as Parsis, or Parsees. The religion is called Parsiism. Founded by the Iranian prophet and reformer Zoroaster in the 6th century bc, the religion contains both monotheistic and dualistic features. http://www.britannica.com/EBchecked/topic/658081/Zoroastrianism

The main cause of concern of the petitioners is that the Petitioner No.2 was established to promote young Parsi Zoroastrian  men love for technical education and to apply its income and funds towards promotion of Parsi Zoroastrian institutions imparting technical education to young men of said community and to utilize the income and funds of the trust for the purpose of scholarship. The case of the petitioner is that since February 25 no Parsi Zoroastrian student approached the Petitioner No.2 for availing any benefit or scholarship on account of migration of some Zoroastrian families from Pakistan. The reason of making this petition is that the will of the executor who set up the trust cannot be fulfilled in its true perspective so in the peculiar circumstances of the case the trustees of Petitioner No.2 resolved to utilize the funds for similar objects which is not possible unless they are allowed to enlarge the scope and class of beneficiaries. It is further stated that if the amalgamation is allowed to both the petitioners, Petitioner No.1 shall promote welfare of poor and relief for distress persons and will also assist needy students for technical studies and in this way the object of Petitioner No.2 shall also be fulfilled in a proper way.

 

17. As I observed earlier the scope, nature of relief  that can be granted by the Court in clause (h) of Section 92 CPC is wide enough which can handle the situation and to mould the relief according to facts and circumstances of each case. Since the objects of Petitioner No.2 cannot be fulfilled in view of the above circumstances therefore, the doctrine of Cy press will also apply. The doctrine of Cy press was discussed in Ajaib Singh’s case reported in AIR 1954 Punjab 150, in which it was held that doctrine of Cy press has been evolved as an auxiliary to main purpose of the trust and the said doctrine ipso-facto is no excuse to defeat the original purpose of the trust.  The doctrine Cy press is applicable where although the original object to the charitable trust cannot be achieved but an object as nearly as possible similar to the original objective can be achieved. But where neither the original purpose nor a purpose similar thereto may be achieved, the doctrine of Cy press will not apply to save the trust. In Halsbury’s Law of India (Butterworth, New Delhi) “doctrine of Cy press has been explained as follows:-

 

“Cypres means following as nearly as possible the intention of donor. When a particular mode of charity indicated by donor is not capable of being carried into effect but the donor has expressed a general intention of charity, the Court does not allow the trust to fail but execute it ‘Cypres’  that is in some way as nearly as possible to that which the testator specified.

 

Failure of object given by the testator essential.-

 

For the application of Cypres, the failure of the particular object specified by the testator is an essential pre-condition. Alternatively this doctrine can be applied when surplus is left after satisfying the purpose specified by donor.

 

The prime rule to be observed in the application of the Cypres doctrine is that donor intention must be observed as far as possible”

 

 

Reference can be made to the case of Hussain A. Haroon and others v. Mrs. Laila Sarfraz and others reported in 2003 CLC 771 and case of Hameed A. Haroon v. Yousuf A. Haroon and 10 others reported in 2009 MLD 1259.

 

18. Halsbury’s Laws of England, (4th Edition, Vol.5 page 430, paragraph 696) explains cy press in the words  that where a clear charitable intention is expressed, it will not be permitted to fail because, the mode if specified cannot be executed but the law still substitute another mode Cy press as near as possible to the mode specified by the donor.  An application cy-pres results from the exercise of the court’s ordinary jurisdiction to administer a charitable trust of which the particular mode of application has not been defined by the donor. Where he has in fact prescribed a particular mode of application and that mode is incapable of being performed, but he had a charitable intention which transcended the particular mode of application prescribed, the court, in the exercise of this jurisdiction, can carry out the charitable intention as though the particular direction had not been expressed at all. In the case of Dr. Man Singh reported in 1974 Delhi 228, it was held that the judicial doctrine of Cy press adhered to by Courts whereby if a person had expressed a general intention with regard to his property and also directed a particular mode in which the general intention had to be carried out. Particular mode so set out is or has become either contrary to law or has otherwise not capable of being carried out either of lapse of time or change of circumstances, they in adequate cases try to give effect to that personals general intention as near as possible even by deviating from the original intention written by the settler and applying it beneficiary to similar purposes by or through an mode different from that enacted.

 

19. The restriction or the condition if any, provided in the trust deed only creates bar to some extent that the petitioner No.2 should not be amalgamated with any larger institution that may hereafter be founded by any larger donor, which is not applicable for the reason that in both the trusts mostly the trustees are common and they are not going to amalgamate the petitioner No.2 with any larger institution. It is further provided in the same proviso that the management and control of the property and affairs of the trust shall be vested in the trustees with full power and authority at their discretion at any time to appoint or make provision for the appointment of any person as committee men or otherwise, for the purpose of administration of the trust. Many unlimited and unrestricted powers have been conferred upon the trustees including to sell the trust properties.

 

20.   For the foregoing reasons the petitioner No.2 is allowed to be amalgamated with all its funds and assets with petitioner No.1. However, it is clarified that whenever any Parsi Zoroastrian students will approach the petitioner No.1 for any financial assistance and support for education, the petitioner No.1 will consider the request and also provide necessary help and support to carry out the original purpose and object of the petitioner No.2.

 

 

Karachi:-                                                         Judge

Dated. 7.12.2012