1. Dispute over whether properties are subject to a public charitable trust or merely burdened by charitable obligations following a compromise decree substituting an original trust deed. (Para 1 , 2 , 4 , 9 )
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1957 Supreme(SC) 57
SUPREME COURT OF INDIA
10th May, 1957.
Menakuru Dasaratharami Reddi and another, Appellants
Versus
Duddukudru Subbu Rao and others, Respondents.
S.R. DAS, C.J.I., IMAM, GAJENDRAGADKAR AND SARKAR, JJ.
Civil Appeal No. 185 of 1952.
Advocates appeared
M/s. Alladi Kuppuswami and M. S. K. Sastri, Advocates, for Appellants; M/s. T. V. R. Tatachari and T. M. Sen, Advocates, for Respondent No. 4.
Advocates:
ALLADI KRISHNASVAMI IYER, M.S.K.Shastri, T.M.SEN, T.V.R.TATACHARI
ALLADI KRISHNASVAMI IYER, M.S.K.Shastri, T.M.SEN, T.V.R.TATACHARI
A public charitable trust requires complete dedication of property, extinguishing private title. If the property retains its private character, devolves to heirs, or allows private enjoyment of income, it constitutes a partial dedication, creating a charge rather than a trust.
Headnote:(A) Code of Civil Procedure, 1908 - Section 92 - Hindu Law - Dedication of property to charity - Complete vs. Partial dedication - If the dedication is complete, a trust in favour of public religious charity is created; if the dedication is partial, a trust is not created, but a charge in favour of the charity is attached to, and follows, the property which retains its original private and secular character. (Para 5)
(B) Construction of documents - Intention of the parties to be gathered from a fair and reasonable construction of the document considered as a whole - The use of the word "trust" or "trustee" is of some help but cannot be treated as decisive of the matter. (Para 5)
(C) Indicators of partial dedication - Where a document provides for the enjoyment of the property by the settlor and its devolution upon heirs subject to the performance of charities, and where the income is to be utilised for charities only "according to the necessity" rather than exclusively, it indicates that the private title remains unimpaired and the property is merely burdened with a charge. (Para 11)
Facts of the case:
A settlor had previously created a public charitable trust. Subsequently, a compromise decree in a legal dispute divided the properties, allotting certain properties to the settlor. The decree provided that the settlor would be the sole trustee for his lifetime, could enjoy the property without rights to gift or sale, and upon his death, the property would pass to his grandson subject to the performance of specified charities. The plaintiffs sought the framing of a scheme for the administration of a public trust based on this compromise decree.
Findings of Court:
The compromise decree did not create a public charitable trust. The properties continued to be the private properties of the settlor and subsequently devolved upon his grandson, remaining subject only to a charge for the performance of the specified charities.
Issues: Whether the properties allotted under a compromise decree were the subject-matter of a public charitable trust or were private properties burdened with a charge in favour of specified charities.
Ratio Decidendi: The court held that the provision for the property to "pass on" to the grandson and the right of the settlor to "enjoy" the property were inconsistent with the complete extinction of private title necessary for a public trust. Additionally, the requirement to use income for charities "according to the necessity" contrasted with the requirement of exclusive use for charity, confirming that the dedication was partial and created only a charge. (Para 11)
Result: Appeal allowed.
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2. Plaintiffs claim the properties are trust properties; defendants contend the compromise decree created a private title burdened only by a charge for charities. (Para 1 , 3 )
3. The court analyzed the compromise decree, finding that the right to enjoy property and its devolution to a grandson indicate private ownership subject to a charge. (Para 5 , 11 )
4. Complete dedication creates a trust, whereas partial dedication creates a charge; intention is determined by whether private title is extinguished or retained. (Para 5 )
5. Appeal allowed and suit dismissed; properties declared subject to a charge in favor of charities rather than being trust properties. (Para 13 )
6. What is the legal distinction between complete and partial dedication of property to charity?
Complete dedication extinguishes the private secular character of the property and creates a public charitable trust. Partial dedication does not create a trust but attaches a charge to the property, which retains its original private and secular character. (Para 5 )
7. How is the intention of a settlor determined when evaluating the dedication of property to charity?
Intention is gathered from a fair and reasonable construction of the document as a whole. The use of words like trust or trustee is helpful but not decisive; the court must determine if the private title was intended to be completely extinguished. (Para 5 )
8. Does the designation of a person as a sole trustee necessarily imply the creation of a public trust?
No. If the designated trustee is permitted to enjoy the property and the title is intended to devolve to a private heir, such provisions are inconsistent with complete dedication and suggest the property is merely burdened with a charge. (Para 11 )
9. Can a subsequent compromise decree effectively modify or efface an original trust?
Yes, provided the compromise is not fraudulent or collusive and is binding on the trust. If the plaintiffs acquiesce to the finding that the compromise binds the trust, they cannot later claim the original trust remains unaffected. (Para 4 , 12 )
Judgement
GAJENDRAGADKAR J. - This is an appeal by defendants 47 and 48 and the principal question which is raised for our decision in the appeal is whether the properties in suit are the subject-matter of public charitable trust or are merely burdened or charged with the obligation in favour of the specified charities. The suit from which this appeal arises was filed with the sanction of the Collector under S. 92 of the Civil P.C. and the plaintiffs alleged that the properties in suit were the subject- matter of a public charitable trust and that a scheme may be framed for the administration of the said trust.
The present appellants who are in possession of a substantial portion of the properties in suit as alienees have resisted this claim. They conceded that the properties in their hands were subject to the charge in favour of the charities but they denied that the said properties were the subject matter of a charitable trust. Several other pleas were made by the parties but the principal question in dispute between them was in regard to the character of the properties in suit. Both the learned trial Judge and the High Court of Madras have upheld the plaintiffs plea.
It has been declared that the properties in question are trust properties and a direction has been issued that a scheme of management should be frame in respect of the trust with a view to carry out the charitable intentions of the settlor. It is this decree which is challenged before us by Mr. Alladi Kuppuswami on behalf of defendants 47 and 48 and his argument is that the view taken by the Court below about the character of the properties is based upon a misconstruction of the decree in question.
2. In the plaint, it was alleged that one Purushottam had been earning and purchasing large properties and endowing and dedicating them for public charitable purpose since 1896. In about 1919 Purushottam who had then become old wanted to place the charities which he had been till then personally administering on a permanent and enduring basis. That is why he executed and registered a deed of trust on 17th March 1919. By this document, a trust in respect of his properties was created and three trustee were appointed to administer the trust. Purushottam himself was one of these trustees and two advocates, Mr. Reballa Subbarayudu and Mr. C. Viswanadha Rao, were his co-trustees.
It would appear that Purushottam s son Ramakrishnayya did not approve of this arrangement and he began to obstruct the administration of the trust. As a result of this obstructive attitude adopted by Ramakrishnayya, two suits had to be filed by the trustees against Ramakrishnayya and his associates who interfered with the management of the trust. These two suits were O. S. No. 599 of 1919 and O. S. No. 68 of 1920 on the files of the District Munsiff s Court, Kavali, and the District Court, Nellore, respectively.
They were subsequently transferred to the Sub- Court, Nellore, and numbered as O. S. No. 39 of 1921 and O. S. No. 67 of 1921 in the said Court. Pending the hearing of these suits the two advocates trustees withdrew from the suits leaving the conduct of the suits solely in charge of Purushottam. Ultimately the two suits ended in a compromise.
According to the plaint in the present suit out of which this appeal has arisen, this compromise decree was fraudulent and collusive the object of the parties being to efface the character of the trust properties completely and to create individual rights in Purushottam, his son Ramakrishnayya and the other defendants who claimed to be alienees from Ramakrishnayya.
The plaint even alleged that, in persuading the Court to pass the said compromise decree, the parties effectively played fraud on the Court and the trust. Since the compromise was thus null and void, it cannot affect the original trust created by Purushottam in 1919. That is why the plaint alleged that the properties mentioned in Sch. A which were covered by the original deed of trust of 191
