LAW OF TRUSTS – V

CHARITABLE TRUSTS

S.Selvakunapalan LL.B., LL.M.

Attorney-at Law, Deputy Legal Draftsman
Visiting Lecturer – Sri Lanka Law College.

1
 Certainty
Since section 6 is expressly subject to 107, it may
be argued that 107 gives the court power to
ignore the requirement of certainty of
beneficiary in relation to the charitable trusts. It
is also relevant that most of the decisions have
ignored the requirement in section 6 that
beneficiaries must be indicated with certainty in
a valid charitable trusts.

2
Where there is a specific intention to create a
charitable trusts defined by section 99,
uncertainty as to the manner in which the trust
is to be administered may be cured either, by
reference to sections 99(2) and 100 or 101(1)(e)
or 102(1)(a) or by a discretion given to the
trustee by the settlor.

It is an important that the definition of charity

and the requirement of public benefit are
regarded as two distinct requirements.
3
It has been stated that purpose of the trusts will
fail, if the purpose is not stated with sufficient
certainty. This rule does not apply to charities. It
does not matter that the charitable purpose is
only vaguely stated, or that no purpose is stated
at all. Thus, a gift simply ‘for charitable purposes’
or, as in Moggridge v Thackwell (1792) 1 Ves Jr
464, a gift to A ‘to dispose of to such charities as
he shall think fit’ will be valid.

4
The trusts in section 99 may be explained by
reference to section 3(a). Because of the words
“unless the context or the subject matter
otherwise implies,” the implication in 3(a) that a
beneficiary must be a person can be modified by
section 99(1) (a) to (d).

5
To constitute the valid trust, it is necessary that
its objects or purposes are certain and that the
directions to the trustees are given in imperative
terms. If the testator leaves a discretion to the
trustee to apply a fund to a charitable or non-
charitable purpose at his option, no valid
charitable trust can be created.

6
It however, does not mean that the trustee
cannot be given any discretion under a charitable
trust. In Manorama vs. Kalicharan (1904) it has
been held that gift for a purpose which can be
regarded as charitable or to charity generally,
would be a valid trust even though a wide
discretion is given to the trustee.
In Gangabai Charities vs. CIT (1992) 197 ITR 27,
the object of the trust were described in the
Trust Deed as “religious, charitable, cultural and
social” purposes. There was no …

7
mention in the Deed as to how the trust income
was to be utilized. There was no mandate that
the income was to be spent on religious or
charitable purposes. In these circumstances, it
was held that it was not possible to cull out in
clear terms any specific charitable or religious
objects from the trust deed to conclude that the
trust was set up wholly for religious or charitable
purposes.

8
 Dedication to Trust
The mere declaration of a trust or execution of a
deed is not enough to constitute a valid
endowment; it is necessary for the validity of a
deed that the executor should divest himself of
the property. Whether he had done or not, is to
be determined by his subsequent acts or
conduct.- Dharma Raja vs. Raja Ammal (1978) 1
Mad. LT 492.

9
In order that a dedication must be real, the
following are essential requirements:-
(a) Subject matter of the dedication must be specific
and well defined;
(b) The words employed for the dedicating the
property for the endowment must be
unambiguous and certain;
(c) The object of the charity should be certain;
(d) The dedication should be made by an
unambiguous expression of intention to divest.

10
• Once a valid trust has been created, the
subsequent conduct of the founder contrary
to the dedication cannot invalidate or affect
the trust.

• If a trust had been validly created, any

deviation by founder of the trust would
amount only to a breach of trust.- Thanthi
Trust vs. ITO (1973) 91 ITR 261 (Mad.)

11
 Perpetuity
Charities are not bound by this rule and may
therefore last forever. There are many charities
of considerable age which continue to operate.
Thus, where a gift is made of the income from a
particular fund to a charity in perpetuity, it will
never be possible to release the capital from the
fund: Re Levy [1960] Ch 346

12
 Rule against perpetuities
Section 110(5) of the Trusts Ordinance-

The restrictions of this section shall not apply to

charitable trusts as defined by section 99.

13
 De facto trusts
In dealing with any property alleged to be
subject to a charitable trust, the court shall not
be debarred from exercising any of its powers by
the absence of evidence of the formal
constitution of the trust, if it shall be of opinion
from all the circumstances of the case that a
trust in fact exists, or ought to be deemed to
exist- section 107

14
Charitable trusts where these formalities had
not been observed were nonetheless held to be
valid because of section 107.

Section 107 appears to be respective and has

been assumed without argument to apply to
trusts arising before 1918.

15
Charities

16
The expression "charitable trust" includes any trust for the
benefit of the public or any section of the public within or
without Sri Lanka of any of the following categories:-

(a) for the relief of poverty; or

(b) for the advancement of education or knowledge ; or
(c) for the advancement of religion or the
maintenance of religious rites and practices; or
(d) for any other purposes beneficial or of interest to
mankind not falling within the preceding categories.
(Sec 99 of the Trusts Ordinance)

17
Section 34 of the Companies Act-

Where the Registrar is satisfied that an

association about to be formed as a company
limited by guarantee is to be formed for
promoting commerce, art, science, religion,
charity, sport, or any other useful object, and
intends to apply its profits, if any, or other
income in promoting its objects, and to prohibit
the payment of any dividend to its members —

18
(a) the Registrar may by licence direct that the
association be registered as a company limited
by guarantee, without the addition of the word
“Limited” to its name; and

(b) the association may be registered accordingly

and shall on registration enjoy all the
privileges and subject to the provisions of this
section, be subject to all the obligations of a
limited company.
Section 57 of the Inland Revenue Act 2017-

• A trust shall be liable to tax separately from its

beneficiaries.
• A beneficiary of a trust shall be liable to tax on
the income of the trust to which that
beneficiary is entitled for as individual.
• Distributions of a resident trust shall be
exempt in the hands of the trust’s
beneficiaries.
20
 Where any charitable institution provides
institutionalized care for the sick or the needy
and where the Commissioner-General is
satisfied that the cost of provision of such care
is borne by such charitable institution, the
Commissioner-General may, reduce the tax
payable. –section 68(3)

21
Section 193 of IRA 2017
“charitable purposes” means a purpose for the
benefit of the public or any section of the
public in or outside Sri Lanka, including the
following categories:
(a) the relief of poverty;
(b) the advancement of education or knowledge
other than by any institution established for
business purposes or by any institution
established under the Companies Act;

22
(c) activities for the protection of the
environment or eco-friendly activities;
(d) the advancement of religion or the
maintenance of religious rites and practices or
the administration of a place of public
worship;
(e) any other purpose beneficial to the
community, not falling within any of the above
categories;

23
 Charities Act 2011 (UK)
[14th November 2011]

For the purposes of the law of England and

Wales, a charitable purpose is a purpose which—

(a) falls within section 3(1), and

(b) is for the public benefit (see section 4).

24
 A purpose falls within this subsection if it falls
within any of the following descriptions of purposes
—

(a) the prevention or relief of poverty;

(b) the advancement of education;
(c) the advancement of religion;
(d) the advancement of health or the saving of
lives;

25
(e) the advancement of citizenship or community
development;
(f) the advancement of the arts, culture, heritage
or science;
(g) the advancement of amateur sport;
(h) the advancement of human rights, conflict
resolution or reconciliation or the promotion of
religious or racial harmony or equality and
diversity;
(i) the advancement of environmental protection
or improvement;
26
(j) the relief of those in need because of youth,
age, ill-health, disability, financial hardship or
other disadvantage;
(k) the advancement of animal welfare;
(l) the promotion of the efficiency of the armed
forces of the Crown or of the efficiency of the
police, fire and rescue services or ambulance
services;
(m) any other purposes that are not within
paragraphs (a) to (l) but are recognized as
charitable purposes.
27
(a) in paragraph (c), “religion” includes—

(i) a religion which involves belief in more

than one god, and
(ii) a religion which does not involve belief
in a god,

28
This is very obviously an adaptation of the test
laid down by Lord Macnaghten in Income Tax
Commissioner vs. Pemsel that,
“Charity in its legal sense comprises four
principal divisions: (1) trusts for the relief of
poverty; (2) trusts for the advancement of
education; (3) trusts for the advancement of
religion; and (4) trusts for other purposes
beneficial to the community, not falling under
any of the preceding heads.”

29
It has been pointed out in relation to the word
“include” in section 99 that the effect of this
word in a statutory definition is that prima facie
the enumeration following the word is not
exhaustive.

30
The Privy Council, in A-G of the Cayman Islands v
Wahr-Hansen [2000] 3 All ER 642, has recently held
that gifts to ‘organisations or institutions operating
for the public good’ and acting ‘for the good or for
the benefit of mankind . . .’ were not exclusively
charitable purposes; the words used were wider
than charity. It is also a general rule that a
limitation to, for example, ‘charitable and
deserving’ is effective whereas a gift to ‘charitable
or public’ is not, for in the first case the money
must go to charitable purposes whereas in the
second it can go to public purposes which are not
necessarily charitable.
31
BENEFIT OF THE PUBLIC OR ANY
SECTION OF THE PUBLIC

32
A charitable or religious endowment, in order to
be a charity in the legal sense, will have to be for
the purpose of the public nature, in other words
for the benefit of the community of some part of
it.- Ram Sarup Dasi vs. Sahi (AIR 1959 SC 951).

When the beneficiaries of a trust constitute

general public or a section of public, as
distinguished from private individuals, and when
the trust is meant to perform a public charity, it is
a public charitable.
33
Section 4 of the Charities Act 2011 UK

The “public benefit” test

This section applies in connection with the

requirement in section 2(1)(b) that a purpose
falling within section 3(1) must be for the public
benefit if it is to be a charitable purpose.

34
In Commissioner of Income Tax vs. The Trustees
of Abdul Caffoor Trust H.N.G Fernando J
thought that section 99,
“…. Does not require a trust to be solely for the
public benefit, so that a trust which is essentially
and substantially for the public benefit may
reasonably be considered to fall within the
definition.”
H.N.G Fernando J. essayed in some detail to define
the words “the public or section thereof.” The test of
the public benefit laid down by the House of Lords
in Oppenheim vs. Tobacco Securities Ltd. has been
adopted in Sri Lanka.
35
According to this test an aggregate of individuals
ascertain by reference to some tie. (e.g blood or
contract), such as the relations of particular
individual or family, or the employees of the
particular firm, do not constitute a section of
public.
In the Abdul Gaffoor case a trust for the
deserving youths of the following Islamic faith,
which contained a discretion to the trustees to
give preference to descendants of the testator’s
family was held to be not for the benefit of the
public.
36
In the Abdul Caffoor case, the English case of Re
Koettgen’s Trust was not followed. In Re
Koettgen’s Trust, an educational trust for
“British born subjects,” contained a clause that
in selecting beneficiaries preference should be
given to the employees and the members of
their families. This trust was held to be for the
public benefit.
In Sri Lanka, there are different minorities
groups and religions. So, a trust for a group may
be qualified as valid charitable trust.

37
THE RELIEF OF POVERTY

38
Poverty may mean different things to different
people. Those who have been wealthy but are
no longer so may regard themselves as poor
even though still comparatively well off. Support
for the relative approach is to be found in the
words of Sir Raymond Evershed in Re
Coulthurst [1951] Ch 661:

39
“Poverty, of course, does not mean destitution. It
is a word of wide and somewhat indefinite
import, and, perhaps, it is not unfairly
paraphrased for present purposes as meaning
persons who have to ‘go short’ in the ordinary
acceptation of that term, due regard being had to
their status in life and so forth.”.
Two points may be elucidated from this
statement. First, a person may in legal terms be
poor without being entirely without means. The
term is wide enough to embrace anyone who
does not have enough.
40
The relief of the poor must not be relief to a
body of private individuals but must have a
public character.- In re, Mercantile bank of India
(Agency) Ltd (1942)10ITR 512(Cal.).

Relief of a group of individuals like “poor

relations” of the donor or the poor employee of
a company would not amount to the charitable
trust.- Trustees of Gordhandas Gonidram family
Charity Trust vs. CIT (1952) 21 ITR 231 (Bom.)

41
Oppenheim Vs. Tobacco Securities Trust Co Ltd.
[1951] 1 All ER 31 The trustees were directed to
apply certain income in providing for ‘the
education of children of employees or former
employees’ of a British limited company. The
number of eligible employees was over 110,000.
Charitable status was claimed.
Held: The trust was not charitable. The nexus,
that of being employment by particular
employers, did not satisfy the test of public
benefit to establish the trust as a charitable
trust.
42
Trusts for the relief of poverty form a major
exception to the usual rule as laid down in Re
Oppenheim. The courts have long accepted the
so-called ‘poor relation’ exception, whereby a
valid trust can be established for the relief of
poverty among the settlor’s poor relations. This
is valid so long as the class of beneficiaries is not
further restricted, for example, to a group of
named relations. The question was reviewed in
Dingle v Turner [1972] 1 All ER 878.

43
In Dingle v Turner [1972] 1 All ER 878, a trust was
established for the benefit of poor employees of
Dingle & Co. The class was therefore identified by
a personal nexus, that is they were all employees
of the same firm, such as had been held invalid in
Re Oppenheim. On the authority of the ‘poor
relations’ cases the court held that poverty was
an exception: a trust for poor persons who are
also identified by a common ancestor,
employment by the same firm or some other
personal nexus, does not lack the necessary
public benefit.
44
The essential difference between charitable and
private trusts in this area is between gifts for the
relief of poverty among poor people of a
particular description (which is charitable), and
gifts to particular persons, the relief of poverty
being the motive of the gift (which is not
charitable). A gift for the relief of poverty in a
particular class of relations could therefore be
charitable: in Re Scarisbrick’s Will Trust [1951] 1
All ER 822, the class named was ‘the relations of
my son and daughter’.

45
It appears that even a selected group of
relations may qualify, in the light of Re Segelman
[1995] 1 All ER 676. In that case the testator
listed some, but not all, of his siblings, and
stated that they, together with their issue,
formed the class to be benefited.

46
Accordingly, there might be circumstances
where a narrow beneficial class, such as
employees of a firm or relations of an individual,
is a sufficient section of the public for relief of
poverty. Nonetheless, the ‘poor relations’ cases
as anomalous and invite debate on this issue.
They do not appear to share the same concern
about restriction to a firm’s employees, as long
as the purpose is purely relief of poverty.

47
In Commissioner of Income Tax vs. The Trustees
of the Abdul Gaffoor Trust a trust for “charity
once a year during the month of Ramalhan” was
held to be charitable because of the significance
to Muslims of the month of Ramalhan and their
practice of distributing alms to the poor during
that month. The trust was regarded as one for
the relief of poverty.

48
In Sri Lanka, a sum of money given in trust to the
high priest of the particular temple, to Bishop for
the benefit of the church, for the priesthood of
the Buddhist sect have been upheld without
upheld English authorities.

49
ADVANCEMENT OF EDUCATION
OR KNOWLEDGE

50
Lord Hailsham, in IRC v McMullen [1980] 1 All
ER 884, said of education:

when applied to the young [it] is complex and

varied . . . It is a balanced and systematic process
of instruction, training and practice containing
both spiritual, moral, mental and physical
elements.

51
It may be assumed therefore that anything which
forms part of the normal educational process and
which can be said to fall within that definition will
be regarded as education and that any trust for
the advancement of such things will be
charitable, subject to the requirements of public
benefit.
The courts will reserve to themselves the right to
exclude things which they regard as harmful:
Harman J in Re Shaw [1957] 1 All ER 748 stated
that schools for prostitutes or pickpockets would
not be regarded as charitable.
52
Attempts to disseminate political propaganda
under the guise of education have been
consistently rebuffed by the courts. Similarly,
educational charities will be restrained from using
their resources for political purposes. Thus, in
Baldry v Feintuck [1972] 2 All ER 81, Sussex
University Students’ Union, a registered charity,
was restrained from spending money on a
campaign to restore free school milk. Since this
was an attempt to challenge government policy, it
was regarded by the courts as political and not
charitable.
53
In Southwood v A-G (1998) the express objects
of PRODEM were ‘the advancement of the
education of the public in militarism and
disarmament’. In practice this went beyond
educating the public in peaceful means of
dispute resolution, and identified ‘militarism’
with current policies of western governments
with the intention of challenging those policies.
This ‘clear and dominant message’ was political,
and, The decision was subsequently confirmed
by the Court of Appeal ((2000) The Times, 18
July).
54
In McGovern v A-G [1981] 3 All ER 493 by Slade
J, who stated:
(1) A trust for research will ordinarily qualify as a
charitable trust if, but only if (a) the subject
matter of the proposed research is a useful
object of study; and (b) it is contemplated that
the knowledge acquired as a result of the
research will be disseminated to others; and (c)
the trust is for the benefit of the public, or a
sufficiently important section of the public.

55
(2) In the absence of a contrary context, however,
the court will be readily inclined to construe a
trust for research as importing subsequent
dissemination of the results thereof.
(3) Furthermore, if a trust for research is to
constitute a valid trust for the advancement of
education, it is not necessary either (a) that the
teacher/pupil relationship should be in
contemplation, or (b) that the persons to benefit
from the knowledge to be acquired should be
persons who are already in the course of
receiving ‘education’ in the conventional sense.
56
In the case advancement of education,
unfettered by English precedents the Sri Lanka
courts are free to hold that research and
learning at least in scientific subjects are
unquestionably in the public benefit.
In Falil caffoor vs. Commissioner of Income Tax
the Judicial Committee assumed without
deciding that “educational instruction or training
in any department of human activity is a
charitable purpose.” It is relevant that section
99(1)(b) refers to “education or knowledge”.

57
The Supreme Court of India has however, confined
the meaning of the word “education” to connote
the process of systematic instruction, developing
the knowledge, skill, mind and character of the
students by formal schooling.- Sole Trustee, Lok
ShikshanaTrust vs. CIT (1975)101 ITR 234 (SC)

Education in order to charitable, must relate to the

public and a trust created for the education of the
members of a family or the descendants of a
certain named individual are not for charitable
purposes.- D.V. Arur vs. CIT (1945) 13 ITR 465
(Bom.).
58
The promotion of search for the truth and
diffusion of useful knowledge, promotion
conferences and discussion, the foundation and
maintenance of conference centres and reading
room for the general use among the members
and others are objects directly relating to
education,- Ecumenical Charistian Centre vs. CIT
(1983)139 ITR 226. (Karn.)

59
ADVANCEMENT OF RELIGION OR THE
MAINTENANCE OF RELIGIOUS RITES
AND PRACTICES

60
The Pemsel definition refers to “trusts for the
advancement of religion”. Section 99 has the
additional words “or the maintenance of
religious rites and practices”.

The trusts for the maintenance of religious rites

and practices may be invalid in England. The
inclusion of extra words in section 99 was
perhaps intended to widen this category
because Buddhism, Hinduism and Islam which
are practiced in Sri Lanka are heavily ritualistic.

61
In University of Bombay vs. Minicipal
Commissioner, Bombay (1892) 16Bom. 217) it
was stated that the charitable purpose has been
defined to include relief of poverty,
advancement of education, advancement of
religion and other purposes beneficial to the
community not falling under any of the
preceding heads.

62
But despite of differences in the facts, the
principle in Gilmour could have been applied in
Fernando case and the issue could have been
formulated, whether the ceremonies, the
performance of which was directed by the trust,
constituted a “central act” of the Hindu religion,
and whether it could be objectively proved that
their performance was for the benefit for the
public.

63
The House of Lords in Gilmour vs. Coats [1949] 1
All ER 848 held that the requirement of public
benefit is not satisfied, and a trust will fail as
charity, if the trust is created for the performance
of private ceremonies.
In Fernando vs. Sivasubramanium (61NLR241) a
trust was created by a Hindu testator, “desirous of
my soul’s attainment of salvation” for the
performance of religious ceremonies. Pulle J held
that the facts in two cases were very different and
therefore Gilmour case was not a relevant
authority.
64
There is a dual test to be satisfied. The purposes
of the trust must (i) fall within legal definition of
charity, and (ii) be for the public benefit, if it is to
be valid charitable trust.

65
That purely private religious services are not
charitable has been confirmed in Re Le Cren
Clarke [1996] 1 All ER 715. The contrast between
this case and Re Hetherington [1989] 2 All ER
129 was that in Re Hetherington the services
could be conducted either in public or in private
and the judge was entitled to take a benignant
view of the gift and assume that they would be
held in public. In Re Le Cren Clarke, on the other
hand, evidence clearly indicated that…

66
the services were conducted in private, so there
was no room for a benignant assumption where
the facts were clear (though it was also held on
the facts that the services were merely ancillary,
so the gift as a whole was upheld as charitable).
The case appears also to recognize faith healing
as charitable within this heading of charity.

67
English authorities regarding the element of
public benefit have not generally been even
cited in local decisions except in Fernando case.
Trusts for observing various ways Hindu festival
days, for the bathing of idols and the offering of
eatables to a deity on the festival days, for
keeping a lamp burning in a temple, for
performing ceremonies at the Hindu shine, for
the maintenance of Buddhist rites.

68
In Bhupati Nath vs. Ram Lal (1910) 37 Cal. 128) it was
stated that a religious endowment is one which has for
its object the establishment, maintenance or worship,
of an idol or deity, or any object or purpose subservient
to the religion. A charitable endowment is one which
has its object the benefit of the public or of mankind.

In CIT vs. Jamal Mohammed Sahib (1941) 9ITR 375

(mad) it was said that there might be a private trust for
religious purposes, but there can be no private
charitable trust.

69
In Bihar State Board of religious Trust vs. Palat Lal.
(AIR 1972 SC 57) it was said that if an endowment is
not intended to benefit the general body of
worshippers but only for the members of family or
specified individuals it is a private endowment.

But where the beneficiaries are not members of a

family or specified individual, then the endowment
can only be regarded as public, intended to benefit
the general body of worshippers.-Kannika
Parameswari vs. Educational Institution (1990)
1MLJ 293)
70
A public temple is one where a considerable
portion of the public or a section thereof has a
beneficial interest. A gift for the purpose of such a
temple must therefore benefit the public.- Mahant
Ram Swaroop Dasji vs. S.P. Sahi. (AIR 1956 SC 951)

The main characteristic of a public temple is that it

is intended for the use of pubic at large or specified
class, who are entitled the right of worshipping in
it.- Smt. Charusila Dassi, in re. (1946) 14ITR 362
(Cal.)

71
In brief, the origin of the temple, the manner in
which its affairs are managed, the nature and
extent of the gift received by it, expenses of the
temple being met by public contribution, rights
exercised by the devotees in regard to the worship
therein, the consciences of the manager and the
consciences of the devotees themselves as to the
character of the temple are factors that go to
establish whether a temple is a public or private
temple.- T.D. Gopalan vs. Commir. Of Hindu
Religious and Charitable endowments (AIR1972
SC1716)
72
In Narayanan Bhawant Rao Gosavi Balajiwale vs.
Gopal Vinayak Gosavi (AIR 1960 SC100) the
Supreme Court of India held that the vastness of
the temple, the mode of its construction, the long
user of public as of right, grant of land and cash
by the Rulers taken along with the other factors,
were consistent with the public nature of the
temple.

73
For any other purposes beneficial
or of interest to mankind not
falling within the preceding
categories
section (99(1)(d)

74
The words “beneficial or of interest of mankind”
in section 99 differ from the words used in the
Pemsel classification. In England, a trust only for
the benefit of animals may not be charitable.
Public benefit must be there. (section 2(2)(k)
read with section 2(1)(b) of the Charities Act
2006)

75
Swinfen-Eady LJ observed in Re Wedgewood
[1915] 1 Ch 113:
A gift for the benefit and protection of animals
tends to promote and encourage kindness
towards them, to discourage cruelty, and to
ameliorate the condition of brute creation, and
thus to stimulate humane and generous
sentiments in man towards the lower animals;
and by these means promote feelings of
humanity and morality generally, repress
brutality, and thus elevate the human race.

76
it is the indirect benefit to the community as a
whole which counts and so as with religion it is
necessary that the example of kindly behaviour
is a public one.

77
An attempt to protect animals in isolation from
humans thus lacks the necessary benefit, as
emerged in Re Grove-Grady [1929] 1 Ch 557. In
this case, the testator left money to provide ‘a
refuge or refuges for the preservation of all
animals, birds or other creatures not human . . .

so that they shall be safe from molestation and

destruction by man’. Since man was entirely
excluded, he had no opportunity to be elevated
and so there was no public benefit.

78
The charitable purpose listed by the Charity
Commission of UK as follows-

1. provision of public works and services such as the

repair of bridges, ports and the provision for water
and lighting;

2. relief of unemployment; The promotion of mental

or moral improvement;

3. preservation of public order;

79
4. promoting of the sound administration and
development of law;

5. Rehabilitation of ex-offenders and prevention

of crime.

80
 For the benefit of the public or
any section of the public within or
without Sri Lanka

81
 Whicker vs. Hulme (1858)
The House of Lords upheld a trust, “for the
benefit and advancement and advancement,
and propagation, of education and learning in
every part of World as far as circumstances will
permit”.

82
In the case of Camille and Henry Dreyfus
Foundation Inc. Vs. IRC, it was stated “It may be
that, on very broad and general grounds, relief of
poverty or distress in any part of the World would
be regarded as being for benefit of the
community in the UK. I see formidable difficulties,
however where the objects of the trust were, say,
the setting of the soldiers or repair of bridges in a
foreign country.”

83
A more cautious tack is to be adopted.
Accordingly, other purposes deemed charitable
if carried out at home can be charitable when
carried out overseas provided that there is no
offence to public policy.

In McGovern vs. AG (1982) it was stated that in

addition, there must be some benefit to the UK
community, however indirect or an accepted,
identifiable benefit to the community abroad.

84
ACTIONS INTO CARRYING
INTO EFFECT THE TRUSTS

85
 Scope of sections 101 and 102
Section 101 applies to all types of charitable
trust and section 102 to religious trusts. These
sections provide a mean whereby the
beneficiaries, settlor, or other persons interested
in charitable trust, or the Attorney-General, may
bring an action inter alia where there is a breach
of trust, for the appointment or dismissal of
trustees, demanding accounts, and for the
purpose of settling a scheme for the
administration of a charitable trust.
86
• Sections 101 and 102 are intended primarily to
serve the needs of the Hindus.
• Section 102(8) enacts “this section shall not
apply to any Christian religious trust.
• Section 109 - This Chapter shall not apply-
(a) to religious trusts regulated by the
Buddhist Temporalities Ordinance;
(b) to religious trusts regulated by the Muslim
Mosques and Charitable Trusts or Walks Act, No.
51 of 1956, in so far as this Chapter is
inconsistent with the provisions that Act.
87
• Section 101 is applicable all the charitable
trusts including Christian religious trusts.

• Section 102 is applicable all the religious trusts

other than Christian religious trusts.

• Section 102 is applicable to the Buddhist trusts

which is not regulated by the Buddhist
Temporalities Ordinance.

88
• An author of trust or trustee of a charitable
trust including religious trust may apply to the
court by action or otherwise for direction or
relief without following procedures provided
in section 101 and 102.

• The procedures established under sections

101 and 102 shall be applicable to the
beneficiary or interested persons.

89
 Procedures
• Any five persons interested in a religious trust
present a petition together with a plaint to the
Divisional Secretary.

• Appointment of Commissioners.

• Deposit a sum of money to cover the

reasonable expenses.

90
• Amicable settlement.

• Report – calls for consideration of the court or

not possible to bring about an amicable
settlement or assistance of the court to give
effect to the settlement.

• Report should be filed in the Office of the

Divisional Secretary.

• Institute an action.
91
In Wijewardena vs. Buddharakkita Thera
(59NLR121) it has been held that 109 does not
prevent a Buddhist creating a trust for the
benefit of a temple regulated by the Buddhist
Temporalities Ordinance.
In Mapitagama vs. Wijeyawardena (62NLR49) it
was stated that section 109 merely prevents
actions brought under sections 101 and 102 in
respect of property which is vested in the
trustee appointed under Buddhist Temporalities
Ordinance.

92
Buddhist Temporalities
Ordinance
• Complaint made by persons interested to the Public
Trustee (on his own motion).

• Inquired by Public Trustee. (to dismiss a trustee

frame charge and give time to answer)

• Certificate of the Public Trustee – suitable for the

consideration of the court.

• Persons interested -person who has a right of

attendance at any temple or who has been in the
habit of attending at the performance of the
worship.
 15. (1) On the complaint of any person interested or on his
own motion the Public Trustee shall have power to hold an
inquiry into-

(a) any alleged misfeasance, breach of trust; or

(b) neglect of duty committed by any trustee or controlling
viharadhipati in respect of property belonging to his
temple and,

if at the conclusion of any such inquiry into the conduct of a

trustee, the Public Trustee is of opinion that proceedings
should be taken for his dismissal it shall be competent for the
Public Trustee as a preliminary to suspend such trustee, to
frame charges in writing against him and to call upon him to
answer thereto.
 (2) The Public Trustee or any person interested in a temple
may sue before the court having jurisdiction for the area
within which such temple is situated the trustee or controlling
viharadhipati of such temple for any alleged misfeasance,
breach of trust or neglect of duty committed by such trustee
or controlling viharadhipati in respect of property belonging
to such temple; and such court may after trial-

(a) direct the specific performance of any act by such

trustee or controlling viharadhipati,

(b) decree damages in favour of such temple and costs

against such trustee or controlling viharadhipati, and

(c) direct the removal of such trustee:

 Provided that no plaint submitted by any person
interested shall be accepted by any court unless it is
accompanied by a certificate from the Public Trustee
to the effect that he has inquired into the subject-
matter of the complaint and that the same is in his
opinion suitable for the consideration of the court.

(3) Any person who has a right of attendance at any

temple or who has been in the habit of attending at
the performance of the worship at any temple shall
be deemed to be a person interested in such temple
within the meaning of this section.
 (4) Proceedings may be taken under this section in respect
of every alleged misfeasance, breach of trust or neglect of
duty by any trustee or viharadhipati and in respect of such
proceedings, the Public Trustee may exercise all the powers
vested in him for the investigation of the conditions and
accounts of trusts by the Public Trustee Ordinance, as
amended from time to time.
Muslim Mosques and Charitable
Trusts or Wakfs Act, No. 51 of
1956
Sections 100 to 109 (both sections inclusive) of the
Trusts Ordinance shall not apply to any Muslim
charitable trust or wakf or any property subject to
such trust or wakf.- Section 55.

Section 99 of the Trusts Ordinance is applicable.

• Commissioner may file action upon the direction of
the board.

• Persons interested - a certificate under the hand of

the Commissioner that the action has been
approved by the board.

• District Court.

• Five persons interested- provisions are similar to the

Trusts Ordinance.
 39.(1) Subject to the provisions of subsection (2),
Commissioner for Mosques and Muslim Charitable Trusts or
Wakfs upon a direction given by the Mosques and Muslim
Charitable Trusts or Wakfs Board in that behalf in respect of a
Muslim charitable trust or wakf, or any five persons interested
in that trust or wakf, may institute an action in the District
Court of the district to obtain a decree providing for all or any
of the following purposes: -
(a) removing from office any trustee of the trust or wakf;
(b) appointing, where necessary, a trustee or trustee for the
trust or wakf;
(c) directing the submission of statements of accounts to the
court or the board;
(d) declaring what proportion of the property of the trust or
wakf or of the interest therein shall be allocated to any
specified object of the trust or wakf;
(e) settling a scheme for the management of the trust or
wakf;
(f) directing the specific performance of any act by the trustee
or trustees of the trust or wakf;
(g) declaring any trustee of the trust or wakf guilty of any
misfeasance, breach of trust or neglect of duty;
(h) ordering the payment by any trustee of the trust or wakf
of any sum to the funds of the trust or wakf by way of
damages in respect of any misfeasance, breach of trust or
neglect of duty:
(i) enumerating the properties comprised in the trust or wakf;
and
(j) granting such further or other relief as the circumstances of
the case may require.

(2) No action other than an action instituted by the

Commissioner shall be entertained by the District Court under
this section, unless the plaint in the action is accompanied by
a certificate under the hand of the Commissioner that the
action has been approved by the board.
(3) The interest required in order to entitle any person to be
one of the plaintiffs in any action instituted under this section
need not be a pecuniary or immediate interest or such an
interest as would entitle the person to take any part in the
management or superintendence of the trust or wakf.
(4) For the purposes of any action to be instituted, any person
who-
(a) is the donor of any property subject to any Muslim
charitable trust or wakf or is a direct male descendant of
the donor; or
(b) in the case of any Muslim charitable trust or wakf
created partly for the benefit of a registered mosque, is a
member of the jama'ath of that mosque; or
(c) has, during a period of twelve months preceding that
date, received any alms distributed by any trustee of a
Muslim charitable trust or wakf or otherwise enjoyed the
benefits of that trust or wakf.
(5) Where five or more persons interested in a Muslim
charitable trust or wakf have instituted an action under
subsection (1), the withdrawal of one or more than one such
person from the action shall not prevent the District Court
from continuing and concluding that action, so long as at least
one person who instituted the action continues to be a party.

(6) When a trustee is removed from, or otherwise vacates,

office, the other trustees shall, during the continuance of the
vacancy, exercise the powers vested in, and perform the
duties imposed on, trustees by or under this Act.
40. In settling a scheme for the management of any Muslim
charitable trust or wakf under subsection (1) of section 39,
the court may-

(a) order the inspection of any institution maintained for

the purposes of, or in connection with, that trust or wakf
by persons authorized by the court;
(b) fix as the amount of the annual remuneration of any
trustee of that trust or wakf any amount not exceeding ten
per centum of the gross annual income of that trust or
wakf; and
(c) direct that any surplus remaining out of the income of
that trust or wakf after reasonable provision has been
made for carrying out the objects of that trust or wakf shall
be applied to such purposes as the court may consider fit.
41. In settling a scheme for the management of any Muslim
charitable trust or wakf under subsection (1) of section 39 or
in determining any question relating to the constitution or
existence of any such trust or wakf or the devolution of the
trusteeship or the administration of such trust or wakf,

the court shall have regard to the instrument, if any, by which

such trust or wakf has been created, the religious law and
custom of the sect of the Muslim community concerned, the
local custom with reference to such trust or wakf and the
practices and other arrangements in force for the
administration of such trust or wakf.
48. In any action instituted under section 29 or section 39, the
court may-
(a) on the joint application of the parties to the action,
order any matter in dispute between them to be referred
for inquiry and decision by one or more arbitrators
appointed by the court, or

(b) appoint a committee for the purpose of making an

inquiry and reporting to the court in regard to the
settlement or adjustment of any matter involved in the
action or arising in the course thereof, or for the purpose of
assisting the court in the exercise of its powers under
sections 29, 39 and 47.
 The Cy-Pres Doctrine
Where the object of a charitable trust, specified by
the settlor or subsequently becomes impossible,
impracticable or unlawful, the trust will not
necessarily fail, but the court has power to apply
the trust to some other charitable object as nearly
as possible resembling the intention of the donor.

110
In other words, in the particular mode of charity
indicated by the donor is not capable of being
carried out, yet if the donor had expressed a
general intention of charity, the court would
execute it “cypres”, in a way as nearly as possible
to that which the testator specified. This is
known as ‘doctrine of cypres’.

111
The cypres doctrine applies if the nature of the
charitable object is general and not specific.-
State of U.P. vs. Bansi Dhar (AIR 1974 SC1084).

Where the donor has specified a special object or

mode for the course of his beneficiation, the
court cannot innovate and undo, but where a
general charitable goal is projected and particular
objects and modes are indicated the court, acting
to fulfill the broader benevolence of the donor
and
112
to avert the frustration of the good to the
community, reconstructs as nearly as may be the
charitable intent and make viable what
otherwise may die.
Where the doctrine of cy-pres can be applied, a
charitable trust shall not be held void for the
uncertainty of the object.- Hidayat Beg vs.
Beharilal (AIR 1941 All. 225).
Where the paramount general intention of the
charity is manifested, the certainty of the
charitable object is not essential to its validity.
113
The twin conditions to be satisfied for the
application of ‘doctrine of cy-pres’ are-
(a) The settlor must have expressed a general
intention of charity;
(b) It has become impossible to carried out the
settlor’s intention or some surplus has remained
after application to objects specified by settlor.

The doctrine of cy-pres applies only in relation to

the public charitable trusts not private charities.

114
The court shall have the same power for the
establishment, regulation, protection, and
adaptation of all " charitable trusts " (as defined
by this Ordinance) as are exercised for the time
being with reference to " charitable trusts"
within the meaning of English law by the High
Court of Justice in England –sec 100.

115
The expression "adaptation " with reference to
a trust means adaptation of the trust in such a
manner as to carry out the wishes of the author
of the trust as nearly as practicable, according to
the doctrine of cypres, where it is not possible
to carry out those wishes in the exact manner
prescribed by the instrument of trust- 99(2)

The expression " settlement of a scheme"

includes variation of a scheme previously
settled-99(3).
116
In England, if non-charitable trust fails there will
be a resulting trust. But if a charitable trust fails
the court will direct that trust fund be applied
cy-pres, provided, it is possible to discover a
general charitable intention in the original gift.

The English rule that the cy-pres doctrine may

be invoked only where a general charitable
intention is present has not been applied in a
local decision.

117
Since purposes may last forever, so might a trust
for a purpose, thus offending the rule against
perpetual trusts unless a limitation is expressly
stated in the gift. Charities are not bound by this
rule and may therefore last forever.
There are many charities of considerable age
which continue to operate. Thus, where a gift is
made of the income from a particular fund to a
charity in perpetuity, it will never be possible to
release the capital from the fund: Re Levy [1960]
Ch 346 (subject to the power to authorise a
‘scheme’).
118
 Charitable and other trusts
• The perpetuity rules do not apply to charitable
trusts.
• The formalities for creation of charitable trusts
are very flexible. Provided there is a charitable
intention, the beneficiaries of a charitable
trust need not be indicated with certainty.
• The cy-pres doctrine applies only to charitable
trusts.

119