http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 7

CASE NO.:

Appeal (civil) 5682 of 1999

PETITIONER:

ABID HATIM MERCHANT .

Vs.

RESPONDENT:

JANAB SALEBHAI SAHEB SHAIFUDDIN & ORS.

DATE OF JUDGMENT: 03/02/2000

BENCH:

U.C.Banerjee, A.P.Misra

JUDGMENT:

BANERJEE,J.

L.....I.........T.......T.......T.......T.......T.......T..J

The issue before the Court in this Civil Appeal

against the judgment of the Bombay High Court is rather

short, to wit, whether the avowed object with which Sir

Adamji Peerbhoy the great Philanthropist founded the trust

for Dawoodi Bohra Community in 1883 A.D. needs a change of

object under Cypres doctrine having regard to

consititutional parameters so as to make the Trust truly

secular in nature since the situation of the early 19th

century may not suit the purpose in the 21st century. The

respondent Trust contended that the preamble to the

Constitution itself declares India to be secular and as such

what was possible in 1883 may not be proper and in line with

lofty ideas of our Constitution since the constitutional

mandate is to be obeyed in its observance rather than in its

breach and it is this concept which is said to have prompted

the Trustees of Sir Adamji Peerbhoy Sanatorium Trust to move

the City Civil Court for variation and amendment to the

scheme of the Trust as sanctioned by the Court in 1931.

Incidentally, be it noted that the expression Cy-pres in

common English acceptation means and implies as near as

possible (to testators or donors intentions when these

cannot be precisely followed).

In Halsburys Laws of England (4th Ed. Vol.5B) cy

pres doctrine has been referred to as below: The cy-pres

doctrine: 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 will substitute

another mode cy-pres, that is, as near as possible to the

mode specified by the donor.

An application cy-pres results from the exercise of

the courts 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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 7

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.

The primary rule to be observed in the application of

the cy-pres doctrine is that the donors intention must be

observed as far as possible. Thus, if the donor names a

particular object which is capable of taking effect, any

application cy-pres that becomes necessary must be

restricted within the limits of that object, and the mode of

application must as far as possible coincide with his

wishes.

A charity may by cy-pres to the original object even

though it seems to have no trace of resemblance to it, if no

other can be found which has a nearer connection, but

objects nearer the donors intention will always be selected

in preference to those more remote.

The doctrine of Cy-pres as noticed by this Court in

Ratilal vs. State of Bombay (AIR 1954 SC 388) and as

developed by the Equity Courts in England stands adopted by

our Indian Courts since a long time past. B.K.

Mukherjea,J. (As His Lordship then was) speaking on behalf

of Bench stated:- When the particular purpose for which a

charitable trust is created fails or by reason of certain

circumstances the trust cannot be carried into effect either

in whole or in part, or where there is a surplus left after

exhausting the purposes specified by the settler the court

would not when there is a general charitable intention

expressed by the settler, allow the trust to fail but would

execute it cy pres, that is to say, in some way as nearly

as possible to that which the author of the trust intended.

In such cases, it cannot be disputed that the court can

frame a scheme and give suitable directions regarding the

objects upon which the trust money can be spent.

Subsequently, this Court in N.S. Rajabathar Mudaliar

vs. M.S. Vadivelu Mudaliar and Ors. (1970 (1) SCC 12)

observed:

The cy-pres doctrine applies where a charitable trust

is initially impossible or impracticable and the Court

applies the property cy-pres, viz., to some other charities

as nearly as possible, resembling the original trust.

Having dealt with the situation for the applicability

of the doctrine cy- pres and before adverting further in the

matter, however, certain factual details ought to be noticed

at this juncture. The records depict that the Collector of

Bombay on 8th May, 1886 as per the request of Sir Adamji

Peerbhoy granted lease of a plot of land at Queens Road,

Bombay for a period of 99 years commencing from July, 1884.

The lease deed itself contained an option to the lessees to

renew the lease for a further period of 99 years. A social

benefactor, as Sir Adamji was, however, used the land for

the purpose of a mosque and also constructed a building

having three wings for charitable purposes. Incidentally,

Sir Adamji after his death was buried within the compound of

leasehold land whereupon a tomb was erected. Records

further depict that on September 22, 1927, a suit was filed

(Suit No.960 of 1927) in the High Court at Bombay, for

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 7

declaration that the entire property cannot but be dealt

with as a trust property and the High Court in June, 1931

passed a decree by way of a sanctioned scheme and the Trust

since then came to be known as Sir Adamji Peerbhoy

Sanatorium Trust. It appears that in 1944, the third wing

or wing C of the property was requisitioned under the

Defence of India Rules, 1935 for Polish Red Cross Hospital

and after the departure of the Polish Red Cross Hospital, a

Society called Saifee Hospital Society came to be registered

with an object to give medical help to the members of the

Dawoodi Bohra Community and started running a hospital in

wing C with however, the infra structural facility,

available through purchase, as was existing with the Polish

Red Cross Hospital. It is since then the hospital is being

run till this day by the Saifee Hospital Society and later

registered as Saifee Hospital Trust on and since Ist

January, 1973. On records therefore we do find at this

juncture the existence of Sir Adamji Peerbhoy Sanatorium

Trust as also the Saifee Hospital Trust. Needless to record

here that all proper authorisations from the appropriate

statutory agencies were obtained to run the hospital by the

Saifee Hospital Trust. The establishment of Saifee Hospital

Trust, however begins the era of litigation: Application

before the court wherein change of objects and also

sanctions were sought on the ground that what was possible a

century ago cannot possibly be restricted in the manner as

it was and Saifee Hospital Trust is rather firm in its

conviction that in 21st century question of restricting a

super speciality hospital to a particular community of a

particular religion may not sub-serve the need of the hour

and call of the day for the country. The Saifee Hospital

Trust has been contending that the constitutional parameters

cannot but be adopted so as to make it a true secular State,

as professed in the Constitution. Cypres doctrine for the

change of objects was sought and such a change was granted.

The matter went from court to court without however any

variation in favour of the change of objects. The High

Court in no uncertain terms recorded that the judgment of

the learned Judge of the City Civil Court does not warrant

any interference on any of the findings and as such

dismissed the appeal. Before coming to the findings of the

City Civil Court be it noted that during the course of the

hearing of the appeal before the High Court several civil

miscellaneous applications came up for hearing and in one

such application the High Court observed as below:-

It is quite obvious from the character of this

litigation that the appellants do not desire to allow it to

be concluded and this is just one more ploy at a hopelessly

late stage to have the entire proceedings reopened before

the Trial Court were asking for an additional issue which

inevitably means additional evidence etc. This is one of

the litigations where every conceivable aspect of the matter

has not only been agitated by the parties but has already

been decided by the Trial Court. After hearing this appeal

on merits for a considerable period of time, we are of the

view that it is impermissible to grant this application.

The Civil application accordingly fails and stands

dismissed.

Coming back to the findings of the Court on the Cypres

issue, records depict that by a judgment and order dated 5th

August, 1991 the Bombay City Civil Court granted the

application filed for variation and amendment to the scheme

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 7

of Adamji Peerbhoy Sanatorium Trust framed in terms of the

order of the High Court in 1931 as noticed above. The

appellant herein however, by reason of being aggrieved moved

the High Court in First Appeal bearing No.1078 of 1991 but

the same was summarily rejected and subsequently Letters

Patent Appeal came to be filed before the High Court and the

same was also rejected as noticed above and hence this

Special Leave Petition against the order of rejection of the

Letters Patent appeal, before this Court. After

considerable hearing of the matter we also had a feeling

that the appellant is not very keen to have the proceedings

concluded at this juncture. But our apprehensions were

allayed by the learned Advocate appearing in support of the

appeal when certain proposals were considered to be

otherwise reasonable and as a matter of fact this Court

records its appreciation for all round efforts of the

learned Advocates appearing for the parties including that

of the added respondent, namely, the Jamat in coming to a

very reasonable amicable solution as detailed hereinbelow

and in this subsequent factual backdrop, we are thus not

called upon to embark upon an enquiry as to applicability of

the Cypres doctrine in the contextual facts.

Incidentally, the State Government being a primary

party in the matter of resolution of disputes by reason of

the lease spoken of earlier, this Court thought it fit to

issue notice to the State Government and the State

Government as per the directive of this court did make

certain submissions which we will immediately refer to

hereinbelow, but before so doing the agreed minutes of the

Order are placed below:-

1. The Orders of the City Civil Court at Bombay in

Charity Application No.18 of 1976 dated 5.8.1991 and

22.10.1991 as modified by the Order of the Bombay High Court

dated 15.7.93 in Letters Patent Appeal No.103 of 1991 are

confirmed save and except as modified by the following

directions: 2. 30 (Thirty) beds in the proposed Saifee

Hospital shall be reserved for treatment of members of the

Dawoodi Bohra Community free of charge (inclusive of 20 beds

as provided in the Order of the City Civil Court, Bombay

mentioned above). Such beds and treatment to be provided to

economically needy Dawoodi Bohras regardless of whether they

have taken the Oath of Allegiance (Misaq) or not, and

regardless of whether they have been excommunicated or not.

The criterion of economic need shall be as determined by the

Maharashtra Government for other charitable hospitals from

time to time. 3. Wings A and B of the Adamji Peerbhoy

Sanatorium Trust property shall not be demolished unless and

until a sum of Rs.1 crore (inclusive of Rs.50 lakhs ordered

by the City Civil Court at Bombay) is deposited by the

Trustees of Saifee Hospital Trust in a separate Bank Account

to be opened for this purpose. The utilisation of the said

sum of Rs.1 crore shall be in accordance with the Orders

referred to in Clause 1 above. It is placed on record that

a sum of Rs. 1 crore has already been deposited by the

Saifee Hospital Trust on 23rd November, 1999.

4. The Trustees of Saifee Hospital Trust undertake to

this Court and are accordingly directed to complete the

construction of the Sanatorium Wing of the proposed building

of minimum built-up area of 16,000 square feet within five

years from the date of commencement of demolition of Wings A

and B of the Adamji Peerbhoy Sanatorium Trust property. The

plans annexed to the Affidavit of Mudrekabhai Saheb T.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 7

Zakiuddin dated 8.10.1997 at Volume XIV pages 2237 to 2262

filed in this Court shall be amended to bring the entrance

of the Sanatorium Wing to the front of the building facing

Maharishi Karve Marg. The cost of the construction of the

Sanatorium Wing of the proposed building with the minimum

built up area of 16,000 square feet and within the time

frame as indicated above shall be borne by the Saifee

Hospital Trust. The Trust would also furnish the Sanatorium

fully so as to make it a comfortable living and resting

place for the Musafirs. It is further clarified that the

entire maintenance of the Sanatorium as also Dargah and the

open space shall be effected by the Saifee Hospital Trust in

the same way and manner as of the Hospital. 5. The open

area adjacent to the Mosque and Dargah in the Adamji

Peerbhoy Sanatorium Trust property which is shown in green

colour in the plan annexed to the Affidavit of Respondent

No.11 dated 8.10.1997 at page 2253 of Volume XIV filed

herein shall be used exclusively for the purposes of the

Mosque and shall always be available to the Mosque for the

use of devotees. 6. Upon completion of the project, an

openable gate shall be placed on the East and West sides of

the newly constructed property for the purpose of

distinguishing separately the areas of the Sanatorium,

Mosque and Dargah from the area of the Hospital. These

gates which shall ordinarily be kept locked shall be

designed and placed in a manner so as to facilitate without

any obstruction the entry, exit, passage and movement during

emergencies of fire brigade vehicles, ambulances and hearses

around the property. The gates however shall be under the

care and custody of the Saifee Hospital Trust but a set of

duplicate keys would be kept with the Caretaker of the

Sanitorium for use during any emergency. It is made clear

that in the normal course of events, locking arrangement and

opening and closure of the gates shall be with the Saifee

Hospital Trust excepting however in emergencies as noted

above. 7. The gates and entrances to the Sanatorium and

Mosque portions of the building shall bear only the name of

Sir Adamji Peerbhoy Sanatorium and/or Sir Adamji Peerbhoy

Sanatorium Trust. The gates and entrances to the Hospital

portion of the building will bear the name of Saifee

Hospital and/or Saifee Hospital Trust on the gate posts, and

the name of Sir Adamji Peerbhoy Sanatorium and/or Sir Adamji

Peerbhoy Sanatorium Trust on the opposite gate posts in

letters of equal size and prominence. If the name of Saifee

Hospital or Saifee Hospital Trust is put up on any exterior

surface of the Hospital Wing then the name of Sir Adamji

Peerbhoy Sanatorium Trust shall be placed alongside the same

or one after the other with due regard to the Aesthetics of

the Building with equal size and prominence. 8. It is

placed on record that the State Government is otherwise

prepared to renew the lease but by reason of the fact that

the State Government is not a party to these agreed minutes.

The details and particulars in regard thereto would appear

herein below under the head directions. 9. The Trustees of

Saifee Hospital Trust undertake that the entire ground rent

for the Adamji Peerbhoy Sanatorium Trust property will be

paid by the Saifee Hospital Trust for and on behalf of Sir

Adamji Peerbhoy Sanatorium Trust. However, in the event of

non-payment of such a rent for a period of three months the

State Government being the lessor will intimate Sir Adamji

Peerbhoy Sanatorium Trust and called the latter to pay the

arrears within further period of three months together with

the current rate of rents and in the event, however, there

is any failure to pay on the part of Sir Adamji Peerbhoy

Sanatorium Trust, however, within the period, as aforesaid,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 7

the property lease deed shall stand automatically terminated

and the land and constructions thereon shall stand vested on

to the State Government excepting however, the area for the

Dargah and Mosque and the open land adjacent thereto as

earmarked in the plan. In the event, however, on payment by

Sir Adamji Peerbhoy Sanatorium Trust by reason of the

default of the Hospital Trust, the property shall stand

vested on to Sir Adamji Peerbhoy Sanatorium Trust. The

forfeiture as above, on both counts however shall be subject

to the existing law as regards the relief against

forfeiture. 10. Save and except the modifications in the

Scheme of the Adamji Peerboy Sanatorium Trust as granted by

the City Civil Court at Bombay in its order dated 5.8.1991,

the original Scheme of the Trust as settled by the Bombay

High Court in 1931 stands confirmed and thus shall remain

operative and in force in all other respects. 11. The

confirmation of Orders as above of the City Civil Court at

Bombay and the High Court of Judicature at Bombay by this

Court are however without prejudice to the right of the

parties to adopt such remedies as are available in law

against the concerned Trustees for any malfeasance or

misfeasance. 12. All contentions other than those

expressly decided by the City Civil Court and High Court and

as dealt with hereinbefore in this order by this Court are

kept open.

As noticed above the State Government not being a

party in regard to amicable resolution of disputes between

the two trusts, but since the presence of the State

Government being otherwise necessary due notice was issued

to the State Government and upon hearing Mr. Mohta, learned

Senior Advocate appearing for the State of Maharashtra and

regard being had to the affidavit filed in support thereof,

we do feel it expedient to issue the following directives to

the State Government. These directions are however in

addition to the agreed terms as noticed and not in

derogation therewith. Incidentally, be it noted that the

directives are however in conformity with the Affidavit

filed by Shri Jagdish Kashinath Gharat, Under Secretary to

Government of Maharashtra, Revenue and Forest Department and

affirmed on 10th January, 2000. The directives are as

below:- (i) The orders given under the Government Memorandum

No.S- 30/91/211923 CR No.46/J-2, dated 28.2.94 for renewal

of lease of the said land in favour of the Trust stands

cancelled by this Order. (ii) The Policy laid down under

Government Resolution No.LND 1085/134222 CR No.184/J-2,

dated 5.10.99 for renewal of the expired Government lease

from Greater Bombay is made applicable in this matter as a

Special Case and the lease is being renewed from the date

1.7.83 to 31.12.98 in favour of Sir Adamji Peerbhoy Trust.

The ground rent at the rate of 1% on the 50% concessional

value of the value calculated as per the market value

prevailing at the time of expiry of the lease i.e. on the

date 1.7.83 shall be charged at the time of the renewal.

(iii) The lease of the said land shall be renewed for the

further period of 30 years from the date 1.1.1999 and for

that purpose, the ground rent at the rate of 1% on the

amount arrived at after calculating 50% concessional value

of the land at the market rate prevailing on the date 1.1.99

shall be charged as the said land would be used for

hospital/religious purpose. (iv) The ground rent rate shall

be hiked by 10% after every 10 years. (v) On the expiry of

30 years period of the lease, the period thereof shall be

extended and the lease be renewed at the option of the

lessee and in the event of failure to exercise the option

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 7

above on the part of the concerned Trust (Sir Adamji

Peerbhoy Sanatorium Trust) the Sub- lessee (as is spoken of

hereinbelow) would have the right to renew the lease and be

treated for all intents and purposes the lessee of the land

though however, upon receipt of information pertaining to

failure to renew the lease sofar as Sir Adamji Peerbhoy

Sanatorium Trust is concerned. Further renewal also shall

be on the same terms and conditions as regards the quantum

of rent to be fixed in the light of the market rate then

prevailing on the respective dates of future renewal. (vi)

The State Government is hereby directed to accord permission

to use the land for Saifee Hospital and also for the

Sanatorium in terms of wishes and desires of Sir Adamji in

the building of the Trust as well as to sub-lease the land

under the said building to Saifee Hospital Trust. (vii) The

documentation of the said lease shall be prepared by the

Government Solicitor and Joint Secretary, Law and Judiciary

Department and the cost incurred therefor shall be borne by

the Lessee or the Sub-lessee. (viii) 25 beds shall be

reserved for Government employees in the Hospital of Saifee

Hospital Trust. (ix) Sir Adamji Peerbhoy Trust and Saifee

Hospital shall take precaution, while carrying out new

construction for the Hospital, to see that no, let or

hindrance is caused to the religious place as well as the

graveyard located there. (x) While renewing the lease of

Sir Adamji Peerbhoy Sanatorium Trust due regard be had to

the covenant, provisions and stipulations as are available

in the lease deed of 1888 excepting, however, the rate of

rent as mentioned hereinbefore. The appeal and other

miscellaneous applications stands disposed of on the basis

of the Agreed Minutes and the directions on to the State of

Maharashtra as above with due reservation of right as

noticed hereinabove. We once again do record our

appreciation for the efforts made by the learned Advocates

appearing for the parties herein including Shri V.A. Mohta,

learned Senior Advocate appearing for the State of

Maharashtra, for the assistance rendered in resolution of

disputes between the parties in the manner as above. We do

feel it fit and proper to record that needful should be done

to see that the solemn objects with which Sir Adamji

Peerbhoy Sanatorium Trust was created are respected and in

the same way the requirements of the Hospital also be met on

essential terms, on the expectation of which this order is

passed as above. Parties are directed to bear their own

costs.

.J (S.B. Majmudar)