What is the CY-PRES DOCTRINE?
The term ‘cy-pres’ comes from the old French phrase ‘cy pres comme possible’, which means “as near as possible.” In the legal sphere, the phrase refers to ensuring that a donor’s or testator’s desires are followed out as nearly as possible, whether in a will or as part of a charitable trust or estate. When legal complications occur that make it impossible to distribute cash for any reason, the instrument or trust may become null and invalid.
For example, if a charity goes bankrupt and is unable to function or meet its goals, legal action may be required. The cy pres doctrine can be used by courts to prevent it from ‘failing.’ The cy pres concept allows courts to develop their own interpretations to guarantee that a donor’s, charity trust’s, estate’s, or will’s wishes are followed out as precisely as possible, even if some revisions are required.
Purpose of the cy-pres doctrine
The cy pres doctrine is a legal theory that courts use to prevent a charity trust from failing when a philanthropic purpose is impossible or impractical to achieve at the outset or afterwards.
Rather than nullifying the charitable donation, the court might choose a new beneficiary who closely matches the donor’s original purpose. For example, if a deceased formed a trust with the purpose that the remaining trust funds must go to a specific charity that no longer exists after the death of their last living relative, the court may transfer the funds to a similar organisation that satisfies the decedent’s general philanthropic aim.
The cy pres concept has also been used in the distribution of class action settlement awards if the money goes unclaimed or it is not cost-effective to distribute the cash to each individual class member. A beneficiary, such as a charity organisation, may be approved by the court in such instances.
Conditions for the doctrine of cy pres:
The following are the requirements for the Cypres Doctrine:-
1. It must be difficult to actually carry out a donor’s goal with the literal meaning.
2. The donor must have had a strong desire to help others.
3. The new goal with which the property will be attached must be as close in nature as feasible to the settler’s specific goal, but it must be impossible to implement.
Cy pres doctrine in India: an insight
Under Section 92 of the Code of Civil Procedure, 1908, the Court of the District Judge has the power to administer public charities. Sub-section (3) of Section 92 embodies the doctrine of cy pres. This provision was taken from Section 13 of the Charities Act of England of 1960. Even before the adoption of sub-section (3), Indian courts had the authority to apply the cy pres concept to public trusts under England’s law. Sub-section (3) effectively broadens the scope of when the property can be used by pres.
This establishes the conditions under which a charity or religious trust’s ‘original intentions’ can be changed and the property utilised cy pres. Mergers of many organisations are also allowed under sub-section (3). This provision provides the most significant modification of the old cy pres norm, and will likely be of the most practical utility in allowing money to be used for the greatest public advantage.
Before the addition of sub-section (3), the cy pres doctrine could only be used if carrying out the trust’s aim was ‘difficult or impracticable.’ This requirement, despite the fact that the word ‘impossible’ was widely interpreted, created a number of problems; for example, nothing could be done in cases where the continued administration of the trust was highly inconvenient but not ‘impossible’, or where an old charity served no useful purpose in modern times, perhaps due to changes in societal needs or the value of money. The Chantries Act of 1960 (parts 13 and 14 in England) and Section 92(3) in India modernised the whole matter surrounding the cy pres doctrine.
Indian judiciary’s take on the cy pres doctrine:
Abid Hatim Merchant v. Janab Salebhai Saheb Shaifuddin (2000)
It is to be noted that the use of the courts’ ordinary jurisdiction to manage a charitable trust whose particular form of application has not been indicted by the donor, results in a cy-pres application. Where he has prescribed a particular mode of application that is incapable of being carried out, but he had a charitable intention that was greater than the particular mode of application prescribed, the court can carry out the charitable intention as if the particular direction had not been expressed at all.
Further, the most important thing to remember while using the cy-pres concept is to follow the donor’s purpose as closely as possible. As a result, if the donor selects a specific item capable of taking effect, any subsequent application for cy-pres must be limited to the scope of that object, and the manner of application must, as much as possible, correspond to his intentions. If no other object with a closer link can be located, a charity may cy-pres to the original object, even if it appears to have no similarity to it, however things closer to the donors purpose will always be picked in preference to those more distant. The Apex Court in light to the facts of the present case has opined that necessary changes in the object of the Trust should be carried out to eliminate hindrance in its application.