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Report No. 70

Chapter 26

Transfers for Benefit of Public

Section 18

26.1. Gist.-

Transfers for the benefit of the public have been excluded by section 18 from certain restrictions. The section is in these terms:-

"18. The restrictions in sections 14, 16 and 17 shall not apply in the case of a transfer of property for the benefit of the public in the advancement of religion, knowledge, commerce, health, safety, or any other object beneficial to mankind."

Although the section does not use the word "charity" or "charitable purposes", there is hardly any doubt that it is meant for transfers in favour of charities. The words "benefit of the public" and "object beneficial to mankind" make this clear.

26.2. Gifts for charity-special position.-

Both in India and elsewhere, gifts for charity have received social approval. They have also received certain special privileges in a law, though the abuse-suspected or real-of some of those privileges has sometimes led to a fluctuation of views as to the propriety of conferring special benefits on charities. This has been particularly so in the field of fiscal privileges.

Confining ourselves, however, to non-fiscal matters, and leaving aside the peculiar historical developments in England which led to the Statutes of Mortmain, we may state that the law has been tender towards transfers for charitable purposes in general and it would be true to say that several types of provisions which would not be normally permissible, become so where a charitable purpose is shown. The section under discussion, to put the matter broadly, exempts charities from the rule against perpetuities (section 14) and from two other provisions-dependent transfers (section 16) and accumulation (section 17).

26.3. Charity in Vedic and post-Vedic texts.-

From the earliest times, the merit of charity has been recognised in India. The Rig Veda contains passages extolling the merits of charity. One of them is thus translated by Max Mueller:1 "He who gives alms goes to the highest place in heaven."

The Hindu concept of charity is not confined to religious purposes, even though the two often co-exist. Purely secular objects were equally praiseworthy. The Vedic notions of hospitality are interesting, and it is well-known that in the Hindu household the guest is treated as a divinity hence the social recognition of "guest houses" as a kind of charitable institution.

1. Rig Veda 1, 125, 5-6. cited in Max Mueller's Chips from a German Workshop, Vol. I, p. 46; Hemadri Danakhanda, Bib Ind, p. 6.

26.4. Impartible property.-

Property dedicated for pious uses has been made impartible under Hindu law, as much from the fundamental idea of its not being private property, as from a desire to maintain uninterrupted use of the same for pious purposes.1 This is one example of the special treatment afforded to charities. We need not, for the present purpose, detain ourselves with a detailed discussion of the expressions used in the texts to indicate what are now described as "religious and charitable" purposes-expressions such as Ishta and Purtta, Yoga Kshema.

Nor are we concerned with the meaning of the latter. But, at least according to the one construction of the passage in the Mitakshara,2 dealing with property not liable to partition, where it speaks of "Yoga Kshema", the expression is taken in this sense-Yoga means a fund for the performance of religious ceremonies and Kshemam signifies a reservoir of water or the like constructed for public benefit.3

Of course, the mention of "reservoir of water" is merely to be taken as an illustration. The dominant element is public benefit-which, it may be of interest to note, is also the most important element in the modern concept of charities. The construction of reservoirs is unanimously classified by the Hindu ages amongst purtta (roughly, charitable works). The commonest enumeration of these reservoirs is "Vapi-Kupa-tarnagini", an enumeration occurring not only in later texts4 (Yama, Atri and Varsha Purana), but also in Ashwalayana. But these were not the only instances of purtta works. Gifts for learning and gifts for hospitals form an equally important category of "purtta" works.5

1. P.N. Saraswati Hindu Law of Endowments, (1897 Edn.), Chapter 7.

2. Mitakshara, Chapter 1, section 4, clause 3, reproduced in Vira Mitrodaya, Chapter VII, Section 2.

3. See Golap Chandra Sarkar's Translation, quoted by P.N. Saraswati Hindu Law of Endowments, (1897 Edn.) Chapter 7.

4. Ashwalayana Grihya Parishishta, IV. 9. Bib Ind, p. 342; P.N. Saraswati Hindu Law of Endowments, (1897 Edn.), Chapter 8.

5. P.N. Saraswati Hindu Law of Endowments, (1897 Edn.), p. 27, para. 24.

26.5. Meaning of Ishta and Purtta.-

Ishta, in ancient texts, includes Agnihotra, Vedic gifts, sacrifices, Pashubandh, Chaturmashya, Agnistoma, offered to priests at scarifies, religious austerity, truth, studying in the Vedas, Vaisvedeva sacrifice and Atithya. Purtta works are gifts and charily, according to the Smarta and not Vedic rites. A text of a Smriti cited by Hemadri says-they are gifts made outside the sacrificial ground.

Purtta works include the following-gifts made during eclipses, and other days auspicious for such acts, tanks, groves, processions for the gods, wells, temples, rest-houses, giving of food and relief to the diseased. Gifts for educational purposes, though strictly not coming within the definition of Purtta, have been extolled in the Smrities and Puranas as of high merit Imparting learning and gifts of land and cows are declared to be gifts of surpassing merit, in a text of an Upanishada cited by Hemadri. Hemadri also declares, by citing many texts, that assistance to students in any shape in prosecuting their studies is of great merit.

26.6. History of charities in the West.-

So far as the West is concerned, it is highly probable that the rudiments of the law of charities were derived from the Roman or Civil law.1 In Lord Chief Justice Wilmot's notes of his opinions (pp. 53, 54), it is said: "Donations for public purposes were sustained in the civil law, and applied, when illegal, cy pres to other purposes, one hundred years before Christianity was the religion of the Empire." And for this cited Dig. Lib. tit. 2, De Usuet usufruc. Legatorum, 16, 17.

One of the earliest fruits of the Emperor Constantine's real or pretended zeal for Christianity was a permission to his subjects to bequeath their property to the Church.2 Of course, the Church was originally regarded as the "bride" of God-whence the word "endowment" which has its association with dower.

The permission given by Constantine was soon abused to so great a degree as to induce the Emperor Valentinian to enact a "mortmain law", by which it was restrained.3

But this restraint was gradually relaxed; and in the time of Justinian it became a fixed maxim of Roman jurisprudence, that legacies to pious uses (which included all legacies destined for works of piety or charity, whether they related to spiritual or to temporal concerns), were entitled to peculiar favour, and to be deemed privileged testaments.4

Thus, for example, a legacy of ornaments for a church, a legacy for the maintenance of a clergyman to instruct poor children, and a legacy for their sustenance, were esteemed legacies to pious and charitable uses.5

1. Story Equity Jurisprudence, (1919), pp. 475, 1137.

2. Cod. Theodos, Lib 16, Title 2, 1.4.

3. Cod. Theodos, Lib 16, Title 2, 1.20.

4. Domat Civil Law, Vol. 2, B 4, tit. 2, 6.

5. Domat, Vol. 2, B 4, tit. 2, 6.

26.7. Public benefit in regard to religion.-

In general, a charitable endowment is one which has for its object the benefit of the public or of mankind. A religious endowment is one which has for its object the establishment, maintenance or worship of an idol, deity or other object or purpose subservient to religion. Every religious endowment, in the sense explained above, is not charitable. The following definition of "charitable purpose" occurs in the Charitable Endowments Act:1

"2. In this Act, 'charitable purpose' includes relief of the poor, education, medical relief-and the advancement of any other object of general public utility but does not include a purpose which relates exclusively to religious teaching or worship."

An endowment may be charitable without being religious, and it may be religious without being charitable-particularly where the element of public benefit is missing. This is true where an endowment is private in the sense that the dedication is limited to a family god, meant for a family or families or a small and certain body of individuals and the public has no access to the idol. In general, any property, movable and immovable, that a person can dispose, of by gift or will may form the subject of endowment by gift or will, as the case may be.

1. Section 2, Charitable Endowments Act, 1890.

26.8. Hindu endowments.-

Hindu endowments are mostly intended for the benefit of the public, but, by way of exception, private ownership may be found.

In general, the distinction between a public and private endowment depends upon its extensiveness.1 The essential characteristic of a charitable gift is that is must be for the benefit of the public or mankind.

Wholesale bequests of the estate to religious charity are not unknown.2 In fact, where a gift is made not a living person but to an idol-a dedication-one cannot engraft upon it the English law of perpetuities.3

1. Prakash Chandra v. Subhash Chandra, ILR 37 Cal 67 (79).

2. Gour Hindu Code, (1938), p. 804.

3. Markby, J. Esamy v. Krishna, 2 Bengal Law Reports Original Cases 47; Jamshedji v. Sana, ILR 33 Born 122.

26.9. Statutory precedents.-

Indian statute law contains a number of provisions wherein the aspect of charity becomes important. While section 18 confers a benefit on charity, section 118 of the Succession Act contains a restrictive provision for death-bed gifts to charity.

Section 118 of the Indian Succession Act1 is based on the Statute of Mortmain (9 Geo. II, C. 36). Although it was held in Mayor of Lyons v. East India Co., I MIA 175, that this statute has no application in India, the words used in this section are "religious uses or charitable uses" and the illustrations are adopted from the enumerations of objects mentioned in the Statute of Elizabeth, and the provisions as to the execution of wills for a period of six months in the registry are also borrowed from the English law mentioned above.

1. Paruck Succession Act, (1965).

26.10. Income-tax Act.-

In section 4(3) of the Indian Income-tax Act, 1922, charitable purposes included relief of the poor education, medical relief and advancement of any other object of general public utility. The word "include" indicates that the definition is merely enumerative.1

In the Charitable Endowments Act VI of 1890, charitable purposes "include relief of the poor, education, medical relief and the advancement of any other objects of general public utility but does not include a purpose which relates exclusively to religious teaching or worship." In section 92 of the Code of Civil Procedure, 1908, the words used are "public purposes of a charitable or religious nature."

In the Bombay Public Trusts Act,2 a "public trust" is defined as meaning as express or constructive trust for either a public religious or charitable purpose or both; there is an inclusive portion which is not material for the present purpose. In the same Act,3 it is provided that for the purposes of that Act, a charitable purpose includes-

(1) Relief of poverty or distress;

(2) Education;

(3) Medical relief;

(4) Provision for facilities for recreation or leisure-time occupations (certain conditions are added which are not reproduced here); and

(5) The advancement of any other object of general public utility, but not including a purpose which relates exclusively to religious teaching for worship.

In the Income-tax Act, 1961,4 'charitable purposes' are defined in an inclusive manner. They are defined as including "relief of the poor, education, medical relief and advancement of any other object of general public utility not involving the carrying on of any activity for profit."

1. Commissioner I.T. v. National Mutual Association, ILR 57 Born 519.

2. Section 2(13), Bombay Public Trusts Act, 1950.

3. Section 9, Bombay Public Trusts Act, 1950.

4. Section 2(15), Income-tax Act, 1961.

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