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Faculty of Law, Jamia Millia Islamia- New Delhi-110025

Project Paper on
Concept of Charity under Hindu Law of Religious and Charitable
Endowments

Under the guidance of:


Prof. Ghulam Yazdani, JMI, New Delhi)

Submitted by:
Tasaduq Suhail Sheikh (LL.M. II Semester)
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Table of Contents

S. No Content Title Page No.

1. Title Page 1

2. Table of Contents 2

3. Acknowledgement 3

4. Abstract; Key words 4

5. Introduction 5

6. Certain Statutory Provisions 7

7. Charity: General Rules 8

8. Donatio Mortis Causa: A Maxim of Law 9

9. Charity: Relief of Poverty 10

10. Charities: Advancement of Education 11

11. Universities and Educational Institutions 12

12. Charity: Advancement of Religion 14

13. Charity: Objects of General Public Utility 17-24

14. Trust for Political Purposes 24

15. Conclusion 28

16. Bibliography 30
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Acknowledgement

I have taken efforts in this project; however it would not have been possible
without the kind support and help of many individuals especially Professor
Ghulam Yazdani Sir, Farzan Bashir Dar, Lubna Tanweer Khan, Syed Suboor
and Kaiser Naz. Yazdani sir helped me from the research methodology till the
end of the project. I am grateful for your help sir. Dar helped me in format of
the project and also guided me in writing the abstract of this project. I owe you
one, Dar. Khan, Syed and Naz helped me in collecting the materials for the
project and their help is highly appreciated.

Tasaduq Suhail Sheikh


Jamia Millia Islamia
New-Delhi
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Abstract

Charity is age-old, and has existed in all societies. where charitable acts consist
of gifts to persons thought worthy of receiving such gifts, the act of charity is
complete the moment the gift is made, and there no need of any law to regulate
it .The need for a legal system to regulate charities arises when the donor wishes
to make a more permanent and lasting gift by building, say, a temple or a
hospital which expected to last for centuries. In England, the first statute
regulating charities was enacted in 1597, replaced by the famous Elizabeth
statute of 1601 whose preamble has been employed by English judges to lay
down the legal meaning of charity. The rules developed in England by Equity
have been freely employed in construing and regulating Hindu religious
endowments and waqfs, the basic concepts are not the same. The rules laid
down by the Courts in England and the Indian courts form the most part of law
regarding the charities in general. The author discusses the rules of charity
under Hindu law in detail, its objectives in detail along with the doctrine of
donatio causa mortis.

Key Words: Charity, Endowments, Hindu Law, Judiciary.


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Introduction

The definition of endowments recognised by the courts since long includes the
properties set apart or dedicated by gift or devise for the worship of some
particular deity or for the maintenance of a religious or charitable institution, or
for the benefit of the public or some section of the public in the advancement of
religion, knowledge, commerce, health, safety or for any other object beneficial
to the mankind.
Amongst the religious and charitable endowments, hospitals, schools,
universities alms houses (for distribution of food to Brahmanas or poor),
establishment of idols etc., are included. According to Raghvachariar an
endowment is referred to as the setting apart of property for religious and
charitable purposes in which there is a Karta and a specific thing which can be
ascertained. A disposition in India to be a public trust must be made with the
purpose of advancement of either religion, knowledge, commerce, health, safety
or other objects beneficial to the mankind.

Endowments are of different kinds which can be placed in different categories


in the following manner—

(a) Public or private;

(b) Real or apparent;

(c) Absolute or partial;

(d) Religious or charitable;

(e) Valid or invalid.

In order to ascertain the nature of the endowment as to whether it is public or


private the subsequent conduct of the settler and use of the evidence of the
property set apart by the public at large are to be considered. In fact when a
temple is thrown open for public at large for worship, a valid inference can be
drawn that a public trust has been intended to have been created. Where the
outsiders along with the members of the family of the settler take part in
worship in celebration of festivals in a temple as in public temples, the state of
affairs point out to the public nature of the endowment.
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In contrast private endowment is that in which the public has no ingress, as an


endowment for the worship of the family deity of the settler. Where the property
is kept separate safely for the worship of family deity by family members only,
with which the public has nothing to do, it is a private endowment.

Where the gifts are made for charitable purposes such as for the institution of
Dharmashala, Anathashram (choultries), Sadavratas of the establishment of
educational and medical institutions or/and for the construction of
Anathashrams (orphanage) tanks, wells and bathing ghats etc., they are known
as charitable endowments. In such endowments property is dedicated through
the usual ceremonies of Sankalpa and Utsarga.

The popular charitable institutions created through endowments and recognised


under the Hindu law are Dharmashala or rest houses, Sadavrats Anathashram,
public institutions, constructions of tanks, wells, groves etc. Dharmashalas are
the rest houses provided for the travellers known as Pratishraya Griha in
ancient times.

The property dedicated to the Dharmashalas vest in Dharmashalas itself. Its


management may vest in the founder himself or a committee constituted by the
founder. The benefit of Dharmashala may be available to public in general or it
may be restricted to the members of a community or to the followers of a
particular religion.

Sometimes gifts are made for the establishment of educational institutions or


hospitals. Imparting free education to the people in general has been one of the
prime objects of charity throughout the ages amongst Hindus. Similarly
hospitals and dispensaries known as Arogashalas have also been the objects of
charitable endowments.

The establishment and maintenance of Goshalas is also a valid charitable


purpose. Similarly the excavation of tanks and wells has also been recognised as
charitable objects from the very beginning. According to Dharmashastra,
construction of a well is equal to Agnistoma sacrifice; in desert it equals the
Aswamedha. The well flowing with drinking water destroys all sins. The well
maker, attaining heaven, enjoys all the worldly pleasures. The consecration of
trees and groves is also a well-recognised charitable purpose amongst Hindus.
Dedications for groves and trees have been held valid.
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Similarly Sadavrats, where free distribution of food and alms to the needy and
poor are arranged, have been well known charitable institutions amongst
Hindus. Langars and Anathashram are species of Sadavrats. Endowments for
them have been held valid. Similarly endowments for reciting sacred books and
for the food and maintenance of Brahmacharies and Brahamans have also been
held valid.

Certain Statutory Provisions

Several Indian statutes throw light on the meaning of charity. Indian law,
following the rules of English law, provides that all property must vest in a
person, and the vesting of such property cannot be indefinitely postponed; this
rule is described as the rule against perpetuities, and is contained in the Transfer
of Property Act, 1882. The settled exception to the applicability of the rule is
transfers to charity. The way this exception is expressed in the statute throws
some lights on the legal meaning of the ‘charity’.

Section 18 of the Transfer of property Act, 1882, provides that the rules enacted
in Section 14, 16 and 17 will not apply to in case of transfer of property:

‘for the benefit of public in the advancement of religion,


knowledge, commerce, health safety or any other object
beneficial to mankind’.1

The definition of a ‘charitable purpose’ in the Charitable Endowments Act, 1890


defines it inclusively to include:

‘relief of the poor, education, medical relief and the advancement


of any other object of general public utility, but doesn’t include a
purpose which relate exclusively to religious teaching or
worship’.

Another inclusive definition being substantially the same as is given in the


Charitable Endowments Act, 1890 is contained in section 2(15) of the Income-
tax Act, 1961, which lays down that:

‘relief of the poor, education, medical relief and the advancement


of any other object of general public utility’.

1
Section 18 does not apply to Muslims and did not, till 1929 apply to Hindus and Buddhists.
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These two definitions are of great value in delineating the scope of ‘charity’ in
Indian law. Though both definitions are inclusive in form, the last of the
specifically enumerated objects is sufficiently general to cover all objects which
are beneficial to the community.

Lord Macnaghten in Commissioners for Special Purposes of Income-


tax V. Pemsel2 observed:

‘ “charity” in its legal sense comprises four principle divisions:


trusts for the relief of poverty; trusts for the advancement of
education; trusts for the advancement of religion; and trusts for
other purposes beneficial to the community, not falling under any
of the preceding heads.”

In considering what is of public utility Courts would consider all relevant


factors. In India, it may also be useful to consider the Directive Principles of
State Policy contained in the Constitution which, though intended to guide state
action, lay down what the constitution regards as important; a gift to achieve
these objects would, it is submitted, be charitable in law.

Charity: General Rules

Whether a trust is or is not charitable has to be ascertained by considering its


objects. The usual rules in interpreting a trust deed are well settled.

Dedication may be Absolute or Partial:

A dedication for an endowment may be absolute or partial. It is an absolute


dedication when the donor divests himself of all beneficial interest in the property
dedicated to the endowment. The dedication is partial when only a charge for an
endowment is created on the property.3

Subject Matter must be specified:

The second essential of valid endowment is that property dedicated must be


specific. The words of gift used by the testator must be unambiguous and that the

2
[1891] AC 531 (583).
3
'Hindus have been dedicating property for religious and charitable purposes' (Lawteacher.net, April 2019)
<https://www.lawteacher.net/free-law-essays/land-law/hindus-have-been-dedicating-property-for-religious-
and-charitable-purposes-land-law-essay.php?vref=1> accessed 13 April 2019
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subject matter of the gift must be well defined and certain. Any uncertainty about
the subject matter of the dedication will be fatal to the creation of endowment.
Thus, where the testator gave direction in the will that the money should be spent
for a certain charity, but did not specify the amount, it was held that no valid
endowment came into existence.

Object must be definite:

What are purely religious purposes and what charitable purposes will be
charitable, must be entirely decided according to Hindu Law and Hindu notions.
In the case of Manorama V. Kalicharan4, testator directed his executors, inter
alia, to set apart a sum not exceeding Rs. 25,000 for distribution “among his poor
relation, dependents and servants”. As to who would be entitled to the benefit was
left to the discretion of the executor. The court held the bequest to be valid.

Settlor must have the capacity to settle the endowment:

The fourth requirement for the validity of an endowment is that the settler must
be of sound mind and a major and he should not suffer from any legal
disqualification. Under the Dayabhaga school, the father as well as a coparcener
has the absolute power over all properties, self-acquired or inherited. So, a father
or a coparcener under the Dayabhaga School has full power of creating
endowments. Karta or any other Mitakshara coparcener has no power of making
gift or otherwise alienating the joint family property. Save with the consent of
other coparceners.

Donatio Mortis Causa: a Maxim of Law

Donatio Mortis Causa is a legal maxim, used in India, with the following
meaning: Donatio mortis causa (a gift by reason of death) is a gift of personal
property in contemplation of death; a death-bed disposition; an inchoate gift of
personality consummated by the giver’s death. To render this kind of gift valid, it
must be made by the giver, when ill, in anticipation of his death and intended to
take effect only upon his death by his existing illness, for his recovery from that
illness, or his surviving the person to whom it was made, or his subsequent
personal revocation of the gift, as by resuming its possession, will defeat it; and
tradition or delivery, either actual or symbolical of subject of the gift or of the

4
(1904) ILR 31 Cal 166
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instrument which represents it must be made to the donee, either for his own use,
or upon trust for another person, or for a particular purpose, e.g., the gift of a
cheque upon the donor’s banker is not good as a donatio mortis causa, because it
is a gift which can only be made effectual by obtaining payment of it in the
donor’s life time and is revoked by his death; and so a promissory note not
payable to bearer. But a deposit in the Post Office Savings Bank can be subject of
such a gift. This kind of gift is deemed to pass on death. In case of a gift inter
vivos the property may be either movable or immovable, but in the case of gift
mortis causa the property must be movable. In the case of gift inter-vivos the
transfer is unconditional; in the case of gift mortis causa the transference is
conditional and revocable. Further, the subject-matter of a gift inter-vivos is the
gratuitous transfer of property by one person to another where death is not
necessarily contemplated while an essential element of gift mortis causa is that it
is made in contemplation of death. A donatio mortis causa differs from legacy
mainly in its being wholly independent of donor’s last will and testament and it,
therefore, requires no probate and no assent on the part of his executor or
administrator to give full effect to it. It resembles a legacy inasmuch as it is
ambulatory, incomplete and revocable during the donor’s life; and is liable to his
debts upon a deficiency of assets.5

Charity: Relief of Poverty

The first head of what constitute charities under the Charitable Endowments
Act, 1890, the Income-tax Act, 1961, and the principal divisions of charity laid
down by Lord Macnaghten in England in the relief of poverty.

‘Poverty’ is the relative term, and should not be equated with destitution. A trust
for encouraging hand spinning and Khaddar was held to be a trust for the relief
of poverty.6 A trust for the welfare of the workmen of Kanpur and the
neighbouring areas is for the relief of poverty as the trustees will make the
benefits available to those in need. A trust for rural reconstruction or promoting
cottage industries is for the relief of the poor as the majority of people in rural
areas or involved in cottage industries is poor.7 A trust for the vanbhojana
dharman, feeding the poor, is a valid charity: it is not too vague.8

5
(2017, 01). Donatio Mortis Causa india.lawi.asia Retrieved 04, 2019.
6
All India Spinners’ Association of Mirzapur, Ahmadabad V. Commissioner of Income-tax of Bombay
Presidency, Sind and Baluchistan, (1943-44) LR 71 IA 159.
7
Thigarajar Charities, Madurai V. Commissioner of Income-tax, AIR 1997 SC 2541
8
Mathusami Naidu V. Rayala Naidu, AIR 1925 Mad 689.
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English decisions have also taken a similar wide view of the meaning of ‘relief
of poverty’. A trust for windows and orphans of band officers most deserving of
financial assistance was a trust for the relief of poverty as a gift to windows and
orphans was prima facie a gift for people suffering under circumstances of
privation.9 A gift for the construction of the working men’s hostels were used
by persons was for the relief of poverty even though economic rents to old
persons were for the relief of poverty even though an economic rent was to be
charged from the occupants. A trust to make available accommodation on a
lease basic to old people was a trust to relieve poverty.10

A bequest for blind boys and blind girls was a charitable bequest; it was
observed that the words relief of the aged, impotent and poor in the preamble to
the statute of 1601 were to be ready disjunctively so that the blind boys and
girls need not to be poor.11

Trust for the relief of poverty constitute, in English law, for historical reasons,
an anomaly as such trust (Unlike, say, trust for the advancement of education)
are valid charitable trusts even if the benefit is conferred on private individuals,
such as the poor employees of a particular company.12 It is unlikely that such a
view would be taken in India: such as trust would not, in any case qualify for
exemption under the Income-tax Act.

Charities: Advancement of Education

A trust for the advancement of education is an established head of charities. If a


trust advances education, it would be a charity regardless of whether the
beneficiaries are poor or not.

Advancement of education is a wide and flexible term and covers arrange of


activities which advance education which means as matter of language,
anything which develops the mind or body of a person. Anything directly or
indirectly it is not confined to teaching in a classroom.

A trust to help Anglo-Indian youth in studies was an educational trust.13 In a


decision of the Supreme Court, it was held that education as used in section
2(15) of the Income-tax Act, 1961, meant systematic instruction, schooling or

9
In re Coulthrust, Decd., [1951] Ch 661.
10
Rowntree (Joseph) Memorial Trust Housing Association Ltd. V. Attorney- General, [1983] Ch 159.
11
In re Lewis, [1955] Ch 104.
12
Dingle V. Turner, [1972] AC 601.
13
Edward H.M. Bower V. A.M.V. Hesterlow, AIR 1939 Mad 1920.
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training given to the young in preparation for the work of the life and had not
been used in the wide and extensive sense under which every acquisition of
further knowledge constitutes education the decision interpreted section 11 of
the Income-tax Act accordingly. The Supreme Court followed on this point a
decision of the Privy Council on the corresponding provision in the Indian
Income-tax Act, 192214

A learned single judge of the Karnataka High Court has, however held that the
object of a body is called the Ecumenical Christian Centre which included
diffusion of useful knowledge, publication of books and establish educational
institutions were directly related to education and it was therefore, a charity 15.
In a latter decision, The Karnataka High Court reiterated the view point and
held that a fund for giving scholarships to poor and deserving students
belonging to the Saraswath community was a charity for the advancement of
education.16

A college run by the registered society is an educational institution and a


charity under the Charitable Endowments Acts. 1890.17

In decision involving the construction of the Delhi Municipal Corporation Act,


1957, as school and the children Book Trust were not entitled to exemption
from property taxes as they were not supported by voluntary contributions
which was a requirement under that Act fees and donations paid by the students
of the school could not be regarded as voluntary as they forced on the students
or parents.18

Universities and Educational Institutions

As has been noted above the income of universities and educational institutions
of most kinds in exempt from the Income-tax act if certain specified conditions
are satisfied, the most important being that the income must be wholly applied
for the spread of education and this provision is independent of the body being
charitable under section 2(15) of the Income-tax Act, 1961.19 The exemption is
available to a society or trust running an educational institution.20

14
Trustees of the Tribune Press, Lahore V. Commissioner of Income-tax, (1938-39) LR 66 IA 241.
15
Ecumenical Christian Centre V. Commissioner of Income-tax, Karnataka-I, (1980) 139 ITR 226
16
Commissioner of Income-tax, Karnataka-II, Banglore V. Saraswath Poor Students Fund, (1984) 150 ITR 142.
17
Pamulapati Buchi Naidu College Committee, Nidubrolu V. Government of Andhra Pradesh, AIR 1958 AP 773
18
Muncipal Corporation of Delhi V. Children Book Trust, AIR 1992 SC 1456.
19
Section 10 (23C) of the Income-tax Act, 1961
20
Commissioner of Income-tax V. Rajasthan Text Book Board, (1999) 244 ITR 667
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The exemption under section 10(22) of the Income-tax Act,1961 would be


available to a university established outside India but the Oxford university
press was not so entitled as it did not exist solely for educational purpose.21

In England, Numerous decisions have interpreted ‘education’ very widely.

A gift to an institution called Wilton Park which held conference to promote


peace and co-operation was a gift which advanced education. A gift for the
students Union of a teaching hospital was a charitable trust as it advanced
education by providing physical, culture and social outlets for the students.

Other examples of objects held to be charitable as advancing education include


encouraging singing and organ music;22 he Boy Scout movement which
instructs boys in the principles of discipline, loyalty and good citizenship;23 a
bequest of arms and antiques to be displayed24; the publication of laws Reports
is an education purpose, a gift to build a court for fives or squash in a school as
it essential that a school should have organised sports, o gift for an annual chess
tournament as chess ha an educational value, a society to promote facilitate and
encourage the study of biology, zoology and kindred sciences.

A bequest to the Royal College of Surgeons advances education as it promotes


the study and practise of the art and science of surgery: the professional
protection of the members of the Royal College was only an ancillary object.

A trust to look for the original manuscripts of Shakespeare’s play to establish


that they were written by Bacon was an educational purpose: research would be
an educational purpose if it is of educational value to the researcher or directed
to improve the sum of communicable knowledge in an area which may be
covered by education. In a letter unreported decision, a learned single judge
may set out when a trust for research can be educational and therefore
charitable.

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 subject of study, and (b) it is
contemplated that knowledge acquired as a result of the
research will be disseminated to others, and (c) the trust is
21
Oxford University Press V. Commissioner of Income-tax, AIR 2001 SC 886
22
In re Levien, [1955] 1 WLR 964
23
In re Webber, [1954] 1 WLR 1500
24
In re Spence,[1938] Ch 96
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for the benefit of the public or a sufficiently important


section of the public.
2) In the absence of a contract context, however the court will
be readily inclined to contrite 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 a teacher/ pupil relationship should be in
contemplation, or (b) that the persons to benefit from the
knowledge to be acquired should be already in the course of
receiving “education” in the conventional sense…..25

Charity: Advancement of Religion

The Preamble to the statute of Elizabeth includes only one purpose connected
with the advancement of religion, viz., the repair of churches, but it has been
settled law in England since 1639 that advancement of religion was a charitable
purpose as being with “the equity of the Act”.26 Likewise, though the purpose of
“advancement of religion” is not expressly set out in the definition of the
charitable purpose in the (inclusive) definitions contained in the Charitable
Endowments Act, 1890 or the Income-tax Act, 1961, it is settled law that trusts
for the advancement of religion are charitable trusts in India.

It is therefore, necessary to understand that the word “religion” connotes. The


meaning and scope of what is regarded as religion and what purposes can be
regarded as religious purposes cannot possibly have the same meaning in India
as in England: India is a country with many religions, theistic and non-theistic,
persons believing in only one God, and persons worshipping many Gods, etc.
England is, at least nominally, a Christian country, though many persons are
non-performing Christians, and, in recent years, many Muslims and Hindus
have settled in England. This is consequently; felid where English decisions are
of little value.

In India, religion is not necessary theistic as there are well-known religious such
as Jainism and Buddhism which do not believe in the existence of God or of any
intelligent First Clause, a religion has it’s basic in a system of beliefs and
25
In re Besterman’s Will Trusts, Unreported, passage quoted in McGovern V. Attorney General, [1982] Ch 669.
26
Pember V. Inhabitants of Kingdon, (1639) 1 Eq Cas Abr 95
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doctrines which are regarded by those who profess that religion to be conducive
to their spiritual well-being.27 This has been restated in a more recent decision
where the supreme court observed that essentially, religion is a matter of
personal faith and belief of personal relations of an individual with what he
regards as cosmos, his maker or his Creator which he believes regulates the
existence of insentient beings and the forces of the universe, it is not necessarily
theistic.28

What is a religious purpose must be determined by referring to the religion of


the settlor or testator. In the Hindu system there is no clear demarcation between
religion and charity as charity is itself regarded as part of religion as gift for
charitable purposes are impelled by the desire to acquire religious merit.
Charities amongst Hindu traditionally fell under two heads, “Istha” acts which
include Vedic sacrifices gifts to priests, preservation of Vedas, religious
austerity, rectitude vaisvadev sacrifices and hospitality and “purta” acts which
include construction and maintenance of temples, tanks, wells, planting of
groves, gifts of food, dharamshalas, places for drinking water, relief of the sick
and promotion of education and learning perpetual endowments for the worship
of family idols or the continued performance of annual sraddhs of an individual
or his ancestors are good religious and charitable purposes.29

As far as Hindus are concerned, what is a religious purpose has to be


ascertained by considering Hindu notions, this is primarily a matter of what the
shastras lay down so that before any trust can be claimed to be a religious trust.
It must ordinarily be shown that the purpose has a shastraic basic: if it is
contended that other practices and beliefs have subsequently grown and been
accepted as conferring religious merit, it must be shown that they have attained
wide recognition and constitute the religious practices of a substantial and large
class of persons.30

The Privy Council had held that a trust for ‘dharam’ was void as it was too
vague to enable the trust to be administered.31 The Supreme Court has pointed
out there is a distinction between the meaning of the expression ‘dhama’ and
‘dharmada’: the former is indefinite and equivocal, the latter, by trading or
commercial custom, invariably means a charitable purpose, consequently, a gift
27
Ratilal Panachand Gandhi V. State of Bombay, AIR1954 SC 398
28
Narayana Deekshitulu, A.S. V. State of Andhra Pradesh, AIR 1997 SC 3702
29
Ramachanrda Shukla, Pt. V. Shree Mahadeoji, AIR 1970 SC 458
30
Saraswati Ammal V. Rajagopal Ammal AIR 1953 SC 491
31
Ranchordas Vandrawandas V. Parvatibai, (1898-99) LR 26 IA 71
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or payment to dharmada cannot be regarded as void as being vague or uncertain


and is valid.32

The gift for a dharmachatram, a resting place for travellers and pilgrims, called
a choultry in South India, was a valid religious trust.33 Property entrusted to a
municipality for providing a shelter to Shadus, saints and religious mendicants
is a religion and charitable purpose under the Bombay Public Trusts Act, 195034

A trust for the religious mutt, known in North India as an ‘asthal’ is a religious
trust under the Bihar Hindu Religious Trust Act, 1951, if it is shown to be a
public Mutt.35 A trust for a tank is a religious charitable purpose. 36 A trust the
dominant purpose of which was the Pooja of, and at the Samadhi (tomb) of a
private person is not a recognised religious under Hindi Law.37 A trust, the
dominant object of which was to establish an akhara (wrestling ground) was not
a valid religious trust.38

The same approach has been applied in the case of the rusts created by Muslim
settlors or testators, whether a mosque named after one ‘Chandabhoy’ regarded
as saint by the Dawoodi Bohra Community of Muslims, is a charitable trust of a
religious nature has to be determined by applying the rules of Muslim law. 39 A
private gift to one’s elf or kith and kin may be meritorious and pious but is not a
charity even under the ‘Muslim Law’40

Having regard to the approach of courts in India on what constitutes religion or


advancement of religions, though English decisions are of little value, a few
laying down the general principles are noted down.

English courts do not distinguish between one religion and another.41 That is
also the approach our court would adopt. The Bombay High Court has upheld a
trust in favour of a body called the “Es’ean Community of Vind’yu”. A body
whose doctrines the learned judge found difficult to understand.42

32
Commissioner of Income-tax (Central), New Delhi V. Bijli Cotton Mills (P) Ltd., AIR 1979 SC 346
33
Thyarammal V. Kanakammal, AIR 2005 SC 1588
34
Municipality of Taloda V. Charity Commissioner, AIR 1968 SC 418
35
Bihar State Board of Religious Trusts (Patna) V. Mahant Sri Bishwer Das, AIR 1971 SC 2057
36
Kamaraju Venkata Krishna Rao V. Sub-Collector, Omgole, AIR 1969 SC 563
37
Saraswati Ammal V. Rajagopal Ammal, AIR 1953 SC 491
38
Ramachanrda Shukla, Pt. V. Shree Mahadeoji, AIR 1970 SC 458
39
Advocate-General of Bombay V. Yousuf Ali Ebrahim, AIR 1921 Bom 338
40
Fazlul Rabbi Pradhan V. State of West Bengal, AIR 1965 SC 1722.
41
Gilmour V. Coats, [1949] AC 426 (459)
42
Fakirji Edulji Bharucha V. Bomanji Munchershaw Jhaveri, (1945) 48 Bom LR 323
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Advancement of religion is a wide concept and covers all religions and sect’s
trusts for the advancement of religion are assumed to be for the public benefit
unless doctrines inculcated are provided to be subversive of all morality.43

A gift to an ethical society whose objects promoted that was called rational
religious sentiment could not be said to be for the advancement of religion as
religion involves man’s relations with God while ethics involves man’s relation
with man, the object was however a charitable object as being for the
advancement of education and as being for the public benefit.44 In India there
can be a religious trust which does not involve the worship of god, as noted
above.

In England, trust for supporting missions and missionaries would be regarded as


trusts for the advancement of religion.45 In India, it should be noted that the
definition of charities in the charitable Endowment Act, 1890 expressly
excludes a purpose relating exclusively to religious teaching or worship, and
under section 13 of the Income-tax act, 1961, exemption from the tax is not
available in respect of trusts under which the benefit was confined to a
particular religious community.

Charity: Objects of General Public Utility

This section involves noting many decisions dealing with trusts for diverse
range of subjects which have been held to be trusts for objects of general public
utility in India or trusts for objects beneficial to the community in England. In
this field English decisions are useful and have been freely cited and relied upon
in Indian decisions.

As the range of subjects is diverse, it has been thought best to the deal with the
various objects of charity alphabetically so that the reader can ascertain, at a
glance, which objects have been held to be charitable. Bot Indian and England
decision have been dealt with together. The difference between the concept of
objects of general utility in India and purposes beneficial to the community in
England, as also the approach of courts in the two countries, has already been
noted above and must be kept in mind. It should also be remembered that the
purposes of exemption from Income-tax between 1961 and 1984, a trust for an

43
In re Watson, [1973] 1 WLR 1472
44
In re South Place Ethical Society, [1980] 1 WLR 1565
45
See Tudor on Charities, 9th Edn., paragraph 2-052
18 | P a g e

object of general public utility was not entitled to exemption of it carried on an


activity for profit.

Agriculture, promotion of

The promotion of agriculture and horticulture has been held by the Privy
Council in an appeal from Australia to be charitable purpose.46 That would also
be the law in India as promotion of trade and commerce has been held to be an
object of general public utility, as has been noted below.

Animals Welfare of

In England, a gift for the benefit if animals was held to be valid charitable trust
as it was calculated to promotion public morality by checking the innate
tendency to cruelty.47 A home for lost dogs would be charitable institution in the
general sense.48 A similar view is bound to be taken in India because of the
views of many persons in India about the sanctity of all life, and the need to
protect animals.

Automobile Association

An association with the object of developing the automobile movement was a


charitable trust as its object resulted in improving standards of driving which
would reduce accidents.49

Bar council

Having regard to the preamble and objects of the advocates Act, 1961, a State
Bar council sub serves an object of general public utility. 50 As the objects of a
Bar council are to safeguard the interests of advocates, assisting, disabled
advocates and securing standards of professional conduct, which would protect
the members of public, its objects of general public utility.51

The income of such an organization may also exempt under the section 120
(23A) of the Income-tax Act, 1961.

46
Brisbane City Council & Myer shopping Centre Pty. Ltd. V. Attotney-General of Queensland, [1980] 3 All ER 918
47
In re Wedgwood, [1915] 1 Ch 113 CA
48
Adamson V. Melborne & Metropolitan Board of Works, [1929] AC 142.
49
Additional Commissioner of Income-tax, Madras I, V. Automobile Association of Southern India, (1980) 127
ITR 730
50
Commissioner of Income-tax, Bombay V. Bar Council of Maharashtra, AIR 1981 SC 1462
51
Bar Council of Uttar Pradesh V. Commissioner of Income-tax, Lucknow, (1982) 143 ITR 584
19 | P a g e

Clubs

A gift of a building for a village club and reading room for the furtherance of
religion and mental improvement and to be kept free of intoxicants and dancing,
has been to be charitable purpose in England.52

As public reading room or hall would be regarded as an object of general public


utility in India but that would not, it is submitted, be the case of social clubs.

Ethical principles, promotion of

The study and dissemination of ethical principles and cultivation of a rational


religious sentiment has been held in England to be trust for advancement of
education and for an object beneficial to the community and therefore,
charitable but not for the advancement of religion.53 Such a body is likely to be
held to be a body for an object of general public utility in India.

Fire brigades

The provision of a fire brigade in a district is a charitable purpose.54

Hand Spinning and weaving promotion of

Hand spinning and weaving serves an object of general public utility (through
economist may differ on some aspects of the activities of an association formed
to promote and spinning and weaving.55

Heritage Buildings, sites and places of natural beauty

A body incorporated for preserving lands and tenements of beauty or historical


interests and as regards land the prevention of natural aspects features and
animal and plant life was a charitable body as the objects were beneficial to the
community.56

52
In re Scowcroft, [1989] 2 Ch 638
53
In re South Place Ethical Society, [1980] 1 WLR 1565
54
In re Wokingham Fire Brigade Trusts,[1951] Ch 373
55
All India Spinners’ Association of Mirzapur, Ahmadabad V. Commissioner of Income-tax of Bombay
Presidency, Sind and Baluchistan, (1943-44) LR 71 IA 159.
56
In re Verrall, [1916] 1 Ch 100
20 | P a g e

Home industries and craft, promotion of

A trust for the promotion of home industries and craft is a trust for an object of
general public utility and, therefore, charitable.57

Hospitals, convalescent homes etc.,

A trust for a hospital for women was a charitable trust.58 In England, a bequest
for a home of rest for physical or mental recuperation of persons in need of such
rest by reason of the stress and strain caused by the conditions in which they
live and work was held to be valid charitable bequest59. That would also it is
submitted, the position in India.

It must be noted that the income of certain hospitals for the reception and
treatment of persons suffering from illness or mental defectiveness or of the
reception and treatment of person during rehabilitation is exempt under the
section 10(23C) of Income-tax Act 1961, if they exist wholly for philanthropic
purposes and provide that the conditions specified in that clause are satisfied.

Knowledge, dissemination of

Dissemination of knowledge in diverse fields has been held to be charitable as


an object of general public utility. Examples include: legal education,
dissemination of knowledge and raising moral economic political conditions
generally; education in commercial and tax laws.60

In England, all these trusts would have been held to be charitable as being for
the advancement of education.

A private coaching organizations can’t, however, be called an object of general


public utility. In England legacies to the royal society and the royal
Geographical society, for improving natural knowledge and improving
geographical knowledge, respectively, were held to be charitable under the
Mortmain Act.

Law reports

The preparation and publication of law reports by an origination which did not
distribute its profit to its members is both an object beneficial to the
57
Commissioner of Income-tax, West Bengal V. Bengal Home Industries Association, (1962) 48 ITR 181
58
State of Uttar Pradesh V. Bansi Dhar, AIR 1974 SC 1084
59
In re Chaplin, [1933] Ch 115
60
Commissioner of Income-tax V. Jodhpur Chartered Accountants Society, (2002) 258 ITR 548
21 | P a g e

consequently, charitable; the purpose were beneficial to the community as the


law reports led to the development of law and to make the law known or
accessible to members of the community.61

Library, Museum, reading room, etc.,

Only some decisions on the topic are set out to illustrate the principle. A library
and gallery is charitable object. Preservation of ancient cottages as examples of
English craftsmanship is a charitable purpose. Erecting a public hall for purpose
and to display armour and antiques was an object beneficial to the community. 62

Mental and Moral Improvement, trust for

A legacy to an association to spread the teachings of one Dr. Steiner was a valid
charitable bequest as it was for the mental and moral improvement of man.63

Miscellaneous Objects

A gift to my country England was held to be a valid charitable gift in England to


be expended as his Majesty may direct.64

Newspapers

In a decision of the privacy council it was held that a newspaper to supply the
province with an organ of educated public opinion was an object of general
public utility, and the trust doing so was charitable trust.65 In a similar case,
when the supreme court was considering the case of a trust established to
provide Kannada speaking people with an organ of educated public opinion, it
was held that though its object was an object of general public utility, it could
not be regarded as a charitable trust under section 2(15) of the Income-tax Act,
1961. As it then stood as it was carrying on an activity for profit66. After the
amendment of section 2(15) in 1984, such trust be held to be objects of general
public utility.

61
Incorporated Council of Law Reporting for England and Wales V. Attorney-General, [1972] Ch 73
62
In re Spence [1938] Ch 96
63
In re Price [1943] Ch 422
64
In re Smith, [1932] 1 Ch 153 CA
65
Trustees of the Tribune Press, Lahore V. Commissioner of Income-tax, (1938-39) LR 66 IA 241.
66
Sole Trustee, Lok Shikshana trust V. Commissioner of Income-tax, Mysore, AIR 1976 SC
22 | P a g e

Professional Associations

The income of certain professional association in the fields of law, medicine,


accountancy, engineering or architecture is exempt under section 10(23A) of the
Income-tax Act 1961. Provided that certain stipulated conditions bare satisfied.
A body such as State Bar Council sub serves an object of general public
utility.67

Recreation Grounds

A bequest for establishing a public recreation ground or playing fields, parks


and gymnasiums was for a purpose beneficial to the community. A park and
recreation grounds was held to be charitable by the Privy Council hearing an
appeal from Australia.68

Under the (England) recreational charities Act, 1958, providing recreational or


leisure-time occupations was charitable provided that it was done in the
interests of social welfare, ‘social welfare’ was defined to refer to the provision
of facilities to persons in need of such facilities by reason of youth, age,
infirmity or disablement, poverty or social or economic circumstances, or to
females generally.

A provision based on the English Act has been inserted in the Bombay public
trusts Act, 1959, as in force in Maharashtra with effect from 1971.

It is submitted that even in the absence of statutory provisions, a recreation


ground or playground would be an object of general public utility, and,
therefore, providing them would be charitable.

Research Institutions

It has been held in India that establishing a research station for research in
coffee plants to improve their quality and to control the coffee crop was an
object of general public utility.69

The income of scientific research association approved by the government of


India is exempt from Income-tax under section 10(21) of the Income-tax Act,
1961, provided that the conditions specified in the clause are satisfied.

67
See under Bar Councils above.
68
Brisbane City Council V. Attorney-General of Queensland, [1979] AC 411
69
Coffee Board V. Deputy Commissioner of Agricultural Income-tax, Mysore, (1956) 52 ITR 126
23 | P a g e

It has been noted above that promoting research has been held to be charitable
in England as an instance of the advancement of education.

Roads and Roads transport

The Supreme Court has held that providing road transport to an object of
general public utility; the surplus income was to be handed over to the state
Government which was required to use for development of roads, which was
also a purpose of general public utility. Maintenance of Roads has also been
held in England to be an object beneficial to the community.70

Sports, Promotion of

In English law, promotion of sport simpliciter cannot be regarded as charitable


as even of it is found to be benefit to the community, it does not fall within the
spirit and intendment of the preamble to the 1601 Act. If, however, the
promotion of sport is part of a wider activity which is itself charitable,
promotion of sports can be charitable under English law. Examples are sports in
schools, in the police, etc.71

The promotion of sports is not regarded as a charitable in Hindu law. 72 Our


court are free to determine whether in their opinion promotion of sports is or is
not an object of general public utility, regardless of the preamble to the Act of
1601, and have held in several cases that such activities are charitable. It has
been held, for instance, that the following are objects of general public utility:
providing a swimming bath (even though it was then limited to Europeans),
providing a gymkhana for sports and games, training in horsemanship and
riding.73

It should be noted that the Bombay Public trusts Act, 1950, as originally
enacted and still in force in the state of Gujarat, expressly excluded the
exclusive promotion of sports from the category of objects of general public
utility. That express exclusion has been deleted in the Act as in force in the state
of Maharashtra from 1972. A trust for the promotion of sports could, therefore,
be held to be a trust for objects of general public utility in that state.

70
Attorney-General V. Day, [1900] Ch 31
71
See Tudor on Charities, 9th Edn., paragraph 2-094
72
Ramachanrda Shukla, Pt. V. Shree Mahadeoji, AIR 1970 SC 458 (Para. 19)
73
Hyderabad Race Club, Hyderabad V. Commissioner of Wealth-tax, Andhra Pradesh, (1997) 10 SCC 334
24 | P a g e

The organization and promotion of horse racing in not, however, an object of


general public utility. The property of a race club in not being used for a
benevolent activity calculated to benefit the poor or the deprived; it was not
exempt from property taxes under the Hyderabad Municipal Corporation Act,
1956; that its income may have been applied for charitable purposes was not
relevant.74

Section 10 of the Income-tax Act, 1961, was amended in 1991, to provide that
the income of a sports association expended exclusively for the promotion that
of sport was exempt from Income-tax provided that certain conditions were
satisfied. This provision was, however, deleted with effect from1-4-2003.

Stock Exchange

It has been held that a stock exchange, whose principal object is to facilitate
transactions of business on the stock exchange and establishing a clearing
house, is exempt from tax as its object is of general public utility.75

Trade, Commerce and Industry, Promotion of

Associations and bodies for the promotion of trade commerce and industry are
exempt from tax as they sub serves an object of general public utility. The same
view has been taken in England under the English town and country planning
Act 1947; a trust to manage a place of education and recreation and to promote
industry, commerce and art was charitable.76

Trust for Political Purposes

It is settled law, both in India and England, that a trust for political purposes is
not charitable. The principal and leading decision in India is that of a Bench of 5
learned Judges of the Supreme Court, who reviewed the English decisions on
this point, and held by a majority of 4:1 that on this point there was no
difference between English and Indian law; the actual decision of the Court was
that a trust to run the newspaper Kesari, which had been founded by Lokmanya
Bal Gangadhar Tilak was not a charitable trust under the Bombay Public Trusts
Act, 1950, as its objects were political.77 The decision would be applicable even
74
Municipal Corporation of Hyderabad V. Hyderabad Race Club AIR 1987 SC 92.
75
Commissioner of Income-tax, Karnataka V. Banglore Stock Exchange Ltd., (1978) 115 ITR 493
76
In re Town and Country Planning Act, 1947, [1951] Ch 132
77
Laxman Balwant Bhopatkar V. Charity Commissioner, AIR 1962 SC 1589
25 | P a g e

under the law relating to Income-tax as what the Court considered was the
meaning and scope of the phrase ‘an object of general public utility’, a phrase
which occurs both in the Bombay Public Trusts Act, 1950, and the Income-tax
Act, 1961. Subba Rao, J. (as he then was) dissented on this point and held that
the trust was a charitable trust. He reviewed the English decisions and observed:

'Let me now summarise my views on the subject: (1) The


English decisions are based upon a pragmatic approach to the
problems that arose before them, having regard to the historical
development of the law of charities in that country; there is no
common thread discernible in the large volume of English
decisions, (2) Under the Act [Bombay Public Trusts act,
1950], unlike in England, the advancement of the object
common public utility is declared to be a charitable purpose,
and it is not permissible to curtail its scope with reference to
English decisions, (3) The expression " object of general public
utility" is very comprehensive and it includes all purposes,
whether political or otherwise, provided that it is an object of
general public utility.78

The conclusion of Subba Rao, J. on the applicability of English


decisions in determining whether a trust is charitable under
Indian law is similar to a later decision of 5 Learned Judges of
the Supreme Court in the context of the phrase 'object of
general public utility' occurring in the Income-tax act, 1961, in
a matter where the question of political objects was not,
however, in issue.79

As the law stands at present, it is settled law in India that a trust for political
purposes is not a charitable trust.4 A trust for promoting hand spinning and
weaving was a charitable trust as it helped the relief of poverty; the Privy
Council expressly approved the conclusion of Wadia, J., of the Bombay High
Court, viz.,

... if an Association is set on foot by a political organisation and


its connected with it but still has for its real object the relief of

78
AIR 1962 SC 1589, paragraph 51.
79
Additional Commissioner of Income-tax, Gujarat V. Surat Art Silk Cloth Manufacturers’ Association, Surat, AIR
1980 SC 387
26 | P a g e

poverty, its connection with the political organisation does not


in my opinion make its real object any the less charitable.'80

The test is to ascertain the dominant object of the trust. If the dominant purpose
of a trust relating to the newspaper the Tribune was to supply the Province of
Punjab with an organ of educated public opinion it subserved an object of
general public utility, and was charitable trust.81

A trust to promote trade and commerce is a charitable trust as it promoted an


object of general public utility; it did not cease to be so even if it incidentally
entered the political domain for achieving the principal purpose by promoting or
opposing legislation likely to affect trade or commerce.82

The leading English decisions is that of the House of Lords in a decision where
the principal question was whether a bequest to a body called Secular Society
was valid in law; it had been contended that the Secular Society promoted
atheism and was, consequently, blasphemous; the House rejected the argument
and upheld the bequest as being a valid bequest; Lord Parker held, however,
that the bequest could not be regarded as a charitable bequest, observing:

'... ...but a trust for the attainment of political objects has


always been held invalid, not because it is illegal, for everyone
is at liberty to advocate or promote by any lawful means a
change in the law, but because the Court has no means of
judging whether a proposed change in the law will or will not
for the public benefit, and therefore cannot say that a gift to
secure the change is a charitable gift'83

It has been held that a society called the National Anti-vivisection Society with
the object of suppression of vivisection was not a charitable trust both because
the advancement of morals achieved by its objects would be far outweighed by
the determent to medical science and research and, consequently to public
health, and because its main object was political in as much as it desired to
promote legislation to prohibit vivisection.84

80
All India Spinners Association of Mirzapur V. Commissioner of Income-tax, Bombay Presidency, Sind and
Baluchistan, (1943-44) LR 71 IA 159
81
Trustees of the Tribune Press, Lahore V. Commissioner of Income-tax, (1938-39) LR 66 IA 241.
82
Commissioner of Income-tax, Madras V. Chamber of Commerce, Madras, AIR 1965 SC 1281.
83
Bowman V. Secular Society Ltd., [1917] AC 406 (442)
84
National Anti-vivisection Society V. Inland Revenue Commissioners, [1947] AC 31.
27 | P a g e

The principle that a trust for a political purpose was not charitable has been
reiterated in later decisions.85 In a decision as to whether the organisation
'Amnesty International' was a charity, it was held that a trust for the relief of
human suffering and distress was capable of being charitable in nature, it would
not be charitable if its main objects were of a political nature; the main objects
of 'Amnesty International' were held to be political in nature as they included an
alteration of the laws of the British or a foreign Government and persuading a
Government to alter its policies or administrative decisions; Slade, J.,
summarised his conclusions:

(1) Even if otherwise it appears to fall within the spirit and


intendment of the Preamble to the Statue of Elizabeth, a trust
for political purposes falling within the spirit of Lord Parker's
pronouncement in Bowman's case can never be regarded as
being for the public benefit in the manner in which the law
regards as charitable. (2) Trusts for political purposes falling
within the spirit of this pronouncement include, inter alia, trusts
of which a direct and principal purpose is either (i) to further the
interests of a particular political party; or (ii) to produce
changes in the law of this country; or (iii) to procure a reversal
of Government policy or of particular decisions of
governmental authorities in this country; or (v) to procure a
reversal Government policy or of particular decisions of
governmental authorities in a foreign country.86

85
Baldry V. Fentuck, [1972] 1 WLR 552 (558).
86
McGovern V. Attorney-General, [1982] Ch321 (340).
28 | P a g e

Conclusion

Religious and Charitable Endowments throws light on how people have been
dedicating their property in the name of Religion to Deities and Non Profitable
Trusts. People have been doing this service to attain satisfactory Moksha after
death.Thus provided the knowledge about the Administration, Uses, and legal
aspect of those endowed properties.

Where the gifts are made for charitable purposes such as for the institution of
Dharmashala, Anathashram (choultries), Sadavratas of the establishment of
educational and medical institutions or/and for the construction of
Anathashrams (orphanage) tanks, wells and bathing ghats etc., they are known
as charitable endowments. In such endowments property is dedicated through
the usual ceremonies of Sankalpa and Utsarga.

The popular charitable institutions created through endowments and recognised


under the Hindu law are Dharmashala or rest houses, Sadavrats Anathashram,
public institutions, constructions of tanks, wells, groves etc. Dharmashalas are
the rest houses provided for the travellers known as Pratishraya Griha in
ancient times.

The property dedicated to the Dharmashalas vest in Dharmashalas itself. Its


management may vest in the founder himself or a committee constituted by the
founder. The benefit of Dharmashala may be available to public in general or it
may be restricted to the members of a community or to the followers of a
particular religion.

Sometimes gifts are made for the establishment of educational institutions or


hospitals. Imparting free education to the people in general has been one of the
prime objects of charity throughout the ages amongst Hindus. Similarly
hospitals and dispensaries known as Arogashalas have also been the objects of
charitable endowments.

The establishment and maintenance of Goshalas is also a valid charitable


purpose. Similarly the excavation of tanks and wells has also been recognised as
charitable objects from the very beginning. According to Dharmashastra,
construction of a well is equal to Agnistoma sacrifice; in desert it equals the
Aswamedha. The well flowing with drinking water destroys all sins. The well
maker, attaining heaven, enjoys all the worldly pleasures. The consecration of
29 | P a g e

trees and groves is also a well-recognised charitable purpose amongst Hindus.


Dedications for groves and trees have been held valid.

Similarly Sadavrats, where free distribution of food and alms to the needy and
poor are arranged, have been well known charitable institutions amongst
Hindus. Langars and Anathashram are species of Sadavrats. Endowments for
them have been held valid. Similarly endowments for reciting sacred books and
for the food and maintenance of Brahmacharies and Brahamans have also been
held valid.
30 | P a g e

Bibliography

1. Yazdani, Ghulam. 1994 ‘Definition of the Term “Hindu”- A Socio-Legal


Viewpoint’-https://www.researchgate.net/publication/319108504 Definition of
the Term Hindu- A Socio-Legal Viewpoint.

2. Baltutis, Michael C. [1993] 2005. “Recognition and Legislation of Private


Religious Endowments in Indian Law.” Pp. 443–47 in Religion and Law in
Independent India, edited by R.D. Baird. 2nd enlarged edition. New Delhi:
Manohar

3. Baxi, Upendra. 2007. “Commentary: Savarkar and the Supreme Court.”


Pp. 47–58 in Legalizing Religion: The Indian Supreme Court and Secularism,
edited by R. Sen. Washington: East-West Center.

4. Setalvad, Atul M. “Law of Trusts and Charities”. Edition 2008, Universal


Law Publishing Co.

5. Sen, A.C., B.K. Mukherjea The Hindu Law of Religious and Charitable
Trusts, Tagore Law Lectures, Fifth Edition, Eastern Law House, New Delhi
2003.

6. Ronojoy Sen, Legalizing Religion: The Indian Supreme Court and


Secularism, East-West Center Washington, 2007.

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