Private vs Public Endowment

The principles of law for determination of the question whether an endowment is public or private are fairly well-settled. This Court observed in Deoki Nandan v. Murlidhar, (1956) SCR 756 as follows:-

“The distinction between a private and a public trust is that whereas in the former the beneficiaries are specific individuals, in the latter, they are the general public or a class thereof. While in the former the beneficiaries are persons who are ascertained, or capable of being ascertained, in the latter they constitute a body which is incapable of ascertainment.”

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Difference between a tax and a fee

It is well settled that the basic difference between a tax and a fee is that a tax is a compulsory exaction of money by the State or a public authority for public purposes, and is not a payment for some specific services rendered. On the other hand, a fee is generally defined to be a charge for a special service rendered by some governmental agency. In other words there has to be quid pro quo in a fee vide Kewal Krishan Puri vs. State of Punjab (AIR 1980 SC 1008):

The meaning given to the word “tax” by Latham C.J. of the High Court of Australia in Matthews v. Chicory marketing Board 60 CLR 263 has been quoted with approval at page 1040 and has been often repeated in many other decisions. Generally speaking a fee is defined to be a charge for a special service rendered to individuals by some governmental agency. A question arises – “special service” rendered to whom, which kind of individuals? Mr. V. M. Tarkunde who appeared for the Haryana marketing Board stressed the argument that service rendered must be correlated to those on whom the ultimate burden of the fee falls. In our opinion this argument is neither logical nor sound. The impost of fee and the liability to pay it is on a particular individual or a class of individuals. They are under the obligation to submit accounts, returns or the like to the authorities concerned in cases where quantification of the amount of fees depends upon the same. They have to undergo the botherations and harassments, sometimes justifiable and sometimes even unjustifiably, in the process of discharging their liability to pay the fee. The authorities levying the fee deal with them and realize the fee from them. By operation of the economic laws in certain kinds of impositions of fee the burden may be passed on to different other persons one after the other. A few lines occurring at page 119 in the judgment of the Privy Council in the case of Attorney General for British Columbia v. Esquimalt and Nanaimo Rly. Co. 1950 AC 87 may be quoted with advantage.

They are as follows:-

“It is probably true of many forms of tax which are indisputably direct that the assessee will desire, if he can, to pass the burden of the tax on to the shoulders of another. But this is only an economic tendency. The assessee’s efforts may be conscious or unconscious, successful or unsuccessful; they may be defeated in whole or in part by other economic forces. This type of tendency appears to their Lordships to be something fundamentally different from the “passing on” which is regarded as the hallmark of an indirect tax”.

The authorities, more often than not, almost invariably, will not be able to know the individual or individuals on whom partly or wholly the ultimate burden of the fee will fall. They are not concerned to investigate and find out the position of the ultimate burden. It is axiomatic that the special service rendered must be to the payer of the fee. The element of quid pro quo must be established between the payer of the fee and the authority charging it. It may not be the exact equivalent of the fee by a mathematical precision, yet, by and large, or predominantly, the authority collecting the fee must show that the service which they are rendering in lieu of fee is for some special benefit of the payer of the fee. It may be so intimately connected or interwoven with the service rendered to others that it may not be possible to do a complete dichotomy and analysis as to what amount of special service was rendered to the payer of the fee and what proportion went to others. But generally and broadly speaking it must be shown with some amount of certainty, reasonableness or preponderance of probability that quite a substantial portion of the amount of fee realised is spent for the special benefit of its payers.

9. We may now extract some very useful and leading principles from the decision of this Court in Shirur Mutt’s case (supra) pointing out the difference between tax and fee. At pages 1040-41 says Mukherjea. J., as he then was:

“The second characteristic of tax is that it is an imposition made for public purpose without reference to any special benefit to be conferred on the payer of the tax. This is expressed by saying that the levy of tax is for the purposes of general revenue,which when collected forms part of the public revenues of the State. As the object of a tax is not to confer any special benefit upon any particular individual, there is, as it is said, no element of quid pro quo between the taxpayer and the public authority………”

“a ‘fee’ is generally defined to be a charge for a special service rendered to individuals by some governmental agency.”

At page 1042 the learned Judge enunciates – “The distinction between a tax and a fee lies primarily in the fact that a tax is levied as a part of common burden, while a fee is a payment for a special benefit or privilege……… Public interest seems to be at the basis of all impositions, but in a fee it is some special benefit which the individual receives.” After pointing out that ordinarily there are two classes of cases where Government imposes ‘fees’ upon persons, the first being the type of cases of the licence fees for Motor Vehicles or the like and in the other class of cases “the Government does some positive work for the benefit of persons and the money is taken as the return for the work done or services rendered” (vide page 1043), it is said further – “If the money thus paid is set apart and appropriated specially for the performance of such work and it is not merged in the public revenues for the benefit of the general public, it could be counted as fees and not a tax. There is really no generic difference between the tax and fees and as said by Seligman, the taxing power of a State may manifest itself in three different forms known respectively as special assessments, fees and taxes.” Finally at page 1044 the striking down by theHigh Court of the imposition of fee under Section 76 of the Madras Act was upheld on the ground – “It may be noticed, however, that the contribution that has been levied under Section 76 of the Act has been made to depend upon the capacity of the payer and not upon the quantum of benefit that is supposed to be conferred on any particular religious institution.” Benefit conferred on any particular religious institution would have been undoubtedly benefit conferred on the payer of the fee.

Amin vs Surveyors: Difference between

Whether the qualifications, the duties discharged by the surveyors and Amins are same and identical so as to treat the Amins at par with that of the surveyors?

The Technical Rules and Instructions relating to survey work indicate that surveyors use more sophisticated equipment involving superior training and skills than Amins. surveyors use Theodolite for conducting traverse survey requiring knowledge of trigonometry and they are also trained in the use of equipment for the measurement of automatic levels and electronic distance measurement. The surveyors have to undergo a two-year specialized training in different kinds of surveying such as Topographic and Hydrographic surveying and Mine surveying and, are also trained in mechanics and drawing. On the other hand, the Amins are given training in simple survey work and in the use of relatively simple equipment such as Guntur’s chain, plane table, optical square. It is true that both surveyors and Amins undertake the survey work but the nature of duties discharged by both of them are different.

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Arbitration agreement Vs Agreement for decision by an expert

Advocatetanmoy Law Library

In the case of K.K. Modi v. K.N. Modi, (1998) 3 SCC 573, a Bench of this Court (of which one of us was a member) had the occasion to consider the essential ingredients of an arbitration clause. Among the ingredients which are described in the said judgment, two important ingredients are; that the agreement between the parties must contemplate that substantive rights of parties will be determined by the agreed Tribunal and that the Tribunal will determine the rights of the parties in an impartial and judicial manner with the Tribunal owing an equal obligation of fairness towards both sides and also that the agreement of the parties to refer their disputes to the decision of the Tribunal must be intended to be enforceable in law. There is a difference between an expert determination and arbitration.

S.K. Chawla in the Law of arbitration and Conciliation at Page 164 states as follows:

“4. arbitration agreement to be distinguished from agreement for decision by an engineer or expert, contracts may contain a clause that on certain questions the decision of an engineer, architect or another expert shall be final. The decision given in such cases by the engineer etc., is not an award. As pointed out by Bernstein, such a person is under no obligation, unless the contract otherwise provides, to receive evidence or submissions and is entitled to arrive at his decision solely upon the results of his own expertise and investigations. The procedure involved is not arbitration, and the arbitration Act does not apply to it. The primary material on which such person acts is his own knowledge and experience, supplemented if he thinks fit by

(i) his own investigations; and/or

(ii) material (which need not conform to rules of ‘evidence’) put up before him by either party.

An arbitrator on the other hand, acts primarily on material put before him by the parties. The determination by an engineer or an expert would involve a less thorough investigation. Only one mind will be brought to bear on the problem. There will be no discovery of documents, there will not normally be any oral ‘evidence’ or oral submissions.”


Distinction between resignation and voluntary retirement

The distinction between resignation and voluntary retirement in the following terms:

“22. … [quoting RBI v Cecil Dennis Solomon (2004) 9 SCC 461] In service jurisprudence, the expressions “superannuation”, “voluntary retirement”, “compulsory retirement” and “resignation” convey different connotations. Voluntary retirement and resignation involve voluntary acts on the part of the employee to leave service. Though both involve voluntary acts, they operate differently. One of the basic distinctions is that in case of resignation it can be tendered at any time, but in the case of voluntary retirement, it can only be sought for after rendering the prescribed period of qualifying service. Another fundamental distinction is that in case of the former, normally retiral benefits are denied but in case of the latter, the same is not denied. In case of the former, permission or notice is not mandated, while in the case of the latter, permission of the employer concerned is a requisite condition. Though resignation is a bilateral concept, and becomes effective on acceptance by the competent authority, yet the general rule can be displaced by express provisions to the contrary.”

The above observations highlighted the material distinction between the concept of resignation and voluntary retirement. The Court also observed that while pension schemes do form beneficial legislation in a delegated form, a beneficial construction cannot run contrary to the express terms of the provisions:

Read more: BSES Yamuna Power Ltd. Vs Sh. Ghanshyam Chand Sharma & Anr-05/12/2019

Difference Between the International Court of Justice from the International Criminal Court and the ad hoc international criminal tribunals?

International Court of Justice(ICJ) is the principal judicial organ of the United Nations, established by the United Nations Charter.

Only sovereign states are eligible to sue before the Court in contentious cases. This Court is not works as a supreme court nor acts as a court of last appeal for individuals. It can, however, rule on the validity of arbitral awards.

ICJ has a twofold role: first, to settle, in accordance with international law, legal disputes between States submitted to it by them and, second, to give advisory opinions on legal matters referred to it by duly authorized United Nations organs and specialized agencies.

ICJ is not a Criminal Court

The International Court of Justice has no jurisdiction to try individuals accused of war crimes or crimes against humanity. As it is not a criminal court, it does not have a prosecutor able to initiate proceedings.

This task is the preserve of national courts, the ad hoc criminal tribunals established by the United Nations (such as the International Residual Mechanism for Criminal Tribunals (IRMCT), mandated to take over residual functions from the International Criminal Tribunal for the former Yugoslavia (ICTY) and from the International Criminal Tribunal for Rwanda (ICTR)) or in co-operation with it (such as the Special Court for Sierra Leone and the Special Tribunal for Lebanon), and also of the International Criminal Court, set up under the Rome Statute.

Absolute enactment Vs directory enactment.

When a statute is passed for the purpose of enabling something to be done, and prescribed the way in which it is to be done, it may be either an absolute enactment or a directory enactment.

The difference being that an absolute enactment must be obeyed or fulfilled exactly, but it is sufficient if a directory enactment be obeyed or fulfilled substantially.

No universal rule can be laid down as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience.

The intention of the provision here is that where in the course of any enquiry into, or trial of, an offence, it appears to the Courts from the evidence that any person not being the accused has committed any offence, the Court may proceed against him for the offence which he appears to have committed. At that stage, the Court would consider that such a person could be tried together with the accused who is already before the Court facing the trial. The safeguard provided in respect of such person is that, the proceedings right from the beginning have mandatory to be commenced afresh and the witnesses re-heard. In short, there has to be a de novo trial against him. The provision of de novo trial is mandatory. It vitally affects the rights of a person so brought before the Court. It would not be sufficient to only tender the witnesses for the cross-examination of such a person. They have to be examined afresh. Fresh examination in chief and not only their presentation for the purpose of the cross-examination of the newly added accused is the mandate of Section 319(4). The words ‘could be tried together with the accused’ in Section 319(1), appear to be only directory. ‘Could be’ cannot under these circumstances be held to be ‘must be’. The provision cannot be interpreted to mean that since the trial in respect of a person who was before the Court has concluded with the result that the newly added person cannot be tried together with the accused who was before the Court when order under Section 319(1) was passed, the order would become ineffective and inoperative, nullifying the opinion earlier formed by the Court on the basis of evidence before it that the newly added person appears to have committed the offence resulting in an order for his being brought before the Court.

The mandate of the law of fresh trial is mandatory whereas the mandate that newly added accused could be tried together the accused directory. The construction to be placed on a provision like this has to commend to justice and reason. It has to be reasonable construction to promote the ends of justice. The words ‘could be tried together with the accused’ in Section 319(1) cannot be said to be capable of only one construction. If it was so, approach to be adopted would be different since the intention of the Parliament is to be respected despite the consequences of interpretation. There is, however, a scope for two possible construction. That being the position, a reasonable and common sense approach deserves to be adopted and preferred rather than a construction that would lead to absurd result of newly added escaping the trial despite passing on an order against him on Court’s satisfaction under Section 319(1) and despite the fact that the proceedings against him have to commence afresh.

Moreover, a Magistrate is empowered to take cognizance of an offence in the manner provided under Section 190 of the Code. Section 209 enjoins upon a Magistrate to commit the case of the Court of Session when it appears to the Magistrate that the offence is triable exclusively by the Court of Session. Section 193 provides for the power of the Court of Session to take cognizance of any offence. It uses the expression ‘cognizance of any offence’ and not that of ‘offender.’ These three provisions read with Section 319 make it clear that the words ‘could be tried together with the accused’ in Section 319 is only for the purpose finding out whether such a person could be put on trial for the offence. Once it is so found, sub-section (4) of Section 319 comes into play [Shashikant Singh v. Tarkeshwar Singh and Anr. (2002) 5 SCC 738]

The distinction between dedication to a Temple and a Mutt

A religious mutt in northern India is usually known as asthal, a monastic institution founded for the maintenance and spread of a particular sampradaya or cult. The distinction between dedication to a temple and a mutt is that in the former case it is to a particular deity, while in the latter, it is to a superior or a mahant. But just as in the case of the debutter endowment, there is both a private and a public endowment, so too there can be the same distinction between a private and a public mutt. A mutt can be dedicated for the use of ascetics generally or for the ascetics of a particular sect or cult, in which case it would be a public institution. Mutts have generally sadavrats, i.e. arrangements for giving food and shelter to wayfarers and ascetics attached to them. They may have temples to which the public is allowed access. Such circumstances might indicate the public character of the institution. But it is not impossible to have a private mutt, where the endowment is not intended to confer benefit upon the public generally or even upon the member of a particular religious sect or order. Examples do occur where the founder may grant property to his spiritual preceptor and his disciples in succession with a view to maintain one particular spiritual family and for perpetuation of certain rights and ceremonies which are deemed to be conducive to the spiritual welfare of the founder and his family. In such cases it would be the grantor and his descendants who are the only persons interested in seeing that the institution is kept up for their benefit. Even if a few ascetics are fed and given shelter, such a purpose is not to be deemed an independent charity in which the public or a section of it has an interest. Such charities as already stated earlier, appertain to a private debuttor also. (see B.K. Mukherjea, Hindu Law of Religious and Charitable Trusts, (3rd ed.) 303, 304) .

The existence of a private mutt, where the property was given to the head of the mutt for his personal benefit only, has in the past been recognised. (see Matam Nadipudi v. Board of Commissoners for Hindiu Religious Endowments, Madras, AIR 1938 Mad 810 and Missir v. Das, (1949) ILR 28 Pat 890. In such cases there is no intention on the part of the grantor to fetter the grantee with any obligation in dealing with the property granted. In each case the court has to come to its conclusion either from the grant itself or from the circumstances of the case whether the grant was for the benefit of the public or a section of it, i.e., an unascertained class, or for the benefit of the grantee himself or for a class of ascertained individuals. An inference can also be drawn from the usage and custom of the institution or from the mode in which its properties have been dealt with as also other established circumstances.

The Bihar State Board of Religious Trust, (Patna) Vs Mahanth Sri Biseshwar Das- 09/02/1971

Endowment private vs Endowment public

The concept of a private endowment or a private trust is unknown to English law where all trusts are public trusts of a purely charitable and religious nature. Thus, under the English law what is a public trust is only a form of Charitable Trust. Dr. Mukherjea in his Tagore Law Lectures on the Hindu Law of Religious and Charitable Trusts (1952 Edition) has pointed out that in English law the Crown is the constitutional protector of all properties subject to charitable trusts as these trusts are essentially matters of public concern. The learned author has further pointed out that one fundamental distinction between English and Indian law lies in the fact that there can be religious trust of a private character under the Hindu law which is not possible in English law. It is well settled that under the Hindu law, however, it is not only permissible but also very common to have private endowments which though are meant for charitable purposes yet the dominant intention of the founder is to instal a family deity in the temple and worship the same in order to effectuate the spiritual benefit to the family of the founder and his descendants and to perpetuate the memory of the founder. In such cases, the property does not vest in God but in the beneficiaries who have installed the deity. In other words, the beneficiaries in a public trust are the general public or a section of the same and not a determinate body of individuals as a result of which the remedies for enforcement of charitable trust are somewhat different from those which can be availed of by beneficiaries in a private trust. The members of the public may not be debarred from entering the temple and worshipping the deity but their entry into the temple is not as of right. This is one of the cardinal tests of a private endowment. Similarly, even the Mahomedan law recognises the existence of a private trust which is also of a charitable nature and which is generally called Waqf-allal-Aulad, where the ultimate benefit is reserved to God but the property vests in the beneficiaries and the income from the property is used for the maintenance and support of the family of the founder and his descendants. In case the family becomes extinct then the Waqf becomes a public waqf, the property vesting, in God. A public Waqf under the Mahomedan law is called Waqf-fi-sabi-lil-lah.

The question as to whether the religious endowment is of a private nature or of a public nature has to be decided with reference to the facts proved in each case and it is difficult to lay down any test or tests which may be of universal application. It is manifest that where the endowment is lost in antiquity or shrouded in mystery, there being no document or revenue entry to prove its origin, the task of the court becomes difficult and it has to rely merely on circumstantial. evidence regarding the nature of the user of the temple. In the instant case, however, as there are two documents which clearly show the nature of the endowment, our task is rendered easier. It is well settled that the issue whether a religious endowment is a public or a private one must depend on the application of legal concept of a deity and private endowment, as may appear from the facts proved in each case. The essential distinction between a private and a public endowment is that whereas in the former the beneficiaries are specified individuals, in the latter they are the general public or class of unascertained people. This doctrine is well-known and has been accepted by the Privy Council as also by Supreme Court in a large catena of authorities. This being the essential distinction between the nature of a public or a private endowment, it follows that one of the crucial tests to determine the nature of the endowment would be to find out if the management of the property dedicated is in the hands of the strangers or members of the public or in the hands of the founders or their descendants. Other factors that may be considered would be the nature of right of the worshippers, that is to say, whether the right to worship in the temple is exercised as of right and not as a matter of concession. This will be the strongest possible circumstance to indicate that the endowment was a public one and the beneficiaries are the worshippers and not a particular family. After all, an idol is a juristic person capable of holding property and the property dedicated to the temple vests in the deity. If the main worshippers are the members of the public who worship as a matter of right then the real purpose is to confer benefit on God. Some of the circumstances from which a public endowment can be inferred may be whether an endowment is made by a person who has no issue and who after installing the deity entrusts the management to members of the public or strangers which is a clear proof of the intention to dedicate the temple to public and not to the members of the family. Where, however, it is proved that the intention of the testator or the founder was to dedicate the temple merely for the benefit of the members of the family or their descendants, the endowment would be of a private nature.

The mere fact that members of the public are allowed to worship by itself would not make an endowment public unless it is proved that the members of the public had a right to worship in the temple. In Deoki Nandan v. Murlidhar, (1956) SCR 756, SupremeCourt observed as follows:

“The distinction between a private and a public trust is that whereas in the former the beneficiaries are specific individuals, in the latter they are the general public or a class thereof. While in the former the beneficieries are persons who are ascertained or capable of being ascertained, in the latter they constitute a body which is incapable of ascertainment.

……….. …………. ………….

The cardinal point to be decided is whether it was the intention of the founder that specified individuals are to have the right of worship at the shrine, or the general public or any specified portion thereof. In accordance with this theory, it has been held that when property is dedicated for the worship of a family idol, it is a private and not a public endowment, as the persons who are entitled to worship at the shrine of the deity can only be the members of the family, and that is an ascertained group of individuals. But where the beneficiaries are not members of a family or a specified individual, then the endowment can only be regarded as public, intended to benefit the general body of worshippers.”

(Emphasis supplied)

9. This view was reiterated in a later decision of Supreme Court in Mahant Ram Saroop Dasji v. S. P. Sahi. (1959) 2 Suppl. SCR 583, where S. K. Das, J. as he then was, speaking for the Court clarified the law thus:

“But the most usual and commonest form of a private religious trust is one created for the worship of a family idol in which the public are not interested .. .. .. Dealing with the distinction between public and private endowments in Hindu Law, Sir Dinshah Mulla has said at page No. 529 of his Principles of Hindu Law (11th Edition)

‘Religious endowments are either public or private. In a public endowment the dedication is for the use or benefit of the public. When property is set apart for the worship of a family god in which the public are not interested the endowments is a private one’.”

10. In Narayan Bhagwantrao Gosavi Balajiwale v. Gopal Vinayak Gosavi, (1960) 1 SCR 773, the same principles were reiterated and it was pointed out that the entries made in the Inam Register showing the nature of the endowment were entitled to great weight and taken with the vastness of the temple, the mode of its construction, the long user by the public as of right and grants by Rulers and other persons were clear pointers to the fact that the endowment was of a public nature.

11. In the case of Bihar State Board Religious Trust, Patna v. Mahant Sri Biseshwar Das, (1971) 3 SCR 680, Supreme Court laid down some important tests to determine the nature of the endowment. In this connection, the following observations need specific mention:

“Therefore, evidence that sadhus and other persons visiting the temple are given food and shelter is not by itself indicative of the temple being a public temple or its properties being subject to a public trust.

Evidence that the mahants used to celebrate Hindu festivals when members of the public used to attend the temple and give offerings and that the public were admitted to the temple for darshan and worship is also not indicative of the temple being one for the benefit of the public …………………. The fact that members of the public used to come to the temple without any hindrance also does not necessarily mean that the temple is a public temple, for members of the public do attend private temples . ………Yet, the Privy Council held that the general effect of the evidence was that the family had treated the temple as family property and the mere fact of the members of the public having come to the temple and having made offerings and the mela having been held which gave popularity to the temple and increased its esteem in the eyes of the public and the fact that they were never turned away were not enough to hold the temple and the properties as a public trust.

…… …… ………

Thus, the mere fact of the public having been freely admitted to that temple cannot mean that courts should readily infer therefrom dedication to the public. The value of such public user as evidence of dedication depends on the circumstances which give strength to the inference that the user was as of right.”

It may thus be noticed that Supreme Court has invariably held that the mere fact that the members of the public used to visit the temple for the purpose of worship without any hindrance or freely admitted therein would not be a clear indication of the nature of the endowment. It is manifest that whenever a dedication is made for religious purposes and a deity installed in a temple, the worship of the deity is a necessary concomitant of the installation of the deity, and therefore, the mere factum of worship would not determine the nature of the endowment. Indeed if it is proved that the worship by the members of the public is as of right that may be a circumstance which may in some cases conclusively establish that the endowment was of a public nature. In Dhaneshwarbuwa Guru Purshottambuwa v. The Charity Commissioner, State of Bombay, (1976) 3 SCR 518, all the aforesaid cases were summarised and the principles indicated above were reiterated.

 In Gurpur Guni Venkataraya Narashima Prabhu v. B. C. Achia, (1977) 3 SCC 17, Krishna Iyer, J. reiterated these very principles in the following words:

“The law is now well settled that ‘the mere fact of the public having been freely admitted to the temple cannot mean that courts should readily infer therefrom dedication to the public. The value of such public user as evidence of dedication depends on the circumstances which give strength to the inference that the user was as of right’. (See Bihar State Board Religious Trust, Patna v. Mahant Sri Biseshwar Das, (1971) 3 SCR 680, 689 ).”

Thus, on a conspectus of the authorities mentioned above, the following tests may be laid down as providing sufficient guidelines to determine on the facts of each case whether an endowment is of a private or of a public nature:

(1) Where the origin of the endowment cannot be ascertained, the question whether the user of the temple by members of the public is as of right;

(2) The fact that the control and management vests either in a large body of persons or in the members of the public and the founder does not retain any control over the management. Allied to this may be a circumstance when the evidence shows that there is provision for a scheme to be framed by associating the members of the public at large;

(3) Where, however, a document is available to prove the nature and origin of the endowment and the recitals of the document show that the control and management of the temple is retained with the founder or his descendants, and that extensive properties are dedicated for the purpose of the maintenance of the temple belonging to the founder himself, this will be a conclusive proof to show that the endowment was of a private nature;

(4) where the evidence shows that the founder of the endowment did not make any stipulation for offerings or contributions to be made by members of the public to the temple, this would be an important intrinsic circumstance to indicate the Private nature of the endowment.

Breach of contract vs the offence of cheating

In determining the question it has to be kept in mind that the distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time to inducement which may be judged by his subsequent conduct but for this subsequent conduct is not the sole test. Mere breach of contract cannot give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, that is the time when the offence is said to have been committed. therefore it is the intention which is the gist of the offence. To hold a person guilty of cheating it is necessary to show that he had fraudulent or dishonest intention at the time of making the promise. From his mere failure to keep up promise subsequently such a culpable intention right at the beginning, that is, when he made the promise cannot be presumed. [Devendra and OTHERS Vs State of U.P. and ANOTHER – 06/05/2009]

(See also Indian Oil Corporation v. NEPC India Ltd. and OTHERS, AIR 2006 SC 2780 , Veer Prakash Sharma v. Anil Kumar Agarwal and ANOTHER, 2007 CriLJ 3735 , V.Y. Jose (supra) and Ravindra Kumar Madhanlal Goenka and ANOTHER v. Rugmini Ram Raghav Spinners and ANOTHER, 2009 CriLJ 2852 )