THE INDIAN TRUSTS ACT, 1882

Introduction:

• The act came into existence on 1st March, 1882.
• An act to define and amend the law relating to private trusts and trustees.
• It extends to the whole of India (except the state of Jammu and Kashmir).

Definitions:

• Trust: A ‘trust’ is an obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another.
• Lawful purpose: A trust may be created for any lawful purpose-

          The purpose of a trust is lawful unless it is-

1. Forbidden by law, or 
2. Is of such a nature that, if permitted, it would defeat the provisions of any laws, or 
3. Is fraudulent, or 
4. Involves or implies injury to the person or property of another, or 
5. The court

• Who may create trusts: A trust may be created-

1. By every person competent to contract,
2. With the permission of a principal civil courts of original jurisdiction, by or on behalf of a minor, but the subject in each case to the law for the time being in force as to the circumstances and extent in and to which the author of the trust may dispose of the trust-property.

• The Subject of trust: The subject - matter of a trust must be 

1. Property transferable to the beneficiary.
2. It must not be merely beneficial interest under a subsisting trust.

• Who may be beneficiary, disclaimer by beneficiary: Every

1. A person capable of holding property may be a beneficiary.
2. A proposed beneficiary may renounce his interest under the trust. 
3. By disclaimer addressed to the trustee, or by setting up, with notice.
4. Of the trust, a claim inconsistent therewith.

• Who may be a trustee: Every person capable of holding property

1. May be a trustee but, where the trust involves the exercise of,
2. Discretion, he cannot execute it, unless he is competent to contract.

• Trustee to execute trust: The trustee is bound fulfil the

1. Purpose of the trust, and to obey the directions of the author of the 
2. trust is given at the time of its creation, except as modified by the 
3. Consent of all the beneficiaries being competent to contract.

Rights of the trustees:

1. Right to title-deed.
2. Right to reimbursement of expenses.
3. Right to be recouped for erroneous over-payment.
4. Right to indemnity from gainer by breach of trust.
5. Right to apply to the court for opinion in management of trust property.
6. Right to settlement accounts.

How trust is extinguished: A trust is extinguished-

1. When its purpose is completely fulfilled; or 
2. When its purpose becomes unlawful; or 
3. When the fulfilment of its purpose becomes impossible by 
4. Destruction of the trust-property or otherwise
5. When the trust being revocable is expressly revoked.

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