SECTIONS. 35. Right to settlement of accounts. 36. General authority of trustee. 37. Power to sell in lots, and either by public auction or private contract. 38. Power to sell under special conditions. Power to buy-in and re-sell. Time allowed for selling trust-property. 39. Power to convey. 40. Power to vary investments. 41. Power to apply property of minors, &c., for their maintenance, &c. 42. Power to give receipts. 43. Power to compound, &c. 44. Power to several trustees of whom one disclaims or dies. 45. Suspension of trustee's powers by decree. CHAPTER V. OF THE DISABILITIES OF TRUSTEES. 46. Trustee cannot renounce after acceptance. 47. Trustee cannot delegate. 48. Co-trustees cannot act singly. 49. Control of discretionary power. 30. Trustee may not charge for services. 51. Trustee may not use trust-property for his own profit. 52. Trustee for sale or his agent may not buy. 53. Trustee may not buy beneficiary's interest without permission. Trustee for purchase. 54. Co-trustees may not lend to one of themselves. CHAPTER VI. OF THE RIGHTS AND LIABILITIES OF THE BENEFICIARY. 55. Rights to rents and profits. 56. Right to specific execution. Right to transfer of possession. 57. Right to inspect and take copies of instrument of trust, accounts, &c. 58. Right to transfer beneficial interest. 59. Right to sue for execution of trust. 60. Right to proper trustees. 61. Right to compel to any act of duty. 62. Wrongful purchase by trustee. 63. Following trust-property into the hands of third persons; into that into which it has been converted. 64. Saving of rights of certain transferees. 65. Acquisition by trustee of trust-property wrongfully converted. 66. Right in case of blended property. SECTIONS. 67. Wrongful employment by partner-trustee of trust-property for partnership purposes. 68. Liability of beneficiary joining in breach of trust. 69. Rights and liabilities of beneficiary's transferee. CHAPTER VII. OF VACATING THE OFFICE OF TRUSTEE. 70. Office how vacated. 71. Discharge of trustee. 72. Petition to be discharged from trust. 73. Appointment of new trustees on death, &c. 74. Appointment by Court. Rule for selecting new trustees. 75. Vesting of trust-property in new trustees. Powers of new trustees. 76. Survival of trust. CHAPTER VIII. OF THE EXTINCTION OF TRUSTS. 77. Trust how extinguished. 78. Revocation of trust. 79. Revocation not to defeat what trustees have duly done. CHAPTER IX. OF CERTAIN OBLIGATIONS IN THE NATURE OF TRUSTS. 80. Where obligation in nature of trust is created. 81. Where it does not appear that transferor intended to dispose of beneficial interest. 82. Transfer to one for consideration paid by another. 83. Trust incapable of execution or executed without exhausting trust property. 84. Transfer for illegal purpose. 85. Bequest for illegal purpose. Bequest of which revocation is prevented by coercion. 86. Transfer pursuant to rescindable contract. 87. Debtor becoming creditor's representative. 88. Advantage gained by fiduciary. 89. Advantage gained by exercise of undue influence. 90. Advantage gained by qualified owner. 91. Property acquired with notice of existing contract. SECTIONS. (Chapter I-Preliminary. Sec. 1.) 92. Purchase by person contracting to buy property to be held on trust. 93. Advantage secretly gained by one of several compounding creditors. 94. Constructive trusts in cases not expressly provided for. 95. Obligor's duties, liabilities and disabilities. 96. Saving of rights of bona fide purchasers. THE SCHEDULE. ACT No. II OF 18821. [13th January, 1882.] An Act to define and amend the law relating to Private Trusts and Trustees. WHEREAS it is expedient to define and amend the law relating to private Preamble. trusts and trustees; It is hereby enacted as follows: CHAPTER I. 1. This Act may be called the Indian Trusts Act, 1882: and it shall Short title. come into force on the first day of March, 1882. Commencement. It extends in the first instance to the territories respectively adminis- Local extent. tered by the Governor of Madras in Council, the Lieutenant-Governors of the North-Western Provinces and the Punjab, the Chief Commissioners of Oudh, the Central Provinces, Coorg and Assam; and the Local Government may from time to time, by notification in the official Gazette, extend it to any other part of British India. But nothing herein contained affects the Savings. rules of Muhammadan law as to waqf, or the mutual relations of the members of an undivided family as determined by any customary or per 1 For Report of the Indian Law Commission on the Private Trusts Bill which they were instructed to consider among others, see Gazette of India, 1880, Supplement, p. 104, and for the Statement of Objects and Reasons, see Gazette of India, 1880, Pt. V. p. 476; for Report of the Select Committee, sec ibid, Supplement, 1881, p. 766; for further Report of the Select Committee, see ibid, Supplement, 1882, p. 67; for Proceedings in Council, see ibid, Supplement, 1881, p. 687; and ibid, Supplement, 1882, p. 68. 2 The Act has, under this section, been extended (a) to the whole of the Bombay Presidency, including the Scheduled Districts—see (b) to the ordinary civil jurisdiction of the Recorder of Rangoon-see notification Repeal of nactments. Interpreta "trust": (Chapter I.-Preliminary. Secs. 2-3. Chapter II.-Of the Creation of sonal law, or applies to public or private religious or charitable endowments, 2. The Statute and Acts mentioned in the Schedule hereto annexed 3. A "trust" is an obligation annexed to the ownership of property, tion-clause and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner: "author of the trust": "trustee": "benefi ciary": "trust property "beneficial "breach of "registered": "notice." Expressions defined in Act IX of 1872. 66 the person who reposes or declares the confidence is called the "author of the trust" the person who accepts the confidence is called the trustee" the person for whose benefit the confidence is accepted is called the "beneficiary": the subject-matter of the trust is called "trustproperty" or "trust-money": the "beneficial interest" or "interest" of the beneficiary is his right against the trustee as owner of the trustproperty; and the instrument, if any, by which the trust is declared is called the "instrument of trust": a breach of any duty imposed on a trustee, as such, by any law for the time being in force, is called a "breach of trust": and in this Act, unless there be something repugnant in the subject or context, "registered" means registered under the law for the registration of documents for the time being in force: a person is said to have "notice" of a fact either when he actually knows that fact, or when, but for wilful abstention from inquiry or gross negligence, he would have known it, or when information of the fact is given to or obtained by his agent, under the circumstances mentioned in the Indian Contract Act, 18721, section IX of 1872. 229; and all expressions used herein and defined in the Indian Contract Act, 1872, shall be deemed to have the meanings respectively attributed to them by that Act. Lawful pur pose. CHAPTER II. OF THE CREATION OF TRUSTS. 4. A trust may be created for any lawful purpose. The purpose of a trust is lawful unless it is (a) forbidden by law, or (b) is of such a nature Printed, General Acts, Vol. II, p. 299. (Chapter II.—Of the Creation of Trusts. Secs. 5-6.) that, if permitted, it would defeat the provisions of any law, or (c) is fraudulent, or (d) involves or implies injury to the person or property of another, or (e) the Court regards it as immoral or opposed to public policy. Every trust of which the purpose is unlawful is void. And where a trust is created for two purposes, of which one is lawful and the other unlawful, and the two purposes cannot be separated, the whole trust is void. Explanation.-In this section the expression "law" includes, where the trust-property is immoveable and situate in a foreign country, the law of such country. Illustrations. (a) A conveys property to B in trust to apply the profits to the nurture of female foundlings to be trained up as prostitutes. The trust is void. (b) A bequeaths property to B in trust to employ it in carrying on a smuggling business, and out of the profits thereof to support A's children. The trust is void. (c) A, while in insolvent circumstances, transfers property to B in trust for A during his life, and after his death to B. A is declared an insolvent. The trust for A is invalid as against his creditors. 5. No trust in relation to immoveable property is valid unless declared by a non-testamentary instrument in writing signed by the author of the trust or the trustee and registered, or by the will of the author of the trust or of the trustee. No trust in relation to moveable property is valid unless declared as aforesaid, or unless the ownership of the property is transferred to the trustee. These rules do not apply where they would operate so as to effectuate a fraud. Trust of immoveable property. Trust of moveable property. trust. 6. Subject to the provisions of section 5, a trust is created when the Creation of author of the trust indicates with reasonable certainty by any words or acts (a) an intention on his part to create thereby a trust, (b) the purpose of the trust, (c) the beneficiary, and (d) the trust-property, and (unless the trust is declared by will or the author of the trust is himself to be the trustee) transfers the trust-property to the trustee. Illustrations. (a) A bequeaths certain property to B, "having the fullest confidence that he will dispose of it for the benefit of " C. This creates a trust so far as regards A and C. hoping he will continue it in the (b) A bequeaths certain property to B, family." This does not create a trust, as the beneficiary is not indicated with reasonable certainty. |