Indian Trusts Act, 1882
Trust and trustees is a concurrent subject. Thus, the Act will apply all over India except when specifically amended/altered by any State Government.
The Indian Trusts Act was passed in 1882 to define law relating to private trusts and trustees. A trust is not a 'legal person'. Property of trust is held in name of trustee for benefit of beneficiary.
WHAT IS A 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, or of another and the owner (section 3(1)). The person who reposes the confidence is called 'author of trust', the person who accepts the confidence is called 'author of trust', the person who accepts the confidence is called 'trust' another person for whose benefit the confidence is accepted is 'beneficiary'. The subject matter of trust is called 'trust property' and 'trust-money'. The 'beneficial interest' or 'interest of the beneficiary' is his right against the trustee as the owner of trust-property. The instrument by which trust is declared is called as 'instrument of trust'.
Thus, when a property is held by one person as trustee for the benefit of another, it can be regarded as a trust. Trusts are governed by Indian Trust Act, as may be modified by State Governments.
A trust can be created for any lawful purposes (section 4)/ A trust can be created by deed, will or even word of mouth. However, trust of immovable property can be created by non-testamentary instrument signed by author of trust and s registered, or by will of author(section 5). Thus, 'will; is not required to be registered, even if it pertains to immovable property.
DUTIES OF TRUSTEES- Trustee is not bound to accept the trust. However, once accepted, he cannot renounce it except permission of civil court or beneficiary or by virtue of special power in the instrument of trust. Once trustee accepts trust, he is bound to fulfill the purpose of trust and to obey directions given at the time of creation of the trust. It can be modified with consent o beneficiary. His duties are- inform himself of state of trust property. Protect title to trust property. Not to set up title adverse to beneficiary. Take care of property as a man of ordinary prudence would deal with such property as own property (section 15). Conversion of perishable property to permanent and immediately profitable character. To be impartial. To prevent waste. Keep proper accounts and information. Invest trust-money in prescribed securities and not others. Trustee is liable for breach of trust. 'Breach of trust' means a breach of duty imposed on a trustee, as such, by any law for the time being in force (Section3(3)
RIGHTS AND LIABILITIES OF BENEFICIARY- The beneficiary has rights to rent and profits. Right to specific execution of interaction of author of trust (section 56). Right to inspect and take copies of instrument of trust, accounts etc. Right to transfer beneficial interest (Section 58). Right to sue for execution of trust. Right to proper trustees. Right to compel trust to perform an act of duty. Follow trust property into hands of third person and into which it has been converted. A beneficiary is liable if he joins in breach of trust.
REVOCATION OF TRUST- A trust created by will can be evoked at the pleasure of testator. A trust created otherwise by will can be revoked (a) by consent of all beneficiaries if they are competent to contract (b) In exercise of revocation expressly reserved by author of trust, if the trust has been declared by a non-testamentary instrument or by word of mouth or (c) At pleasure of author of trust, if the trust is for payment of debts and the author of trust has not communicated to the creditors (section 78).
