The Indian Trust Act-law

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THE INDIAN TRUST ACT, 1882 Prepared By:

CHETAN TARUN WAHID AJAY PRANIT BHARTI VANDANA

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33 50 59 80 10 25 43

Submitted To: MAHEK MANSURI MAM Subject

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Business Law

Class

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F.Y.Bcom. (Banking &

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Insurance) DEFINITION: 1) TRUST (Section 3);

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 2) AUTHOR OF THE TRUST:

The person who reposes or declares the confidence is known as the Author Of The Trust. It is synonymous with creator, settler or donor. 3) TRUSTEE:

The person who accepts the confidence and is responsible to hold the trust property for the benefit of the beneficiaries is known as Trustee. 4) BENEFICIARY:

The person for whose benefit the trust is created is known as the Beneficiary. Author of the trust can himself be one of the beneficiary.

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Classification Of Trust

Public Trust

Religio us Trust

Private Trust

Charita ble Trust

Discretion ary Trust

Definit e Trust

Oral Trus t

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CLASSIFICATION OF TRUSTS: 1)Public Trust: When the trust is constituted for the benefit of the at large or of some considerable portion of it answering a particular description it is a public trust. A public trust is of permanent and indefinite character. In public trust beneficiaries are not capable of ascertainment. Such trusts are generally created for public support and convenience. a)Religious Trust: A trust is known as religious trust; if it is constituted to uphold and promote particular religion, propagate views of a particular religion, to maintain a particular religious place, etc. E.g. Trust constituted for maintaining a temple, Parsee Trust. b)Charitable Trust: Charitable trust comes in the category of public trust. Charitable trust means a trust created for philanthropic purpose. The main object of charitable trust is the general welfare of the community at large. 2)Private Trust

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When the beneficial interest is limited to specific individuals or definite ascertainable individuals it is a private trust. In private trust the beneficial interests vested in some individuals who are defined and ascertained or who within definite time can be ascertained. Private trusts concern only individuals or families for private convenience and support. a)Discretionary Trust: A trust is regarded as discretionary trust, if the income or any part thereof is specifically receivable on behalf or for the benefit of any one person or where individual share of beneficiaries are indeterminate or unknown. b)Definite Trust: A trust is regarded as definite trust where the shares of the beneficiaries are determinate or known. c) Oral Trust: A trust, which is not declared by a duly executed deed in writing, is considered as a oral trust.

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Sections 55 to 69 deal with rights and liabilities of the beneficiary:

RIGHTS OF BENEFICIARY: 1)The beneficiary has, subject to the provisions of the instrument of trust, a right to the rents and profits of the trust property. 2)The beneficiary is entitled to have the intention of the Author of the trust specifically executed to the extent of beneficial interest. E.g. A bequeaths Rs. 10,000 to trustees upon trust to purchase an annuity for B who has attained his majority and is otherwise competent to contract. B may claim Rs. 10,000. 3)Beneficiary has the right to inspect and take copies of instrument and trust, title deeds, trust property and other documents relating to the trust. 4)If the beneficiary is competent to contract, he can transfer his beneficial interest.

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5)Beneficiary has right to sue for execution of trust, if no trustees are appointed or all the trustees die, disclaim or are discharged, or if the execution of trust becomes impracticable. 6)The beneficiary has the right that the trust property should be properly protected and held and administered by proper persons. Following are held to be not proper persons: • A person domiciled out of India. • An alien enemy. • A person having an interest inconsistent with that of the beneficiary.

LIABILITY OF BENEFICIARY: If a beneficiary commits breach of trust or intentionally obtains any advantage there from, without the consent of other beneficiaries,

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then other beneficiaries are entitled to have all his beneficial interests impounded as against him, until the lost caused by the breach has been compensated.