Express, Implied & Constructive Trusts under the Indian Trusts Act, 1882: Key Differences, Examples, Case Laws & Comparative Table

Overview of the Indian Trusts Act, 1882

The Indian Trusts Act, 1882 codifies the law relating to private trusts and trustees in India (excluding the erstwhile State of Jammu & Kashmir and certain territories, though now applicable pan-India). It defines the creation, administration, and enforcement of trusts based on principles of equity, good conscience, and fiduciary responsibility.

The Act lays down the essentials of a valid trust:

• Clear intention on the part of the author (settlor) to create a trust (Section 6);
• Identifiable trust property;
• Lawful purpose (Section 4);
• Definite beneficiary or class of beneficiaries; and
• Transfer of ownership or declaration vesting the property in the trustee.

It recognizes three main categories of trusts—express, implied, and constructive—while imposing strict duties, liabilities, and accountability on trustees (Chapters II–VIII). The Act also regulates the rights and remedies of beneficiaries, prescribes consequences for breach of trust, and empowers courts to intervene to prevent misuse or mismanagement of trust property. Ultimately, it ensures that legal ownership is exercised with honesty, fairness, and justice, preventing any abuse of the confidence reposed in the trustee.

What is a Trust?

Under Section 3 of the Indian Trusts Act, 1882, a trust is defined as an obligation annexed to the ownership of property, arising out of confidence reposed in and accepted by the owner (the trustee), for the benefit of another person (the beneficiary) or for any lawful purpose.

In practical terms, a trust is a legal arrangement in which an individual, known as the settlor (or author of the trust), transfers ownership of specified assets or property to another party—the trustee—who holds and administers those assets not for personal benefit but solely for the advantage of one or more designated beneficiaries.

The management, investment, and distribution of the trust assets must strictly follow the instructions set out in the trust instrument (deed or declaration). Trusts serve diverse objectives, such as:

• Preserving and managing family wealth across generations;
• Providing for the education, maintenance, or welfare of specific individuals;
• Supporting charitable or religious causes (though public charitable trusts are governed by separate laws); or
• Protecting assets from risks, creditors, or mismanagement.

Examples:

• A parent may create a trust by transferring funds to a trustee, with clear directions that the money be used exclusively for their child’s higher education or medical needs.
• A philanthropist may establish a private trust to support specific charitable activities, such as funding medical facilities, with the trustee obligated to ensure the funds are applied only for the stated lawful purpose.

Express Trust

An express trust is intentionally created by the author (settlor) of the trust through clear and explicit words, whether oral or in writing, manifesting an unequivocal intention to establish a trust. It must clearly specify the trust property, the purpose (which must be lawful under Section 4), and the beneficiary (or class of beneficiaries), as required under Sections 4 (lawful purpose) and 6 (creation of trust) of the Indian Trusts Act, 1882.

For immovable property, the trust must be declared by a non-testamentary instrument in writing, signed by the author or trustee, and registered (Section 5). For movable property, it may be created by transfer of ownership to the trustee or by a written/oral declaration (Section 6).

Example: A executes a written and registered trust deed transferring ₹10 lakh to B, to be held in trust for the education of C. This constitutes a valid express trust.

Leading Indian Case Laws on Express Trusts

• Ram Chandra v. Mst. Bhanwari (AIR 1954 SC 749): The Supreme Court emphasized that where a trust deed clearly declares the obligations of the trustee, the trust qualifies as an express trust even if the language used is informal, provided the intention to create a trust is manifest.
• J.K. Trust v. CIT (AIR 1957 SC 97): The Court recognized that express trusts can be validly created by written instruments for both charitable and private purposes, provided the essentials under Sections 4 and 6 are satisfied.
• Narayan Bhagwantrao Gosavi v. Gopal Vinayak Gosavi (AIR 1960 SC 100): The Supreme Court held that an express dedication of property for religious or charitable purposes constitutes a valid express trust, underscoring the requirement of clear intention and transfer.

Note on Bai Dosabai v. Mathurdas Govinddas (AIR 1980 SC 1334): This case is frequently cited in trust and property contexts, but its primary focus is on the doctrine of conversion (equitable treatment of contracts for sale), specific performance, and obligations annexed to property ownership under the Transfer of Property Act, 1882. It does not directly address the core requirements for creating an express trust under Sections 4 and 6 of the Indian Trusts Act. For precise illustrations of express trust creation (clear intention, identifiable property, and definite beneficiaries), the above cases are more directly applicable.

Implied Trust

An implied trust (often referred to as a resulting trust in Indian jurisprudence) arises by operation or implication of law from the circumstances, conduct, or relationship of the parties, even in the absence of an express declaration of trust. It reflects a presumed intention of the parties, typically where equity intervenes to prevent unjust enrichment or to give effect to inferred expectations.

Such trusts are recognized under the principles embodied in the Indian Trusts Act, 1882, particularly where one party provides consideration for property but the title is vested in another (classic resulting trust scenario). While Section 9 primarily declares that every person capable of holding property may be a beneficiary, implied trusts derive from equitable doctrines under Sections 3–10 and case law interpreting the Act’s framework.

Example: A pays the entire consideration for the purchase of immovable property, but the sale deed is executed in B’s name. In the absence of evidence showing a contrary intention (e.g., gift or loan), B holds the property as an implied (resulting) trustee for A, who is the real beneficial owner.

Leading Indian Case Laws on Implied Trusts

• Valliammal (D) by LRs v. Subramaniam (2004) 7 SCC 233: The Supreme Court discussed principles akin to implied/resulting trusts in benami-like situations, where one person pays the consideration but property stands in another’s name. The Court emphasized the need to examine intention, source of funds, and surrounding circumstances to determine beneficial ownership.
• Ranganayakamma v. K.S. Prakash (D) by LRs (2008) 15 SCC 673 (AIR 2008 SC 3174): The Supreme Court inferred trust-like obligations from the conduct of parties in family property arrangements and partition deeds, highlighting how equity may imply trusts based on relationships and mutual understanding, even without explicit words.
• Krishnamurthy v. S. Rajagopal (AIR 1975 Mad 272): The Madras High Court held that implied trusts can arise from fiduciary relationships or conduct of parties, even in the absence of express declaration, where confidence is reposed and accepted.

Note on Stridhanam Cases (e.g., Thressiamma & Ors. v. Varghese & Ors., Kerala High Court precedents): In certain Kerala High Court judgments dealing with Christian marriages and stridhanam (dowry-like payments by the bride’s family), entrustment of property or funds has been held to create trust-like obligations. However, such cases often classify them as express trusts (arising indirectly from the act of entrustment), though they are frequently cited in discussions of implied obligations under Section 9 and equitable principles. For strict implied trusts, the benami/purchase-money examples remain the most direct.

Constructive Trust

A constructive trust is imposed by operation of law (irrespective of the intention of the parties) as an equitable remedy to prevent fraud, breach of confidence, unjust enrichment, or abuse of fiduciary position. It arises in situations where a person holds property in circumstances where it would be unconscionable for them to retain the beneficial interest.

Under the Indian Trusts Act, 1882, constructive trusts are dealt with in Chapter IX (“Of Certain Obligations in the Nature of Trusts”), particularly:

• Section 88: Where a fiduciary (e.g., trustee, agent, partner) gains an advantage by using their position or influence.
• Section 90: Where a qualified owner (e.g., one holding property with notice of another’s interest) gains an advantage.
• Other specific instances (Sections 81–93), with courts retaining equitable discretion via inherent powers (Section 151 CPC) even after repeal of Section 94 by the Benami Transactions (Prohibition) Act, 1988.

Example: A trustee secretly purchases trust property for personal benefit (or at an undervalue). The law imposes a constructive trust, treating the trustee as holding the property (or profit) for the benefit of the original beneficiaries to prevent unjust enrichment.

Leading Indian Case Laws on Constructive Trusts

• Canbank Financial Services Ltd. v. Custodian (2004) 8 SCC 355: The Supreme Court held that a broker who receives securities or proceeds on behalf of a client holds them under a trust-like obligation (constructive trust under Section 88 principles), as wrongful advantage gained by a fiduciary cannot be retained.
• Gopalakrishnayya v. Subrahmanyam (AIR 1928 PC 48): The Privy Council applied constructive trust principles where a fiduciary abused their position of confidence, emphasizing that equity imposes a trust to remedy breach of duty and prevent personal gain.
• Additional Relevant Authorities: Indian courts frequently invoke constructive trusts in cases of fiduciary breach, fraud, or undue influence (e.g., under Sections 88 and 90). The repeal of Section 94 does not limit equitable intervention; courts draw from Section 88 and inherent powers to impose such trusts where justice demands (as noted in scholarly analysis and post-1988 judgments).

Note: Constructive trusts are remedial rather than institutional — they focus on rectifying inequity rather than creating a formal trust relationship from the outset. They differ from express and implied trusts by being involuntary and intention-independent.

Differences Between Express, Implied, and Constructive Trusts

Conclusion

Together, express, implied, and constructive trusts ensure legal ownership aligns with fairness, honesty, and justice. They honour declared intentions while enforcing equitable duties arising from conduct or circumstances. Express trusts realise the settlor’s clear intent; implied trusts safeguard genuine expectations against mere technical title; constructive trusts act as a robust equitable remedy against fraud, breach of confidence, and unjust enrichment. Collectively, these trusts transcend rigid formalism, guaranteeing that property is administered not merely by legal title but in accordance with conscience, equity, and good faith.