The Indian Trusts Act is one of India's most significant pieces of legislation.
The objectives of trusts in India are governed by and protected by this statute.
India's trust law is intricate and has seen extensive development. According to
the Indian Trusts Act, a trust's main goal is to safeguard the interests of its
Definition of TrustAccordingly, trust is "an eq
uitable obligation binding a person (who is called a
trustee) to deal with property over which he has control (called the trust
property), for the benefit of persons (called the beneficiaries)of himself be
one, an anyone of whom may enforce the obligation. \
Indian Trust Act, 1882
Section 3 of the Indian Trust Act, of 1882 defines a Trust. But one has to note
that the Act is confidence to private trust ( Section 1). It does not apply to
public trust or private religious or charitable trust.
Definitions of Trust by Historians
According to Ketton, the trust arises whenever a person called the trustee has
compelled the equity to hold the property whether real or personal, legal or
equitable for the benefit of some person or some object permitted by law in such
a way that the rear benefit is provided to the beneficiary.
According to Smith, it is a duty deemed in equity to rest on the conscience of
the legal owner.
According to Snell, it is a beneficial interest provided to the beneficiary by
Types of Trust under the Indian Trust Act, of 1882
Constructive Trust is further divided into:
- Public Trust
- Private Trust
- Trust for Value
- Voluntarily Trust
Public Trust is a trust which provides benefits to the public at large. It is
for the benefit or to promote public welfare like education and medical
facilities in form of a charitable trust or religious trust.
Private Trust is created for the benefit of a specified class or a certain group
of individuals. For eg. A transfers certain property to B as a trustee for the
benefit of C as an individual.
Trust is created on express terms whether written or verbal. For eg, A declares
himself a trustee of 'Blackacre' for B. Similarly where A conveys the land to C
in trust for B, the same result follows.
Implied Trust is assumed or created by the act of construction of law. For eg.
Hindu Undivided Family.
It is created based on the operation of law. In certain circumstances, the legal
owner of the property must hold it in trust for another according to the
principles of equity. It is not possible in such circumstances to observe
formalities. When it would be an abuse of confidence for the owner of the
property to hold the same for his benefit, a trust is imposed upon him
irrespective of his intention. For eg. C as a trustee after completion of a
specified time renew that trust again and acts as a trustee based on equity.
Trust for Value
Where a party gets a consideration by the beneficiary to the settlor to bring a
trust into existence. The resultant trust is Trust for Value. For eg. A creates
trust in favour of P if she marries A. Marriage is a valuable consideration.
Wherever the trustee accepts the trust with free will without any kind of
pressure or force that is called voluntary trust.
Section 3- Interpretation Clause
- Trust- A "Trust" is an obligation annexed to the ownership of property and
arising out of confidence respond in and accepted by the owner, or declared
and accepted by him, for the benefit of another, or of another and the
- Author of the Trust- The person who reposes or declares the confidence
is called the author of the trust.
- Trustee- The person who accepts the confidence is called the "Trustee".
- Beneficiary- The person for whose benefit the confidence is accepted is
called the ' Beneficiary'.
- Trust Property- The subject matter of the trust is called "trust
- Beneficial Interest- Beneficial interest or interest of the beneficiary
in his right against the trustee as owner of the trust property.
- Instrument of Trust- The instrument by which trust is declared is called
an 'instrument of trust".
- Breach 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".
In the case of Bai Dosabai V Mathurdas Govinddas
, it was held that an
obligation annexed to the ownership of property, not amounting to interest in
the property", but an obligation which may be conferred against a transferee
with notice or a gratuitous transferee.
Section 4- Lawful Purpose
A trust may be created for any lawful purpose. The purpose of a trust is lawful
unless it is.
- forbidden by law, or
- is of such nature that, if permitted, it would defeat the provision of
any law, or
- fraudulent in nature
- involves or implies injury to the person or property of another, or
- the court regards it as immoral or opposed to public policy.
Every Trust of which the purpose is unlawful is void. When a trust is created
for two purposes of which one is lawful and the other is unlawful and the other
two purposes cannot be separated, the whole trust is void.
- 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. In this
case, the purpose of the trust is void.
Section 5- Trust of Immovable Property
No trust about the immovable 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 the
The trust of immovable property
No trust about the movable property is valid unless declared or aforementioned,
or unless the ownership of the property is transferred to a trustee. Immovable
property must be transferred mere vesting is not enough.
In the case of Hemcahnd V Pyarelal
, it was held that an uncertain trust and a
trust void for want of registration may be made perfect by 12 years of adverse
possession by the trustee, and action against them for remedy is barred
Section 6- Creation of Trust
Subject to the provision of Section 5, a trust is created when the author of the
trust indicates with reasonable certainty by any words or acts:
- an intention on his part to create thereby a trust.
- Purpose of Trust
- unless the trust is declared by will or the author of the trust is
himself to be a trustee and transfers the trust property to the trustee. As
laid down by the section, the following are necessary for the creation of a
- purpose of the trust, and
- transfer of trust property to the trustee which may be transferred inter vivos or under a will.
- A bequeaths certain property to B, "having the fullest confidence that he
will dispose of it for the benefit of C. This creates trust so far as
regards A and C.
- A bequeaths a shop and stock-in-trade to B, on condition that he pays
A's debts and a legacy to C. This is a condition, not a trust for A's
creditors to C.
Section 7- Who may create a Trust
A Trust may be created by:
- By every person competent to contract
- who is major and attained the age of majority as defined in the Majority
- He is of sound mind.
- He is not disqualified from contracting by any law to which he is
- with the permission of a Principal Civil Court of original jurisdiction,
on or behalf of a minor, but subject in each case to the law for the time
being in force as to the circumstances and extent to which the author of the
trust may dispose of the trust property.
Also, the following are eligible to create a trust:
Section 8- Subject of Trust
- Hindu Undivided Family
- Association of persons
- Company registered under the Company Act, 2013
The subject matter of a trust must be property transferrable to the beneficiary.
It must not be a merely beneficial interest under a subsisting trust.
Section 9, Who may be beneficiary
- A conveys property to B in trust to apply the profits to nurture female
foundlings to be trained up as prostitutes. The trust in this case is void
as the subject of the trust is for an unlawful purpose.
- A conveys property to B in interest for C for his lifetime. In this
case, the trust is held to be valid as it is for the benefit of C.
Every person capable of holding property may be a beneficiary. A proposed
beneficiary may renounce his interest under the trust by a disclaimer addressed
to the trustee, or by giving notice to the trustee.
This means that even a minor or a child in its mother's womb may be a
beneficiary. Of course, in giving property to such an unborn person, the rule as
to perpetuities (Section 14 of the Transfer of Property Act) should not be
Section 10- Who may be a Trustee
- A bequeaths property to B in trust to apply the profits for the benefit of
C (here C can act as a beneficiary).
Every person capable of holding property may be a trustee; but where the trust
involves the exercise of discretion, he cannot execute it unless he is competent
Thus, a minor can be a trustee but where the question of using discretion
arises, he is considered not competent to become a trustee. Besides, as per
Section 60 of the Act, 'the beneficiary has a right that the trust property
shall be properly protected and shall be administered by proper persons, and by
a proper number of such persons".
Reading Section 10 with Section 60 it is clear that though a minor can be a
trustee if the beneficiaries object to his being such and the court does not
consider him to be a proper person, he cannot be one. A married women's position
is also the same. If the personal law of the beneficiary allows a minor or woman
to be a trustee, the section has no application.
The following are not proper persons within the meaning of this section:
- A Person Domiciled Abroad;
- An Alien Enemy;
- A Person Having An Interest Inconsistent With That Of The Beneficiary;
- A Person In Insolvent Circumstances; And
- Unless The Personal Law Of The Beneficiary Allows Otherwise, A Woman And
A Minor (Section 60).
- A bequeaths certain property to B and C, his executors, as trustees for D.
B and C prove A's will. This is in itself an acceptance of the trust, and B
and C hold the property in trust for D.
The article would particularly specify Sections 3 to 10 of the Indian Trust Act,
of 1882 which deals with the creation of trust and various measures to be
followed. From the above discussion, we can conclude that there are various
measures or steps that one needs to follow or abide by to register one's trust
if one wants that his trust may not be declared void.
- (1980) 3 SCC 545
- AIR 1942 PC 64