1) Discuss the rights & powers of trustee under Indian Trust Act,

1882

What is a Trust?
The word ‘Trust’ is used in common parlance as a word
by which a confidence is denoted in one person by
another person.
When it is said that A ‘Trusts’ B with something, it
generally means that A has confidence in B that B
would honestly and diligently perform the responsibility
entrusted upon him. 

In India, the law relating to Private Trusts is provided

under the Indian Trusts Act, 1882. 
From a legal point of view, a trust can be said to be a
kind of arrangement including three parties, namely, 

1. The Author of the Trust – The person who

creates the Trust.
2. The Trustee – The person who accepts the
responsibilities of the Trust.
3. The Beneficiary – The person/persons for whose
benefit the Trust is created.

What is the objective of creating a Trust?

A trust is generally created for the benefit of a group of
people/persons. For example:
1. There exists certain movable and immovable
property of an individual. The Individual has children,
but the children, for the time being, are unable to
maintain such property.
The father wants to create a mechanism by which the
benefits of his property are properly enjoyed by his
children as well as the property is maintained. In such
a situation, the Father may choose to create a Trust for
his children. Here, the Father would be the Author, a
trusted person who the Father wants to appoint for
delivering the benefits and maintaining the property,
such person can be the trustee, and the children would
be the beneficiaries.
2. There is a wealthy senior citizen, who wants to set
up an institution for the welfare of the poor and needy.
Here, such a person may create a trust for charitable
purposes and appoint an appropriate person for being
the trustee.
 In such a case, the beneficiaries would be the poor
and needy people of the society.
3. A Mutual fund is also a Trust, where generally the
trustee is an artificial person, i.e. a Company.
4. In case of debenture issue by a Company, under
certain conditions provided for under the Companies
Act, a debenture trust is required to be formed and a
Debenture trustee is required to be appointed.

Who is a Trustee?
A Trustee is a person appointed under a Trust to
administer the Trust property. A trustee should be a
person who is capable of holding property and who is
competent to contract. A company, being an artificial
person created by law, can be a trustee as well. A
Trustee is specifically required to accept or disclaim the
trust entrusted upon him, either expressly or by way of
his actions. There can be more than one trustees in a
single Trust.

Duties/Liabilities of a Trustee
The Indian Trusts Act, 1882 provides for certain
duties/liabilities of a Trustee, we shall see each one of
them in brief detail.

 Execution of Trust
The trustee is required to actually carry out the
purpose of the trust as laid out in the Trust deed. The
trustee is also required to follow the directions of the
Author of the Trust at the time of creation of the trust. 
However, the trustee is not required to follow such
directions if they are impractical or illegal.

 Acquaintance of Trust Property

The trustee is required to know about the details,
whereabouts and current condition of the trust property
and also to take appropriate measures to secure the
trust property.

 Protection of Title of Trust Property

The trustee is required to defend all the claims against
the title of the Trust property and to take adequate
measures to assert and protect the title of the
property.

 Not to set up Title adverse to the

beneficiary
As the trustee is entrusted with the trust property to
maintain it for the benefit of the beneficiaries, it is
expected and required of the trustee to not set up any
title adverse to the beneficiary.
A good example explaining this point would be,
suppose the trustee is entrusted with an immovable
property and is required to apply the rents and profits
of such property for the benefit of the beneficiaries.
The trustee is also given the rights to sell such
property. 
It is expected of the trustee that the trustee would not
sell such property to himself or anyone of his relatives
or friends or a person of like nature, as such an action
on the Trustee’s part would be adverse to the
beneficiaries, and the trust factor upon which the
foundation of the trust is built, would cease to exist.

 Take care of the Trust Property

The trustee is required to provide adequate safeguard
and required to apply such prudence to the trust
property, as that of an ordinary man would apply to his
own property. 
However, the Act provides that the Trustee would not
be responsible for any loss caused to the trust property
or the benefits arising thereof, if he had applied such
prudence as would an ordinary man would apply to his
own property.

 Convert perishable property

If the trust property is of such nature, that with time, it
would keep on deteriorating and keep losing value, the
trustee is required to convert, i.e. sell and convert such
property into cash proceeds and apply such proceeds
for the benefits of the beneficiaries. This duty is
especially required of a trustee when the trust is
created for the benefit of several persons in succession.

 Be impartial among the beneficiaries

When the trust is created for the benefit of several
beneficiaries, the trustee is required to apply the
benefits received from the trust property equally
among the beneficiaries, without being partial to
anyone or any group among the beneficiaries.

 Protect the trust property from adverse

beneficiary
When there are several beneficiaries of a trust, and one
or more of such beneficiaries commit, or threaten to
commit an act, which would be adverse to the interest
of other beneficiaries and the trust in general, the
trustee is required to take measures to stop such act of
such beneficiary/beneficiaries.

 To maintain and keep books and accounts

The trustee is required to keep a clear and accurate
account of the trust property and at all times, provide
the same to the beneficiary upon the request of the
beneficiary.

 Investment of Trust money

The Act specifically provides that when the trust
property consists of money, and such money is not
required to be immediately applied for the benefit of
the beneficiaries, the trustee is required to invest such
money in such instruments as provided for in the Act.
The Act provides for instruments such as promissory
notes and other securities of the Central Government;
in stock or debentures of the Railways or other
government companies; in Units issued by the Unit
Trust of India, etc.

     Powers/Rights of a Trustee
Certain rights/powers are conferred upon the Trustee
under the Indian Trusts Act, 1882. They are discussed
in detail in the following paragraphs.

 Right to Title deed

The trustee is entitled to possess the trust deed or any
other instrument by which the trust is created, and the
title documents of the trust property.

 Right to reimburse expenses incurred for

trust purposes
The trustee has the right to be reimbursed for the
expenses incurred by him for the purpose of the trust,
like expenses incurred for the execution of the trust,
for the preservation of the trust property, for the
protection or support of the beneficiary, etc.

 Right to re-collect overpayment

If a trustee has mistakenly made a payment over and
above the required amount to a beneficiary, the trustee
has the right to collect such excess amount from the
beneficiary. Such collection might be made from the
interest of the beneficiary in the trust property, and if
not possible, then even from the beneficiary personally.

 Right to indemnity from breach of trust, by

a gainer
If a person has committed a breach of trust and has
gained from such breach, the trustee has the right to
indemnify himself against such gain by the person who
has committed such a breach. 
However, if the trustee himself is also guilty of fraud in
committing such a breach, then he loses the right to
indemnify himself in such a situation.

 Right to seek Court’s opinion in managing

trust property
The trustee has the right to apply to the Court, by way
of a petition, to seek the Court’s opinion, advice,
opinion or direction with regards to the management of
the trust property.

 Right to Settle accounts

When the duties of a trustee are complete, the trustee
is entitled to have the accounts of the administration of
the trust property examined and settled, and when no
benefit is due to any beneficiary under the trust after
the completion of the trustee’s duties, the trustee is
also entitled to receive an acknowledgement to that
effect.
  Right to sell trust property, along with
power to convey
The trustee has the power to sell the trust property as
per the instructions laid out in the trust deed, and if no
such instructions are laid out, then by way of public
auction or private contract, in any way the trustee
deems fit.

 Right to vary or rescind the sale of trust

property, and re-sell the same
The trustee has the power to vary the conditions of the
sale of trust property or even rescind such sale. He also
has the power to re-sell the same property. If in such
recession and re-sale, if any loss occurs, the trustee is
not liable for the same.

 Power to manage investments

The Trustee has the power to sell any existing
investment of the Trust property and invest the same
into any other instrument, as he deems fit.
However, if there is a beneficiary who is competent to
contract, then such power cannot be exercised by the
trustee without such beneficiary’s consent in writing.

 Power to apply property of Trust for

maintenance of minor beneficiaries
In case the beneficiary is a minor, the Trustee has the
power to apply, i.e. use the income for the Trust
property for the maintenance of the minor.
Maintenance of the minor may include functions such
as food and clothing, Education, Religious worship,
marriage, funeral, etc.

 Power to compound
This power may also be called as power to settle
disputes. When there is any dispute related to any of
the trust property, the trustees, when there are two or
more trustees appointed, or the sole trustee, may
settle the dispute in the manner they think fit. For
example, they may compromise, compound, abandon
the dispute or may even submit the dispute to
arbitration. In the doing of such settlement, the sole
trustee or the trustees may enter into any agreement,
or instruments, as they deem fit.

 Trustees to continue with trust if one of

several trustees dies or disclaims
When there are two or more than two trustees
appointed, and one of them disclaims the trust or dies,
the remaining trustees shall have the power to deal
with the trust property, as provided in the Trust deed. 
However, such power would not be exercisable, if the
Trust deed specifically requires a specific number or
more of trustees to execute the authority provided for
in the trust, and after the death or disclaimer, such
specific number is not satisfied.

Conclusion
It is said that the relation of Trust is like a glass. Once
broken, it is never the same as before. By a prima facie
observation of the Indian Trust Act, it can be seen that
apart from the legal aspects, the duties and powers
provided in the Act intend to preserve the delicate
relation of trust, so that the trust may be kept, and the
intention with which the trust is formed may be
fulfilled. Therefore, here we may conclude with the
duties and powers of a Trustee as provided for in the
Indian Trust Act, 1882.

2) Discuss in brief the rights & liabilities of Beneficiary under

Indian Trust Act, 1882
Introduction
According to the Indian Trusts Act, 1882, a trust is
referred to as an obligation that is annexed to the
ownership of property, and it arises out of a confidence
reposed and accepted by the owner for the benefit of
another person and owner. It is an acceptance of an
obligation by someone, but against either some kind of
property or funds to use it or hold it in order to gain
benefit for the person, for whom the trust is created.
The rights and liabilities of the beneficiary are also
dependent on the kind of trust, to some extent – as
there are many different kinds of trusts.
In lay-mans language, we can describe a trust as a
three-party fiduciary relationship. In this, the first party
(author of the trust) usually transfers a property (often
refers to a sum of money, but not necessarily) upon
the second party (the trustee) for the benefit of the
third party (the beneficiary). A trustee refers to the
legal owner of the property. Here, the beneficiary(s) is
referred to as the equitable owner(s) of the property.
Therefore, trustees have a duty to manage the trust
with full interest for the benefit of the equitable
owners. A regular accounting of trust income and
expenditures also must be provided to the equitable
owners, and trustees have the right to get reimbursed
or compensated for any expenses that they make. A
court of jurisdiction can easily remove a trustee who
breaches his/her duty towards the trust and
sometimes, some breaches may even be treated as
criminal offences. Trustees will be liable to be charged
and tried with reference to such breaches.
Some primary duties of a trustee include – duty of
prudence, duty of loyalty, and duty of impartiality. A
trustee can even sometimes be held to a very high
standard of care in their dealings, in order to enforce
their behaviour towards the trust. Trustees are also
bound to many kinds of ancillary duties, with addition
to these duties, this is in order to ensure that
beneficiaries receive their dues, etc. In addition, a
trustee is expected to always understand, know, and
also abide by the terms and conditions of the relevant
law concerned as well as the terms of the trust. Trusts
are usually governed by the terms and conditions
under which they are created. A contractual trust
agreement or a deed is required for this in most
jurisdictions. There also exist very strong restrictions in
relation to a trustee with conflict of interests. Courts
can do the following, in case it is found that a trustee
has failed to do any of his/her duties-

 Reverse trustee’s actions

 Order for profits to be returned
 Impose other sanctions
This failure of duties or actions is termed as a breach of
Trust. It is also highly recommended that both,
trustee’s as well as the author’s to seek qualified legal
advice before entering into a trust agreement.

Concept of a Trust
Mr.P- Property Reposes Confidence- Mr Q- P’S Grand-
Daughter
Here, we can suppose that Mr P wants to pass on his
bungalow (property) to Mr Q, for the benefit of his
minor granddaughter. The only reason Mr P passes his
property to Mr Q is because he has confidence in Mr Q,
this is nothing but the essence of a trust, as illustrated.
In simple words, we can describe this trust as nothing
but the transfer of property by the original owner (Mr
P), to another person on whom the owner has
confidence (Mr Q) for the gain of the benefit of a third
person (P’s Grand-daughter).
A property, with reference to a trust, does not always
have to mean property concerned with real estate.
Property in reference to a trust can be referring to even
cash, shares, or any other valuable asset’s.
Lastly, there has to be an instrument by which the
trust can be entirely declared/created. This instrument
is called ‘the instrument of trust’ or ‘the trust deed’.

The Parties in a Trust

Author/Trustor/Donor/Settlor (Mr P) – The person who
originally transfers their property and has confidence in
another person in order to create the trust. Trustee (Mr
Q) – The person who accepts the transfer of property
as well as the confidence in order to create the trust.
Beneficiary (P’s Grand-daughter) – The end benefiter of
the trust who will benefit from the trust in the near
future, or person for whose benefit the trust is created.

Objectives of a Trust in General

As per what Section 4 of the Indian Trusts Act, 1882
states, all purposes and objectives are said to be lawful
to create a trust, unless they are:

1. Forbidden by law
2. Is fraudulent or related to fraud
3. Defeats any kind of provision of the law
4. Immoral
5. Against Public Policy
6. Involves injury to another person or to his
property

Who can Create a Trust

A trust may be created by-
 1. Any person who is competent to contracts in
India. This may include any individuals, AOP,
HUF, or any company/firm etc.
2. A trust can even be created on behalf of, or by a
minor in India. This may be done through the
permission that is to be first granted by a
Principal Civil Court.

Types of Trust’s that can be Created in India

1. Private Trusts – These trusts are for a closed

group. In other words we can say that
beneficiaries can be identified in these type of
trusts. Eg: A trust that is created for a friend or
someone in the family of the author.
2. Public Trusts – These are usually created for a
large group or a public in large. The end
beneficiaries cannot be identified in these type of
trusts. Eg: NGO’s or charitable institutions for
the general public.

The Indian Trusts Act, 1882

The Indian Trusts Act is an Act related to private trusts
and trustee’s in India. The act defines what exactly will
be called a Trust, and who exactly can be a trustee
legally and also provides a definition for them. The
Indian Trusts Amendment Bill of 2015 enabled the
government to scrutinize the trusts’ investment at will,
but at the same time also removed some restrictions
on monetary assets investment, etc. The act also
defines and states how the author of the trust can
assign his assets to be controlled by the trust, and how
he can appoint trustees and beneficiaries. Furthermore,
the Act states that the trust should have a clear
definition of the following:
 1. What is the intention of the author to create the
trust.
2. The future beneficiary who is the controller of
the monetary assets later.
3. Purpose of the trust.
4. The monetary assets that are assigned to the
trust.
5. Grants control of the monetary assets– whether
to the trustee, partially or fully, and what control
the author has left.

Trust Beneficiary
Under the provisions of Trusts Act 1882, every person
is legally capable of holding a beneficiary in a trust, in
India. Beneficiary means the person for whose benefit
the repose is originally accepted. The beneficiary is
entitled to all the benefits that an author of the trust
mentions in the Trust deed/Instrument of Trust.
Relevant provisions – Section 68, of the Indian
Trusts Act, 1882.
Definition as given under Section 3 – Defines
beneficiary as the person for whose benefit the
confidence is accepted, is called the beneficiary.
Section 9 of the Trusts Act– According to this
section, any person who is capable of holding property
may be a legal beneficiary. The beneficiary is not
bound to accept the Interest under Trust.

Rights of a Trust Beneficiary in India

Case law – S. Darshan Lal V. Dr. R.E.S Dalliwal (AIR
1952 All 825)
Many people often believe, in India, that a beneficiary
has no rights in a Trust other than just to wait and see
what the trustee’s actions are and what, how the
trustee will distribute exactly to them. However, this is
not true as trust beneficiary have certain rights to them
provided under The Trusts Act as well. They have
certain rights in relation to the trust. The rights of the
beneficiaries, except for those mentioned in the Act,
typically depend on the type of trust, provisions
contained under the trust, type of beneficiary that they
hold, and lastly, state law. 
If the trust is a revocable trust – This means that the
author of the trust can revoke or change the trust at
any time that they desire, it also proves that the author
may even change the beneficiary completely, as and
when he desires. In this type of a trust, the rights are
usually provided by the author to the beneficiary, and
mentioned in the deed (if any). A trust can be
revocable until the author/settlor dies and then it
changes to an irrevocable trust.
However, in case of an irrevocable trust– The trust
cannot be changed except by court orders, that too in
rare cases. Beneficiaries of this kind of trust have full
rights to information about the trust and what takes
place or does not. The beneficiary also has the right to
make sure that the trustee(s) are behaving in an
accurate manner, etc.
There are also, generally, provisions in the Trust that
contain which rights are given to which beneficiaries
and which beneficiaries are entitled to what within the
trust. However, the following are the common rights
that are given to every beneficiary in a irrevocable
trust as revocable trusts are not considered to be
stable.  

Right to payment (Rents & Profits)

All beneficiaries of Trust have the right to payment as
set forth in the document of the trust. It is mandatory
for trustee’s and author’s to make sure that the
beneficiary receives whatever payment is legally
supposed to be given to the beneficiary. Beneficiary
has the right to receive all profits.

Right to information
All types of beneficiaries have the right to get all types
of information regarding the trust and its
administration. Enough information needs to be
provided to the beneficiary in order for them to know
where exactly they stand in the Trust and how to
enforce their rights.

Right to an Accounting
Current beneficiaries are entitles to all information of
accounting within the Trust. An accounting, this sense,
refers to a detailed report of all income and
expenditure that the Trust incurs. Rules of the
accounting of the trust may vary, but usually it is the
trustee’s responsibility to maintain an account and give
an accounting report at the end of the year.
Beneficiaries also have the right to completely waive off
any accountings.

Remove the trustee

If the beneficiaries feel in any way that the trustee is
not acting in a proper or accurate manner, and is not
able to take responsibility of the trust well, then the
beneficiary has the right to put a petition in court and
get the trustee removed according to what they find
inappropriate. Trustee’s have the obligation to cope up
and manage with all needs of current beneficiaries, as
well as remainder beneficiaries, that may prove to be a
tough job for them sometimes, which often leads to
their removal from the Trust.
Termination of The Trust
In very rare cases, if all beneficiaries, remainder as
well as current beneficiaries agree on mutual terms,
they have the right to petition in court and end the
Trust. This happens in cases where the trust
beneficiaries believe that the trust is acting improperly
in some way or not productive in some way.
Sometimes, the reason for which the beneficiaries want
to end the trust, may also be that the purpose the trust
may have been fulfilled, or must be impossible. State
laws vary on when this type of termination is allowed
to end the trust.

Liabilities of a Trust Beneficiary in India

Duty to compensate the trustee

It is the duty of the beneficiary to compensate or
reimburse the trustee in case there are any damages
caused either to the trustee or to the trust, due to the
beneficiary. It is legally mandatory for the beneficiary
to compensate if there is any injury or damage caused
by himself.

Liability in breach of trust

The beneficiary is held liable, if by any chance, in any
case, he/she breaches the trust agreement in any way.
He is held fully liable for all losses/damages if he
commits a breach of trust.

Liability not to harm others’ interests

Beneficiary cannot harm another party’s interests in
any way in the trust, as he will be liable for any harm
caused to another party within the trust that is due to
him or his behaviour/etc.
Liability not to obtain any advantage without the
consent of other beneficiaries: It is mandatory for the
beneficiary to take consent of all other beneficiaries
involved in the trust in case, he/she needs to obtain
any kind of advantage. If not done, it will be
considered as a breach of trust.

Liability to receive his interest(s)

The beneficiary is entitled to get his/her interest from
the trust, but the beneficiary should not claim more
than his interest in the trust property.

Liability to become aware of breach of trust

It is the beneficiary’s liability to become aware of all
types of breach of trust, whether by the author or by
the trustee, and it is his liability and responsibility to
become fully aware and proceed against any party, if a
breach of trust is found by the beneficiary.

Liability in case to deceive the trustee

The beneficiary will be held liable if in case, it is found
that he has deceived the trustee in any way or induced
him to commit a breach of trust. Court will proceed
against the beneficiary in this matter.

Liability to take reasonable steps

The beneficiary will be held liable in case he fails to
take reasonable steps and actions, as mentioned in the
trust deed, within the rights and duties of other
beneficiaries. It is mandatory for the beneficiary to only
take steps within the limitations and boundaries set of
all other beneficiaries.

Bar to Remedies for Breach of Trust

The beneficiary’s right of action can be lost in anyone
one of the following ways:

1. By concurrence
2. By the way of limitation (lapse of time)
3. By continued acceptance in the breach
4. By release of trustee from any liability
5. By subsequent confirmation of breach

Conclusion
To conclude, we can say that under the provisions of
the Trusts Act, the beneficiary is entitled to many
rights and is equally liable for any breaches as well.
There is an equal ratio of rights as well as the liabilities
of the beneficiary. This analysis also proves that it is
compulsory for the beneficiary to maintain a good co-
operation with the trustee’s of the trust, which help
him save himself from any breach of trusts.
Lastly, even though trust is primarily created for the
benefit of the beneficiary, there are still certain rights
and liabilities that the beneficiary will hold, and there is
still a way and manner that a beneficiary needs to act
and behave in within the limitations of the Trust.

3)Define Trust. Also discuss the rules regarding creation

of trust under Indian Trust Act, 1882
CREATION OF TRUST
The elements of valid trust are presented in section-6.
The act defines how the author could create the trust,
assign trustees and give them his monetary assets to
be controlled by the trust. It may be express or
implied. It includes-
  Intention of the author to create the trust.
 Purpose of the trust.
 The monetary asset is assigned for the benefit of
the trustee.
 Gives control or transfer the trust property to the
trustee which includes intention of the author.
 Trustee can claim expenses & salary from the
benefits from the trust of his work.
The requirement of the trust law is that the author
should indicate by words or conduct with the
reasonable intention to create a trust.

 Certainty of author’s intention,

 Certainty of object,
 Certainty of beneficiary &
 Certainty of trust property.
For example: A property transfer within the same
family no valid trust will arise because the beneficiary
of the trust is not indicated with certainty similarly if
the transferee distributed the property amongst the
member of same family, as he should think most
deserving, here there is also no valid trust because
there should be no certainty about beneficiaries but
where a person transfer is property and his assets to
another person for payment of his creditor. This is not
trust but a transfer on a condition mentioned under a
trust law in India.

SECTION 8 – About the subject matter

Under this provision, the trust law requires that the
subject matter must be property & are capable of being
transferred to beneficiary.
SECTION 5 – Nature of the property
Under this provision, properties which are transferred
to the trustee may be moveable or immoveable.
In case of immovable property, it may be valid if the
author of the trust & the trustee being signed on the
instrument & by the will of the author of the trust
The provision of trust law in India cannot be used for
the purpose of committing fraud. (R/W Sec-4)

SECTION 4 – Purpose should be lawful

Under the provision, sec4 states that a trust must be
created for lawful purpose.
Where the purpose of law of trust is unlawful, the trust
becomes void.
But as if the trust property is located in foreign
country, the law of that country shall apply.
Trust Law in India requires that the purpose should be
lawful.
Unless it is not being-

It is forbidden by the law,

 It is fraudulent,
 It is of such nature that, if permitted it would
defeat the provision,
 The court regards it as immoral or opposed to
public policy.
Suppose for example- trust for fraudulent of creditors,

SECTION 7– Competent to contract

According to sec-7 of the trust law in India says that a
trust may be created by every person competent to
contract. But where the trust is created on behalf of
minor, permission from civil court jurisdiction should be
obtained first.
SECTION 9 – Who may be beneficiary
Under the provision, every person capable of holding
property may be a beneficiary. As if the proposed
beneficiary may renounce his interest under the trust
he can by disclaimer addressed to the trustee, by
giving notice.

WHO MAY BE TRUSTEE UNDER THE TRUST LAWS

Section 10 says that every person who is competent
to contract are capable of holding property as trustee.
However no person is bound to accept a trust. When a
person is appointed as a trustee, he has the option to
accept or reject the trust. He has to intend his
acceptance by words, written, spoke or by conduct.
The assigned trustee may disclaim it also, but he must
do with in the reasonable time. His disclaimer will
prevent the property to transfer to the trustee. But in
case of more than one proposed trustee & one of the
trustees disclaim, the property will vest to the other
trustee & he will become the sole trustee vice versa. A
proposed trustee who accepts becomes the trustee
from the date of the creation of trust. Where a person
by his will leaves certain property in trust for another &
the proposed trustees prove his will that amounts to
acceptance of the trust on their part.
Under English law, the property becomes to the subject
of two kinds of ownership. The trustee becomes the
legal owner & beneficiary regarded as beneficial owner.
Under Hindu law, provision clearly says that the trustee
having possession of the property. The beneficiary has
certain rights under the trust under Indian trust law.
Beneficial ownership is also known as equitable
ownership but it is not known in the trust law in India.
KINDS OF TRUST UNDER THE TRUST LAW
There are different kinds of trust which are discussed
below-
Express trust– If the trust was created verbally, in
written or in expressed term and a person is being
nominated to be the trustee of the trust it would
amount to express trust. If the property is moveable
then firstly it should be registered & have to physically
transferred to the trustee.
Implied trust– An implied trust is also created by an
act of the parties. It appears from the conduct of the
parties.
The conduct of the party creates presumption & also
shows the intention of the parties.
Public & private trust– A public trust under the trust
law in India is one which is created for the benefit of
the public. In general Public doesn’t mean public as
whole. The trust may be created for a part of public & it
will be valid trust so long as every member of
particular class is permitted to enjoy the benefit of the
trust. Examples of general public purpose are- medical,
health, social service, education, training etc.
Private trust is basically is made for a specified person
so that no one left the one can draw the benefit. Such
a trust is enforceable at the private action of intended
beneficiary.
Secret Trust– Where neither the existence of trust nor
its terms are disclosed, it is called secret trust. In case
the existence of trust is disclosed but its terms are not
disclosed it is a half secret. This is a misuse of concept
trust.
REQUIREMENTS FOR STARTING PUBLIC TRUST UNDER THE
TRUST LAW
The general rules emerge from judicial authorities is
that the charitable trust must satisfy 3 requirements-

 The trust must be for the promotion of public

benefit.
 The trust must be wholly & exclusively charitable
 The trust must be charitable of nature

LIABILITIES OF TRUSTEE UNDER TRUST LAW

Liabilities of trustee defined in Section 23 to Section 30
of the trust law. They are as follow-

 Liability for breach of trust

Where the trustee commit breach of trust, then he is
liable to compensate the beneficiary or the trust
property which loss sustained unless the beneficiary
has by fraud induced the trustee to commit the breach.
A trustee committing a breach is not liable to pay in
some following cases-

1. When he has actually received interest,

2. Where he may be fairly presumed to have
received interest.
3. Where the trustee ought to have received
interest.

 No set off against liability

Where a breach of trust in two distinct forms, one
causing loss & the other brings profit, the trustee
cannot say that his liability for the loss should be
reduced by set off against it the gain in simple words if
breach of trust cause loss the trustee has to bear. If it
brings gains it will go the benefit of trust property.
  The position of co-trustees
The general rule is that a trustee is not liable for the
breach of trust committed by any one of his co-trustees
EXCEPTIONS-

 Section 26 declares where the trustee is liable

for the breach of his co-trustees.
 Where he has delivered the trust property of his
co-trustee without seeing to its proper
application
 Where he comes to know of a breach of trust
committed by his co-trustee or intended to
commit & trustee doesn’t take proper steps to
protect the interest of the beneficiary.

RIGHTS & POWERS OF TRUSTEE UNDER TRUST LAW

 Right to title
A trustee is entitled to have in his possession the
instrument of trust & all the documents of title relating
to the trust property.

 Indemnity from Gainer of breach of trust

Where a breach of trust has occurred and a person
other than a trustee has received benefit from the
breach, he will be bound to indemnify the trustee. Such
indemnity is not available to a trustee who has been
guilty of fraud in breach of trust.

 Settlement of accounts
When the duties of a trustee have been completed, he
is entitled to have the accounts of his administration of
the trust property examined and settled.

 General Authority of trustees

A trustee has the right to do all such acts that are
reasonable & proper for the realization, protection or
benefit of the trust property & also for the protection of
a beneficiary who is not competent to contract. This is
known as general authority of trustee.

Power to convey
The completion of sale may require certain formalities
(formality of conveyance). Section 39 gives the power
of conveyance to trustee. The section says that after
the completion of sale the trustee shall have the power
to convey to the person as may be necessary.

 Authority to deal with trust property under

trust law
Where the authority to deal with trust property is given
to several trustees and any of the trustees disclaim or
dies the authority may be exercised by the continuing
trustee. This will not be applied in those situations
where the instrument of trust is specific on the point
that the trust executed only some specific number of
trustees.

 Power to sell
Where a trustee has the authority to sell the trust
property he may sell the property subject to the
charges or free of them. He may sell the whole
property in one lot or in installments either by public
auction or by the private at one time or at different
times. But the trustee can perform such activity when
it is mentioned in the trust deed.

4) Discuss the rights & powers of trustee under Indian

Trust Act, 1882

INTRODUCTION:
A trustee is a firm or a person who holds and administers the assets or
the properties for the benefit of a third party. A trustee is appointed
for several different reasons which may include cases related to
bankruptcy, charitable purposes, for a trust fund, or retirement or
pension plans. 
Trustees are often believed to act and make decisions in the best
interest of the beneficiary to manage their assets. The author gives the
right to the trustee to hold the titles to the asset or the property for the
benefit of the trust beneficiary or for himself. The trust deed might be
created to give legal protection to the property of the author and
ensure that the assets are distributed properly. The trustees are
responsible for the management of the title(s).
Chapter IV of the Indian Trust Act, 1882 (Section 31-45) discusses
certain rights and powers of the trustees which can be enjoyed by
them.
RIGHTS OF A TRUSTEE:
Right to title deed [S.31]- The trustee has the right to have
possession over the instrument of trust and other documents which are
related to the trust property. Although if the beneficiary demands
copies of such documents, the trustee needs to provide it to them.
Right to reimbursement of expenses [S.32]- For the purpose of the
execution, preservation, or benefit of the trust property or for the
protection and support of the trust beneficiary, the trustee has the right
to reimburse or pay himself all the expenses out of the trust property
which has incurred to him while carrying out these purposes.
The trustee has the right to first charge upon the trust property for
such expenses along with interest, provided that such expenses have
incurred with the sanction of a principal Civil Court of original
jurisdiction. In case the trust property fails to provide the trustee with
such expenses, he has the right to recover the amount from the trust
beneficiary personally on whose request such payments were made. 
Right to recollect over- payment [S.32]- The trustee has the right to
reimburse the trust property of the beneficiary’s interest in case if any
over-payment is made mistakenly by the trustee to the beneficiary.
The trust property on failing to provide for such excess payment, the
trustee is entitled to recover the amount personally from the trust
beneficiary.
Right to indemnity from gainer by breach of trust [S.33]- If a
person has gained an advantage by committing a breach of trust then
such person must indemnify the trustee with the amount which was
received to him by committing the breach. In case if the beneficiary
commits the breach, the trustee has the right to charge upon the trust
property for such amount.
The provision further states that the trustee does not confer the rights
to indemnify if he himself has committed the breach and is guilty of
fraud. 
Right to opinion from Court for trust property management
[S.34]- The trustee has the right to seek opinion, advice, or direction
on any matters related to the management or administration of the
trust property by filing a petition to a principal Civil Court of original
jurisdiction. 
Right to settlement of Accounts [S.35]- The trustee is entitled to
have accounts of his administration of the trust property examined
and settled and also an acknowledgment in writing that no benefit is
due to any beneficiary under the trust after the successful completion
of his duties as a trustee.
Scope of Agent's Authority
POWERS OF A TRUSTEE:
General Authority of Trustee [S.36]- The trustee has the power to
perform any acts which may seem reasonable and proper to him of the
realization, protection, or benefit of the trust property and to provide
protection and support to the trust beneficiary competent to the
contract. However, these powers including the powers conferred by
the act and the trust deed are subject to:
 any restrictions provided in the trust deed, and 
 to the provisions of section 17 of this act. 
In addition to these, the trustee cannot lease a trust property exceeding
more than twenty-one years or without reserving the yearly rent that
can be obtained provided he has taken proper permission from a
principal Civil Court of original jurisdiction.
Power to sell [S.37]- Subject to prior charges or not, the provision
confers the power to the trustee to sell any trust property together in
lots by public auction or by private contracts and either at one time or
several times unless otherwise provided by the trust deed.
Power to sell under special conditions [S.38]-
  Power to buy-in and re-sell- The trustee has the power to
make any reasonable changes in any conditions of sale or
contract for sale. He also has the power to buy-in the
property or any part of it at any auction sale and re-sale it
by making necessary changes in the contract as he deems
fit, provided such changes does not bring any kind of loss
on the part of the trust beneficiary. 
 Time allowed to sell trust property- the trustee is
conferred with the power to exercise reasonable discretion
regarding the time for effecting the sale or purchase
Power to Convey [S.39]- The trustee is granted the power to convey
or dispose of the property for the purpose of completion of any sale as
he may deem fit to be.
Power to vary Investments [S.40]- The trustee is entitled to call in
for any of the trust property which is invested in any security and
invest that property in securities that are mention under Section 20 of
the Act. He may also differ in any such investments anytime subject
to the condition that no such change of investment shall be made
without the consent of the person competent to contract and entitled to
receive the income of the trust property for life or for any greater
estate at that time.
Power to apply for minor’s trust property for their maintenance
[S.41]- In case the trustee is holding trust property for a minor, he
may pay to the guardians at his own discretion or with the permission
of the Principal Civil Court of original jurisdiction apply for or
towards the minor’s benefit such as:
 Maintainance, or
 Education or advancement in life, or
 Religious worship, or
 Marriage, or
 Funeral 
Power to give receipts [S.42]- The provision confers the power to the
trustee(s) to give a receipt, without committing any kind of fraud, to
the person who is paying, transferring, or delivering any money,
securities, or movable properties. After receiving such receipt, the
person paying, transferring, or delivering shall be discharged from
being accountable for any loss or misapplication.
Power to compound [S.43]- The provision confers the power to
settle disputes to the trustee. The trustee or the sole trustee (in case of
two trustees) is entitled to settle any dispute or matter related to the
trust property in the manner they think fit to be unless otherwise
provided by the trust deed. The trustee has the power to:
1. Accept any security or composition for any debt or
property claimed.
2. Allow payment of debt anytime.
3. Compromise, compound, abandon or even submit to the
arbitration or settle any debt, account, claim related to the
trust.
4. Execute, give or enter into such agreements, instruments,
or arrangements which they deem fit to, subject to the
condition that such arrangements being done in good faith
shall not bring any kind of loss.
Power to several trustees of whom one disclaims or dies [S.44]- In
case there are several trustees and any one of them disclaims the trust
or dies, the remaining trustees have the power to continue with the
authority. However, if the trust deed requires a specific number or
more of trustees then the authority cannot be exercised by the
remaining trustees.
Suspension of trustee’s powers by decree [S.45]- The trustee is not
entitled to exercise any of his powers if in case a decree has been
passed by the Court for the execution of a trust unless conformity has
been provided by such decree, or by the Court’s sanction, or a
pending appeal against the decree in the Appellate Court. 
CONCLUSION:
The Indian Trust Act aims to protect the fiduciary relationship formed
between the author, the trustee, and the beneficiary. These rights and
powers conferred to the trustee ensures easy and smooth management
of the trust property and also eases the maintenance which is to be
provided to the trust beneficiary keeping in mind that such rights and
powers are used in good faith.

5) Define trust. Discuss various classification of trust

 The nature of trusts
There is no single agreed definition of a trust, but one that has been
accepted by the courts is as follows:
'A trust is an equitable obligation, binding a person (who is called a
trustee) to deal with property over which he has control (which is
called the trust property), for the benefit of persons (who are called
the beneficiaries or, in old cases, cestuis que trust), of whom he may
himself be one, and any one of whom may enforce the obligation.'

Classification of trusts
There is no generally agreed classification of trusts. However, it is
possible to make distinctions according to:
1. •
mode of creation
2. •
validity and enforceability
3. •
whether private or public
4. •
tax treatment
The traditional generic categorisation of trusts distinguishes between
those that are express, implied, constructive or resulting.
Express trusts are:
1. •
created by the terms of an inter vivos or lifetime settlement,
declaration or other trust instrument or by Will or codicil,
or
2. •
expressly imposed by statute
Implied trusts may be express trusts where the intention of the
settlor or testator is implied in the non-technical language they have
used or where the trust arises by operation of law, as in the case of
constructive and resulting trusts.
Constructive trusts are those that are constructed on the basis of the
presumed intention of the settlor or testator or irrespective of
intention, imposed by a court of equity in circumstances in which it
would be unconscionable or inequitable for a person holding
property to keep it for their own use and benefit absolutely.
Constructive trusts may be sub-divided into two categories:
1. •
the constructive trust proper (known as the institutional
constructive trust)
2. •
the so-called constructive trust (known as the remedial
constructive trust)
A resulting trust is one that returns beneficial ownership of the trust
property to a person who owned the property before it reached the
trustee's hands. There are said to be two kinds of resulting trust, a
presumed resulting trust or an automatic resulting trust.

Nature and classification of trusts—the three certainties

In order for a settlor to create a private express trust the three
certainties must be present, namely:
1. •
certainty as to the intention of the settlor to create a trust
(also known as certainty of words), the trust property being
intended to be kept separate from other property of the
trustee
2. •
certainty as to the property to which the trust is to attach
(also known as certainty of subject matter)
3. •
certainty as to persons or 'objects' who are intended to
benefit (also known as certainty of objects)
Certainty of intention is satisfied if there is sufficient evidence to
show that the settlor or testator clearly intended to create a trust. No
technical expressions are necessary to create a trust: a trust may be
created by the general tenor of an instrument without using the word
'trust' since 'equity regards the intention rather than the form'.
Problems can arise where the usual technical language has not been
employed or, if it has, where there is uncertainty as to intention and
also where precatory words have been used.
For certainty of subject matter the property to be affected by the
trust must be either expressly designated or so defined that it is
capable of being ascertained. There are two issues to consider:
1. •
the property to be subject to the trust must be certain
2. •
the precise extent of the beneficial interests must be certain
For certainty as to the objects or persons to be benefited by a trust,
these must be:
1. •
expressly designated or
2. •
so defined that they are capable of being ascertained
Note that if any of the certainties is absent, then no valid express
trust will be created. The precise consequences will depend on
which of the three certainties is absent.
See Practice Note: Nature and classification of trusts—the three
certainties.

Perpetuities and accumulations

The rules relating to perpetuities and accumulations stem from the
provisions in the Perpetuities and Accumulations Act 1964 and from
common law. These increasingly archaic rules were becoming
troublesome and as long ago as 1989, the Law Commission started
consultations on altering them. 
The Perpetuities and Accumulations Act 2009 became operable on 6
April 2010 but practitioners still have regard to the old rules in
certain cases.
See Practice Note: Perpetuities and accumulations.

Nature and classification of trusts—constitution of trusts

A trust is completely constituted by the settlor either:
1. •
effectively transferring certain property to trustees and
declaring the trusts on which the trustees are to hold such
property, or
2. •
 declaring that certain property vested in them is to be held
henceforth by them
In order for a valid private trust to come into existence, there must
be a manifest intention on the part of the settlor to create a trust; the
intention must be expressed in a way that complies with the three
certainties requirements, and the trust property must be property
vested in trustees who hold it in that capacity on behalf of the
beneficiaries.
If the trust property is not properly vested in trustees, there is no
trust as 'equity will not perfect an imperfect gift'. However, it is
possible for a trust to be constituted where the settlor has done all
that is within their power to constitute the trust by transferring the
property to a trustee but has been thwarted by formalities which are
outside their control, ie equity regards the trust as constituted by the
last act of the settlor.
Resulting trusts
Where parties buy property in joint names:
1. •
without making an express declaration as to their beneficial
interests, and
2. •
contribute towards the purchase money or property in equal
shares
they hold the property as beneficial joint tenants, unless there is
evidence of a contrary intention at the time of the purchase. If they
contributed to the purchase money in unequal shares, they are
tenants in common in proportion to their contributions, although this
may be rebutted by evidence or circumstances.
Financial contributions which determine the beneficial interest are
payment of the:
1. •
deposit
2. •
premium, or
3. •
mortgage instalment
but not rent or other outgoings.
In the absence of fraud or mistake, a specific declaration in the
transfer as to the parties' interests will prevail, even if one party
contributes more to the purchase or mortgage payments.
In Jones v Kernott, the Supreme Court confirmed that this does not
apply to the ascertainment of interests in a family home. There is no
presumption of a resulting trust arising from a couple having
contributed to the deposit (or the rest of the purchase price) in
unequal shares. The presumption, which can be rebutted, is that
equity follows the law and they are joint tenants, entitled to equal
shares, in both law and equity.
See Practice Note: Resulting trusts.

Constructive trust
A constructive trust arises where one party's conduct means it would
be inequitable to allow him to deny to the other party a beneficial
interest in the property—eg where there was a common intention
that both parties should have a beneficial interest, and the claimant
has acted to his detriment in the belief that he was acquiring a
beneficial interest. The burden is on the person seeking to show that
the parties did intend their beneficial interests to be different from
their legal interests, and in what way.
An implied trust can arise where there is a pre-existing agreement
between two parties not to compete against each other for a property
at auction. It is the existence of the advantage to the one, or
detriment to the other, gained or suffered as a consequence of the
arrangement or understanding, which leads to the conclusion that it
would be inequitable or unconscionable to allow the acquiring party
to retain the property for himself, in a manner inconsistent with the
arrangement or understanding which enabled him to acquire it.