Indian Trust Act 1882

Section 3 defines A Trust

as : 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
What is a Trust?

•Agreement between a person, called

author of the trust who transfers
something of value, called an asset, to
another person, called a trustee.

•The trustee then manages and controls

this asset for the benefit of a third
person, called a beneficiary.
Some Important
Terms

•Author Of Trust
•Trustee
•Beneficiary
•Trust property or Trust
money
•Beneficial Interest or
Interest Of The Beneficiary
•Instrument of trust
Difference between Trust and Bailment

•Trustee becomes the full owner of the property, but the

bailee has a special property only (for the time being).

•Bailee has legal obligation, but the trustee has equitable

obligation

•Trust maybe for any property, but bailment can be for

only movable property.
Classification Of Trusts

•Public Trust •Private Trust

Religious Trust Discretionary Trust
Charitable Trust Definite Trust
Oral Trust
Creation Of A Trust
a) An intention on his
part to create trust.

b) The purpose of the

trust.

c) The beneficiary .

d) The trust property

 Lawful purpose.
• Forbidden by law
•Is of such a nature that, if permitted, it would defeat the
provisions of any law
•Is fraudulent
•Involves or implies injury to the person or property of
another
•The Court regards it as immoral or opposed to public policy

 Trust of immovable property.

Trust of movable property.

THE DUTIES AND
LIABILITIES OF TRUSTEES
•Trustee to execute trust
•Trustee to protect title to trust-property.
• Trustee not to set up title adverse to beneficiary.
•Trustee to inform himself of state of trust-property
•Care required from trustee.
•Conversion of perishable property
•Trustee to be impartial.
•Investment of trust-money
•Liability for breach of trust.
•Non-liability for predecessor's default.
•Non-liability for co-trustee's default.
•Several liabilities of co-trustees
•Liability of trustee where beneficiary's interest is forfeited to the Government.
• Indemnity of trustees. 
THE RIGHTS AND POWERS
OF TRUSTEES
•Right to title deed
•Right to reimbursement of expenses
-Right to be recouped for erroneous over-payment
• Right to indemnity from gainer by breach of trust
•Right to settlement of account
•General authority of trustee
• Power to sell in lots, and either by public auction or private contract
•  Power to convey
•Power to several trustees of whom one disclaims or dies
 DISABILITIES OF
 

TRUSTEES
•Trustees cannot renounce after acceptance
•Trustee cannot delegate
•Co-trustees cannot act singly
•Control of discretionary power
•Trustee may not charge for services.
•Trustee may not use trust-property for his own
profit
•Trustee for sale or his agent may not buy
•Trustee may not buy beneficiary's interest
without permission
•Co-trustees may not lend to one of themselves
•Rights to rents and profits
•Right to specific execution
 RIGHTS AND LIABILITIES OF THE
BENEFICIARY
•Right to rents and profits
•Right to specific execution
•Right to inspect and take copies of instrument of trust accounts, etc.
•Right to transfer beneficial interest
•Right to sue for execution of trust
•Right to proper trustees
•Right to compel to any act of duty
•Wrongful purchase by trustee
•Acquisition by trustee of trust-property wrongfully converted
•Liability of beneficiary joining in breach of trust
•Rights and liabilities of beneficiary's transferee
EXTINCTION OF TRUSTS

• A trust is extinguished 
• Revocation of trust
• Revocation not to defeat
what trustees have duly
done
CERTAIN OBLIGATIONS IN THE NATURE OF
TRUSTS

•Where obligation in nature of trust is created

•Transfer to one for consideration paid by another
•Trust incapable of execution or executed without exhausting trust-property
•Transfer for illegal purpose
•Bequest for illegal purpose
•Debtor becoming creditor's representative
•Advantage gained by exercise of undue influence
•Obligator's duties, liabilities and disabilities
•Property acquired with notice of existing contract
•Pratik Patra
•Nidhi Wahi
•Pooja Parekh
•Manthan Joshi
•Pooja Jogu
•Swati Pardesi