By Subrata Mukherjee
In love with Golapi, Subratagolapi.
A trust can be created by individuals, men or women competent to make a contract. The provision of the Indian Trust Act 1882 governs only private trusts. Public Trusts are governed by the state specific legislation.
This Act is applicable to the whole of India except Jammu and Kashmir and is also not applicable to waqf, religious endowment or to certain specific religious provisions.The New World (Natun Prithibi)
According to Section 2 of Indian Trust Act trust means an obligation annexed to the ownership of a 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.
In simple explanation a trust is a transfer of property by the owner to another person on whom that owner has the confidence for the benefit of a third person.
The transferable property can be immovable or cash or any other asset. The instrument by which the trust is created is called the deed of trust or instrument of trust.
There are three kinds of parties in a trust namely :
1.Author/Settlor/Owner/Trustor/Donor…the person who wants to transfer his or her property and reposed his or her trust on another person for creation of the trust.
2.Trustee …the person who accepts the confidence for the creation of the trust.
3. The beneficiary… .. the person who will be benefited from the trust.
The objective of the trust should be always for the lawful purposes and it’s always mandatory for creating trust on the foundation of lawful purposes in accordance with the Section 4 of the Act.
A trust can be a private trust created for the identified relatives of the Author or a public trust for the people in general eg. A non profit organization or an NGO.
Section 5 of the Act states provision for registration of a trust.
The trust laws came to India through English Trust laws that says about dual ownership of the trust property. The legal title vests with the trustee and the equitable right vests with the beneficiary.
A trustee is under a duty, to keep clear and accurate accounts of the trust property, and at all reasonable times at the request of the beneficiaries, to furnish them with full and accurate information as to the amount and state of trust property under the trust laws in India
Section 10 of the Act deals with the question who can be a trustee, the section says that every person capable of holding a property may be a trustee.
The following persons may be a trustee under Indian Trust Act
2. A married woman.
3. An infant.(Not in a public trust)
4. A convict.
5. An illegitimate child.
6. An insolvent.
The Act defines and explains how the author of the trust could create a trust and reposes confidence on the trustees with the assignment of monetary assets to be controlled within the specified framework of the trust.
The trust should have a clear explanation of the following things :
1. Intention of the Author in creation of the trust.
2. Purpose of the trust.
3. The beneficiary of the monetary assets to be controlled by the trust.
The Trust Act has also specifically explained the roles of the trustees under specified limitations as :
1. The trustees should be impartial.
2. The trustee can not convert property and the monetary assets to profitable property outside the purpose of the trust specifically created.
3.The trustee cannot do such acts for the breach of the terms of the trust created for the specified purposes.