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Ministry of Law and Justice

Act nº 2 of 1882

  • Chapter I
  • Chapter II
  • Chapter III
  • Chapter IV
  • Chapter V
  • Chapter VI
  • Chapter VII
  • Chapter VIII
  • Chapter IX
  • Schedules
  • Act nº 2 of 1882



[Act, No. 2 of 1882]

[13th January, 1882]


An Act to define and amend the law relating to Private Trusts and Trustees.

WHEREAS it is expedient to define and amended the law relating to private trusts and trustees; It is hereby enacted as follows:--

1. For Report of the Indian Law Commission on the Private Trusts Bill which they were instructed to consider among others, see Gazette of India, 1880, Supplement, p.104; and for the Statement of Objects and Reasons, see Gazette of India, 1880, Pt. V.P. 476; for Report of the Select Committee, see Gazette of India, Supplement, 1881, p. 766; for further Report of the Select Committee, see Gazette of India, Supplement 1882, p.67; for Proceedings in Council see Gazette of India, supplement, 1881, p. 687; and Gazette of India, Supplement, 1882, p.68.The Act has been extended to Berar by Act 4 of 1941; Dadra and Nagar Haveli by Regulation 6 of 1963, section. 2 and Schedule. 1;

Pondicherry by Regulation 7 of 1963, section. 3 and Schedule. I; and Goa, Daman and Diu by Regulation 11 of 1963, section. 3 and Schedule. Act enforced in the State of Sikkim, vide S.O. 642(E), dated 24th August, 1984 (w.e.f. 01.09.1984).

Chapter I

Section 1. Short title, Commencement

This Act may be called the Indian Trusts Act, 1882; and it shall come into force on the first day of March, 1882.

Local extent

1[It extends to2[the whole of India3[except the State of Jammu and Kashmir] and] the Andaman and Nicobar Islands4[* * *] but the Central Government may, from time to time, by notification in Official Gazette, extend it to5[the Andaman and Nicobar Islands] or to any part thereof.]


But nothing he re in contained affects the rules of Muhammad an law as to waqf, or the mutual relations of the members of an undivided family as determined by any customary or personal law, or applies to public or private religious or charitable endowments or to trusts to distribute prizes taken in war among the captors; and nothing in the Second chapter of this Act applies to trusts created before the said day.

1. Substituted by the A.O. 1948 for the first sentence.

2. Substituted by the A.O. 1950 for "all the Provinces of India, except".

3. Substituted by Act 3 of 1951, section. 3 and Schedule., for "except part BStates".

4. The words "and Panth Piploda" omitted by the A.O. 1950.

5. Substituted by A.O. 1950, for "either or both of the said Provinces".

Section 2. Repeal of enactments

The Statute and Acts mentioned in the Schedule hereto annexed shall, to the extent mentioned in the said Schedule, be repealed, in the territories to which this Act for the time being extends.

Section 3. Interpretation-clause

"trust".--A "trust" is an obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by theowner, or declared and accepted by him, for the benefit of another, or of another and the owner:

"author of the trust": "trustee": "beneficiary": "trust-property": "beneficial interest": "instrument of trust".--The person who reposes or declares the confidence is called the "author of the trust". The person who accepts the confidence is called the "trustee" : the person for whose benefit the confidence is accepted is called the "beneficiary": the subject-matter of the trust is called "trust-property" or "trust-money" : the "beneficial interest" or "interest" of the beneficiary is his right against the trustee as owner of the trust-properly; and the instrument, if any, by which the trust is declared is called the '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".

"registered", "notice", expressions defined in Act 9 of 1872.-- And in this Act, unless there be something repugnant in the subject of context, "registered" means registered under the law for the registration of documents for the time being in force a person is said to have "notice" of a fact either when he actually knows that fact or when, but for wilful abstention from inquiry or gross negligence, he would have known it, or when information of the fact is given to or obtained by his agent, under the circumstances mentioned in the Indian Contract Act, 1872, sect ion 229; and all expressions used herein and defined in the Indian Contract Act, 1872, shall be deemed to have the meanings respectively attributed to them by that Act.

Chapter II

Section 4. Lawful purpose

A trust may be created for any lawful purpose. The purpose of a trust is lawful unless it is (a) forbidden by law, or (b) is of such a nature that, if permitted, it would defeat the provisions of any law, or (c) is fraudulent, or (d) involves or implies injury to the person or property of another, or (c) the court regards it as immoral or opposed to public policy.

Every trust of which the purpose is unlawful is void. And where a trust is created for two purposes, of which one is lawful and the other unlawful, and the two purposes, cannot be separated, the whole trust is void.

Explanation. -- In this section, the expression "law" includes, where the trust property is immovable and situate in a foreign country, the law of such country.


(a) conveys property to Bin trust to apply the profits to the nurture of female foundings to be trained up as prostitutes. The trust is void.

(b) A bequeaths properly to 5 in trust to employ it in carrying on a smuggling business, and out of the profits thereof to support A's children. The trust is void

(c) A, while in insolvent circumstances, transfers properly to Bin trust for A during his lift:, and after his death for It. A is declared an insolvent. The trust for is invalid as against his creditors.

Section 5. Trust of immovable property

No trust in relation to 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 of the trustee.

Trust of movable property

No trust in relation to movable property is valid unless declared as aforesaid, or unless the ownership of the properly is transferred to the trustee.

These rules do not apply where they would operate so as to effectuate a fraud.

Section 6. Creation of trust

Subject to the provisions of section 5, a {rust is created when the author of the trust indicates with reasonable certainly by any words or acts (a) an intention on his part to create thereby a trust, (b) the purpose of the trust, (c) the beneficiary, and (d) the trust-property, and (unless the trust is declared by will or the author of the trust is himself to be the trustee) transfers the I rust -property to the trustee.


(a) A bequeaths certain properly to B, "having the fullest confidence that lie will dispose of it for the benefit of "C. This creates a trust so far as regards. A and C.

(b) A bequeaths certain property to B, "hoping he will continue it in the family". This does not create a trust, as the beneficiary is not indicated with reasonable certainty.

(c) A bequeaths certain property to B, requesting him to distribute it amongst such members of C's family as /(should think most deserving This does not create a trust, for the beneficiaries are not indicated with reasonable certainty.

(d) A bequeaths certain properly to B, desiring him to divide the bulk of it among C's children. This does not create a trust, for the trust-property is not indicated with sufficient certainly.

(e) A bequeaths a shop and stock- in- trade to B, on condition that he pays A's debts and legacy to C. This is a condition, not a trust for A "s creditors and C,

Section 7. Who may create trusts

A trust may be created--

(a) by every person competent to contract,1and

(b) with the permission of a principal civil court of original jurisdiction, by or on behalf of a minor,

but subject in each case to the law for the time being in force as to the circumstances and extent in and to which the author of the trust may dispose of the trust-property.

1. See section 11 of the Indian Contract Act, 1972 (9 of 1872).

Section 8. Subject of trust

The subject- matter of a trust must be property transferable to the beneficiary.

It must not be merely beneficial interest under a subsisting trust.

Section 9. Who may be beneficiary

Every person capable of holding property may be a beneficiary.

Disclaimer by beneficiary

A proposed beneficiary may renounce his interest under the trust by disclaimer addressed to the trustee, or by setting up, with notice of the trust, a claim inconsistent therewith.

Section 10. Who may be trustee

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 to contract.

No one bound to accept trust.--No one is bound to accept a trust

Acceptance of trust.--A trust is accepted by any words or acts of the trustee indicating with reasonable certainly such acceptance.

Disclaim of trust.--Instead of accepting a trust, the intended trustee may, within a reasonable period, disclaim it, and such disclaimer shall prevent the trust-property from vesting in him.

A disclaimer by one of two or more co-trustees vests the trust-property in the other or others, and makes him or them sole trustee or trustees from the date of the creation of the trust.


(a) A bequeaths certain properly to Band C, his executors, as trustees for D, Band C proved A's will. This is in itself an acceptance of the trust, and Band C hold the properly in trust for D.

(b) A transfers certain property to Bin trust to sell it and to pay out of the proceeds A's debts, Baccepts the trust and sells the property. So far as regards B, a trust of the proceeds is created fur A's creditors.

(c) A bequeaths a lakh of rupees to Bupon certain trusts and appoints him his executor. Bsevers the lakh form the general assets and appropriates it to the specific purpose. This is an acceptance of the trust.

Chapter III

Section 11. Trustee to execute trust

The trustees is bound to fulfil the purpose of the trust, and to obey the directions of the author of the trust given al the time of its creation, except as modified by the consent of all the beneficiaries being competent to contract.

Where the beneficiary is incompetent to contract, his consent may, for the purposes of this section, be given by a principal civil court of original jurisdiction.

Nothing in this section shall be deemed to require a trustee to obey any direction when to do so would be impracticable, illegal or manifestly injurious to the beneficiaries.

Explanation.--Unless a contrary intention be expressed, the purpose of a trust for the payment of debts shall be deemed to be (a) to pay only the debts of the author of the trust existing and recoverable at the date of the instrument of trust, or, when such instrument is a will, at the date of his death, and (b) in the case of debts not bearing interest, to make such payment without interest.


(a) A, a trustee, is simply authorised to sell certain land by public auction. He cannot sell the land by private contract.

(b) A, a trustee of certain land for A, Y and Z, is authorized to sell the land to Bfor a specified sum. X, Y and Z, being comptent to contract, consent that A may sell the land to C for a less sum. A may sell the land accordingly.

(c) A, a trustee for Band her children, is directed by the author of the trust to land, on B's request, trust-property to B's husband. C, on the security of his bond, C becomes insolvent and Brequests A to make the loan. A may refuse to make it.