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29. Vadivelu Mudaliar v. C.N Kuppuswami Mudaliar, [1972]1 Mad LJ 265. 30. Vadivelu Mudaliar v. N.S Rajabada, AIR 1967 Mad 175. 31. Venkataratnam v. Bola Buravayya, AIR 1930 Mad 84. Table of Statutes 1. 2. 3. 4. 5. 6. 7. Code of Civil Procedure, 1908. Indian Penal Code, 1860. Indian Registration Act, 1908. Indian Trusts Act, 1882. Limitation Act, 1963. Transfer of Property Act, 1882. Trustee Act, 1925.
Introduction Of all the exploits of equity the largest and the most important is the invention and development of the trust- Maitland According to Underhill A trust is an equitable obligation binding a person(called a trustee) to deal with property over which he has control(called the trust property) for the benefit of persons(called beneficiaries or cestui que trust) of whom he himself may be one and any of whom may enforce the obligation[1]. Thus the essential characteristic of a trust is that a person (the settlor) transfers property, or declares to another, or others (the trustees), property which he already holds, and that property is to be managed and controlled for the benefit of someone else (the beneficiary).
Origin of Trusts[2]
Trusts originate when assets are transferred to another person with instructions that the assets are used to benefit a third party. The question that arises is how can the use of the assets and the benefit of another be guaranteed? Originally it couldnt; the transfer was the end of the matter and, despite
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the undertaking by the recipient to use the property to benefit others, advantage was taken of that position. The recipient had been endowed with the legal ownership of that property and those who anticipated receiving the benefit from that property could be in difficulty. How this was overcome marks the development of English law over all other systems. A disappointed beneficiary could not hope to succeed by appealing to the law courts. He wouldnt get very far. The legal ownership had been transferred and he had no legal title at all to the assets. Instead he appealed to the Lord Chancellor. In the early days the Lord Chancellor was a cleric and was known as Keeper of the Kings Conscience. The Lord Chancellor was a powerful person. He had jurisdiction over spiritual matters and matters affecting peoples conscience. He could not deny the authority of the law in the common law courts, and the rights that they conferred on others in respect of the property transfer. However, by an ingenious step, although whilst not denying the legal ownership, the Lord Chancellor could exercise his jurisdiction by saying to that person that if he did not honour his obligation this would damage his conscience. The Lord Chancellor would therefore feel he should take action to prevent this. He would enforce the beneficial rights of the person who the transfer was intended to benefit. These beneficial rights become part of the title to the property; English law, therefore, adopted a split concept of ownership. There was the legal ownership by the person holding the assets, who became known as the trustee, and there was the equitable, or beneficial ownership held for the person, who became known as the beneficiary. This is a simple explanation of a complex historical process but, nevertheless, upon this distinction between the legal and equitable ownership, the modern law of trusts has developed. This split in ownership is unique to the English legal system and is unknown in civil law systems.
Types of Trusts
Many kinds of trusts are available. Trusts may be classified by their purposes, by the ways in which they are created, by the nature of the property they contain, and by their duration. One common way to describe trusts is by their relationship to the trustors life.
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In this regard, trusts are generally classified as either living trusts (inter vivos trusts), or testamentary trusts.[3] Living trusts are created during the lifetime of the trustor. Property held in a living trust is not normally subject to probate (the court-supervised process to validate a will and transfer property on the death of the trustor)[4]. Testamentary trusts are created as part of a will and must conform to the statutory requirements that govern wills. This type of trust becomes effective upon the death of the person making the will (the decedent) and is commonly used to conserve or transfer wealth. The will provides that part or all of the decedents estate will go to a trustee who is charged with administering the trust property and making distributions to designated beneficiaries according to the provisions of the trust[5]. Most trusts involve a number of technical legal concepts relating to ownership, taxes and control. In creating a trust, one should consider several factors and obligations, including[6]: Personal situation, including age, health and financial status; Family relationships familys financial circumstances; Personal financial data: personal property, real estate holdings, securities, and other property as well as ones tax situation and any debts or obligations; The purpose of the trust: ones goals, or what one hopes to accomplish by the arrangement; The type of trust, and how versatile or flexible ones plans are. The amount and type of property it will contain; The duration, or how long the trust will last; The beneficiaries and their specific needs; Any conditions that must be met by a beneficiary to receive benefits (such as attaining a certain age); Alternatives for disposing of assets in case the trust conditions are not met or circumstances change; and The trustee, and the conditions or guidelines under which he or she will function. This project focuses on and performs a comprehensive study of the various legal issues
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and aspects involved in The Creation and Extinction of Trusts. The law of trusts has proved to be versatile and adaptable and in todays world the law of trusts is only gaining in importance and stature. Trusts are making their presence felt in almost every walk of life including international finance. Thus emphasis on the basics of the law of trusts viz. Creation and Extinction of Trusts assumes an even greater importance as it will enable a fuller and more comprehensive understanding of the legal niceties involved in trust law and will equip one to face the challenges posed by the ever developing law of trusts in todays dynamic world. Research Methodology
Nature of Project
The project is analytical as well as descriptive in nature. However majority of the project is analytical in nature.
Sources of Data
The sources of data used are primary as well as secondary in nature. A host of leading textbooks relating to the law of trusts have been referred to. Legal encyclopaedias have also been referred to. Case reporters like All England Reports and All India Reporter have also been used. Electronic information sources like Westlaw and Manupatra have been accessed. Information has also been accessed from the information superhighway.
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Research Questions
The research questions are: What is a trust? What is the origin of the law of trusts? What are the different kinds of trusts? What are the various factors and obligations that must be kept in mind while creating a trust? Why are trusts created and extinguished? Which are the relevant statutory provisions in India which deal with creation and extinction of trusts? Who are competent to create trusts? What are the essential requirements for a valid trust? How can a trust be extinguished? Why are trusts extinguished? How can a trust be revoked? How do the provisions relating to creation and extinction of trusts apply to religious and charitable trusts? How is the law of trusts developing today?
Mode of Citation
A uniform mode of citation has been adopted throughout the course of the project. Creation Of Trusts- An Exploration Of Issues And Controversies
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members. The funds are owned by the members and the trust is treated as the collective alter ego of the members. The members may appoint or elect officers of the club. The officers may hold the clubs assets and income as trustees for the purposes declared in the constitution of the association.
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Certainty of Words
No formal language is necessary to create a trust. But what is required is an unequivocal or unambiguous expression of intention on the part of the author of the trust to create a trust[15]. The language used must make it certain that the settlor intended to constitute a trust binding on in law on himself, or the person to whom the property was given; that he intended to bind definite property by the trust and that he intended to benefit a definite person or persons in a definite way[16]. The language used must be such as to disclose with certainty the purpose to create the trust. And a Court will not raise a trust from where the words used and all the circumstances it is of the opinion that a trust was not intended. In determining whether or not a trust has been created, courts will take into consideration the situation and relations of the parties, the character of property and the purpose which the settlor had in view in making the declaration. It is sufficient if the language used shows that the settlor intended to create a trust, and clearly points out the property, the beneficiary and the disposition to be made of the property. The use of the words trust or trustee is not essential to the creation of a trust[17]. No positive rule can be laid down which shall determine in all cases what terms or expressions will carry a beneficial interest or what will create a trust[18]. Precatory words such as wish, hope, desire etc. should be avoided[19]. In Adams and the Kensington Vestry, Re[20], where there was a gift by a person to his wife in full confidence that she would do what was right as to the disposal between the children. It was held that there was no trust in favour of the children.
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Where in a partition deed between father and son there was a direction that the son should make certain articles for divine service but no particular property was earmarked for the purpose and there was only a prohibition that the son should not mortgage or alienate his share, there was no trust because of absence of dedication[23]. When no specific property is earmarked but only a direction to spend out of general income is given there is no trust but only a charge[24]. In Ram Ran Vijay Prasad Singh v. Province of Bihar[25] where neither any land was set apart for the maintenance and support of the institution mentioned in the instrument of trust and nor was the income from any particular property earmarked for the objects of the trust, it was held that there was no valid trust.
Certainty of Object
Certainty of Object is an essential requirement for a valid trust. This rule is founded on the principle that the trust must be one which a court can control and enforce[26]. Certainty of object implies that the beneficiaries must be identifiable with reasonable certainty. Moreover there must also be certainty regarding the nature and quantity of interest which the beneficiaries have and the manner in which the trust is to be performed[27]. Applying the rule of certainty of object- where a testator gave leaseholds to his brother hoping he will continue them in the family, it was held that the object of the trust was uncertain and that no trust was created[28]. In Subhash Chandra Bose v. Gordhandas Patel[29] where the will provided that after applying certain legacies the residue of the testators assets should be handed over to a certain person to be spent by him or by his nominee for the political upliftment of India and preferably for publicity work on behalf of Indias cause in other countries it was held that trust was vague and could not be enforced by the court. It was further held that a trust for the attainment of political objects is invalid not because it is illegal but because the court has no means of judging whether any proposed political change will or will not be for the public welfare or benefit.
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Section 7 of the Indian Trusts Act, 1882 says who is competent to create a trust. This section provides that a trust can be created by every person who is competent to contract. It further provides that a trust may be created by or on behalf of a minor with the permission of a principal civil court of original jurisdiction. Competency to contract is the test laid down for the capacity to create a trust. Any person who is not competent to contract cannot create a trust. Section 7 of the Transfer of Property Act, 1882 is analogous to this section[30]. It follows therefore that a person must be competent to contract and he must further be entitled or authorised to transfer property in order to create a trust. English Law provides that[31]: Every person who can hold and dispose of any legal or equitable estate or interest in property can create a trust in respect thereof. It is to be noted that the capacity of a minor to create a trust is different under English Law and different under Indian Law[32]. This is because under Indian Law a contract entered into by a minor is void whereas under English Law a contract by a minor is void able. Thus in India a minor is not competent to enter into any contract whatsoever, and, therefore, no trust can be created by him except as provided in section 7 of the Indian Trusts Act, 1882.
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might be a private trust for religious purposes but there can be no private charitable trust[39]. A Hindu charitable or religious trust may be created by a Hindu who is of sound mind and not a minor, under a will or inter vivos by gift for any religious or charitable purpose[40]. Even a karta of a Hindu joint family can make effective dedication of a portion of the joint family property for religious and charitable purposes[41]. The essentials of a religious or charitable trust are:[42] The object or purpose of the trust must be a valid religious or charitable purpose according to Hindu Law. The founder or settlor should be capable of creating a trust and dedicating his property to that trust. The settlor should indicate precisely the object of the trust and the property in respect of which it is made. The property should be dedicated to the trust and the owner must divest himself from the ownership of that property. The trust or its objects must not be opposed to the provisions of any law for the time being in force. A Hindu charitable or religious endowment may be created under a will or inter vivos. No writing is necessary to create an endowment except where the endowment is created by will in which case the will creating the trust must be in writing and attested by at least two witnesses[43]. No written trust deed is necessary for creating a valid trust[44] since the provisions of Section 5 of the Indian Trusts Act, 1882 do not apply to charitable or religious trusts[45]. However even though it is competent for a Hindu to dedicate any immovable or movable property for a religious or charitable endowment without any document in writing[46] it is always desirable to have a written trust deed to avoid future complications. Dedication may be inferred from long use for a charitable purpose; however, an instrument in writing declaring a trust is sound supporting evidence. It is always desirable to have a written trust deed, with an intention to create a trust manifest therein in unequivocal terms, followed by vesting of the trust property in the trustees for the benefit of the public or for a religious purpose[47].
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No religious ceremony is necessary to establish a religious endowment[48] but ceremony/rituals may be performed if so desired by the settlor or if decided by the trustees. A dedication of immoveable property for a public endowment is a transfer of property within the meaning of Section 5 read with Section 18 of the Transfer of Property Act, 1882 and as per the provisions of Section 18(d) of the Indian Registration Act, 1908 any instrument (other than a will) declaring a trust in relation to an immovable property may be registered optionally. Extinction Of Trusts- An Analytical Overview Section 77 of the Indian Trusts Act, 1882 describes how a trust is extinguished. The extinction of a trust may be brought about in any one of the following ways: By the fulfilment of the object of the trust By the purpose of the trust becoming unlawful By the purpose becoming impossible by either the destruction of the trust property or otherwise By the trust being revoked It was held in Harbans Singh v. Rajendra Kaur[49] that a trust is not extinguished merely because one of the trustees is dissatisfied with the trust or is dissatisfied with the management of other co-trustees.
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Where under a contract of sale a suit fore specific performance by the vendee was dismissed it was held that the relationship of vendor and vendee came to an end on such dismissal and it was not competent to hold the vendor as a constructive trustee[52]. .Another case which illustrates fulfilment of purpose as a reason for extinction of a trust is Jadunath Singh v. Bisheswara Singh[53] where land was obtained by a resettlement from the Government and the head of the family would hold it in trust for the co-sharers but if a co-sharer took a guzari or maintenance grant in lieu of his share the trust would come to an end. In Dinshaw and Co. v. Krishna Piarey[54] it was held that a security deposit by employees would be held in trust by the employer but the trust would not be extinguished by a mere demand for its return. On the fulfilment of the purpose the trustee becomes a bare trustee for the person entitled[55].
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ly impossible the purpose of the trust did not become unlawful and thus the trust was not extinguished.
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created, it is irreversible, irrevocable and it cannot be terminated[63]. Where the trust has been effectually created even the fact that the trustees have failed to carry out the objects of the trust will not invalidate it. Thus it is clear that the provisions of Section 77 of the Indian Trust Act, 1882 do not apply to religious or charitable trusts[64].
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purchase of an annuity for a beneficiary, the latter can refuse the annuity and claim the money. The Rule in Saunders Case is applicable not only to trusts for a single beneficiary but also where there are joint or successive beneficiaries, provided that all the possible beneficiaries, under the trust are in existence, are sui juris and concur in putting an end to the trust[71]. It was held in Isaac Nissim v. Official Trustee, Bengal[72] that the settlor can revoke the trust with the with the consent of all beneficiaries.
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amounted to revocation. This clause applies only to a trust solely for the payment of debts and not to a trust deed created for payment of debts and other purposes[76]. It is a well-known rule of equity that no revocation can have retrospective effect. Therefore, acts already performed in the due execution of the trust cannot be affected by any subsequent revocation of it. This principle is reflected in section 79 of the Indian Trusts Act, 1882 which states that No trust can be revoked by the author of the trust so as to defeat or prejudice what the trustees may have duly done in execution of the trust. Conclusion Creation and Extinction of Trusts is an absolutely essential imperative part of the law of trusts and has extreme importance and relevance. The various legal issues involved in the creation of extinction of trusts form the basics which provide the foundations of the law of trusts. This project has explored these issues in detail and has also performed a comprehensive study and analysis of the relevant case law and statutory provisions. The provisions relating to Creation and Extinction of Trusts in India are well developed and clear. There is not much ambiguity and the law also does not prescribe too many formalities. Thus the law with respect to creation and extinction of trusts is reflective of the legislative intent of keeping the law simple and clear so as to be easily understood and followed by the common man. Trusts are a very important part of life today and the Indian Trusts Act, 1882 does not make a person apprehensive about creating a trust or extinguishing owing to ambiguity and complexity. Thus these provisions are a step in the right direction. Complexities will no doubt arise but the law is equipped to deal with them In the United States the ever-growing importance of the Law of Trusts has been realised and the National Conference of Commissioners on Uniform State Laws has drafted a Uniform Trust Code in order to provide the states with a comprehensive model for codifying their law of trusts. In India the law of trusts is codified and well developed. The Indian Trusts Act, 1882 is the major statute relating to trusts. Other statutes like the Indian Penal Code, 1860 deal with offences relating to trusts and punishment for such offences. The Code of Civil Procedure, 1908 prescribes the procedure for actions relating to trusts and the Limitation Act, 1963 prescribes periods of limitation for recovery of
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property conveyed away by trustees in breach of trust. The law of trusts today is assuming a greater significance and importance. Some of the common benefits that trust arrangements offer include[77]: Providing personal and financial safeguards for family and other beneficiaries; Postponing or avoiding unnecessary taxes; Establishing a means of controlling or administering property; and Meeting other social or commercial goals. Apart from providing these benefits trusts have weaved their way into new territory and are being applied in various new fields. Trusts are extremely versatile and adaptable. Innovation with respect to trusts has come in two ways[78]. First, the growth of trusts in international financial centres is now developing into a branch of trust law and practice of its own. The second source is the growth of the use of trusts for other commercial operations. Of these, securitisation is becoming a major example. Securitisation by the use of trusts is being taken up by several countries. Bibliography
Articles
1. David M. English, The Uniform Trust Code (2000): Significant Provisions and Policy Issues Missouri Law Review (Spring, 2002).
Books
1. A.J Oakley, Parker and Mellows: The Modern Law of Trusts (8th ed.) (London: Sweet and Maxwell, 2003). 2. L.C Goyle, The Law of Trusts (Calcutta: Eastern Law House, 1989). 3. Mohamed Ramjohn, Sourcebook on Law of Trusts (London: Cavendish Publishing Limited, 1998). 4. Nabhi Kumar Jain, Nabhis Formation and Management of A Trust alongwith Tax Planhttp://legalsutra.org/1239/creation-and-extinction-of-trusts/ Page 20 of 27
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ning, 1998-99 (New Delhi: Nabhi Publications, 1998). 5. P.S Narayana, Law of Trusts, Endowments and Wakfs (Hyderabad: Gogia Law Agency, 2000). 6. Philip H. Pettit, Equity and The Law of Trusts (Kent: ELBS with Butterworths, 1990). 7. Prafulla C. Pant, N. Suryanarayana Iyers The Indian Trusts Act (5th ed.) (New Delhi: Butterworths, 2001). 8. S. Krishnamurthi Aiyar and Harbans Lal Sarin, Principles and Digest of Trust Laws (Allahabad: University Book Agency, 1998).
Encyclopaedias
1. Halsburys Laws of England (4th ed. Reissue), Volume 48 (London: Butterworths, 1995).
Websites
1. ourworld.compuserve.com/homepages/pntodd/trusts/intro/cre_trus.htm#intro (Visited on 5th April, 2004). 2. www.trusts-and-trustees.com/main.htm (Visited on 7th April, 2004). 3. www.wsba.org/media/publications/pamphlets/trusts.htm (Visited on 7th April, 2004). [1] Mohamed Ramjohn, Sourcebook on Law of Trusts (London: Cavendish Publishing Limited, 1998)at 11. [2] www.trusts-and-trustees.com/main.htm (Visited on 7th April, 2004). [3] www.wsba.org/media/publications/pamphlets/trusts.htm (Visited on 7th April, 2004). [4] Id. [5] Id. [6] Supra note 3.
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[7] Mohamed Ramjohn, Sourcebook on Law of Trusts (London: Cavendish Publishing Limited, 1998)at 18-19. [8] L.C Goyle, The Law of Trusts (Calcutta: Eastern Law House, 1989)at 16. [9] Section 4 of the Indian Trusts Act, 1882. [10] Section 5 of the Indian Trusts Act, 1882. [11] Section 6 of the Indian Trusts Act, 1882. [12] Id. [13] Section 8 of the Indian Trusts Act, 1882. [14] (1840) 3 Beav. 148. [15] Prafulla C. Pant, N. Suryanarayana Iyers The Indian Trusts Act (5th ed.) (New Delhi: Butterworths, 2001)at 163. [16] S. Krishnamurthi Aiyar and Harbans Lal Sarin, Principles and Digest of Trust Laws (Allahabad: University Book Agency, 1998)at 65. [17] Ibid at 65-66. [18] Supra note 16 at 66. [19] Id. [20] LR 27 Ch D 394. [21] Prafulla C. Pant, N. Suryanarayana Iyers The Indian Trusts Act (5th ed.) (New Delhi: Butterworths, 2001)at 174. [22] S. Krishnamurthi Aiyar and Harbans Lal Sarin, Principles and Digest of Trust Laws (Allahabad: University Book Agency, 1998)at 67. [23] Dassa Ramachandra v. Narasimha Damodar, 13 Bom LR 101.
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[24] Supra note 21 at 175. [25] AIR 1942 Pat 435. [26] Morice v. Bishop of London, 10 Ves 527. [27] S. Krishnamurthi Aiyar and Harbans Lal Sarin, Principles and Digest of Trust Laws (Allahabad: University Book Agency, 1998)at 68. [28] Harland v. Trigg, 1 Bro CC 141. [29] AIR 1940 Bom 76. [30] Section 7 of the Transfer of Property Act, 1882 states: Every person competent to contract and entitled to transferable property, or authorised to dispose of transferable property not his own, is competent to transfer such property either wholly or in part, and either absolutely or conditionally, in the circumstances, to the extent and in the manner, allowed and prescribed by any law for the time being in force. [31] Prafulla C. Pant, N. Suryanarayana Iyers The Indian Trusts Act (5th ed.) (New Delhi: Butterworths, 2001)at 194. [32] Ibid at 196. [33] Thayammal v. Perumal Chetty, AIR 1926 Mad 284. [34] Re, Caplens Estate, Bulbeck v. Silvester, (1876)45 LJ Ch 2. [35] Prafulla C. Pant, N. Suryanarayana Iyers The Indian Trusts Act (5th ed.) (New Delhi: Butterworths, 2001)at 183. [36] Id. [37] Nabhi Kumar Jain, Nabhis Formation and Management of A Trust alongwith Tax Planning, 1998-99 (New Delhi: Nabhi Publications, 1998)at 34. [38] Id.
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[39] Id. [40] Nabhi Kumar Jain, Nabhis Formation and Management of A Trust alongwith Tax Planning, 1998-99 (New Delhi: Nabhi Publications, 1998)at 38. [41] Gangi Reddi v. Tami Reddi, AIR 1927 PC 80. [42] Supra note 40 at 39. [43] Supra note 40 at 46. [44] Ramchandra Sukla v. Mahadeoji, AIR 1970 SC 458. [45] Suraj Bhan v. Bodh Nand, AIR 1987 All 183. [46] Govindlalji v. State of Rajasthan, AIR 1963 SC 1638. [47] Supra note 40 at 47. [48] Supra note 44. [49] AIR 1925 All 277. [50] For example where the author of a trust makes a provision by way of trust in respect of property which he is settling for the benefit of minors and provides for the estate being handed over to them on the attainment of majority; the duration of the trust is only for the minority of the beneficiaries and can be terminated by the beneficiaries calling for a conveyance of the trust estate to them on attaining majority. [51] AIR 1953 Punj 98. [52] Venkataratnam v. Bola Buravayya, AIR 1930 Mad 84. [53] AIR 1939 Oudh 17. [54] AIR 1941 Oudh 126. [55] Prafulla C. Pant, N. Suryanarayana Iyers The Indian Trusts Act (5th ed.) (New Delhi:
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Butterworths, 2001)at 648. [56] Chhogmal Bhandari v. Deputy Commissioner Tax Officer, AIR 1976 SC 656. [57] 11 Ch D 170. [58] AIR 1969 SC 135. [59] Princess Usha Trust v. CIT, 1983 Tax LR 838. [60] AIR 1923 Lah 93. [61] [1972]1 Mad LJ 265. [62] Revocation of Trusts as a way of extinguishing a trust is dealt with in detail in the next section of this project. [63] Nabhi Kumar Jain, Nabhis Formation and Management of A Trust alongwith Tax Planning, 1998-99 (New Delhi: Nabhi Publications, 1998)at 101. [64] By virtue of the proviso to Section 1 the Indian Trusts Act, 1882 does not apply to religious or charitable trusts. [65] Prafulla C. Pant, N. Suryanarayana Iyers The Indian Trusts Act (5th ed.) (New Delhi: Butterworths, 2001)at 797. [66] Vadivelu Mudaliar v. N.S Rajabada, AIR 1967 Mad 175. [67] S. Krishnamurthi Aiyar and Harbans Lal Sarin, Principles and Digest of Trust Laws (Allahabad: University Book Agency, 1998)at 336. [68] The clauses state that a trust created otherwise than by a will can be revoked only: Where all the beneficiaries are competent to contract- by their consent Where the trust has been declared by a non-testamentary instrument or by word of mouth-in exercise of a power of revocation expressly reserved to the author of the trust; or Where the trust is for the payment of the debts of the author of the trust, and has
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not been communicated to the creditors- at the pleasure of the author of the trust [69] Jessel, M.R in Dutton v. Thompson, (1883)23 Ch D 278 stated that: It is not the province of a court of justice to decide on what terms or conditions a man of competent understanding may choose to dispose of his property. If he thoroughly understands what he is about, it is not the duty of a court of justice to set aside a settlement which he chooses to execute, on the ground that it contains clauses which are not proper. [70] Rule in Saunders Case, (1841) 4 Beav. 115. [71] Supra note 67 at 342. [72] AIR 1957 Cal 118. [73] Harihar Prasad Singh v. Maharaja Kesho Prasad Singh, AIR 1925 Pat 68. [74] Supra note 67 at 343. [75] 1 IC 347. [76] The rationale behind the rule regarding a trust in favour of creditors was clearly stated in Garrard v. Lauderdale, (1830)3 Sim 1 wherein the Court said that: I take the real nature of the deed to be, not so much a conveyance vesting a trust in A for the benefit of the creditors of the grantor, but rather an arrangement made by the debtor for his own personal convenience and accommodation-for the payment of his own debts in an order prescribed by himself, over which he retains power and control, and with respect to which the creditors can have no right to complain, inasmuch as they are not injured by it- they waive no right of action and are not executing parties to it. [77] www.wsba.org/media/publications/pamphlets/trusts.htm (Visited on 7th April, 2004). [78] Id. share share
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