SHG and NGO:: Indian Trust Act
INDIAN TRUSTS ACT
What is a trust - 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. The person who reposes the confidence is called 'author of trust' (testator), the person who accepts the confidence is called 'trustee' and the person for whose benefit the confidence is accepted is 'beneficiary'. The subject matter of trust is called 'trust property' or ‘trust-money. The ‘beneficial interest’ or ‘interest of the beneficiary’ is his right against the trustee as the owner of trust-property. The instrument by which trust is declared is called as ‘instrument of trust’.
Thus, when a property is held by one person as trustee for the benefit of another, it can be regarded as a trust. Trusts are governed by Indian Trust Act, as may be modified by State Governments.
A trust can be created for any lawful purpose. A trust can be created by deed, will or even word of mouth. However, trust of immovable property can be created only by non-testamentary instrument signed by author of trust and is registered, or by will of author. . Thus, ‘will’ is not required to be registered, even if it pertains to immovable property.
Duties of trustees - Trustee is not bound to accept the trust. However, once accepted, he cannot renounce it except permission of civil court or beneficiary (if he is major) or by virtue of special power in the instrument of trust. Once trustee accepts trust, he is bound to fulfil the purpose of trust and to obey directions given at the time of creation of the trust. It can be modified with consent of beneficiary. .
His duties are -
Trustee is liable for breach of trust. ‘Breach of trust’ means a breach of duty imposed on a trustee, as such, by any law for the time being in force.
Rights and Powers of trustee – Trustee has following powers -
A beneficiary is liable if he joins in breach of trust.
Revocation of trust - A trust created can be revoked at the pleasure of testator. A trust created otherwise by will can be revoked
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