Report No. 17

Trusts Act, 1882

Part I

General

1. Historical background.-

The concept of trust as it obtains in India is not merely a transplantation of the English concept of trust. Indeed, there is little that is exotic about it, though in the course of the administration of the law of trusts may of the detailed rules have been borrowed from the English law of trusts. Untramelled by any technical notions and distinctions such as legal and equitable estates, the Indian systems of law evolved a concept of trust in the wider sense "of possession or dominion over property coupled with, the obligation to use it, either wholly or partially, for the benefit of others than the possessor".1

This wider concept of trust was an integral part of both the Hindu and the Muslim systems. However, the detailed rules applicable to trusts in this sense were not free from doubt especially in the case of Hindu Law. As pointed out by West J.,2 while the substantive Hindu Law insisted strongly on the suppression of fraud and the fulfilment of promises, it failed to furnish the detailed rules by which effect was to be given to its principles.

The usual practice of the English judges was, therefore, to determine the estate of the trustee with reference to the personal law of property and to determine the duties annexed to the trust estate, the rights of beneficiaries, and the means by which those rights are made effectual, by reference to rules of English equity. In short, with the Indian concept of trust as the basis, a system of detailed rules of law embodying well-established principles of English equity came to be developed.

Till 1882 the process of development of the law of trusts was almost completely left to the courts. There were only a few statutory provisions3 relating to trusts. Provision was made in the Penal Code for the punishment of criminal breach of trust. The Specific Relief Act embodied definitions of the terms 'trust' and 'trustee' and provided for suits by trustees for possession of trust property. The Civil Procedure Code4 made provisions for suits by and against trustees as also for suits relating to public charities.

The Limitation5 Act contained certain provisions as to limitation in action pertaining to trusts and trust properties. Apart from these, there were a few others - the Statute of Frauds, sections 7 to 11, which were in force only in the Presidency Towns and the Indian Trustee Act, 1866 and the Trustees and Mortgagees Powers Act, 1866 (Acts 27 and 28 of 1866 respectively) both6 of which were generally regarded as applicable only in cases where the parties were European British subjects.

1. Ganendra Mohan Tagore v. Upendra Mohan Tagore, 4 Bent' OCJ 134.

2. In the Matter of the petition of Kakandas Narandas, 5 Born 154 (174).

3. See the Statement of Objects and Reasons attached to the Private Trust Bill, Gazette of India, 1880, Pt. V, p. 494.

4. Act 10 of 1877.

5. Act 15 of 1877.

6. Both these Acts were repealed by Act 48 of 1952.