Report No. 17
Section 20.- For section 20 of the principal Act, the following section shall be substituted, namely:-
"20. Investment of trust money.-Where the trust-property consists of money and cannot be applied immediately or at an early date to the purposes of the trust, the trustee is bound (subject to Any direction contained in the instrument of trust)-
(a) to deposit the money in the State Bank of India or any bank which is its subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (18 of 1959); or
[Cf. section 35(1), main para of the Bombay Act and also section 21, Indian Trusts Act, 1882, last 7 words]
(b) to deposit it in a Government Savings Bank; or
[Cf. section 35(1), main para of the Bombay Act]
(c) to deposit it in a co-operative bank specified in this behalf by the State Government by notification in the Official Gazette; or
(d) to invest it in public securities; or
[Cf. sect ion 20(a), (c), (d), Indian Trusts Act, 1882]
(e) to invest it in shares in the State Bank of India;1 or
[Cf. section 12 State Bank of India Act, 1955]
(f) to invest it on a first mortgage of immovable property situated in any part Of the territories to which this Act extends, if the property is not a leasehold for a term of years and the value of the property exceeds by one-half the mortgage-money; or
[Cf. existing section 20(e), Indian Trusts Act, 1882]
(g) to invest it in securities, both the principal whereof and the interest whereon shall have been fully and unconditionally guaranteed by the Government; or
[Cf. existing section 20(a) Proviso, Indian Trusts Act, 1882]
(h) to invest it in any other manner expressly authorised by the instrument of trust;2 and to invest it in no other manner.
[Cf. existing section 20(f), Indian Trusts Act, 1882]
Explanation.- In this section, "public securities" means
[Cf. section 2(12), Bombay Public Trusts Act, 1950]
(a) Government securities, that is to say, securities of the Government, including securities created or issued by the Government for the purpose of raising a public loan in any of the following forms, namely:-
(i) stock transferable by registration in the books of the Reserve Bank of India;
(ii) promissory notes payable to order.
[Cf. section 2(2)(a)(i) and (ii), Public Debt Act, 1944 which replaces section 2(a) of the Indian Securities Act, 1920]
(b) certificates, bonds and other documents issued by the Central Government as a part of the National Savings Scheme, whatever be the designation under which they are issued;
(c) stocks, debentures or shares in any company or corporation, the interest or dividend on which has been guaranteed by the Government;
[Cf. section 20(c), Indian Trusts Act, 1882]
(d) debentures or other securities for money issued by or on behalf of any local authority in exercise of the powers conferred by any Central, State or Provincial Act."
[Cf. section 20(d), Indian Trusts Act, 1882]
1. It is considered unnecessary to add subsidiary banks here.
2. Investments authorised by rules made by the High Court have been omitted a proposed.
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