Classification of Trusts

Saji Koduvath, Advocate, Kottayam.

1. Introduction.

Trusts are classified mainly based on:

  • (i)  number of beneficiaries (public or private), and
  • (ii) character under law (express or constructive).

 If the number of the beneficiaries of a trust are unascertainable, it will be public trust; and if ascertainable, private trust.

Trust is created by a founder by dedicating property and by appointing trustee for its administration. There must be a transfer of the property to the trustee.[1] Trusts covered by these express acts is called ‘express trusts’; and trusts resulted by directives of law is called ‘constructive or implied trusts’.

Read Blog: What is Trust in Indian Law?

2. Public Trusts and Private Trusts

The beneficiaries of the trust may be the general public or a limited number of persons. Trusts for the former are public trusts and the latter, private trusts. Legal incidents thereon are different. 

The Indian Trusts Act, 1882 is enacted primarily to govern private trusts; and ‘public or private charitable or religious endowments’ are expressly excluded from its ambit. 

In Sec. 1, Indian Trusts Act, 1882, under the head, ‘Savings’, it is stated:

  • But nothing herein contained affects the rules of Mohammedan 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.

Under Sec. 5, when a private trust is created upon an immovable property, it must be registered under the Registration Act.

In Sec. 5 of the Indian Trusts Act, 1882 reads as under:

  • 5. Trust of immovable property.—No trust in relation to immoveable 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.

On analysis, the crucial differentiating factor between public or private trust is the ‘purpose of trust’ envisioned by the author.

Dr. BK Mukherjea, J., ‘On the Hindu Law of Religious and Charitable Trusts’, has set out the difficulty to make a distinction between public and private charitable trust as under:

  • “The line of distinction between a public purpose and a purpose which is not public is very thin and technical and is difficult of an easy definition.”[2]

As to determination of the nature of a temple, whether public or private, it is held in Deoki Nandan  Vs. Murlidhar,[3]  as under:

  • “The distinction between a private and a public trust is that, whereas in the former, the beneficiaries are specific individuals, in the latter, they are the general public or a class thereof. While in the former the beneficiaries are persons who are ascertained or capable of being ascertained, in the latter they constitute a body which is incapable of ascertainment.”

Read Blog: Public & Private Trusts in India.

Remedies Under Sec. 92 CPC.

Charitable Private Trust – Indian Law and English Law

Charitable trusts of public nature alone, and not of private nature, are accepted as valid under English Law. English Jurists prefer to call it ‘charities’.  But, Indian law admits private charitable and religious trusts also.

The distinction between English Law and Hindu Law has been stated by Dr. Mukherjea in his Tagore Law Lectures ‘On the Hindu Law of Religious and Charitable Trusts’ as under:

  • “In English Law charitable trusts are synonymous with public trusts and what is called religious trust is only a form of charitable trust. The beneficiaries in a charitable trust being the general public or a Section of the same and not a determinate body of individuals, the remedies for enforcement of charitable trust are somewhat different from those which can be availed of by beneficiaries in a private trust. In English Law the Crown as ‘parens-patriae’ is the constitutional protector of all property subject to charitable trusts, such trusts being essentially matters of public concern. … One fundamental distinction between English and Indian Law lies in the fact that there can be religious trust of a private character under Hindu Law which is not possible in English Law.” [4]

‘Lewin on Trusts’ describes public trusts as those ‘constituted for the benefit either of the public at large or of some considerable portion of it answering a particular description’; ‘to this class belong all trusts for charitable purposes; and indeed Public Trusts and Charitable Trusts may be considered in general as synonymous expressions’. According to Lewin, ‘In private trusts, the beneficial interest is vested absolutely in one or more individuals who are, or within a certain time may be, definitely ascertained’.

Tudor, in his treatise, ‘Tudor on Charities’, summed up the English principles as under:

  • “If the intention of donor is merely to benefit specific individuals, the gift is not charitable, even though the motive of the gift may be to relieve their poverty or accomplish some other purpose with reference to those particular individuals which would be charitable if not so confined; on the other hand, if the donor’s object is to accomplish the abstract purpose of relieving poverty, advancing education or religion or other purpose charitable within the meaning of the Statute of Elizabeth, without giving to any particular individual the right to claim the funds, the gift is charitable.” [5]

3. Cardinal Point:  Intention of Founder

Cardinal Point[6] to solve the question, whether an endowment is private or public, is ‘Intention of Founder’.In the trailblazer decision in this subject, Deoki Nandan Vs. Murlidhar (1957),[7]the Supreme Court held as under:

  • “When once it is understood that the true beneficiaries of religious endowments are not the Idols but the worshippers, and that the purpose of the endowment is the maintenances of that worship for the benefit of the worshippers, the question whether an endowment is private or public presents no difficulty. The cardinal point to be decided is whether it was the intention of the founder that specified individuals are to have the right of worship at the shrine, or the general public or specified portion thereof. In accordance with this theory, it has been held that when property is dedicated for the worship of a family Idol, it is a private and not a public endowment, as the persons who are entitled to worship at the shrine of the Deity can only be the members of the family, and that is an ascertained group of individuals. But where the beneficiaries are not members of a family or a specified individual, then the endowment can only be regarded as public, intended to benefit the general body of worshippers.” [8]

4. Nature of Dedication – Terms of the Document, Important

Declaration by a registered deed or transferring property to a trustee is the usual mode of dedication of immovable property; and no document is necessary for creating a religious endowment.

If the founder’s intention is clear from the document of foundation or other direct evidence, oral or documentary, no difficulty arises. In cases where express dedication cannot be proved, it will be a matter for legal inference from the proved facts and circumstances of each case. In Radhakanta Deb Vs. Commr. of Hindu Religious Endowments, it is held by our Apex Court as under:

  • “Where, however, a document is available to prove the nature and origin of the endowment and the recitals of the document show that the control and management of the temple is retained with the founder or his descendants, and that extensive properties are dedicated for the purpose of the maintenance of the temple belonging to the founder himself, this will be a conclusive proof to show that the endowment was of a private nature.”[9]

In S. Shanmugam Pillai . Vs. K. Shanmugam Pillai .[10]it is held by our Apex Court as under:

  • “Whether or not a dedication is complete would naturally be a question of fact to be determined in each case on the terms of the relevant document if the dedication in question was made under a document. … “[11]

In Hemanta Kumari Debi Vs. Gauri Shankar Tewari[12] it is held by the Privy Council, while dealing with a bathing ghat on the banks of the River Ganges, that complete relinquishment of title was not the only form of dedication under Hindu Law. It further observed as under:

  • “In the absence of a formal and express endowment evidenced by deed or declaration, the character of the dedication can only be determined on the basis of the history of the institution and the conduct of the founder and his heirs.”[13]

Read Blog: Dedication of Property in Public Trusts

5. ‘Valid and Complete’ Dedication in Family Temple

Though control and management of the property are retained by the founder, if the temple is bestowed for the benefit of the family members, it could also be qualified as ‘dedication’. Dedication arises by the release of the individual rights of the founder over the endowed property in favour of a family temple and by vesting  the legal ownership of the same with the family Deity, is also taken asvalid and complete’ in law.

6.  Public Religious Trusts & Indian Trusts Act

The Indian Trusts Act, 1882 is enacted primarily to govern private trusts; but, ‘private charitable or religious endowments’ are expressly excluded from its ambit. 

As shown above, in Sec. 1, under the head (Savings), it is stated that nothing contained in the Act affects the rules of Mohammedan 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.

Though the Indian Trusts Act does not apply, in terms, to the public trusts and private charitable or religious trusts, the common legal principles,[14] which cover matters of these excluded trusts, especially the Sections that speak as to the Duties and Liabilities of Trustees (Chapter III), Disabilities of Trustees (Chapter V), and Chapter IX pertaining to implied trusts, apply to public trusts also.[15]They ‘cannot become untouchable’[16] merely because they find a place in the Trusts Act.

Our courts apply the general law of trusts, and the universal rules of equity and good conscience upheld by the English judges in this subject, in appropriate cases.So far as private religious trusts are concerned, there are no specific statutory enactments to regulate their affairs. Such trusts are governed by the foundational principles upon which they are established, as evidenced by documents, if any;customs and usages;general law of contract and transfer of property, etc; apart from the common law of the land applicable to such trusts.[17]

7. Private Trust: Settlement of Scheme

Section 92 CPC will not apply to a private trust.  It does not necessarily mean that the civil court has no jurisdiction to settle a scheme for the management of a private trust. It is a civil right under Section 9 of the Civil Procedure Code and governed entirely by the general law of the land which prescribes the remedies for enforcement of civil rights.[18]In Thenappa Chettiar  Vs.  Karuppan Chettiar[19] the Supreme Court held that even in the case of a private trust, a suit could be filed for settlement of a scheme for the purpose of effectively carrying out the object of the trust. If there is a breach of trust or mismanagement on the part of the trustee, a suit can be brought in a Civil Court by any person interested for the removal of the trustee and for the proper administration of the endowment.

If the trustee or Shebait is guilty of mismanagement, waste, wrongful alienation of debutter property or other neglect of duties, a suit can be instituted for remedying these abuses of trust. A suit can also be filed for settlement of a scheme for the purpose of effectively carrying out of the trust. [20]

8. Express Trusts and Constructive Trusts in the Trusts Act

According to the definitions of ‘trust’, there must be a deliberate intention on the part of the author to create a trust.[21]To accomplish a valid trust, the trustee should have positively accepted the confidence reposed in by the author. The trustee must have accepted the ‘obligations’ also.  The legal ownership of the trust property must have been vested in the trustee. Transfer of ‘the trust-property to the trustee’, for administration, is also a legal requirement of trust.  The trustee is bound to deal with the trust-property in a fiduciary manner for the benefit of the beneficiaries. He is bound to act with prudence[22] and consciousness for attaining the objectives intended by the author.

Underhill in Law of ‘Trusts and Trustees’ points out that no technical expressions are necessary for the creation of an express trust. It is sufficient if the settlor evinces with reasonable certainty: (a) an intent to create a trust; (b) the trust property; (c) the persons intended to be beneficiaries; and (d) the purpose of the trust so that the trust is administratively workable and not capricious. If all the above factors are present, there will be an express trust.

The trust covered by this express declaration is referred to in Sections 4 to 79 of the Indian Trust Act, 1882as (merely) ‘trusts’. English Courts call this branch of trusts as ‘express trusts’. Sections 80 to 96, in Chapter IX of the Act state that the persons specified in these sections are bound by the ‘obligations in the nature of trust’ ‘for the benefit of another’. English Law classifies these trusts as ‘constructive or implied trusts’.[23]

9. Precatory Trusts

Precatory trusts are created by expressions of wish or desire.  On true construction they also amount to declarations of trust and include in express trusts. In such cases, the Court has to find, as a matter of construction,that the settler had actually expressed, indirectly, an intention to create a trust.[24]

10. ‘Constructive or Implied Trusts’

Constructive trust arises by operation of law.It emerges without regard to the intention of the parties to create a trust.It arises as from the date of the circumstances which give rise to it. The function of the court is only to declare that such a trust that has arisen in the past.[25]It is not a trust declared by any person either by clear or even by doubtful words.  It arises in a variety of situations. Eg.  Trustee-de-son-tort, holder of lost good, husband possessing dowry,money paid under a plain mistake of fact etc. Since there may be no intention for the parties to create a trust relation, it is said: ‘A constructive trustee may not know that he is a trustee.’[26]

Constructive trust is ‘a trust to be made out by circumstances’.[27]It is more than a concept. It is a remedy.[28] It is akin to fiduciary duty with responsibility, accountability, etc. Such fiduciary obligations are incorporated in the statute, principally to render justice and also to extend protection to the legally deserving ones from those who unlawfully enrich otherwise. These are benevolent legal safeguard in favour of dissipated and exhausted ones, on equitable considerations. Public benefit is a necessary condition of constructive trust. When an ostensible owner holds a property for the benefit of another under an obligation annexed to the ownership, he is said to hold the property in trust for that other person.[29]

Constructive trust may be an implied trust. That is, it may be applied on the ground of‘implied intention’.[30] Its forms and varieties are practically without limit. It is gathered by a court of equity whenever it becomes necessary, in justice and good-conscience, that such a trust should exist. The categories of constructive trusts are never closed.[31]

Constructive trust is an equitable remedy.If it becomes necessary, the courts in India, as courts of equity, will invoke the doctrine of constructive trust and deal with the holder of property as a trustee for the party who in equity is entitled to the beneficial enjoyment.[32]Lord Denning has said as under: 

  • “It is an equitable remedy by which the court can enable an aggrieved party to obtain restitution.”[33]

Lewin on Trust speaks on Constructive Trust as under:

  • “A constructive trust is raised by a court of equity wherever a person, clothed with a fiduciary character, gains some personal advantage by availing himself of his situation as trustee; for as it is impossible that a trustee should be allowed to make a profit by his office, it follows that so soon as the advantage in question is shown to have been acquired through the medium of a trust, the trustee, however good a legal title he may have, will be decreed in equity to hold for the benefit of his cestuique trust. A common instance of a constructive trust occurs in the renewal of leases; the rule being, that if a trustee, or executor, or even an executor de son tort, renew a lease in his own name, he will be deemed in equity to be trustee for those interested in the original term. The new lease is deemed to be a graft upon the old one”.[34]

Professor AW Scott in his book on Trusts has explained the “constructive trust” as follows:

  • “Similarly, where chattels are conveyed or money is paid by mistake, so that the person making the conveyance or payment is entitled to restitution, the transferee or payee holds the chattels or money upon a constructive trust. In such a case, it is true, the remedy at law for the value of the chattels or for the amount of money paid may be an adequate remedy, in which case a court of equity will not ordinarily give specific restitution. If the chattels are of a unique character, however, or if the person to whom the chattels are conveyed or to whom the money is paid is insolvent, the remedy at law is not adequate and a court of equity will enforce the constructive trust by decreeing specific restitution. The beneficial interest remains in the person who conveyed the chattel or who paid the money, since the conveyance or payment was made under a mistake …
  • The beneficial interest in the property is from the beginning in the person who has been wronged the constructive trust arises from the situation in which he is entitled to the remedy of restitution, and it arises as soon as that situation is created. For this reason, the person who is wronged is entitled to specific restitution from the wrongdoer even though the wrongdoer becomes insolvent before suit is brought, and he is entitled to specific restitutions from a person to whom the wrongdoer has transferred the property, if the transferee is not a bona fide purchaser, even though the transfer is made before suit is brought for restitution. It would seem that there is no foundation whatever for the notion that a constructive trust does not arise until it is decreed by a court. It arises when the duty to make restitution arises, not when that duty is subsequently enforce.”[35]

The Supreme Court, in Swami Shivshankargiri Chella Swami Vs. Satya Gyan Niketan,[36] considered whether a trust would arise when the donor waqfed (gifted) property to a society registered under the Indian Societies Registration Act, 1960, for the development and publicity of the Hindi Language. The property was gifted on condition that the society would not have a right to mortgage or right of sale. The society had not been taking any interest in achieving the purpose. The Apex Court observed that prima facie it appeared that a constructive trust was created. Accordingly, the application filed under Section 92 of CPC would be maintainable.

The principles of constructive trust and fiduciary relationships are equitable principles, and equity never operates in an absolute manner or in a vacuum. In fact, the very basis of the law of equity is its flexibility to take care of mutual concerns of the parties. Equity is about balancing the competing interests- by preventing the erosion of interests of one party while ensuring a free exercise of legally enshrined discretionary powers to the other. No doubt, specific fiduciary duties could definitely be recognised in the specific facts of the case but the manner of performance of such duties cannot be dictated in regulatory matters. Legal recognition of the role of a trustee and fixing actual obligations to be performed under such role are two separate matters. The latter is dependent on the nature of discretion and on the diligence of other party.[37]

11. Constructive Trust: Jurisdiction Derived from S. 151 CPC & S. 88 Trusts Act.

Sections 80 to 96 of the Indian Trusts Act, 1882 lay down the specific instances in which the doctrine of constructive trust could be applied. Apart from these particular instances, the general principles as to constructive trusts had been contained in Sec. 94 of the Trusts Act. Sec. 94 was deleted by Sec. 7 of the Benami Transactions (Prohibition) Act, 1988.

Erstwhile Sec. 94 read as under:

  • 94. Constructive trusts in cases not expressly provided for. – In any case not coming within the scope of any of the preceding sections, where there is no trust, but the person having possession of property has not the whole beneficial interest therein, he must hold the property for the benefit of the persons having such interest, or the residue thereof (as the case may be), to the extent necessary to satisfy their just demands.

In Gopal L. Raheja Vs. Vijay B. Raheja,[38] the Bombay High Court accepted the argument that the position of law in India, did not permit a recourse to the doctrine of constructive trust inasmuch as Sec. 94 had been deleted.

But, our Apex Court after considering the Bombay decision in Janardan Dagdu Khomane Vs. Eknath Bhiku Yadav[39] it was held as under:

  • “In Gopal L. Raheja Vs. Vijay B. Raheja[40], the Bombay High Court restrained itself from exercising its equitable jurisdiction to apply the English doctrine of constructive trust when the legislature had specifically deleted it from the Indian Trusts Act.
  • In our view, the repeal of Section 94 of the Act does not put any fetter in declaring a trust, even if the situation falls outside the purview of the Act. Its jurisdiction can be derived from Section 151 of CPC and Section 88 of the Indian Trusts Act.”

Sec, 88 of the Indian Trusts Act, 1882 reads as under:

  • 88. Advantage gained by fiduciary.—Where a trustee, executor, partner, agent, director of a company, legal adviser, or other person bound in a fiduciary character to protect the interests of another person, by availing himself of his character, gains for himself any pecuniary advantage, or where any person so bound enters into any dealings under circumstances in which his own interests are, or may be, adverse to those of such other person, and thereby gains for himself a pecuniary advantage, he must hold for the benefit of such other person the advantage so gained.

The Andhra Pradesh High Court in Abdul Razack Vs. Mohammed Rahamatullah[41] inferred a constructive trust under section 88 of the Indian Trusts Act. The Division Bench held as under:

  • “The principle, however, is quite clear, in that a person who is in a fiduciary position and is bound to protect the interests of another person and who takes advantage of the same and makes profit or derives benefit or acts in any manner adverse to the interests of that person he would be liable to that person or holds the benefit as a trustee of that person whose property he had utilised or against whose interests he had acted. The principle embodied in that section is wide. It embraces all cases of dealings entered into by the person under circumstances in which his own interests may be adverse to that of the beneficiary. This section also was held not to be exhaustive and is wide enough to cover the case of those transferees who had taken the property with notice of the transferor’s defective title.”[42]

12. Mutual & Reciprocal Trusts and Secret Trusts

Our Apex Court explained these matters in Shiva Nath Prasad Vs. State of West Bengal[43] as under:

  • “To understand the basis of the complaint we need to understand the concept of mutual wills,[44] mutual and reciprocal trusts and secret trusts. A will on its own terms is inherently revocable during the lifetime of the testator. However, “mutual wills” and “secret trusts” are doctrines evolved in equity to overcome the problems of revocability of wills and to prevent frauds. Mutual wills and secret trusts belong to the same category of cases. The doctrine of mutual wills is to the effect that where two individuals agree as to the disposal of their assets and execute mutual wills in pursuance of the agreement, on the death of the first testator (T1), the property of the survivor testator (T2), the subject matter of the agreement, is held on an implied trust for the beneficiary named in the wills. T2 may alter his/her will because a will is inherently revocable, but if he/she does so, his/her representative will take the assets subject to the trust.”

13. Active and Passive Trustees

Duty of the trustees may be passive or active according to the nature of the trust.Underhill has defined a simple trust as a trust in which the trustee is a mere repository of the trust property, with no active duties to perform.[45] In Principles of Equity by H. A. Smith[46] which reads: 

  • “A trust is a duty seemed in equity to rest on the conscience of a legal owner. This duty may be either passive, such as to allow the beneficial ownership to be enjoyed the some other person, named the cestui que trust, in which case the legal owner is styled a bare trustee; or it may be some active duty, such as to sell, or to administer for the benefit of some other person or persons; such for example are the duties of a trustee in bankruptcy.”[47]

14. Constructive Trust on Realising Fraud

It is an old legal rule that fraud unravels all: frausomnia-corrumpit.  Moneys stolen from a bank account can be traced in equity.[48]

The ‘fraud constructive trust’ is described by Lord Browne-Wilkinson as under:

  • “I agree that [the] stolen moneys are traceable in equity. But the proprietary interest which equity is enforcing in such circumstances arises under a constructive, not a resulting, trust. Although it is difficult to find clear authority for the proposition, when property is obtained by fraud equity imposes a constructive trust on the fraudulent recipient: the property is recoverable and traceable in equity. Thus, an infant who has obtained property by fraud is bound in equity to restore it.”[49]

These principles are incorporated in our Trusts Act also.  Section 86 of the Indian Trusts Act, 1882 reads as under:

  • 86. Transfer pursuant to rescindable contract.—Where property is transferred in pursuance of contract which is liable to rescission, or induced by fraud or mistake, the transferee must, on receiving notice to that effect, hold the property for the benefit of the transferor, subject to repayment by the latter of the consideration actually paid.

15. Implied Trusts can be Turned to Express Trusts by Executing Deeds

By executing a trust deed the implied trust can be converted to an express trust, as held in Donor Bellur Thammaiah Vs. GM  Gadkar.[50]

16. Constructive Trust in Indian Trusts Act: Sections 80 to 96

Chapter IX,‘Certain Obligations in the Nature of Trusts’, of the Indian Trusts Act incorporates instances of implied or constructive trust. Sec. 80 reads as under:

  • 80. Where obligation in nature of trust is created.—An obligation in the nature of a trust is created in the following cases.

Sec. 83 onwards considers the following. (Secs. 81, 82 and 94 were repealed by the Benami Transactions (Prohibition) Act, 1988, Sec. 7.)

  • 83.    Trust incapable of execution or where the trust is completely executed without exhausting the trust property. The trustee must hold the trust property, or so much thereof as is unexhausted, for the benefit of the author of the trust or his legal representative.
  • 84.    Transfer for illegal purpose. The transferee must hold the property for the benefit of the transferor.
  • 85.    Bequest for illegal purpose. The legatee must hold the property for the benefit of the testator’s legal representative.
  • 86.    Transfer pursuant to rescindable contract, or induced by fraud or mistake. The transferee must, hold the property for the benefit of the transferor.
  • 87.    Debtor becoming creditor’s representative. He must hold the debt for the benefit of the persons interested therein.
  • 88.    Advantage gained by fiduciary. A trustee, executor, partner, agent, director of a company, legal adviser, or other person bound in a fiduciary character must hold for the benefit of such other person the advantage so gained.
  • 89.    Advantage gained by exercise of undue influence.The person gaining such advantage must hold the advantage for the benefit of the person whose interests have been so prejudiced.
  • 90.    Advantage gained by qualified owner. A tenant for life, co-owner, mortgagee, or other qualified owner of any property, must hold, for the benefit of all persons interested, the advantage so gained.
  • 91.    Property acquired with notice of existing contract must hold that property for the benefit of the latter to the extent necessary to give effect to the contract.
  • 92.    Purchase by person contracting to buy property to be held on trust must hold the property for their benefit to the extent necessary to give effect to the contract.
  • 93.    Advantage secretly gained by one of several compounding creditors – must hold, for the benefit of such creditors, the advantage so gained.

Secs. 95 and 96 deal with connected general matters. They read as follows:

  • 95. Obligor’s duties, liabilities and disabilities.—The person holding property in accordance with any of the preceding sections of this Chapter must, so far as may be, perform the same duties, and is subject, so far as may be, to the same liabilities and disabilities, as if he were a trustee of the property for the person for whose benefit he holds it:
  • 96. Saving of rights of bona fide purchasers.—Nothing contained in this Chapter shall impair the rights of transferees in good faith for consideration, or create an obligation in evasion of any law for the time being in force.

17. Trustee De Son Tort or Constructive Trustee

A trustee who is in actual management of a trust without a lawful title is a trustee de son tort. ‘De Son Tort’ means ‘of his own wrong’. He may not be dishonest in his actions. His mental attitude has no significance. Constructive trustee and a trustee de son tort are synonymous expressions.[51]Though such a trustee is also called as a ‘de facto trustee’,[52] the expression is not favored by all.[53]

A trustee de son tort is distinguishable from a trespasser;for, a trespasser does not acknowledge trust or act as a trustee; but, he asserts claims of his own.[54]The trustee de son tort,who, without title, chooses to take upon himself the character of a trustee, is liable to account[55] for what he has done or what he has received while so acting. It is in the same way as if he were a de jure trustee.[56]

In Subramannaiya Vs. Abbinava (1940)[57]  it was observed by the Madras High Court as under:

  • “When the trust property is without a legal guardian, owing to any defects in the machinery for the appointment of a trustee or owning to unwillingness of the legal trustee to act, it would be a monstrous thing if any honest person recognised as being in charge of the institution and actually controlling its affairs in the interest of the trust should not be entitled, in the absence of any one with a better title, to take these actions which are necessary to safeguard the interests of the trust”.[58]

[1]Maulavi Kamiruddin Khan Vs. Badrun Nisa Bibi: AIR 1940 Pat 90; Chief Controlling Revenue Authority Vs. Banarsi Dass Ahluwalia: AIR  1972 Del  128; Pankumari Kochar Smt Vs. Controller Of Estate Duty: 1969-73 ITR 373.

[2]     Quoted in State of West Bengal Vs. Sri.Sri Lakshmi Janardan Thakur, 2006- 7 SCC 490: 2006 AIR (SCW) 4622; Yelandau Arasikere Deshikendra Sammthana Vs. Gangadharaiah: 2007-5 AIR Kar R 565: 2008-4 Kat LJ 323.

[3]     AIR 1957 SC 133. See also: Commr. of Endowments Vs. Vittal Rao:  AIR  2005 SC 454; Bala Shankar Maha Shanker Vs. Charity Commr. Gujarat: AIR  1995 SC 167, Jammi Raja RaoVs.Anjaneya Swami Temple Valu: AIR 1992 SC 1110;       Radhakanta Deb Vs. Commr. of HR Endowments Orissa: AIR  1981 SC 798;       Commr.HR and CE Mysore Vs. Ratnavarma Hegade: AIR 1977 SC 1848, Dhaneshwarbuwa Guru Vs. Charity Commr. Bombay: AIR  1976 SC 871; Mahant Shri Srinivas Ramanuj Das Vs. Surajnarayan Das: AIR  1967 SC 256,

[4]     Quoted in Mahant Ram Saroop Dasji Vs. SP Sahi: AIR 1959 SC 951.

[5]     Quoted in Dr. BK Mukherjea, J. on the Hindu Law of Religious and Charitable Trusts; State of WB  Vs. Sri. Sri Lakshmi Janardan: (2006) 7 SCC 490: 2006 AIR (SCW) 4622; Yelandau Arasikere  Vs. Gangadharaiah: 2007-5 AIR Kar R 565: 2008-4 Kat LJ 323.

[6]     DeokiNandan  Vs.  Murlidhar: AIR 1957 SC 133.

[7]     AIR 1957 SC 133.

[8]     Deoki Nandan Vs. Murlidhar (AIR 1957 SC 133): Cardinal Point, intention of founder – Followed in State of Bihar Vs. Charusila Dasi AIR 1959 SC 1002; Dhaneshwarbuwa Guru Vs. Char. Commr. Bom., AIR 1976 SC   871; Radhakanta Deb Vs. Commr. of Hindu Reli. Endts,  AIR 1981 SC 798; Pratapsinhji N Desai Vs. Dy Char. Commr. Gujt, AIR 1987 SC 2064; Jammi Raja Rao Vs. Anjaneya Swami Temple Valuair, 1992 SC 1110; Gedela Satchid. Murthy Vs. Dy. Commr. Endts, A P, AIR 2007 SC 1917.

[9]     AIR 1981 SC 798; (quoted in Kuldip Chand Vs. Advocate General to Government of H P: AIR 2003 SC 1685).

[10]   AIR 1972 SC 2069

[11]   Quoted in Sitaram Agarwal Vs. Subarata Chandra: AIR 2008 SC 952; Controller of Estate Duty West Bengal Vs. Usha Kumar: AIR 1980 SC 312

[12]   AIR 1941 PC 38;   Terms of the document, important:1951 SCR 1122;  Sri.Govindlalji Vs. State of Rajasthan: AIR 1963  SC  1638; R VenugopalaReddiar Vs. Krishnaswamy: AIR 1971 Mad  262; Importance of document: Radhakanta Deb Vs. Commr. of Hindu Endts.: AIR 1981 SC 798; Dr. BK Mukherjea, J. on the Hindu Law of Religious and Charitable Trusts: Page 188.

[13]Quoted in Kuldip Chand Vs. AG to Government of H P: AIR 2003 SC 1685.

[14]   Thayarammal Vs. Kanakammal: AIR 2005 SC 1588; Sk. Abdul KayumVs.Mulla Alibhai: AIR 1963 SC 309.

[15]   Bai Dosabai Vs. Mathurdas Govinddas: AIR 1980 SC 1334.

[16]   State of Uttar Pradesh Vs. BansiDhar:  AIR 1974 SC 1084.

[17]   CK Rajan  Vs. Guruvayoor Devaswom Managing Comtee: .AIR 1994 Ker 179 [Appeal Judgment: Guruvayoor Devaswom Managing Comte Vs. CK Rajan: AIR 2004 SC 561].

[18]   Cheriyathu  Vs.  ParameswaranNamboodiripad: 1953 Ker LT 125, Also 1953 Ker LT 117; AIR1922 P. C. 253 AIR 1925 PC 139.                                          

[19]AIR 1968 SC 915

[20]   Cheriyathu  Vs.  Parameswaran Namboodiripad: 1953 Ker LT 125; Also Manohar Mukherji  Vs. Raja Peary Mohan Mukherji: 24 Cal WN 478; Bimal Krishna Vs. Iswar Radha Balla (1937 Cal 338); Rajasekharan Naicker Vs. Govindankutty 1983 KerLJ 506.

[21]Cambay Municipality Vs. Ratilal Ambalal Reshamwala: 1995 Supp2 SCC 591.

[22]Shanti Vijay and Company Vs. Princess Fatima Fouzia: AIR 1980  SC 17

[23]   See: Rotopacking Materials Industry Vs. Ravinder Kumar Chopra: 2003-6 BCR 6

[24]Christopher Karkada, Bangalore VS Church of South India: ILR 2012Kar 725; 2012-1 KCCR 503

[25]   Janardan Dagdu KhomaneVs. Eknath Bhiku Yadav 2019 0 Supreme(SC) 1040.

[26]   Maudsley and Burn Trusts and Trustees: 2nd ed. p. 213; Referred to by: Gissing Vs. Gissing (1971) AC 886 (Lord Diplock); Quoted in: Arjan Singh Vs. Deputy Mal Jain: ILR 1982- 1 Del 11

[27]Soar Vs. Ashwell (1893) 2 QB 390 per Bowen LJ; Quoted in: Arjan Singh Vs. Deputy Mal Jain: ILR 1982- 1 Del 11

[28]   Gissing Vs. Gissing (1971) AC 886 (Lord Diplock); S Kotrabasappa Vs. Indian Bank Davanagara: AIR1987 Kar 236; G V Films Limited Vs. Unit Trust of India: 2000-100 Comp Cases 257: 1998- 2 CTC 518; Nellie Wapshare Vs. Pierce Leslie and Co Ltd: AIR1960 Mad 410.

[29]   Bharose Sharma Vs. Mahant Ram Swaroop: 2001 AIR- SCW  4062; See also: Mitar Sain Vs. Data Ram: AIR 1926 All 7; Urshottam Vs. Kanhaiyalal: AIR 1966 Raj 70.

[30]   Narayani AmmaVs. Eyo Poulose: AIR 1982 Ker 198.

[31]   Arjan Singh Vs. Deputy Mal Jain ILR 1982- 1 Del 11

[32]   Arjan Singh Vs. Deputy Mal Jain ILR 1982- 1 Del 11

[33]   Hussey Vs. Palmer (1972) 1 WLR 1286; Quoted in Arjan Singh Vs. Deputy Mal Jain ILR 1982- 1 Del 11.

[34]   Quoted in: Chacko Vs. Annamma: AIR 1994  Ker 107.

[35]   Quoted in: GV Films Ltd. Vs. UTI: 2000-100 CC 257; 1998-2 CTC 518 (Mad).

[36]2017-4 SCC 771; AIR 2017 SC 1221.

[37]LAWS(SC) 2020 11 26.

[38]   2007 (4) BomCR 288

[39]   2019 0 Supreme(SC) 1040.

[40]   2007 (4) BomCR 288

[41]   AIR 1964 AP 522

[42]   Harihara Iyer  VS Bhageerathi Amma: 1986 1 ILR(Ker) 184

[43]   AIR 2006  SC 1181

[44]   See: Manilal Sunderji Doshi Vs. Kamal Manilal Doshi: 2013-4 All MR 600; 2013-6 BomCR 685; 2013-5 MhLJ 596

[45]   Underhill: ‘Law relating to Trusts and Trustees’:13th Edition, Page 23; Quoted in Arjan Singh Vs. Deputy Mal Jain: ILR 1982-1 Del 11

[46]   4th Edition, Page 23

[47]   Quoted in Arjan Singh Vs. Deputy Mal Jain: ILR 1982-1 Del 11.

[48]   Bankers Trust Co. Vs. Shapira [1980] 1 W.L.R. 1274, 1282C-E:; See also McCormick v. Grogan (1869) L.R. 4 H.L. 82, 97

[49]   Stocks v. Wilson [1913] 2 K.B. 235, 244; R. Leslie Ltd. v. Sheill[1914] 3 K.B. 607.

[50]   2010 4 AIR Kar R 306; 2011-2 KarLJ 307

[51]   Sankaranarayana Ayyar Vs. Sri Poovanalha Swami Temple: 1LR 1950 Mad. 191; Chacko Vs. Annamma: AIR 1994 Ker 107;  CR Shivananda Vs. HC Gurusiddappa: ILR 2011  Kar 4624; 2012-2 KCCR 1186

[52]   C Nagamanickaya Vs. K Syamanthakamma: 2012-2 LW 970; 2012-3 MLJ 1089.

[53]   Sankaranarayana Ayyar Vs. Sri Poovanalha Swami Temple: 1LR 1950 Mad. 191; Chacko Vs. Annamma: AIR 1994 Ker 107.

[54]   CR Shivananda Vs. HC Gurusiddappa: ILR 2011  Kar 4624; 2012-2 KCCR 1186; Association of Radhaswami Vs. Gurnam Singh: AIR 1972 Raj 263.

[55]   Sheikh Abdul Kayum Vs. Mulla Alibhai: AIR 1963  SC  309.

[56]   CR Shivananda Vs. HC Gurusiddappa: ILR 2011  Kar 4624; 2012-2 KCCR 1186

[57]   AIR  1940 Mad. 617

[58]   Quoted in Sankaranarayanan Vs. Shri Poovananatha: AIR  1949 Mad.721; Parshvanath Jain Temple Vs. L.Rs of Prem Dass: 2009-3-RCR (CIVIL) 133.

Read in this Cluster (Click on the Topic):

Book No. 1.   Handbook of a Civil Lawyer

Book No. 2: A Handbook on Constitutional Issues

Book No. 3: Common Law of CLUBS and SOCIETIES in India

Book No. 4: Common Law of TRUSTS in India

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