1. Who is Praetor?

Ans. Praetors were judicial magistrate in Rome, who had taken the initiative to decide the
cases on the basis of principles of equity.

2. Give the meaning of Laches and Acquiescence.

Ans. Unreasonable delay in bringing forth a claim is known as laches.

3. Explain equitable interest.

Ans. An equitable interest is an "interest held by virtue of an equitable title (a title that
indicates a beneficial interest in property and that gives the holder the right to acquire formal
legal title) or claimed on equitable grounds, such as the interest held by a trust beneficiary".

Equitable interest is a broad term that covers an interest which is established through
principles of fairness, rather than a legal assignment of ownership.

4. Which sections cover “ Injunction ” in Specific Relief Act , 1963 ?

Ans. Sections 38-42.

5. Define specific performance.

Ans. Specific performance is an equitable relief, given by the court to enforce against a
defendant, the duty of doing what he agreed by contract to do.

6. Name various kinds of trust.

Ans. Kinds of Trust –

There are different kinds of trust prevalent and some of the important ones are-

• Express Trust– In case the trust is created verbally or in written form in an expressed
term, wherein the process of trust is followed properly and person is appointed as trustee
 of the trust, then it would be vaunted as an express trust. If the property is movable then
the property should be registered first and then legally transferred in the name of trustee.
• Implied Trust – This trust is also created by parties but in covert manner, as the parties
don’t expressly declare that they are creating a trust, but it is understood from the
conduct of the parties. The parties’ conduct will create presumption as well as indicate
the intention to create trust.
• Public and Private Trust – A public trust by its name signifies that it is created by the
government for the benefit of public at large or for a specific set of public. It is not
necessary that the trust should be serving the entire public, as it may be created for a
particular class of public and then also it will be known as public trust. Some of the
common causes for which a public trust is created are health, social service, medical
facilities, education, training etc. Whereas, Private trust is created for specified person,
so as to ensure that no one person will avail the benefit of the property. Such a trust is
enforced only at the action of intended beneficiary.
• Secret Trust – There are some trust where nothing is disclosed, neither the existence of
trust nor its terms and conditions and thus is called a secret trust. There are certain trusts
where the existence of the trust is disclosed but the terms are kept as closed and so that
kind of trust acts as “half secret” trust. Although, this kind of trust can be counted as
abuse of the concept of “trust”.

7. What are the liabilities of beneficiaries?

Ans. The liabilities of beneficiaries is mentioned in Section 68:
I. Duty to compensate trustee,
II. Liability in breach of trust,
III. Liability to not to harm other interests

8. Explain equitable estoppels.

Ans. The Principle of Equitable estoppel states that no person can make a statement which
contradicts or conflicts with his previously made statement, claims or acts.
 9. Name the sections which cover appointment and removal of trustee under the Indian
Trust Act?
Ans. Section 73

10. Define breach of trust.

Ans. When a trustee commits a breach in fulfilment of his duties, which can be
conferred on him either through trust deed or general law, he is said to committing
breach of trust.
 Part B
11. What is the concept and evolution of equality in Roman Law? Compare it with
Common Law.
Incomplete.
Ans. Before the introduction of ' Equity ' in Roman Law: all the powers were confined in the
hands of the Monarchs. They were the absolute judges of right and wrong. In the earliest period
of the Roman Law, there were five actions (legist actionist) for the enforcement of all civil
rights. The Jus Civile was strictly followed and there was no remedy for the wrongs, if they did
not come under any of the recognized five actions. Thus, the law was rigid, formal and
arbitrary.
In 366 B.C., the appointment of Praetors started, who were the Chief Judicial Magistrates of
the Roman Republic. These Praetors were called upon to discharge the duties of the Supreme
Judicial head of the State. They having clothed with extensive powers to modify or change the
laws. The rules, which are created by the praetor popularly known as edictum novum.

12. Explain the “Personal Remedy" of the beneficiary against the Breach of Trust?
Ans. When a trustee commits a breach in fulfilment of his duties, which can be conferred on
him either through trust deed or general law, he is said to committing breach of trust.

Section 23 of ITA contains the provision regarding breach of trust. This section also mentions
the remedy to the beneficiary, in the event of failure of fulfillment of duties by the trustee.
According to section 23, Where the trustee commits a breach of trust, he is liable to make good
the loss which the trust-property or the beneficiary has thereby sustained, unless the beneficiary
has by fraud induced the trustee to commit the breach, or the beneficiary, being competent to
contract, has himself, without coercion or undue influence having been brought to bear on him,
concurred in the breach, or subsequently acquiesced therein, with full knowledge of the facts
of the case and of his rights as against the trustee.
 13. What do you understand by Chancery?
Ans. At the time of 13th century, the courts of law had froze the types of claims they would
hear as well as the procedure governing the hearing of those claims. The range of claims that
would be heard became narrow and the processes to bring the actions to court became so
technical with jurors often being bribed. As a result of these changes plaintiffs with meritorious
claims were often denied relief.
To attempt to counteract this discrepancy, the petitioners started to approaching the King, who
had residual judicial power to deal with such matters. The King began delegating the function
of dealing with such petitions to the Chancellor. The post of Chancellor at this time was usually
a clergyman and King’s confessor. Then only, the Chancery evolved into a judicial body known
as the Court of Chancery.
Until by the end of the 15th century the judicial power of the Chancery was fully recognized.
The Court of Chancery was infect developed as a court of conscience to counteract the defects
that existed in the common law system.
Over time, Chancery grew from an administrative body within the King’s Council to a separate
court with its own formalized procedures and doctrines. Compared to the increasingly rigid
courts of common law, the Court of Chancery provided more adaptable remedies based on
notions of moral fairness. While courts of common law were mostly limited to providing
monetary damages, the Court of Chancery could order forms of equitable relief such as specific
performance or injunction.
The rules of equity varied from Chancellor to Chancellor, but ultimately, the Judicature Act of
1873 passed and its jurisdiction and powers properly determined.

14. Explain the maxim “Equity acts in Personam”.

Ans. The body of the Law of Equity is preserved in the twelve maxims. These maxims are
general principles adopted to administer justice and fairness. They govern the Law of Equity
and are discretionary in nature. Out of these maxims, one is “equity acts in personam”.
In personam is a Latin phrase meaning "directed toward a particular person".

This maxim states the equity applies to a person rather than a property. In England, the Court
of Common law and Chancery Courts were distinguished by the fact that the former had
authority over the person as well as property but the latter only acted over people. As equity’s
jurisdiction is primarily over the parties and not the subject matter, it was than immaterial
whether the property in dispute was within or outside the jurisdiction of the courts of equity or
may not even be within the reach of courts. But if the defendant was found within jurisdiction,
equity courts may order him personally to comply with its orders. The non-compliance of the
orders of the court by the defendant consequently result of initiation of contempt proceedings
against him.
In the case of Penn v. Lord Baltimore, an order of specific performance was made for the
plaintiff who brought a boundary dispute case to an English Court, yet the land was situated in
Maryland, USA. the jurisdiction of the court was applicable to the parties as they both were
English and lived in England.
 Part C
15. What are the principles on which courts act in granting specific performance?
Ans. Specific performance is an equitable relief, given by the court to enforce against a
defendant, the duty of doing what he agreed by contract to do. The subject of Specific
performance is dealt in Part II, Chapter II of the Specific Relief Act, 1963. Specific
performance means enforcement of exact terms of the contract. Under it the plaintiff claims for
the specific thing of which he is entitled as per the terms of contract. For example, if A agrees
to sell certain shares to B of a specific company which are limited in number and after the
payment made by B, if A refuses to sell the shares, then B is entitled to recovery of those shares.

According to Section 10 of Specific Relief Act 1963 in the following conditions specific
performance of the contract is enforceable:
• When there is no standard for determining actual damage: This is the situation in
which the plaintiff is unable to determine the amount of loss he has suffered. When
the damage caused by the breach of contract is quantifiable, the plaintiff is not entitled
to specific performance. For example, if a person enters into a contract to purchase a
painting by a deceased painter that is the only one in the market and whose value is
unknown, he is entitled to the same.
• When monetary compensation is insufficient, the following relief is available: In the
following cases, monetary compensation would be insufficient to provide adequate
relief:
➢ When the contract's subject matter is immovable property.
➢ Where the subject matter of the contract is movable property and such
property or goods are not an ordinary article of commerce, that is, they cannot
be sold or bought in the market.
➢ The plaintiff values or is interested in the article.
➢ The article is unique in that it is not widely available in the market.
➢ The property or goods held by the defendant as the plaintiff's agent or trustee.

In Case of Ram Karan v. Govind Lal, an agreement for sale of agricultural land was made &
buyer had paid full sale consideration to the seller, but the seller refuses to execute sale deed
as per the agreement. The buyer brought an action for the specific performance of contract and
it was held by the court that the compensation of money would not afford adequate relief and
seller was directed to execute sale deed in favour of buyer.
Similarly, it was held by the court where the part payment was paid by plaintiff and defendant
admitted that he had handed over all documents of title of property to the plaintiff. Sale price
in an agreement is not low and defendant had failed to establish that said document was only a
loan transaction then the agreement is valid and defendant is liable to perform his part (M.
Ramalingam v. V. Subramanyam).

Contracts which cannot be specifically enforced (OPTIONAL WRITING)

According to Section 14 of Specific Relief Act 1963, there are certain contracts which cannot
be specifically enforced and these are:

• Where compensation in money is an adequate relief: Here the court will not order
specific performance of contract as it is expected that the plaintiff will bank upon
the normal remedy for breach of contract i.e. remedy of compensation. For example
contract of mortgage of immovable property (Rambai v. Khimji), contract of sale
of goods (Bharat v. Nisarali) [4], contract of repair of premises etc.

• Where a contract runs into minutes or numerous detail: These contracts

includes contract which depends upon the personal qualification or the violation of
the parties or is of such nature that the court cannot enforce specific performance of
its material terms. In Robinson Davison it was held by the court that the contract to
perform in concert depends upon the personal kill of defendant’s wife, and the
contract cannot be specifically enforced due to her illness. The other example is
construction contract where the detailed terms of contract are not explained.

• Contracts of determinable nature: Determinable contract means a contract which

can be determined or revoked or put to an end by a party to the contract. For example
in case of partnership at will any partner can retire by giving notice in writing to
other partners and can dissolve the firm.

• Contracts which involve the performance of continuous duty which court

cannot supervise: Earlier under Specific Relief act, 1877 the continuous duty
which court cannot supervise is considered over a period of 3 years which was
omitted under Specific Relief Act, 1963 and no time limit restricted for the
 performance of a continuous duty. These include contract of appointment of
employees for continuous service or contract to execute sale deed every year.
In Central Bank v. Vyankatesh , the defendant was required to execute deed every
year for the period of 25 years and contract is held to be specifically unenforceable.

• Contract of arbitration: According to Section 14(2), a contract to refer present or

future differences to arbitration shall not be specifically enforceable.
 16. Define Permanent and Mandatory Injunction. Explain the principles on the basis of
which court grants Temporary Injunction.
Ans. The term ‘injunction’ has been the subject of various attempts at a definition.

Burney defined injunction as, “a judicial process, by which one who has invaded or
threatening to invade the rights of another is restrained from continuing or commencing such
wrongful act”.

The most expressive and acceptable definition is the definition of Lord Halsbury. According
to him, “An injunction is a judicial process whereby a party in an order to refrain from doing
or to do a particular act or thing”.

I. Permanent Injunction
The permanent injunction is also known with the name of perpetual injunction. Section 37(2)
of the Specific Relief Act, 1963 lays down that a permanent injunction can only be granted
by a decree at the hearing and upon the merits of the case. In simple words, for obtaining a
permanent injunction, a regular suit is to be filed in which the right claimed is examined upon
merits and finally, the injunction is granted by means of judgement.

Section 38 of the Specific Relief Act, 1963 specifies certain circumstances under which
permanent injunction may be granted. Section 38 with the head ‘Perpetual injunction when
granted’ reads as:

1. a perpetual injunction may be granted to the plaintiff to prevent the breach of an

obligation existed in his favour or by implication.
2. When any such obligation arises from the contract, the court shall be guided by the
provisions and rules contained in chapter II (specific performance).
3. When the defendant invades or threatens to invade the plaintiff’s right to, or
enjoyment of, property, the court may grant the perpetual injunction in the following
cases, namely:
I. Where the defendant is the trustee of the property of the plaintiff.
II. Where there exist no standards for ascertaining the actual damage caused, or
likely to be caused by an invasion.
III. Where the invasion is such that compensation in money would not afford adequate
relief.
 IV. Where the injunction is necessary to prevent multiplicity of judicial proceedings.

Requirements of Applicability
The conditions pre-requisite for the application of this section are-

• There must be an expressed or implied legal right in favour of the plaintiff;

• Such a right must be violated or there should be a threatened invasion;

• Such right must be an existing one;

• Should fall within the sphere of restraining provisions (referred to in section 41 of the
specific relief act).

Illustration

Aryan is a business co-founder X. He violates corporate rules provisions and thereby poses a
chance of future harm to the credibility of the corporate. Ayesha is also a business co-founder
X. She may seek an injunction to prohibit Aryan from performing an act that would
potentially assist the company’s image in the devastation.

II. Mandatory Injunction

Section 39 of the Specific Relief Act, 1963 deals with the mandatory injunctions. The section
says that in order to prevent the breach of an obligation the court can compel the performance
of certain actions at its discretion which it is capable of enforcing and can issue injunctions
for the infringement complained of. The principle of mandatory injunction is used to grant
final relief and not the interim reliefs like in exceptional or exemplary cases like saving life,
etc. There are essentially two conditions requested for mandatory injunctions:

1. The court has to determine what acts are necessary to prevent the breach; and
2. The requisite acts must be as such as the court is capable of enforcing.

In the case of Laxmi Narain Banerjee v. Tara Prosanna Banarjee, where the plaintiff and the
defendant were joint owners of the land and the defendant planted several trees that
penetrated the foundation of the building and damaged it, the plaintiff then prayed for
mandatory injunction to the court and the court accordingly granted it and held that the roots
were damaging the building that belonged to the plaintiff.

In Dorab Cawasji Warden v. Coomi Sarab Warden, the Supreme Court held that:

1. The complainant must present a strong case in the court and it should be of a level higher
than that of the prima facie case;

2. the plaintiff must make it clear that the grant of a mandatory injunction is obligatory to
prevent irreparable damage or serious injury which cannot be compensated in terms of
money.

III. Temporary Injunctions

Under the Specific Relief Act, 1963, Section 37 deals with a temporary injunction.
Temporary injunctions continue for a specified period of time or until the further order of the
court. They may be allowed at any stage in a suit and are managed by the Code of Civil
Procedure (1908).

The essential purpose for granting this injunction is to secure the interests of an individual or
the property of the suit until the final judgment is passed. The factors looked into while
providing such an injunction are:

A. The plaintiff must be able to establish a prima facie case.

B. An irreparable injury may be caused to the plaintiff if the injunction is refused and
that there is no other remedy open to the applicant by which he could protect himself
from the feared injury.
C. The balance of convenience requires that the injunction should be granted and
compensation in money would not serve an adequate relief.
 17. Explain the maxim, “Where equities are equal the law shall prevail".
ANS. The body of the Law of Equity is preserved in the twelve maxims. These maxims are
general principles adopted to administer justice and fairness. They govern the Law of Equity
and are discretionary in nature.

In case neither of the parties has been wronged and both stand at an equitable position, the legal
remedy will be prioritized. Equity shall not provide any specific remedy in case both the parties
have equal causes. Thus, in such cases, the parties must bring a legal action rather than an
equitable action.

This maxim states that "when the conflicting interests of two or more parties are supported by
equitable pleas of equal value, equity being unable to prefer one to the other would allow the
conflicting equities to cancel out and leave law to take its course." It means that the parties will
litigate in a Court of Law, where only legal estate will apply. Where the defendant has an equal
claim to the protection of a Court of Equity for his title as the plaintiff does to the Court's
assistance in asserting his title, the Court will not interpose (introduce, interrupt) on either side,
but will leave the matter as it is. The equity is equal between people who have been equally
innocent. The equity is shared by people who have been equally innocent and diligent. This
doctrine applies strictly in all cases where the plaintiff seeking relief has an equitable title. In
all cases, however, the purchaser must have a legal title in order to be fully protected by his
defence. He must have paid the purchase price prior to receiving the notice; otherwise, he will
not be protected.

A legal right is enforceable against anyone who takes property, whether or not he is aware of
it.For example, if A sells land to C over which B has a right of way, C takes the land subject to
B's right even if he was unaware of it at the time of purchase. However, the rule is different
when it comes to equitable rights. It is a well-established rule that a purchase for valuable
consideration without notice of prior equitable right, acquiring the legal estate at the time of
his purchase, is entitled to priority in both equity and at law. In such a case, equity follows the
law, and the purchaser's conscience is unaffected by the equity.

Where one thing follows two claimants on the basis of equal equity, equity must follow the law
and legal right must come first. Law provides relief to those who make claims based on legal
rights.
According to this maxim, if legal rights are equal to equitable rights, legal rights must be
preserved. It means that the person with the legal right must come first, regardless of what the
law says about equity.

This maxim has several applications, including:

1. Property transfer dispute: When both contestants are equally entitled to seek assistance from
courts of equity (because their equities are equal), the party who has the law on his side will
prevail.

For example, A and B agree to sell their property for Rs. 5,000/-. As a result, in violation of
the above agreement, A sells the property to C for B Rs. 6,000/- and hands over possession of
the property to C via a document. B received no legal interest in the property as a result of the
agreement. B has only an equitable interest in swaying A's conscience in his favour. C, on the
other hand, receives the legal interest as a result of his agreement with A, has executed a
document, and has taken possession of the property. B's interest is an equitable one, with the
law on his side. As a result, in a conflict between B and C, C's interest is obviously superior to
B's. As a result, an equitable interest is not as strong as a legal interest, and the law will prevail,
according to the maxim.

It is worth noting that the doctrines of Election, Marshalling, and Set Off are all based on the
maxim under consideration.

2. Tacking (application in Pakistan): Three mortgages are executed in respect of the same
property to X, Y, and Z, respectively. The mortgagor executed on a different date, and neither
party was aware of the prior mortgage. In such a case, the first mortgagee is required to legal
estate. Mortgages rank in order of time, according to the maxim that where equities are equal,
the first in time shall prevail. If C obtains the legal estate by paying off A's mortgage, i.e.,
obtains conveyance of A's estate and an assignment of his securities, he is entitled to
precedence over B as well as the first mortgage. However, if the first mortgagee lacks legal
estate, the third mortgagee does not acquire property over the second mortgagee, even if he has
made payments to the first mortgagee.
3. When legal and equitable rights conflict: This maxim is used when equitable and legal rights
conflict and legal right takes precedence. Equities must be equal, and there must be no conflict
between legal and equitable rights. It does not apply where the priority of time is a determining
factor in relief in the case of equity.

4. Property transfer cases: Section 78 of the Transfer of Property Act is based on this maxim.
It states that "where another person has been induced to advance money on the security of the
mortgaged property by the fraud, misrepresentation, or gross neglect of a prior mortgagee, the
prior mortgagee shall be postponed to the subsequent mortgagee."

This maxim is also the basis for Section 53 of the Transfer of Property Act. It states that "any
transfer of immovable property made with intent to defeat or delay the transferor's creditors
shall be voidable at the option of any creditor so defeated or delayed."

The law states unequivocally that a fraudulent transfer of property with the intent to defraud or
delay is voidable.

X being heavily indebted tries to dispose of his immovable property and converts it into cash
in order to defeat his creditors. Y being aware of all these facts, purchased such property from
X. The sale is void-able at the option of the creditors so defeated. If however, Y is not aware
of the above circumstances and purchases the property in good faith, the sale would not be
void-able. But if Y takes the property by way of gift, without paying any consideration for the
same, the sale shall be void-able at the instance of the creditors regardless of the fact whether
Y had or had not any notice of the intention of X to defraud his creditors.

Justice Lord Selborne held in famous case Ewing v Orr Ewing that “courts of equity are always
supposed courts of conscience in England.” They act in personam and not in rem. In exercise
of this jurisdiction they put pressure for the performance of agreements and securities even
they do not come under their jurisdiction.

Exception: This maxim has two exceptions as follows:

1. Prior equitable and subsequent legal right: Where interest in legal property comes
subsequently, cannot attain precedence. Person, who acquires equitable right in the presence
of legal right, he procures breach of duty.

In case of negligence or fraud legal property extinct priority right if equitable property comes
subsequently.

2. Equal equities without legal right: Where there are equal equities but legal right lacks, this
maxim shall not apply.
 1. Define Equity.

Ans. “Equity is a body of rules, the primary source of which was neither custom nor written
law but the imperative details of conscience and which had been set forth and developed in
the Court of Chancery.”: Henry Levery Ulman.

2. Give another name of equity under Hindu Law.

Ans. Vedas.

3. Name the kinds of Injunctions.

Ans. Injunctions can be classified into:

I. Temporary injunction,
II. Permanent/perpetual injunction, and
III. Mandatory injunction.

4. What are the Rights of Beneficiaries?

Ans. The rights of the beneficiary, in accordance of Indian trust act, are as follows:
I. Right to rents and profits [S. 55]
II. Right to specific execution [S. 56],
III. Right to terminate a trust [S. 56],
IV. Right to inspect and take copies of instrument of trust, accounts, etc.[S.57]-
V. Right to transfer beneficial interest [S.58]-
VI. Right to sue for execution of trust [S. 59]

5. Define Doctrine of Cypres.

Ans. Cypres doctrine is a legal concept that gives courts the power to interpret the terms of a
will, gift, or charitable trust, in case of ambiguous content or changed in the situations. This
doctrine will become active if the intended wishes or conditions of the original document
cannot be carried out, be legitimately interpreted literally, or legally performed, in that case, it
should be performed in as close as possible to the trust's original goals.

6. Define fiduciary relationship.

Ans. A fiduciary relationship refers to a relationship wherein one party puts special
confidence, trust, and reliance on, and is influenced by, someone else. This other person has a
fiduciary duty to act in the original party's best interests.
 7. Mention the sections which deals with rights of Beneficiaries.
Ans. S. 56-67.

8. Give another name of cesstui que trust.

Ans. Beneficiary.

9. Explain charitable trust.

Ans. A charitable trust is a trust established specifically for charitable purposes, such as:
education, welfare of old-age-homes or accomplishment a substantial social benefit

10. Which section deals with liabilities of Beneficiaries.

Ans. Section 68.
 11. Explain evolution of equity under Roman Law.
Ans. The Praetor was the famous judicial magistrate of a Roman law. The exercising of power
at that time was by the means of formulae and written statements. Everything was bounded or
surrounded all around the statements. Gradually, the Praetor started following another mode of
jurisdiction, which is termed as an extraordinary jurisdiction. After a phase, the cases and areas
where the Praetor could interfere become more common and through this only the principle of
morality and equity was introduced in the Roman Law.
(I’ll TELL YOU A STORY)
12. Define charitable trust. also explain characteristics of equitable trust.
Ans. Kinds me mention kia h

13. Explain the Rights of Trustees.

Ans. A trustee is a firm or a person who holds and administers the assets or the
properties for the benefit of a third party.

Chapter IV of the Indian Trust Act, 1882 (Section 31-45) discusses certain rights and powers
of the trustees. The rights of the trustees are discussed below:
1. Right to title deed [Sec. 31]: The trustee has the right to have possession over the
instrument of trust and other documents which are related to the trust property.
Although if the beneficiary demands copies of such documents, the trustee needs to
provide it to them.
2. Right to reimbursement of expenses [Sec. 32]: For the purpose of the execution,
preservation, or benefit of the trust property or for the protection and support of the
trust beneficiary, the trustee has the right to reimburse or pay himself all the expenses
out of the trust property which has incurred to him while carrying out these purposes.
3. Right to recollect over- payment [Sec. 32]: The trustee has the right to reimburse the
trust property of the beneficiary’s interest in case if any over-payment is made
mistakenly by the trustee to the beneficiary. The trust property on failing to provide
for such excess payment, the trustee is entitled to recover the amount personally from
the trust beneficiary.
4. Right to indemnity from gainer by breach of trust [Sec. 33]: If a person has gained an
advantage by committing a breach of trust then such person must indemnify the
trustee with the amount which was received to him by committing the breach. In case
if the beneficiary commits the breach, the trustee has the right to charge upon the trust
property for such amount.
5. Right to opinion from Court for trust property management [Sec. 34]: The trustee has
the right to seek opinion, advice, or direction on any matters related to the
management or administration of the trust property by filing a petition to a principal
Civil Court of original jurisdiction.
6. Right to settlement of Accounts [Sec. 35]: The trustee is entitled to have accounts of
his administration of the trust property examined and settled and also an
 acknowledgment in writing that no benefit is due to any beneficiary under the trust
after the successful completion of his duties as a trustee.

Important cases:
Jaya prakash vs Aditya raman: In this case it was held that permission for selling trust
property and the duties of trustee regarding granting permission are advisory in nature.
Narayan gosavi V. g.v gosavi: In this case it was held that according to section 31 of trust act
rights of trustee are in continuation in nature hence it places an obligation to trustee to
protect the title of trust property

14. Explain powers of the Trustees.(ESE QUESTIONS ME SECTION IMP. H)

Ans. *Intro will remain same*.
Powers of trustee
The powers of trustee is mentioned under sections 36-45. It can be divided into 2:
1. General authority of trustee (S36) and
2. Statutory powers (S37-45).
General Authority
A trustee has been given a general authority by this Act by virtue of which he “may do all
acts which are reasonable and proper” for
(i) the realisation, protection or benefit of the trust-property, and
(ii) for the protection and support of a beneficiary who is not competent to contract.
This general authority is subject to the following restrictions:
(i) restrictions contained in the instrument,
(ii) provisions of Section 17 (a trustee to be impartial), and
(iii) restriction as to leasing of trust-property.

Statutory powers of a trustee

These statutory powers are enlisted in Sections 37 to 45. They are:
I. to sell trust property, along with power to convey (S37-39): The trustee has the
power to sell the trust property as per the instructions laid out in the trust deed,
and if no such instructions are laid out, then by way of public auction or private
contract, in any way the trustee deems fit.
II. Right to vary or rescind the sale of trust property, and re-sell the same (S40): The
trustee has the power to vary the conditions of the sale of trust property or even
rescind such sale. He also has the power to re-sell the same property. If in such
recession and re-sale, if any loss occurs, the trustee is not liable for the same.
III. Power to manage investments (S40): The Trustee has the power to sell any
existing investment of the Trust property and invest the same into any other
instrument, as he deems fit.
However, if there is a beneficiary who is competent to contract, then such power
cannot be exercised by the trustee without such beneficiary’s consent in writing.
IV. Power to apply property of Trust for maintenance of minor beneficiaries (S41): In
case the beneficiary is a minor, the Trustee has the power to apply, i.e. use the
 income for the Trust property for the maintenance of the minor. Maintenance of
the minor may include functions such as food and clothing, Education, Religious
worship, marriage, funeral, etc.
V. Power to compound (power to settle disputes) (S43): When there is any dispute
related to any of the trust property, the trustees, when there are two or more
trustees appointed, or the sole trustee, may settle the dispute in the manner they
think fit.
For example, they may compromise, compound, abandon the dispute or may even
submit the dispute to arbitration.
In the doing of such settlement, the sole trustee or the trustees may enter into any
agreement, or instruments, as they deem fit.
VI. Power to continue the trust with individual trustee, in case of death of other
trustees (S44): The trust deed otherwise provides, When there are two or more
than two trustees appointed, and one of them disclaims the trust or dies, the
remaining trustees shall have the power to deal with the trust property.

Section 45 deals with the suspension of powers of trustees by the way of decree of the court.
 15. Explain in detail the origin and development of equity.

Ans. VHI STORY SUNANI H ENGLAND WALI

Q1. What do you mean by Trust?

Ans. A trust is a fiduciary relationship in which one party, known as a trustor, gives another
party, the trustee, the right to hold title to property or assets for the benefit of a third party, the
beneficiary. Trusts are established to provide legal protection for the trustor’s assets, to make
sure those assets are distributed according to the wishes of the trustor, and to save time, reduce
paperwork and, in some cases, avoid or reduce inheritance or estate taxes. In finance, a trust
can also be a type of closed-end fund built as a public limited company.

Q2. What do you understand by “Equity”?

Ans. The term “equity” refers to fairness and justice and is distinguished from equality:
Whereas equality means providing the same to all, equity means recognizing that we do not all
start from the same place and must acknowledge and make adjustments to imbalances. The
process is ongoing, requiring us to identify and overcome intentional and unintentional barriers
arising from bias or systemic structures.

Q3. Define “Fiduciary Relations”?

Ans. Fiduciary relationship is defined as “a relationship in which one person is under a duty to
act for the benefit of the other on the matters within the scope of the relationship.”
 MOST RELEVANT AND IMPORTANT TOPICS--- P

Q. WHAT IS DOCTRINE OF CYPRES?

Ans. It is a legal concept that gives court the power to interpret the terms of a will, gift, or
charitable trust.

➢ The term has its origin is an old French phrase, cy pres comme passible which, in
translation, means “as near as possible”.
➢ When a person creates a charitable trust, the express charitable purpose of the trust may
become impossible to fulfil. Instead of terminating the trust the, courts will then after
the purpose of the trust to allow it to continue, while keeping it as closely in accordance
to the original intention of the settlor as possible.
➢ There may be waqf who’s income cannot be applied to desired object due to change in
circumstance, or lapse of time or due to any other reason then court may apply income
to similar objects. This is how doctrine of cypress is applied.
➢ In TPA under section 18 and 26, under sec. 18 (advancement of religion, knowledge,
health, safety)
➢ Intention plays major role here, where there is no general charitable intent but only a
disposition for, we’ll defined specific purpose there is no room for application of this
doctrine.
➢ Abdul Rauff vs. Shamsul Haq case court held that doctrine of cypress is doctrine of
equity and has not been confined to any rigidly fixed groove. Court has applied it
liberally for preventing failure of charity.

Q. EXPLAIN KINDS OF TRUST?

ANS. Trusts under the Indian Trust Act of 1882

1. PUBLIC TRUST

The trust established for the benefit of the general public or of a specific group. The public
trust is divided into two types: charity trust and religious trust. However, it also includes the –

• For scientific reasons

• Educational objectives

In comparison to other types of trust, public trust is well-known by the majority of people since
its formation is simple and easy to administer. It is also eternal in nature.

2. PERSONAL TRUST

A fund is considered a Private Trust if it is for the benefit of one or more people or for a specific
length of time. The Indian Trust Act of 1882 governs Financially Trusted Trustees. Private
trusts can be formed between Vivos or wills.

ADVANTAGES OF A PRIVATE TRUST-

• An efficient and effective method of managing and passing on family assets. For example, a
father can establish a private trust in his son's name for the purpose of transmitting assets.

• Unlike when a will is executed, the court does not monitor the creation of a trust. The formal
word for signing a will and making it legally binding is "executing a will." The will is
accompanied with a petition asking the court to approve and implement the bill. The executor
is the person appointed in the will who is in charge of bringing the will through the probate
procedure as well as administering and distributing the assets.

• Protects the interests of family members, including the care of members with special needs;
and • prevents family disagreements.

• Conditions, such as reaching a certain age or fulfilling the author's wishes, might be connected
to trust.

PRIVATE TRUST TYPES

• Revocable Trust– This is a trust that can be used instead of a will. It does not secure assets
because they can be removed from the trust. Assets are not considered given away in this case,
thus they are taxed at the slab rate in the hands of the Settlor.
• Irrevocable Non-Discretionary Trust– Assets cannot be withdrawn under this type of trust.
Settler has complete control over trust rules; he can choose which beneficiaries receive which
assets and in what proportion. If the major beneficiary is the settlor, he or she is connected at
the slab rate. For example, the Settlor may transfer half of the trust's benefits to the second
child. Alternatively, a trust may be established for a disabled kid to ensure that he or she is
appropriately cared for in the event that the child's parents or guardians die.

• Irrevocable Discretionary Trust– In this scenario, the Settlor delegated authority to the trustee
to determine which beneficiary receives which asset and in what proportion. The Settlor is only
responsible for determining beneficiaries. In other words, even though the beneficiaries are
designated, their beneficial interest in the trust is not determined at the outset. A well-drafted
discretionary trust gives the trustee the ability to add or remove beneficiaries from the class,
giving the trustee more flexibility to meet changes in circumstances. The beneficiaries are not
permitted to use any of the trust property without the permission of the trustee.

3. Public-Private Partnerships –

The combination of public and private trust is known as public-private trust. A portion of the
profit may be used for public purposes as well as for private individuals or groups. Such trust
should be entitled for exemption in respect of the share of revenue earned by private individuals
or persons and private trusts, as well as the proportion of income earned for public purposes.

4.Private Trust

A trust is formed when property is handed to a person with an absolute or ponderous and
indefinite trust, but there is an understanding granted by him or between him and the donor that
it will be used for the benefit of another person or object.
Q. WHAT ARE THE DUTIES/LIABILITIES ,RIGHTS AND POWERS OF TRUSTEE?

Ans. Duties/Liabilities ( Section 11 to Section 20)

The Indian Trusts Act of 1882 specifies certain duties and liabilities of a Trustee, which we
will go over briefly.

➢ TRUSTEE TO EXECUTE TRUST- (SECTION 11)

The trustee is responsible for carrying out the trust's purpose as stated in the trust deed. The
trustee is also required to follow the instructions given by the Author of the Trust at the time
the trust is established.

However, if such directions are impractical or illegal, the trustee is not required to follow them.

➢ UNDERSTANDING OF TRUST PROPERTY (SECTION 12)

The trustee is required to be aware of the details, whereabouts, and current condition of the
trust property, as well as to take appropriate measures to secure the trust property.

➢ TITLE PROTECTION FOR TRUSTED PROPERTY (SECTION 13)

The trustee is required to defend all claims against the title of the Trust property and to take
adequate measures to assert and protect the title of the property.

➢ IT IS NOT PERMISSIBLE TO CREATE A TITLE THAT IS ADVERSE TO

THE BENEFICIARY. ( SECTION- 14)

Because the trustee is entrusted with the trust property in order to maintain it for the benefit of
the beneficiaries, it is expected and required of the trustee not to create any title that is adverse
to the beneficiary.
Assume the trustee is entrusted with an immovable property and is required to apply the rents
and profits of such property for the benefit of the beneficiaries. The trustee is also given the
authority to sell such property.

It is expected of the trustee that he will not sell such property to himself or any of his relatives,
friends, or a person of like nature, as such an action on the Trustee's part would be detrimental
to the beneficiaries, and the trust factor upon which the foundation of the trust is built would
cease to exist.

➢ TAKE GOOD CARE OF THE TRUST PROPERTY. (SECTION 15)

The trustee is required to provide adequate safeguards and to treat trust property with the same
prudence that an ordinary man would treat his own property.

However, the Act states that the Trustee is not liable for any loss caused to the trust property
or the benefits derived from it if he used the same prudence that an ordinary man would use
with his own property.

➢ CONVERT PERISHABLE PROPERTY (SECTION 16)

If the trust property is of such a nature that it will continue to deteriorate and lose value over
time, the trustee is required to convert, i.e. sell and convert such property into cash proceeds
and apply such proceeds for the benefit of the beneficiaries. This duty is especially important
for a trustee when the trust is established for the benefit of several people in succession.

➢ BE FAIR TO THE BENEFICIARIES (SECTION 17)

When a trust is established for the benefit of several beneficiaries, the trustee is required to
distribute the benefits received from the trust property equally among the beneficiaries, without
favouring anyone or any group of beneficiaries.

➢ SAFEGUARD THE TRUST'S ASSETS FROM A DISGRUNTLED

BENEFICIARY. (SECTION 18)
When there are several beneficiaries to a trust and one or more of those beneficiaries commits
or threatens to commit an act that is detrimental to the interests of other beneficiaries and the
trust in general, the trustee is required to take action to stop such beneficiary/beneficiaries' act.

➢ TO MAINTAIN AND KEEP BOOKS AND ACCOUNTS (SECTION 19)

The trustee is required to keep a clear and accurate account of the trust property and to provide
the same to the beneficiary upon request at all times.

➢ TRUST FUND INVESTMENT ( SECTION 20)

The Act expressly states that when the trust property consists of money and such money is not
required to be immediately applied for the benefit of the beneficiaries, the trustee is required
to invest such money in the instruments specified in the Act. The Act provides for instruments
such as promissory notes and other securities issued by the Central Government; in stock or
debentures issued by the Railways or other government companies; in Units issued by the Unit
Trust of India, and so on.

RIGHTS OF TRUSTEE-

➢ RIGHT TO TITLE DEED [S.31]- The trustee has the right to hold the instrument of
trust and any other documents pertaining to the trust property. However, if the
beneficiary requests copies of such documents, the trustee must furnish them.

➢ EXPENSE REIMBURSEMENT RIGHTS [S] .32]

- For the execution, preservation, or benefit of the trust property, or for the protection and
maintenance of the trust beneficiary, the trustee has the right to reimburse or pay himself all
expenses spent by him while carrying out these purposes out of the trust property.

The trustee has the power to make a first charge against the trust property for such expenses,
plus interest, if they were expended with the approval of a major Civil Court of original
jurisdiction. If the trust property fails to satisfy the trustee's expenses, he has the authority to
collect the money from the trust beneficiary who made the payments at his or her request.

➢ RIGHT TO RECOUP OVERPAYMENT [S.32]- The trustee has the right to

reimburse the trust property of the beneficiary's interest if the trustee overpays the
beneficiary by mistake. In the event that the trustee fails to provide for such excess
payment, the trustee has the right to reclaim the sum directly from the trust beneficiary.

➢ RIGHT TO INDEMNITY FROM GAINER BY BREACH OF TRUST [S.33]- If a

person gains an advantage by committing a breach of trust, that person shall compensate
the trustee for the sum acquired by committing the breach. If the beneficiary violates
the terms of the trust, the trustee has the authority to levy such sum against the trust
property.

The article further stipulates that the trustee does not impart indemnification rights if he has
committed the breach and is guilty of fraud.

➢ RIGHT TO A COURT DECISION ON TRUST PROPERTY MANAGEMENT

[S] .34]

The trustee has the right to seek the opinion, advice, or direction of a major Civil Court of
original jurisdiction on any matter relating to the management or administration of trust
property.

➢ ACCOUNT SETTLEMENT RIGHT [S] .35]

- The trustee is entitled to have the accounts of his administration of the trust property
investigated and settled, as well as a written acknowledgement that no benefit is owed to any
beneficiary under the trust following the successful fulfilment of his duties as a trustee.

A TRUSTEE'S AUTHORITY:

➢ TRUSTEE GENERAL AUTHORITY [S] .36]

- The trustee has the authority to conduct whatever acts that appear reasonable and proper to
him for the realisation, protection, or benefit of the trust property, as well as to safeguard and
support the trust beneficiary competent to the contract. However, these rights, including those
bestowed by the act and the trust deed, are subject to the following limitations: • any limits
specified in the trust deed; and • the provisions of Section 17 of this act.

Furthermore, the trustee may not lease a trust property for more than twenty-one years or
without retaining the yearly rent that can be acquired if he obtains legal approval from a primary
Civil Court of original jurisdiction.

➢ POWER TO SELL [S.37]- Unless otherwise provided by the trust deed, the clause
grants the trustee the authority to sell any trust property together in lots by public
auction or private contract, at one time or multiple times.

➢ THE ABILITY TO SELL UNDER CERTAIN CIRCUMSTANCES [S] .38]

- • Power to buy in and resell- The trustee has the authority to make any reasonable revisions
to the terms of any sale or contract for sale. He also has the authority to purchase the property
or any portion of it at any auction sale and resell it by making the required adjustments to the
contract as he sees fit, as long as such changes do not result in any loss on the part of the trust
beneficiary.

• Time allowed to sell trust property- the trustee is given the authority to make reasonable
decisions about when to sell or buy trust property.

➢ CONVEYANCE AUTHORITY [S] .39]

- The trustee is given the authority to convey or dispose of the property for the purpose of
completing any sale that he sees fit.

➢ THE ABILITY TO CHANGE INVESTMENTS [S] .40]

- The trustee has the authority to call in any trust property that is invested in any security and
invest that property in securities listed in Section 20 of the Act. He may also vary in any such
investments at any time, subject to the condition that no such change of investment be made
without the approval of the person competent to contract and entitled to the income of the trust
property for life or for any greater estate at the time.

➢ POSSESSION OF THE AUTHORITY TO APPLY FOR MINORS' TRUST

PROPERTY FOR THEIR MAINTENANCE [S] .41]
- If the trustee is holding trust property for a minor, he may pay to the guardians at his discretion
or with the permission of the Principal Civil Court of original jurisdiction apply for or towards
the minor's benefit such as: • Maintenance, or • Education or advancement in life, or • Religious
worship, or • Marriage, or • Funeral After receiving such receipt, the person paying,
transferring, or delivering is no longer liable for any loss or misapplication.

➢ POWER TO COMPOUND [S] .43]

- The trustee is given the authority to decide disputes under the provision. Unless otherwise
stipulated by the trust deed, the trustee or single trustee (in the event of two trustees) has the
authority to decide any dispute or matter relating to the trust property in the manner they deem
appropriate. The trustee has the authority to do the following: 1. Accept any security or
composition for any debt or property claimed.

2. Allow debt payments at any time.

3. Make a compromise, compound, relinquish, or even subject to arbitration or settle any

obligation, account, or claim pertaining to the trust.

4. Execute, give, or enter into such agreements, instruments, or arrangements as they see
suitable, subject to the proviso that such arrangements, if done in good faith, will not result in
any loss.

➢ POWER TO NUMEROUS TRUSTEES, ONE OF WHOM RESIGNS OR DIES

[S] .44]

- If there are multiple trustees and one of them disclaims the trust or dies, the surviving trustees
have the authority to carry on with the authority. However, if the trust deed needs a specified
number or more of trustees, the remaining trustees cannot exercise the authority.

➢ BY DECREE, THE TRUSTEE'S POWERS ARE SUSPENDED [S] .45]

- The trustee is not authorised to execute any of his powers if the Court has issued a decree for
the execution of a trust, unless conformity is granted by such decree, or by the Court's sanction,
or if an appeal against the decree is pending in the Appellate Court.
Q. WHAT ARE THE DUTIES, RIGHTS AND POWERS OF BENEFICIARY?

Ans. RIGHTS OF TRUST BENEFICIARY:

The Indian Trust Act of 1882 grants various rights to the beneficiary in order to gain the
interests-in-trust.

➢ RENT AND PROFIT RIGHTS [S] .55]

- The trust beneficiary is entitled to all rentals and profits earned by the trust property. This
provision imposes an obligation on the author or trustee to ensure that the beneficiary receives
the interest.

➢ RIGHT TO SPECIFIC EXECUTION [S.56]- The beneficiary has the right to receive
all information regarding the author's intention and the extent to which their interest
rests in the trust specifically executed for them. As a result, it requires the trustee to
communicate all relevant information to the beneficiary.

➢ POSSESSION TRANSFER RIGHT [S] .56]

- The provision also requires the trustees to transfer the trust property to the beneficiary(s) or
to such person as the beneficiary directs (s).

If a trust is established for the benefit of a married woman so that she does not refuse the right
of her beneficial interest, the beneficiary's right to have the property transferred will be
unavailable to her throughout her marriage.

➢ RIGHT TO SEE AND COPY INSTRUMENTS OF TRUST, ACCOUNTS, AND

SO ON .[Section- 57]

- The beneficiary has the right to request copies of any papers connected to the trust property,
such as the trust deed, accounting of trust property, or vouchers, if applicable. It makes the
trustee obligated to keep an accounting record and submit it by the end of each year.
Beneficiaries have the right to waive any records.
 ➢ BENEFICIAL INTEREST TRANSFERABILITY [S] .58]

- The beneficiary who is competent under the contract has the right to transfer the beneficial
interest, but only in line with the law in effect at the time. The transfer, however, must be made
in the circumstances and to the degree that the right can be transferred.

If the trust is bequeathed for the benefit of a married woman and she does not disclaim the
beneficial interest, she is not granted the power to transfer such trust property during her
married life.

➢ RIGHT TO SUE FOR TRUST EXECUTION [S] .59]

- This section deals with the circumstance when trustees are not appointed or have died,
disclaimed or discharged, or for any other cause where the trustees' execution of the trust
becomes impossible, in which case the beneficiary might file a suit for the trust's execution. In
such instances, the court must carry out the trust's execution under its own supervision until a
new trustee is chosen.

➢ RIGHT TO A PROPER TRUSTEE [S.60]- This clause gives the beneficiary the right
to require that the trust property be protected and administered by a proper person or a
proper number of such people. The clause also includes a list of those who cannot be
defined as proper people under the terms of this section:
• A person with a foreign domicile; an opponent from another country;
• A person whose interests conflict with those of the beneficiary;
• A person in insolvent circumstances, unless expressly allowed by the beneficiary's
personal laws,
• a married lady,
• A child of little age.

In circumstances when the administration of trust necessitates the receipt and safekeeping of
funds, at least two trustees should be appointed.
 ➢ RIGHT TO FORCE PERFORMANCE OF ANY DUTY [S] .61]

- The clause grants the beneficiary the authority to compel the trustee to do a specific act of his
obligation or as such. He can also prevent the trustee from performing any planned or
anticipated breach of trust.

➢ TRUSTEES' ERRONEOUS PURCHASE [S] .62]

- This provision gives the beneficiary the authority to prevent the trustee from breaching the
trust. If the beneficiary incorrectly purchased the trust property with the goal of using it for
himself, the beneficiary has the right to recover it from him and can also compel him to hold
the trust property for the beneficiary.

If the property was sold to a third party while the beneficiary was aware that it was trust
property, the beneficiary has the right to recover it from the third party. However, in this
situation, the beneficiary must refund the purchase price plus interest, and any such expenses
incurred while conserving the property would be reimbursed by the trustee.

The provision imposes specific requirements on the trustee or purchaser. He is required to:

Account for the property's net income.

If he was in actual possession of the property, he must pay the occupation rent, and

Allow the beneficiary to deduct a portion of the purchase price if the property has been harmed
due to the trustee's or purchaser's conduct or omissions.

TRUST BENEFICIARY LIABILITIES:

Duty to pay the Trustee- If the beneficiary causes any damage to the trustee or the trust
property, he is legally obligated to compensate or reimburse for those damages.
➢ Liability for breach of trust- If the beneficiary breaches the trust agreement in any way, he
will be held liable for any damage or losses sustained as a result of the breach of trust.
➢ Liability for Endangering Others' Interests- The beneficiary will be held accountable if
his/her activity endangers the interests of another party in any way.
➢ Liability not to take advantage- If the beneficiary wishes to take use of the trust property,
he or she must obtain the consent of all other beneficiaries associated with the trust. If this
is not done, it will be deemed a violation of trust.
➢ Liability to receive interest(s)- The beneficiary is only obligated to receive his share of the
trust's interest and nothing more.
➢ Liability to be aware of a breach of trust- It is the beneficiary's responsibility to file a lawsuit
against any party if a breach of trust is discovered. It is his responsibility to become aware
of any violation of trust, whether committed by the author or the trustee.
➢ Liability to fool the trustee- If it is discovered that the beneficiary has deceived or
encouraged the trustee to execute a breach of trust, the court may proceed with a complaint
against the beneficiary.
➢ Liability to take reasonable actions- It is the beneficiary's responsibility to follow the
reasonable steps specified in the instrument of trust within the constraints and boundaries
established while keeping in mind the rights and liabilities of other beneficiaries. If this is
not done, the person will be held accountable.

Q. WHAT IS A FIDUCIARY RELATIONSHIP?

ANS. A Fiduciary Relationship Is One In Which One Person Invests Trust, Faith, And
Reliance On Another. The Individual Who Has Been Delegated Trust And Confidence
Has A Fiduciary Duty To Behave In The Best Interests Of The Other Party.

Fiduciary Relationship Definition

There is no exact definition of a fiduciary relationship. The phrase "fiduciary connection" is

not defined under the Indian Trust Act of 1882. The definition of Fiduciary Relationship can
be found in numerous High Court and Supreme Court judgements. In the case of Mrs. Nellie
Wapshare v. Pierce Leslie and Co. Ltd., Justice Anant Narayan of the Madras High Court
defined the term Fiduciary Relationship as follows:
In the context of a jural connection, a fiduciary relationship may arise. When one person has
faith in another and that trust leads to a transaction in which the person in whom the trust is
placed has a conflict of interest and responsibility, a fiduciary relationship is formed.

The word fiduciary ties refers to a person who is entrusted with property or power for the
benefit of another. It is a person's relationship with another in which the former is obligated to
utilise rights and powers in good faith for the benefit of the latter, e.g. trustee and beneficiary.
This fiduciary relationship may or may not originate from a jural relationship.

NATURE OF FIDUCIARY RELATIONSHIP:

Fiduciary relationship covers variety of relations having some common features. Whether the
relation between the two persons is of fiduciary or not, depend upon the fact and circumstances
of the case. Though there is no hard and fast rule to determine the existence of fiduciary
relationship but it could be said that whether one has reposed confidence in another, i.e. whether
confidential relationship exists, is the material test to determine the existence of fiduciary
relationship.

Generally fiduciary relationship is a confidential relationship created by the equity in the

interest of good consciences and justice. It was held by Supreme Court in Jaya Singh v.
Krishna, that wherever a person clothed with a fiduciary character obtains some personal
advantage by availing himself of his position, such person remains as fiduciary for all the
profits which are to be held for the benefit of person at whose expenses and in derogation of
whose rights, the profit has been made or advantage has derived.

Q. DIFFERENCE BETWEEN TRUST AND AGENCY?

ANS. i)Trusts are governed by the equity but agency by the common law

ii)Agency normally arises by contract between the principal and agent whereas most trusts has
no such contractual relationship between trustees and beneficiaries.

iii)Property of trust vests in the trustee but property of agency does not vests int he agent.

iv)A trustee can not involve his beneficiaries in liability while an agent can make his principal
liable.
v)A trustee is free of the control of both the author and the beneficiary, whereas an agent is
always under the control of his principal.

vi)A trustee can pass a legal title to a bonafide purchaser while an agent cannot pass the legal
title to the same.

vii)A trustee obtains such authority from the instrument of trusts, whereas an agent derives
authority from a principal.

Q. DESCRIBE THE HISTORY OF TRUST?

Ans. History of Trust Law

The origin or history of Trusts is also a source of contention. According to some authors, trust
first arose as a result of Roman Law. Others claim that English law was the first to incorporate
the concept of trust.

THE CONCEPT OF TRUST AND IN ENGLISH LAW, HOW DID TRUSTS EMERGE?

Some authors claim that trust in English law dates back to the Romans, while others claim that
it was developed and introduced first in England. In the preceding example, A was the legal
owner, and B was to look after and manage the property for the benefit of X. These were B's
moral responsibilities. B's obligation could not be enforced under English law because moral
obligations cannot be enforced. It was also difficult to enforce the obligation in equity courts
at first because "equity follows the law." But, over time, chancery lawyers and judges
discovered a way to enforce B's obligation and provide punishment in the event of non-
compliance. As a result, B was obligated to keep and manage the property, and not to give it
away or damage it in order to avoid punishment.

By separating beneficial interests, equity transformed moral obligation into equitable

obligation. When beneficial interests are separated from legal title and confidence is placed in
the legal title holder, a trust is formed.

Another thing to keep in mind is that, according to the Maitland, the term "use" in English law
is derived from the Latin word "ad opus," which means "on behalf of." And the property was
held after the agreement between the inter vivos, which means that both parties, as well as the
beneficiary, had to be alive. According to Maitland, the land was held permanently by one man
on behalf of another, which resulted in the formation of trust.
THE CONCEPT OF TRUST AND IN ROMAN LAW, HOW DID THE CONCEPT OF
TRUST EMERGE?

The concept of trust was derived from the Latin term "fidei commissum," which expresses the
obligation of the heir to carry out the deceased's last wishes. That is, the appointed heir who
received property in trust for another was referred to as a fidei commissum. And the citizen
had few options when naming a testamentary heir because he could not name an alien, a
posthumous child outside his family, or a woman to inherit his property.

As a result, the law was enacted to appoint a qualified heir and require him to transfer the
property to the person who was to be the true object. This subsequent transfer took the form of
a gift, which the recipient was not prohibited from accepting. As a result, the qualified person
was to hold the property in trust for someone else until he transferred it to the real object.

THE CONCEPT OF TRUST AND IN INDIAN LAW, HOW DID TRUSTS EMERGE?

In India, the Indian Trust Act 1882 was specifically enacted for trusts, though it could only be
used on private trusts. Unlike in English law, where double ownership is the norm, there are
two types of estates, legal and equitable, of which two different people can be the owners, and
these owners can freely transfer their respective interests to any person or persons. However,
the concept of dual ownership does not exist in India.

Prior to 1882, trusts were enforced under Hindu and Mohomedan law, but principles of English
equity, justice, and good conscience were applied where necessary. However, with the passage
of The Indian Trust Act 1882, the trust became a legal entity in India.