Veer Narmad South Gujarat University, Surat

Department of Law
B.Com.LL.B.(Honors) Five Year Integrated Programme

Name : Fijimol Frankline

Roll.no. : 06
Course. : B.Com.LL.B.(Hons.)
Semester. : 07
Academic Year. : 2021-2022
Subject. : Law of Equity and Trust
Topic. : Revocation of Trust (Indian Trust Act)
Submitted To. : Dr. Heena Makwana
Revocation of Trust
Section 78 of the Indian Trust Act,
1882
Indian Trust Act, 1882
• Indian Trusts Act, 1882 is a law in
India relating to private trusts and
trustees.
• The Act defines what would
lawfully be called as a trust and
who can legally be its trustees and
provides a definition for them.
• The Indian Trusts Amendment Bill
of 2015 amended the Act and
removed some restrictions on
investment of the monetary
assets by the trust in certain
investments.
• But at the same time, it enabled
the government to scrutinize the
trusts' investments at will.
 Trust
• According to Section.3 of Indian
Trust Act trust means an
obligation annexed to the
ownership of property, & arising
out of a confidence reposed in &
accepted by the owner for the
benefit of another or for another
and owner.
• Parties of Trust

Settlor Trustees

Beneficiaries
 Revocation of
Trust
• Revocation
• Revocation means the undoing of a thing granted or
destroying or making void of some deed that had existence
until the act of revocation made it void.
• The relevant enquiry that has to be made in relation to trust,
therefore, is when the trust has once been created or
become operative, it is open to the settlor to revoke his grant
and withdraw the property as a whole from the trust or vary
the grant in respect of the beneficiaries either as to their
class, number or terms or expressed at the time of creating
the trust.
• As has been stated earlier, once
a trust has been created and
becomes operative or capable of
operation without any assistance
of or interference from the
author of the trust, he (the
author of the trust) is divested of
all interest in or dominion over
the trust property and he has, as
a general rule, no right to revoke
the trust or grant in any manner
or to any extent.

• There are, however, certain

exceptional cases or situations in
which it may be revoked.
 In this context, Section 78 of
the Indian Trust Act, 1882
provides as follows:
• A trust created by will may be revoked at the
pleasure of the testator.
• A trust otherwise created can be revoked only
—
a. where all the beneficiaries are competent to
contract—by their consent;
b. where the trust has been declared by a non-
testamentary instrument or by word of
mouth—in exercise of a power of revocation
expressly reserved to the author, of the trust;
or
c. where the trust is for the payment of the
debts of the author of the trust, and has not
been communicated to the creditors—at the
pleasure of the author of the trust.
• In so far as a trust created by will
is concerned, it is revocable at the
pleasure of the testator, the
reason being that a will is
ambulatory during the lifetime of
the testator and takes effect only
after his death.

• Like all wills, the testator is

capable of revoking his will for
trust as and when he likes

• The will of trust if unrevoked,

takes effect after the death of the
testator and no question of its
revocation by him arises
thereafter.
• Then with regard to a trust
for the payment of debts, it
has been already stated
that, unless communicated
to the creditor, these are,
strictly speaking, no trust at
all.

• Being merely an
arrangement for the
convenience of the debtor, it
may be revoked at his
pleasure.
 So there are, in fact, only two
cases wherein a trust created by
a non-testamentary instrument
may be revoked:

a. where the author of the trust

has expressly reserved such a
power and
b. where all the beneficiaries being
competent to contract, consent
to the revocation.

In the former, there can be no cause for complaint or

disappointment to any while in the latter case, there should be no
one to complain.
 Illustration
• A conveys property to B in trust to
sell the same and pay out of the
proceeds the claims of A’s creditors.

• A reserves no power of revocation.

• If no communication has been made

to the creditors, A may revoke the
trust.

• But if the creditors, are parties to the

arrangement, the trust cannot be
revoked without their consent.
 Besides the above noted
cases, a settlor may also
revoke a trust if it was
obtained from him

a. By fraud or undue
influence
b. If executed under a
fundamental mistake or
misapprehension as to
its effect.

But in such cases no trust, in fact or under law,

is, strictly speaking at all.
 Case Law

Commissioner of Income-tax, Bombay

v.
Navaj N. Gandai

The Bombay High Court has held that it is open to a

Parsi in India to make a revocable trust of personality
for a charitable purpose. An oral revocable trust of
securities made by a Parsi with the object of paying the
income to a Parsi Hunershala is, therefore, a valid
charitable trust.
 Revocation not to defeat what trustees have duly
done.

• Section 79 of Indian Trust Act, 1882 provides that no trust

can be revoked by the author of the trust so as to defeat or
prejudice what the trustees may have duly done in execution
of the trust.

• In this way, revocation of trust, does not have retrospective

operation, so far as the acts of trustees are concerned.

• In other words, revocation operates prospectively. So, if the

trustees have already performed certain acts in due
execution of trust, the subsequent revocation of such a trust
would not affect those acts.
Bibliography
Thank
You