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Tax India ›› Indian Law ›› Corporate Law ›› Trusts
Trusts
Discharge Of A Trustee
The office of a trustee is vacated by his death or by his discharge underthe provisions of the Indian Trusts Act, which envisages following six modes of discharge for a trustee.
- by extinction of the trust
- by the completion of duties under the trust
- by such means as may be prescribed by the instrument of trust
- by appointment of a new trustee in his place
- by consent of himself and all the beneficiaries provided the beneficiaries are of the age of majority and have sound mind and are notdisqualified under any law
- by the court by filing a petition for discharge.
A trustee can apply to a principal civil court of original jurisdiction forseeking discharge from his office. If the court finds that there aresufficient reason for such discharge, it may discharge him accordingly. Insuch a case, the cost of litigation is paid out of the trust property. Butif there is no sufficient reason, the court cannot discharge such a trusteeunless a proper person can be found to take his place.
Appointment Of A New Trustee
A new trustee can be appointed by
- a person nominated for that purpose by the instrument of trust or
- author of trust or
- surviving or continuing trustees or the trustee for the time being
- legal representatives of the last surviving and continuing trustee or
- with the consent of the court, the retiring trustees(if they all retire simultaneously) or the last retiring trustee
- by the court if it is impracticable to appoint a new trustee by the aforesaid persons.
A new trustee can be appointed if
- any person appointed as trustee disclaims
- any trustee dies
- any trustee is absent from India for a continuous period of 6 months or leaves India for the purpose of residing abroad
- any trustee is declared an insolvent
- any trustee desires to be discharged from the trust or refuses to act as trustee or accepts an inconsistent trust
- if any trustee, in the opinion of a court becomes unfit or personally incapable to act as a trustee.
Extention And Revocation Of Trusts
A trust gets extinguished under four circumstances:(1) when its purpose is completely fulfilled (2) when its purpose becomes unlawful (3) when the fulfillment of its purpose becomes impossible by destruction of the trust property or otherwise (4) when the trust being revocable is expressly revoked.
Revocation Of Private Trust
The trust created by will can be revoked at the pleasure of the testatorthat is, author of the trust who has by his will envisaged the trust. Atrust created otherwise can be revoked only in following 3 circumstances:
- by the consent of all the beneficiaries if they are of the age ofmajority and of sound mind and are as well not disqualified by any law
- by exercising power of revocation if it is expressly reserved for the author of the trust
- at the pleasure of the author of the trust if the trust is for the payment of the debts of the author of the trust and it has not been communicated to the creditors. But no trust can be revoked by the author of the trust so as to defeat or prejudice the acts duly done by the trustees in the execution of trust.
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