Public Trusts and Indian Trusts Act – An Overview

The Indian Trusts Act, 1882 basically applies to and meant for private trusts, whereas Sec. 92 of the CPC pertains only to public trusts. Public and private religious or charitable trusts are expressly excluded from the ambit of the Indian Trusts Act.

The relevant portion of Sec. 1 of the Indian Trusts Act, 1882 reads as follows:

But there are common legal principles[1] which cover matters of both public and private trusts.[2] Our courts apply the general or common law of trusts and the universal rules of equity and good conscience upheld by the English judges in the matter of public trusts. In other words, the principles of the English Law of Trusts which have been incorporated in the Indian Trusts Act will apply to public trusts also.

In State of Uttar Pradesh Vs. Bansi Dhar[3] it was held by VR Krishna Iyer J. that merely because common legal principles which cover both private and public trusts find a place in the Trusts Act, they cannot become ‘untouchable’ where affairs of public trusts are involved.[4] It is held as under:

The Supreme Court, in Sheikh Abdul Kayum Vs. Mulla Alibhai,[6] observed:

Though the Indian Trusts Act do not apply in terms to the public trusts,[7] the common legal principles under various sections, which cover matters of both public and private trusts, especially the Sections that speak as to the Duties and Liabilities of Trustees (Chapter III), Disabilities of Trustees (Chapter V), etc., and Chapter IX pertaining to implied trusts, apply to public trusts also. [8]

Our courts apply the general law of trusts and the universal rules of equity and good conscience upheld by the English judges. In other words, the principles of the English law of Trusts which have been incorporated in the Indian Trusts Act will apply to public Trusts also. Generally, the Courts in India apply the principles and Rules of English Law on the subjects and matters which are not provided for (in an enactment) unless they are inconsistent with the existing Rules and practice.

Provisions of Trusts Act Not Apply Proprio Vigore

Referring to Sheikh Abdul Kayum Vs. Mulla Alibhai[9] and State of UP Vs. Bansi Dhar,[10] it is held in Trustees of HEH The Nizams Pilgrimage Money Trust Hyderabad Vs. CIT, AP[11] that the general principles of trust adumbrated in the provisions of the Trust Act can be applied by invoking the universal rules of equity and good conscience even though provisions of the Trusts Act proprio vigore do not apply to public charitable trusts.

Indian Trusts Act: Scheme

Principles of Trusts Act Applied to Public Trusts