Vol. 12 · pages 356–360

335THE LAW OF TRUST (5) Trust for the creation of a perpetuity. (6) Trust to take effect upon future separation of husband and wife. 3. Whether the trust is lawful or unlawful is to be determined in the case of immoveable property by the law where the property is situated. 4. A trust which is unlawful is void. 5. Where a trust has two purposes of which one is lawful and the other unlawful, the validity of the trust depends upon the severability of the two. If they can be severed, the one with a lawful purpose is valid and the one with an unlawful purpose will be void. If they cannot be separated the whole will be void. 6. Consequences of settlor creating an unlawful trust— (i) Court will not enforce it in favour of the person intended to be benefitted thereby. (ii) Court will not help the settler to recover the estate. Formalities for a valid trust Sec. 5. 1. A trust may be a trust of immoveable property or it may be a trust of moveable property. The formalities prescribed by law for the validity of a trust differ according as the property is immoveable property or moveable property. 2. Formalities in case the property is immoveable. Such a trust may be made in two ways— (i) Either by anon-testamentary instrument signed by the author of the trust or by the trustee, or (ii) By the will of the author of the Trust, 3. Formalities in the case of a trust of moveable property. There are three ways by which it could be done. (1) By a non-testamentary instrument signed by the author of the trust or the trustee. (2) By a testamentary instrument signed by the author or the trustee. (3) By transfer of the ownership of property to the trustee. 4. Difference between declaration and creation of Trust. (Not explained in ms.)

336 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES 5. Transfer of Trust Property 1. No trust is created until the author of the trust has divested him of the trust property. That means he must have transferred the property to the Trustee. 2. This does not apply where the author of the trust is himself the trustee. All that is necessary to show is that he has changed the character in which he holds it. 3. This does not apply when the trust is created by a will. The will operates after his death and the trustees then take possession. Section II.—A trust may be valid and yet impeachable. 1. A valid trust may be impeached on the following grounds by the following persons :—- (a) By the settlor or his successors in title on the ground: (i) of the incapacity of Parties. (ii) of some mistake made by, or fraud practised on, the settlor at its creation. (b) By the settlor’s creditors, by reason of its having been made with a fraudulent intention to defeat or delay them or because it infringes the provisions of the Insolvency Act. (c) By future purchasers of the property from the settlor without notice of the trust, where the trust property is land, and though was intended by the settlor to defeat the claims of future purchasers. I. Incapacity of Parties to a Trust § Capacity of the author of the Trust. 1. The author of a trust must be a person who is competent to contract, i.e., (i) He must be major and (ii) He must be of sound mind. 2. Although this prevents a minor from making a trust yet the law provides for a minor making a trust, if the conditions prescribed are observed under the Law, a trust may be made by or on behalf of the minor, provided it is done with the permission of the Principal Civil Court of original jurisdiction.

337THE LAW OF TRUST The Principal Civil Court of original jurisdiction is according to the Civil Procedure Code the District Court. 3. This competency of the Author of the Trust to make a trust is limited in two ways— (i) The property which is to be the subject-matter of the trust must be transferable. (ii) He can transfer it only to the extent permitted by Law for the time being in force. A trust is not valid if the author had no power to dispose of property. 4. What property is transferable and what is not is defined in section 6 of the T. P. Act. 5. The authority to dispose of property and the extent of such power depends upon law. Illus. (i) A Hindu father cannot dispose of the ancestral property and therefore, he cannot create a trust thereof. (ii) A Hindu widow cannot dispose of the estate inherited by her from her husband. She having only a life-estate in it—therefore, she cannot dispose of it by way of Trust. (iii) A Mohammedan cannot dispose of more than 1/3 of his property after the payment of debts and funeral expenses— therefore, cannot dispose of more than 1/3 by way of a Trust. § Capacity to be a Trustee— Sec. 10. 1. Every person capable of holding property is competent to be a trustee. 2. Who is capable of holding property ? Every living person is capable of holding and taking property. Therefore, every living person whether a minor or a lunatic is capable of being a trustee. 3. There is a difference between capacity to contract and capacity to hold and take property. Every living person does not have the capacity to contract; but every living person has the capacity to hold and take property. 4. This distinction is necessary to make and important to bear in mind because a person may not have capacity to contract yet he may be competent to be a trustee provided he has capacity to hold

338 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES and take property ;be not dead physically he must not be dead civily: (1) A person who is sentenced to transportation is not civily dead. 7. There is one further distinction which is to be noted. Ordinarily a person who is competent to be a trustee is also competent to execute a trust. But in the case where a trust involves the use of discretion the person who is competent to be a trustee is not necessarily competent to execute a trust. 8. Where the trust is such that it does not involve the use of discretion the requirement for competency to execute a trust is the same for being a trustee, namely, capacity to hold and take property. 9. Where the trust is such that its execution does involve the use of discretion, then the trustee must have capacity to contract. Capacity to be a Beneficiary — Sec. 9. 1. Every person capable of holding property may be a beneficiary. 2. The requirement for being a beneficiary is the same as for being a trustee. 3. That is every living person can be a beneficiary. That is a trust can be created in the interest of every living person. It is not necessary that a beneficiary should have contractual capacity. In this respect his position is regulated by the same provisions as that of the trustee. zz

CHAPTER III The Revocation of an Express Trust D e c l a r e d Sec. 78. 1. Whether a trust can be revoked depends upon how the trust is created. (i) If the trust is created by a will then it can be revoked by the testator at his pleasure. This is because will does not take effect till death. There is can be revoked before it takes effect. 2. If the trust is created otherwise than be a will—i.e., by a non-testamentary instrument or by word of mouth then it can be revoked in the following circumstances only— (i) If the power of revocation is expressly reserved to the author of the trust. (ii) If the beneficiaries consent, provided all of them are competent to contract zz