Vol. 12 · pages 376–380

355THE LAW OF TRUST III. Section 89 1. The third case arises where advantage is gained at the cost of another person by the exercise of undue influence. 2. This is dealt with in section 89. Section 89 says that such a person must hold the advantage for the benefit of the person who is the victim of such undue influence. 3. This is subject to two limitations— (i) The advantage must have been gained without consideration or (ii) The person must have had notice of the advantage having been gained by undue influence. IV. Section 90 1. The fourth case arises where advantage is gained by a qualified owner availing himself of his position as such in derogation of the rights of other persons interested in the property. 2. This is dealt with in section 90. Section 90 says that such an advantage shall be held for the benefit of all and not merely for the benefit of the one who secured it. 3. Subject to two conditions— (i) The others must repay their due share of expenses properly incurred for securing such advantage. (ii) The others must bear proportionate part of their liabilities property contracted for gaining such an advantage. 4. Cases covered are those of co-tenants, members of joint family, mortgagee, etc. V. Section 93 1. The fifth case arises where the advantage is gained by a creditor secretly. 2. Such a case generally arises when the creditors accept a composition from a debtor who is unable to pay his debts in full. 3. If it is found that one of the creditors who is a party to the composition has by arrangement with the debtor unknown to the other creditors gains better terms for himself he shall not be

356 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES entitled to retain the advantage gained by him by reason of such better terms which have caused prejudice to other creditors. 4. The law will regard him as a trustee for the other creditors in so far as the advantage gained by him is concerned. (3) Constructive Trusts arising out of Contracts I. Section 86 1. The first case dealt with by the Trust Act under this head relates to a contract for the transfer of property. 2. It falls under section 86. Section 86 refers to a contract in pursuance of which property is transferred and where the contract is of such a character that— (i) It is liable to recession or (ii) It is induced by fraud or mistake. 3. The transferee of the property under such a contract shall hold the property for the benefit of the transferor. 4. This obligation arises only under certain circumstances and is not absolute: (i) The obligation arises only on receiving notice from the transferor that the contract is liable to recession or that it has been induced by fraud or mistake. (ii) The obligation will be enforced only on repayment by the transferor of the consideration actually paid by the transferee. II. Section 91 1. Acquiring property with notice that is subject to a contract with another person. 2. In such a case the person who acquires the property must hold it for the person who had contractual rights in it. 3. This obligation is limited in its extent. It is enforced only to the extent necessary to give effect to the contract. 4. This obligation does not arise in the case of every acquisition of property which is subject to a contract. It applies only in the case of a contract which could be specifically enforced.

357THE LAW OF TRUST III. Section 92 1. Property bought for being held on trust for certain persons. 2. A contracts to buy property from B and represents to B that the purpose of buying it is to hold the property on trust for C. B believing in the representation of A sells the property to A. 3. A must hold the property for the benefit of C. 4. This obligation is also limited in its extent—It is enforced only to the extent necessary to give effect to the contract. 5. The contract may be to hold part of the property in trust for C. In that case the obligation will be enforced only to the extent of the property. (4) Constructive Trust arising out of merger of two personalities in one individual. I. Section 87 1. This provides for the case of double personality—one man but two persons. 2. Every contract, debt, obligation or assignment requires two persons. 3. But these two persons may be the same human being. 4. In all such cases, were it not for the recognition of double personality, the obligation or incumbrance would be destroyed by merger. 5. Because no man can in his own right be under any obligation to himself; or own any incumbrance over his property. 6. But with the recognition of the double personality this is possible. 7. In fact this is necessary.

358 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES 8. Illustration— Debtor becoming executor. Executor is the owner in the eye of the law. Merger. Extinction of debt. 9. Section says no. zz

PART V THE ADMINISTRATION OF A CONSTRUCTIVE TRUST