Indian Trusts Act, 1882 – Landmark Cases
| Case Name | Section | Rule(s) | Case Brief |
|---|---|---|---|
| Knight v Knight | 6 | Three certainties (intention, purpose, beneficiary) | This case laid down the basic rules for creating a valid trust. The court said there must be clear intention, clear purpose, and clear beneficiary. If any of these is missing, trust fails. This case is very important to understand how trusts are formed. |
| Gherulal Parakh v Mahadeodas Maiya | 4 | Trust must have lawful purpose | The case explained that a trust cannot be created for illegal purpose. If the purpose is against law, the trust is invalid. This protects public policy (public interest). |
| CIT v Kamalini Khatau | 3 | Meaning of trust and parties | The court explained roles of trustee and beneficiary. It clarified how trust property is managed. This helps in understanding basic structure of trust. |
| Speight v Gaunt | 11 15 47 | Trustee duty to follow trust Standard of care No delegation | The trustee invested money through a broker. Loss happened. The court held trustee acted with reasonable care. Trustee is not liable if he acts like a careful person. It also explained that delegation is allowed in normal business practice. |
| Howe v Earl of Dartmouth | 16 | Conversion of wasting property | The case said trustee must convert risky or wasting assets. This protects beneficiaries from loss. |
| Cowan v Scargill | 17 | Trustee must act in best interest of beneficiaries | Trustees refused to invest in some industries due to personal views. Court said trustee must focus on benefit of beneficiaries, not personal beliefs. |
| Learoyd v Whiteley | 18 | Duty to prevent loss | The court held trustee must act carefully to avoid loss. If trustee fails, he is liable. |
| Re Londonderry’s Settlement | 19 32 | Right to information Inspection of documents | The court said beneficiaries have limited right to see documents. Trustee must give necessary information but can refuse in some cases. |
| Nestle v National Westminster Bank | 20 | Investment duty of trustee | The trustee invested poorly. The court said trustees must invest wisely. But liability depends on overall performance. |
| Target Holdings v Redferns | 23 73 | Liability for breach of trust | The case explained when trustee is liable for loss. Trustee must compensate if breach causes loss. |
| Ex parte James | 24 | No personal benefit or adjustment | Trustee cannot mix personal claims with trust duties. Court enforced strict fairness. |
| Saunders v Vautier | 28 55 72 | Beneficiary rights Right to full ownership End of trust | The beneficiary wanted full control of property. The court allowed it because he was adult and sole beneficiary. Trust can end if all beneficiaries agree. |
| Lloyd v Banks | 31 61 | Right to enforce trust | Beneficiary can force trustee to perform duties. The court protected beneficiary rights. |
| Public Trustee v Cooper | 34 | Right to seek court directions | Trustees can approach court for guidance. This protects them from future liability. |
| Worrall v Harford | 35 | Right to indemnity | Trustee can recover proper expenses from trust property. |
| Ex parte Belchier | 36 | Right to reimbursement | Trustee can claim back money spent for trust. |
| Luke v South Kensington Hotel Co. | 51 | Co-trustees must act together | Trustees must act jointly. One cannot act alone without others. |
| Keech v Sandford | 53 | Trustee cannot make personal profit | Trustee took benefit for himself. Court said trustee must not gain personally. Strict rule to avoid misuse. |
| Letterstedt v Broers | 60 | Removal of trustee | Court can remove trustee if he fails in duty. This protects trust property. |
| Foskett v McKeown | 63 | Tracing of trust property | Beneficiary can trace property if misused. Even if property changes form, right continues. |
| Pilcher v Rawlins | 64 | Protection of good faith purchaser | Buyer who buys honestly is protected. Even if trust is broken earlier. |
| Vidyodaya Trust v Mohan Prasad | 77 | Extinction of trust | Trust ends when purpose is completed. Court confirmed end of trust in such case. |
| Atmaram v Gulamhusein | 78 | Revocation of trust | Trust can be cancelled in certain cases. Court explained valid revocation. |
Case Name
Knight v Knight
Section
6
Rule(s)
Three certainties (intention, purpose, beneficiary)
Case Brief
This case laid down the basic rules for creating a valid trust. The court said there must be clear intention, clear purpose, and clear beneficiary. If any of these is missing, trust fails. This case is very important to understand how trusts are formed.
Case Name
Gherulal Parakh v Mahadeodas Maiya
Section
4
Rule(s)
Trust must have lawful purpose
Case Brief
The case explained that a trust cannot be created for illegal purpose. If the purpose is against law, the trust is invalid. This protects public policy (public interest).
Case Name
CIT v Kamalini Khatau
Section
3
Rule(s)
Meaning of trust and parties
Case Brief
The court explained roles of trustee and beneficiary. It clarified how trust property is managed. This helps in understanding basic structure of trust.
Case Name
Speight v Gaunt
Section
11
15
47
15
47
Rule(s)
Trustee duty to follow trust
Standard of care
No delegation
Standard of care
No delegation
Case Brief
The trustee invested money through a broker. Loss happened. The court held trustee acted with reasonable care. Trustee is not liable if he acts like a careful person. It also explained that delegation is allowed in normal business practice.
Case Name
Howe v Earl of Dartmouth
Section
16
Rule(s)
Conversion of wasting property
Case Brief
The case said trustee must convert risky or wasting assets. This protects beneficiaries from loss.
Case Name
Cowan v Scargill
Section
17
Rule(s)
Trustee must act in best interest of beneficiaries
Case Brief
Trustees refused to invest in some industries due to personal views. Court said trustee must focus on benefit of beneficiaries, not personal beliefs.
Case Name
Learoyd v Whiteley
Section
18
Rule(s)
Duty to prevent loss
Case Brief
The court held trustee must act carefully to avoid loss. If trustee fails, he is liable.
Case Name
Re Londonderry’s Settlement
Section
19
32
32
Rule(s)
Right to information
Inspection of documents
Inspection of documents
Case Brief
The court said beneficiaries have limited right to see documents. Trustee must give necessary information but can refuse in some cases.
Case Name
Nestle v National Westminster Bank
Section
20
Rule(s)
Investment duty of trustee
Case Brief
The trustee invested poorly. The court said trustees must invest wisely. But liability depends on overall performance.
Case Name
Target Holdings v Redferns
Section
23
73
73
Rule(s)
Liability for breach of trust
Case Brief
The case explained when trustee is liable for loss. Trustee must compensate if breach causes loss.
Case Name
Ex parte James
Section
24
Rule(s)
No personal benefit or adjustment
Case Brief
Trustee cannot mix personal claims with trust duties. Court enforced strict fairness.
Case Name
Saunders v Vautier
Section
28
55
72
55
72
Rule(s)
Beneficiary rights
Right to full ownership
End of trust
Right to full ownership
End of trust
Case Brief
The beneficiary wanted full control of property. The court allowed it because he was adult and sole beneficiary. Trust can end if all beneficiaries agree.
Case Name
Lloyd v Banks
Section
31
61
61
Rule(s)
Right to enforce trust
Case Brief
Beneficiary can force trustee to perform duties. The court protected beneficiary rights.
Case Name
Public Trustee v Cooper
Section
34
Rule(s)
Right to seek court directions
Case Brief
Trustees can approach court for guidance. This protects them from future liability.
Case Name
Worrall v Harford
Section
35
Rule(s)
Right to indemnity
Case Brief
Trustee can recover proper expenses from trust property.
Case Name
Ex parte Belchier
Section
36
Rule(s)
Right to reimbursement
Case Brief
Trustee can claim back money spent for trust.
Case Name
Luke v South Kensington Hotel Co.
Section
51
Rule(s)
Co-trustees must act together
Case Brief
Trustees must act jointly. One cannot act alone without others.
Case Name
Keech v Sandford
Section
53
Rule(s)
Trustee cannot make personal profit
Case Brief
Trustee took benefit for himself. Court said trustee must not gain personally. Strict rule to avoid misuse.
Case Name
Letterstedt v Broers
Section
60
Rule(s)
Removal of trustee
Case Brief
Court can remove trustee if he fails in duty. This protects trust property.
Case Name
Foskett v McKeown
Section
63
Rule(s)
Tracing of trust property
Case Brief
Beneficiary can trace property if misused. Even if property changes form, right continues.
Case Name
Pilcher v Rawlins
Section
64
Rule(s)
Protection of good faith purchaser
Case Brief
Buyer who buys honestly is protected. Even if trust is broken earlier.
Case Name
Vidyodaya Trust v Mohan Prasad
Section
77
Rule(s)
Extinction of trust
Case Brief
Trust ends when purpose is completed. Court confirmed end of trust in such case.
Case Name
Atmaram v Gulamhusein
Section
78
Rule(s)
Revocation of trust
Case Brief
Trust can be cancelled in certain cases. Court explained valid revocation.