Lawgist20Investment of trust-money
Where the trust-property consists of money and cannot be applied immediately or at an early date to the purposes of the trust, the trustee is bound (subject to any direction contained in the instrument of trust) to invest the money on the following securities, and on no others:--
(a) in promissory notes, debentures, stock or other securities 1[of any State Government or] of the Central Government, or of the United Kingdom of Great Britain and Ireland:
2[Provided that securities, both the principal whereof and the interest whereon shall have been fully and unconditionally guaranteed by any such Government, shall be deemed, for the purposes of this clause, to be securities of such Government;]
(b) in bonds, debentures and annuities 3[charged or secured by the 4 [Parliament of the United ]Kingdom 5[before the fifteenth day of August, 1947] on the revenues of India or of the 6[GovernorGeneral in Council]7 or of any Province]8:
8[Provided that, after the fifteenth day of February, 1916, no money shall be invested in any such annuity being a terminable annuity unless a sinking fund has been established in connection with such annuity; but nothing in this proviso shall apply to investments made before the date aforesaid;]
9[(bb) in India three and a half per cent. stock, India three per cent. stock, India two and a half per cent. stock or any other capital stock 10[which before the 15th day of August, 1947, was] issued issued by the Secretary of State for India in Council under the authority of an Act of Parliament 11[of the United Kingdom] and charged on the revenues of India] 12[or which 13[was] issued by the Secretary of State on behalf of the Governor-General in Council under the provisions of Part XIII of the Government of India Act, 1935;]
(c) in stock or debentures of, or shares in, Railway or other Companies the interest whereon shall have been guaranteed by the Secretary of State for India in Council 10 or by the Central Government 14[or in debentures of the Bombay 15[Provincial] Co-operative Bank, Limited, the interest whereon shall have been guaranteed, by the Secretary of State for India in Council] 13[or the State Government of Bombay;]
16[(d) in debentures or other securities for money issued, under the authority of 17[any Central Act or 16[Provincial] Act or State Act, by or on behalf of any municipal body, port trust or city improvement trust in any presidency-town or in Rangoon Town, or by or on behalf of the trustees of the port of Karachi:]
18Provided that after the 31st day of March, 1948, no money shall be invested in any securities issued by or on behalf of a municipal body, port trust or city improvement trust in Rangoon Town, or by or on behalf of the trustees of the port of Karachi;
(e) on a first mortgage of immoveable property situate in 19[any part of the territories to which this Act extends:] Provided that the property is not a leasehold for a term of years and that the value of the property exceeds by one-third, or, if consisting of buildings, exceeds by one-half, the mortgage-money; 20***
18[(ee) in units issued by the Unit Trust of India under any unit scheme made under section 21 of the Unit Trust of India Act, 1963 (52 of 1963); or]br (j) on any other security expressly authorised by the instrument of trust, 21 or by the Central Government by notification in the Official Gazette, or by any rule which the High Court may from time to time prescribe in this behalf:
Provided that, where there is a person competent to contract and entitled in possession to receive the income of the trust-property for his life, or for any greater estate, no investment on any security mentioned or referred to in clauses (d), (e) and (f) shall be made without his consent in writing.
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1 Ins. by Act 31 of 1920, s. 2 and the First Schedule.
2 Added by Act 18 of 1934, s. 2.
3. Subs. by the A.O.1937, for charged by the Imperial Parliament on the revenues of India .
4. Subs. by the A.O.1950, for Imperial Parliament.
5. Ins. by the A.O.1948.
6. Subs., ibid., for Federation.
7. The words Governor-General and Province stand unmodified, vide the A.O.1950.
8. Added by Act 1 of 1916, s. 2.
9 Ins. by s. 2, ibid.
10. Subs. by the A.O. 1950, for which may at any time hereafter be.
11 .Ins., ibid.
12 .Ins. by the A.O. 1937.
13. Subs. by the A.O. 1950, for may be- .
14 .Ins. by Act 21 of 1917, s. 2.
15.Subs. by Act 37 of 1925, s. 2 and Sch. 1, for Central.
16.Subs. by Act 3 of 1908, s. 2, for the original cl.
17.The words any Act of a Legislature established in British India have been successively amended by the A.O. 1948, the A.O. 1950 and Act 3 of 1951, s. 3 and Sch., to read as above.
18. Ins. by Act 16 of 1975, s. 2 (w.e.f. 7-1-1975).
19. The words British India have been successively amended by the A.O. 1948, the A.O. 1950 and Act 3 of 1951, s. 3 and Sch., to read as above.
20. The word or omitted by Act 16 of 1975, s. 2 (w.e.f. 7-1-1975).
21 .Ins. by Act 1 of 1916, s. 3.
- 1 Short title
- 2 Repeal of enactments
- 3 Interpretation-clause
- 4 Lawful purpose
- 5 Trust of immoveable property
- 6 Creation of trust
- 7 Who may create trusts
- 8 Subject of trust
- 9 Who may be beneficiary
- 10 Who may be trustee
- 11 Trustee to execute trust
- 12 Trustee to inform himself of state of trust-property
- 13 Trustee to protect title to trust-property
- 14 Trustee not to set up title adverse to beneficiary
- 15 Care required from trustee
- 16 Conversion of perishable property
- 17 Trustee to be impartial
- 18 Trustee to prevent waste
- 19 Accounts and information
- 20 Investment of trust-money
- 20A Power to purchase redeemable stock at a premium
- 21 Mortgage of land pledged to Government under Act 26 of 1871
- 22 Sale by trustee directed to sell within specified time
- 23 Liability for breach of trust
- 24 No set-off allowed to trustee
- 25 Non-liability for predecessor’s default
- 26 Non-liability for co-trustee’s default
- 27 Several liability of co-trustees
- 28 Non-liability of trustee paying without notice of transfer by beneficiary
- 29 Liability of trustee where beneficiary’s interest is forfeited to the Government
- 30 Indemnity of trustees
- 31 Right to title-deed
- 32 Right to reimbursement of expenses
- 33 Right to indemnity from gainer by breach of trust
- 34 Right to apply to Court for opinion in management of trust -property
- 35 Right to settlement of accounts
- 36 General authority of trustee
- 37 Power to sell in lots, and either by public auction or private contract
- 38 Power to sell under special conditions
- 39 Power to convey
- 40 Power to vary investments
- 41 Power to apply property of minors, etc., for their maintenance, etc
- 42 Power to give receipts
- 43 Power to compound, etc
- 44 Power to several trustees of whom one disclaims or dies
- 45 Suspension of trustee’s powers by decree
- 46 Trustee cannot renounce after acceptance
- 47 Trustee cannot delegate
- 48 Co-trustees cannot act singly
- 49 Control of discretionary power
- 50 Trustee may not charge for services
- 51 Trustee may not use trust-property for his own profit
- 52 Trustee for sale or his agent may not buy
- 53 Trustee may not buy beneficiary’s interest without permission
- 54 Co-trustees may not lend to one of themselves
- 55 Rights to rents and profits
- 56 Right to specific execution
- 57 Right to inspect and take copies of instrument of trust, accounts, etc
- 58 Right to transfer beneficial interest
- 59 Right to sue for execution of trust
- 60 Right to proper trustees
- 61 Right to compel to any act of duty
- 62 Wrongful purchase by trustee
- 63 Following trust-property into the hands of third persons; into that into which it has been converted
- 64 Saving of rights of certain transferees
- 65 Acquisition by trustee of trust-property wrongfully converted
- 66 Right in case of blended property
- 67 Wrongful employment by partner-trustee of trust property for partnership purposes
- 68 Liability of beneficiary joining in breach of trust
- 69 Rights and liabilities of beneficiary’s transferee
- 70 Office how vacated
- 71 Discharge of trustee
- 72 Petition to be discharged from trust
- 73 Appointment of new trustees on death, etc
- 74 Appointment by Court
- 75 Vesting of trust-property in new trustees
- 76 Survival of trust
- 77 Trust how extinguished
- 78 Revocation of trust
- 79 Revocation not to defeat what trustees have duly done
- 80 Where obligation in nature of trust is created
- 81 [Repealed.]
- 82 [Repealed.]
- 83 Trust incapable of execution or executed without exhausting trust -property
- 84 Transfer for illegal purpose
- 85 Bequest for illegal purpose
- 86 Transfer pursuant to rescindable contract
- 87 Debtor becoming creditor’s representative
- 88 Advantage gained by fiduciary
- 89 Advantage gained by exercise of undue influence
- 90 Advantage gained by qualified owner
- 91 Property acquired with notice of existing contrac
- 92 Purchase by person contracting to buy property to be held on trust
- 93 Advantage secretly gained by one of several compounding creditors
- 94 Repealed
- 95 Obligor’s duties, liabilities and disabilities
- 96 Saving of rights of bona fide purchasers
