Trust is defined in section 3 of the Trust Act, 1882
as " an obligation annexed to the ownership of
property and arising out of a confidence reposed in
and accepted by the owner, or declared and accepted
by him, for the benefit of another or of another and
the owner. In simple words it is a transfer of property
by the owner to another for the benefit of a third
person alongwith or without himself or a declaration
by the owner, to hold the property not for himself
In India, the second most popular form of registration
is as a Trust. However, the statutory provisions, procedures
and the laws relating to trusts are confusing. Under
Indian Laws, various kinds of public and private trusts
can be formed. Here, we have dealt with the laws and
procedures related to Public Charitable Trusts.
The Indian Trust Act, 1882 is not applicable to Public
Charitable Trust. There is no specific act under which
a Public Trust is to be registered, except in the State
of Gujarat and Maharastra. Public Trusts are formed
under general law, with guidance drawn from the Indian
Trust Act, 1882. The other relevant acts are Religious
Endowment Act, 1863, Charitable & Religious Trust
Act, 1920 and The Bombay Public Trust Act, 1950.
The following are the basic ingredients of
a valid trust :
i) There must be an author or settlor of the trust.
The author or the settlor refers to the person who
sets aside certain property for the benefit of the
ii) There must be a trustee. The trustee are the persons
who manage this property for the benefit of the beneficiaries
as per the Trust Deed. The author himself may or may
not become a trustee.
iii) There must be a beneficiary or beneficiaries.
iv) There must be clearly delineated trust property.
v) The objects of the trust must be specific.
THE THREE CERTAINITIES REQUIRED
Three Certainties of a Trust are :
i) Certainty of intention to create Trust.
ii) Certainty of the objects and the beneficiaries.
iii) Certainty of the subject matter of the Trust
i.e. fund or properties must be specified and settled
in the deed.
WHO CAN FORM A TRUST ?
Every person competent to make a contract and competent
to deal with property can create a Trust. Besides individuals,
a body of individuals or an artificial person such
as an association of persons, an institution, a limited
company, a Hindu Undivided Family through its Karta
can also form a Trust. For all practical purposes,
two or more individuals are required to form a charitable
To form a public charitable trust it is very important
that the objects of the Trust must be of charitable
nature & of general public utility. The Charitable
Endowment Act, 1890 defines ‘charitable purpose’ as
a purpose for the relief of the poor, education, medical
relief and advancement of any other object of general
public utility but does not include a purpose which
relates exclusively to religious teachings or worship.