THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 521(1)ISLAMABAD, THURSDAY, AUGUST 27, 2020 PART I Acts, Ordinances, President’s Orders and Regulations SENATE SECRETARIAT Islamabad, the 26th August, 2020 No. F. 9(29)/2020-Legis.The following Act of Majlis-e-Shoora (Parliament) received the assent of the President on the 24th August, 2020 and ishereby published for general information:—ACT NO. XXV OF 2020An Act to define and amend the law relating to trustsWHEREAS it expedient to enact a law relating to registration, administration and monitoring of trusts registered within the territorial limits of Islamabad Capital Territory; AND WHEREAS the Trust Act, 1882 (II of 1882) does not cater effective administration and financial monitoring and evaluation of the trusts; it is hereby enacted as follows:521 (1—31)Price : Rs. 40.00 [5957 (2020)/Ex. Gaz.]521(2) THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 [PART I CHAPTER IPRELIMINARY]
Short title, extent, commencement and application.—(1) This Act shall be called The Islamabad Capital Territory Trust Act, 2020. (2) It shall extend to the whole of the Islamabad Capital Territory. (3) It shall come into force at once. (4) Nothing herein contained shall affect the rules of Muslim law as to waqf or the mutual relations of the members of an undivided family as determined by any customary or personal law or to public or private religious or charitable endowments or to trusts to distribute prizes taken in war among the captors.
Definitions.—In this Act, unless there is anything repugnant in the subject or context; (a) author of the trust means the natural person who reposes or declares the confidence and assigns the property to the trustee for the benefit of beneficiary; (b) ―beneficiary‖ means the natural person who benefits the confidence of the trust; (c) breach of trust means breach of any duty imposed on trustee as such by any law for the time being in force; (d) Competent authorities means the regulators‘, the oversight bodies for SRBs as specified in the Anti-Money Laundering Act, 2010 (VII of 2010), the investigating or prosecuting agency, and the Financial Monitoring Unit; (e) ―department‖ means the directorate of labour and industries, Islamabad Capital Territory; (f) ―director‖ means the director of directorate of labour and industries, Islamabad Capital Territory; (g) district intelligence coordination committee means the intelligence committee headed by the deputy commissioner or district magistrate, Islamabad Capital Territory, Islamabad and comprising the representatives of police and intelligence agencies; PART I] THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 521(3) (h) financial monitoring unit means the financial monitoring unit specified under the Anti-Money Laundering Act, 2010 (VII of 2010); (i) home department means the office of the Chief Commissioner, Islamabad Capital Territory; (j) instrument of the trust means the instrument by which the trust is declared; (k) interest means the beneficiary‘s right against the trust property; (l) investigating or prosecuting agency means an investigating or prosecuting agency as specified in the Anti-Money Laundering Act, 2010 (VII of 2010); (m) law department means directorate of law, Chief Commissioner‘s office, Islamabad Capital Territory; (n) notice means a person is said to have known of a fact either when he actually knows that fact, or when, but for willful abstention from inquiry or gross negligence, he would have known it, or when information of the fact is given to or obtained by his agent, under the circumstances mentioned in the Contract Act, 1872 (IX of 1872), and all expressions used herein and defined in the Contract Act, 1872 (IX of 1872), shall be deemed to have the meanings respectively attributed to them by that Act; (o) prescribed means prescribed by rules made under this Act; (p) ―provincial government‖ means the government defined under Presidential Order No. 1 of 1980; (q) purpose means any lawful purpose unless it is— (i) forbidden by law; or (ii) is of such a nature that, if permitted, it would defeat the provisions of any law; or (iii) is fraudulent; or (iv) involves or implies injury to the person or property of another; or (v) the court regards it as immoral or opposed to public policy; (r) registered means registered with the director; 521(4) THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 [PART I (s) reporting entity means an entity specified under the Anti-Money Laundering Act, 2010; (t) ―revenue department‖ means office of the district collector, Islamabad Capital Territory; (u) trust means an obligation annexed to the ownership of property and rising out of the confidence reposed in and accepted by the owner or declared and accepted by him for the benefit of beneficiary; (v) trustee means any person who accepts the confidence of the author of the trust to the benefit of the beneficiary; and (w) trust property means the subject matter of the trust; it may be movable or immovable property. CHAPTER II OF THE CREATION OF THE TRUSTS
Validity of trust.—(1) No trust in relation to any immovable property is valid unless declared by a non-testamentary instrument in writing signed by the author of the trust or the trustee and registered or by the will of the author of the trust or of the trustee and its ownership is transferred to the trust. (2) No trust in relation to movable property is valid unless declared as aforesaid or unless the ownership of the property is transferred to the trust.
Creation of trust.—(1) Subject to the provisions of section 3, a trust is created when the author of the trust indicates with reasonable certainty by any words or acts,— (a) an intention on his part to create thereby a trust; (b) the purpose of the trust; (c) the beneficiary; (d) the trust-property; and (e) transfers the trust-property to the trustee unless the trust is declared by will or the author of the trust is himself to be the trustee. PART I] THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 521(5) (2) Every trust for which the purpose of the trust is unlawful is void and where it is created for more than one purpose and one of the purposes is unlawful then whole of the trust is void.
Who may create trusts.—A trust may subject in each case to the law for the time being in force as to the circumstances and extent in and to which the author of the trust may dispose of the trust property be created – (a) by every natural person competent to contract under the Contract Act, 1872 (IX of 1872); or (b) with the permission of a principal civil court of original jurisdiction by or on behalf of a minor.
Subject of trust.—The subject matter of a trust must be property transferable to the beneficiary and it must not be merely beneficial interest under a subsisting trust.
Who may be beneficiary.—Every natural person capable of holding property may be a beneficiary and no legal person shall be a beneficiary under this Act.
Disclaimer by beneficiary.—A proposed beneficiary may renounce his interest under the trust by disclaimer addressed to the trustee or by setting up with notice of the trust a claim inconsistent therewith.
Who may be trustee.—Every natural person capable of holding property and not a legal person may be a trustee but, where the trust involves the exercise of discretion, he shall not execute it unless he is competent to contract under the Contract Act, 1872 (IX of 1872).
Acceptance to trust.—(1) A trust is accepted by any words or acts of the trustee indicating with reasonable certainty such acceptance. (2) Each of the trustee accepting the trust in this section shall provide an affidavit that the trustee has read and understood the duties and liabilities of the trustee as mentioned in Chapter-IV.
Disclaimer of trust.—(1) Instead of accepting a trust, the intended trustee may, within a period of sixty days, disclaim it and such disclaimer shall prevent the trust-property from vesting in him. (2) In case of more than one trustees, if one of trustees, disclaims to be a trustee, it shall not automatically confer the disclaiming trustee‘s rights on the other trustees. The author of the trust shall either (a) explicitly allow the 521(6) THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 [PART I co-trustees to proceed in case of any of the member‘s disclaimer, or (b) write a new trust-deed. CHAPTER III OF THE ADMINISTRATION OF THE TRUSTS
Trusts to be registered.—No Trust shall be functional unless it is registered under this Act with the Directorate of Labor and Industries, Islamabad Capital Territory, Islamabad.
Application for registration.—(1) For every trust required to be registered under this Act, the trustee shall provide to the director at or before the time of registration, the information regarding the purpose, author of the trust, details of the trustees, beneficiaries of the trust, and any other natural person exercising ultimate effective control over the trust as prescribed to the satisfaction of the department. Explanation.—In case of more than one trustee, all the trustees will nominate one Trustee who shall be responsible for the provision of information. (2) The details of the information required to be provided under sub-section (1) above shall be prescribed.
Verification of the application.—The director shall verify the contents and particulars of the application before the registration through the investigating or prosecuting agencies who shall submit the verified report to the Director within 14 days of receiving the request from him.
Registration of the properties.—(1) All movable and immovable properties must be registered in the name of the Trust under the Registration Act, 1908. (2) Without prejudice to the Registration Act, 1908, the registration of the properties must include the details of authors of the trust, beneficiaries, trustee, co-trustee, if any, and any other natural person exercising ultimate effective control over the trust.
Certificate of registration.—(1) The director, after fulfillment of legal requirements, as mentioned in sections 13 to 15, shall register the trust under this Act and issue a certificate of registration to the trustee. (2) The director, for the reasons to be recorded in writing, may refuse the registration of the application, if — PART I] THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 521(7) (a) the purpose of the trust is unlawful or the trust proceeds are suspected to be proceeds of crime, as the investigating or prosecuting agencies inform the director under section 14 and the director may refer back the application to the law enforcement agencies for legal action or any of the members of the trust including author, trustees or any other person exercising ultimate effective control over the trust are declared proscribed by the office of the Chief Commissioner, Islamabad Capital Territory, or associated with the proscribed organizations under the AntiTerrorism Act, 1997 or under the United Nations Security Council Act, 1948, and in such cases as mentioned in clause (b), the director shall share the details of individuals with the Ministry of Interior and Ministry of Foreign Affairs through the home department; or (b) the district intelligence coordination committee considers the trust a threat to national security; or (c) the author of the trust, trustee, beneficiary, or any person acting on their behalf fail to provide the complete personal details required under section 13 for the registration and functioning of the trust; or (d) any other reason as may be prescribed.
Power to inspect record and compliance.—(1) The director, or the district magistrate, ICT or the provincial government may summon any information relating to the trust from the trustee for any purpose, and shall have the power to inspect such record at any time: Provided that the director while inspecting the record under this sub-section, shall state the reasons in writing for such inspection. (2) The officer summoning the record under sub-section (1) may share it with the competent authorities upon written request through the office of Chief Commissioner, Islamabad Capital Territory any information about the trust, trust assets, trust proceeds, author of the trust, trustee, beneficiary or any other person exercising ultimate effective control over the trust. (3) The director may also share the information under this section relating to the trust assets and beneficiaries with the reporting entity upon request. (4) The director may after conviction by the competent court of law impose financial penalty up to Rupees one million, if a trustee is found in violation to the purpose of the trust or fails to provide the information under sub-section (1). 521(8) THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 [PART I (5) In case of failure to pay the penalty under sub-section (4), the director may seek a legal action through the court of original jurisdiction against the trustees held responsible for non-compliance under this Act, and such legal action may result in imprisonment ranging from one month to six months. The imprisonment granted under this section shall be for the non-compliance of the provisions of this Act and shall be in addition to the financial penalty already imposed under sub-section (4). (6) The director may after conviction by the competent court of law impose financial penalty up to Rupees one million, if a trustee fails to provide the information required under sections 20 and 22, or fails to obtain and hold the information required under section 23. In addition, the trustee shall also be liable for imprisonment of minimum three months to a maximum of six months if he fails to make information available to the competent authorities as required under section 20 or to the department or director for the purposes of sharing information under section 20. This punishment shall be awarded by a court of the original jurisdiction. (7) The director may further take over the properties of the trust or freeze its assets or remove a trustee or a beneficiary from the trust and assign new trustees or beneficiary through a legal order from a court of original jurisdiction in case the trust or trustee or beneficiary is convicted of a criminal offence, including terror financing, money laundering or a threat to national security. (8) Nothing in sub-sections (2), (3), (4), (5) and (6) shall limit the person‘s basic right of being given fair trial opportunity and appeal to the secretary of the Division concerned or the appellant court, as the case may be.
Power to obtain the registration record.—The department shall obtain the registration of trust record from the revenue department i.e. district collector, ICT, which was held by it before the enactment of this Act within a period of sixty days from the date of enactment of this Act, and, the department shall make efforts to make the trust record in conformity with the provisions of this Act.
Register of trusts.—(1) The director shall maintain a register of the trusts in such manner as may be prescribed. (2) The register shall contain information, including but not limited to the name and details of every trust, its purpose, author, trustee, beneficiaries, any person exercising ultimate effective control over the trust and other information as required by the department. PART I] THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 521(9) (3) The details must also include, if any of the person associated with the trust is living in Pakistan or outside Pakistan along with their residential addresses. (4) The department shall explain the extent of the details of individuals as included in the sub-sections (1), (2) and (3) to be made public in a manner and circumstances as may be prescribed.
Access to the information.—(1) The director may at any time require any information relating to the trust from the trustee, and the trustee is bound to provide the information in a timely manner as may be prescribed. (2) For purposes of domestic and international cooperation, competent authorities may at any time require any information relating to the trust from the trustee, and the trustee shall provide the information in a timely manner as may be prescribed. Both the request of the competent authorities and response of the trustee shall be routed through the provincial government in a timely manner as may be prescribed. (3) The reporting entity may, in a timely manner as may be prescribed, also obtain the information from the trustee about the details of trust assets, residential addresses of trustees and details of beneficiaries, however such request and response shall be routed through the department: Provided that reasons of obtaining any kind of information, record shall be communicated to the trust along-with notice of obtaining such information, record etc.
Legal arrangement for holding the property.—A trust may hold immovable and movable property under its name, or may sell or dispose of the property being held by it. Such sale and purchase shall be the responsibility of the trustee. CHAPTER IV OF THE DUTIES AND LIABILITIES OF TRUSTEES
Trustee to execute trust.—(1) The trustee is bound to fulfill the purpose of the trust, and to obey the directions of the author of the trust given at the time of its creation, except as modified by the consent of all the beneficiaries being competent to contract. (2) Where the beneficiary is incompetent to contract, his consent may, for the purposes of this section, be given by a principal civil court of original jurisdiction. 521(10) THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 [PART I (3) Nothing in this section shall be deemed to require a trustee to obey any direction when to do so would be impracticable, illegal or manifestly injurious to the beneficiaries. Explanation—Unless a contrary intention be expressed, the purpose of a trust for the payment of debts shall be deemed to be,— (a) to pay only the debts of the author of the trust existing and recoverable at the date of the instrument of trust, or, when such instrument is a will, at the date of his death; and (b) in the case of debts not bearing interest, to make such payment without interest. (4) A trustee, or all of the trustees, as the case may be, are bound to disclose the fact that they are trustees when entering into a business relationship or carrying out an occasional transaction with a reporting entity.
Trustee to collect and hold information.—(1) A trustee or each of the trustees, as the case may be, must collect and hold information about the author of the trust, co-trustee, if any, beneficiaries of the trust, and any other natural person exercising ultimate effective control over the trust to his satisfaction and requirement of the department, before the execution of the trust as mentioned in section 22. (2) The trustee must provide the updated information under this Act to the director in timely manner as may be prescribed. In case of more than one trustee, only one trustee shall be nominated by other co-trustees for the purpose of provision of information. (3) The trustees or the trustee shall collect and hold basic information about the other service providers to the trust including, but not limited to, investment advisers or managers, accountants or tax advisors, and, provide this information to the director even after the registration of the trust, in the circumstances and manner as may be prescribed. (4) The details of the information required to be collected and held under sub-sections (1), (2) and (3) shall be as may be prescribed. (5) The trustees or the trustee shall further inform the provincial government or the director and law enforcement agencies if it comes to their knowledge of any illegal utilization of the trust money by the beneficiaries, after and during the execution of the trust. PART I] THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 521(11)
Trustee to inform himself to state of trust-property.—A trustee is bound to acquaint himself, as soon as possible, with the nature and circumstances of the trust property to obtain, where necessary, a transfer of the trust property to himself and subject to the provisions of the instrument of trust to get in trust-money invested or insufficient or hazardous security. Illustrations.— (a) The trust-property is a debt outstanding on personal security. The Instrument of trust gives the trustee no discretionary power to leave the debt so outstanding. The trustee‘s duty is to recover the debt without unnecessary delay. (b) The trust-property is money in the hands of one of two co-trustees. No discretionary power is given by the instrument of trust. The other cotrustee must not allow the former to retain the money for a longer period than the circumstances of the case required.
Trustee to protect title to trust-property.—A trustee is bound to maintain and defend all such suits, and subject to the provisions of the instrument of trust to take such other steps, as regards being had to the nature and amount or value to the trust property, may be reasonably requisite for the preservation of the trust-property and the assertion or protection of the title thereto. Illustrations.—The trust-property is immovable property, which has been given to the author of the trust by an unregistered instrument. Subject to the provisions of the law for the registration of the documents, the trustee‘s duty is to cause the instrument to be registered.
Trustee not to set up title adverse to beneficiary.—The trustee must not for himself set up or aid any title to the trust-property adverse to the interest of the beneficiary.
Care required from trustee.—A trustee is bound to deal with the trust-property as carefully as a man of ordinary prudence would deal with such property if it were his own; and, in the absence of a contract to the contrary, a trustee so dealing is not responsible for the loss, destruction or deterioration of the trust-property.
Conversion of perishable property.—Where the trust is created for the benefit of several persons in succession, and the trust-property is of a perishable nature or a future or reversionary interest, the trustee is bound unless an intention to the contrary may be inferred from the instrument of trust, to convert the property into property of a permanent and immediate profitable character. 521(12) THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 [PART I
Trustee to be impartial.—(1) Where there are more beneficiaries than one, the trustee is bound to be impartial, and must not execute the trust for the advantage of one at the expense of another. (2) Where the trustee has a discretionary power, nothing in this section shall be deemed to authorize the court to control the exercise of same reasonably and in good faith.
Trustee to prevent waste.—Where the trust is created for the benefit of several persons in succession and one of them is in possession of the trust-property, if he commits, or threatens to commit any act, which is destructive, or permanently injurious thereto, the trustee is bound to take measures to prevent such act.
Accounts and information.—A trustee or each of the trustee, as the case may be, is bound to— (a) keep clear and accurate accounts of the trust-property and income; (b) at all reasonable times, at the request of the beneficiary, to furnish him with full and accurate information as to the amount and state of the trust-property; (c) update the information in a timely manner about the author of the trust, beneficiaries, trustees, any other natural person exercising ultimate control over the trust, trust assets and incomes; Explanation.—The details of the information shall be as may be prescribed this Act; (d) get accounts audited by a third party at least once in a year; (e) submit financial reports to the director in every financial year; and (f) shall maintain the information collected under this section, and, section 23 for a period not less than the five years after their involvement with the trust ceases, or, the trust is extinguished.
Investment of trust-money.—(1) 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 other, namely:— PART I] THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 521(13) (a) in promissory notes, debentures, stock or other securities of a Provincial or Federal Government: Provided that securities, both the principal whereof and the interest whereon shall have been fully and unconditionally guaranteed by any government, shall be deemed, for the purposes of this clause, to be securities of such Government; and (b) on any other security expressly authorized by the instrument of trust, or by any rule which the High Court may prescribe in this behalf.
Power to purchase redeemable stock at a premium.—A trustee may invest in any of the securities mentioned or referred to in section 32, notwithstanding that the same may be redeemable and that the price exceeds the redemption value, and a trustee may retain until redemption any redeemable stock, fund or security which may have been purchased in accordance with this section.
Sale by trustee directed to sell within specified time.—Where a trustee, directed to sell within a specified time extends such time, the burden of proving, as between himself and the beneficiary, that the latter is not prejudiced by the extension lies upon the trustee, unless the extension has been authorized by a principal civil court of original jurisdiction.
Liability for breach of trust.—(1) Where the trustee commits a breach of trust, he is liable to make good the loss which the trust-property or the beneficiary has thereby sustained, unless the beneficiary, has by fraud induced the trustee to commit the breach, or the beneficiary, being competent to contract, has himself, without coercion or undue influence having been brought to bear on him, concurred in the breach, or subsequently acquiesced therein, with full knowledge of facts of the case and of his rights as against the trustee. (2) A trustee committing a breach of trust is not liable to pay interest except in the following cases, namely:— (a) where he has actually received interest; (b) where the breach consists in unreasonable delay in paying trustmoney to the beneficiary; (c) where the trustee ought to have received interest, but has not done so; 521(14) THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 [PART I (d) where he may be fairly presumed to have received interest. He is liable, in case (a), to account for the interest actually received, and, in cases (b), (c) and (d), to account for simple interest at the rate of six per cent per annum, unless the court otherwise directs; (e) where the breach consists in failure to invest trust-money and to accumulate the interest or dividends thereon, he is liable to account for compound interest with half-yearly rests at the same rate; and (f) where the breach consists in the employment of trust-property or the proceeds thereof in trade or business, he is liable to account, at the option of the beneficiary, either for compound interest (with half-yearly rests) at the same rate, or for the net profits made by such employment.
No set-off allowed to trustee.—A trustee who is liable for a loss occasioned by a breach of trust in respect of one portion of the trust property cannot set-off against his liability again which has accrued to another portion of the trust-property through another and distinct breach of trust.
Non-liability for predecessor’s default.—Where a trustee succeeds another, he is not, as such, liable for the acts or defaults of his predecessor.
Non-liability for co-trustee’s default.—(1) Subject to the provisions of sections 25 and 27, one trustee is not, as such, liable for a breach of trust committed by his co-trustee: Provided that, in the absence of an express declaration to the contrary in the instrument of trust, a trustee is so liable – (a) Where he has delivered trust-property to his co-trustee without seeing to its proper application; (b) where he allows his co-trustee to receive trust-property and fails to make due inquiry as to the co-trustee‘s dealings therewith, or allows him to retain it longer than the circumstances of the case reasonably require; (c) where he becomes aware of a breach of trust committed or intended by his co-trustee, and either actively conceals it or does not within a reasonable time take proper steps to protect the beneficiary‘s interest. PART I] THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 521(15) (2) A co-trustee who joins in signing a receipt for trust-property and proves that he has not received the same is not answerable, by reason of such signature only, for loss or misapplication of the property by his co-trustee.
Several liabilities of co-trustee.—(1) Where co-trustees jointly commit a breach of trust, or where one of them by his neglect enables the other to commit a breach of trust, each is liable to the beneficiary for the whole of the loss occasioned by such breach. (2) As between the trustees themselves, if one be less guilty than another and has had to refund the loss, the former may compel the latter, or his legal representative to the extent of the assets he has received, to made good such loss; and, if all be equally guilty, any one or more of the trustees who has had to refund the loss may compel the others to contribute. (3) Nothing in this section shall be deemed to authorize a trustee who has been guilty of fraud to institute a suit to compel contribution.
Non-liability of trustee paying without notice of transfer by beneficiary.—When any beneficiary‘s interest becomes vested in another person, and the trustee, not having notice of the vesting, pays or delivers trustproperty to the person who would have been entitled thereto in the absence of such vesting, the trustee is not liable for the property so paid or delivered.
Liability of trustees where beneficiary’s interest is forfeited to the Government.—When the beneficiary‘s interest is forfeited or awarded by legal adjudication to the government or federal government, the trustee is bound to hold the trust-property to the extent of such interest for the benefit of such person in such manner as the government may direct in this behalf.
Indemnity of trustees.—Subject to the provisions of the instrument of trust and of sections 35 and 38, trustees shall be respectively chargeable only for such moneys, stocks, funds and securities as they respectively actually receive, and shall not be answerable the one for the other of them, nor for any banker, broker or other person in whose hands any trustproperty may be placed, nor for the insufficiency or deficiency of any stocks, funds or securities, nor otherwise for involuntary losses. CHAPTER V OF RIGHTS AND POWERS OF TRUSTEE
Right to title-deed.—A trustee is entitled to have in his possession the instrument of trust and all the documents of title if any relating solely to the trust-property. 521(16) THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 [PART I
Right to reimbursement of expenses.—(1) Every trustee may reimburse himself, or pay or discharge out of the trust-property, all expenses property incurred in or about the execution of the trust, or the realization, preservation or benefit of the trust-property, or the protection or support of the beneficiary. (2) If the trust-property fails, the trustee is entitled to recover from the beneficiary personally on whose behalf he acted, and at whose request, expressed or implied, he made the payment, the amount of such expenses. (3) Where a trustee has by mistake made an over-payment to the beneficiary, he may reimburse the trust-property out of the beneficiary‘s interest. If such interest fails, the trustee is entitled to recover from the beneficiary personally the amount of such over-payment.
Right to indemnity from gainer by breach of trust.—(1) A person other than trustee who has gained an advantage from a breach of trust must indemnify the trustee to the extent of the amount actually received by such person under the breach; and where he is beneficiary the trustee has a charge on his interest for such amount. (2) Nothing in this section shall be deemed to entitle a trustee to be indemnified who has, in committing the breach of trust, been guilty of fraud.
Right to apply to Court for opinion in management of trustproperty.—(1) Any trustee may, without instituting a suit, apply by petition to a principal civil court of original jurisdiction for its opinion, advice or direction on any present questions respecting the management or administration of the trustproperty other than questions of detail, difficulty or importance, not proper in the opinion of the court for summary disposal. (2) A copy of such petition shall be served upon, and the hearing thereof may be attended by, such of the persons interested in the application as the court thinks fit. (3) The costs of every application under this section shall be in the discretion of the court to which it is made.
Right to settlement of accounts.—When the duties of a trustee, as such, are completed, he is entitled to have the accounts of his administration of the trust-property examined and settled and, where nothing is due to the beneficiary under the trust, to an acknowledgement in writing to that effect.
General authority of trustee.—(1) In addition to the powers expressly conferred by this Act and by the instrument of trust, and subject to the PART I] THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 521(17) restrictions, if any, contained in such instrument, and to the provisions of section 29, a trustee may do all acts which are reasonable and proper for the realization, protection or benefit of the trust-property, and for the protection or support of a beneficiary who is not competent to contract. (2) Except with the permission of a principal civil court of original jurisdiction, no trustee shall lease trust-property for a term exceeding twenty-one years from the date of execution of the lease, nor without reserving the best yearly rent that can be reasonably obtained.
Power to sell in lots, an either by public auction or private contract.—Where the trustee is empowered to sell any trust-property, he may sell the same subject to prior charges or not, and either together or in lots, by public auction or private contract, and either at one time or at several times, unless the instrument of trust otherwise directs.
Power to sell under special conditions Power to buy-in-and resell.—(1) The trustee making any such sale may insert such reasonable stipulations either as to title or evidence of title, or otherwise, in any conditions of sale or contract for sale, as he thinks fit; and may also buy in the property or any part thereof at any sale by auction, and rescind or vary any contract for sale, and resell the property so bought in, or as to which the contract is so rescinded, without being responsible to the beneficiary for any loss occasioned thereby. (2) Where a trustee is directed to sell trust-property or to invest trustmoney in the purchase of property, he may exercise a reasonable discretion as to the time of effecting the sale or purchase.
Power to convey.—For the purpose of completing any such sale, the trustee shall have power to convey or otherwise dispose of the property sold in such manner as may be necessary.
Power to vary investments.—A trustee may, at his discretion, call in any trust-property invested in any security and invest the same on any of the securities mentioned or referred to in section 32, and from time to time vary any such investments for others of the same nature.
Power to apply property of minors, etc., for their maintenance etc.—(1) Where any property is held by a trustee in trust for a minor, such trustee may, at his discretion, pay to the guardians if any of such minor, or otherwise apply for or towards his maintenance or education or advancement in life, or the reasonable expenses of his religious worship, marriage or funeral, the whole or any part of the income to which he may be entitled in respect of such property; and such trustee shall accumulate all the residue of such income by way of compound interest by investing the same and the resulting income thereof from 521(18) THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 [PART I time to time in any of the securities mentioned or referred to in section 32, for the benefit of the person who shall ultimately become entitled to the property from which such accumulations have arisen: Provided that such trustee may, at any time, if he thinks fit, apply the whole or any part of such accumulations as if the same were part of the income arising in the then current year. (2) Where the income of the trust-property is insufficient for the minor‘s maintenance or education or advancement of life, or the reasonable expenses of his religious worship, marriage or funeral, the trustee may, with the permission of a principal civil court of original jurisdiction, but not otherwise, apply the whole or any part of such property for or towards such maintenance, education, advancement or expenses. (3) Nothing in this section shall be deemed to affect the provisions of any local law for the time being in force relating to the persons and property of minors.
Power to give receipts.—Any trustees or trustee may give a receipt in writing for any money, securities or other moveable property payable, transferable or deliverable to them or him by reason, or in the exercise, of any trust of power; and, in the absence of fraud, such receipt shall discharge the person paying, transferring or delivering, the same there from, and from seeing to the application thereof, or being accountable for any loss or misapplication thereof.
Power to compound, etc.—(1) Two or more trustees acting together may, if they think appropriate,- (a) accept any composition or any security for any debt or for any property; (b) allow any time for payment of any debt; (c) compromise, compound, abandon, submit to arbitration or otherwise settle and debt, account, claim or thing whatever relating to the trust; and (d) for any of those purposes, enter into, give, execute and do such agreements, instruments of composition or arrangement, releases and other things as to them seem expedient, without being responsible for any loss occasioned by any act or thing so done by them in good faith. PART I] THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 521(19) (2) The powers conferred by this section on two or more trustees acting together may be exercised by a sole acting trustee when by the instrument of trust, if any, a sole trustee is authorized to execute the trusts and powers thereof. (3) This section applies only if and as far as a contrary intention is not expressed in the instrument of trust, if any, and shall have effect subject to the terms of that instrument and to the provisions therein contained.
Power to several trustees of whom one disclaims or dies.—When an authority to deal with the trust-property is given to several trustees and one of them disclaims or dies, the authority may be exercised by the continuing trustees, unless from the terms of the instrument of trust it is apparent that the authority is to be exercised by a number in excess of the number of the remaining trustees.
Suspension of trustee’s powers by decree.—Where a decree has been made in a suit for the execution of a trust, the trustee must not exercise any of his powers except in conformity with such decree, or with the sanction of the court by which the decree has been made, or, where an appeal against the decree is pending, of the Appellate Court. CHAPTER VI OF THE DISABILITIES OF TRUSTEES
Trustees cannot renounce after acceptance.—A trustee who has accepted the Trust cannot afterwards renounce it except.— (a) with the permission of a principal civil court of original jurisdiction, or (b) if the beneficiary is competent to contract, with his consent, or (c) by virtue of a special power in the instrument of trust.
Trustee cannot delegate.—A trustee cannot delegate his office or any of his duties either to a co-trustee or to a stranger, unless— (a) the instrument of trust so provides, or (b) the delegation is in the regular course of business, or (c) the delegation is necessary, or (d) the beneficiary, being competent to contract, consents to the delegation. 521(20) THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 [PART I Explanation.—The appointment of an attorney or proxy to do an act merely ministerial and involving no independent discretion is not a delegation within the meaning of this section.
Co-trustees cannot act singly.—When there are more trustees than one, all must join in the execution of the trust, except where the instrument of trust otherwise provides.
Control of discretionary power.—Where a discretionary power conferred on a trustee is not exercised reasonably and in good faith, such power may be controlled by a principal civil court of original jurisdiction.
Trustee may not charge for services.—In the absence of express directions to the contrary contained in the instrument of trust or of a contract to the contrary entered into with the beneficiary or the court at the time of accepting the trust, a trustee has no right to remuneration for his trouble, skill and loss of time in executing the trust. Nothing in this section applies to any official trustee, administrator general, public curator, or person holding a certificate of administration.
Trustee may not use trust-property for his own profit.—A trustee shall not use or deal with the trust property for his own profit or for any other purpose unconnected with the trust.
Trustee for sale or his agent may not buy.—No trustee whose duty it is to sell trust property and no agent employed by such trustee for the purpose of the sale, may, directly or indirectly, buy the same or any interest therein, on his own account or as agent for a third person.
Trustee may not buy beneficiary’s interest without permission.—(1) No trustee and no person who has recently ceased to be a trustee, may, without the permission of a principal civil court of original jurisdiction, buy or become mortgagee or lessee of the trust property or any party thereof and such permission shall not be given unless the proposed purchase, mortgage or lease is manifestly for the advantage of the beneficiary. (2) No trustee whose duty it is to buy or to obtain a mortgage of lease of particular property for the beneficiary may buy it or any part thereof or obtain a mortgage or lease of it or any part thereof, for himself.
Cotrustee may not lend to one of themselves.—A trustee or cotrustee whose duty, it is to invest trust-money on mortgage or personal security must not invest it on a mortgage by or on the personal security of himself, or one of his co-trustees. PART I] THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 521(21) CHAPTER VII OF RIGHTS AND LIABILITIES OF BENEFICIARY
Rights to rents and profits.—The beneficiary has subject to the provisions of the instrument of trust, a right to the rents and profits of the trustproperty.
Right to specific execution.—The beneficiary is entitled to have the intention of the author of the trust specifically executed to the extent of the beneficiary‘s interest. (2) Right to transfer of possession.—Where is only one beneficiary and he is competent to contract or where there are several beneficiaries and they are competent to contract and all are of one mind, he or they may require the trustee to transfer the trust property to him or them, or to such person as he or they may direct. (3) When property has been transferred or bequeathed for the benefit of a married woman, so that she shall not have power to deprive herself of her beneficial interest nothing in sub-section (2) applies to such property during her marriage.
Right to inspect and take copies of instrument of trust accounts, etc.—The beneficiary has a right, as against the trustee and all persons claiming under him with notice of the trust to inspect and take copies of the instrument of trust, the documents of title relating solely to the trust property, the accounts of the trust property and the vouchers if any by which they are supported and the cases submitted and opinions taken by the trustee for his guidance in the discharge of his duty.
Right to transfer beneficial interest.—The beneficiary, if competent to contract, may transfer his interest but subject to the law for the time being in force as to the circumstances and extent in and to which he may dispose of such interest: Provided that when property is transferred or bequeathed for the benefit of a married woman, so that she shall not have power to deprive herself of her beneficial interest, nothing in this section shall authorize her to transfer such interest during her marriage.
Right to sue for execution of trust.—Where no trustees are appointed or all the trustees die, disclaim, or discharged or where for any other reason the execution of a trust by the trustee is or becomes impracticable, the beneficiary may institute a suit for the execution of the trust and the trust shall, so 521(22) THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 [PART I far as may be possible, be executed by the Court until the appointment of a trustee or new trustee.
Right to proper trustees.—(1) The beneficiary has a right subject to the provisions of the instrument of trust, that the trust property shall be properly protected and held and administered by proper persons and by a proper number of such persons. (2) A person domiciled abroad, alien enemy, a person having an interest inconsistent with that of the beneficiary, a person in insolvent circumstances; and unless the personal law of the beneficiary allows otherwise and a minor are not proper persons under this section.
Right to compel to any act of duty.—The beneficiary has a right that his trustee shall be compelled to perform any particular act of his duty as such and restrain from committing any contemplated or probable breach of trust.
Wrongful purchase by trustee.—(1) Where a trustee has wrongfully bought trust property, the beneficiary has a right to have the property declared subject to the trust or retransferred by the trustee, if it remains in his hands unsold, or, if it has been bought from him by any person with notice of the trust, by such person. But in such case the beneficiary must repay the purchase money paid by the trustee, with interest, and such other expenses, if any as he has properly incurred in the preservation of the property and the trustee or purchaser must,— (a) account for the net profits of the property; (b) be charged with an occupation-rent, if he has been in actual possession of the property; and (c) allow the beneficiary to deduct a proportionate part of the purchasemoney if the property has been deteriorated by the acts or omissions of the trustee or purchaser. (2) Nothing in this section — (a) impairs the rights of lessees and others who, before the institution of a suit to have the property declared subject to the trust or retransferred, have contracted in good faith with the trustee or purchaser; or (b) entitles the beneficiary to have the property declared subject to the trust or retransferred where he being competent to contract has himself, without coercion or undue influence having been brought PART I] THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 521(23) to bear on him, ratified the sale to the trustee with full knowledge of the facts of the case and of his rights as against the trustee.
Trust property into the hands of third person.—(1) Where trust property comes into the hands of a third person inconsistently with the trust, the beneficiary may require him to admit formally, or may institute a suit or a declaration, that the property is comprised in the trust. (2) Where the trustee has disposed of trust property and the money or other property which he has received therefore can be traced in his hands or the hands of his legal representative or legatee, the beneficiary has in respect thereof, rights as merely as may be the same as his rights in respect of the original trust property.
Saving of rights of certain transferees.—Nothing in section 75 entitles the beneficiary to any right in respect of property in the hands of — (a) a transferee in good faith for consideration without having notice of the trust, either when the purchase-money was paid, or when the conveyance was executed, or (b) a transferee for consideration from such a transferee. (2) A judgment creditor of the trustee attaching and purchasing trust property is not a transferee for consideration within the meaning of this section. (3) Nothing is section 75 applies to money currency notes, negotiable instruments in the hands of a bona fide holder to whom they have passed in circulation, or shall be deemed to affect the Contract Act, 1872 (IX of 1872), section 108, or the liability of a person to whom a debt or charge is transferred.
Acquisition by trustee of trust-property wrongfully converted.—Where a trustee wrongfully sells or transfers trust property and afterwards himself becomes the owner of the property, the property again becomes subject to the trust, notwithstanding any want of notice on the part of intervening transferees in good faith for consideration.
Right in case of blended property.—Where the trustee wrongfully mingles the trust property with his own, the beneficiary is entitled to a change on the whole fund for the amount due to him.
Wrongful employment by partner-trustee.—(1) If a partner, being a trustee, wrongfully employs trust property in the business or on the account of the partnership, on other partner is liable therefore in his personal capacity to the beneficiaries, unless he had notice of the breach of trust. 521(24) THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 [PART I (2) The partners having such notice are jointly and severally liable for the breach of trust.
Liability of beneficiary joining in breach of trust.—(1) Liability of beneficiary in committing breach of trust arises where one of several beneficiaries— (a) joins in committing breach of trust, or (b) knowingly obtains any advantage there from, without the consent of the other beneficiaries, or (c) becomes aware of a breach of trust committed or intended to be committed, and either actually conceals it, or does not within a reasonable time take proper steps to protect the interests of the other beneficiaries, or (d) has deceived the trustee and thereby induced him to commit a breach of trust, the other beneficiaries are entitled to have all his beneficial interest impounded as against him and all who claim under him, otherwise than as transferees for consideration without notice of the breach, until the loss caused by the breach has been compensated. (2) When property has been transferred or bequeathed for the benefit of a married woman, so that she shall not have power to deprive herself of her beneficial interest, nothing in this section applies to such property during her marriage.
Rights and liabilities of beneficiary’s transferee.—Every person to whom a beneficiary transfers his interest has the rights and is subject to the liabilities of the beneficiary in respect of such interest at the date of the transfer. CHAPTER VIII OF VACATING THE OFFICE OF TRUSTEE
Office how vacated.—The office of a trustee is vacated by his death or by his discharge from his office.
Discharge of trustee.—the trustee may be discharged from his office only as follows— (a) by the extinction of the trust; PART I] THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 521(25) (b) by the completion of his duties under the trust; (c) by such means as may be prescribed by the instrument of trust; (d) by appointment under this Act of a new trustee in his place; (e) by consent of himself and the beneficiary, or, where there are more beneficiaries than one, all the beneficiaries being competent to contract; (f) by the executive order of the Director if any of the trustee: (i) is convicted by a court in criminal case; (ii) fails to fulfill any of the duty or obligation required under this Act; or (iii) has been penalized under sections 17 (c) and (e) above; and (g) by the court to which a petition for his discharge is presented under this Act.
Petition to be discharged from trust.—Notwithstanding the provisions of section 22, every trustee may apply by petition to a principal civil court of original jurisdiction to be discharged from his office and if the court finds that there is sufficient reason for such discharge, it may discharge him accordingly and direct his costs to be paid out of the trust property. But where there is no such reason, the court shall not discharge him, unless a proper person can be found to take his place.
Appointment of new trustees on death, etc.—(1) Whenever any person appointed a trustee disclaims of any trustee, either original or substituted, dies or is for a continuous period of six months absent from Pakistan, or leaves Pakistan for the purpose of residing abroad or is declared an insolvent or desires to be discharged from the trust or refuses or becomes in the opinion of a principal civil court of original jurisdiction unfit or personally incapable to act in the trust or accepts an inconsistent trust, a new trustee may be appointed in his place by – (a) the person nominated for that purpose by the instrument or trust (if any), or (b) if there be no such person or no such person able and willing to act, the author of the trust if he be alive and competent to contract or the surviving or continuing trustee or trustee for the time being, or legal representative of the last surviving and continuing trustee, or with the consent of the court, the retiring trustee, if they all retire simultaneously, or with the like consent, the last retiring trustee. 521(26) THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 [PART I (2) Every such appointment shall be in writing under the hand of the person making it. (3) On an appointment of new trustee the number of trustees may be increased. (4) The official trustee may, with his consent and by the order of the court, be appointed under this section, in any case in which only one trustee is to be appointed and such trustee is to be sole trustee. (5) The provisions of this section relative to a trustee who is a dead include the case of a person nominated trustee in a will but dying before the testator and those relative to a continuing trustee included refusing or retiring trustee if willing to act in the execution of the power.
Appointment by Court.—(1) Whenever any such vacancy or disqualification occurs and it is found impracticable to appoint a new trustee under section 85, the beneficiary may, without instituting a suit, apply by petition to a principal civil court of original jurisdiction for the appointment of a trustee or a new trustee, and the Court may appoint a trustee or a new trustee accordingly. (2) Rule for selecting new trustees.—In appointing new trustees, the court shall have regard: (a) to the wishes of the author of the trust as expressed in or to be inferred from the instrument of trust; (b) to the wishes of the person, if any, empowered to appoint new trustees; (c) to the question whether the appointment shall promote or impede the execution of the trust; and (d) where there are more beneficiaries than one to the interests of all such beneficiaries.
Vesting of trust property in new trustees.—(1) Whenever any new trustee is appointed under sections 85 or 86, all the trust property for the time being vested in the surviving or continuing trustees or trustee or in the legal representative of any trustee shall become vested in such new trustee, either solely or jointly with the surviving or continuing trustees or trustee as the case may require. PART I] THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 521(27) (2) Power of new trustees.—Every new trustee so appointed and every trustee appointed by a court, either before or after the passing of this Act, shall have the same powers, authorities and discretions and shall in all respects act, as if he had been originally nominated a trustee by the author of the trust.
Survival of trust.—On the death or discharge of one of several cotrustees, the trust survives and the trust property passes to the others, unless the instrument of trust expressly declares, otherwise. CHAPTER IX OF THE EXTINCTION OF TRUSTS
Trust how extinguished.—A trust is extinguished— (a) when its purpose is completely fulfilled; or (b) when the director considers and has sufficient reasons to believe that the activities of the trust are included in section 16 (b) of this Act and records reasons in the order to extinct the trust; or (c) when the fulfillment of its purpose becomes impossible by destruction of the trust property or otherwise; or (d) when the trust being revocable is expressly revoked: Provided that reasonable defense opportunity has been given to the trust in case of sub-section (c), above and the trust has the right of appeal to the department.
Revocation of trust.—(1) A trust created under this Act shall be revoked at the pleasure of the testator. (2) A trust otherwise created can be revoked only – (a) where all the beneficiaries are competent to contract by their consents; (b) where the trust has been declared by non testamentary instrument or by word of mouth, in exercise of a power of revocation expressly reserved to the author of the trust; or (c) where the trust is for the payment of the debts of the author of the trust and has not been communicated to the creditors at the pleasure of the author of the trust. 521(28) THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 [PART I Illustration:—A conveys property to B in trust to sell the same and pay out of the proceeds the claims of A‘s creditors. A reserves no power of revocation. If no communication has been made to the creditors, A may revoke the trust. But if the creditors are parties to the arrangement, the trust cannot be revoked without their consent.
Revocation not to defeat what trustees have duly done.—No trust can be revoked by the author of the trust so as to defeat or prejudice, what the trustees may have duly done in execution of the trust. CHAPTER X OF CERTAIN OBLIGATIONS IN THE NATURE OF TRUSTS
Obligation in nature of trust is created.—An obligation in the nature of a trust is created in the cases mentioned in section 93.
Transferor intended to dispose of beneficial interest.—Where the owner of property transfers or bequeaths and it cannot be inferred consistently with the attendant circumstances that he intended to dispose of the beneficial interest therein, the transferee or legatee must hold such property for the benefit of the owner or his legal representative.
Transfer to one for consideration paid by another.—Where property is transferred to one person for a consideration paid by another person and it appears that such other person did not intend to pay or provide such consideration for the benefit of the transferee, the transferee must hold the property for the benefit of the person paying or providing the consideration. This section shall not affect, the provisions of the Code of Civil Procedure, 1908.
Trust incapable of execution without exhausting trustproperty.—Where a trust is incapable of being executed or where the trust is completely executed without exhausting the trust property, the trustee, in the absence of a direction to the contrary, must hold the trust property, or so much thereof as is unexhausted, for the benefit of the author of the trust or his legal representative.
Transfer for illegal purpose.—Where the owner of property transfers it to another for an illegal purpose and such purpose is not carried into execution or the transferor is not as guilty as the transferee or the effect of permitting the transferee to retain the property might be to defeat the provisions of any law, the transferee must hold the property for the benefit of the transferor.
Bequest for illegal purpose.—(1) Where a testator bequeaths certain property upon trust and the purpose of the trust appears on the face of the PART I] THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 521(29) will to be unlawful, or during the testator‘s life time the legatee agrees with him to apply the property for an unlawful purpose, the legatee must hold the property for the benefit of the testator‘s legal representative. (2) Where property is bequeathed and the revocation of the bequest is prevented by coercion, the legatee must hold the property for the benefit of the testator‘s legal representative.
Transfer pursuant to rescindable contract.—Where property is transferred in pursuance of a contract which is liable to rescission or induced by fraud or mistake, the transferee must, on receiving notice to that effect, hold the property for the benefit of the transferor, subject to repayment by the latter of the consideration actually paid.
Debtor becoming creditor’s representative.—Where a debtor becomes the executor or other legal representative of his creditor, he must hold the debt for the benefit of the persons interested therein.
Advantage gained by fiduciary.—Where a trustee, executor, partner, agent, director of a company, legal advisor, or other person bound in a fiduciary character to protect the interests of another person, by availing himself of his character, gains for himself any pecuniary advantage or where any person so bound enters into any dealings under circumstances in which his own interests are or may be, adverse to those of such other person and thereby gains for himself a pecuniary advantage, he must hold for the benefit of such other person the advantage so gained.
Advantage gained by exercise of undue influence.—Where, by the exercise of undue influence, any advantage is gained in derogation of the interests of another, the person gaining such advantage without consideration, or with notice that such influence has been exercised, must hold the advantage for the benefit of the person whose interests have been so prejudiced.
Advantage gained by qualified owner.—Where a tenant for life, co-owner, mortgagee or other qualified owner of any property by availing himself of his position as such gains an advantage in derogation of the rights of the other persons interested in the property or where any such owner, as representing all persons interested in such property, gains any advantage, he must hold for the benefit of all persons so interested, the advantage so gained, but subject to repayment by such persons of their due share of the expenses properly incurred and to an indemnity by the same persons against liabilities properly contracted in gaining such advantage.
Property acquired with notice of existing contract.—Where a person acquires property with notice that another person has entered into an 521(30) THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 [PART I existing contract affecting that property of which specific performance could be enforced, the former must hold the property for the benefit of the latter to the extent necessary to give effect to the contract.
Property to be held on trust.—Where a person contracts to buy property to be held on trust for certain beneficiaries and buys the property accordingly, he must hold the property for their benefit to the extent necessary to give effect to the contract.
Advantage secretly gained by one of several compounding creditors.—Where creditors compound the debts due to them and one of such creditors, by a secret arrangement with the debtor, gains an undue advantage over his co-creditors, he must hold for the benefit of such creditors the advantage so gained.
Constructive trusts in cases not expressly provided for.—In any case not coming within the scope of any of the preceding sections, where there is no trust, but the person having possession of property has not the whole beneficial interest therein, he must hold the property for the benefit of the persons having such interest, or the residue thereof, as the case may be to the extent necessary to satisfy their just demands.
Obligator’s duties, liabilities and disabilities.—The person holding property in accordance with any of the preceding sections of this Chapter must, so far as may be, perform the same duties, and is subject so far as may be to the same liabilities and disabilities, as if he were a trustee of the property for the person for whose benefit he holds it: Provided that where he rightfully cultivates the property or employs it in trade or business, he is entitled to reasonable remuneration for his trouble, skill and loss of time in such cultivation or employment: Provided further that where he holds the property by virtue of a contract with a person for whose benefit he holds it or with any one through whom such person claims, he may, without the permission of the court, buy or become lessee or mortgagee of the property or any part thereof.
Saving of rights of bona fide purchasers.—Nothing contained in this Chapter shall impair the rights of transferees in good faith for consideration or create an obligation in evasion of any law for the time being in force. PART I] THE GAZETTE OF PAKISTAN, EXTRA., AUGUST 27, 2020 521(31) CHAPTER XI Miscellaneous
Power to make rules.—Subject to the approval of the Federal Government, the Chief Commissioner of Islamabad Capital Territory shall make rules to carry out the purposes of this Act within a period not later than the sixty days from the date of enactment of this Act.
Power to interpret.—(1) The Chief Commissioner, Islamabad Capital Territory, Islamabad can exercise arbitrary powers to clarify any confusion arising out of the interpretation of the sections of this Act: Provided that the secretary must— (a) refer to the illustrations or explanations mentioned in the Trust Act 1882; and (b) consult the Law, Parliamentary Affairs and Human Rights department. (2) Nothing contained in this section may be interpreted contrary to the judgments of High Courts or Supreme Court of Pakistan, as the case may be.
Repeal.—The Trust Act, 1882 (II of 1882) is hereby repealed to the extent of Islamabad Capital Territory, Islamabad.
Saving.—(1) Notwithstanding the aforesaid repeal in section 111 above, anything done, action taken, rules made or notifications issued under the aforesaid Act, so far as it is not inconsistent with the provisions of this Act, shall be deemed to have been made, done or taken under this Act and shall have effect accordingly. (2) Any document referring to the repealed Act shall be construed as referring to corresponding provisions of this Act: Provided that all the Trusts registered in Islamabad Capital Territory under the repealed Act shall be freshly registered under this Act within a period of six months. DR. SYED PERVAIZ ABBASS, Secretary. PRINTED BY THE MANAGER, PRINTING CORPORATION OF PAKISTAN PRESS, ISLAMABAD. PUBLISHED BY THE DEPUTY CONTROLLER, STATIONERY AND FORMS, UNIVERSITY ROAD, KARACHI.
