PART I] 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 is
hereby published for general information:—
ACT NO. XXV OF 2020
An Act to define and amend the law relating to trusts
WHEREAS 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 I
PRELIMINARY
- 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;
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(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.
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