L 2
L 2
Introduction
Equity is that body of law administered by the common law, which was earlier developed and
nourished in the Court of Chancery. It is governed by different principles, rules, and remedies.
Equity means fairness, power, justice. There was a large body of principles that became the
law of equity. According to the meaning of equity, 'the rules developed to mitigate the severity
of common law.' It is the rule of conduct that ought to be followed by the people. In its
broader sense, the word "equity" means fair or just, but according to its legal meaning, it is the
rules formed to fulfill the common law's gravity.
Definition
Sir Henry Maine, 'equity is a fresh body of law by the side of the original law founded on
distinct principles, also supersede the civil law by virtue of its superiority in principles.'
According to Osborne, equity is primarily fairness or Natural Justice.
Earlier, the customary law originated in Curia Regis, a king's Court in London known as
Common Law. It was based on judicial decisions and precedents. In Common Law, there was
just one remedy available: damages, and for that, the civil action had to be filed, which had a
very rigid system of 'No writ, no remedy.' The civil action starts with a legal written document
writ, where the reason and basis a person sued was mentioned and was issued by clerks of a
Chancellor's office.
This law was very narrow and rigid. Common law has three types of courts: the office of the
exchequer, the Court of Common Pleas, and the King's Bench. The Court of exchequer was
for the collection of revenues. The Court of common pleas resolved disputes between one
and another individual. The King's bench was responsible for enforcing common laws, the
judicial function, and other minor crimes. Thus, this led to dissatisfaction among the people
as for the maximum time they need to settle their disputes through inappropriate and unjust
remedies.
The juries in the law courts could be corrupted and intimated. There was just one remedy
which was damages. More attention was paid to the formalities of writs rather than the
merits of the case. The common law does not recognize the trust and has a rigid structure.
No oral pieces of evidence were allowed in the courtroom.
The defects and rigidity gave rise to Chancellery, which was the law of equity. Equity follows
the law as a fundamental principle. The rules prescribed by old courts, which means common
law courts, were adopted by the Chancery court unless the Court finds any reason for their
rejection.
The Law of Equity provided petitioning to the King. The King was considered as the origin or
foundation of justice. When workload over the King was increased, the King passed his work
to the Chancellery who learned in the civil and common law. The clergyman worked behind
the wooden screens, which were known to be Cancelleria from where the word Chancery
came.
Equity issued new rights such as trusts. The benefit was provided to trustees. Here one party
gives property to trustees to hold for the beneficiary's use. In common law, the trustees were
regarded as the owners. Equity also provided the right of redemption, allowing the mortgagor
to keep the property if the debtor does not pay with interest. Court of Equity popularly was a
flexible, superior procedure and also provided a more appropriate remedy.
Specific Performance- is an order telling the party to perform part of the contract where
damages are inadequate. E.g., the Sale of the house refused to convey it.
Rectification- It was made allowed to make changes in a written document if they did not
represent the actual agreement.
Rescission allowed parties to revert to their original position (as there was no contract) if the
contract was misrepresented.
Injunction- It is an order to stop a person from doing a particular act. E.g., Breach of contract.
Estoppels, Account of profit, Subrogation, Declaratory Relief, proprietary Remedies are also
few remedies available in the Law of Equity.
Principles of Equity:
Ubi jus ibi remedium: It means where there is a right, there is a remedy. Rights and remedies
are to be treated within a single jurisdiction. General remedies available are specific
Performance of contract or injunction.
In Ashby vs. White (1703) 92 ER 126, the voter was not allowed to vote in elections, and he
filed a suit against the officer restraining him from voting. This case shows that if any person
has been granted a right, then that person also remedies its infringement.
Aequitas Sequitur Legem: According to this principle, equity will not allow the remedy that is
not specified or different from the specific law. The equity does not supersede the law; it has
to be part of the law. In the case where the law does not apply, this legal maxim suffers a
limitation as it is applying to the existing laws. In the case of Earls of Oxford (1615) 21 ER 485,
the Hon'ble Court was of the contention that, when there will be confusion between the rule of
law and equity, the law of equity will prevail.
He who seeks equity must do equity: According to this principle, the plaintiff is a follower and
worker to justice, and court power is to apply it. Thus, making them obliged to perform duties.
Parties who seek equitable relief. In the lodge vs. National union investment corporation
limited case, the plaintiff borrowed money from a money lender and took action to recover
the money as security. The Hon'ble Court refuses the plea filed by the lodge.
Whoever comes to equity must come with clean hands: This principle is related to past
conduct, past behavior of the person. It states that the person who asks for a remedy must
not be involved in the inequitable act on his own past. The defense is only applicable when
there is any bridge between the party's conduct in the past and the remedy he wishes to fulfill.
D and C Builder limited vs. Rees [1965] EWCA Civ 3 in this case, the Hon'ble Court rejected the
plaintiff's claim for promissory estoppel as he wanted to take unfair advantage of the pure
position defended. This specific principle was adopted in section 17,18,20 of the specific
relief act.
Vigilantilus non dormient bus aequitas subvenit: This maxim states that a person with
excessive delay is not entitled to get equity. According to this principle, equity generally helps
the active people. Laches stands for unreasonable delay in filing a plea for a specific claim. If
there is laches in a case, it results in the dismissal of such claims. In some cases, there may
be situations where the law expressly provides the period. Then the party is barred from
bringing any such suit. This rule of laches and reasonable time was first introduced in Chief
Young Dede vs. African Association limited [1914] UKPC 23 Bailii.
Equality is equity: The principle is explained with the help of Latin legal maxim that is
Aequitas est quasi aequalitus which means equality is equity. This principle puts both the
parties on equal footing and makes the rights and obligations equate. In other ordinary laws,
they may give advantage to one person over the other, but it strives for both parties equally.
Equity looks at what ought to have been done: It results in a legal phenomenon, an equitable
conversion, and acts done before it happened. According to this principle, where an individual
is required to perform any action by way of law or by an agreement under legal significance,
the Court presumes as the act has already been done or ought to be done before the act has
happened.
Equity looks to intent rather than form: The equity remedy is established by way of this
principle. It establishes that when the terms and facts of the case are seen to determine
justice, then it is required to check the intention of the parties. According to this principle,
equity seeks for the intention of the person rather than the form of seeking that relief. The
common law court generally seeks for the forms as the case has to be presented in the
writs.In the case of Parkins vs. Thorold [1851] Eng R 542, (1851), if the party fails to fulfill the
contract in the time frame given in the contract, the Court provides a reasonable time to the
party to perform the act.
Aequitaes est corectrio legis generalities tales parte deficit: This follows the common law.
According to this principle, equity is the correction of that part of the common law, where it is
defective, not as a new law.
Equity imputes an intention to fulfil obligation: If the party is under the obligation to perform
an act but instead of performing that act, acts similar to that act, then the intention of fulfilling
the act is considered as the act done.
Where there is equal equity, the law prevails: Equity did not prevail when no justice in taking
the answer to an issue. Equity is not any sort of punishment, but it is a remedy to right
infringement.
Qui prior est tempore potior est jure: According to this principle, where the equities are equal,
the first in time prevails. If two-person have conflicting interests in the same property, then
the rule is that the person who is first in time has priority in the law of equity over the other
person.
Conclusion:
The body of rules of fairness and justice has become the law of equity. It is being derived
from back in England. Earlier, the common law had a rigid system and even lacked specific
remedies, then the Court of Equity was established, which was governed by these principles.
These principles are still followed by the Court today also. Later in the 19th century, the equity
courts also became rigid, delay caused, inadequacy was there, number of judges were
dependent on the fees paid, so the new dual system is known to be Judicature Act 1873-75
was established.
☰Rights
iPleaders
and Liabilities of a Trust
Beneficiary in India
Table of Contents
Introduction
Concept of a Trust
The Parties in a Trust
Objectives of a Trust in General
Who can Create a Trust
Types of Trust’s that can be Created in India
The Indian Trusts Act, 1882
Trust Beneficiary
Rights of a Trust Beneficiary in India
Right to payment (Rents & Profits)
Right to information
Right to an Accounting
Remove the trustee
Termination of The Trust
Liabilities of a Trust Beneficiary in India
Duty to compensate the trustee
Liability in breach of trust
Liability not to harm others’ interests
Liability to receive his interest(s)
Liability to become aware of breach of trust
Liability in case to deceive the trustee
Liability to take reasonable steps
Bar to Remedies for Breach of Trust
Conclusion
Introduction
According to the Indian Trusts Act, 1882, a trust is referred to as an obligation that is annexed
to the ownership of property, and it arises out of a confidence reposed and accepted by the
owner for the benefit of another person and owner. It is an acceptance of an obligation by
someone, but against either some kind of property or funds to use it or hold it in order to gain
benefit for the person, for whom the trust is created. The rights and liabilities of the
beneficiary are also dependent on the kind of trust, to some extent – as there are many
different kinds of trusts.
Some primary duties of a trustee include – duty of prudence, duty of loyalty, and duty of
impartiality. A trustee can even sometimes be held to a very high standard of care in their
dealings, in order to enforce their behaviour towards the trust. Trustees are also bound to
many kinds of ancillary duties, with addition to these duties, this is in order to ensure that
beneficiaries receive their dues, etc. In addition, a trustee is expected to always understand,
know, and also abide by the terms and conditions of the relevant law concerned as well as the
terms of the trust. Trusts are usually governed by the terms and conditions under which they
are created. A contractual trust agreement or a deed is required for this in most jurisdictions.
There also exist very strong restrictions in relation to a trustee with conflict of interests.
Courts can do the following, in case it is found that a trustee has failed to do any of his/her
duties-

Reverse trustee’s actions
Order for profits to be returned
Impose other sanctions
This failure of duties or actions is termed as a breach of Trust. It is also highly recommended
that both, trustee’s as well as the author’s to seek qualified legal advice before entering into a
trust agreement.
Concept of a Trust
Mr.P- Property Reposes Confidence- Mr Q- P’S Grand-Daughter
Here, we can suppose that Mr P wants to pass on his bungalow (property) to Mr Q, for the
benefit of his minor granddaughter. The only reason Mr P passes his property to Mr Q is
because he has confidence in Mr Q, this is nothing but the essence of a trust, as illustrated.
In simple words, we can describe this trust as nothing but the transfer of property by the
original owner (Mr P), to another person on whom the owner has confidence (Mr Q) for the
gain of the benefit of a third person (P’s Grand-daughter).
A property, with reference to a trust, does not always have to mean property concerned with
real estate. Property in reference to a trust can be referring to even cash, shares, or any other
valuable asset’s.
Lastly, there has to be an instrument by which the trust can be entirely declared/created. This
instrument is called ‘the instrument of trust’ or ‘the trust deed’.

The Parties in a Trust
Author/Trustor/Donor/Settlor (Mr P) – The person who originally transfers their property and
has confidence in another person in order to create the trust. Trustee (Mr Q) – The person
who accepts the transfer of property as well as the confidence in order to create the trust.
Beneficiary (P’s Grand-daughter) – The end benefiter of the trust who will benefit from the
trust in the near future, or person for whose benefit the trust is created.
Forbidden by law
Is fraudulent or related to fraud
Defeats any kind of provision of the law
Immoral
Against Public Policy
Involves injury to another person or to his property
Who can Create a Trust
A trust may be created by-
Any person who is competent to contracts in India. This may include any individuals, AOP,
HUF, or any company/firm etc.
A trust can even be created on behalf of, or by a minor in India. This may be done through the
permission that is to be first granted by a Principal Civil Court.
Types of Trust’s that can be Created in India
Private Trusts – These trusts are for a closed group. In other words we can say that
beneficiaries can be identified in these type of trusts. Eg: A trust that is created for a friend or
someone in the family of the author.
Public Trusts – These are usually created for a large group or a public in large. The end
beneficiaries cannot be identified in these type of trusts. Eg: NGO’s or charitable institutions
for the general public.
The Indian Trusts Act, 1882
The Indian Trusts Act is an Act related to private trusts and trustee’s in India. The act defines
what exactly will be called a Trust, and who exactly can be a trustee legally and also provides
a definition for them. The Indian Trusts Amendment Bill of 2015 enabled the government to
scrutinize the trusts’ investment at will, but at the same time also removed some restrictions
on monetary assets investment, etc. The act also defines and states how the author of the
trust can assign his assets to be controlled by the trust, and how he can appoint trustees and
beneficiaries. Furthermore, the Act states that the trust should have a clear definition of the
following:
Definition as given under Section 3 – Defines beneficiary as the person for whose benefit the
confidence is accepted, is called the beneficiary.
Section 9 of the Trusts Act– According to this section, any person who is capable of holding
property may be a legal beneficiary. The beneficiary is not bound to accept the Interest under
Trust.
Many people often believe, in India, that a beneficiary has no rights in a Trust other than just
to wait and see what the trustee’s actions are and what, how the trustee will distribute exactly
to them. However, this is not true as trust beneficiary have certain rights to them provided
under The Trusts Act as well. They have certain rights in relation to the trust. The rights of the
beneficiaries, except for those mentioned in the Act, typically depend on the type of trust,
provisions contained under the trust, type of beneficiary that they hold, and lastly, state law.
If the trust is a revocable trust – This means that the author of the trust can revoke or change
the trust at any time that they desire, it also proves that the author may even change the
beneficiary completely, as and when he desires. In this type of a trust, the rights are usually
provided by the author to the beneficiary, and mentioned in the deed (if any). A trust can be
revocable until the author/settlor dies and then it changes to an irrevocable trust.
However, in case of an irrevocable trust– The trust cannot be changed except by court orders,
that too in rare cases. Beneficiaries of this kind of trust have full rights to information about
the trust and what takes place or does not. The beneficiary also has the right to make sure
that the trustee(s) are behaving in an accurate manner, etc.
There are also, generally, provisions in the Trust that contain which rights are given to which
beneficiaries and which beneficiaries are entitled to what within the trust. However, the
following are the common rights that are given to every beneficiary in a irrevocable trust as
revocable trusts are not considered to be stable.
Right to information
All types of beneficiaries have the right to get all types of information regarding the trust and
its administration. Enough information needs to be provided to the beneficiary in order for
them to know where exactly they stand in the Trust and how to enforce their rights.
Right to an Accounting
Current beneficiaries are entitles to all information of accounting within the Trust. An
accounting, this sense, refers to a detailed report of all income and expenditure that the Trust
incurs. Rules of the accounting of the trust may vary, but usually it is the trustee’s
responsibility to maintain an account and give an accounting report at the end of the year.
Beneficiaries also have the right to completely waive off any accountings.
Liability not to obtain any advantage without the consent of other beneficiaries: It is
mandatory for the beneficiary to take consent of all other beneficiaries involved in the trust in
case, he/she needs to obtain any kind of advantage. If not done, it will be considered as a
breach of trust.
By concurrence
By the way of limitation (lapse of time)
By continued acceptance in the breach
By release of trustee from any liability
By subsequent confirmation of breach
Conclusion
To conclude, we can say that under the provisions of the Trusts Act, the beneficiary is entitled
to many rights and is equally liable for any breaches as well. There is an equal ratio of rights
as well as the liabilities of the beneficiary. This analysis also proves that it is compulsory for
the beneficiary to maintain a good co-operation with the trustee’s of the trust, which help him
save himself from any breach of trusts.
Lastly, even though trust is primarily created for the benefit of the beneficiary, there are still
certain rights and liabilities that the beneficiary will hold, and there is still a way and manner
that a beneficiary needs to act and behave in within the limitations of the Trust.
Charity Commissioner's Powers and Duties
The Charity Commissioner is a legal authority appointed by the government to regulate and
oversee charitable organizations and their activities. The primary role of a Charity
Commissioner is to ensure that the charitable institutions are operating in compliance with
the relevant laws and regulations, and to protect the interests of the beneficiaries and donors.
In this article, we will discuss in detail the powers and duties of a Charity Commissioner.
Registration of Charitable Organizations: The Charity Commissioner has the power to register
charitable organizations under the relevant Acts and to grant them permission to receive
donations and operate as non-profit entities.
Inspection and Audit: The Commissioner has the power to inspect the accounts and records
of charitable organizations to ensure that they are being maintained properly and that the
funds are being used for the intended purposes. The Commissioner may also conduct audits
of these organizations to verify compliance with the relevant laws and regulations.
Resolution of Disputes: The Commissioner can also resolve disputes between charitable
organizations and their stakeholders, including beneficiaries, donors, and members.
Removal of Trustees: The Commissioner has the power to remove trustees of charitable
organizations in cases where they have breached their duties or acted in a manner that is
detrimental to the interests of the organization or its beneficiaries.
Investigation: The Commissioner can conduct investigations into the affairs of charitable
organizations to ensure that they are complying with the relevant laws and regulations.
Protection of Beneficiaries and Donors: The Commissioner is responsible for protecting the
interests of beneficiaries and donors by ensuring that charitable organizations are operating
in compliance with the relevant laws and regulations.
Q ) Discuss in detail the Power and duties of Charity Commissioner with sections under
bombay public trust act 1950
The Bombay Public Trusts Act, 1950 governs the functioning of public trusts in the state of
Maharashtra, India. The Charity Commissioner is the regulatory authority under this Act and
has extensive powers and duties to ensure the proper functioning of public trusts. Let's
discuss the powers and duties of the Charity Commissioner under the Bombay Public Trusts
Act, 1950.
Powers of Charity Commissioner under the Bombay Public Trusts Act, 1950:
Registration of Public Trusts: Section 4 of the Act empowers the Charity Commissioner to
register public trusts. The Commissioner can refuse to register a trust if it does not comply
with the requirements of the Act.
Inspection and Inquiry: Section 41 empowers the Charity Commissioner to conduct an inquiry
into the functioning of a public trust and to inspect its accounts and records. The
Commissioner may also appoint an auditor to conduct a special audit of the trust.
Granting of Permissions: The Charity Commissioner has the power to grant permissions for
various activities such as leasing, selling, mortgaging, or exchanging trust property, and
making investments.
Imposing Penalties: The Commissioner has the power to impose penalties on trustees who
violate the provisions of the Act or fail to comply with the orders of the Commissioner.
Duties of Charity Commissioner under the Bombay Public Trusts Act, 1950:
Registration of Public Trusts: The primary duty of the Charity Commissioner is to register
public trusts and ensure that they comply with the provisions of the Act.
Protection of Beneficiaries and Donors: The Commissioner has a duty to protect the interests
of the beneficiaries and donors of public trusts by ensuring that the trust is being operated in
accordance with the law.
Facilitating Dispute Resolution: The Commissioner has a duty to facilitate the resolution of
disputes between the trustees of a public trust or between the trustees and the beneficiaries.
Prevention of Fraud and Mismanagement: The Commissioner has a duty to prevent fraud and
mismanagement by ensuring that the accounts and records of public trusts are maintained
properly and that funds are used for the intended purposes.
Promotion of Transparency and Accountability: The Commissioner has a duty to promote
transparency and accountability in the operations of public trusts by ensuring that they
comply with the relevant laws and regulations.
In conclusion, the powers and duties of the Charity Commissioner under the Bombay Public
Trusts Act, 1950 are crucial for the proper functioning of public trusts. By monitoring their
activities, protecting the interests of beneficiaries and donors, preventing fraud and
mismanagement, and promoting transparency and accountability, the Commissioner can help
to maintain public trust in the charitable sector.
Duties of beneficiaries under indian trust act
Under the Indian Trusts Act, 1882, beneficiaries of a trust have certain duties that they must
adhere to. Some of these duties include:
Duty to co-operate with the trustee: Beneficiaries must co-operate with the trustee and
provide any assistance that may be required to carry out the trust.
Duty to give information: Beneficiaries must give any information they have regarding the
trust to the trustee, if it is requested.
Duty to communicate with the trustee: Beneficiaries must communicate with the trustee in a
timely and efficient manner, and inform the trustee of any changes in their contact details.
Duty not to interfere with the trust: Beneficiaries must not interfere with the trust in any way,
and must not attempt to modify or change the terms of the trust.
Duty not to use trust property for personal benefit: Beneficiaries must not use the trust
property for their personal benefit, and must not sell or transfer their interest in the trust
property.
Duty to pay taxes: Beneficiaries must pay any taxes that are due on their share of the income
from the trust property.
Duty to indemnify the trustee: Beneficiaries must indemnify the trustee for any losses that
may be incurred as a result of their actions.
These duties help to ensure that the trust is managed efficiently and that the interests of all
beneficiaries are protected.