Trust - Legal Entity

This query is : Resolved 

10 June 2009

As the trust is a legal entity, has been defined under which provision?

Manish Singh (Expert)
11 June 2009

trust is not a legal entity. its an obligation attached to properties.

Divya Paras (Expert)
11 June 2009

I stand corrected-the trust is not a legal entity.

Manish Singh (Expert)
11 June 2009

Dear Ms Divya,
I would again reiterate the fact that a trust is not a leagl entity since it is just a creation of an obligation or right over certain property. please go through the following cases or some other cases pertaining to the issue:

Mad HC Decided On: 07.03.2003
Sri Premananda Trust, Premananda Ashram, rep. by its Managing Trustee, Dhamayanthi Mathaji
The District Collector, Pudukkottai,and anr

20. The Sessions Case against Swami Premananda having attracted wide publicity, it was a sensational case. It is very difficult to understand as to how the Sub Judge of the same place would have been oblivious to the case and has omitted to notice the fine imposed and the direction to recover the fine amount. Inspite of the averment made in the plaint to the effect that the Board of Trustees had decided to bring and consolidate the entire properties, both movable and immovable, including the various bank balances standing in the name of defendants 1 to 4, the Sub-court has not bothered to find out the documents under which such a transfer could have taken place and the question whether by a unilateral resolution of the subsequent Board of Trustee, without the direction of Swami Premananda to the bank and a letter, the amounts could have been transferred in the name of the Trust without impleading the Bank concerned was not considered at all. The learned Sub Judge ought to have taken into consideration all these facts when such a vast amount running to Rs.90 lakhs is sought to be declared and its possession ordered before passing an exparte decree in favour of the petitioner. We are constrained to observe that the learned Sub Judge has miserably failed to apply his judicial mind and discretion properly before passing an exparte decree of this nature. It is crystal clear that the suit is a collusive one and is filed only to get at the various bank accounts and to keep it out of the reach of the recovery proceedings, the fine imposed and the direction issued by this court. The learned Sub Judge ought to have gone into the question whether Section 28 of the Act will apply in the absence of any dispute between the present Trustees before valuing the suits under Section 28 of the Act and the maintainability of the suit. The suits are filed on behalf of the Trust without being represented by all the Trustees; the Trust is not a legal entity on its own; the reference to the total fine of Rs.66,40,000/- has been made and it is admitted that the amount stands in the name of Premananda; and a court fee is paid under Section 28 of the Court Fees Act as though there is a dispute in the management of the Trust.

Venkatesh Iyer Vs. Bombay Hospital Trust & others 1998(3)BomCR503

Mr. Ketan Parikh argued that no suit can lie against "Bombay Hospital Trust" as such, because the trust is not a legal entity and that the trust is merely an obligation attached to the property settled on trust and that the suit has to be filed against all the trustees of the trust and that if that is not done, no decree can be passed in the suit against the trustees or the trust and the suit has to be dismissed.

Urvashi Saumya (Querist)
11 June 2009

Thanks a lot. It is very informative.

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