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Sushil Kumar Bhatia (Advocate)     25 October 2008

How to define public and private trust

How to define a trust is private or public trust what are the ingridients of public and private trust .kindly give clear differences


 5 Replies

Shree. ( Advocate.)     25 October 2008


Dear Sir,

The essential distinction between a public and a private endowment (trust) is that the beneficial endowments vests in an uncertain and a fluctuating body of the persons either the public at large or some considerable portion of it answering a particular description. On the other hand , in a private endowment the beneficiaries are definite and ascertained individuals .

Trust is defined in section 3 of the Trust Act, 1882 as " an obligation annexed to the ownership of property and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another or of another and the owner. In simple words it is a transfer of property by the owner to another for the benefit of a third person alongwith or without himself or a declaration by the owner, to hold the property not for himself and another.

In India, the second most popular form of registration is as a Trust. However, the statutory provisions, procedures and the laws relating to trusts are confusing. Under Indian Laws, various kinds of public and private trusts can be formed. Here, we have dealt with the laws and procedures related to Public Charitable Trusts.

The Indian Trust Act, 1882 is not applicable to Public Charitable Trust. There is no specific act under which a Public Trust is to be registered, except in the State of Gujarat and Maharastra. Public Trusts are formed under general law, with guidance drawn from the Indian Trust Act, 1882. The other relevant acts are Religious Endowment Act, 1863, Charitable & Religious Trust Act, 1920 and The Bombay Public Trust Act, 1950.

The following are the basic ingredients of a valid trust :

i) There must be an author or settlor of the trust. The author or the settlor refers to the person who sets aside certain property for the benefit of the beneficiaries

ii) There must be a trustee. The trustee are the persons who manage this property for the benefit of the beneficiaries as per the Trust Deed. The author himself may or may not become a trustee.

iii) There must be a beneficiary or beneficiaries.

iv) There must be clearly delineated trust property.

v) The objects of the trust must be specific.


Three Certainties of a Trust are :

i) Certainty of intention to create Trust.

ii) Certainty of the objects and the beneficiaries.

iii) Certainty of the subject matter of the Trust i.e. fund or properties must be specified and settled in the deed.

1 Like

Shree. ( Advocate.)     25 October 2008

Wait for other members answers.Sir.



Trilok Nath Saxena (Lawyer)     26 October 2008

To my understanding the basic difference in public & private trust is the acceptance of donations from public at large or from a defined group of people as per the trust deed. If during course of time the private trust accepts donations from public at large inspite of defination of group of people given in the trust deed than also the said trust partakes the caracter of public trust. To a lawyers prospective the problem arise in answering the Question when the trust incorporated as private initially but during course of time some body challenges it character as public citing the works done by trust, the trust can maintain it's private character even it do's charities to public at large provided the source of funds are sourced as per definitation of body of people constitutiong it, moreover if trust just distribute the largaseis of other in urgent situations e.g. floods, natural calamity, war etc the trust does not loses it character of private.

I think I have made clear to you the subject.

T N Saxena

Manish Singh (Advocate)     27 October 2008

private trust means a trust created by an individual to maintain ones own property like a trust created in favour f a minor. when the minor attains 18 years of age , the trustee so appointd loses th administrative power over the trsut property and the property goes to the beneficiary. its al about private settlements.

but public trusts are thise which we see in our daily life like a religious trust, educatnional trust etc. under  a public trust a beneficiary  can not be any individual only but the benefits arising out of the trust go to general public as a whole and the trust property aslo  does not remain any private property but becomes a public property.

jayavadan (individual)     22 April 2014

We have khatri community charitable trust for more than 60 year in navsari, gujarat.

there are some beneficiary staying in  subsidised  houses by the trust and also medical benefits and educational fees for their childrens. 



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