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CS Executive · Setting Up of Business, Industrial and Labour Laws · Non-Corporate Entities

A family trust has one trustee, Kavita, and three beneficiaries: two adults and a minor. Kavita wants to be discharged from office. Which of the following is a means by which she may be discharged under the Indian Trusts Act, 1882?

Kavita can be discharged by consent of herself and all the beneficiaries, provided all are competent to contract. Consent from only some beneficiaries, her unilateral resignation or mere lapse of time is not a listed mode of discharge under the Indian Trusts Act, 1882.

  1. AHer own written resignation alone, whatever the trust instrument says
  2. BConsent of herself and the two adult beneficiaries, leaving out the minor
  3. CConsent of herself and all the beneficiaries, all being competent to contractCorrect
  4. DPassage of ten years since her appointment

Explanation

Section 71 lists the only ways of discharge: extinction of the trust, completion of duties, means prescribed in the instrument, appointment of a new trustee, consent of the trustee and all beneficiaries competent to contract, or the Court. A minor is not competent to contract, and resignation alone or lapse of time are not listed. The adult-only consent therefore fails.

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