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CS Professional · CSR and Social Governance · Societies and Trusts

Meera is the beneficiary of a private trust created by her father, and the trust deed gives her the right to receive the income from a trust house. She transfers her interest in the trust to Kabir for a price. Kabir then claims the same rights that Meera had in the trust. Which statement correctly describes Kabir's position under the Indian Trusts Act, 1882?

Kabir steps into Meera's shoes. A transferee of a beneficiary's interest has the rights and is subject to the liabilities the beneficiary had in respect of that interest at the date of transfer, so rights and liabilities pass together.

  1. AKabir gets the rights of the beneficiary in respect of that interest at the date of the transfer, and is subject to the liabilities attached to it.Correct
  2. BKabir gets only the rights, without any of the liabilities that Meera had.
  3. CKabir gets no rights unless the trustee approves the transfer in writing.
  4. DKabir gets the rights but is subject only to liabilities that arise after the transfer.

Explanation

Section 69 says a person to whom a beneficiary transfers an interest has the rights, and is subject to the liabilities, of the beneficiary in respect of that interest at the date of the transfer. The rights and liabilities pass together. The option giving only rights is wrong because liabilities also pass.

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