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

Trustee Nair wishes to leave office. The trust has three beneficiaries, all competent to contract, and the deed is silent on retirement. Which route is a valid means of discharge under the Indian Trusts Act, 1882?

Nair can be discharged by the consent of himself and all three beneficiaries, provided they are competent to contract. A majority is insufficient, and unilateral notice or declaration is not a listed mode, since discharge is possible only in the ways the Act lists.

  1. AConsent of himself and all three beneficiariesCorrect
  2. BConsent of himself and the majority of the beneficiaries
  3. CWritten notice by Nair to the settlor alone
  4. DMere declaration by Nair that he resigns

Explanation

Section 71(e) allows discharge by consent of the trustee and, where there are several beneficiaries, all of them, being competent to contract. Majority consent is not enough. Notice or declaration alone is not among the listed modes, which are exhaustive ('only as follows').

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