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

Trustee Suresh of Gupta Trust retires and Neha is appointed as new trustee under section 73. Trust property is held by the continuing trustees. Under the Indian Trusts Act, 1882, what is the effect of her appointment?

The trust property vests in Neha, either solely or jointly with the continuing trustees as the case requires, and she has the same powers, authorities and discretions as if the author had originally nominated her. This follows from Section 75 of the Indian Trusts Act.

  1. AThe property vests in her, solely or jointly with continuing trustees as required, and she has the same powers as if originally nominatedCorrect
  2. BShe holds only a supervisory role until the Court confirms her
  3. CThe property stays with continuing trustees and she has no powers over it
  4. DShe gets only the powers that the Court specifically lists

Explanation

Section 75 provides that on appointment of a new trustee, trust property held by surviving or continuing trustees becomes vested in the new trustee, solely or jointly as the case may require. She has the same powers, authorities and discretions as if originally nominated by the author. Hence the other options are inconsistent with the section.

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