Section 1. Mortgage of land pledged to Government under Act 26 of 1871

21. Mortgage of land pledged to Government under Act 26 of 1871. - Deposit in Government Savings Bank. 22. Sale by trustee directed to sell within specified time. 23. Liability for breach of trust. 24. No set-off allowed to trustee. 25. Non-liability for predecessor's default. 1. For Report of the Indian Law Commission on the Private Trusts Bill which they were instructed to consider among others, see Gazette of India, 1880, Supplement, p. 104; and for Report of the Select Committee, see Gazette of India, 1880, Pt. V, Supplement, 1881, p. 766; for further Report of the Select Committee, see ibid., Supplement, 1882, p. 67; for Proceedings in Council, see ibid., Supplement, 1881, p. 687; and ibid., Supplement, 1882, p. 68. The Act has been extended to Berar by Act 4 of 1941; Dadra and Nagar Haveli by Regulation 6 of 1963, s. 2 and Sch. I; Pondicherry by Regulation 7 of 1963, s. 3 and Sch. I; Goa, Daman and Diu by Regulation 11 of 1963, s. 3 and Sch. and Sikkim by Notifn. No. S.O. 642 E, dt. 24-8-1984 (w.e.f. 1-9-1984). 2. Subs. by the A.O. 1948, for the first sentence. 3. Subs. by the A.O. 1950, for "all the Provinces of India, except". 4. The words "except the state of Jammu & Kashmir" omitted by Act 34 of 2019, s. 95 & 96 and the Schedule. V. (w.e.f. 31-10-2019). 5. The words "and Panth Piploda" omitted by the A.O. 1950. 6. Subs., ibid., for "either or both of the said Provinces". "registered":— and in this Act, unless there be something repugnant in the subject or context, "registered" means registered under the law for the registration of documents for the time being in force: "notice":— a person is said to have "notice" of a fact either when he actually knows that fact, or when, but for wilful abstention from inquiry or gross negligence, he would have known it, or when information of the fact is given to or obtained by his agent, under the circumstances mentioned in the Indian Contract Act, 1872 (9 of 1872), section 229; Expressions defined in Act 9 of 1872:— and all expressions used herein and defined in the Indian Contract Act, 1872 (9 of 1872), shall be deemed to have the meanings respectively attributed to them by that Act. CHAPTER I PRELIMINARY 1. Short title.— This Act may be called the Indian Trusts Act, 1882. Commencement.— and it shall come into force on the first day of March, 1882. Local extent.—[2] [It extends to[3] [the whole of India[4] * and] the Andaman and Nicobar Islands[5] *; but the Central Government may, from time to time, by notification in the Official Gazette, extend it to[6] [the, Andaman and Nicobar Islands] or to any part thereof.] Savings.— But nothing herein contained affects the rules of Muhammadan law as to waqf, or the mutual relations of the members of an undivided family as determined by any customary or personal law, or applies to public or private religious or charitable endowments, or to trusts to distribute prizes taken in war among the captors; and nothing in the Second Chapter of this Act applies to trusts created before the said day. _Explanation 1. See s.11 of the Indian Contract Act, 1872 (9 of 1872). Explanation.— Unless a contrary intention be expressed, the purpose of a trust for the payment of debts shall be deemed to be (a) to pay only the debts of the author of the trust existing and recoverable at the date of the instrument of trust, or, when such instrument is a will, at the date of his death, and (b) in the case of debts not bearing interest, to make such payment without interest. Illustrations (a) A, a trustee, is simply authorised to sell certain land by public auction. He cannot sell the land by private contract. (b) A, a trustee of certain land for X, Y and Z, is authorised to sell the land to B for a specified sum. X, Y and Z, being competent to contract, consent that A may sell the land to C for a less sum. A may sell the land accordingly. (c) A, a trustee for B and her children, is directed by the author of the trust to lend, on B's request, trust-property to B's husband, C, on the security of his bond. C becomes insolvent and B requests A to make the loan. A may refuse to make it. 1. See now the Indian Registration Act, 1908 (16 of 1908). (d) A, a trustee directed to sell the trust-property by auction, sells the same, but does not advertise the sale and otherwise fails in reasonable diligence in inviting competition. A is bound to make good the loss caused thereby to the beneficiary. (e) A, a trustee for B, in execution of his trust, sells the trust-property, but from want of due diligence on his part fails to receive part of the purchase-money. A is bound to make good the loss thereby caused to B. (f) A, a trustee for B of a policy of insurance, has funds in hand for payment of the premiums. A neglects to pay the premiums, and the policy is consequently forfeited. A is bound to make good the loss to B. (g) A bequeaths certain moneys to B and C as trustees, and authorises them to continue trust-moneys upon the personal security of a certain firm in which A had himself invested them. A dies, and a change takes place in the firm. B and C must not permit the moneys to remain upon the personal security of the new firm. (h) A, a trustee for B, allows the trust to be executed solely by his co-trustee, C. C misapplies the trust-property. A is personally answerable for the loss resulting to B. 1. Second paragraph rep. by Act 12 of 1891, s. 2 and I Schedule. and re-sell the property so bought in, or as to which the contract is so rescinded, without being responsible to the beneficiary for any loss occasioned thereby. Time allowed for selling trust-property. —Where a trustee is directed to sell trust-property or to invest trust-money in the purchase of property, he may exercise a reasonable discretion as to the time of effecting the sale or purchase. Illustrations (a) A bequeaths property to B, directing him to sell it with all convenient speed and pay the proceeds to C. This does not render an immediate sale imperative. (b) A bequeaths property to B, directing him to sell it at such time and in such manner as he shall think fit and invest the proceeds for the benefit of C. This does not authorise B, as between him and C, to postpone the sale to an indefinite period.