Additional MCQs on Indian Trusts Act, 1882
- What is the term used for the person who benefits from the trust?
a) Settlor
b) Trustee
c) Beneficiary
d) Executor
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Answer: c) Beneficiary
Explanation: The person who benefits from the trust, for whom the trust property is held and managed by the trustee, is referred to as the beneficiary under the Indian Trusts Act, 1882.
- Which of the following is NOT a valid power of a trustee?
a) To sell trust property when authorized
b) To delegate duties to another person
c) To act as per the trust deed
d) To modify the purpose of the trust
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Answer: d) To modify the purpose of the trust
Explanation: A trustee does not have the power to modify the purpose of the trust. They must act strictly according to the terms set by the settlor in the trust deed.
- Under the Indian Trusts Act, 1882, can a trust be created for future property?
a) Yes, always
b) No, never
c) Yes, only if the property is certain to come into existence
d) Yes, but only with court approval
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Answer: c) Yes, only if the property is certain to come into existence
Explanation: A trust can be created for future property only if it is certain to come into existence. Otherwise, a trust for uncertain property cannot be valid under the Indian Trusts Act.
- If a trustee improperly uses trust property for personal gain, this is termed as what?
a) Breach of fiduciary duty
b) Delegation of authority
c) Lawful action
d) Settlement of property
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Answer: a) Breach of fiduciary duty
Explanation: When a trustee uses trust property for personal benefit, it is considered a breach of fiduciary duty, which goes against the obligations imposed by the trust.
- Under the Indian Trusts Act, 1882, who can dissolve a public trust?
a) The settlor
b) The trustee
c) The court
d) The beneficiaries
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Answer: c) The court
Explanation: A public trust can only be dissolved by a court of law if the trust’s purpose has been fulfilled, becomes unlawful, or cannot be carried out.
- Which of the following is NOT included under trust property?
a) Movable property
b) Immovable property
c) Intellectual property
d) Property owned by a minor
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Answer: d) Property owned by a minor
Explanation: A minor cannot transfer property to create a trust. Only lawful, transferable property (movable, immovable, or intellectual property) can be considered trust property.
- What does Section 11 of the Indian Trusts Act, 1882, deal with?
a) Who may be a trustee
b) The duties of trustees
c) Creation of a trust
d) Rights of beneficiaries
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Answer: b) The duties of trustees
Explanation: Section 11 of the Indian Trusts Act, 1882, outlines the duties of trustees, which include executing the trust according to its purpose and acting in good faith and prudence.
- Which of the following is NOT required for creating a trust?
a) Trust deed
b) Trust property
c) Trustee
d) Intention to create a trust
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Answer: a) Trust deed
Explanation: While a trust deed is preferred for clarity, it is not mandatory. A trust can be created orally, provided there is trust property, a trustee, and an intention to create the trust.
- Which section of the Indian Trusts Act, 1882, specifies the trustee’s liability for breach of trust?
a) Section 19
b) Section 24
c) Section 26
d) Section 30
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Answer: c) Section 26
Explanation: Section 26 of the Indian Trusts Act, 1882, deals with the liability of trustees in cases of breach of trust and specifies the remedies available to the beneficiaries.
- What is the maximum number of trustees required to manage a trust?
a) One
b) Two
c) Unlimited
d) Seven
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Answer: c) Unlimited
Explanation: The Indian Trusts Act, 1882, does not prescribe a maximum limit for the number of trustees. A trust can have as many trustees as necessary, provided they act jointly and responsibly.
- What is the legal effect if a trustee accepts a trust but later renounces it without fulfilling any duties?
a) The trust is invalid.
b) The trust property passes to the court.
c) A new trustee is appointed.
d) The trust automatically dissolves.
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Answer: c) A new trustee is appointed.
Explanation: If a trustee renounces their position, the trust does not dissolve. A new trustee is appointed to ensure the continuation of the trust and execution of its purpose.
- What happens if all the beneficiaries of a private trust agree to terminate the trust?
a) The trust is dissolved.
b) The trust continues for the settlor’s benefit.
c) The property passes to the government.
d) The trustee retains the property.
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Answer: a) The trust is dissolved.
Explanation: If all the beneficiaries of a private trust agree to terminate it and the trust’s purpose is fulfilled, the trust is dissolved, and the property is distributed as agreed.
- In what situation can a trust property be sold by the trustee without prior permission?
a) When the trust deed expressly allows it
b) For personal financial gain
c) Without consulting beneficiaries
d) When the trust is being terminated
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Answer: a) When the trust deed expressly allows it
Explanation: A trustee can sell trust property only when authorized by the trust deed or when necessary for fulfilling the trust’s purpose. Unauthorized sale amounts to a breach of trust.
- What does the “reversionary right” in a trust signify?
a) The trustee has the right to the property.
b) The beneficiary has future ownership.
c) The settlor can reclaim the trust property after the trust ends.
d) The property automatically transfers to the government.
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Answer: c) The settlor can reclaim the trust property after the trust ends.
Explanation: Reversionary rights refer to the settlor’s right to reclaim the trust property once the trust purpose is completed or extinguished.
More MCQs on Indian Trusts Act, 1882
- Which of the following rights does NOT belong to a trustee under the Indian Trusts Act, 1882?
a) Right to reimbursement of expenses
b) Right to renounce the trust
c) Right to make a profit from trust property
d) Right to apply to the court for direction
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Answer: c) Right to make a profit from trust property
Explanation: A trustee cannot make a profit from trust property. They are entitled only to reimbursement for expenses incurred in carrying out their duties. Making a profit from trust property amounts to a breach of fiduciary duty.
- Under the Indian Trusts Act, 1882, when can a trustee be discharged from their duties?
a) On completion of the trust’s purpose
b) By mutual agreement with the beneficiary
c) By the court
d) All of the above
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Answer: d) All of the above
Explanation: A trustee can be discharged from their duties upon completing the trust’s purpose, by mutual agreement with the beneficiaries, or by the court’s intervention if necessary.
- Which section of the Indian Trusts Act, 1882, outlines the liability of co-trustees?
a) Section 19
b) Section 23
c) Section 26
d) Section 30
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Answer: a) Section 19
Explanation: Section 19 of the Indian Trusts Act, 1882, deals with the liability of co-trustees, specifying that all co-trustees must act jointly unless otherwise authorized, and they share joint liability in case of a breach.
- When can a trust for religious or charitable purposes fail?
a) When the settlor becomes insolvent
b) When the trust property is destroyed
c) When the beneficiaries do not agree
d) None of the above
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Answer: b) When the trust property is destroyed
Explanation: A trust for religious or charitable purposes may fail if the trust property is destroyed, making it impossible to fulfill the trust’s objective. Insolvency of the settlor does not automatically affect a trust.
- What does Section 8 of the Indian Trusts Act, 1882, state regarding the subject matter of a trust?
a) The subject matter must be transferable property.
b) The subject matter must always be movable property.
c) The subject matter cannot include future property.
d) The subject matter can be illegal property.
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Answer: a) The subject matter must be transferable property.
Explanation: Section 8 of the Indian Trusts Act, 1882, specifies that the subject matter of a trust must be property that is transferable under law. It cannot be illegal property or anything restricted by law.
- A public trust differs from a private trust in which of the following ways?
a) Public trust benefits the general public or a section of the public.
b) Public trust cannot have any private beneficiaries.
c) Public trust is regulated by statutory authorities.
d) All of the above
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Answer: d) All of the above
Explanation: A public trust is created for the benefit of the general public or a specific section of the public, and it is regulated by statutory authorities. Unlike private trusts, it does not have specific private beneficiaries.
- Which of the following is NOT an obligation of the trustee under the Indian Trusts Act, 1882?
a) To prevent waste of trust property
b) To act with utmost care and diligence
c) To use trust property for personal benefit
d) To invest trust funds prudently
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Answer: c) To use trust property for personal benefit
Explanation: A trustee is legally bound to act with care, diligence, and prudence. Using trust property for personal benefit violates their fiduciary duty and is a breach of trust.
- Under the Indian Trusts Act, 1882, when does the position of a trustee become vacant?
a) On the death of the trustee
b) On the resignation of the trustee
c) On the discharge of the trustee by the court
d) All of the above
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Answer: d) All of the above
Explanation: The position of a trustee becomes vacant due to death, resignation, or discharge by the court. In such cases, a new trustee may be appointed to ensure the trust’s continuity.
- What is the duty of a trustee in regard to the accounts of the trust?
a) The trustee is not required to maintain accounts.
b) The trustee must maintain clear and accurate accounts of the trust property.
c) The trustee may delegate the maintenance of accounts to the settlor.
d) None of the above
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Answer: b) The trustee must maintain clear and accurate accounts of the trust property.
Explanation: Under the Indian Trusts Act, 1882, a trustee is obligated to maintain proper accounts of the trust property and provide them to the beneficiaries upon request.
- What does Section 6 of the Indian Trusts Act, 1882, deal with?
a) Rights of the settlor
b) Creation of a trust
c) Duties of trustees
d) Discharge of trustees
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Answer: b) Creation of a trust
Explanation: Section 6 of the Indian Trusts Act, 1882, outlines the essential requirements for the creation of a valid trust, including intention, trust property, and a lawful purpose.
- Under the Indian Trusts Act, 1882, which of the following is NOT a valid way to create a trust?
a) By a will
b) By word of mouth
c) By a written instrument
d) By force
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Answer: d) By force
Explanation: A trust can be created by a written instrument, by a will, or orally. However, it must be voluntary and cannot be created by force or coercion.
- What is the liability of a trustee who delegates duties without authorization?
a) Fully liable for any resulting loss
b) Not liable as delegation is always allowed
c) Liable only for personal misconduct
d) Liable only if the settlor approves
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Answer: a) Fully liable for any resulting loss
Explanation: A trustee is generally prohibited from delegating their duties unless authorized by the trust deed or law. Unauthorized delegation makes the trustee fully liable for any resulting loss.
- What does Section 77 of the Indian Trusts Act, 1882, specify?
a) Rights of trustees
b) Extinction of trusts
c) Duties of trustees
d) Rights of beneficiaries
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Answer: b) Extinction of trusts
Explanation: Section 77 specifies the circumstances under which a trust is extinguished, such as when the trust’s purpose is fulfilled, unlawful, or impossible to carry out.
- Can a minor be appointed as a trustee under the Indian Trusts Act, 1882?
a) Yes, always
b) No, never
c) Yes, if authorized by the settlor
d) No, unless assisted by a guardian
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Answer: b) No, never
Explanation: A minor cannot be appointed as a trustee as they are not legally competent to contract or manage trust obligations.
