Indian Trust Act 1882, makes provision for the extinction of trusts under section 77.78 and 79. Extinction of trust means termination of trust.

Section 77 lays down 4 situations when a trust is extinguished: –

• When its purpose is completely fulfilled.
• When it becomes unlawful.
• When the fulfilment of its purpose becomes impossible by destruction of the trust property or otherwise.
• When the trust being revokable, is expressly revoked.

To be legal, a trust must have a lawful object or purpose. A law purpose can be lawful at initial stage but may become unlawful afterwards due to some new legislation coming into force.

Such purpose therefore can’t be accomplished being unlawful. So, the trust is extinguished. This is as per section 77(b).

Similarly, under Section 77 when the fulfilment of purpose becomes impossible by destruction of the trust property or otherwise, a trust property or otherwise, a trust is extinguished.

REVOCATION: –

Section 78 enumerates the circumstances when a trust may be revoked. A trust created by a will may be revoked at any time at the pleasure of the testator, for a will inherently ambulatory (alterable). Revoking means to make generally void a document by taking it back or by recalling.

A trust which is created otherwise than by will may be revoked: –

• By consent of all the beneficiaries where all of them are competent to contract.
• By expressly providing in the instrument of trust for a power of revocation: by exercising such a power a trust may be revoked.
• When its purpose is the payment of authors debt it can be revoked at any time prior to communication of the arrangement to the creditor.

A settlor cannot revoke a completely constituted trust unless a power to do so is reserved in the instrument.

Other grounds for revocation may be: –

• Execution of the settlement under a fundamental mistake or misapprehension as to its effect.
• Illusory trust may also be revoked by the settlor.
• Fraud or undue influence.

One who seeks to set it aside on the above ground must discharge the onus of proving it. If the settlor is proved to be a free agent, it cannot be set aside.

A trust created by will can be revoked at any time by the author, during his life time but thereafter it cannot.

A trust for the payment of its authors debt can be revoked at any time before it is communicated to the creditor.

A trust created otherwise than a will may be revoked by means of power of revocation expressly reserved by the author in that instrument or it may be revoked when all the beneficiaries are competent to contract and they so consent.

When a trust is revoked, the revocation will not affect the acts of the trustee duly done in execution of the trust so as to defeat or prejudice those acts.

It means that the author of the trust cannot revoke the trust to defeat what trustee may have done duly in execution of trust. Such revocation will have retrospective effect.

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.

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