[Act No. 2 of Year 1913]
An Act to consolidate
and amend the law constituting the office of Official
Trustee
It is hereby enacted as follows: -
Comment: This Act seeks to consolidate and amend the law constituting the office of the Official Trustee
PART I : PRELIMINARY
1. Short title, extent
and commencement
(1) This Act may be called the Official Trustees Act,
1913.
(2)
It extends to the whole of India.
(3) It shall come into force on
such date as the Central Government, by notification in the Official
Gazette may direct.
2. Interpretation
clause
In
this Act, unless there is anything repugnant in the subject or
context,-
(1) "Government" or "the Government", means, in relation to
a State, the State Government and, in relation to a Union Territory,
the Central Government.
(2) "Prescribed" means prescribed
by rules under this Act.
3. Extent of
jurisdiction of High Court
The High Court shall, in respect
of proceedings instituted by or against the Official Trustee under
this Act or the Indian Trusts Act, 1882 (2 of 1882), be a competent
Court throughout the territories in relation to which it exercises
civil appellate jurisdiction:
PROVIDED that nothing in this section shall be construed as affecting the jurisdiction of any district court.
PART II : THE OFFICE OF OFFICIAL TRUSTEE
4. Official
Trustees
(1) The Government shall appoint an Official Trustee for
each State:
PROVIDED that nothing
herein contained shall be deemed to bar the appointment of the same
person as Official Trustee for two or more States.
(2) No person shall be
appointed to the office of Official Trustee unless he has been for
at least-
(a) seven years, an advocate; or
(b) seven years, an attorney of a
High Court; or
(c) ten years, a member of the judicial service of a State;
or
(d)
five years, a Deputy Official Trustee.
5. Appointment and
powers of Deputy Official Trustee
(1) The Government may appoint a
Deputy or Deputies to assist the Official Trustee; and any Deputy so
appointed shall, subject to the control of the Government and the
general or special orders of the Official Trustee, be competent to
discharge any of the duties and exercise any of the powers of the
Official Trustee, and, when discharging such duties or exercising
such powers, shall have the same privileges and be subject to the
same liabilities as the Official Trustee.
(2) No person shall be appointed
as a Deputy unless he has been for at least three
years-
(a) an advocate; or
(b) an attorney of a High Court;
or
(c) a
member of the judicial service of a State.
6. Official Trustee to
be corporation sole, to have perpetual succession and official seal,
and to sue and be sued in his corporate name
The Official Trustee shall be a
corporation sole by the name of the Official Trustee of the State
for which he is appointed and, such Official Trustee, shall have
perpetual succession and an official seal, and may sue and be sued
in his corporate name.
PART III : RIGHTS, POWERS, DUTIES AND LIABILITIES OF OFFICIAL TRUSTEE
7. General powers and
duties of Official Trustee
(1) Subject to, and in accordance
with, the provisions of this Act and the rules made thereunder, the
Official Trustee may, if he thinks fit,-
(a) act as an ordinary
trustee;
(b) be appointed trustee by a Court of competent
jurisdiction.
(2) Save as hereinafter expressly provided, the Official
Trustee shall have the same powers, duties and liabilities and be
entitled to the same rights and privileges and be subject to the
same control and orders of the Court as any other trustee acting in
the same capacity.
(3) The Official Trustee may
decline, either absolutely or except on such conditions as he may
impose, to accept any trust.
(4) The Official Trustee shall
not accept any trust under any composition or scheme of arrangement
for the benefit of creditors, nor of any estate known or believed by
him to be insolvent.
(5) The Official Trustee shall
not, save as provided by any rules made under this Act, accept any
trust for a religious purpose or any trust which involves the
management or carrying on of any business.
(6) The Official Trustee shall
not administer the estate of a deceased person, unless he is
expressly appointed sole executor of, and sole trustee under, the
will of such person.
(7) The Official Trustee shall
always be sole trustee, and it shall not be lawful to appoint the
Official Trustee to be trustee along with any other
person.
8. Official Trustee may
with consent be appointed trustee of settlement by
grantor
(1) Any person intending to create a trust other than a
trust which the Official Trustee is prohibited from accepting under
the provisions of this Act may by the instrument creating the trust
and with the consent of the Official Trustee, appoint him by that
name or any other sufficient description to be the trustee of the
property subject to such trust:
PROVIDED that the
consent of the Official Trustee shall be recited in the said
instrument and that such instrument shall be duly executed by the
Official Trustee.
(2) Upon such appointment the property subject to the trust
shall vest in such Official Trustee, and shall be held by him upon
the trusts declared in such instrument.
9. Appointment of
Official Trustee as trustee by will
When the Official Trustee has by
that name or any other sufficient description been appointed trustee
under any will, the executor of the will of the testator or the
administrator of his estate shall, after obtaining probate or
letters of administration, notify in the prescribed manner the
contents of such will to such Official Trustee; and, if such
Official Trustee consents to accept the trust, then upon the
execution by such executor or administrator of an instrument in
writing transferring the property subject to the trust to the
Official Trustee, such property shall vest in such Official Trustee,
and shall be held by him upon the trusts expressed in the said
will:
PROVIDED that the consent of the Official Trustee shall be recited in the said instrument and that such instrument shall be duly executed by the Official Trustee.
10. Power of High Court
to appoint Official Trustee to be trustee of property
(1) If any property is
subject to a trust other than a trust which the Official Trustee is
prohibited from accepting under the provisions of this Act, and
there is no trustee within the local limits of the ordinary or
extraordinary original civil jurisdiction of the High Court willing
or capable to act in the trust, the High Court may on application
make an order for the appointment of the Official Trustee by that
name with his consent to be the trustee of such
property.
(2) Upon such order such property shall vest in the Official
Trustee and shall be held by him upon the same trusts as the same
was held previously to such order, and the previous trustee or
trustees (if any) shall be exempt from the liability as trustees of
such property save in respect of acts done before the date of such
order.
(3) Nothing in this section shall be deemed to affect the
provisions of the Indian Trusts Act, 1882 (2 of
1882).
11. Power of private
trustees to appoint Official Trustee to be trustee of
property
(1) If any property is subject to a trust other than a trust
which the Official Trustee is prohibited from accepting under the
provisions of this Act, and all the trustees or the surviving or
continuing trustee or trustees and all persons beneficially
interested in the trust are desirous that the Official Trustee shall
be appointed in the room of such trustee or trustees, it shall be
lawful for such trustee or trustees, by an instrument in writing to
appoint the Official Trustee by that name or any other sufficient
description with his consent to be the trustee of such
property:
PROVIDED that the
consent of the Official Trustee shall be recited in the said
instrument and that such instrument shall be duly executed by
him.
(2)
Upon such appointment such property shall vest in the Official
Trustee and shall be held by him upon the same trusts as the same
was held previously to such appointment, and the previous trustee or
trustees shall be exempt from all liability as trustees of such
property save in respect of acts done before the date of such
appointment.
12. Executor or
administrator may pay to Official Trustee legacy, share etc., of
minor or lunatic
(1) If any minor or lunatic is entitled to any gift, legacy
or share of the assets of a deceased person, it shall be lawful for
the person by whom such gift is made, or executor or administrator
by whom such legacy or share is payable or transferable or any
trustee of such gift, legacy or share, to transfer the same by an
instrument in writing to the Official Trustee by that name or any
other sufficient description with his consent:
PROVIDED that the
consent of the Official Trustee shall be recited in the said
instrument and that such instrument shall be duly executed by the
Official Trustee.
(2) Any money or property transferred to the Official
Trustee under this section shall vest in him and shall be subject to
the same provisions as are contained in this Act as to other
property vested in such Official Trustee.
13. Official Trustee not
to be required to give bond or security
(1) No Official Trustee shall be
required by any Court to enter into any bond or security on his
appointment in any capacity under this Act.
(2) No Official Trustee shall be
required to verify otherwise than by his signature any petition
presented by him under the provisions of this Act, and if the facts
stated in any such petition are not within his personal knowledge,
the petition may be verified and subscribed by any person competent
to make the verification.
14. Entry of Official
Trustee not to constitute notice of a trust
The entry of the Official Trustee
by that name in the books of a company shall not constitute notice
of a trust; and a company shall not be entitled to object to enter
the name of the Official Trustee on its register by reason only that
the Official Trustee is a corporation; and, in dealing with
property, the fact that the person dealt with is the Official
Trustee shall not of itself constitute notice of a
trust.
15. Liability of
Government
(1) The Government shall be liable to make good all sums
required to discharge any liability which the Official Trustee, if
he were a private trustee, would be personally liable to discharge,
except when the liability is one to which neither the Official
Trustee nor any of his officers has in any way contributed or which
neither he nor any of his officers could by the exercise of
reasonable diligence have averted, and in either of those cases the
Official Trustee shall not, nor shall the Government, be subject to
any liability.
(2) Nothing in sub-section (1) shall be deemed to render the
Government or any Official Trustee appointed under this Act liable
for anything done by or under the authority of any Official Trustee
before the commencement of this Act.
16. Notice of suit not
required in certain cases
Nothing in section 80 of the Code
of Civil Procedure, 1908 (5 of 1908), shall apply to any suit
against the Official Trustee in which no relief is claimed against
him personally.
PART IV : FEES
17. Fees
(1) There shall be
charged in respect of the duties of the Official Trustee such fees,
whether by way of percentage or otherwise, as the Government may
prescribe.
(2) The fees under this section may be at different rates
for different properties or classes of properties or for different
duties, and shall, so far as may be, be arranged so as to produce an
amount sufficient to discharge the salaries and all other expenses
incidental to the working of this Act (including such sum as
Government may determine to be required to insure the Government
against loss under this Act).
18. Disposal of
fees
(1)
All expenses which might be retained or paid out of the trust fund,
if the Official Trustee were a private trustee, shall be so retained
or paid, and any fees leviable under this Act shall be retained or
paid in like manner as and in addition to such
expenses.
(2) The Official Trustee shall transfer and pay to such
authority and in such manner and at such times as the Government may
prescribe, all fees received by him under this Act, and the same
shall be carried to the amount and credit of the
Government.
PART V : AUDIT
19. Auditors to be
appointed to examine Official Trustee's accounts, etc., and to
report to Government
(1) The accounts of the Official
Trustee shall be audited at least once annually and at any other
time if the Government so direct by the prescribed person and in the
prescribed manner.
(2) The auditor shall examine
such accounts, and shall forward to Government a statement thereof
in the prescribed form, together with a report thereon and a
certificate signed by him showing,-
(a) whether the accounts have
been audited in the prescribed manner, and whether, so far as can be
ascertained by such audit, the accounts contain a full and true
account of everything which ought to be contained
therein;
(b) whether the books, which by any rules made under this
Act are directed to be kept by the Official Trustee, have been duly
and regularly kept; and
(c) whether the trust funds and
securities have been duly dept and invested and deposited in the
manner prescribed by this Act or any rules made
thereunder;
or (as the case may be) that such accounts are deficient, or
that the Official Trustee has failed to comply with this Act or the
rules made thereunder, in such respects as may be specified in such
certificate.
20. Auditor's power to
summon witnesses and to call for documents
(1) Every auditor shall have the
powers of a Civil Court under the Code of Civil Procedure, 1908 (5
of 1908).
(a) to summon any person whose presence he may think
necessary to attend him from time to time; and
(b) to examine any
person, on oath to be by him administered; and
(c) to issue a
commission for the examination on interrogatories or otherwise of
any person; and
(d) to summon any person to produce any document or thing,
the production of which appears to be necessary for the purposes of
such audit or examination.
(2) Any person who, when
summoned, refuses, or without reasonable cause neglects to attend or
to produce any document or thing or attends and refuses to be sworn,
or to be examined shall be deemed to have committed an offence
within the meaning of, and punishable under section 188 of the
Indian Penal Code (45 of 1860), and the auditor shall report every
case of such refusal or neglect to Government.
21. Costs of audit,
etc., how paid
The cost of and incidental to every such audit and
examination shall be determined in accordance with rules made by the
Government and shall be defrayed in the prescribed
manner.
22. Right of beneficiary
to inspection and copies of accounts
Every beneficiary under a trust
which is being administered by the Official Trustee shall, subject
to such conditions and restrictions as may be prescribed, be
entitled, at all reasonable times, to inspect the accounts of such
trust, and the report and certificate of the auditor and, on payment
of the prescribed fee, to be furnished with copies thereof or
extracts therefrom, and nothing in the Indian Trusts Act, 1882 (2 of
1882), shall affect the provisions of this
section.
PART VI : MISCELLANEOUS
23. Transfer to
Government of accumulations in the hands of Official
Trustee
When any moneys payable to a beneficiary under a trust have
been in the hands of any Official Trustee for a period of twelve
years or upwards whether before or after the commencement of this
Act in consequence of the Official Trustee having been unable to
trace the person entitled to receive the same, such moneys shall be
transferred in the prescribed manner to the account and credit of
the Government:
PROVIDED that no such moneys shall be so transferred if any suit or proceeding is pending in respect thereof in any Court.
24. Mode of proceeding
by claimant to recover money so transferred
(1) If any claim is made to any
moneys so transferred and such claim is established to the
satisfaction of the prescribed authority, the Government shall pay
to the claimant the amount in respect of which the claim is
established.
(2) If such claim is not established to the satisfaction of
the prescribed authority, the claimant may, without prejudice to his
right to take any other proceedings for the recovery of such moneys,
apply by petition to the High Court against the Government, and
after taking such evidence as it thinks fit, such Court shall make
such order on the petition in regard to the payment of such moneys
as it thinks fit, and such order shall be binding on all parties to
the proceedings.
(3) The Court may further direct by whom all or any part of
the costs of such proceedings shall be paid.
25. Power of High Court
to make orders in respect of property vested in Official
Trustee
The High Court may make such orders as it thinks fit
respecting any trust property vested in the Official Trustee, or the
income or produce thereof.
26. Who may apply for
order under Act
Any order under this Act may be made, on the application of
any person beneficially interested in any trust property or of any
trustee thereof.
27. Order of Court to
have effect of a decree
Any order made by a High Court
under this Act shall have the same effect as a
decree.
28. General powers of
administration
The Official Trustee may, in addition to and not in
derogation of any other powers of expenditure lawfully exercisable
by him, incur
expenditure-
(a) on such acts as may be
necessary for the proper care and management of any property
belonging to any trust administrated by him; and
(b) with the sanction
of the High Court on such religious, charitable and other objects
and on such improvements as may be reasonable and proper in the case
of such property.
29. Transfer of trust
property by Official Trustee to original trustee or any other
trustee
(1) Nothing in this Act shall be deemed to prevent the
transfer by the Official Trustee of any property vested in him
to-
(a)
the original trustee (if any); or
(b) any other lawfully appointed
trustee; or
(c) any other person if the Court so directs.
(2) Upon such transfer
such property shall vest in such trustee, and shall be held by him
upon the same trusts as those upon which it was held prior to such
transfer, and the Official Trustee shall be exempt from all
liability as trustee of such property except in respect of acts done
before such transfer:
PROVIDED that, in the case of any transfer under this section, the Official Trustee shall be entitled to retain out of the property any fees leviable in accordance with the provisions of this Act.
30. Rules
(1) The Government
shall make rules for carrying into effect the objects of this Act
and for regulating the proceedings of the Official Trustee in the
discharge of his duties.
(2) In particular and without
prejudice to the generality of the foregoing power, such rules may
provide for-
(a) the accounts to be kept by the Official Trustee and the
audit and inspection thereof;
(b) the safe custody, and deposit
of the funds and securities which come into the hands of the
Official Trustee;
(c) the remittance of sums of money in the hands of the
Official Trustee in cases in which such remittances are
required;
(d) the statements, schedules and other documents to be
submitted by the Official Trustee to Government or to any other
authority and the publication of such statements, schedules or other
documents;
(e) the realisation of the cost of preparing any such
statements, schedules or other documents;
(f) subject to the provisions of
this Act, the fees to be paid thereunder and the collection and
accounting for any fees so fixed;
(g) the manner in which and the
person by whom the costs of and incidental to any audit under the
provisions of this Act are to be determined and
defrayed;
(h) the manner in which summonses issued under the
provisions of section 20 are to be served and payment of the
expenses of any persons summoned or examined under the provisions of
this Act and of any expenditure incidental to such
examination;
(i) the acceptance by the Official Trustee of trusts for
religious purposes and trusts which involve the management or
carrying on of business; and
(j) any matter in this Act
directed to be prescribed.
(3) Rules made under the
provisions of this section shall be published in the Official
Gazette, and shall thereupon have effect as if enacted in this
Act.
1[(3A) Every rule made by the State Government under this
section shall be laid, as soon as it is made, before the State
Legislature.]
(4) Every rule made the Central Government under this
section shall be laid as soon as it may be after it is made, before
each House of Parliament while it is in session for a total period
of thirty days which may be comprised in one session or 2[in two or
more successive sessions, and if, before the expiry of the session
immediately following the session or the successive sessions
aforesaid,] both Houses agree in making any modification in the rule
or both Houses agree that the rule should not be made, the rule
shall thereafter have effect only in such modified form or be of no
effect, as the case may be; so however that any such modification or
annulment shall be without prejudice to the validity of anything
previously done under that rule.
31. Division of
presidency into provinces
[Repealed by the Government of
India (Adaptation of Indian Laws) Order, 1937]
32. Saving of provisions
of Indian Registration Act, 1908
Nothing contained in this Act
shall be deemed to affect the provisions of the Indian Registration
Act, 1908 (16 of 1908).
32A. Saving
(1) The amendments of
this Act which come into force on the 26th day of January, 1950,
shall not affect any legal proceedings pending in any court on that
date or be construed as automatically transferring any property from
any Official Trustee to any other Official Trustee; but nothing in
this section shall be construed as preventing a transfer of any such
property in accordance with any of the other provisions of this
Act.
(2)
The amendments of this Act, which come into force on the 26th day of
January, 1950 shall not affect any legal proceeding arising out of
application of this Act to any person in a Part B State and pending
in any Court on the said date or the administration of any property
or estate of any such person which was immediately before that date
vested in an Official Trustee under this Act, and the provisions of
this Act shall, notwithstanding the said amendments, continue to
apply with necessary modifications, in relation to such proceedings
or such property or estate, as the case may be.
32B. Special provision
regarding certain Official Trustees affected by States’
reorganisation
The amendments of this Act which come into force on the lst
November, 1956, shall not affect any legal proceedings pending in
any Court on that date and where, on account of the reorganisation
of States under the States Reorganisation Act, 1956 (37 of 1956) or
the Bihar and West Bengal (Transfer of Territories) Act, 1956 (40 of
1956), the whole or any part of a State is transferred to any other
State, such transfer of the territory of the State shall not be
construed as automatically transferring any property from any
Official Trustee to any other Official Trustee; but if, by reason of
such transfer of territory, it appears to the Central Government
that the whole or any part of the property vested in an Official
Trustee, should be vested in another Official Trustee, that
Government may direct that the property will be so vested and
thereupon it shall vest in that other Official Trustee and his
successors as fully and effectually for the purposes of this Act, as
if it had been originally vested in him under this
Act.
33. Repeal
[Repealed by the
Repealing Act, 1927 (12 of 1927)]