MINISTRY OF LAW AND JUSTICE
(Legislative Department)
New Delhi, the 27th July, 2016/Shravana 5, 1938 (Saka)
The following Act of Parliament received the assent of the President on the 26th July, 2016, and is hereby published for general information:—
THE INDIAN TRUSTS (AMENDMENT) ACT, 2016
(NO. 34 OF 2016)
[26th July, 2016.]
An Act further to amend the Indian Trusts Act, 1882
BE it enacted by Parliament in the Sixty-seventh Year of the Republic of India as follows:—
Short title and commencement.
1. (1) This Act may be called the Indian Trusts (Amendment) Act, 2016.
(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint
Substitution of new section for section 20.
2. For section 20 of the Indian Trusts Act, 1882 (hereinafter referred to as the principal Act), the following section shall be substituted, namely:—
Investment of trust money.
‘20. Where the trust-property consists of money and cannot be applied immediately or at an early date to the purposes of the trust, the trustee shall, subject to any direction contained in the instrument of trust, invest the money in any of the securities or class of securities expressly authorised by the instrument of trust or as specified by the Central Government, by notification in the Official Gazette:
Provided that where there is a person competent to contract and entitled in possession to receive the income of the trust-property for his life, or for any greater estate, no investment in any of the securities or class of securities mentioned above shall be made without his consent in writing.
Explanation.—For the purposes of this section, the expression “securities” shall have the same meaning as assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956.’
Amendment of section 20A.
3. In section 20A of the principal Act, in sub-section (1), the proviso shall be omitted.
DR. G. NARAYANA RAJU,
Secretary to the Govt. of India.
Editorial Note :Presently Relevant Section – 20 and Proviso to Section 20A (1) INDIAN TRUSTS ACT, 1882 before above Amendment is as follow :-
Section 20
Investment of trust-money
20. Where the trust-property consists of money and cannot be applied immediately or at an early date to the purposes of the trust, the trustee is bound (subject to any direction contained in the instrument of trust) to invest the money on the following securities, and on no others :—
| (a) | in promissory notes, debentures, stock or other securities of any State Government or of the Central Government, or of the United Kingdom of Great Britain and Ireland: | |
| Provided that securities, both the principal whereof and the interest whereon shall have been fully and unconditionally guaranteed by any such Government, shall be deemed, for the purposes of this clause, to be securities of such Government; | ||
| (b) | in bonds, debentures and annuities charged or secured by the Parliament of the United Kingdom before the fifteenth day of August, 1947 on the revenues of India or of the Governor-General in Council or of any province: | |
| Provided that, after the fifteenth day of February, 1916, no money shall be invested in any such annuity being a terminable annuity unless a sinking fund has been established in connection with such annuity; but nothing in this proviso shall apply to investments made before the date aforesaid; | ||
| (bb) | in India three and a half per cent stock, India three per cent stock, India two and a half per cent stock or any other capital stock which before the 15th day of August, 1947, was issued by the Secretary of State for India in Council under the authority of an Act of Parliament of the United Kingdom and charged on the revenues of India or which was issued by the Secretary of State on behalf of the Governor-General in Council under the provisions of Part XIII of the Government of India Act, 1935; | |
| (c) | in stock or debentures of, or shares in , Railway or other Companies the interest whereon shall have been guaranteed by the Secretary of State for India in Council or by the Central Government or in debentures of the Bombay provincial Co-operative Bank, Limited, the interest whereon shall have been guaranteed, by the Secretary of State for India in Council or the State Government of Bombay; | |
| (d) | in debentures or other securities for money issued, under the authority of any Central Act or ProvincialAct or State Act, by or on behalf of any municipal body, port trust or city improvement trust in any Presidency- town, or in Rangoon town, or by or on behalf of the trustees of the port of Karachi: | |
| Provided that after the 31st day of March, 1948, no money shall be invested in any securities issued by or on behalf of a municipal body, port trust or city improvement trust in Rangoon town, or by or on behalf of the trustees of the port of Karachi; | ||
| (e) | on a first mortgage of immovable property situate in any part of the territories to which this Act extends : | |
| Provided that the property is not a leasehold for a term of years and that the value of the property exceeds by one-third, or, if consisting of buildings, exceeds by one-half, the mortgage-money ; | ||
| (ee) | in units issued by the Unit Trust of India under any unit scheme made under section 21 of the Unit Trust of India Act, 1963 (52 of 1963); or] | |
| (f) | on any other security expressly authorized by the instrument of trust, or by the Central Government by notification in the Official Gazette or by any rule which the High Court may from time to time prescribe in this behalf: | |
| Provided that, where there is a person competent to contract and entitled in possession to received the income of the trust-property for his life, or for any greater estate, no investment on any security mentioned or referred to in clauses (d), (e) and (f) shall be made without his consent in writing. |
Section 20 A(1)
Power to purchase redeemable stock at a premium.
20A. (1) A trustee may invest in any of the securities mentioned or referred to in section 20, notwithstanding that the same may be redeemable and that the price exceeds the redemption value :
Provided that a trustee may not purchase at a price exceeding its redemption value any security mentioned or referred to in clauses (c) and (d) of section 20 which is liable to be redeemed within fifteen years of the date of purchase at par or at some other fixed rate, or purchase any such security as is mentioned or referred to in the said clauses which is liable to be redeemed at par or at some other fixed rate at a price exceeding fifteen per centum above par or such other fixed rate.
(2) A trustee may retain until redemption any redeemable stock, fund or security which may have been purchased in accordance with this section.