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    Question

    Under Section 5 of the Indian Trusts Act, 1882, Mr. X

    orally declares to his nephew, Mr. Y, that he holds certain agricultural land "in trust for Y's education until Y completes his degree, after which the land reverts to X." The declaration is made in the presence of witnesses. Subsequently, X transfers possession of the agricultural land to Y. Years later, a dispute arises regarding the validity of this trust. Which of the following correctly applies Section 5?
    A The trust is valid because the oral declaration coupled with possession transfer satisfies the requirements of creating a trust in immovable property Correct Answer Incorrect Answer
    B The trust is invalid because Section 5 mandates that no trust in relation to immovable property is valid unless declared by a non-testamentary instrument in writing signed by the author of the trust or the trustee and registered, or by will; oral declarations are insufficient regardless of witnesses or possession transfer Correct Answer Incorrect Answer
    C The trust is valid only if Y can prove that the oral declaration constituted an "accepted confidence" within the meaning of Section Correct Answer Incorrect Answer
    D The trust is valid because the presence of witnesses to the oral declaration provides statutory compliance with Section 5 Correct Answer Incorrect Answer
    E The trust becomes valid once the possession is transferred, even though the declaration was oral, because possession itself constitutes a "declaration" under Section 5 Correct Answer Incorrect Answer

    Solution

    Explanation: Section 5 of the Indian Trusts Act provides: "No trust in relation to immovable property is valid unless declared by a non-testamentary instrument in writing signed by the author of the trust or the trustee and registered, or by the will of the author of the trust or of the trustee." This provision is categorical and admits no exceptions (except where compliance would effectuate fraud). Key elements: (i) writing required—oral declarations are insufficient; (ii) signature required—of author or trustee; (iii) registration required—under the Indian Registration Act, 1908 (Section 17); (iv) non-testamentary—if by will, registration is not required, but other formal will requirements apply. The question's trust involves immovable property (agricultural land) and is created inter vivos (during X's lifetime), not by will. The oral declaration, despite witnesses, does NOT satisfy Section 5's writing requirement. Possession transfer does NOT create a written instrument. Courts have consistently held that trusts of immovable property fail for non-compliance with Section 5, even where the parties' intentions are clear. The rationale: protecting against fraud and ensuring clarity in property transactions. Thus, option (B) correctly applies Section 5's mandatory requirements.

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