📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    Question

    Under Section 7 of the Indian Trusts Act, 1882, which of

    the following scenarios regarding trust creation is legally INCORRECT and would violate the competency requirements of Section 7?
    A An individual, age 25, of sound mind, creates a trust by executing a trust deed and registering it; this is permissible as the individual is competent to contract Correct Answer Incorrect Answer
    B A partnership firm, acting through its partners, creates a trust of firm property for charitable purposes; this is permissible because a partnership is competent to contract under the Indian Contract Act Correct Answer Incorrect Answer
    C A 14-year-old minor directs their parents to create a trust on their behalf (with the property supplied by parents) without obtaining permission from the Principal Civil Court of original jurisdiction; this is impermissible because Section 7 expressly requires court permission for trusts created by or on behalf of minors Correct Answer Incorrect Answer
    D A company, duly incorporated under the Companies Act, creates a trust consistent with its Memorandum and Articles of Association; this is permissible because the company is competent to contract Correct Answer Incorrect Answer
    E An individual under suspended animation due to coma creates a trust through a duly executed power of attorney granted before the coma; this is permissible as the trust was created by competent authority at the time of POA execution Correct Answer Incorrect Answer

    Solution

    Explanation: Section 7 of the Indian Trusts Act provides: "A trust may be created (a) by every person competent to contract, and (b) with the permission of a Principal Civil Court of original Jurisdiction, by or on behalf of a minor." The statute identifies two categories: (1) persons competent to contract (adults of sound mind, companies, partnerships, etc.) can create trusts autonomously; (2) minors require express permission from a Principal Civil Court before creating trusts. Competency to contract is defined under Sections 11-12 of the Indian Contract Act: age 18+, sound mind, not disqualified by law. Option (C) presents a violation: a 14-year-old attempting to create a trust without court permission directly contravenes Section 7(b). The requirement is mandatory, not discretionary—court permission must be obtained before the trust is created, not after. Option (E) involves a competent person (who executed the power of attorney while competent) creating a trust through delegated authority, which is permissible. Thus, option (C) correctly identifies the Section 7 violation.

    Practice Next
    More Other Laws and Acts Questions
    ask-question