Under Section 4 of the Indian Trusts Act, 1882, Mr. U

Solution

Explanation: Section 4 of the Indian Trusts Act provides: "A trust may be created for any lawful purpose. The purpose of a trust is unlawful unless it is (a) forbidden by law; or (b) fraudulent; or (c) of such a nature that, if permitted, it would defeat the provisions of any law; or (d) involves or implies injury to the person or property of another; or (e) the Court regards it as immoral or opposed to public policy." Clause (c) is key: trusts that would defeat statutory provisions are unlawful. In Mr. U's case: Indian election laws (including the Representation of the People Act, 1951, and regulations under the Election Commission) impose strict limits on: (i) political funding; (ii) donation transparency; (iii) foreign funding prohibitions; (iv) individual/corporate contribution caps. Creating a trust specifically to circumvent these regulations or to channel funds in violation of election law would constitute a purpose "of such a nature that, if permitted, it would defeat the provisions of any law." While not automatically invalid (as option (D) suggests), the trust's validity depends on whether its operation would violate election finance laws. Section 4 illustration: "A bequeaths property to B in trust to employ it in carrying on a smuggling business, and out of the profits thereof to support A's children. The trust is void [as being opposed to public policy and destructive of law]." Similarly, political trusts that facilitate violation of election law would fail Section 4's lawfulness requirement. Thus, option (B) correctly applies Section 4(c).