Islamabad Capital Territory Trust Act, 2020.

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THE ISLAMABAD CAPITAL TERRITORY TRUST ACT, 2020 
 
 
 
 
CONTENTS 
_______ 
    CHAPTER I 
PRELIMINARY 
1. Short title, extent, commencement and application 
2. Definitions 
                       CHAPTER II 
                       OF THE CREATION OF THE TRUSTS 
3. Validity of trust 
4. Creation of trust 
5. Who may create trusts 
6. Subject of trust 
7. Who may be beneficiary 
8. Disclaimer by beneficiary 
9. Who may be trustee 
10. Acceptance to trust 
11. Disclaimer of trust 
 
 

 
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CHAPTER III 
OF THE ADMINISTRATION OF THE TRUSTS 
12. Trusts to be registered 
13. Application for registration 
14. Verification of the application 
15. Registration of the properties 
16. Certificate of registration 
17. Power to inspect record and compliance 
18. Power to obtain the registration record 
19. Register of trusts 
20. Access to the information 
21. Legal arrangement for holding the property 
CHAPTER IV 
OF THE DUTIES AND LIABILITIES OF TRUSTEES 
22. Trustee to execute trust 
23. Trustee to collect and hold information 
24. Trustee to inform himself to state of trust-property 
25. Trustee to protect title to trust-property 
26. Trustee not to set up title adverse to beneficiary 
27. Care required from trustee 
28. Conversion of perishable property 
29. Trustee to be impartial 
30. Trustee to prevent waste 
31. Accounts and information 
 
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32. Investment of trust-money 
33. Power to purchase redeemable stock at a premium 
34. Sale by trustee directed to sell within specified time 
35. Liability for breach of trust 
36. No set-off allowed to trustee 
37. Non-liability for predecessor’s default 
38. Non-liability for co-trustee’s default 
39. Several liabilities of co-trustee 
40. Non-liability of trustee paying without notice of transfer by beneficiary 
41. Liability of trustees where beneficiary’s interest is forfeited to the Government 
42. Indemnity of trustees 
CHAPTER V 
OF RIGHTS AND POWERS OF TRUSTEE 
43. Right to title-deed 
44. Right to reimbursement of expenses 
45. Right to indemnity from gainer by breach of trust 
46. Right to apply to Court for opinion in management of trust-property 
47. Right to settlement of accounts 
48. General authority of trustee 
49. Power to sell in lots, an either by public auction or private contract 
50. Power to sell under special conditions Power to buy-in-and resell 
51. Power to convey 
52. Power to vary investments 
53. Power to apply property of minors, etc., for their maintenance etc. 
 
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54. Power to give receipts 
55. Power to compound, etc. 
56. Power to several trustees of whom one disclaims or dies 
57. Suspension of trustee’s powers by decree 
CHAPTER VI 
OF THE DISABILITIES OF TRUSTEES 
58. Trustees cannot renounce after acceptance 
59. Trustee cannot delegate 
60. Co-trustees cannot act singly 
61. Control of discretionary power 
62. Trustee may not charge for services 
63. Trustee may not use trust-property for his own profit 
64. Trustee for sale or his agent may not buy 
65. Trustee may not buy beneficiary’s interest without permission 
66. Cotrustee may not lend to one of themselves 
CHAPTER VII 
OF RIGHTS AND LIABILITIES OF BENEFICIARY 
67. Rights to rents and profits 
68. Right to specific execution 
69. Right to inspect and take copies of instrument of trust accounts, etc. 
70. Right to transfer beneficial interest 
71. Right to sue for execution of trust 
72. Right to proper trustees 
73. Right to compel to any act of duty 
 
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74. Wrongful purchase by trustee 
75. Trust property into the hands of third person 
76. Saving of rights of certain transferees 
77. Acquisition by trustee of trust-property wrongfully converted 
78. Right in case of blended property 
79. Wrongful employment by partner-trustee 
80. Liability of beneficiary joining in breach of trust 
81. Rights and liabilities of beneficiary’s transferee 
CHAPTER VIII 
OF VACATING THE OFFICE OF TRUSTEE 
82. Office how vacated 
83. Discharge of trustee 
84. Petition to be discharged from trust 
85. Appointment of new trustees on death, etc. 
86. Appointment by Court 
87. Vesting of trust property in new trustees 
88. Survival of trust 
CHAPTER IX 
OF THE EXTINCTION OF TRUSTS 
89. Trust how extinguished 
90. Revocation of trust 
91. Revocation not to defeat what trustees have duly done 
 
 
 
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CHAPTER X 
OF CERTAIN OBLIGATIONS IN THE NATURE OF TRUSTS 
92. Obligation in nature of trust is created 
93. Transferor intended to dispose of beneficial interest 
94. Transfer to one for consideration paid by another 
95. Trust incapable of execution without exhausting trust-property 
96. Transfer for illegal purpose 
97. Bequest for illegal purpose 
98. Transfer pursuant to rescindable contract 
99. Debtor becoming creditor’s representative 
100. Advantage gained by fiduciary 
101. Advantage gained by exercise of undue influence 
102. Advantage gained by qualified owner 
103. Property acquired with notice of existing contract 
104. Property to be held on trust 
105. Advantage secretly gained by one of several compounding creditors 
106. Constructive trusts in cases not expressly provided for 
107. Obligator’s duties, liabilities and disabilities 
108. Saving of rights of bona fide purchasers 
CHAPTER XI 
Miscellaneous 
109. Power to make rules 
110. Power to interpret 
111. Repeal 
112. Saving 
 
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THE ISLAMABAD CAPITAL TERRITORY TRUST ACT, 2020 
 
ACT NO. XXV OF 2020 
 
[24th August, 2020] 
An Act to define and amend the law relating to trusts 
 
WHEREAS it expedient to enact a law relating to registration, administration and 
monitoring of trusts registered within the territorial limits of Islamabad Capital Territory; 
 
AND WHEREAS the Trust Act, 1882 (II of 1882) does not cater effective  administration 
and financial monitoring and evaluation of the trusts; 
 
It is hereby enacted as follows: 
CHAPTER I 
 
PRELIMINARY 
 
1. Short title, extent, commencement and application.—(1) This Act shall be called 
The Islamabad Capital Territory Trust Act, 2020. 
 
(2) It shall extend to the whole of the Islamabad Capital Territory. 
 
(3) It shall come into force at once. 
 
(4) Nothing herein contained shall affect the rules of Muslim law as to waqf or the mutual 
relations of the members of an undivided family as determined by any customary or personal law 
or to public or private religious or charitable endowments or to trusts to distribute prizes taken in 
war among the captors. 
 
2. Definitions.—In this Act, unless there is anything repugnant in the  subject or 
context; 
 
(a) “author of the trust” means the natural person who reposes or declares the confidence 
and assigns the property to the trustee for the benefit of beneficiary; 
 
(b) “beneficiary” means the natural person who benefits the confidence of the trust; 
 
(c) “breach of trust” means breach of any duty imposed on trustee as  such by any law 
for the time being in force; 
 
(d) “competent   authorities” means   the ‘regulators’, “the oversight bodies for SRBs as 
specified in the Anti-Money Laundering Act, 2010 (VII of 2010)”, “the investigating 
or prosecuting agency” and “the Financial Monitoring Unit”; 
 
 
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(e) “department” means   the   directorate   of   labour   and   industries, Islamabad Capital 
Territory; 
 
(f) “director” means the d irector of directorate of labour and industries, Islamabad 
Capital Territory; 
 
(g) “district intelligence coordination committee” means the intelligence committee 
headed by the deputy commissioner or district magistrate, Islamabad Capital 
Territory, Islamabad and comprising the representatives of police and intelligence 
agencies; 
(h) “financial monitoring unit” means the financial monitoring unit  specified under the 
Anti-Money Laundering Act, 2010 (VII of 2010); 
 
(i) “home department” means the office of the Chief Commissioner, Islamabad Capital 
Territory; 
 
(j) “instrument of the trust” means the instrument by which the trust is  declared; 
 
(k) “interest” means the beneficiary’s right against the trust property; 
 
(l) “investigating or prosecuting agency” means an investigating or prosecuting agency 
as specified in the Anti-Money Laundering Act,  2010 (VII of 2010); 
 
(m) “law department” means directorate of law, Chief Commissioner’s  office, Islamabad 
Capital Territory; 
 
(n) “notice” means a person is said to have known of a fact either when he actually knows 
that fact, or when, but for willful abstention from   inquiry or gross negligence, he 
would have known it, or when information of the fact is given to or obtained by his 
agent, under the circumstances mentioned in the Contract Act,1872 (IX of 1872), 
and all expressions used herein and defined in the Contract  Act,1872 (IX of 1872), 
shall be deemed to have the meanings          respectively attributed to them by that Act; 
 
(o) “prescribed” means prescribed by rules made under this Act; 
 
(p) “provincial government” means the government defined under Presidential Order  
No. 1 of 1980; 
 
(q) “purpose” means any lawful purpose unless it is— 
 
(i) forbidden by law; or 
 
(ii) is of such a nature that, if permitted, it would defeat the provisions of 
any law; or 
 
 
 
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(iii) is fraudulent; or 
 
(iv) involves or implies injury to the person or property of another;  or 
 
  
(v) the court regards it as immoral or opposed to public policy; 
 
(r) “registered” means registered with the director; 
(s) “reporting entity” means an entity specified under the Anti -Money       Laundering Act, 
2010; 
 
(t) “revenue department” means office of the district collector, Islamabad Capital 
Territory; 
 
(u) “trust” means an obligation annexed to the ownership of property and rising out of 
the confidence reposed in and accepted by the  owner or declared and accepted by 
him for the benefit of beneficiary; 
 
(v) “trustee” means any person who accepts  the confidence  of the author of the trust to 
the benefit of the beneficiary; and 
 
(w) “trust property” means the subject matter of the trust; it may be movable or immovable 
property. 
 
CHAPTER II 
 
OF THE CREATION OF THE TRUSTS 
 
3. Validity of trust.—(1) No trust in relation to any 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 and  its ownership is 
transferred to the trust. 
 
(2) No trust in relation to movable property is valid unless declared as aforesaid or unless 
the ownership of the property is transferred to the trust. 
 
4. Creation of trust.—(1) Subject to the provisions of section 3, a trust is created when 
the author of the trust indicates with reasonable certainty by any words or acts,— 
 
(a) an intention on his part to create thereby a trust; 
 
(b) the purpose of the trust; 
 
(c) the beneficiary; 
 
(d) the trust-property; and 
 
 
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(e) transfers the trust -property to the trustee unless the trust is declared  by will or the 
author of the trust is himself to be the trustee. 
(2) Every trust for which the purpose of the trust is unlawful is void  and where it is 
created for more than one purpose and one of the purposes is  unlawful then whole of the trust is 
void. 
 
5. Who may create trusts. —A trust may subject in each case to the  law for the time 
being in force as to the circumstances and extent in and to  which the author of the trust may 
dispose of the trust property be created - 
 
(a) by every natural person competent to contract under the Contract          Act, 1872 (IX 
of 1872); or 
 
(b) with the permission of a principal civil court of original jurisdiction         by or on behalf 
of a minor. 
 
6. Subject of trust.—The subject matter of a trust must be property transferable to the 
beneficiary and it must not be merely beneficial interest under a subsisting trust. 
 
7. Who may be beneficiary.—Every natural person capable of holding property may 
be a beneficiary and no legal person shall be a beneficiary under this Act. 
 
8. Disclaimer by beneficiary.—A proposed beneficiary may renounce his interest 
under the trust by disclaimer address ed to the trustee or by  setting up with notice  of the trust  a 
claim inconsistent therewith. 
 
9. Who may be trustee.—Every natural person capable of holding property and not a 
legal person may be a trustee but, where the trust involves the exercise of discretion, he shall not 
execute it unless he is competent to contract under the Contract Act, 1872 (IX of 1872). 
 
10. Acceptance to trust. —(1) A trust is accepted by any words or acts  of the trustee 
indicating with reasonable certainty such acceptance. 
 
(2) Each of the trustee accepting the trust in this section shall provide  an affidavit that 
the trustee has read and understood the duties and liabilities of the trustee as mentioned in Chapter-
IV. 
 
11. Disclaimer of trust. —(1) Instead of accepting a trust, the intended  trustee may, 
within a period of sixty days, disclaim it and such disclaimer shall prevent the trust-property from 
vesting in him. 
 
(2) In case of more than one trustees, if one of trustees, disclaims to be  a trustee, it shall 
not automatically confer the disclaiming trustee‘s rights on the  other trustees. The author of the 
trust shall either (a) explicitly allow the co-trustees to proceed in case of any of the member‘s 
disclaimer, or (b) write a  new trust-deed. 
 
 
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CHAPTER III 
 
OF THE ADMINISTRATION OF THE TRUSTS 
 
12. Trusts to be registered.—No Trust shall be functional unless it is  registered under 
this Act with the Directorate of Labor and Industries, Islamabad Capital Territory, Islamabad. 
 
13. Application for registration.—(1) For every trust required to be  registered under 
this Act, the trustee shall provide to the director at or before the  time of registration, the 
information regarding the purpose, author of the trust, details of the trustees, beneficiaries of the 
trust, and any other natural person exercising ultimate effective control over the trust as prescribed 
to the satisfaction of the department. 
 
Explanation.—In case of more than one trustee, all the trustees will  nominate one Trustee 
who shall be responsible for the provision of information. 
 
(2) The details of the information required to be provided under sub-section (1) above 
shall be prescribed. 
 
14. Verification of the application.—The director shall verify the contents and 
particulars of the application before the registration through the  investigating or prosecuting 
agencies who shall submit the verified report to the  Director within 14 days  of receiving  the 
request from him. 
 
15. Registration of the properties. —(1) All movable and immovable properties must 
be registered in the name of the Trust under the Registration Act, 1908. 
 
(2) Without prejudice to the Registration Act, 1908, the registration of the properties must 
include the details of authors of the trust, beneficiaries, trustee, co-trustee, if any, and any other 
natural person exercising ultimate effective control over the trust. 
 
16. Certificate of registration. —(1) The director, after fulfillment of  legal 
requirements, as mentioned in sections 13 to 15, shall register the trust under this Act and issue 
a certificate of registration to the trustee. 
 
(2)   The director, for the reasons to be recorded in writing, may refuse the registration of 
the application, if — 
(a) the purpose of the trust is unlawful or the trust proceeds are suspected to be proceeds 
of crime, as the investigating or prosecuting agencies inform the director under 
section 14 and the  director may refer back the application to the law enforcement           
agencies for legal action or any of the members of the trust including author, trustees 
or any other person exercising ultimate  effective control over the trust are declared 
proscribed by the office of the Chief Commissioner, Islamabad Capital Territory, or 
associated with the proscribed organizations under the Anti-Terrorism Act, 1997 or 
under the United Nations Security Council Act, 1948, and in such cases as mentioned 
in clause (b), the director             shall share the details of individuals with the Ministry of 
 
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Interior and Ministry of Foreign Affairs through the home department; or 
 
(b) the district intelligence coordination committee considers the trust a       threat to national 
security; or 
 
(c) the author of the trust, trustee, beneficiary, or any person acting on  their behalf fail 
to provide the complete personal details required under section 13 for the registration 
and functioning of the trust; or 
 
(d) any other reason as may be prescribed. 
 
17. Power to inspect record and compliance.—(1) The director, or   the district 
magistrate, ICT or the provincial government may summon any         information relating to the trust 
from the trustee for any purpose, and shall have the power to inspect such record at any time: 
 
Provided that the director while inspecting the record under this   sub-section, shall 
state the reasons in writing for such inspection. 
 
(2) The officer summoning the record under sub -section (1) may share  it with the 
competent authorities upon written request through the office of Chief  Commissioner, Islamabad 
Capital Territory any information about the  trust, trust assets, trust proceeds, author of the trust, 
trustee, beneficiary or any other person exercising ultimate effective control over the trust. 
 
(3) The director may also share the information under this section relating to the trust 
assets and beneficiaries with the reporting entity upon request. 
 
(4) The director may after conviction by the competent court of law  impose financial 
penalty up to Rupees one million, if a trustee is found in         violation to the purpose of the trust or 
fails to provide the information under sub-section (1). 
(5) In case of failure to pay the penalty under sub-section (4), the director may seek a 
legal action through the court of original jurisdiction against the trustees held responsible for non-
compliance under this Act, and such legal  action may result in imprisonment ranging from one 
month to six months. The imprisonment granted under this section shall be for the non-compliance 
of the provisions of this Act and shall be in addition to the financial penalty already  imposed 
under sub-section (4). 
 
(6) The director may after conviction by the competent court of law  impose financial 
penalty up to Rupees one million, if a trustee fails to provide the        information required under 
sections 20 and 22, or fails to obtain and hold the  information required under section 23. In 
addition, the trustee shall also be liable for imprisonment of minimum three months to a maximum 
of six months if he fails to make information available to the competent authorities as required 
under       section 20 or to the department or director for the purposes of sharing information under 
section 20. This punishment shall be awarded by a court of the         original jurisdiction. 
 
(7) The director may further take over the properties of the trust or  freeze its assets or 
remove a trustee or a beneficiary from the trust and assign            new trustees or beneficiary through 
 
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a legal order from a court of original jurisdiction in case the trust or trustee or beneficiary is 
convicted of a criminal  offence, including terror financing, money laundering or  a threat to 
national security. 
 
(8) Nothing in sub-sections (2), (3), (4), (5) and (6) shall limit the person’s basic right of 
being given fair trial opportunity and appeal to the secretary of the Division concerned or the 
appellant court, as the case may be. 
 
18. Power to obtain the registration record. —The department shall  obtain the 
registration of trust record from the revenue department i.e. district  collector, ICT, which was 
held by it before the enactment of this Act within a period of sixty days from the date of enactment 
of this Act, and, the department shall make efforts to make the trust record in conformity with the 
provisions of this Act. 
 
19. Register of trusts.—(1) The director shall maintain a register of           the trusts in such 
manner as may be prescribed. 
 
(2) The register shall contain information, including but not limited to  the name and 
details of every trust, its purpose, author, trustee, beneficiaries, any  person exercising ultimate 
effective control over the trust and other information           as required by the department. 
(3) The details must also include, if any of the person associated with  the trust is living 
in Pakistan or outside Pakistan along with their residential addresses. 
 
(4) The department shall explain the extent of the details of individuals  as included in 
the sub-sections (1), (2) and (3) to be made public in a manner and  circumstances as may be 
prescribed. 
 
20. Access to the  information.—(1) The  director may at any time  require any 
information relating to the trust from the trustee, and the trustee is  bound to provide the  
information in a timely manner as may be prescribed. 
 
(2) For purposes of domestic and international cooperation, competent  authorities may 
at any time require any information relating to the trust from the  trustee, and the trustee shall 
provide the information in a timely manner as may be prescribed. Both the request of the 
competent authorities and response of the  trustee shall be routed through the provincial 
government in a timely manner as may be prescribed. 
 
(3) The reporting entity may, in a timely manner as may be  prescribed, also obtain the 
information from the trustee about the details of trust assets, residential addresses of trustees and 
details of beneficiaries, however such request and response shall be routed  through the  
department: 
 
Provided that reasons of obtaining any kind of information, record shall be communicated 
to the trust along-with notice of obtaining such information, record etc. 
 
 
 
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21. Legal arrangement for holding the property. —A trust may hold immovable and 
movable property under its name, or may sell or dispose of the  property being held by it. Such 
sale and purchase shall be the responsibility of  the trustee. 
 
CHAPTER IV 
 
OF THE DUTIES AND LIABILITIES OF TRUSTEES 
 
22. Trustee to execute trust.—(1) The trustee is bound to fulfill the purpose of the trust, 
and to obey the directions of the author of the trust given at  the time of its creation, except as 
modified by the consent of all the beneficiaries being competent to contract. 
 
(2) Where the beneficiary is incompetent to contract, his co nsent may, for the purposes 
of this section, be given by a principal civil court of original jurisdiction. 
(3) Nothing in this section shall be deemed to require a trustee to obey  any direction 
when to do so would be impracticable, illegal or manifestly injurious to the beneficiaries. 
 
Explanation—Unless a contrary intention be expressed, the purpose of a  trust for the 
payment of debts shall be deemed to be,— 
 
(a) to pay only the debts of the author of the trust existing and recoverable at the date of 
the instrument of trust, or, when such  instrument is a  will, at the date of  his death; 
and 
 
(b) in the case of debts not bearing interest, to make such payment without interest. 
 
(4) A trustee, or all of the trustees, as the case may be, are bound to disclose the fact that 
they are trustees when entering into a business relationship  or carrying out an occasional  
transaction with a reporting entity. 
 
23. Trustee to collect and hold information.—(1) A trustee or each of  the trustees, as 
the case may be, must collect and hold information about the author of the trust, co-trustee, if any, 
beneficiaries of the trust, and any other  natural person exercising ultimate effective control over 
the trust to his satisfaction and requirement of the department, before the execution of the trust 
as mentioned in section 22. 
 
(2) The trustee must provide the updated information under this Act to  the director in 
timely manner as may be prescribed. In case of more than one  trustee, only one trustee shall be 
nominated by other co-trustees for the purpose         of provision of information. 
 
(3) The trustees or the trustee shall collect and hold basic information  about the other 
service providers to the trust including, but not limited to, investment advisers or managers, 
accountants or tax advisors, and, provide this information to the director even after the registration 
of the trust, in the circumstances and manner as may be prescribed. 
 
(4) The details of the information required to be collected and held  under sub-sections 
 
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(1), (2) and (3) shall be as may be prescribed. 
 
(5) The trustees or the trustee shall further inform the provincial government or the 
director and law enforcement agencies if it comes to their knowledge of any illegal utilization of 
the trust money by the beneficiaries, after and during the execution of the trust. 
24. Trustee to inform himself to state of trust -property.—A trustee  is bound to 
acquaint himself, as soon as possible, with the nature and circumstances of the trust property to 
obtain, where necessary, a transfer of the  trust property to himself and subject to the provisions 
of the instrument of trust to  get in trust-money invested or insufficient or hazardous security. 
 
Illustrations.— (a) The trust -property is a debt outstanding on personal security. The 
Instrument of trust gives the trustee no discretionary power  to leave the debt so 
outstanding. The trustee’s duty is to recover the debt without unnecessary delay. 
 
(b) The trust-property is money in the hands of one of two co -trustees. No discretionary 
power is given by the instrument of trust. The other co -trustee must not allow the former 
to retain the money for a longer period than the circumstances of the case required. 
 
25. Trustee to protect title to trust -property.—A trustee is bo und to  maintain and 
defend all such suits, and subject to the provisions of the instrument         of trust to take such other 
steps, as regards being had to the nature and amount or  value to the trust property, may be 
reasonably requisite for the preservation of the       trust-property and the assertion or protection of 
the title thereto. 
 
Illustrations.—The trust -property is immovable property, which has been   given to the 
author of the trust by an unregistered instrument. Subject to the  provisions of the law for the 
registration of the documents, the trustee’s duty is to         cause the instrument to be registered. 
 
26. Trustee not to set up title adverse to beneficiary.—The trustee must not for himself 
set up or aid any title to the trust-property adverse to the interest of the beneficiary. 
 
27. Care required from trustee.—A trustee is bound to deal with the trust-property as 
carefully as a man of ordinary prudence would deal with such property if it were his own; and, in 
the absence of a  contract to the contrary, a  trustee so dealing is not responsible for the loss, 
destruction or deterioration of  the trust-property. 
 
28. Conversion of perishable property. —Where the trust is created  for the benefit of 
several persons in succession, and the t rust-property is of a  perishable nature or a future or 
reversionary interest, the trustee is bound unless an intention to the contrary may be inferred from 
the instrument of trust, to  convert the property into property of a permanent and immediate 
profitable           character. 
29. Trustee to be impartial. —(1) Where there are more beneficiaries  than one, the 
trustee is bound to be impartial, and must not execute the trust for  the advantage of one at the 
expense of another. 
 
 
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(2) Where the trustee has a  discretionary power, nothing in this section  shall be deemed 
to authorize the court to control the exercise of same reasonably and in good faith. 
 
30. Trustee to prevent waste.—Where the trust is created for the  benefit of several 
persons in succession and one of them is in possession of the  trust-property, if he commits, or 
threatens to commit any act, which is destructive, or permanently injurious thereto, the trustee is 
bound to take measures to prevent such act. 
 
31. Accounts and information.—A trustee or each of the trustee, as         the case may be, 
is bound to— 
 
(a) keep clear and accurate accounts of the trust-property and income; 
 
(b) at all reasonable times, at the request of the beneficiary, to furnish him with full and 
accurate information as to the amount and state of the trust-property; 
 
(c) update the information in a timely manner about the author of the trust, beneficiaries, 
trustees, any other  natural person exercising ultimate control over the trust, trust 
assets and incomes; 
 
Explanation.—The details of the information shall be as may           be prescribed 
this Act; 
 
(d) get accounts audited by a third party at least once in a year; 
 
(e) submit financial reports to the director in every financial year; and 
 
(f) shall maintain the information collected under this section, and,  section 23 for a 
period not less than the five years after their  involvement with the trust ceases, or, 
the trust is extinguished. 
 
32. Investment of trust-money.—(1) 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 other, namely:— 
(a) in promissory notes, debentures, stock or other securities of a Provincial or Federal 
Government: 
 
Provided that securities, both the principal whereof and the interest whereon shall 
have been fully and unconditionally guaranteed by any  government, shall be 
deemed, for the purposes of this clause, to be securities of such Government; and 
 
(b) on any other security expressly authorized by the instrument of trust, or by any rule 
which the High Court may prescribe in this behalf. 
 
 
 
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33. Power to purchase redeemable stock at a premium.—A trustee may invest in any 
of the securities mentioned or referred to in section 32,  notwithstanding that the same may be 
redeemable and that the price exceeds the  redemption value, and a trustee may retain until 
redemption any redeemable stock, fund or security which may have been purchased in accordance 
with this section. 
 
34. Sale by trustee directed to sell within specified time. —Where a trustee, directed 
to sell within a specified time extends such time, the burden of  proving, as between himself and 
the beneficiary, that the latter is not prejudiced  by the extension lies upon the trustee, unless the 
extension has been authorized by a principal civil court of original jurisdiction. 
 
35. Liability for breach of trust.—(1) Where the trustee commits a breach of trust, he 
is liable to make good the loss which the trust -property or the beneficiary has thereby sustained, 
unless the beneficiary, has by fraud induced  the trustee to commit the breach, or the beneficiary, 
being competent to contract,  has himself, without coercion or undue influence having been 
brought to bear on  him, concurred in the breach, or subsequently acquiesced therein, with full 
knowledge of facts of the case and of his rights as against the trustee. 
 
(2) A trustee committing a breach of trust is not liable to pay interest  except in the 
following cases, namely:— 
 
(a) where he has actually received interest; 
 
(b) where the breach consists in unreasonable delay in paying trust -money to the  
beneficiary; 
 
(c) where the trustee ought to have received interest, but has not done so; 
(d) where he may be fairly presumed to have received interest. He is  liable, in case (a), 
to account for the interest actually received, and, in cases (b), (c) and (d), to account 
for simple interest at the rate of  six per cent per annum, unless the court otherwise 
directs; 
 
(e) where the breach consists in failure to invest trust -money and to  accumulate the 
interest or dividends thereon, he is liable to account for compound interest with half-
yearly rests at the same rate; and 
 
(f) where the breach consists in the employment of trust-property or the proceeds thereof 
in trade or business, he is liable to account, at the option of the beneficiary, either for 
compound interest (with half-yearly rests) at the same rate, or for the net profits made 
by such employment. 
 
36. No set-off allowed to trustee. —A trustee who is liable for a loss  occasioned by a 
breach of trust in respect of one portion of the trust property  cannot set-off against his liability 
again which has accrued to another portion of  the trust-property through another  and distinct  
breach of trust. 
 
 
Page 18 of 32 
 
37. Non-liability for predecessor’s default.—Where a trustee succeeds another, he is 
not, as such, liable for the acts or defaults of his predecessor. 
 
38. Non-liability for co-trustee’s default.—(1) Subject to the provisions of sections 25 
and 27, one trustee is not, as such, liable for a breach of trust committed by his co-trustee: 
 
Provided that, in the absence of an express declaration to the contrary in the instrument 
of trust, a trustee is so liable – 
 
(a) Where he has delivered trust-property to his co-trustee without seeing to its proper 
application; 
 
(b) where he allows his co-trustee to receive trust-property and fails to make due inquiry 
as to the co-trustee’s dealings therewith, or allows him to retain it longer than the 
circumstances of the case reasonably require; 
 
(c) where he becomes aware of a breach of trust committed or intended by his co-trustee, 
and either actively conceals it or does not within a  reasonable time take proper steps 
to protect the beneficiary’s interest. 
(2) A co-trustee who joins in signing a receipt for trust -property and proves that he has 
not received the same is not answerable, by reason of such  signature only, for  loss or  
misapplication of the property by his co-trustee. 
 
39. Several liabilities of co-trustee.—(1) Where co-trustees jointly  commit a breach of 
trust, or where one of them by his neglect enables the other to   commit a breach of trust, each is 
liable to the beneficiary for the whole of the loss         occasioned by such breach. 
 
(2) As between the trustees themselves, if one be less guilty than another and has had to 
refund the loss, the former may compel the latter, or his  legal representative to the extent of the 
assets he has received, to made good such   loss; and, if all be equally guilty, any one or more of 
the trustees who has had to refund the loss may compel the others to contribute. 
 
(3) Nothing in this section shall be deemed to authorize a trustee who has been guilty of 
fraud to institute a suit to compel contribution. 
 
40. Non-liability of trustee paying without notice of transfer by beneficiary.—When 
any beneficiary’s interest becomes vested in another person, and the trustee, not having notice of 
the vesting, pays or delivers trust-property to the person who would have been entitled thereto in 
the absence of such vesting, the trustee is not liable for the property so paid or delivered. 
 
41. Liability of trustees where beneficiary’s interest is forfeited to  the 
Government.—When the beneficiary’s interest is forfeited or awarded by  legal adjudication to 
the government or federal government, the trustee is bound to hold the trust-property to the extent 
of such interest for the benefit of such person in such manner as the government may direct in this 
behalf. 
 
 
Page 19 of 32 
 
42. Indemnity of trustees.—Subject to the provisions of the instrument of trust and of 
sections 35 and 38, trustees shall be respectively chargeable only for such moneys, stocks, funds 
and securities as they respectively actually receive, and shall not be answerable the one for the 
other of them, nor for any banker, broker or other person in whose hands any trust-property may 
be placed, nor for the insufficiency or deficiency of any stocks, funds or securities, nor otherwise 
for involuntary losses. 
 
CHAPTER V 
 
OF RIGHTS AND POWERS OF TRUSTEE 
 
43. Right to title-deed.—A trustee is entitled to have in his possession the instrument of 
trust and all the documents of title if any relating solely to the trust-property. 
44. Right to reimbursement of expenses.—(1) Every trustee may reimburse himself, 
or pay or discharge out of the trust -property, all expenses  property incurred in or about the 
execution of the trust, or the realization, preservation or benefit of the trust -property, or the 
protection or support of the beneficiary. 
 
(2) If the trust -property fails, the trustee is entitled to recover from the  beneficiary 
personally on whose behalf he acted, and at whose request, expressed  or implied, he made the 
payment, the amount of such expenses. 
 
(3) Where a trustee has by mistake made an over-payment to the beneficiary, he may 
reimburse the trust-property out of the beneficiary’s interest. If such interest fails, the trustee is 
entitled to recover from the beneficiary personally the amount of such over-payment. 
 
45. Right to indemnity from gainer by breach of trust.—(1) A person other than  
trustee who has gained an advantage from a breach of trust  must indemnify the trustee to the 
extent of the amount actually received by such  person under the breach; and where he is 
beneficiary the trustee has a charge on his interest for such amount. 
 
(2) Nothing in this section shall be deemed to entitle a trustee to be indemnified who has, 
in committing the breach of trust, been guilty of fraud. 
 
46. Right to apply to Court for opinion in management of trust-property.—(1) Any 
trustee may, without instituting a suit, app ly by petition to a  principal civil court of original 
jurisdiction for its opinion, advice or direction on  any present questions respecting the 
management or administration of the trust -property other than questions of detail, difficulty or 
importance, not proper in the opinion of the court for summary disposal. 
 
(2) A copy of such petition shall be served upon, and the hearing thereof may be attended 
by, such of the persons interested in the application as  the court thinks fit. 
 
(3) The costs of every application under this section shall be in the discretion of the court 
to which it is made. 
 
 
Page 20 of 32 
 
47. Right to settlement of accounts. —When the duties of a trustee, as  such, are 
completed, he is entitled to have the accounts of his administration of the trust-property examined 
and settled and, where nothing is due to the beneficiary under the trust, to an acknowledgement 
in writing to that effect. 
 
48. General authority of trustee.—(1) In addition to the powers expressly conferred by 
this Act and by the instrument of trust, and subject to the restrictions, if any, contained in such 
instrument, and to the provisions of section 29, a trustee may do all acts which are reasonable and 
proper for the realization,  protection or benefit of the trust-property, and for the protection or 
support of a beneficiary who is not competent to contract. 
 
(2) Except with the permission of a principal civil court of original jurisdiction, no trustee 
shall lease trust-property for a term exceeding twenty-one years from the date of execution of 
the lease, nor without reserving the best        yearly rent that can be reasonably obtained. 
 
49. Power to sell in lots, an either by public auction or private contract.—Where the 
trustee is empowered to sell any trust-property, he may  sell the same subject to prior charges or 
not, and either together or in lots, by public auction or private contract, and either at one time or 
at several times, unless the instrument of trust otherwise directs. 
 
50. Power to sell under special conditions Power to buy-in-and resell.—(1) The 
trustee making any such sale may insert such reasonable stipulations either as to title or evidence 
of title, or otherwise, in any conditions              of sale or contract for sale, as he thinks fit; and may also 
buy in the property or any part thereof at any sale by auction, and rescind or vary any contract for 
sale, and resell the property so bought in, or as to which the contract is so rescinded, without being 
responsible to the beneficiary for any loss occasioned thereby. 
 
(2) Where a trustee is directed to sell trust -property or to invest trust -money in the 
purchase of property, he may exercise a reasonable discretion as to  the time of effecting the sale 
or purchase. 
 
51. Power to convey. —For the purpose of completing any such sale,  the trustee shall 
have power to convey or otherwise dispose  of the property sold  in such manner as may  be 
necessary. 
 
52. Power to vary investments. —A trustee may, at his discretion, call  in any tru st-
property invested in any security and invest the same on any of the  securities mentioned or 
referred to in section 32, and from time to time vary any such investments for others of the same 
nature. 
 
53. Power to apply property of minors, etc., for their mai ntenance etc.—(1) Where 
any property is held by a trustee in trust for a minor, such trustee          may, at his discretion, pay to 
the guardians if any of such minor, or otherwise apply for or towards his maintenance or education 
or advancement in life, or the reasonable expenses of his religious worship, marriage or funeral, 
the whole or any part of the income to which he may be entitled in respect of such property;  and 
such trustee shall accumulate all the residue of such income by way of  compound interest by 
 
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investing the same and the resulting income thereof from time to time in any of the securities 
mentioned or referred to in section 32, for the        benefit of the person who shall ultimately become 
entitled to the property from which such accumulations have arisen: 
 
Provided that such trustee may, at any time, if he thinks fit, apply the whole or any part of 
such accumulations as if the same were part of the income arising in the then current year. 
 
(2) Where the income of the trust-property is insufficient for the minor’s maintenance or 
education or advancement of life, or the reasonable expenses of his religious worship, marriage 
or funeral, the trustee may, with the  permission of a principal civil court of original jurisdiction, 
but not otherwise, apply the whole or any part of such property for or towards such maintenance, 
education, advancement or expenses. 
 
(3) Nothing in this section shall be deemed to affect the provisions of  any local law for 
the time being in force relating to the persons and property of minors. 
 
54. Power to give receipts. —Any trustees or trustee may give a receipt  in writing for 
any money, securities or other moveable property payable, transferable or deliverable to them or 
him by reason, or in the exercise, of any trust of power; and, in the absence of fraud, such receipt 
shall discharge the person paying, transferring or delivering, the same there from, and from seeing 
to the application thereof, or being accountable for any loss or misapplication thereof. 
 
55. Power to compound, etc.—(1) Two or more trustees acting together may, if they  
think appropriate,- 
 
(a) accept any composition or any security for any debt or for any property; 
 
(b) allow any time for payment of any debt; 
 
(c) compromise, compound, abandon, submit to arbitration or otherwise settle and debt, 
account, claim or thing whatever relating to the trust; and 
 
(d) for any of those purposes, enter into, give, execute and do such  agreements, 
instruments of composition or arrangement, releases and other things as to them seem 
expedient, without being responsible for any loss occasioned by any act or thing so 
done by them in good faith. 
(2) The powers conferred by this section on two or more trustees acting           together may be 
exercised by a sole acting trustee when by the instrument  of trust, if any, a  sole trustee is  
authorized to execute the trusts and powers thereof. 
 
(3) This section applies only if and as far as a contrary intention is not  expressed in the 
instrument of trust, if any, and shall have effect subject to the terms of that instrument and to the 
provisions therein contained. 
 
56. Power to several trustees of whom one disclaims or dies.—When             an authority to 
deal with the tr ust-property is given to several trustees and one of  them disclaims or dies, the 
 
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authority may be exercised by the continuing trustees, unless from the terms of the instrument of 
trust it is apparent that the authority is to be exercised by a number in excess of the number of the 
remaining trustees. 
 
57. Suspension of trustee’s powers by decree. —Where a decree has  been made in a 
suit for the execution of a trust, the trustee must not exercise any  of his powers except in 
conformity with such decree, or with the sanction of the court by which the decree has been made, 
or, where an appeal against the decree is pending, of the Appellate Court. 
 
CHAPTER VI 
 
OF THE DISABILITIES OF TRUSTEES 
 
58. Trustees cannot renounce after acceptance.—A trustee who has accepted the Trust 
cannot afterwards renounce it except.— 
 
(a) with the permission of a principal civil court of original           jurisdiction, or 
 
(b) if the beneficiary is competent to contract, with his consent, or 
 
(c) by virtue of a special power in the instrument of trust. 
 
59. Trustee cannot delegate.—A trustee cannot delegate his office or any of his duties 
either to a co-trustee or to a stranger, unless— 
 
(a) the instrument of trust so provides, or 
 
(b) the delegation is in the regular course of business, or 
 
(c) the delegation is necessary, or 
 
(d) the beneficiary, being competent to contract, consents to t h e d el eg at i o n . 
Explanation.—The appointment of an attorney or proxy to do an act  merely ministerial 
and involving no independent discretion is not a delegation within the meaning of this section. 
 
60. Co-trustees cannot act singly. — When there are more trustees than        one, all must 
join in the execution of the trust, except where the instrument of trust otherwise provides. 
 
61. Control of discretionary power. — Where a discretionary power  conferred on a 
trustee is not exercised reasonably and in good faith, such power may be controlled by a principal 
civil court of original jurisdiction. 
 
62. Trustee may not charge for services.— In the absence of express directions to the 
contrary contained in the instrument of trust or of a contract to the contrary entered into with the 
beneficiary or the court at the time of accepting               the trust, a trustee has no right to remuneration 
for his trouble, skill and loss of time in executing the trust. Nothing in this section applies to any 
 
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official trustee,  administrator general, public curator, or person holding a certificate of 
administration. 
 
63. Trustee may not use trust-property for his own profit.— A trustee shall not use 
or deal with the trust property for his own profit or for any  other purpose unconnected with the 
trust. 
 
64. Trustee for sale or his agent may not buy. — No trustee whose  duty it is to sell 
trust property and no agent employed by such trustee for the purpose of the sale, may, directly or 
indirectly, buy the same or any interest therein, on his own account or as agent for a third person. 
 
65. Trustee may not buy beneficiary’s interest without permission.— (1) No trustee 
and no person who has recently ceased to be a trustee, may, without the permission of a principal 
civil court of original jurisdiction, buy or become mortgagee or lessee of the trust property or any 
party thereof and such permission shall not be given unless the proposed purchase,  mortgage or 
lease is manifestly for the advantage of the beneficiary. 
 
(2) No trustee whose duty it is to buy or to obtain a mortgage of lease  of particular 
property for the beneficiary may buy it or any part thereof or obtain          a mortgage or lease of it or 
any part thereof, for himself. 
 
66. Cotrustee may not lend to one of themselves. — A trustee or co - trustee whose 
duty, it is to invest trust-money on mortgage or personal security must not invest it on a mortgage 
by or on the personal security of himself, or one of his co-trustees. 
 
                                                CHAPTER VII 
 
OF RIGHTS AND LIABILITIES OF BENEFICIARY 
 
67. Rights to rents and profits. — The beneficiary has subject to the  provisions of the 
instrument of trust, a right to the rents and profits of the trust- property. 
 
68. Right to specific execution.— The beneficiary is entitled to have the intention of the 
author of the trust specifically executed to the extent of the beneficiary‘s interest. 
 
            (2)   Right to transfer of possession.— Where is only one beneficiary and he is competent 
to contract or where there are several beneficiaries and they  are competent to contract and all are 
of one mind, he or they may require the trustee to transfer the trust property to him or them, or to 
such person as he or they may direct. 
 
           (3)  When property has been transferred or bequeathed for the benefit of       a married woman, 
so that she shall not have power to deprive herself of her beneficial interest nothing in sub-section 
(2) applies to such property during her marriage. 
 
 
 
Page 24 of 32 
 
69. Right to inspect and take copies of instrument of trust accounts,  etc.—The 
beneficiary has a right, as against the trustee and all persons claiming under him with notice of the 
trust to inspect and take copies of the instrument of  trust, the documents of title relating solely to 
the trust property, the accounts of  the trust property and the vouchers if any by which they are 
supported and the  cases submitted and opinions taken by the trustee for his guidance in the 
discharge of his duty. 
 
70. Right to transfer beneficial interest.— The beneficiary, if competent to contract, 
may transfer his interest but subject to the law for the time  being in force as to the circumstances 
and extent in and to which he may dispose of such interest: 
 
Provided that when property is transferred or bequeathed for the benefit  of a married 
woman, so that she shall not have power to deprive herself of her  beneficial interest, nothing in 
this section shall authorize her to transfer such interest during her marriage. 
 
71. Right to sue for execution of trust.— Where no trustees are appointed or all the 
trustees die, disclaim, or discharged or where for any other reason the execution of a trust by the 
trustee is or becomes impracticable, the  beneficiary may institute a suit for the execution of the 
trust and the  trust shall, so  far as may be possible, be executed by the Court until the 
appointment of a trustee or new trustee. 
 
72. Right to proper trustees.— (1) The beneficiary has a right subject to the provisions 
of the instrument of trust, that the trust property shall be properly protected and held and 
administered by proper persons and by a proper number of such persons. 
 
(2) A person domiciled abroad, alien enemy, a person having an interest inconsistent 
with that of the beneficiary, a person in insolvent circumstances; and unless the personal law of 
the beneficiary allows otherwise and a minor are not proper persons under this section. 
 
73. Right to compel to any act of duty. — The beneficiary has a right  that his trustee 
shall be compelled to perform any particular act of his duty as         such and restrain from committing 
any contemplated or probable breach of trust. 
 
74. Wrongful purchase by trustee.— (1) Where a trustee has wrongfully bought trust 
property, the beneficiary has a right to have the property declared subject to the trust or 
retransferred by the trustee, if it remains in his  hands unsold, or, if it has been bought from him 
by any person with notice of the trust, by such person. But in such case the beneficiary must repay 
the purchase money paid by the trustee, with interest, and such other expenses, if any as he has  
properly incurred in the preservation of the property and the trustee or purchaser must,— 
 
(a) account for the net profits of the property; 
 
(b) be charged with an occupation-rent, if he has been in actual possession of the 
property; and 
 
(c) allow the beneficiary to deduct a proportionate part of the purchase - money if the 
 
Page 25 of 32 
 
property has been deteriorated by the acts or omissions of the trustee or purchaser. 
 
(2) Nothing in this section — 
 
(a) impairs the rights of lessees and others who, before the institution  of a suit to have 
the property declared subject to the trust or retransferred, have contracted in good 
faith with the trustee or purchaser; or 
 
(b) entitles the beneficiary to have the property declared subject to the  trust or 
retransferred where he being competent to contract has himself, without coercion or 
undue influence having been brought to bear on him, ratified the sale to the trustee 
with full knowledge of  the facts of the case and of his rights as against the trustee. 
 
75. Trust property into the hands of third person. — (1) Where trust property comes 
into the hands of a third person inconsistently with the trust, the  beneficiary may require him to 
admit formally, or may institute a suit or a declaration, that the property is comprised in the trust. 
 
(2) Where the trustee has disposed of trust property and the money or other property which 
he has received therefore can be traced in his hands or the  hands of his legal representative or 
legatee, the beneficiary has in respect thereof,    rights as merely as may be the same as his rights in 
respect of the original trust property. 
 
76. Saving of rights of certain transferees. — Nothing in section 75  entitles the 
beneficiary to any right in respect of property in the hands of — 
 
(a) a transferee in good faith for consideration without having notice of   the trust, 
either when the purchase -money was paid, or when the  conveyance was 
executed, or 
 
(b) a transferee for consideration from such a transferee. 
 
(2) A judgment creditor of the trustee attaching and purchasing trust  property is not a 
transferee for consideration within the meaning of this section. 
 
(3) Nothing is section 75 applies to money currency notes, negotiable instruments in the 
hands of a bona fide holder to whom they have passed in circulation, or shall be deemed to affect 
the Contract Act, 1872 (IX of 1872),  section 108, or the liability of a person to whom a debt or 
charge is transferred. 
 
77. Acquisition by trustee of trust-property wrongfully converted.—Where a trustee 
wrongfully sells or transfers trust property and  afterwards himself becomes the owner of the 
property, the property again becomes subject to the trust, notwithstanding any want of notice on 
the part of intervening transferees in good faith for consideration. 
 
78. Right in case of blended property.—Where the trustee wrongfully  mingles the trust 
property with his own, the beneficiary is entitled to a change on  the whole fund for the amount 
 
Page 26 of 32 
 
due to him. 
 
79. Wrongful employment by partner-trustee.—(1) If a partner, being a trustee, 
wrongfully employs trust property in the business or on the  account of the partnership, on  other 
partner is liable therefore in his personal capacity to the beneficiaries, unless he had notice of the 
breach of trust. 
(2) The partners having such notice are jointly and severally liable for the breach of trust. 
 
80. Liability of beneficiary joining in breach of trust.—(1) Liability of beneficiary in 
committing breach of trust arises where one of several beneficiaries— 
 
(a) joins in committing breach of trust, or 
 
(b) knowingly obtains any advantage there from, without the con sent of  the other 
beneficiaries, or 
 
(c) becomes aware of a breach of trust committed or intended to be committed, and either 
actually conceals it, or does not within a reasonable time take proper steps to protect 
the interests of the other beneficiaries, or 
 
(d) has deceived the trustee and thereby induced him to commit a breach of trust, the 
other beneficiaries are entitled to have all his beneficial interest impounded as against 
him and all who claim  under him, otherwise than as transferees for consideration 
without notice of the breach, until the loss caused by the breach has been  
compensated. 
 
(2)   When property has been transferred or bequeathed for the benefit of a married woman, 
so that she shall not have power to deprive herself of her beneficial interest, nothing in this section 
applies to such property during her marriage. 
 
81. Rights and liabilities of beneficiary’s transferee. — Every person  to whom a 
beneficiary transfers his interest has the rights and is subject to the liabilities of the beneficiary in 
respect of such interest at the date of the transfer. 
 
CHAPTER VIII 
 
OF VACATING THE OFFICE OF TRUSTEE 
 
82. Office how vacated. — The office of a trustee is vacated by his  death or by  his 
discharge from his office. 
 
83. Discharge of trustee.— the trustee may be discharged from his   office only as 
follows— 
 
(a) by the extinction of the trust; 
 
Page 27 of 32 
 
(b) by the completion of his duties under the trust; 
 
(c) by such means as may be prescribed by the instrument of trust; 
 
(d) by appointment under this Act of a new trustee in his place; 
 
(e) by consent of himself and the beneficiary, or, where there are more beneficiaries than 
one, all the beneficiaries being competent to contract; 
 
(f) by the executive order of the Director if any of the trustee: 
 
(i) is convicted by a court in criminal case; 
(ii) fails to fulfill any of the duty or obligation required under this Act; or 
(iii) has been penalized under sections 17 (c) and (e) above; and 
 
(g) by the court to which a petition for his discharge is presented under this Act. 
 
84. Petition to be discharged from trust.—Notwithstanding the provisions of section 
22, every trustee may apply by petition to a principal civil  court of original jurisdiction to be 
discharged from his office and if the court   finds that there is sufficient reason for such discharge, 
it may discharge him  accordingly and direct his costs to be paid out of the trust property. But 
where there is no such reason, the court shall not discharge him, unless a proper person  can be 
found to take his place. 
 
85. Appointment of new trustees on death, etc.—(1) Whenever any person appointed 
a trustee disclaims of any trustee, either original or substituted, dies or is for a continuous period 
of six months absent from Pakistan, or leaves  Pakistan for the purpose of residing abroad or is 
declared an insolvent or desires  to be discharged from the trust or refuses or becomes in the 
opinion of a principal   civil court of original jurisdiction unfit or personally incapable to act in the 
trust or accepts an inconsistent trust, a new trustee may be appointed in his place by - 
 
(a) the person nominated for that purpose by the instrument or trust (if any), or 
 
(b) if there be no such person or no such person able and willing to act, the author of the 
trust if he be alive and competent to contract or the  surviving or continuing trustee 
or trustee for the time being, or legal          representative of the last surviving and 
continuing trustee, or with  the consent of the court, the retiring trustee, if they all 
retire simultaneously, or with the like consent, the last retiring trustee. 
(2) Every such appointment shall be in writing under the hand of the person making it. 
 
(3) On an appointment of new trustee the number of trustees may be increased. 
 
(4) The official trustee may, with his consent and by the order of the court, be appointed 
under this section, in any case in which only one trustee is to  be appointed and such trustee is to 
be sole trustee. 
 
Page 28 of 32 
 
 
(5) The provisions of this section relative to a trustee who is a dead include the case of a 
person nominated trustee in a will but dying before the testator and those relative to a continuing 
trustee included refusing or retiring trustee if willing to act in the execution of the power. 
 
86. Appointment by Court.—(1) Whenever any such vacancy or disqualification 
occurs and it is found impracticable to appoint a new trustee  under section 85, the beneficiary 
may, without instituting a suit, apply by petition  to a principal civil court of original jurisdiction 
for the appointment of a trustee            or a new trustee, and the Court may appoint a trustee or a new 
trustee accordingly. 
 
(2) Rule for selecting new trustees. —In appointing new trustees, the  court shall have 
regard: 
 
(a) to the wishes of the author of the trust as expressed in or to be  inferred from the 
instrument of trust; 
 
(b) to the wishes of the person, if any, empowered to appoint new trustees; 
 
(c) to the question whether the appointment shall promote or impede  the execution of 
the trust; and 
 
(d) where there are more beneficiaries than one to the interests of all  such beneficiaries. 
 
87. Vesting of trust property in new trustees. —(1) Whenever any  new trustee is 
appointed under sections 85 or 86, all the trust property for the  time being vested in the 
surviving or continuing trustees or trustee or in the legal  representative of any trustee shall 
become vested in such new trustee, either  solely or jointly with the surviving or continuing 
trustees or trustee as the case may require. 
(2) Power of new trustees.—Every new trustee so appointed and every trustee 
appointed by a court, either before or after the passing of this Act,  shall have the same powers, 
authorities and discretions and shall  in all respects act, as if he had been originally nominated a 
trustee by the author of the trust. 
 
88. Survival of trust.—On the death or discharge of one of several co- trustees, the trust 
survives and the trust property passes to the others, unless the  instrument of trust  expressly 
declares, otherwise. 
CHAPTER IX 
 
OF THE EXTINCTION OF TRUSTS 
 
89. Trust how extinguished.— A trust is extinguished— 
 
(a) when its purpose is completely fulfilled; or 
 
(b) when the director considers and has sufficient reasons  to believe that the activities 
 
Page 29 of 32 
 
of the trust are included in section 16 (b) of this Act and records reasons in the order 
to extinct the trust; or 
 
(c) when the fulfillment of its purpose becomes impossible by destruction of the trust 
property or otherwise; or 
 
(d) when the trust being revocable is expressly revoked: 
 
Provided that reasonable defense opportunity has been given to  the trust in case 
of sub-section (c), above and the trust has the right of appeal to the department. 
 
90. Revocation of trust. — (1) A trust created under this Act shall be  revoked at the 
pleasure of the testator. 
 
(2) A trust otherwise created can be revoked only – 
 
(a) where all the beneficiaries are competent to contract by their consents; 
 
(b) where the trust has been declared by non testamentary instrument or   by word of 
mouth, in exercise of a power of revocation expressly  reserved to the author of the 
trust; or 
 
(c) where the trust is for the payment of the debts of the author of the  trust and has not 
been communicated to the creditors at the pleasure    of the author of the trust. 
Illustration:— A conveys property to B in trust to sell the same and pay out of the proceeds 
the claims of A‘s creditors. A reserves no power of revocation. If no com munication has been 
made to the creditors, A may revoke the trust. But if the creditors are parties to the arrangement, 
the trust cannot be revoked without their consent. 
 
91. Revocation not to defeat what trustees have duly done.— No trust can be revoked 
by the author of the trust so as to defeat or prejudice, what  the trustees may have duly done in 
execution of the trust. 
 
CHAPTER X 
 
OF CERTAIN OBLIGATIONS IN THE NATURE OF TRUSTS 
 
92. Obligation in nature of trust is created.— An obligation in the nature of a trust is 
created in the cases mentioned in section 93. 
 
93. Transferor intended to dispose  of beneficial interest.— Where the owner of 
property transfers or bequeaths and it cannot be inferred consistently with the attendant 
circumstances that he intended to dispose of the  beneficial interest therein, the transferee or 
legatee must hold such property for the benefit of the owner or his legal representative. 
 
 
 
Page 30 of 32 
 
94. Transfer to one for consideration paid by another.— Where property is 
transferred to one person for a consideration paid by another person and it appears that such other 
person did not intend to pay or provide such  consideration for the benefit of the transferee, the 
transferee must hold the property for the bene fit of the person paying or providing the 
consideration. This section shall not affect, the provisions of the Code of Civil Procedure, 1908. 
 
95. Trust incapable of execution without exhausting trust property.— Where a trust 
is incapable of being executed or where the trust is  completely executed without exhausting the 
trust property, the trustee, in the  absence of a direction to the contrary, must hold the trust 
property, or so much  thereof as is unexhausted, for the benefit of the author of the t rust or his 
legal representative. 
 
96. Transfer for illegal purpose.— Where the owner of property transfers it to another 
for an illegal purpose and such purpose is not carried into  execution or the transferor is not as 
guilty as the transferee or the effect o f permitting the transferee to retain the property might be 
to defeat the provisions         of any law, the transferee must hold the property for the benefit of the 
transferor. 
 
97. Bequest for illegal purpose.— (1) Where a testator bequeaths certain property upon 
trust and the purpose of the trust appears on the face of the will to be unlawful, or during the 
testator‘s life time the legatee agrees with him  to apply the property for an unlawful purpose, the 
legatee must hold the property for the benefit of the testator‘s legal representative. 
 
(2) Where property is bequeathed and the revocation of the bequest is  prevented by 
coercion, the legatee must hold the property for the benefit of the testator’s legal representative. 
 
98. Transfer pursuant to rescindable contract. — Where property is  transferred in 
pursuance of a contract which is liable to rescission or induced by fraud or mistake, the transferee 
must, on receiving notice to that effect, hold the property for the benefit of the transferor, subject 
to repayment by the latter of the consideration actually paid. 
 
99. Debtor becoming creditor’s representative.— Where a debtor becomes the 
executor or other legal representative of his creditor, he must hold  the debt for the benefit of the 
persons interested therein. 
 
100. Advantage gained by fiduciary.— Where a trustee, executor, partner, agent, 
director of a company, legal advisor, or other person bound in a fiduciary character to protect the 
interests of another person, by availing himself of his character, gains for himself any pecuniary 
advantage or where any person so bound enters into any dealings under circumstances in which 
his own interests  are or may be, adverse to those of such other person and thereby gains for 
himself a pecuniary advantage, he must hold for the benefit of such other person  the advantage 
so gained. 
 
101. Advantage gained by exercise of undue influence. — Where, by the exercise of 
undue influence, any advantage is gained in derogation of the  interests of another, the person 
gaining such advantage without consideration, or  with notice that such influence has been 
 
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exercised, must hold the advantage for  the benefit of the person whose interests have been so 
prejudiced. 
 
102. Advantage gained by qualified owner. — Where a tenant for life,  co-owner, 
mortgagee or other qualified owner of any property by availing himself of his position as such 
gains an advantage in derogation of the rights of  the other persons interested in the property or 
where any such owner, as representing all persons interested in such property, gains any 
advantage, he must  hold for the benefit of all persons so interested, the advantage so gained, but  
subject to repayment by such persons of their due share of the expenses properly incurred and to 
an indemnity by the same persons against liabilities properly  contracted in gaining such 
advantage. 
 
103. Property acquired with notice of existing contract. — Where a person acquires 
property with notice that another person has entered into an existing contract affecting that 
property of which specific performance could be enforced, the former must hold the property for 
the benefit of the latter to the extent necessary to give effect to the contract. 
 
104. Property to be held on trust.— Where a person contracts to buy property to be held 
on trust for certain beneficiaries and buys the property  accordingly, he must hold the property for 
their benefit to the extent necessary to give effect to the contract. 
 
105. Advantage secretly gained by one of several compounding creditors.— Where 
creditors compound the debts due to them and one of such creditors, by a secret arrangement with 
the debtor, gains an undue advantage over   his co-creditors, he must hold for the benefit of such 
creditors the advantage so gained. 
 
106. Constructive trusts in cases not expressly provided for.— In any case not coming 
within the scope of any of the preceding sections, where there is  no trust, but the person having 
possession of property has not the whole beneficial interest therein, he must hold the property for 
the benefit of the person  s having such interest, or the residue thereof, as the case may be to the 
extent necessary to satisfy their just demands. 
 
107. Obligator’s duties, liabilities and disabilities.— The person holding property in 
accordance with any of the preceding sections of this Chapter     must, so far as may be, perform 
the same duties, and is subject so far as may be  to the same liabilities and disabilities, as if he 
were a trustee of the property for the person for whose benefit he holds it: 
 
Provided that where he rightfully cultivates the property or employs it in trade or business, 
he is entitled to reasonable remuneration for his trouble, skill and loss of time in such cultivation 
or employment: 
 
Provided further that where he holds the property by virtue of a contract with a person for 
whose benefit he holds it or with any one through whom such person claims, he may, without the 
permission of the court, buy or become lessee  or mortgagee of the property or any part thereof. 
 
 
 
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108. Saving of rights of bona fide purchasers.— Nothing contained in this Chapter shall 
impair the rights of transferees in good faith for consideration  or create an obligation in evasion 
of any law for the time being in force. 
CHAPTER XI 
Miscellaneous 
109. Power to make rules. — Subject to the approval of the Federal Government, the 
Chief Commissioner of Islamabad Capital Territory shall make rules to carry out the purposes of 
this Act within a period not later than the sixty days from the date of enactment of this Act. 
110. Power to interpret.— (1) The Chief Commissioner, Islamabad Capital Territory, 
Islamabad can exercise arbitrary powers to clarify any confusion arising out of the interpretation 
of the sections of this Act: 
Provided that the secretary must— 
(a) refer to the illustrations or explanations mentioned in the Trust Act 1882; and 
(b) consult the Law, Parliamentary Affairs and Human Rights department. 
(2) Nothing contained in this section may be interpreted contrary to the judgments of High 
Courts or Supreme Court of Pakistan, as the case may be. 
111. Repeal.— The Trust Act, 1882 (II of 1882) is hereby repealed to the  extent of 
Islamabad Capital Territory, Islamabad. 
112. Saving.— (1) Notwithstanding the aforesaid repeal in section 111  above, anything 
done, action taken, rules made or notifications issued under the  aforesaid Act, so far as it is not 
inconsistent with the provisions of this Act, shall  be deemed to have been made, done or taken 
under this Act and shall have effect accordingly. 
 
(2) Any document referring to the repealed Act shall be construed as  referring to 
corresponding provisions of this Act: 
Provided that all the Trusts registered in Islamabad Capital Territory  under the repealed    
Act shall be freshly registered under this Act within a period of six months. 
 
_________________ 
 
 
 
 
 
 
 
 
 
         RGN Dated: 22-10-2025