PUNJAB TRUSTS ACT 2020

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THE PUNJAB TRUSTS ACT 2020 
(XXI of 2020) 
CONTENTS 
CHAPTER I 
PRELIMINARY 
1. Short title, extent and commencement 
2. Application 
3. Definitions 
CHAPTER II 
CREATION OF TRUSTS 
4. Lawful purpose  
5. Validity of Trusts  
6. Creation of trusts 
7. Who may create a trust  
8. Subject matter of trusts 
9. Who may be a beneficiary 
10. Disclaimer by a beneficiary  
11. Who may be a trustee 
12. Acceptance of trusts 
13. Disclaimer of trusts 
14. Registration of properties 
CHAPTER III 
ADMINISTRATION OF TRUSTS 
15. Trusts to be registered 
15-A. Registration of specialized trusts 
15-B. The regulator, his powers and appeal against his orders 
16. Registration of Trusts  
17. Refusal of application for registration 
 
 
17-A.  Appeal 
18. Inspection of records and punishments 
19. Power to obtain the registration record 
20. Register of Trusts 
21. Access to the information 
22. Legal arrangement for holding the property 
CHAPTER IV 
DUTIES AND LIABILITIES OF TRUSTEES 
23. Trustee to execute trust 
24. Trustee to collect and hold information 
25. Trustee to inform himself of state of trust-property 
26. Trustee to protect title to trust-property  
27. Trustee not to set up title adverse to beneficiary 
28. Care required from trustee  
29. Conversion of perishable property 
30. Trustee to be impartial 
31. Trustee to prevent waste 
32. Accounts and information  
33. Investment of trust-money 
34. Power to purchase redeemable stock at a premium 
35. Sale by trustee directed to sell within specified time 
36. Liability for breach to trust 
37. No set-off allowed to trustee 
38. Non-liability for predecessor's default 
39. Non-liability for co-trustee's default 
40. Several liabilities of co-trustee 
41. Non-liability of trustee paying without notice of transfer by beneficiary 
 
 
42. Liability of trustees where beneficiary's interest is forfeited to 
 Government 
43. Indemnity of trustees 
CHAPTER V 
RIGHTS AND POWERS OF TRUSTEES 
44. Right to title-deed 
45. Right to reimbursement of expenses 
46. Right to indemnity from gainer by breach of trust 
47. Right to apply to Court for opinion in management of trust-property 
48. Right to settlement of accounts 
49. General authority of trustee 
50. Power to sell in lots, an either by public auction or private contract 
51. Power to sell, buy-in and re-sell 
52. Time allowed for selling trust-property 
53. Power to convey 
54. Power to vary investments 
55. Power to apply property of minors for their maintenance 
56. Power to give receipts 
57. Power to compound, etc 
58. Power to several trustees of whom one disclaims or dies 
59. Suspension of trustee's powers by decree 
CHAPTER VI 
DISABILITIES OF TRUSTEES 
60. Trustees cannot renounce after acceptance 
61. Trustee shall not delegate 
62. Co-trustees shall not act singly 
63. Control of discretionary power 
64. Trustee may not charge for services 
 
 
65. Trustee shall not use trust-property for his own profit 
66. Trustee or his agent shall not buy 
67. Trustee shall not buy beneficiary's interest without permission 
68. Trustee for purchase 
69. Co-trustee shall not lend to one of themselves 
CHAPTER VII 
RIGHTS AND LIABILITIES OF BENEFICIARIES 
70. Rights to rents and profits 
71. Right to specific execution and transfer of possession 
72. Right to inspect and take copies of instrument of trust accounts, etc 
73. Right to transfer beneficial interest 
74. Right to sue for execution of trust 
75. Right to proper trustees 
76. Right to compel to any act of duty 
77. Wrongful purchase by trustee 
78. When trust-property is into the hands of third persons 
79. Saving of rights of certain transferees 
80. Acquisition by trustee of trust-property wrongfully converted 
81. Right in case of blended property 
82. Wrongful employment by partner -trustee of trust -property for 
 partnership purposes 
83. Liability of beneficiary joining in breach of trust 
84. Rights and liabilities of beneficiary's transferee 
CHAPTER VIII 
VACATING THE OFFICE OF TRUSTEE 
85. Office how vacated 
86. Discharge of trustee 
87. Petition to be discharged from trust 
 
 
88. Appointment of new trustees on death, etc 
89. Appointment by Court of new trustees 
90. Vesting of trust-property in new trustees 
91. Survival of trust 
CHAPTER IX 
EXTINCTION OF TRUSTS 
92. Trust how extinguished 
93. Revocation of trust 
94. Revocation not to defeat what trustees have duly done 
CHAPTER X 
CERTAIN OBLIGATIONS IN THE NATURE OF TRUSTS 
95. Where it does not appear that  transferor intended to dispose of 
 beneficial interest 
96. Transfer to one for consideration paid by another 
97. Trust incapable of execution or executed without exhausting trust -
 property 
98. Transfer for illegal purpose 
99. Bequest for illegal purpose or of which revocation is prevented by 
 coercion 
100. Transfer pursuant to rescindable contract 
101. Debtor becoming creditor's representative 
102. Advantage gained by fiduciary 
103. Advantage gained by exercise of undue influence 
104. Advantage gained by qualified owner 
105. Property acquired with notice of existing contract 
106. Purchase by person contracting to buy property to be held on trust 
107. Advantage secretly gained by one of several compounding creditors 
108. Constructive trusts in cases not expressly provided for 
109.  Obligator's duties, liabilities and disabilities 
 
 
110. Saving of rights of bona fide purchasers 
CHAPTER XI 
Miscellaneous 
111. Power to make rules 
112. Repeal and saving 
 
 
 
TEXT 
1
THE PUNJAB TRUSTS ACT 2020 
(XXI of 2020) 
    [10th September, 2020] 
An 
Act 
to revise and modify the law relating to trusts. 
It is necessary to revise and modify the law relating to trusts, and to make provisions 
for the ancillary matters.  
Be it enacted by Provincial Assembly of the Punjab as follows: 
CHAPTER I 
PRELIMINARY 
1. Short title, extent and commencement .− (1) This Act may be cited as the 
Punjab Trusts Act 2020. 
(2) It extends to whole of the Punjab. 
(3) It shall come into force at once. 
2. Application.− Nothing contained in this Act shall affect the Muslim law as to 
waqf, or the mutual relations of the m embers of an undivided family as determined 
by any customary or personal law, or apply to public or private religious or charitable 
endowments. 
3. Definitions.− In this Act: 
(a) “Assistant Commissioner” means an Assistant Commissioner 
appointed under the Punjab Civil Administration Act 2017 (III of 2017);  
(b) “author” means 
2
[any] person who reposes or declares his confidence 
in a trustee, and assigns a property to a trustee for the benefit of a 
beneficiary; 
(c) “authorities” means an „investigating or prosecuting age ncy‟ and the 
„Financial Monitoring Unit‟ as defined in the Anti -Money Laundering 
Act, 2010 (VII of 2010); 
(d) “beneficiary” means 
3
[any] person for whose benefit the confidence is 
accepted; 
                                                      
1This Act was passed by the Provincial Assembly of the Punjab on 02 September 2020; assented to by the Governor of the 
Punjab on 08 September 2020; and, was published in the Punjab Gazette (Extraordinary), dated: 10 September 20 20, pp. 
1035-1052  
2Substituted for the words “a natural”  by the Punjab Trusts (Amendment) Act 2022 (XLIII of 2022) , published in the Punjab 
Gazette (Extraordinary), dated: 20 December 2022, pp. 2869-2870, s.3. 
3Substituted for the words “a natural”  by the Punjab Trusts (Amendment) Act 2022 (XLIII of 2022) , published in the Punjab 
Gazette (Extraordinary), dated: 20 December 2022, pp. 2869-2870, s.3. 
 
 
(e) “breach of trust” means a breach of any duty imposed on a trustee by 
any law for the time being in force; 
(f) “Department” means Revenue Department of the Board of Revenue of 
the Government; 
(g) “Director” means Director of Land Records, Punjab; 
(h) “Committee” means the District Intelligence Committee notified by 
Home Department of the Government for each district; 
(i) “Financial Monitoring Unit” means the Financial Monitoring Unit as 
defined in the Anti-Money Laundering Act, 2010 (VII of 2010); 
(j) “Government” means Government of the Punjab; 
(k) “instrument” means an instrument of trust through w hich a trust is 
declared; 
(l) “interest” means right of a beneficiary against a trustee; 
(m) “investigating or prosecuting agency” means the investigating or 
prosecuting agency as defined in the Anti -Money Laundering Act, 2010 
(VII of 2010); 
(n) “notice”: a person is said to have “notice” 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 circumsta nces 
mentioned in section 229 of the Contract Act, 1872 (IX of 1872); 
(o) “prescribed” means prescribe by the rules made under this Act; 
4
[(oo)  “regulator” means a regulator as mentioned in clause (1) of Schedule 
IV of the Anti -Money Laundering Act, 2010 (VII  of 2010)  5[or, as the 
case may be, Director General Labour Welfare, Labour and Human 
Resource Department];] 
(p) “reporting entity” means an entity specified under the Anti -Money 
Laundering Act, 2010 (VII of 2010);   
(q) “trust property” means the subject matter o f a trust whether movable or 
immovable property; 
(r) “trust” means an obligation annexed to the ownership of a property, 
and arising out of a confidence reposed in and accepted by a trustee, 
or declared and accepted by him, for the benefit of another and the 
owner; 
6
[*****] 
                                                      
4Inserted by the Punjab Trusts (Amendment) Act 2022 (XLIII of 2022) , published in the Punjab Gazette (Extraor dinary), dated: 
20 December 2022, pp. 2869-2870, s.3. 
5Inserted by the Punjab Trusts (Amendment) Act 2026 (XLVII of 2026), published in the Punjab Gazette (Extraordinary), dated: 
24 June 2026, pp. 7413-7414, s.2 (a). 
6Omitted the word “and”  by the Punjab T rusts (Amendment) Act 2022 (XLIII of 2022) , published in the Punjab Gazette 
(Extraordinary), dated: 20 December 2022, pp. 2869-2870, s.3. 
 
 
(s) “trustee” means a person who accepts the confidence of an author for 
the benefit of a beneficiary
7
[; and] 
8
[(t) “specialized trust ” means a trust created for the establishment of 
collective investment schemes, collective investment vehicles,  private 
funds, pension funds, real estate investment trust, exchange trade 
funds, private equity and venture capital funds, debt securities trusts, 
trusts relating to any security issued by the Federal or a Provincial 
Government through capital markets, p rovident funds, gratuity funds, 
superannuation funds, employee benefit trust or any other trust, 
administered by the regulator 
9
[* * * * * * * * * * * *]]. 
CHAPTER II 
CREATION OF TRUSTS 
4. Lawful purpose.− (1) A trust may be created for any lawful purpose, and the 
purpose of a trust is lawful unless: 
(a) it is forbidden by law; or 
(b) it is of such a nature that it defeats the provisions of any law for the 
time being in force; or 
(c) it is fraudulent; or  
(d) it involves or implies injury to the person or property of another; or  
(e) the court regards it as immoral or opposed to public policy.  
(2) Every trust which has an unlawful purpose shall be void, and where a 
trust is created for more than one purpo ses and one of the purposes is unlawful, the 
whole trust shall be void.  
5. Validity of Trusts.− (1) No trust in relation to an immovable property shall be 
valid unless declared by a non -testamentary instrument in writing signed by the 
author of the trust and the trustee, and duly registered, or by the will of the author of 
the trust or of the trustee and ownership of the property is transferred to the trust. 
(2) No trust in relation to movable property shall be valid unless declared 
in the manner as given under subsection (1), or unless the ownership of the property 
is transferred to the trust.  
6. Creation of trusts .− Subject to the provisions of sections 4 and 5, a trust is 
created when the author of the trust indicates with reasonable certainty in writing: 
(a) an intention to create a trust;  
(b) purpose of trust;  
                                                      
7Substituted for the “full stop”  by the Punjab Trusts (Amendment) Act 2022 (XLIII of 2022) , published in the Punjab Ga zette 
(Extraordinary), dated: 20 December 2022, pp. 2869-2870, s.3. 
8Added by the Punjab Trusts (Amendment) Act 2022 (XLIII of 2022), published in the Punjab Gazette (Extraordinary), dated: 20 
December 2022, pp. 2869-2870, s.3. 
9Omitted by the Punjab Trusts (Amendment) Act 2026 (XLVII of 2026), published in the Punjab Gazette (Extraordinary), dated: 
24 June 2026, pp. 7413-7414, s.2 (b). 
 
 
 
(c) trustee;  
(d) beneficiary;  
(e) trust property; and 
(f) transfers the trust property to the trust, unless the trust is declared by 
will or the author is himself to be the trustee. 
7. Who may create a trust .− A trust may be created by 
10
[any] person 
competent to contract under the Contract Act, 1872 (IX of 1872) , or, with the 
permission of a Civil Court of original jurisdiction, on behalf of a minor.  
8. Subject matter of trusts .− The subject matter of a trust shall be a property 
transferable to the trust.  
9. Who may be a beneficiary .− Every 
11
[*****] person capable of holding a 
property may be a beneficiary.  
12
[*****] 
10. Disclaimer by a beneficiary .− A proposed beneficiary may renounce his 
interest in the trust by disclaimer addressed to the trustee, or by setting up, with 
notice of the trust, a claim inconsistent therewith.  
11. Who may be a trustee . − Every 
13
[*****] person capable of holding a property 
may be a trustee; but, where the trust involves the exercise of discretion, such 
person shall not execute it unless he is competent to contract under the Contract 
Act, 1872 (IX of 1872). 
14
[*****] 
12. Acceptance of trusts .− A trust shall be accepted by the trustee indicating 
with reasonable certainty in writing, and the trustee accepting the trust shall provide 
an affidavit that the trustee has read and understood the duties and liabilities of the 
trustee as mentioned in Chapter-IV of this Act. 
13. Disclaimer of trusts .− (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.  
                                                      
10Substituted for the words “a natural”  by the Punjab Trusts (Amendment) Act 2022 (XLIII of 2022) , published in the Punjab  
Gazette (Extraordinary), dated: 20 December 2022, pp. 2869-2870, s.4. 
11Omitted the word “natural”  by the Punjab Trusts (Amendment) Act 2022 (XLIII of 2022) , published in the Punjab Gazette 
(Extraordinary), dated: 20 December 2022, pp. 2869-2870, s.5. 
12Omitted the “Explanation”  by the Punjab Trusts (Amendment) Act 2022 (XLIII of 2022) , published in the Punjab Gazette 
(Extraordinary), dated: 20 December 2022, pp. 2869-2870, s.5. 
13Omitted the word “natural”  by the Punjab Trusts (Amendment) Act 2022 (XLIII of 2022), published in the Punjab Gazette 
(Extraordinary), dated: 20 December 2022, pp. 2869-2870, s.6. 
14Omitted the “Explanation”  by the Punjab Trusts (Amendment) Act 2022 (XLIII of 2022) , published in the Punjab Gazette 
(Extraordinary), dated: 20 December 2022, pp. 2869-2870, s.6. 
 
 
(2) In case of more than one trustees, if one of the trustees disclaims to be 
a trustee, it shall not automatically confer the disclaiming trustee‟s rights on the other 
trustees.  
(3) The author 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. 
14. Registration of properties.− All movable and immovable properties shall be 
registered in the name of the trust under the Registration Act, 1908 (XVI of 1908).  
CHAPTER III 
ADMINISTRATION OF TRUSTS 
15
[15. Trusts to be registered .- (1) No trust shall be functional unless it is 
registered with the  Director under this Act in such manner as may be prescribed. 
(2) All trusts created under the Trusts Act, 1882 (II of 1882) or registered 
under the Registration Act, 1908 (XVI of 1908) or under any other law for the time 
being in force shall get registered under subsection (1) within such timeframe as 
may be notified by the Government. 
(3) A trust which fails to get registered under this section shall cease to 
function or operate in any manner, and necessary action shall be initiated against 
such trust under section 92 of this Act.] 
16
[15-A. Registration of specialized trusts .- (1) For registration of a specialized 
trust under this Act, the trustee shall provide to the Director a No Objection 
Certificate from the concerned regulator containing the prescribed information. 
(2) Where the trustee provides the No Objection Certificate under 
subsection (1), it shall be deemed that the requirements for registration of trust 
under section 16 have been fulfilled, and the Director shall register the specialize d 
trust.  
(3) A specialized trust created prior to commencement of this Act shall be 
deemed to have been registered under section 15 of this Act.  
 (4) A specialized trust, which is deemed to have been registered under 
subsection (3), shall be issued a cer tificate of registration under section 16 of this 
Act. 
(5) A specialized trust which fails to fulfill the requirements of subsection 
(1) shall cease to function or operate in any manner, and necessary action shall be 
initiated against such trust under section 92 of this Act.] 
 
 
 
 
                                                      
15Substituted by the Punjab Trusts (Amendment) Act 2022 (XLIII of 2022) , published in the Punjab Gazette (Extraordinary), 
dated: 20 December 2022, pp. 2869-2870, s.7. 
16Inserted by the Punjab Trusts (Amendment) Act 2022 (XLIII of 2022), published in the Punjab Gazette (Extraordinary), dated: 
20 December 2022, pp. 2869-2870, s.8. 
 
 
17
[15-B. The regulator, his powers and appeal against his orders .- (1) For the 
purpose of this Act, Director General Labour Welfare, Labour and Human Resource 
Department shall be the regulator for issuance of No Objection Certificat e in the 
matters other than those within jurisdiction of the regulator provided in Schedule IV 
of the Anti-Money Laundering Act, 2010 (VII of 2010). 
 (2) The regulator provided under sub -section (1) may, in such manner, on 
such terms and conditions and on payment of such fee as may be prescribed, issue 
No Objection Certificate and may, for the reasons to be recorded in writing, refuse to 
issue No Objection Certificate, or cancel No Objection Certificate issued by him, 
however, before cancellation, an opport unity of hearing shall be provided to the 
person likely to be affected thereby. 
 (3) In case No Objection Certificate is refused or cancelled under sub -
section (2), the aggrieved person may, within thirty days of such refusal or 
cancellation, file an appea l before Secretary, Labour and Human Resource 
Department, whose decision shall be final.] 
16. Registration of Trusts .− (1) For registration of a trust under this Act, a 
trustee shall file an application before the Assistant Commissioner concerned 
containing the following information: 
(a) details of the author;  
(b) details of the trustees;  
(c) details of the beneficiaries;  
(d) details of any other natural person exercising ultimate effective control 
over the trust to the satisfaction of the Department; and 
(e) any other information as may be prescribed. 
Explanation: In case of more than one trustees, all the trustees may 
nominate one trustee who shall be responsible for the provision of information 
under this section. 
(2) The Assistant Commissioner concern ed shall forward the application 
received under subsection (1) to the Director.  
(3) The Director shall request to verify the contents and particulars of the 
application before the registration through the investigating or prosecuting agencies 
which shall submit the verified report to the Director within fourteen days of receiving 
the request from the Director. 
(4) After receipt of the verified report mentioned in subsection (3), the 
Director shall register the trust and issue a Certificate of Registration to the trustee.  
17. Refusal of application for registration. − The Director, for the reasons to be 
recorded in writing, may refuse an application for registration of a trust 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 
                                                      
17Inserted by the Punjab Trusts (Amendment) Act 2026 (XLVII of 2026), published in the Punjab Gazette (Extraordinary), dated: 
24 June 2026, pp. 7413-7414, s.3. 
 
 
may report to the Director under section 16, and the Director shall 
refer the application to law enforcement agencies for legal action; or 
(b) any of the members of the trust including the author , the trustee, the 
beneficiary or any other person exercising ultimate effective control 
over the trust are declared proscribed by Home Department of the 
Government, or associated with the proscribed organizations under 
the Anti -Terrorism Act, 1997 ( XXVII of 1997 ) or under the United 
Nations Security Council Act, 1948, and in such cases as mentioned in 
section 18, the Assistant Commissioner concerned shall share the 
details of such individuals with Ministry of Interior and Ministry of 
Foreign Affairs, Government of Pakistan through Home Department of 
the Government; or 
(c) the District Intelligence Coordination Committee concerned considers 
that the trust is a threat to national security; or 
(d) the author, the trustee, the beneficiary, or any person acting on their  
behalf fails to provide the complete personal details required for the 
registration and functioning of the trust under this Act; or 
(e) any other reason as may be prescribed. 
18
[17-A.  Appeal.−  A trustee, aggrieved by a decision of the Director, may, within 
thirty days of such order, file an appeal before the Senior Member, Board of 
Revenue, Punjab, who shall decide the appeal within sixty days, and his decision 
thereon shall be final.] 
18. Inspection of records and punishments .− (1) The Assistant Commissioner  
concerned or the Director or the Department may require any information relating to 
a trust from the trustee for any purpose, and shall have the power to inspect such 
record at any time. 
(2) The Assistant Commissioner shall share, through Home Department of 
the Government, with the authorities, upon written request, the information obtained 
under subsection (1).  
(3) The Assistant Commissioner shall share the information obtained 
under subsection (1) relating to assets of a trust and beneficiaries with the  reporting 
entity upon written request.  
(4) The Director upon intimation by the Assistant Commissioner concerned 
may impose fine up to rupees one million upon a trustee who fails to provide 
information required under this section or section 21 or 24 of this Act.  
(5) For the contravention of section 21, a trustee, in addition to the fine 
mentioned under subsection (4), shall also be liable to imprisonment for a term which 
may extend to six months but shall not be less than three months. 
(6) The Court of Ma gistrate first class shall take cognizance of the 
offences mentioned in subsection (5) upon a complaint in writing by the Director, and 
                                                      
18Inserted by the Punjab Trusts (Amendment) Act 2026 (XLVII of 2026), published in the Punjab Gazette (Extraordinary), dated: 
24 June 2026, pp. 7413-7414, s.4. 
 
 
 
shall try the offences in a summary manner as provided in the Code of Criminal 
Procedure, 1898 (V of 1898). 
(7) The Director may take over the properties of a trust or freeze its assets 
or remove a trustee or a beneficiary from the trust and assign new trustees or 
beneficiaries through a legal order from a court of original jurisdiction in case the 
trust or trustee or benef iciary is convicted of a criminal offense, including terrorist 
financing, money laundering or a threat to national security. 
19. Power to obtain the registration record .− The Department shall obtain the 
certified copies of registration of trusts record from Sub-Registrar or the Registrar, as 
the case may be, appointed under the Registration Act, 1908 (XVI of 1908) , held by 
them before the commencement of this Act, within a period of sixty days from the 
date of commencement of this Act, and, the Department shall make the record of 
trusts in conformity with the provisions of this Act. 
20. Register of Trusts.− 
19
[(1) The Director at provincial level and the 
20
[Assistant 
Commissioner] at tehsil level shall jointly maintain a register of the trusts in such 
manner as may be determined by the Department.] 
(2) The register shall contain information, including but no t limited to the 
name and details of every trust, its purpose, author, trustees, beneficiaries, any 
person exercising ultimate effective control over the trust and such other information 
as may be required by the Department.  
(3) The information under subs ection (1) shall also include the details if 
any of the persons associated with the trust is living in Pakistan or outside Pakistan 
along with their residential addresses. 
(4) The Department shall determine the extent of the details mentioned in 
subsections (1), (2) and (3) to be made public in such manner as may be 
21
[determined by the Department]. 
21. Access to the information .− (1) The Department or the Director through the 
Assistant Commissioner concerned may at any time require any information relating 
to a trusts from the trustee, and the trustee shall be bound to provide such 
information.  
(2) For purposes of domestic and international cooperation, the authorities 
may at any time, through Home Department of the Government, require any 
information relat ing to a trust from the trustee, and the trustee shall provide the 
information in such manner and within such period of time as may be prescribed.    
(3) The reporting entity may, through the Department, in such manner and 
within such period of time as may  be prescribed, obtain any information from a 
trustee about the details of assets of the trust, residential addresses of the trustees 
and details of the beneficiaries. 
                                                      
19Substituted by the Punjab Trusts (Amendment) Act 2022 (XLIII of 2022) , published in the Pun jab Gazette (Extraordinary), 
dated: 20 December 2022, pp. 2869-2870, s.9. 
20Substituted for the words "Assistant Director" by the Punjab Trusts (Amendment) Act 2026 (XLVII of 2026) , published in the 
Punjab Gazette (Extraordinary), dated: 24 June 2026, pp. 7413-7414, s.5. 
21Substituted for the word “prescribed” by the Punjab Trusts (Amendment) Act 2022 (XLIII of 2022) , published in the Punjab 
Gazette (Extraordinary), dated: 20 December 2022, pp. 2869-2870, s.9. 
 
 
22. Legal arrangement for holding the property .− A trust may hold immovable 
and movable property in its name, or may dispose of such property through a 
trustee. 
CHAPTER IV 
DUTIES AND LIABILITIES OF TRUSTEES 
23. Trustee to execute trust .− (1) The trustee shall be bound to fulfill the 
purpose of the trust, and to obey the directions of the auth or 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 consent may, for 
the purposes of this section, be given by a Civil Court of original jurisdiction.  
(3) Nothing in this section shall be deemed to require a trustee to obey any 
direction which is impracticable, illegal or manifestly injurious to the beneficiaries.  
(4) 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. 
(5) A trustee, or all of the trustees, as the case may be, shall be bound to 
disclose the fact that they are the trustees when entering into a business relationship 
or carrying out an occasional transaction with a reporting entity. 
24. Trustee to collect and hold information .− (1) A trustee or each of the 
trustees, as the case may be, shall collect and hold information about the author, the 
trustees, the beneficiaries, and any other natu ral person exercising ultimate effective 
control over the trust to his satisfaction and requirement of the Department, before 
the execution of the trust as mentioned under this Act. 
(2) The trustee shall provide the updated information under this Act to th e 
Assistant Commissioner, in such manner and within such period of time as may be 
prescribed and in case of more than one trustees, only one trustee will be nominated 
by other co-trustees for the purpose of provision of information. 
(3) The trustee shall c ollect and hold basic information about the other 
service providers to the trust including, but not limited to, investment advisors or 
managers, accountants or tax advisors, and, provide this information to the Assistant 
Commissioner even after the registr ation of the trust, in such manner as may be 
prescribed and in case of more than one trustee, only one trustee will be nominated 
by other co-trustees for the purpose of provision of information. 
(4) A trustee shall further inform the Department and law enf orcement 
agencies if it comes to his knowledge any illegal utilization of the trust money by the 
beneficiaries, after and during the execution of the trust. 
25. Trustee to inform himself of state of trust -property.– A trustee shall be 
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 -
moneys invested on 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 shall not 
allow the former to retain the money for a longer period than the c ircumstances of 
the case required. 
26. Trustee to protect title to trust -property.− A trustee shall be bound 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 give n 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.  
27. Trustee not to set up title adverse to beneficiary.− The trustee shall not for 
himself of another set up or aid any title to the trust -property adverse to the interest 
of the beneficiary. 
28. Care required from trustee .− A trustee is bound to deal with the trust -
property as carefully as a man of ordinary p rudence 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.  
29. Conversion of perishable property .− Where the trust is created for the  
benefit of several persons in succession, and the trust-property is of a wasting 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 immediately profitable character. 
30. Trustee to be impartial .− (1) Where there are more beneficiaries than one, 
the trustee is bound to be impartial, and shall not execute the trust for the advantage 
of one at the expense of another. 
(2) Where the trustee has a discretionary power, nothing in this section 
shall be d eemed to authorize the Court to control the exercise of such discretion 
reasonably and in good faith. 
31. Trustee to prevent waste .− Where the trust is created for the benefit to  
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. 
32. Accounts and information .− A trustee or each of the trustees, as the case 
may be, shall be bound to: 
(a) keep clear and accurate accounts of the trust-property, and income; 
(b) furnish to the beneficiary at the request of the beneficiary at all 
reasonable times with full and accurate information as to the amount 
and state of the trust-property; 
(c) update such information as may be prescribed about the author, 
beneficiaries, trustees, any other natural person exercising ultimate 
control over the trust, trust assets and incomes.  
(d) get accounts audited by a third party at least once in a year; 
(e) submit financial reports to the Assistant Commissioner in every 
financial year; and  
(f) maintain the information collected under this section, and, section 24 
above for a period not less than the five years after their involvement 
with the trust ceases, or, the trust is extinguished.  
33. Investment of trust -money.− 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: 
(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 such Government, shall be deemed, for the purposes of this 
clause, to be securities of such Government; or 
(b) security expressly authorized by the instrument of trust, or any other 
security as may be prescribed. 
34. Power to purchase redeemable stock at a premium.− A trustee may invest 
in any of the securities mentioned in section 33, 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 s ecurity which may have been 
purchased in accordance with this section. 
35. 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 t he beneficiary, that the latter is not prejudiced by the 
extension, lies upon the trustee unless the extension has been authorized by a Civil 
Court of original jurisdiction. 
36. Liability for breach to trust .− 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. 
Provided that a trustee committing a breach of trust is not liable to pay interest 
except in the following cases: 
(i) where he has actually received interest; 
(ii) where the breach consists in unreasonable delay in paying trust-money 
to the beneficiary; 
(iii) where the trustee ought to have received interest, but has not done so; 
(iv) where he may be fairly presumed to have received interest; 
Explanation: The trustee shall be liable, in case (i), to account for the interest 
actually received, and, in cases (ii), (iii) and (iv), to account for simple interest 
at the rate of six per cent per annum, unless the Court otherwise directs; 
(v) where the breach consists in failure to invest trust -money and to 
accumulate the interest or dividends thereon, he shall be liable to 
account for compound interest (with half -yearly rests) at the same rate; 
or 
(vi) where the breach consists in the employment of trust -property or the 
proceeds thereof in trade or business, he shall be 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. 
37. 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 shall not set -off 
against his liability again which has acc rued to another portion of the trust -property 
through another and distinct breach of trust. 
38. Non-liability for predecessor's default.− Where a trustee succeeds another, 
he shall not, as such, liable for the acts or defaults of his predecessor. 
39. Non-liability for co -trustee's default .− (1) Subject to the provisions of 
sections 26, and 28, one trustee shall 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 shall be 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; or 
 
 
(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 shall not be answerable, by reason of such 
signature only, for loss or misapplication of the property by his co-trustee. 
40. 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 shall be liable to the beneficiary for the whole of the loss 
occasioned by such breach: 
provided that as between the trustees themselves,  if one is 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 are equally guilty , any one or more of the trustees who has had to refund 
the loss may compel the others to contribute. 
(2) Nothing in this section shall be deemed to authorize a trustee, who has 
been guilty of fraud, to institute a suit to compel contribution. 
41. 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 shall not 
be liable for the property so paid or delivered. 
42. Liability of trustees where beneficiary's interest is forfeited to 
Government.− When the beneficiary's interest is forfeited or awarded b y legal  
adjudication to the 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. 
43. Indemnity of trustees .− Subject to the pro visions of the instrument of trust  
and of sections 36 and 39, 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 
RIGHTS AND POWERS OF TRUSTEES 
44. Right to title-deed.− A trustee shall be entitled to have in his possession the  
instrument of trust and all the documents of title (if any) relating solely to the trust -
property. 
45. 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 shall be 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 shall be entitled to recover from the beneficiary the 
amount of such over-payment. 
46. Right to indemnity from gainer by breach o f trust .− (1) A person other 
than a trustee who has gained an advantage from a breach of trust shall 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 in terest 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. 
47. Right to apply to Court for opinion in management of trust -property.− (1) 
Any trustee may, without instituting a suit, apply by petition to a 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 petition under subsection (1) 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 petition under this section shall be in the discretion 
of the Court to which it is made. 
48. Right to settlement of accounts.− When the duties of a trustee, as such, are 
completed, he shall be 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. 
49. General authority of trustee .− (1) In addition to the powers expr essly 
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 30, a trustee may 
do all acts which are reasonable and proper for the realization, protectio n 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 Civil Court of original jurisdiction, no 
trustee shall lease trust -property for a term exceeding tw enty-one years from the 
date of executing the lease, nor without reserving the best yearly rent that can be 
reasonably obtained. 
50. 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. 
 
 
51. Power to sell, buy -in and re-sell.− The trustee making any 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. 
52. Time allowed for selling trust -property.− 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. 
53. Power to convey.− For the purpose of completing any sal e, the trustee shall 
have power to convey or otherwise dispose of the property sold in such manner as 
may be prescribed. 
54. Power to vary investments .− A trustee may, at his discretion, call in any  
trust-property invested in any security and invest the sa me on any of the securities 
mentioned or referred to in section 33, and from time to time vary any such 
investments for others of the same nature. 
55. Power to apply property of minors for their maintenance .− (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 fun eral, 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 investing the same and 
the resulting income thereof from time  to time in any of the securities mentioned or 
referred to in section 33, 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 think s 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, o r the reasonable expenses of his 
religious worship, marriage or funeral, the trustee may, with the permission of a 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 person and property of minor. 
56. 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 receip t shall discharge the person paying, transferring or 
delivering the same therefrom, and from seeing to the application thereof, or being 
accountable for any loss or misapplication thereof. 
 
 
57. Power to compound, etc .− (1) Two or more trustees acting togeth er may, if 
and as they think fit: 
(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 wh atever 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 shall apply 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. 
58. Power to several trustees of whom one disclaims or dies. − When an  
authority to deal with the trust -property is given to several trustees and one of them 
disclaims or dies, the authority may be exercised by the continuing trustees, unless 
from the te rms 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. 
59. Suspension of trustee's powers by decree. − Where a decree has been 
passed in a suit for the execution of a trust, the trustee shall 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 passed, or, where an appeal against the decree is 
pending, of the Appellate Court. 
CHAPTER VI 
DISABILITIES OF TRUSTEES 
60. Trustees cannot renounce after acceptance .− A trustee who has accepted  
the trust shall not afterwards renounce it except: 
(a) with the permission of a Civil Court of original jurisdiction; or  
(b) when the beneficiary is competent to contract with his consent; or  
(c) by virtue of a special power specified in the instrument of trust. 
61. Trustee shall not delegate .− A trustee shall not delegate his office or any of 
his duties either to a co-trustee or to a stranger, unless: 
(a) instrument of trust so provides, or  
(b) delegation is in the regular course of business, or  
(c) delegation is necessary, or  
(d) beneficiary, being competent to contract, consents to the delegation. 
 
 
Explanation: The appointment of an attorney or proxy to do an act merely  
ministerial and involving no independent discretion is not a delegation within th e 
meaning of this section. 
62. Co-trustees shall not act singly .− When there are more than one trustees, 
all shall join in the execution of the trust, except where the instrument of trust 
otherwise provides. 
63. Control of discretionary power.− Where a discretionary power conferred on  
a trustee is not exercised reasona bly and in good faith, such power may be 
controlled by a Civil Court of original jurisdiction. 
64. 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 contr ary 
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. 
Explanation: Nothing in this section shall apply to any Official T rustee, 
Administrator General, Public Curator, or person holding a certificate of 
administration. 
65. Trustee shall 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. 
66. Trustee or his agent shall not buy .− No trustee whose duty is to  sell trust-
property and no agent employed by such trustee  for the purpose of the sale, shall, 
directly or indirectly, buy the same or any interest therein, on his own account or as 
agent for a third person. 
67. Trustee shall not buy beneficiary's interest without permission .− No 
trustee, and no person who has re cently ceased to be a trustee, shall, without the 
permission of a Civil Court of original jurisdiction, buy or become mortgagee or 
lessee of the trust -property or any part thereof; and such permission shall not be 
given unless the proposed purchase, mortga ge or lease is manifestly for the 
advantage of the beneficiary. 
68. Trustee for purchase .− No trustee whose duty is to buy or to obtain a 
mortgage of lease of particular property for the beneficiary shall buy it, or any part 
thereof, or obtain a mortgage or lease of it, or any part thereof, for himself. 
69. Co-trustee shall not lend to one of themselves.− No trustee or co -trustee 
whose duty is to invest trust -money on mortgage or personal security, shall invest it 
on a mortgage by, or on the personal security of, himself, or one of his co-trustees. 
CHAPTER VII 
RIGHTS AND LIABILITIES OF BENEFICIARIES 
70. 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. 
 
 
71. Right to specific execution and transfer of possession .− (1) The 
beneficiary is e ntitled to have the  intention of the author of the trust specifically 
executed to the extent of the beneficiary‟s interest; and, where there is only one 
beneficiary and he is competent to contract, or where there are several beneficiaries 
and they are comp etent 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. 
(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 shall apply to such property during her marriage. 
72. Right to inspect and take copies of instrument of trust accounts, etc .− 
The beneficiary has a ri ght, 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 voucher s, 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. 
73. 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 beq ueathed 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. 
74. Right to sue for execution of trust .− Where no trustee is appointed or all  
the trustees die, disclaim, or are 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. 
75. Right to proper trustees .− Subject to the  provisions of the instrument of 
trust, the beneficiary has a right that the trust -property shall be properly protected 
and held and administered by proper persons and by a proper number of such 
persons. 
Explanation: The following are not p roper persons within the meaning of this 
section: 
(a) a person domiciled abroad;  
(b) alien enemy;  
(c) a person having an interest inconsistent with that of the beneficiary;  
(d) a person in insolvent circumstances; and 
(e) unless the personal law of the beneficiary allows otherwise, a married 
woman and a minor. 
 
 
76. 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. 
77. Wrongful purchase by trustee .− (1) Where a trustee has wrong fully 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 su ch person. But in 
such case the beneficiary shall 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 shall; (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 property has been deteriorated by 
the acts or omissions of the trustee or purchaser. 
(2) Nothing in this section shall: 
(a) impair 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) entitle 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. 
78. When trust -property is into the hands of third persons .− (1) Where a 
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 trust ee has disposed of trust -property and the money or 
other property which he has received therefor 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 a s his rights in respect of the original trust -
property. 
79. Saving of rights of certain transferees .− Nothing in section 78 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. 
Explanation 1:  A judgment -creditor of the trustee attaching and purchasing 
trust-property is not a transferee for consideration within the meaning of this section. 
Explanation 2: Nothing in sec tion 78 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 or the liability of a 
person to whom a debt or charge is transferred. 
80. Acquisition by trustee of trust -property wrongfully converted .− Where a 
trustee wrongfully sells or otherwise 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. 
81. Right in case of blended property .− Where the trustee wrongfully mingles  
the trust-property with his own, the beneficiary shall be entitled to a cha nge on the 
whole fund for the amount due to him. 
82. Wrongful employment by partner -trustee of trust -property for 
partnership purposes .− If a partner, being a trustee, wrongfully employs trust -
property in the business or on the account of the partnership, no other partner shall 
be liable in his personal capacity to the beneficiaries unless he has notice of the 
breach of trust and the partners having such notice are jointly and severally liable for 
the breach of trust. 
83. Liability of beneficiary joining in  breach of trust .− (1) The liability of a 
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 therefrom, without the consent of the 
other beneficiaries; or 
(c) becomes awar e 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 t o 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 has no power to deprive herself of her beneficial 
interest, nothing in this section shall apply to such property during her marriage. 
84. 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 
VACATING THE OFFICE OF TRUSTEE 
85. Office how vacated.− The office of a trustee shall be vacated by his death or 
by his discharge from his office. 
 
 
86. Discharge of trustee.−The trustee may be discharged from his office only as 
follows: 
(a) by the extinction of the trust; or 
(b) by the completion of his duties under the trust; or 
(c) by such means as may be prescribed by the instrument of trust; or 
(d) by appointment under this Act of a new trustee in his place; or 
(e) by consent of himself and the beneficiary, or, where there are more 
beneficiaries than one, all the beneficiaries be ing competent to contract; 
or 
(f) by the executive order of the Director, if any of the trustee: 
(i) is convicted by a court in criminal case; or 
(ii) fails to fulfill any of the duty or obligation required under this Act; 
or 
(iii) has been punished under section 18; or 
(g) by the Court to which a petition for his discharge is presented under this 
Act. 
87. Petition to be discharged from trust .− Notwithstanding the provisions of  
section 23, every trustee may apply by petition to a 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. 
88. 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 insolv ent, or desires to be 
discharged from the trust, or refuses or becomes, in the opinion of a 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 tru stee 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 appointment under subsection (1) 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. 
(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 shall include refusing or retiring trustee if willing 
to act in the execution of the power. 
89. Appointment by Court of  new trustees .− (1) Whenever any vacancy or 
disqualification occurs and it is found impracticable to appoint a new trustee under 
section 88, the beneficiary may, without instituting a suit, apply by petition to a 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) 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 will promote or impede the 
execution of the trust; and  
(d) where there are more beneficiaries than one, to the interests of all such 
beneficiaries. 
90. Vesting of trust -property in new trustees .− Whenever any new trustee is  
appointed under section 88 or section 89, all the trust -property for the time being 
vested in the surviving or continuing trustees or trustee, or in the legal representati ve 
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 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. 
91. 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 
EXTINCTION OF TRUSTS 
92. 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 of the trust are included in clause (b) of section 17 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 
 
 
22
[(cc) when it fails to comply with the requirements contained in section 15 and 
15-A of this Act; or] 
(d) when the trust, being revocable, is expressly revoked. 
Provided that reasonable defense opportunity has been given to the trust in 
case of clause (c) above and the trust has the right of appeal to the Department. 
93. Revocation of trust .− (1) A trust created by will may be revoked at th e 
pleasure of the testator. 
(2) A trust otherwise created can be revoked only: 
(a) by the consent of all the beneficiaries competent to contract; or 
(b) in exercise of a power of revocation expressly reserved to the 
author where the trust has been declared by non -testamentary 
instrument or by word of mouth; or 
(c) at the pleasure of the author where the trust is for the payment 
of the debts of the author and has not been communicated to 
the creditors. 
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 communication 
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. 
94. Revocation not to defeat what trustees have duly done .− No trust shall be 
revoked by the author so as to defeat or prejudice what the trustees may have duly 
done in execution of the trust. 
CHAPTER X 
CERTAIN OBLIGATIONS IN THE NATURE OF TRUSTS 
95. Where it does not appear that 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 shall hold such 
property for the benefit of the owner or his legal representative. 
96. Transfer to one for consideration paid by another. − Where property is  
transferred to one person for a consideration paid or provided 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 shall hold the property 
for the benefit of the person paying or providing the consideration. 
Explanation: Nothing in this section shall affect the provis ions of the Code of 
Civil Procedure, 1908 (V of 1908). 
                                                      
22Inserted by the Punjab Trusts (Amendment) Act 2022 (XLIII of 2022), published in the Punjab Gazette (Extraordinary), dated: 
20 December 2022, pp. 2869-2870, s.10. 
 
 
97. Trust incapable of execution or executed 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, shall hold the trust -property, or so much 
thereof as is unexhausted , for the benefit of the author of the trust or his legal 
representative. 
98. 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 of permitting the transferee 
to retain the property might be to defeat the provisions of any law, the transferee 
shall hold the property for the benefit of the transferor. 
99. Bequest for illegal purpose or of wh ich revocation is prevented by 
coercion.− (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 lega tee shall 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 shall hold the property for the benefit of the 
testator's legal representative. 
100. 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 shall, 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. 
101. Debtor becoming creditor's representative .− Where a debtor becomes the  
executor or other legal representative of his creditor, he shall hold the debt for the 
benefit of the persons interested therein. 
102. 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 
shall hold for the benefit of such other person the advantage so gained. 
103. 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 exercised, shall hold the advantage for the  benefit of the 
person whose interests have been so prejudiced. 
104. 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 shall 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. 
105. 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 shall hold  the property for the benefit of the latter to the extent necessary to 
give effect to the contract. 
106. Purchase by person contracting to buy property to be held on trust .− 
Where a person contracts to buy property to be held on trust for certain beneficia ries 
and buys the property accordingly, he shall hold the property for their benefit to the 
extent necessary to give effect to the contract. 
107. 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 shall hold for the benefit of such creditors the advantage so gained. 
108. 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 shall hold the property for the benefit of the persons havin g such interest, 
or the residue thereof, as the case may be, to the extent necessary to satisfy their 
just demands. 
109. Obligator's duties, liabilities and disabilities .− The person holding  property 
in accordance with any of the preceding sections of this  Chapter shall, 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: 
(a) where he rightfully c ultivates the property or employs it in trade or 
business, he shall be entitled to reasonable remuneration for his 
trouble, skill and loss of time in such cultivation or employment; and 
(b) 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. 
110. Saving of rights of bona fide purchasers .− Nothing containe d 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 
 
 
111. Power to make rules.− The Government may make rules for carry ing out the 
purposes of this Act within sixty days from the date of commencement of this Act. 
112. Repeal and saving.− (1) The Trusts Act, 1882 (II of 1882) is hereby repealed. 
(2) Notwithstanding the repeal of the Trusts Act, 1882 (II of 188 2), 
anything done, actions taken, rules made or notifications issued under the repealed 
Act, so far as they are 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. 
(3) Any d ocument referring to the repealed Act shall be construed as 
referring to corresponding provisions of this Act. 
(4) All the trusts registered in the Punjab under the repealed Act shall be 
freshly registered under this Act within a period of six months of th e commencement 
of this Act.