Scope of the Act and What It Excludes (Sections 1 and 2)

Before studying what the Indian Trusts Act says, it is essential to know where it applies. Section 1 fixes the Act's territorial extent and commencement and, through a savings clause, removes several important institutions from its reach altogether: waqf, the joint family, religious and charitable endowments and prize trusts. The result is that the Act is a code of private trusts, while public, religious and charitable trusts are governed by a separate body of law. This note explains Section 1, the exclusions, and Section 2.

1. Short Title, Extent and Commencement

Section 1, Indian Trusts Act, 1882 (as amended)

This Act may be called the Indian Trusts Act, 1882, and it shall come into force on the first day of March, 1882.

It extends to the whole of India except the Andaman and Nicobar Islands; but the Central Government may, from time to time, by notification in the Official Gazette, extend it to the Andaman and Nicobar Islands or to any part thereof.

But nothing herein contained affects the rules of Muhammadan law as to waqf, or the mutual relations of the members of an undivided family as determined by any customary or personal law, or applies to public or private religious or charitable endowments, or to trusts to distribute prizes taken in war among the captors; and nothing in the Second Chapter of this Act applies to trusts created before the said day.

Territorial extent

Original position: the Act extended to British India; after independence it extended to the whole of India except the State of Jammu and Kashmir and the Andaman and Nicobar Islands.
Extensions: it was extended by separate laws to territories such as Dadra and Nagar Haveli, Pondicherry, Goa, Daman and Diu, and Sikkim.
Jammu and Kashmir: the words excluding the State were omitted by the Jammu and Kashmir Reorganisation Act, 2019, with effect from 31 October 2019. The Act now applies in the Union Territories of Jammu and Kashmir and Ladakh.
Andaman and Nicobar Islands: the Central Government has power to extend the Act to the Islands by notification.

Commencement

The Act came into force on 1 March 1882. The last words of Section 1 add a transitional rule: Chapter II (Sections 4 to 10, on the creation of trusts) does not apply to trusts created before that date. The validity of an older trust is judged by the law in force when it was created, but once it exists, the rest of the Act (duties, rights, disabilities, remedies and extinction) governs its administration.

2. The Savings Clause: Five Exclusions

Excluded matter	What it means	What governs instead
Rules of Muhammadan law as to waqf	The dedication of property by a Muslim for a purpose recognised as religious, pious or charitable	Muslim personal law and the Waqf Act, 1995, as amended
Mutual relations of members of an undivided family	The relations among coparceners and members of a Hindu undivided family, including the position of the karta	Hindu law, custom and the Hindu Succession Act, 1956
Public religious or charitable endowments	Temples, maths, public charities and similar institutions dedicated to the public or a section of it	General law of public trusts, Section 92 CPC, State public trust and endowment Acts, central endowment statutes
Private religious or charitable endowments	Endowments for a family deity or similar private religious purpose, where the public has no right	Hindu law of endowments and the general principles of trusts applied by analogy
Trusts to distribute prizes of war among captors	A historical category concerning the distribution of property captured in war	Of historical interest only

3. Understanding the Main Exclusions

Waqf

A waqf is a permanent dedication of property to God, with the usufruct applied to purposes recognised by Muslim law. Unlike a trust, ownership is regarded as transferred to God and the mutawalli is a manager, not an owner. Because the institution differs in concept, the Act leaves waqf entirely to Muslim law and the Waqf Act, 1995 (Topic 45). The saving protects the rules of Muhammadan law as to waqf; it does not prevent a Muslim from creating an ordinary private trust under the Act.

The undivided family

The karta of a Hindu undivided family manages joint family property for the benefit of the family, but he is not a trustee in the sense of the Act; his powers and liabilities come from Hindu law. The saving ensures that the Act does not rewrite the internal relations of the joint family. Again, the exclusion is limited to those mutual relations: members of a joint family may still create, and be parties to, private trusts governed by the Act.

Religious and charitable endowments

This is the most significant exclusion. Public religious and charitable endowments, and private religious endowments, are outside the Act. In practice, India therefore has two bodies of trust law:

Private trusts: governed by the Indian Trusts Act.
Public charitable and religious trusts: governed by the general (largely judge made) law of public trusts; Section 92 of the Code of Civil Procedure; State statutes such as the Maharashtra Public Trusts Act, 1950 and the Gujarat and Rajasthan public trusts laws; State Hindu religious endowment Acts; and central laws such as the Charitable Endowments Act, 1890 and the Charitable and Religious Trusts Act, 1920 (Part J of this series).

Courts nonetheless regularly apply the principles of the Indian Trusts Act to public trusts by analogy, as rules of justice, equity and good conscience, where no specific law governs a point. The exclusion removes the Act's force as statute, not the usefulness of its reasoning.

4. What the Act Covers

Read with the preamble ("the law relating to private trusts and trustees"), Section 1 confines the Act to private trusts: trusts whose beneficiaries are specific, ascertained or ascertainable persons. Typical examples are family trusts for children or dependants, trusts for the payment of debts, trusts arising on settlements of property, and the large modern class of commercial trusts used for mutual funds, real estate and infrastructure investment trusts, security trusts and employee benefit schemes (Part L). Chapter IX also applies to the obligations in the nature of trusts that arise by operation of law, whether or not anyone intended to create a trust.

⚠ Note

Whether a trust is public or private is decided by its substance, not its label. The test, developed in Deoki Nandan v Murlidhar (Topic 57), is whether the beneficiaries are specific individuals or the general public or a section of it. A trust called "charitable" in its deed may be private, and vice versa (Topic 40).

5. Section 2: Repeal of Enactments

Section 2 repealed, to the extent specified in its Schedule, the English statute and the Indian enactments that had previously governed aspects of trust law in the territories to which the Act extended. Its purpose was to clear the ground so that the new code would operate without overlapping earlier law. Its practical significance today is historical.

⚠ Key point

The Act came into force on 1 March 1882 and now extends to the whole of India except the Andaman and Nicobar Islands (the Jammu and Kashmir exclusion was removed with effect from 31 October 2019). Section 1 excludes waqf, the mutual relations of members of an undivided family, public and private religious or charitable endowments and prize trusts, and Chapter II does not apply to trusts created before 1882. The Act is therefore a code of private trusts; public charitable and religious trusts are governed by a separate body of law, though courts apply the Act's principles by analogy.

6. Related Topics and Provisions

Classification of trusts (Topic 5): private and public trusts
Private and public trusts; charitable purpose (Topic 40)
Hindu religious endowments (Topic 44) and waqf and trust compared (Topic 45)
Section 92 CPC and public trust litigation (Topic 41)