The Indian Trusts (Amendment) Act, 2016 passed by the Parliament and received the assent of the President on 26th day of July 2016 has become effective with effect from 17th April 2017.
Amendment: Substitution of Old Section 20 by New Section
For section 20 of the Indian Trusts Act, 1882 (hereinafter referred to as the principal Act), the following section shall be substituted, namely:—
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 shall, subject to any direction contained in the instrument of trust, invest the money in any of the securities or class of securities expressly authorised by the instrument of trust or as specified by the Central Government, by notification in the Official Gazette:
Provided that where there is a person competent to contract and entitled in possession to receive the income of the trust-property for his life, or for any greater estate, no investment in any of the securities or class of securities mentioned above shall be made without his consent in writing.
Explanation.—For the purposes of this section, the expression “securities” shall have the same meaning as assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956.’.
Prior to its substitution, Section 20 read as under:
Section 20 [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 others:-
(a) in promissory notes, debentures, stock or other securities of any State Government or of the
Central Government or of the United Kingdom of Great Britain and Ireland:
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;
(b) in bonds, debentures and annuities charged or secured by the Parliament of the United Kingdom before the fifteenth day of August 1947 on the revenues of India or of the Governor-General in Council or of any Province
Provided that, after the fifteenth day of February 1916, no money shall be invested in any such annuity being a terminable annuity unless a sinking fund has been established in connection with such annuity; but nothing in this proviso shall apply to investments made before the date aforesaid;
(bb) in India three and a half percent. Stock, India three per cent. stock, India two and a half percent stock or any other capital stock which before the 15th day of August, 1947, was issued by the secretary of State for India in Council under the authority of an Act of Parliament of the United Kingdom and charged on the revenues of India or which was issued by the Secretary of State on behalf of the Governor-
General in Council under the provisions of Part XIII of the Government of India Act, 1935];
(c) in stock or debentures of, or shares in, Railway or other Companies the interest whereon shall have been guaranteed by the Secretary of State for India in Council or by the Central Government or in debentures of the Bombay Provincial Co-operative Bank, Limited, the interest whereon shall have been guaranteed, by the Secretary of State for India in Council or the State Government of Bombay;
(d) in debentures or other securities for money issued, under the authority of any Central Act or Provincial Act or State Act, by or on behalf of any municipal body, port trust or city improvement trust in any Presidency-town, or in Rangoon Town, or by or on behalf of the trustees of the port of Karachi
Provided that after the 31st day of March, 1948, no money shall be invested in any securities issued by or on behalf of a municipal body, port trust or city improvement trust in Rangoon town, or by or on behalf of the trustees of the port of Karachi;
(e) on a first mortgage of immoveable property situate in any part of the territories to which this Act extends, Provided that the property is not a leasehold for a term of years and that the value of the property exceeds by one-third, or, if consisting of buildings, exceeds by one-half, the mortgage-money;
(ee) in units issued by the Unit Trust of India under any unit scheme made under section 21 of the Unit Trust of India Act, 1963; or;
(f) on any other security expressly authorized by the instrument of trust or by the Central Government by notification in the Official Gazette, or by any rule which the High Court may from time to time prescribe in this behalf.
Provided that, where there is a person competent to contract and entitled in possession to receive the income of the trust-property for his life, or for any greater estate, no investment on any security mentioned or referred to in clauses (d), (e) and (f) shall be made without his consent in writing.
Amendment: Proviso to Section 20A has been omitted.
Prior to its omission Proviso to Section 20A read as under:
Provided that a trustee may not purchase at a price exceeding its redemption value any security mentioned or referred to in clauses (c) and (d) of section 20 which is liable to be redeemed within fifteen years of the date of purchase at par or at some other fixed rate, or purchase any such security as is mentioned or referred to in the said clauses which is liable to be redeemed at par or at some other fixed rate at a price exceeding fifteen per centum above par or such other fixed rate.
About us:
Compliance Chambers is a growing Delhi-based firm that offers comprehensive Corporate legal and tax services. Our clients are small & medium-sized enterprises as well as large corporations. Compliance Chambers works closely with other law firms across India. Our innovative awareness aspires us to provide our clients with customized legal advice that addresses individual needs and delivers the greatest possible economic benefit.
Our areas of practice include Corporate Laws, Medical Laws, Intellectual Property Laws, Corporate Restructuring M&A / Private Equity, Environmental Laws, Labour & Industrial Laws, Food safety & Packaging Laws, Civil litigations.
The firm believes that the client awareness and service are the highest priority and also ensures that they are kept well informed of industry developments on a regular basis. For details regarding our services, contact us at:
Compliance Chambers
Advisory & Consulting
Address F-2 / 151, Sector - 11
Rohini, New Delhi | Pin Code 110085
Abhimanyu Rajpurohit: +91 93100 48341, +91 7838060605
Manish Nama: +91 88007 22330, +91 88004 22330
Comments
Post a Comment