Amendment of Section 20 of the Indian Trusts Act, 1882

Amendment to Section 20 of the Indian Trusts Act, 1882 (2 of 1882) which relates to investment of trust money has been approved by the Cabinet today. A Bill will be introduced in the ensuing Session of Parliament.
In accordance with this section, 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 in securities enumerated in clauses (a) to (f) of that section.
Accordingly, section 20 of the Act is now proposed to be substituted by the following:
“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 any security or class of securities expressly authorized by the instrument of trust, or 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 above trust-property for his life, or for any greater estate, no investment on any security or class of securities mentioned above shall be made without his consent in writing.” Provided further that no such consent shall be required where such investment is made in the securities of the Government.