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Can Creditors Claim Against A Trust In India?


Khushi Parmar, D.Y. Patil College of Law, Mumbai University


ABSTRACT


The Indian Trusts Act, 1882, serves as the legislative framework governing the creation, classification, administration, and dissolution of private trusts and trustees in India. The Indian Trusts Act, 1882 defines a trust as an obligation attached to property ownership for the benefit of another, detailing the roles of the settlor, trustee, and beneficiary. Trusts can be established through settlement or will and are classified into public, private, and charitable trusts. The Indian Trusts Act, 1882 highlights the separation of the trust assets from trustees' personal property, posing challenges for creditors claiming against the trust assets. Provisions from the Transfer of Property Act, 1882, the Income Tax Act, 1961, and the Insolvency and Bankruptcy Code, 2016, address creditors' rights and protections, particularly regarding fraudulent transfers and revocable trusts. Legal precedents reinforce the protection of trust assets from creditors' claims, emphasizing the necessity for procedural adherence and the collective responsibility of the trustees. The framework aims to balance the interests of the beneficiaries and the creditors while ensuring the integrity and lawful purpose of trust arrangements. This framework helps safeguard the assets held in the trust from creditors' claims, ensuring the trust's purpose is fulfilled for the benefit of the intended beneficiaries.


Keywords: Indian Trusts Act, 1882, Trust Assets Protection, Creditors' Claims, Fraudulent transfers, Revocable trusts.



Indian Journal of Law and Legal Research

Abbreviation: IJLLR

ISSN: 2582-8878

Website: www.ijllr.com

Accessibility: Open Access

License: Creative Commons 4.0

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All research articles published in The Indian Journal of Law and Legal Research are fully open access. i.e. immediately freely available to read, download and share. Articles are published under the terms of a Creative Commons license which permits use, distribution and reproduction in any medium, provided the original work is properly cited.

 

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The opinions expressed in this publication are those of the authors. They do not purport to reflect the opinions or views of the IJLLR or its members. The designations employed in this publication and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the IJLLR.

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