Under Muslim law, a person can make a gift of his properties through the medium of a trust. The difference between a direct gift and a gift through trust is that in the former the donee gets the property directly from the donor whereas, in the latter the donee gets it through the trustees. The trustees simply possess and safeguard the property so that its benefit may ultimately be given to the donee.
In a gift through the medium of trust, all the elements of a Hiba namely, the declaration, acceptance and the delivery of possession are necessary to validate it. In such gifts, the acceptance of the gift and also the delivery of possession, whether actual or constructive, must be made by the trustees. However, the execution of the trust-deed by the trustees is sufficient to indicate that the trustees have accepted the gift and have taken the possession of the property on behalf of the donees.
In Sadik Hussain v. Hashim Ali, a Shia Muslim made a gift of his immovable properties for the benefit of his wife and children through the medium of a trust. Three persons were made trustees. The deed was duly signed by the donor (settler) and was also registered but the trustees had not signed the deed. The property was also not transferred in the name of any of the trustees and the donor continued to receive the rents of the properties as before.
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ADVERTISEMENTS:
It was held by the Court that a gift through the medium of a trust must be accepted by the trustees. The possession, actual or constructive, must also be taken by the trustees on behalf of the beneficiaries (donees). Since there was neither acceptance of the gift nor any delivery of possession to the trustees, therefore, the gift was void.