Trust, partition, rectification and partnership deeds
Drafting, Pleading and Conveyance · Unit IV · Topic 17 of 19 · 7 min read
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Cases checked to exist. Read the judgment before quoting a holding.
Every case cited here has been checked to exist — the citation resolves and names the right parties. The propositions attributed to each case have not been verified line by line against the judgment. Case names link through to the full judgment: read it before quoting a holding in an examination answer, and never carry a proposition from notes into court on trust.
1. Trust deed
Section 3 of the Indian Trusts Act, 1882 defines a trust as an obligation annexed to the ownership of property, arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner. The Act governs private trusts; section 1 says it does not apply to public or private religious or charitable endowments, which are governed by the general law and, for religious endowments in Karnataka, by State legislation.
- Section 5: a trust of immovable property is valid only if declared by a non-testamentary instrument in writing, signed by the author or the trustee, and registered, or by will. A trust of movable property needs such an instrument or a transfer of ownership to the trustee.
- Section 6: a trust is created when the author indicates with reasonable certainty (a) an intention to create a trust, (b) its purpose, (c) the beneficiary, and (d) the trust property, and (unless the author is himself the trustee or the trust is by will) transfers the property to the trustee.
- Section 11: the trustee must fulfil the purpose and obey the author’s directions. The deed should therefore state the trustee’s powers (investment, sale, leasing), remuneration, accounts, appointment of new trustees and the end of the trust.
- The Author, Sri Narayan P. Bhat, transfers to the Trustees, Sri Ajay N. Bhat and Smt. Usha Hegde, the sum of Rs. 25,00,000 and the house described in the Schedule (the Trust Fund), to hold on trust as follows.
- Purpose and beneficiary. To apply the income for the maintenance, education and medical care of the Author’s grandson, Master Rohan A. Bhat, born 4 April 2016, until he completes 25 years, and then to transfer the Trust Fund to him absolutely.
- Powers. The Trustees may invest the money only in scheduled bank deposits and Government securities, may let the house for terms not exceeding three years, and may not sell it without the written consent of both Trustees and the beneficiary’s guardian.
- Accounts. The Trustees shall keep accounts, have them audited every year and give a copy to the beneficiary’s guardian.
- New trustees. On the death, resignation or incapacity of a Trustee, the surviving Trustee shall appoint a new Trustee by registered instrument.
- Remuneration. The Trustees act without remuneration but may recover reasonable expenses.
Signed by the Author and accepted by both Trustees; registered under section 5.
2. Partition deed and family settlement
A partition deed divides joint property (coparcenary or co-owned) into separate shares and allots each to a co-owner. It “creates, declares, assigns, limits or extinguishes” rights in immovable property and so needs registration under section 17(1)(b) of the Registration Act, 1908 if the value is one hundred rupees or more. Stamp duty is charged on the value of the separated shares.
A family settlement is treated more kindly. In Kale v. Deputy Director of Consolidation, 1976 INSC 6, (1976) 3 SCC 119, the Supreme Court held that a bona fide family arrangement to settle disputes among members, which is fair and voluntary, is binding; that it needs registration only if the terms are reduced into a document which itself creates rights; and that a memorandum recording an arrangement already made orally does not require registration. Drafting choice follows: either make a registered partition deed, or record a past oral partition in a memorandum that says so in terms.
- Parties. Sri Shivakumar B. Angadi (First Party) and Smt. Shobha R. Patil (Second Party), son and daughter of late Basappa M. Angadi.
- Recital. On their father’s death on 1 March 2026, the properties in Schedules A and B devolved on the parties in equal shares as Class I heirs under the Hindu Succession Act, 1956 (their mother having predeceased their father).
- Division. The parties divide the properties by metes and bounds: Schedule A is allotted to the First Party, Schedule B to the Second Party, each absolutely.
- Owelty. Schedule A being of higher value, the First Party has paid the Second Party Rs. 4,00,000 to equalise the shares, receipt of which she acknowledges.
- Release. Each party releases all right in the property allotted to the other.
- Possession and records. Each party is in possession of the property allotted and may have the revenue and municipal records changed.
Signed by both parties; two witnesses; registered.
3. Rectification deed
A mistake in a registered deed (a wrong survey number, a misspelt name, a wrong extent) is corrected in one of two ways.
- By consent: a rectification deed. All parties to the original deed execute a deed that recites the original, identifies the mistake, states the correct particulars and declares that the original shall be read accordingly. It must not change the consideration or the substance of the bargain; if it does, it is a fresh conveyance. If the original was registered, register the rectification deed too.
- By suit: section 26 of the Specific Relief Act, 1963. Where, through fraud or mutual mistake, an instrument does not express the parties’ real intention, either party may sue to have it rectified, and the court may rectify it if this can be done without prejudice to rights acquired in good faith and for value by third persons.
“By a sale deed dated 20 November 2026, registered as Document No. 4567 of 2026-27 in the office of the Sub-Registrar, Dharwad, the Vendor sold to the Purchaser the property described in its Schedule. In that Schedule the property was by mistake described as CTS No. 2465/B instead of CTS No. 2456/B. The parties declare that the correct number is CTS No. 2456/B, that the sale deed shall be read and construed as if that number had been stated in it, and that all other terms remain unchanged. No consideration passes under this deed.”
4. Partnership deed
Section 4 of the Indian Partnership Act, 1932 defines partnership as the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. It arises from contract, not status (section 5), and the partners’ mutual rights may be fixed by contract (section 11). The deed should cover:
- Firm name, nature and place of business, commencement.
- Duration: for a fixed term, or at will.
- Capital contribution of each partner, and interest on capital.
- Profit and loss sharing ratio (absent a term, equal: section 13(b)).
- Salary or remuneration of working partners.
- Bank accounts and who may operate them.
- Books of account and annual accounts.
- Duties: diligence, no competing business, no use of firm property for private ends.
- Limits on authority: no borrowing, guarantees or sale of immovable property without consent of all.
- Admission of new partners, retirement (section 32), death, expulsion.
- Dissolution and settlement of accounts.
- Arbitration of disputes.
Registration. A firm is registered by sending the Registrar of Firms a statement in the prescribed form (section 58). Registration is not compulsory, but section 69 bars an unregistered firm, and a partner of an unregistered firm, from suing to enforce a right arising from a contract against third parties or against the firm and other partners. Advise registration.
This Deed of Partnership is made at Hubballi on 1 December 2026 between Sri Anand K. Shetty and Smt. Kavya N. Rao (the Partners).
- The Partners shall carry on the business of retail and wholesale stationery under the name “M/s Sapna Stores” at Shop No. 3, CTS No. 2456/B, Shrinagar, Dharwad, from 1 December 2026, as a partnership at will.
- The capital is Rs. 20,00,000, contributed equally. Net profits and losses shall be shared equally, after paying interest on capital at 8 per cent per annum and a monthly salary of Rs. 25,000 to each working partner.
How this is examined
The syllabus lists trust, partition, rectification and partnership deeds, so each should appear among the 15 conveyancing exercises (3 marks each). At the viva: the three certainties of a trust and section 5; whether a partition deed and a family settlement need registration, with Kale; the difference between a rectification deed and a suit under section 26; and the effect of non-registration of a firm under section 69.