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 other : (a) in promissory notes, debentures, stock or other securities [of any [Provincial Government] or] of the [Federal 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 [before the 15th August, 1947] by the [parliament of the United Kingdom] 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 per cent stock, India three per cent. stock, India two and a half percent. stock or any other capital stock which [was at any time] 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(26 Geo. 5, ch.2.] ;] (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 [Federal 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 Provincial Government of Bombay] : [Provided that after the 31st day of March, 1949 no trustee shall invest the money in debentures of the Bombay Provincial Cooperative Bank Limited;] [(d) in debentures or other securities for money issued, under the authority of any [Central Act or Act] of a Legislature established in [a Province] 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, 1949 no trustee shall invest the money in any securities issued by or on behalf of a municipal body, port trust or city improvement trust in any Presidencytown, or in Rangoon Town ;] (e) on a first mortgage of immoveable property situate in [a Province] : 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 onehalf, the mortgagemoney; or (f) on any other security expressly authorized by the instrument of trust, or by any rule which the High Court may from time to time prescribe in this behalf [;or] [(g) in bonds, redeemable capital, debt securities or instruments issued by the Pakistan Water and Power Development Authority and in listed securities subject to the conditions as may be prescribed by the Government [;or] [(h) in units issued by schemes established under the Asset Management Companies Rules, 1995.] 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.

Effective date: 1882-03-01

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