There has been some controversy as to whether Muslim law recognizes trust; “It is of no avail that ye turn your faces (in prayer) towards the East and the West, but righteousness is in those who perform their engagements in which they have engaged. These are the true, these are the pious”.
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These verses from the Koran are often quoted in favour of the view that Muslim law recognizes trusts. In modern India, a Muslim can validly create a trust. Whenever a Muslim makes a gift through the medium of a trust, all formalities of a gift must be complied with. In all those cases where a Muslim can make a valid gift inter, vivos, he may make such a gift through the medium of trust.
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In such cases the delivery of possession should be made to the trustee. Trust is merely an instrumentality by which a gift is carried into effect, and as such the delivery of possession to the trustee is essential.
In Sadak v. Hasim, a Shia Muslim executed a trust deed under which he purported to transfer certain immovable property to Â, Ñ and D, as trustees for the benefit of his wife and children. Neither the trust deed was executed by Â, Ñ or D, or was the property transferred in the name of anyone of them. The delivery of possession was not given either. The donor continued to be in possession and enjoyment of the property. It was held that no trust came into existence.
