Fiduciary relationship - Indian Laws - General

fiduciary relationship Black s Law Dictionary Tenth Edition, p. 744 , defines fiduciary relationship thus: A relationship in which one person is under a duty to act for the benefit of the other on matters within the scope of the relationship. Fiduciary relationships such as trustee-beneficiary, guardian-ward, principal-agent, and attorney-client require an unusually high degree of care. Fiduciary relationships usually arise in one of four situations : (1) when one person places trust in the faithful integrity of another, who as a result gains superiority or influence over the first, (2) when one person assumes control and responsibility over another, (3) when one person has a duty to act for or give advice to another on matters falling within the scope of the relationship, or (4) when there is a specific relationship that has traditionally been recognized as involving fiduciary duties, as with a lawyer and a client or a stockbroker and a customer. In Words and Phrases , Volume 16-A, St. Paul: West Pub. Co, 1940 the term fiduciary is defined: Generally, the term fiduciary applies to any person who occupies a position of peculiar confidence towards another... It refers to integrity and fidelity... It contemplates fair dealing and good faith, rather than legal obligation, as the basis of the transaction The term includes those informal relations which exist whenever one party trusts and relies upon another, as well as technical fiduciary relations. In Corpus Juris Secundum : A Complete Restatement of the Entire American Law As Developed by All Reported Cases, Volume 36-A, fiduciary is defined thus: A general definition of the word which is sufficiently comprehensive to embrace all cases cannot well be given. The term is derived from the civil, or Roman law. It connotes the idea of trust or confidence, contemplates good faith, rather than legal obligation, as the basis of the transaction, refers to the integrity, the fidelity, of the party trusted, rather than his credit or ability, and has been held to apply to all persons who occupy a position of peculiar confidence toward others, and to include those informal relations which exist whenever one party trusts and relies on another, as well as technical fiduciary relations. The word fiduciary , as a noun, means one who holds a thing in trust for another, a trustee, a person holding the character of a trustee, or a character analogous to that of a trustee, with respect to the trust and confidence involved in it and the scrupulous good faith and candor which it requires; a person having the duty, created by his undertaking, to act primarily for another s benefit in matters connected with such undertaking. Also more specifically, in a statute, a guardian, trustee, executor, administrator, receiver, conservator or any person acting in any fiduciary capacity for any person, trust or estate. Some examples of what, in particular connections, the term has been held to include and not to include are set out in the note. In CBSE v Aditya Bandopadhyay (2011) 8 SCC 497 , a two judge Bench of this Court while discussing the nature of fiduciary relationships relied upon several decisions and explained the terms fiduciary and fiduciary relationship thus: 39. The term fiduciary refers to a person having a duty to act for the benefit of another, showing good faith and candour, where such other person reposes trust and special confidence in the person owing or discharging the duty. The term fiduciary relationship is used to describe a situation or transaction where one person (beneficiary) places complete confidence in another person (fiduciary) in regard to his affairs, business or transaction(s). The term also refers to a person who holds a thing in trust for another (beneficiary). The fiduciary is expected to act in confidence and for the benefit and advantage of the beneficiary, and use good faith and fairness in dealing with the beneficiary or the things belonging to the beneficiary. If the beneficiary has entrusted anything to the fiduciary, to hold the thing in trust or to execute certain acts in regard to or with reference to the entrusted thing, the fiduciary has to act in confidence and is expected not to disclose the thing or information to any third party. CENTRAL PUBLIC INFORMATION OFFICER, SUPREME COURT OF INDIA VERSUS SUBHASH CHANDRA AGARWAL - 2019 (11) TMI 895 - SUPREME COURT