356 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES
entitled to retain the advantage gained by him by reason of such better terms which have caused prejudice to other creditors.
- The law will regard him as a trustee for the other creditors in so far as the advantage gained by him is concerned.
(3) Constructive Trusts arising out of Contracts
I. Section 86
The first case dealt with by the Trust Act under this head relates to a contract for the transfer of property.
It falls under section 86. Section 86 refers to a contract in pursuance of which property is transferred and where the contract is of such a character that—
(i) It is liable to recession or
(ii) It is induced by fraud or mistake.
The transferee of the property under such a contract shall hold the property for the benefit of the transferor.
This obligation arises only under certain circumstances and is not absolute:
(i) The obligation arises only on receiving notice from the transferor that the contract is liable to recession or that it has been induced by fraud or mistake.
(ii) The obligation will be enforced only on repayment by the transferor of the consideration actually paid by the transferee.
II. Section 91
Acquiring property with notice that is subject to a contract with another person.
In such a case the person who acquires the property must hold it for the person who had contractual rights in it.
This obligation is limited in its extent. It is enforced only to the extent necessary to give effect to the contract.
This obligation does not arise in the case of every acquisition of property which is subject to a contract. It applies only in the case of a contract which could be specifically enforced.