The Indian Trust Act, 1882
This Act may be called the Indian Trusts Act, 1882:
Commencement.-- and it shall come into force on the first day of March, 1882.
Local extent.-- 1[It extends to 2[the whole of India 3*** and] the Andaman and Nicobar
Islands 4***; but the Central Government may, from time to time, by notification in the
Official Gazette, extend it to 5[the, Andaman and Nicobar Islands] or to any part thereof.]
Savings.-- But nothing herein contained affects the rules of Muhammadan law as to waqf, or the
mutual relations of the members of an undivided family as determined by any customary or personal
law, or applies to public or private religious or charitable endowments, or to trusts to distribute
prizes
The Statute and Acts mentioned in the Schedule hereto annexed shall, to
the extent mentioned in the said Schedule, be repealed, in the territories to which this Act for the time
being extends.
A "trust":-- is an obligation annexed to the ownership of
property, and 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:
"author of the trust": "trustee": "beneficiary": "trust-property": "beneficial interest":
"instrument of trust":-- "the person who reposes or declares the confidence is called the "author of the
trust": the person who accepts the confidence is called the trustee: the person for whose benefit the
confidence is accepted is called the "beneficiary": the subject-matter of the trust is called "trust-property"
or "trust-money": the "beneficial interest" or "interest" of the beneficiary is his right against the trustee
as owner of the trust-property; and the instrument, if any, by which the trust is declared is called the
"instrument of trust":
A trust may be created for any lawful purpose. The purpose of a trust is
lawful unless it is (a) forbidden by law, or (b) is of such a nature that, if permitted, it would
defeat the provisions of any law, or (c) is fraudulent, or (d) involves or implies injury to the
person or property of another, or (e) the Court regards it as immoral or opposed to public policy.
Every trust of which the purpose is unlawful is void. And where a trust is created for two purposes, of
which one is lawful and the other unlawful, and the two purposes cannot be separated, the whole trust is
void.
Explanation.-- In this section, the expression law includes, where the trust-property is immoveable
and situate in a foreign country, the law of such country.
Illustrations
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No trust in relation to immoveable property is valid
unless declared by a non-testamentary instrument in writing signed by the author of the trust or
the trustee and registered, or by the will of the author of the trust or of the trustee.
Trust of moveable property.-- No trust in relation to moveable property is valid unless
declared as aforesaid, or unless the ownership of the property is transferred to the trustee.
These rules do not apply where they would operate so as to effectuate a fraud.
Subject to the provisions of section 5, a trust is created when the author of the
trust indicates with reasonable certainty by any words or acts (a) an intention on his part to create thereby
a trust, (b) the purpose of the trust, (c) the beneficiary, and (d) the trust-property, and (unless the trust is
declared by will or the author of the trust is himself to be the trustee) transfers the trust-property to the
trustee.
Illustrations
(a) A bequeaths certain property to B, having the fullest confidence that he will dispose of it for the benefit of C. This
creates a trust so far as regards A and C.
(b) A bequeaths certain property to B, "hoping he will continue it in the family". This does not create a trust, as the
beneficiary is not
A trust may be created--
(a) by every person competent to contracts 1, and
(b) with the permission of a principal Civil Court of original jurisdiction, by or on behalf of a
minor; but subject in each case to the law for the time being in force as to the
circumstances and extent in and to which the author of the trust may dispose of the trustproperty.
The subject-matter of a trust must be property transferable to the
beneficiary.
It must not be a merely beneficial interest under a subsisting trust.
Every person capable of holding property may be a
beneficiary.
Disclaimer by beneficiary.--A proposed beneficiary may renounce his interest under the
trust by disclaimer addressed to the trustee, or by setting up, with notice of the trust, a claim
inconsistent therewith.
Every person capable of holding property may be a trustee; but,
where the trust involves the exercise of discretion, he cannot execute it unless he is competent to
contract.
No one bound to accept trust.-- No one is bound to accept a trust.
Acceptance of trust.-- A trust is accepted by any words or acts of the trustee indicating with
reasonable certainty such acceptance.
Disclaimer of trust.-- Instead of accepting a trust, the intended trustee may, within a
reasonable period, disclaim it, and such disclaimer shall prevent the trust-property from
vesting in him.
A disclaimer by one of two or more co-trustees vests the trust-property in the other or
others, and makes him or them sole trustee o
The trustee is bound to fulfil the purpose of the trust, and to
obey the directions of the author of the trust given at the time of its creation, except as modified
by the consent of all the beneficiaries being competent to contract.
Where the beneficiary is incompetent to contract, his consent may, for the purposes of this
section, be given by a principal Civil Court of original jurisdiction.
Nothing in this section shall be deemed to require a trustee to obey any direction when to
do so would be impracticable, illegal or manifestly injurious to the beneficiaries.
Explanation.-- Unless a contrary intention be expressed, the purpose of a trust for the
payment of debts shall be deemed to be (a) to pay only the debts of the author of the trust
existi
A trustee is bound to acquaint
himself, as soon as possible, with the nature and circumstances of the trust-property; to obtain,
where necessary, a transfer of the trust-property to himself; and (subject to the provisions of the
instrument of trust) to get in trust-moneys invested on insufficient or hazardous security.
Illustrations
(a) The trust-property is a debt outstanding on personal security. The instrument of trust gives the trustee no discretionary
power to leave the debt so outstanding. The trustees duty is to recover the debt without unnecessary
delay.
(b) The trust-property is money in the hands of one of two co-trustees. No discretionary power is given by the instrument of
trust. The other co-trustee must not allow the f
A trustee is bound to maintain and defend
all such suits, and (subject to the provisions of the instrument of trust) to take such other steps
as, regard being had to the nature and amount or value of the trust-property, may be reasonably
requisite for the preservation of the trust-property and the assertion or protection of the title
thereto.
Illustrations
The trust-property is immoveable property which has been given to the author of the trust by an unregistered instrument.
Subject to the provisions of the Indian Registration Act, 18771 (3 of 1877), the trustees duty is to cause the instrument to be
registered.
The trustee must not for himself
or another set-up or aid any title to the trust-property adverse to the interest of the beneficiary.
A trustee is bound to deal with the trust-property as
carefully as a man of ordinary prudence would deal with such property if it were his own; and, in the
absence of a contract to the contrary, a trustee so dealing is not responsible for the loss, destruction or
deterioration of the trust-property.
Illustrations
(a) A, living in Calcutta, is a trustee for B, living in Bombay. A remits trust-funds to B by bills drawn by a
person of undoubted credit in favour of the trustee as such, and payable at Bombay. The bills are dishonoured. A is
not bound to make good the loss.
(b) A, a trustee of leasehold property, directs the tenant to pay the rents on account of the trust to a banker, B, then
in credit. The rents are accordingly paid to B
Where the trust is created for the benefit of several
persons in succession, and the trust-property is of a wasting nature or a future or reversionary
interest, the trustee is bound, unless an intention to the contrary may be inferred from the
instrument of trust, to convert the property into property of a permanent and immediately profitable
character.
Illustrations
(a) A bequeaths to B all his property in trust for C during his life, and on his death for D, and on D's death
for E. A's property consists of three leasehold houses, and there is nothing in As will to show that he intended the
houses to be enjoyed in specie. B should sell the houses, and invest the proceeds in accordance with section 20.
(b) A bequeaths to B his three
Where there are more beneficiaries than one, the trustee is bound
to be impartial, and must not execute the trust for the advantage of one at the expense of another.
Where the trustee has a discretionary power, nothing in this section sha ll be deemed to
authorize the Court to control the exercise reasonably and in good faith of such discretion.
Illustrations
A, a trustee for B, C and D, is empowered to choose between several specified modes of investing the trust -
property. A in good faith chooses one of these modes. The Court will not interfere, although the result of the
choice may be to vary the relative rights of B, C and D.
Where the trust is created for the benefit of several persons in
succession and one of them is in possession of the trust-property, if he commits, or threatens to commit,
any act which is destructive or permanently injurious thereto, the trustee is bound to take measures to
prevent such act.
A trustee is bound (a) to keep clear and accurate accounts of the
trust- property, and (b), at all reasonable times, at the request of the beneficiary, to furnish him with full
and accurate information as to the amount and state of the trust-property.
1[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 shall, subject to any
direction contained in the instrument of trust, invest the money in any of the securities or class of
securities expressly authorised by the instrument of trust or as specified by the Central
Government, by notification in the Official Gazette:
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 in any of the securities or class of securities mentioned above shall be made without his
consent in writing.
Explanation.--For the purposes of this section,
1[20A. Power to purchase redeemable stock at a premium.--(1) A trustee may invest in any of the
securities mentioned or referred to in section 20, notwithstanding that the same may be redeemable and
that the price exceeds the redemption value:
2* * *
Nothing in section 20 shall apply to investments made before this Act comes into
force, or shall be deemed to preclude an investment on a mortgage of immoveable property already
pledged as security for an advance under the Land Improvement Act, 18711, or, in case the trustmoney does not exceed three thousand rupees, a deposit thereof in a Government Savings Bank.
Where a trustee directed to sell within a
specified time extends such time, the burden of proving, as between himself and the beneficiary, that the
latter is not prejudiced by the extension lies upon the trustee, unless the extension has been authorised by
a principal Civil Court of original jurisdiction.
Illustration
A bequeaths property to B, directing him with all convenient speed and within five years to sell it, and apply the proceeds
for the benefit of C. In the exercise of reasonable discretion, B postpones the sale for six years. The sale is not thereby rendered
invalid, but C, alleging that he has been injured by the postponement, institutes a suit against B to obtain compensation. In such
suit the burden of proving that C has not been injured lies on B.
Where the trustee commits a breach of trust, he is liable to
make good the loss which the trust-property or the beneficiary has thereby sustained, unless the
beneficiary has by fraud induced the trustee to commit the breach, or the beneficiary, being
competent to contract, has himself, without coercion or undue influence having been brought to bear
on him, concurred in the breach, or subsequently acquiesced therein, with full knowledge of the
facts of the case and of his rights as against the trustee.
A trustee committing a breach of trust is not liable to pay interest except in the following cases:--
(a) where he has actually received interest;
(b) where the breach consists in unreasonable del
A trustee who is liable for a loss occasioned by a
breach of trust in respect of one portion of the trust-property cannot set-off against his
liability a gain which has accrued to another portion of the trust-property through another
and distinct breach of trust.
Where a trustee succeeds another, he is not, as such,
liable for the acts or defaults of his predecessor.
Subject to the provisions of sections 13 and
15, one trustee is not, as such, liable for a breach of trust committed by his co -trustee:
Provided that, in the absence of an express declaration to the contrary in the instrument of trust, a
trustee is so liable--
(a) where he has delivered trust-property to his co-trustee without seeing to its proper
application;
(b) where he allows his co-trustee to receive trust-property and fails to make due
enquiry as to the co-trustee's dealings therewith, or allows him to retain it longer than the
circumstances of the case reasonably require;
Where co-trustees jointly commit a breach of trust,
or where one of them by his neglect enables the other to commit a breach of trust, each is
liable to the beneficiary for the whole of the loss occasioned by such breach.
Contribution as between co-trustees.-- But as between the trustees themselves, if one be
less guilty than another and has had to refund the loss, the former may compel the latter, or
his legal representative to the extent of the assets he has received, to make good such loss;
and if all be equally guilty, any one or more of the trustees who has had to refund the loss
may compel the others to contribute.
Nothing in this section shall be deemed to authorise a trustee who has been guilty of
fraud to institute a suit to compel contribution.
When
any beneficiary's interest becomes vested in another person, and the trustee, not having notice
of the vesting, pays or delivers trust-property to the person who would have been entitled
thereto in the absence of such vesting, the trustee is not liable for the property so paid or
delivered.
When the
beneficiary's interest is forfeited or awarded by legal adjudication 1[to the Government], the trustee is
bound to hold the trust-property to the extent of such interest for the benefit of such person in such
manner as 2the State Government may direct in this behalf.
Subject to the provisions of the instrument of trust and of
sections 23 and 26, trustees shall be respectively chargeable only for such moneys, stocks,
funds and securities as they respectively actually receive, and shall not be answerable the one
for the other of them, nor for any banker, broker or other person in whose hands any trust -
property may be placed, nor for the insufficiency or deficiency of any stocks, funds or
securities, nor otherwise for involuntary losses.
A trustee is entitled to have in his possession the instrument of trust and all
the documents of title (if any) relating solely to the trust-property
Every trustee may reimburse himself, or pay
or discharge out of the trust-property, all expenses properly incurred in or about the execution
of the trust, or the realisation, preservation or benefit of the trust-property, or the protection
or support of the beneficiary.
If he pays such expenses out of his own pocket he has a first charge upon the trust-property
for such expenses and interest thereon; but such charge (unless the expenses have been incurred
with the sanction of a principal Civil Court of original jurisdiction) shall be enforced only by
prohibiting and disposition of the trust-property without previous payment of such expenses and
interest.
If the trust-property fail, the trustee is entitled to recover from the beneficiary personally
on whose behalf he acted, and at whose request, expressed or implied, he made the p
A person other than a trustee
who has gained an advantage from a breach of trust must indemnify the trustee to the extent
of the amount actually received by such person under the breach; and where he is a
beneficiary the trustee has a charge on his interest for such amount.
Nothing in this section shall be deemed to entitle a trustee to be indemnified who has, in committing
the breach of trust, been guilty of fraud.
When the duties of a trustee, as such, are completed,
he is entitled to have the accounts of his administration of the trust-property examined and settled;
and, where nothing is due to the beneficiary under the trust, to an acknowledgment in writing to
that effect.
In addition to the powers expressly conferred by this
Act and by the instrument of trust, and subject to the restrictions, if any, contained in such
instrument, and to the provisions of section 17, a trustee may do all acts which are reasonable
and proper for the realisation, protection or benefit of the trust-property, and for the protection
or support of a beneficiary who is not competent to contract.
1* * * * *
Except with the permission of a principal Civil Court of original jurisdiction, no trustee shall
lease trust-property for a term exceeding twenty-one years from the date of executing the lease,
nor without reserving the best yearly rent that can be reasonably obtained.
Where the
trustee is empowered to sell any trust-property, he may sell the same subject to prior charges or
not, and either together or in lots, by public auction or private contract, and either at one time or
at several times, unless the instrument of trust otherwise direc ts.
The trustee
making any such sale may insert such reasonable stipulations either as to title or evidence of title,
or otherwise, in any conditions of sale or contract for sale, as he thinks fit; and may also buy-in
the property or any part thereof at any sale by auction, and rescind or vary any contract for sale, and re-sell the property so bought in, or as to which the contract is so rescinded, without being
responsible to the beneficiary for any loss occasioned thereby.
Time allowed for selling trust-property.-- Where a trustee is directed to sell trust-property or to
invest trust-money in the purchase of property, he may exercise a reasonable discretion as to the time of
effecting the sale or purchase.
Illustrations
(a) A b
For the purpose of completing any such sale, the trustee shall have power to
convey or otherwise dispose of the property sold in such manner as may be necessary.
A trustee may, at his discretion, call in any trust-property
invested in any security and invest the same on any of the securities mentioned or referred to in
section 20, and from time to time vary any such investments for others of the same nature:
Provided that, where there is a person competent to contract and entitled at the time to
receive the income of the trust-property for his life, or for any greater estate, no such change of
investment shall be made without his consent in writing.
Where any
property is held by a trustee in trust for a minor, such trustee may, at his discretion, pay to the
guardians (if any) of such minor, or otherwise apply for or towards his maintenance or education
or advancement in life, or the reasonable expenses of his religious worship, marriage or funeral,
the whole or any part of the income to which he may be entitled in respect of such property; and such
trustee shall accumulate all the residue of such income by way of compound interest, by investing the
same and the resulting income thereof from time to time in any of the securities mentioned or referred to
in section 20, for the benefit of the person who shall ultimately become entitled to the property from
which such accumulations have arisen: Provided that such trustee may, at any time, if he thinks fit, apply
the whole or any part of such accumulations as if the same were part of the income arising in the then
current year.
Any trustees or trustee may give a receipt in writing for any
money, securities or other moveable property payable, transferable or deliverable to them or him
by reason, or in the exercise, of any trust or power; and, in the absence of fraud, such receipt shall
discharge the person paying, transferring or delivering the same therefrom, and from seeing to the
application thereof, or being accountable for any loss or misapplication thereof.
Two or more trustees acting together may, if and as they think fit--
(a) accept any composition or any security for any debt or for any property claimed;
(b) allow any time for payment of any debt;
(c) compromise, compound, abandon, submit to arbitration or otherwise settle any debt, account,
claim or thing whatever relating to the trust; and
(d) for any of those purposes, enter into, give, execute and do such agreements, instruments
of composition or arrangement, releases and other things as to them seem expedient, without
being responsible for any loss occa
When an authority to deal
with the trust-property is given to several trustees and one of them disclaims or dies, the authority
may be exercised by the continuing trustees, unless from the terms of the instrument of trust it is
apparent that the authority is to be exercised by a number in excess of the number of the remaining
trustees.
Where a decree has been made in a suit
for the execution of a trust, the trustee must not exercise any of his powers except in conformity with such
decree, or with the sanction of the Court by which the decree has been made, or, where an appeal against
the decree is pending, of the Appellate Court.
A trustee who has accepted
the trust cannot afterwards renounce it except (a) with the permission of a principal
Civil Court of original jurisdiction, or (b) if the beneficiary is competent to
contract, with his consent, or ( c) by virtue of a special power in the instrument of
trust.
A trustee cannot delegate his office or any of his
duties either to a co-trustee or to a stranger, unless (a) the instrument of trust so
provides, or (b) the delegation is in the regular course of business, or (c) the delegation
is necessary, or (d) the beneficiary, being competent to contract, consents to the
delegation.
Explanation.-- The appointment of an attorney or proxy to do an act merely
ministerial and involving no independent discretion is not a delegation within the
meaning of this section.
Illustrations
(a) A bequeaths certain property to B and C on certain trusts to be executed by them or the survivor of them
or the assigns of such survivor. B dies. C may bequeath the trust-property to D and E upo
When there are more trustees than one, all
must join in the execution of the trust, except where the instrument of trust otherwise
provides.
Where a discretionary power conferred on a
trustee is not exercised reasonably and in good faith, such power may be controlled by a
principal Civil Court of original jurisdiction.
In the absence of express directions
to the contrary contained in the instrument of trust or of a contract to the contrary
entered into with the beneficiary or the Court at the time of accepting the trust, a
trustee has no right to remuneration for his trouble, skill and loss of time in
executing the trust.
Nothing in this section applies to any Official Trustee, Administrator General, Public
Curator, or person holding a certificate of administration.
A trustee may not use
or deal with the trust-property for his own profit or for any other purpose unconnected
with the trust.
No trustee whose duty it is to sell
trust-property, and no agent employed by such trustee for the purpose of the sale, may,
directly or indirectly, buy the same or any interest therein, on his own account or as
agent for a third person.
No trustee, and no
person who has recently ceased to be a trustee, may, without the permission of a principal Civil Court of
original jurisdiction, buy or become mortgagee or lessee of the trust-property or any part thereof; and
such permission shall not be given unless the proposed purchase, mortgage or lease is manifestly for the
advantage of the beneficiary.
Trustee for purchase.-- And no trustee whose duty it is to buy or to obtain a mortgage
or lease of particular property for the beneficiary may buy it, or any part the reof, or obtain a
mortgage or lease of it, or any part thereof, for himself.
A trustee or co-trustee whose duty it
is to invest trust-money on mortgage or personal security must not invest it on a mortgage by,
or on the personal security of, himself or one of his co -trustees.
The beneficiary has, subject to the provisions of the
instrument of trust, a right to the rents and profits of the trust-property.
The beneficiary is entitled to have the intention of the
author of the trust specifically executed to the extent of the beneficiary s interest;
Right to transfer of possession.-- and, where there is only one beneficiary and he is
competent to contract, or where there are several beneficiaries and they are competent to
contract and all of one mind, he or they may require the trustee to transfer the trust -property
to him or them, or to such person as he or they may direct.
When property has been transferred or bequeathed for the benefit of a married woman, so
that she shall not have power to deprive herself of her beneficial interest, nothing in the second
clause of this section applies to such property during her marriage.
Illustrations
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The beneficiary
has a right, as against the trustee and all persons claiming under him with notice of the trust, to inspect and take copies of the instrument of trust, the documents of title r elating solely to the
trust-property, the accounts of the trust-property and the vouchers (if any) by which they are
supported, and the cases submitted and opinions taken by the trustee for his guidance in the
discharge of his duty.
The beneficiary, if competent to contract, may
transfer his interest, but subject to the law for the time being in force as to the circumstances
and extent in and to which he may dispose of such interest:
Provided that when property is transferred or bequeathed for the benefit of a married
woman, so that she shall not have power to deprive herself of her beneficial interest, nothing
in this section shall authorise her to transfer such interest during her marriage.
The beneficiary has a right (subject to the provisions of
the instrument of trust) that the trust-property shall be properly protected and held and
administered by proper persons and by a proper number of such persons.
Explanation I.-- The following are not proper persons within the meaning of this section:--
A person domiciled abroad: an alien enemy: a person having an interest inconsistent with that of the
beneficiary: a person in insolvent circumstances; and, unless the personal law of the beneficiary allows
otherwise, a married woman and a minor.
Explanation II.--When the administration of the trust involves the receipt and custody of money, the
number of trustees should be two at least.
The beneficiary has a right that his trustee shall be
compelled to perform any particular act of his duty as such, and restrained from committing any
contemplated or probable breach of trust.
Illustrations
(a) A contracts with B to pay him monthly Rs.100 for the benefit of C. B writes and signs a letter declaring that he will hold
in trust for C the money so to be paid. A fails to pay the money in accordance with his contract. C may compel B on a proper
indemnity to allow C to sue on the contract in B's name.
(b) A is trustee of certain land, with a power to sell the same and pay the proceeds to B and C equally. A is about to
make an improvident sale of the land. B may sue on behalf of himself and C for an injunction to restrain A f
Where a trustee has wrongfully bought trust-property,
the beneficiary has a right to have the property declared subject to the trust or retransferred by the
trustee, if it remains in his hands unsold, or, if it has been bought from him by any person with
notice of the trust, by such person. But in such case the beneficiary must repay the purchase -money
paid by the trustee, with interest, and such other expenses (if any) as he has properly incurred in
the preservation of the property; and the trustee or purchaser must (a) account for the net profits of
the property, (b) be charged with an occupation-rent, if he has been in actual possession of the
property, and (c) allow the beneficiary to deduct a proportionate part of the purchase-money if the
property has been deteriorated by the acts or omissions of the trustee or purchaser.
Nothing in this section--
Where trust-property comes
into the hands of a third person inconsistently with the trust, the beneficiary may require him to admit
formally, or may institute a suit for a declaration, that the property is comprised in the trust.
into that into which it has been converted.-- Where the trustee has disposed of trust-property
and the money or other property which he has received therefor can be traced in his hands, or the
hands of his legal representative or legatee, the beneficiary has, in respect thereof, rights as nearly as
may be the same as his rights in respect of the original trust-property.
Illustrations
(a) A, a trustee for B of Rs. 10,000, wrongfully invests the Rs. 10,000 in the purchase of certain land. B is entitled to the
land.
Nothing in section 63 entitles the beneficiary to any
right in respect of property in the hands of--
(a) a transferee in good faith for consideration without having notice of the trust, either when the
purchase-money was paid, or when the conveyance was executed, or
(b) a transferee for consideration from such a transferee.
A judgment-creditor of the trustee attaching and purchasing trust-property is not a transferee for
consideration within the meaning of this section.
Nothing in section 63 applies to money, currency notes and negotiable instruments in the hands of a
bona fide holder to whom they have passed in circulation, or shall be deemed to affect the Indian Contract
A
Where a trustee wrongfully
sells or otherwise transfers trust-property and afterwards himself becomes the owner of the property, the
property again becomes subject to the trust, notwithstanding any want of notice on the part of intervening
transferees in good faith for consideration.
Where the trustee wrongfully mingles the trustproperty with his own, the beneficiary is entitled to a charge on the whole fund for the amount due
to him.
If a partner, being a trustee, wrongfully employs trust-property in the business or on the account of the partnership, no other partner is liable therefor in his personal capacity to the beneficiaries, unless
he had notice of the breach of trust.
The partners having such notice are jointly and severally liable for the breach of trust.
Illustrations
(a) A and B are partners. A dies, having bequeathed all his property to B in trust for Z, and appointed B his sole executor. B,
instead of winding up the affairs of the partnership, retains all the assets in the business. Z may compel him, as partner, to
account for so much of the profits as are derived from As share of the capital. B is also answerable to Z for the improper
employment of
Where one of several beneficiaries--
(a) joins in committing breach of trust, or
(b) knowingly obtains any advantage therefrom, without the consent of the other beneficiaries, or
(c) becomes aware of a breach of trust committed or intended to be committed, and either
actually conceals it, or does not within a reasonable time take proper steps to protect the interests of
the other beneficiaries, or
(d) has deceived the trustee and thereby induced him to commit a breach of trust,
the other beneficiaries are entitled to have all his beneficial interest impounded
Every person to whom a beneficiary
transfers his interest has the rights, and is subject to the liabilities, of the beneficiary in respect of such
interest at the date of the transfer.
The office of a trustee is vacated by his death or by his discharge from his
office
A trustee may be discharged from his office only as follows:--
(a) by the extinction of the trust;
(b) by the completion of his duties under the trust;
(c) by such means as may be prescribed by the instrument of trust;
(d) by appointment under this Act of a new trustee in his place;
(e) by consent of himself and the beneficiary, or, where there are more beneficiaries than one, all the beneficiaries being competent to contract; or
(f) by the Court to which a petition for his discharge is presented under this Act.
Notwithstanding the provisions of section 11,
every trustee may apply by petition to a principal Civil Court of original jurisdiction to be
discharged from his office; and if the Court finds that there is sufficient reason for such discharge,
it may discharge him accordingly, and direct his costs to be paid out of the trust-property. But where there is no such reason, the Court shall not discharge him, unless a proper person can be
found to take his place
Whenever any new trustee is appointed under
section 73 or section 74, all the trust-property for the time being vested in the surviving or continuing
trustees or trustee, or in the legal representative of any trustee, shall become vested in such new trustee,
either solely or jointly with the surviving or continuing trustees or trustee, as the case may require.
Powers of new trustees.-- Every new trustee so appointed, and every trustee appointed by a
Court either before or after the passing of this Act, shall have the same powers, authorities and
discretions, and shall in all respects act, as if he had been originally nominated a trustee by the
author of the trust.
On the death or discharge of one of several co-trustees, the trust
survives and the trust-property passes to the others, unless the instrument of trust expressly declares
otherwise.
A trust is extinguished--
(a) when its purpose is completely fulfilled; or
(b) when its purpose becomes unlawful; or
(c) when the fulfilment of its purpose becomes impossible by destruction of the trust-property or
otherwise; or
(d) when the trust, being revocable, is expressly revoked.
A trust created by will may be revoked at the pleasure of the testator.
A trust otherwise created can be revoked only--
(a) where all the beneficiaries are competent to contract--by their consent;
(b) where the trust has been declared by a non-testamentary instrument or by word of
mouth--in exercise of a power of revocation expressly reserved to the author of the trust; or
(c) where the trust is for the payment of the debts of the author of the trust, and has not been
communicated to the creditors--at the pleasure of the author of the trust.
Illustration
A conveys property to B in trust to sell the same and pay out
No trust can be revoked by the author
of the trust so as to defeat or prejudice what the trustees may have duly done in execution of the trust.
An obligation in the nature of a trust is created
in the following cases.
[Where is does not appear that transferor intended to dispose of beneficial interest.] Rep. by the
Benami Transactions (Prohibition) Act, 1988 (45 of 1988), s. 7 (w.e.f. 19-5-1988).
[Transfer to one for consideration paid by another.] Rep. by s. 7, ibid. (w.e.f. 19-5-1988).
Where
a trust is incapable of being executed, or where the trust is completely executed without
exhausting the trust-property, the trustee, in the absence of a direction to the contrary, must hold
the trust-property, or so much thereof as is unexhausted, for the benefit of the author of the trust
or his legal representative.
Illustrations
(a) A conveys certain land to B--
"upon trust", and no trust is declared; or
"upon trust to be thereafter declared", and no such declaration is ever made; or
upon t
Where the owner of property transfers it to another for an illegal
purpose and such purpose is not carried into execution, or the transferor is not as guilty as the transferee,
or the effect of permitting the transferee to retain the property might be to defeat the provisions of any
law, the transferee must hold the property for the benefit of the transferor.
Where a testator bequeaths certain property upon trust and
the purpose of the trust appears on the face of the will to be unlawful, or during the testators
lifetime the legatee agrees with him to apply the property for an unlawful purpose, the legatee
must hold the property for the benefit of the testators legal representative.
Bequest of which revocation is prevented by coercion.-- Where property is bequeathed and the
revocation of the bequest is prevented by coercion, the legatee must hold the property for the benefit of
the testators legal representative.
Where property is transferred in pursuance of a
contract which is liable to rescission or induced by fraud or mistake, the transferee must, on receiving
notice to that effect, hold the property for the benefit of the transferor, subject to repayment by the latter
of the consideration actually paid.
Where a debtor becomes the executor or other
legal representative of his creditor, he must hold the debt for the benefit of the persons interested therein.
Where a trustee, executor, partner, agent, director of a
company, legal advisor, or other person bound in a fiduciary character to protect the interests of another
person, by availing himself of his character, gains for himself any pecuniary advantage, or where any
person so bound enters into any dealings under circumstances in which his own interests are, or may be,
adverse to those of such other person and thereby gains for himself a pecuniary advantage, he must hold
for the benefit of such other person the advantage so gained.
Illustrations
(a) A, an executor, buys at an undervalue from B, a legatee, his claim under the will. B is ignorant of the value of the
bequest. A must hold for the benefit of B the difference between the price and value.
Where, by the exercise of undue influence,
any advantage is gained in derogation of the interests of another, the person gaining such advantage
without consideration, or with notice that such influence has been exercised, must hold the advantage for
the benefit of the person whose interests have been so prejudiced.
Where a tenant for life, co-owner, mortgagee or other
qualified owner of any property, by availing himself of his position as such, gains an advantage in
derogation of the rights of the other persons interested in the property, or where any such owner, as
representing all persons interested in such property, gains any advantage, he must hold, for the benefit of all persons so interested, the advantage so gained, but subject to repayment by such persons of their due
share of the expenses properly incurred, and to an indemnity by the same persons against liabilities
properly contracted, in gaining such advantage.
Illustrations
(a) A, the tenant for life of leasehold property, renews the lease in his own name and for his own benefit. A holds the
renewed lease for the benefit of all those intere
Where a person acquires property
with notice that another person has entered into an existing contract affecting that property, of
which specific performance could be enforced, the former must hold the property for the benefit of
the latter to the extent necessary to give effect to the contract.
Where a person
contracts to buy property to be held on trust for certain beneficiaries and buys the property accordingly,
he must hold the property for their benefit to the extent necessary to give effect to the contract.
Where creditors
compound the debts due to them, and one of such creditors, by a secret arrangement with the debtor, gains
an undue advantage over his co-creditors, he must hold for the benefit of such creditors the advantage so
gained.
[Constructive trusts in cases not expressly provided for].-- Rep. by the Benami
Transactions (Prohibition) Act, 1988 (45 of 1988), s. 7 (w.e.f. 19-5-1988).
The person holding property in accordance
with any of the preceding sections of this Chapter must, so far as may be, perform the same duties,
and is subject, so far as may be, to the same liabilities and disabilities, as if he were a trustee of the
property for the person for whose benefit he holds it:
Provided that (a) where he rightfully cultivates the property or employs it in trade or business, he is
entitled to reasonable remuneration for his trouble, skill and loss of time in such cultivation or
employment; and (b) where he holds the property by virtue of a contract with the person for whose
benefit he holds it, or with any one through whom such person claims, he may, without the permission of
the Court, buy or become lessee or mortgagee of the property or any part thereof.
Nothing contained in this Chapter shall impair the
rights of transferees in good faith for consideration, or create an obligation in evasion of any law for the
time being in force.
Any trustee
may, without instituting a suit, apply by petition to a principal Civil Court of original
jurisdiction for its opinion, advice or direction on any present questions respecting the
management or administration of the trust-property other than questions of detail, difficulty or
importance, not proper in the opinion of the Court for summary disposal. Section 34 of the Indian Trusts Act, 1882, provides a mechanism for trustees and interested parties to seek the opinion, advice, or directions of a competent civil court on matters relating to the management or administration of trust property. It aims to facilitate the smooth functioning of trusts by allowing non-litigious, summary proceedings for simple questions, thereby reducing the need for full-fledged suits. Section 34 states that any trustee may, without instituting a suit, apply by petition to a principal Civil Court of original jurisdiction for its opinion, advice, or direction on any present questions respecting the management or administration of the trust property, excluding questions of detail, difficulty, or importance which the Court considers unsuitable for summary disposal. The Court's opinion or direction is binding on the trustee acting in good faith, and the trustee is deemed to have discharged his duties regarding the matter. Section 34 does not specify any punitive measures for non-compliance or misuse. Its primary function is advisory; hence, violations typically lead to the trustee acting contrary to the Court’s advice being liable for breach of trust or other legal consequences under general principles of trust law. Misuse or bad faith could result in civil consequences, including liability for damages or removal. Section 34 of the Indian Trusts Act, 1882, provides a summary, advisory procedure for trustees to seek the Court’s opinion or directions on simple management questions. Its primary purpose is to facilitate trust administration efficiently, avoiding contentious litigation. Its scope is limited to private trusts, excluding complex or contentious issues, and orders passed are not binding or appealable. While a valuable tool, it is not a substitute for full suits, especially in public or charitable trusts governed by other statutes or where disputes over rights or titles arise. Note: The interpretation and application of Section 34 are well-established through numerous judgments, emphasizing its advisory, limited, and non-adjudicatory nature.
A copy of such petition shall be served upon, and the hearing thereof may be attended by,
such of the persons interested in the application as the Court thinks fit.
The trustee stating in good faith the facts in such petition and acting upon the opinion, advice
or direction given by the Court shall be deemed, so far as regards his own responsibility, to have
discharged his duty as such trustee in the subject-matter of the application.
Legal Commentary on Section 34 of the Indian Trusts Act, 1882
Introduction
What Does Section 34 Say?
Essential Ingredients
Scope of Section 34
Punishment for Violations
Legal Comments (with references)
Summary
Whenever any person appointed a trustee
disclaims, or any trustee, either original or substituted, dies, or is for a continuous period of six months
absent from 1[India], or leaves 1[India] for the purpose of residing abroad, or is declared an insolvent, or
desires to be discharged from the trust, or refuses or becomes, in the opinion of a principal Civil Court of
original jurisdiction, unfit or personally incapable to act in the trust, or accepts an inconsistent trust, a new
trustee may be appointed in his place by-- Sections 73 and 74 of the Indian Trust Act, 1882 govern the appointment and discharge of trustees, serving as statutory mechanisms to ensure the continuity of trust administration when vacancies arise due to death, resignation, or incapacity. A critical precondition for the invocation of these sections is the nature of the trust; they are explicitly excluded from applying to public, religious, or charitable endowments, which are governed by the Charitable and Religious Trust Act, 1920, or specific local laws like the Hindu Religious Charitable Endowments Acts. Furthermore, the jurisdiction for filing petitions under these sections rests solely with the Principal Civil Court of Original Jurisdiction (typically the District Judge's court), and these proceedings are restricted to non-contentious matters, whereas disputes requiring evidence and investigation must be adjudicated through a full suit under Section 92 of the Code of Civil Procedure, 1908. Section 73 outlines the automatic and private right to appoint new trustees when a vacancy occurs. It stipulates that whenever a trustee disclaims, dies, is absent for six months, becomes insolvent, desires discharge, or is found unfit/incapable, a new trustee can be appointed by: (a) the person nominated by the instrument of trust; (b) if no such person exists, the settlor (author of the trust); (c) the surviving trustees; or (d) with court consent, by the retiring trustees. Section 74 acts as a supplementary remedy, allowing a beneficiary to petition the Principal Civil Court for the appointment of a new trustee if it becomes "impracticable" to appoint one under Section 73. Both sections mandate that every appointment must be in writing, and they provide for the automatic vesting of trust property in the new trustee(s). To validly invoke the provisions of Section 73/74, the following ingredients must be present:1. Existence of a Valid Trust: There must be a trust existing under the Act (not a public/religious endowment).2. Occurrence of a Vacancy: A specific triggering event must have occurred: death, disclaimer, insolvency, absence for 6 months, resignation/refusal to act, acceptance of an inconsistent trust, or being found unfit/incapable.3. Unfitness or Impracticability (for Section 74): No sufficient number of trustees can be found willing to act, or the nominated person is unable/willing to act.4. Writing Requirement: The appointment must be evidence by writing signed by the appointor.5. Jurisdiction: The petition must be filed in the Principal Civil Court of Original Jurisdiction where the trust estate is situate.6. Non-Contentious Nature: The application must relate to a clear fact of vacancy without needing a trial on contested issues of fact. If facts are disputed, the application fails as void ab initio. The scope of these sections is strictly limited to the administration of private trusts.* Applicability: They apply to private trusts created under a deed, will, or declaration, excluding public trusts, religious endowments, and charitable trusts governed by other statutes like the Charitable and Religious Trusts Act, 1920 [MAHESH TULSHAN VS RAJENDRA KUMAR BANKA][Commissioner of Income Tax VS Mehra Trust].* Remedial Nature: The remedy under these sections is summary and preventive, designed to fill vacancies to preserve the trust property, distinct from the plenary powers of a suit [Vimal Kishor Shah VS Jayesh Dinesh Shah].* Removal vs. Appointment: While primarily for appointment, Section 73 implies discharge/removal of trustees (through the vacancy it fills), but it is not intended for contentious removal proceedings which require evidence of breach of trust; for such cases, a suit is necessary [Shri Raimalbua Sansthan–Trust VS Sumanbai wd/o Ramkrushna Wankhade][R. Sai Bharathi VS J. Jayalalitha].* Beneficiary Standing: In a Section 74 application, the petitioner typically must be a beneficiary or a representative with a clear interest, whereas Section 73 is triggered operationally by the state of the trust office . The Indian Trust Act, 1882, does not prescribe specific criminal punishments or fines for violations of its procedural requirements under Sections 73 and 74. The consequences of non-compliance are civil and administrative:1. Invalidity of Appointment: An appointment not made in writing or outside the specified grounds (e.g., appointing based on disputed maladministration without a prior suit) is legally untenable and may be set aside by the court [Shri Raimalbua Sansthan–Trust VS Sumanbai wd/o Ramkrushna Wankhade].2. Liability of Incumbents: Trustees failing to comply with statutory duties regarding the appointment of successors when a vacancy exists may be considered "unfit" or "personally incapable" for their role, leading to their removal by the court under the provisions of the Act [Shri Raimalbua Sansthan–Trust VS Sumanbai wd/o Ramkrushna Wankhade].3. Procedural Invalidity: Filings in the wrong forum (e.g., High Court instead of District Judge) or by ineligible parties (e.g., third parties not defendants in Section 92 suits) are liable to be dismissed as non-maintainable [Anirudh Singh Katoch VS Additional District Judge/F. T. C. -I, Nainital].4. No Direct Penal Penalty: Unlike offences under the Negotiable Instruments Act for cheque dishonor by trusts (Section 18/141), the Trust Act itself focuses on the internal governance and validity of the office rather than penal sanctions for procedural lapses [Narendra Singh VS Purshotamdass Bangur].
(a) the person nominated for that purpose by the instrument of trust (if any), or
(b) if there be no such person, or no such person able and willing to act, the author of the
trust if he be alive and competent to contLegal Commentary: Sections 73 and 74 of the Indian Trust Act, 1882
Introduction
What Section Says
Essential Ingredients
Scope of Section
Punishment for Section
Legal Comments
Where no trustees are appointed or all the
trustees die, disclaim or are discharged, or where for any other reason the execution of a
trust by the trustee is or becomes impracticable, the beneficiary may institute a suit for the execution of
the trust, and the trust shall, so far as may be possible, be executed by the Court until the appointment of a
trustee or new trustee.
Section 59 of the Indian Trusts Act, 1882 serves as a critical safety valve in trust law, ensuring that a trust does not fail due to a lack of trustees or the death/discharge of existing trustees. Under the doctrine that "a trust shall not fail for want of a trustee," this section empowers beneficiaries to directly approach the Civil Court to ensure the trust is executed when it has become practically impossible for appointed trustees to do so. It bridges the gap between an effective trust deed and the reality of trustee availability, maintaining the creator's (settlor's) intent. The provision states: "Right to sue for execution of trust.—Where no trustees are appointed or all the trustees die, disclaim or are discharged, or where for any other reason the execution of a trust by the trustee is or becomes impracticable, the beneficiary may institute a suit for the execution of the trust, and the trust shall, so far as may be possible, be executed by the Court until the appointment of a Trustee or new Trustee." Key components include:* Trigger Conditions: No appointment, death of all trustees, disclaimer, discharge, or impracticability of execution.* Action: The beneficiary institutes a suit (not merely an application).* Empowerment: The Court is authorized to execute the trust.* Interim Measure: The Court manages the trust property until suitable new trustees are appointed. To successfully invoke Section 59, the following elements must be established:* Existence of an Imperfect Trust: The trust must be legally created but currently unable to be executed due to the absence or incapacity of trustees.* Exhaustion of Trustees: There must be no competent trustee left to act. This includes instances where all trustees have died, disclaimed the office, or been discharged.* Impracticability: Even if some trustees exist, their inability to act (e.g., refusal, insanity, or impossibility due to circumstances) renders execution impracticable.* Compliance with Trust Scope: The beneficiary must have standing to demand the execution of the entire trust, not just parts of it.* Proper Forum: The suit must be filed in a Principal Civil Court of Original Jurisdiction in the area where the immovable property is situated, if any. No specific punishment is prescribed under Section 59 itself. Unlike Section 55 or Section 56, which deal with the remedies for breach of trust (making the beneficiary liable or making the trustee liable to compensate), Section 59 is purely a procedural remedy for litigation. The "punishment" or consequence arises generally under Section 88 if a trustee commits a breach of trust while administration is being managed, where they must restore benefits gained. [Thankammu C. W/o Unnikrishna Menon VS Head Master, High School, Anthikkad]Legal Commentary on Section 59 of the Indian Trust Act, 1882
1. Introduction
2. What Section Says
3. Essential Ingredients
4. Scope of Section
5. Punishment for Section
Legal Comments
Whenever any such vacancy or disqualification occurs and it is
found impracticable to appoint a new trustee under section 73, the beneficiary may, without instituting
a suit, apply by petition to a principal Civil Court of original jurisdiction for the appointment of a
trustee or a new trustee, and the Court may appoint a trustee or a new trustee accordingly. Section 74 of the Indian Trust Act, 1882 is a critical statutory provision governing the jurisdiction of the Principal Civil Court of Original Jurisdiction regarding the appointment of new trustees. It serves as a summary remedy for beneficiaries when the nomination process under Section 73 is impracticable due to vacancy, disqualification, or incapacity. The section empowers the court to appoint trustees specifically to execute the effective purposes of the trust and ensures that no trust is left without administration. However, its scope is strictly limited to cases whereSection 73 procedures fail, distinguishing it from contentious matters requiring a full civil suit or public trusts governed by the Charitable and Religious Trusts Act, 1920. Section 74 empowers the Principal Civil Court of original jurisdiction to appoint a new trustee when a vacancy occurs (due to death, resignation, or disclaimer) or when a trustee becomes disqualified or incapable of acting. If the person nominated under Section 73 (such as the author of the trust or remaining trustees) cannot or does not wish to appoint a new trustee, the beneficiary or any interested person may apply to the court. The court must ensure the appointment fulfills the trust's objectives and may consider the wishes of the settlor, the protection of the beneficiary's interests, and the terms of the trust deed. For an application under Section 74 to be maintainable, the following core elements must be present:* There must be a valid existing trust covered by the Indian Trust Act, 1882 (i.e., not a public/religious endowment).* A vacancy or disqualification of an existing trustee must have occurred.* The appointment of a new trustee under Section 73 (by the nominated appointor) must be found impracticable.* The applicant must be a beneficiary or a person with a lawful interest in the trust.* There must be no prospect of nomination under Section 73 being practically executed. The scope of Section 74 is defined by specific limitations found in Case Law:* The application is a summary procedure for non-contentious matters where facts are not disputed.* It applies exclusively to private trusts; it does not apply to public trusts, religious endowments, or charitable trusts governed by the Charitable and Religious Trusts Act, 1920.* The court has limited jurisdiction; it cannot adjudicate on disputed questions of fact, maladministration requiring investigation, or questions of title.* The remedy lies with the Principal Civil Court of original jurisdiction, not the High Court. There is no specific "punishment" clause under Section 74 of the Indian Trust Act, 1882. The section is procedural and remedial, focusing on the custodianship of the trust property rather than penal liability. Penalties for misconduct by trustees are governed by breach of trust principles under Sections 25, 51, and 52 of the Act, or potentially under Section 138 of the Negotiable Instruments Act if cheques are involved.
Rule for selecting new trustees.-- In appointing new trustees, the Court shall have regard (a)
to the wishes of the author of the trust as expressed in or to be inferred from the instrument of
trust; (b) to the wishes of the person, if any, empowered to appoint new trustees; (c) to the question
whether the appointment will promote or impede the execution of the trust; and (d) where there are
more beneficiaries than one, to the interests of all such beneficiaries.Legal Commentary on Section 74 of the Indian Trust Act, 1882
Introduction
What Does Section 74 Say
Essential Ingredients
Scope of Section
Punishment for Section
Legal Comments
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