CHANAKYA NATIONAL LAW UNIVERSITY, PATNA

PROJECT ON:

THE TRUSTEE

SUBJECT:

PROPERTY LAW

Submitted By:

Anwesha Tripathy, Roll No.724, Section-A

2nd Year(3rd Semester)

ACKNOWLEDGEMENT

It is my greatest pleasure to be able to present this project of Property Law. I found it very

interesting to work on this project. I would like to thank Dr.PKVS Rama Rao, my Teacher

and Guide.,for providing me with such an interesting project topic,for his unmatched efforts

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in making learning an enjoyable process,for his immense sincerity for the benefit of his

students and for his constant unconditional support and guidance.

I would also like to thank my librarian for helping me in gathering data for the project. Above

all, I would like to thank my parents, elder sister and paternal aunt,who from such a great

distance have extended all possible moral and motivative support for me.

I hope the project is upto the mark and is worthy of appreciation.

Anwesha Tripathy

Patna

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CONTENTS

CHAPTERS PAGE NO.

1. Introduction………………………………………………………..42. Appointment……………………………………………………….6 2.1Who may be a trustee…………………………………………....6 2.2Acceptance of office……………………………………………..7 2.3Modes of acceptance……………………………………………..83. Position of a trustee………………………………………………...9 3.1 Duties …………………………………………………………....9 3.2 Rights…………………………………………………………....11 3.3 Powers…………………………………………………………...144. Removal of a trustee………………………………………………..185. Conclusion………………………………………………………….21Bibliography…………………………………………………………..22

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INTRODUCTION

A trust is a relationship whereby property (real or personal, tangible or intangible) is held by

one party for the benefit of another. A trust conventionally arises when property is transferred

by one party to be held by another party for the benefit of a third party, although it is also

possible for a legal owner to create a trust of property without transferring it to anyone else,

simply by declaring that the property will henceforth be held for the benefit of the

beneficiary. A trust is created by a settlor (archaically known, in the context of trusts of land,

as the feoffor to uses), who transfers some or all of his property to a trustee (archaically

known, in the context of land, as the feoffee to uses), who holds that trust property (ortrust

corpus) for the benefit of the beneficiaries (archaically known as the cestui que use, or cestui

que trust). In the case of the self-declared trust, the settlor and trustee are the same person.

The trustee has legal title to the trust property, but the beneficiaries have equitable title to the

trust property (separation of control and ownership). The trustee owes a fiduciary duty to the

beneficiaries, who are the "beneficial" owners of the trust property. (Note: A trustee may be

either a natural person, or an artificial person (such as a company or a public body), and there

may be a single trustee or multiple co-trustees. There may be a single beneficiary or multiple

beneficiaries. The settlor may himself be a beneficiary.)

The trust is governed by the terms under which it was created. The terms of the trust are

usually written down in a trust instrument or deed but, in England and Wales, it is not

necessary for them to be written down to be legally binding, except in the case of land. The

terms of the trust must specify what property is to be transferred into the trust (certainty of

subject-matter), and who the beneficiaries will be of that trust (certainty of objects). It may

also set out the detailed powers and duties of the trustees (such as powers of investment,

powers to vary the interests of the beneficiaries, and powers to appoint new trustees). The

trust is also governed by local law. The trustee is obliged to administer the trust in

accordance with both the terms of the trust and the governing law.

The Indian trust Act 1882, is an act to define and amend the law relating to Private Trusts and

Trustees. The trust can be and has been applied as a device for accomplishing many different

purposes As Maitland observes, “of all exploits of equity the largest and the most important

is the invention and development of the trust.” According to him, the trust ‘is an institute’ of

great elasticity and generality; as elastic, as general as contract.”

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A trust has been defined as an obligation annexed to the ownership of property and arising

out of confidence, and the person who accepts the confidence is called the ‘trustee’. The

obligation being annexed to the ownership of property it must vest in the trustee, or at any

rate he must have a right to call for a transfer of, or to possess such property. Mere

appointment of a person as a trustee without the vesting and transfer of property would not

constitute his title.

Section 10 of Indian Trust Act, 1882, defines a trustee. It goes as follows, “Every person

capable of holding a property may be a trustee; but where the trust involves the exercise of

discretion, he cannot execute it unless he is competent to contract.”

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APPOINTMENT OF A TRUSTEE

Appointment of the trustee should be done formally, expressly in writing, even though it will

always be implied “the individual will use the trust property, or performs any act to carry out

the trust for the interest of beneficiaries”. Once the acceptance has been tendered then no

court of law can prevent the trustee from holding the office, except for the breach of trust or

good cause dependent upon clear and lawful necessity.1

Section 10 of the Indian Trusts Act, 1882, is about the appointment of a trustee. It lays down

as to who is capable of being a trustee.

WHO MAY BE A TRUSTEE

Legal capacity to hold property is an essential qualification for being a trustee. Where the

nature of trust requires exercise of discretion on the part of the trustee, he must also possess

the capacity to contract without which he cannot execute the trust.

As observed by Lewin,2 a person to be a Trustee, must be capable of taking or holding the

property of which the trust is declared. The trustee should be competent to deal with the

estate as required by the trustor as directed by the beneficiaries. Whereas certain classes are

by nature or by rules of law under disability, the execution of the trust may call for the

application of judgement and knowledge of business. The trustee ought to be amenable to the

jurisdiction of the court which administers the trust. In general terms, therefore, a trustee

should be a person capable of taking and holding the legal estate and possess a natural

capacity and legal ability to execute the trust and domiciled within the jurisdiction of a Court

of Equity.

Thus in order to be a trustee, he must have the capacity to hold the property. For being a bare

trustee or a passive trustee whose function is merely to hold the trust property, no further

qualification is needed. Where, however, the trust involves duties requiring the exercise of

discretion, the person to be appointed as a trustee must also be competent to contract. 3

1 http://legalservicesindia.com/article/article/who-can-be-a-trustee-&-beneficiary-of-a-trust-under-indian-trust-act-1882-1025-1.html2 Lewin, law of Trust, 15th Ed., p.243 N. Suryanarayan Iyer, Indian Trusts Act, Prafulla C. Panth(Ed.), 5th Edn, Newdelhi, Butterworths India, 2001. p.223

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ACCEPTANCE OF OFFICE

Nobody is bound to accept a trust. The acceptance of a trust is by express declaration or by

interfering with the trust property and acting as a trustee. A person named as a trustee cannot

be taken to have accepted his office from the fact that he has taken possession of the trust

deed, if he received the deed for safe custody only.4 If the acts, however, are attributable only

to his character as trustee, then they amount to acceptance of trust.

By the acceptance of the trust, the trustee becomes subject to the statutory duties imposed

upon him. He cannot therefore cannot renounce except under the provisions under section 71

of the Indian Trusts Act. 5

MODES OF ACCEPTANCE

(a) Acceptance by joining in the deed

When the trustee executes the instrument of trust in which he is named a trustee, it constitutes

an express acceptance of the officer by him. A trustee joining in the execution of the

instruments must be careful about the recitals made therein because there is always a

likelihood of his being bound by those recitals. There is however no absolute bar on the

trustee to contradict those recitals.

(b) Acceptance by express declaration

An express declaration of acceptance, in the deed of appointment or otherwise, will fix the

obligation of acting in accordance with the instrument of trust.

(c) Acceptance by conduct

The acceptance of office of the trustee maybe inferred from the conduct of the trustee. Where

he has acted with reference to the affairs of the trust such acts would be evidence of

acceptance. Thus giving a power-of-attorney to the co-trustees to receive the assets of the

estate has been held to amount to acceptance. A request to the debtors of the estate to pay

would amount to acceptance of the office. Likewise joining in an assignment of testator’s

4 Evans vs John (1841) 4 Beav. 35: 49 E.R.250.5 G.C.V Subba Rao,Law of transfer of property, Volume-2, Revised by V.P Sarathi, 6th Edn, Hyderabad, Alt Publications, 2007, p.548.

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office would amount to acceptance. The doing of an act which is referable to the office of the

executor or trustee would entail acceptance of the office though the trustee or executor

professes to disclaim.

It would not be open to the trustee to act univocally and afterwards take advantage of the

doubt and plead that he did not act as a trustee. Where, for instance, a trustee had collected

rents of the estate which was under a lease to the testator’s son he was not permitted to take

up the position that he had collected as agent of the son who was the heir-in-law and not as a

trustee of the estate.

(d) Conduct not implying acceptance

Where, however, the conduct is clearly referable to some other ground than the execution of

the trust it would not be construed as acceptance of the trust. Merely taking delivery of the

settlement deed as a measure of interim custody by a trustee has been held not to amount to

acceptance.

(e) Bias or interest of person appointed as trustee

When a person appointed as trustee has a discretionary power annexed to the office and he

has a bias or interest in the exercise of the power, he must disclose the same before

acceptance, otherwise he will be disentitled to exercise that discretionary power.

(f) Estoppel by acceptance

A trustee who has once accepted his office is estopped from denying the existence of that

trust. Where for instance a person accepts a trust in relation to a specific sum of money and

agrees to invest it in his firm and also undertakes the duties of a trustee in respect thereto, it

would not be open to him to allege that the transaction in relation to the amount is not a trust,

and that the character in which he holds the property, is different from that of a trustee. In the

event of his insolvency, the beneficiaries as well as the co-trustees would be entitled to trace

the fund in the assets held by the Official Assignee and claim priority. 6

6 N. Suryanarayan Iyer, Indian Trusts Act, Prafulla C. Panth(Ed.), 5th Edn, Newdelhi, Butterworths India, 2001. p. 235

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POSITION OF A TRUSTEE

DUTIES OF A TRUSTEE

1) Duty to obey the direction of the testator or the settler(Section-11)

The guiding principle for the trustee is to obey the directions of the testator or settler.7 Where,

for instance, the author of the trust has directed calling in of the trust monies and investing

the same in the purchase of real estate the trustee must comply with the direction, and in case

of default he will have to make good the loss, if there is any, as a result of his default. 8 But

the trustee would not be liable if the direction is not clear.9 In the case of a trust for sale

within a particular time the failure on the part of the trustee to sell within the prescribed time

will make him liable in the event of the property being thereafter lost, for instance, by

destruction.10

2) Trustee to inform himself of the state of trust property.

Section 12 states that 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 to himself,(and subject to the provisions of trust) to get in trust-moneys invested on

insufficient or hazardous security.

The first duty of a trustee on acceptance of office is to acquaint himself with the nature and

circumstances of trust property. He is under a duty what the trust property consists of that is

proposed to be handed over to him and what are the trusts. He must also look into the trust

documents, make himself conversant with the terms of the trust deed, ascertain the

encumbrances and acquaint himself with all the matters affecting the trust.11

He must ascertain whether assets are secure ie examine whether the securities in which the

assest have been invested are sufficient.12

3) Duty to protect the title of the trust property

7 Attorney General Vs Downing(Lady) (1767) Wilmot 1, 97 FR 1.8 Craven v Craddock 1868 WN 229, reversed in1869 WN 48, 20 LT 638.9 Pg24310 Fry v Fry (1859) 27 Beav 144.11 Halows v Lloyd(1888) 39 Ch D 68612 N. Suryanarayan Iyer, Indian Trusts Act, Prafulla C. Panth(Ed.), 5th Edn, Newdelhi, Butterworths India, 2001.p.253

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Section 13 of the Indian Trusts Act states that ‘A trustee is bound to maintain and defend all

such suits, and (subject to the provisions of the instruments 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 trust property and the assertion or protection of

the title thereto.

The paramount duty of the trustee is to take all necessary steps of preservation and protection

of the trust property. It is the duty of the trustee to see that if anything remains to be done to

perfect the title to the trust property it is carried out. Sometimes it may be necessary to

protect the estate from the settler or others deriving title from him so that they may not deal

with the property in any manner adverse to the trust.13 Where under the terms of the trust,

there is an authority to purchase property, the trustee must investigate the title before

concluding the purchase.14

The title deeds of the trust property must be kept by the trustee under safe custody.15 If they

are lost the trustee will be liable unless he could show that the loss was not due to any

negligence on his part.16

4) Duty not to set up title adverse to beneficiary

Section 14 of the Indian Trust Act states that ‘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.

The position of a trustee being fiduciary it is not open to him to set up any title adverse to the

beneficiary. This section lays down two rules:

a)a trustee cannot set up or aid an adverse title; and

b) a trustee cannot set up or aid a third party’s title against the trust.

The principle underlying the provisions of this section is that a trustee who has accepted

office must assume the validity of the trust and the title of the beneficiaries to the trust

property.17 Under the provisions of this section, a trustee is not permitted to invoke formal

13 Macnamara v Cary (1867) 1 Ir Eq 9.14 Lackhart v Reilly 27 LJ 54, 118 RR 174.15 N. Suryanarayan Iyer, Indian Trusts Act, Prafulla C. Panth(Ed.), 5th Edn, Newdelhi, Butterworths India, 2001, p. 26216 Gillian v National Bank (1901) 2 Ch 59217 N. Suryanarayan Iyer, Indian Trusts Act, Prafulla C. Panth(Ed.), 5th Edn, Newdelhi, Butterworths India, 2001. P. 268

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title in himself in respect to the trust property adversely against the interest of the beneficiary,

nor should he act in a manner inconsistent with his duty as trustee, nor can he take the benefit

of breach of trust.18

5) Duty to maintain accounts and information

Section 19 of the Indian Trusts Act states that ‘ 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 anmount and state of

the trust property.’

Trustees who have assumed management of the estates of the beneficiaries owe a duty to

them to keep a correct and true account of the transaction relating to trust estate. The duty

includes maintaining proper vouchers as regards the transactions. The duty to keep accounts

includes the maintainance of a diary relating to the administration.19

Besides the duty to keep correct accounts the trustee must constantly be ready at all

reasonable times to make them available to the beneficiary. Under Section 19, it is not only

the duty of a trustee to maintain accurate accounts of the trust property but also a duty , nay

an obligation to furnish beneficiaries with full and accurate information as to the amount and

condition of the trust property.20

RIGHTS OF A TRUSTEE

1) Right to reimbursement of expenses-

Section 32 of the Indian Trust Act states that ‘ 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 realization, preservation or benefit of the trust property or the protection or

support of the beneficiary.’

When a trustee has, by mistake, made an overpayment to the beneficiary, he may reimburse

the trust property out of the beneficiary’s interest. If such interest fails, the trustee is entitled

to recover from the beneficiary personally the amount of such over payment.

18 Padma Rani v Panchkori Ghoshal AIR 1978 Cal 104.19 Tiger v Barchass Bank 1952 WN 38.20 Ibid p. 301

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Under the provisions of this section, every trustee is entitled to reimburse himself out of the

trust property, or if it fails, to recover from the beneficiary, personally on whose behalf he

acted all expenses properly incurred in the execution of the trust and interest thereon, even

where the appointment has not been regular but the trustees have acted bonafide they are

entitled to reimbursement.21 Under section 32 of the trusts Act which provides that a trustee is

entitled to be reimbursed of the expenses incurred properly by him about the realization,

preservation or benefit of the trust property ot the protection or support of the beneficiary.22

2) Right to indemnify from gainer by breach of trust.

Section 33 of the Indian Trust Act states that ‘A person other than a trustee who has gained

an advantage from the 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.’

A trustee is undoubtedly liable to the beneficiary for any loss caused to the trust estate by the

breach of trust. But as between the trustees and a third person, who has reaped the benefit of

breach of trust, the loss will be cast upon the person who has gained an advantage by the

breach of trust.

3) Right to apply to Court for opinion in management of the trust property-

Section 34 of The Indian Trusts Act states ‘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.

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 petitions and acting upon the opinion,

advice or direction given by the Court shall be deemed, so far as regards his own

21 Travis v Illingworth 1868 WN 206.22 N. Suryanarayan Iyer, Indian Trusts Act, Prafulla C. Panth(Ed.), 5th Edn, Newdelhi, Butterworths India, 2001. p. 377

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responsibility, to have discharged his duties as such trustee in the subject-matter of the

application.

The costs of every application under this section shall be in the discretion of the Court to

which it is made.’

This section deals with the summary jurisdiction of the court on an application by a trustee

for the opinion, advice or direction of the court on any question respecting the management

or administration of the trust property. Questions of detail, difficulty or importance which by

reason of their complicated nature would not be fit for summary consideration, have been

expressly excluded. This section contains only enabling provisions and it is not binding in

each case to do so.23

4) Right of settlement of accounts.

Section 35 of The Indian Trusts Act states ‘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

acknowledgement in writing to that effect.’

As provided under Section 19, a duty is cast upon a trustee to keep clear and accurate

accounts of the trust property and to furnish the beneficiary with full and accurate accounts

on being requested to do so. This section confers upon the trustee a corresponding right, the

right to an acquittance from the beneficiary that his claims have been settled is an essential

protection to the trustee against being called upon to answer questions as regards the

administration of the trust by him at a later time. In order to the trustees from being faced

with claims after long lapse of time, the law gives him on the completion of trusteeship a

right to have his accounts settled and to a receipt from the beneficiary that all claims and

demands have been settled.24 A receipt as acknowledgement of settlement is sufficient

acquittance of the trustee.

POWERS OF A TRUSTEE

(1) General Authority of a Trustee

23 Dalim Kumar v Nadarani AIR 1970 Cal 292, 73 Cal WN 877.24 Chadwick v Heatley 2 Coll 137, 63 ER 671

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Section 36 of Indian Trusts Act, 1882 states:

In addition to the powers expressly conferred by this Act and by the instrument of trust,

and subject to the restriction, 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

realization, protection or benefit of the trust-property, and for the protection or support of

a beneficiary who is not competent to contract.

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 than can be reasonably

obtained.

(2) Power to sell in lots and either by public auction or by private contract

Section 37 states:

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 directs.

(3) Power to sell under special conditions-Power to buy-in and re-sell

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.

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.

(4) Power to convey

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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.

(5) Power to vary investments

Section 40 states:

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

(6) Power to apply property of minors, etc. for their maintenance, etc

Section 41 states:

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.

Where the income of the trust-property is insufficient for the minor's maintenance or

education or advancement in life, or the reasonable expenses of his religious worship,

marriage or funeral, the trustee may, with the permission of a principal civil court of

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original jurisdiction, but not otherwise, apply the whole or any part of such property for

or towards such maintenance, education, advancement or expenses.

Nothing in this section shall be deemed to affect the provisions of any local law for the

time being in force relating to the persons and property of minors.

(7) Power to give receipts

Section 42 states:

Any trustees or trustee may give a receipt in writing for any money, securities or other

movable 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.

(8) Power to compound

Section 43 states:

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 occasioned by any act or thing so done

by them in good faith.

The powers conferred by this section on two or more trustees acting together may be

exercised by a sole acting trustee when by the instrument of trust, if any, a sole trustee is

authorized to execute the trusts and powers thereof.

This section applies only if and as far as a contrary intention is not expressed in the

instrument of trust, if any, and shall have effect subject to the terms of that instrument

and to the provisions therein contained.

This section applies only to trusts created after this Act comes into force.

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(9) Power to several trustees whom one disclaims or dies

Section 44 states:

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.

(10) Suspension of trustee’s power by decree

Section 45 states:

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.

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REMOVAL OF A TRUSTEE

Section 70 of the Indian trusts Act states how the office of trustee is vacated.

‘The office of a trustee is vacated by his death or by his discharge from his office.’

This Section lays down that the office of a trustee is vacated under two circumstances,

namely-(a) the death of the trustee, and (b) discharge of the trustee. Section 44, has laid down

that when one of the trustees disclaims or dies, the authority of trustee may be excercised by

the continuing trustees in the absence of an intention to the contrary under the terms of the

instruments of the trust. Section 76 provides that on the death or discharge of several co-

trustees, the trust survives and the trust property passes to the others in the absence of an

express declaration to the contrary by the instrument of trust.

It may be noted that though the death of a trustee causes vacancy, his bankruptcy does nto

necessarily have that effect. A trustee becoming a bankrupt doesnot ipso facto cease to be a

trustee. He can continue to function till a new trustee is appointed.25

This section provides that the office of a trustee is vacated by his discharge from office. The

next section prescribes the various modes as to the discharge of a trustee. Section 71 states

that:

‘The trustee maybe discharged from his office only as follows:

(a) by extinction of the trust:

Extinction of the trust automatically puts an end to the office of the trustee, because there

cannot be a trustee without a trust.

(b) by completion of his duties under the trust:

Where the purpose of the trust has fulfilled itself, there is no need to continue the trust and it

will come to an end. Where, for instance, a trust is constituted for looking after the estate of

an infant, the office of the trustee comes to an end when the trustee hands over the estate to

the beneficiary on attainment of majority.

Thus, there may be several instances under which the trust works itself out and nothing

further remaining to be done, the office of the trustee becomes extinct. The trustee gets

discharged from his office by the extinction of the trust. It is to be noted, however, that it

25 Satya Kinkar Dutt v Kiron Chandra Sinha AIR 1954 Cal 432

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doesnot mean that the trustee is relieved from his duty of redering accounts and delivering

the property to the beneficiaries.26

(c) by such means as may be prescribed by the instrument of trust:

Prior to the statutory provisions for appointment of a new trustee in the place of an existing

trustee on his death or resignation, it was the practice to insert a special power in the

instrument of trust providing the appointment of a new trustee on the death or retirement of

any of the existing trustees. A common instance of appointment of new trustees under the

statutory power on removal of an existing trustee occurs in the form that was usually taken by

bankers in obtaining mortgages.

(d) by appointment under this act a new trustee in his place:

A new trustee may be appointed either under statutory power, or by court. In either event, the

office of the old trustee gets vacated.

(e) by consent of himself and the beneficiary, or, where ther are more beneficiaries than one,

all beneficiaries being competent ot contract:

Where all the beneficiaries under a trust are sui juris it is open to them to discharge a trustee

even, as it would be open to them to put an end to the trust. The majority of trustees cannot,

however, give a valid consent for retirement.27 Where there are limitations under the trust

instrument in favour of infant beneficiaries and/or unborn children, thr unanimity of consent

on the part of the beneficiaries is not possible of procurement and there cannot be therefore, a

valid retirement in such a case. Where there are several trustees, it has been a matter of

doubts as to whether one of the trustees can retire even with the consent of all the

beneficiaries but without the consent of co-trustee or trustees.

(f) by the Court to which a petition for discharge is presented under this Act:

Section 72 of the Indian trusts Act states that, “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

26 Darshanlal v Dalliwali AIR 1952 All 82527 Sir G. Colebrooke’s case, cited exparte, Hughes, 6, Ves 622.

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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.’28

CONCLUSION

In the concept of a trust, the trustee becomes the legal owner but the element of legal

ownership is absent in the phenomenon of a security. The trustee although becomes the legal

28 http://agritech.tnau.ac.in/ngo_shg/pdf/ngo_trust%20act.pdf

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owner of the trust property, yet he does not become the full owner thereof and cannot sell or

otherwise dispose pf the same contrary to the provisions of the trust deed. The trustee no

doubt holds the trust property for the benefit of the beneficiaries, but he does not hold it on

their behalf. The expression ‘on behalf of’ is not synonymous but conveys different

meanings. In a trust of land, the legal estate is in the trustee and the interest of the beneficiary

or the cestui que trust is an interest in the land called equitable interest. Therefore, what vests,

in the trustee is only the legal estate or the legal ownership. The trustee is not the full owner

of the property in the real sense of the term because there is a beneficial interest and the

ownership therein carved out in the property. The legal ownership vesting in the trustee is for

the purpose of the trust and the administration of the provisions of the trust. Because the

beneficiary, until the trusts are carried out, is entitled to deal with the property, the trustee is

the person who is empowered to deal with the same, but can only deal with it in accordance

with the provisions of the deed of trust.

It is only for the provident administration of a particular charity that the trustees have the

power to sell the trust properties. Much will depend upon the provisions governing in a

particular trust.

BIBLIOGRAPHY

1. G.C.V Subba Rao,Law of transfer of property, Volume-2, Revised by V.P Sarathi, 6 th Edn,

Hyderabad, Alt Publications, 2007.

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2. N. Suryanarayan Iyer, Indian Trusts Act, Prafulla C. Panth(Ed.), 5th Edn, Newdelhi,

Butterworths India, 2001.

3. Universal’s Guide to Judicial Services Examination.

4. http://agritech.tnau.ac.in/ngo_shg/pdf/ngo_trust%20act.pdf

5. www.wikipedia.com.

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