Halsbury Trust Law

Date and Time: 11 January 2020 19:24:00 IST
Job Number: 107109359
Documents (100)
1. [290.094] In general
Client/Matter: -None-
2. [290.095] Who may be trustee
3. [290.096] Who may not be trustee
4. [290.097] Insolvent firm or person cannot remain trustee
5. [290.098] Trustee de son tort
6. [290.099] Constructive trustee in default of express trustee
7. [290.100] Trusteeship by devolution
8. [290.101] Official trustee
9. [290.102] Appointment by author of trust
10. [290.103] Appointment by court
11. [290.104] Appointment by existing trust
12. [290.105] Principal Civil Court of original jurisdiction
13. [290.106] General powers and liabilities of official trustee
14. [290.107] Vesting of gift or legacy in official trustee
15. [290.108] Administration vests with co-trustees
16. [290.109] Power of government to make rules
17. [290.110] Powers of high court to make orders with respect to property vested in official trustee
18. [290.111] Liability of government
19. [290.112] Audit of accounts of official trustee
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20. [290.113] Appointment by court
21. [290.114] Wishes of author of trust
22. [290.115] Whether appointment will promote or impede interest of trust
23. [290.116] Interest of beneficiaries
24. [290.117] When office is accepted
25. [290.118] Mode of acceptance
26. [290.119] Disclaimer of office
27. [290.120] Effect of disclaimer
28. [290.121] Vacation of office on death of trustee
29. [290.122] Conditions under which trustee may be removed by court
30. [290.123] Procedure for removal of trustee
31. [290.124] Vacation of office on discharge
32. [290.125] Trustee not to be relieved of the liability to render the accounts
33. [290.126] Vacation of office on extinction of trust
34. [290.127] Vacation of office on completion of duties
35. [290.128] Vacation of office by means prescribed by instrument
36. [290.129] Vacation of office on appointment of new trustee
37. [290.130] Vacation of office by consent of beneficiaries
38. [290.131] Vacation of office on application for discharge
39. [290.132] Vacation of office on disqualification of trustee by court
40. [290.133] Trustee to apply for discharge to civil court
41. [290.134] Appointment of new trustee on death, etc.
42. [290.135] When trustee is absent or “unfit”
43. [290.136] In general
44. [290.137] Power of surviving and continuing trustee to appoint new trustee
45. [290.138] As prescribed by founder
46. [290.139] Power of heirs to appoint new Trustee
47. [290.140] Legal representative’s right to be appointed as trustees
48. [290.141] Number of trustees to be appointed
49. [290.142] Appointment of new trustee to be in writing
50. [290.143] Vesting of property in new trustee
51. [290.144] Power of new trustees
52. [290.145] Survival of trust
53. [290.146] Possession of title deeds
54. [290.147] Reimbursement and indemnity in respect of expenses and liabilities
55. [290.148] Money expended in preserving trust property
56. [290.149] Liability of trustee for costs of proceedings
57. [290.150] To be recouped for erroneous overpayment
58. [290.151] Indemnity from gainer by breach of trust
59. [290.152] To apply to court for opinion in management of trust property
60. [290.153] Court’s powers
61. [290.154] Jurisdiction advisory in nature
62. [290.155] Directions under the provision dealing with right to apply to court for opinion in management of
trust property
63. [290.156] Advice sought from the court to sell the trust property
64. [290.157] Provision dealing with right to apply to court for opinion in management of trust property not to
apply to public trust and religious trusts
65. [290.158] Order non appealable
66. [290.159] Settlement of accounts
67. [290.160] General authority for protection of interest of trust
68. [290.161] Acceptance of tender for the development of the trust property
69. [290.162] Power of sale of trust property
70. [290.163] In general
71. [290.164] In general
72. [290.165] Powers which cannot be delegated
73. [290.166] Exceptions to bar on delegation
74. [290.167] Delegation when permissible
75. [290.168] Delegation of power to agent
76. [290.169] Trustee’s personal responsibility
77. [290.170] Trustees to act jointly
78. [290.171] Plea of non joinder
79. [290.172] Circumstances in which trustee is personally liable
80. [290.173] Civil court’s power to control discretion of trustee
81. [290.174] Trustee’s general disentitlement to remuneration
82. [290.175] Exceptions
83. [290.176] Bar against use of trust property for own use
84. [290.177] Disqualification for acquiring trust property by trustee or his agent
85. [290.178] In general
86. [290.179] Exception
87. [290.180] Co-trustees not to lend to one of themselves
88. [290.222] Definition
89. [290.223] Instances of breach of trust
90. [290.224] In general
91. [290.225] Trustee to make good any depreciation and damage suffered by the estate
92. [290.226] Rights of creditors of trustees
93. [290.227] Trustee committing breach of trust
94. [290.228] Breach fraudulently induced by beneficiary
95. [290.229] Beneficiary’s concurrence in breach
96. [290.230] Condonation
97. [290.231] Relief from paying interest
98. [290.232] Non liability of trustees paying without notice of transfer by beneficiary
99. [290.233] Liability of trustee when beneficiary’s interest is forfeited to government
100. [290.234] Successor trustee not liable for predecessor’s default
[290.094] In general
Halsbury's Laws of India (Trust & Charties,Vol 37), 2nd Edn
Halsbury's Laws of India (Trust & Charties,Vol 37), 2nd Edn > Halsbury's Laws of India (Trust &
Charities, Vol 37) 2nd ed > Part One TRUSTS > II. TRUSTEES > 1. INTRODUCTION
290 - Halsbury's Laws of India (Trust & Charities, Vol 37) 2nd ed
Part One TRUSTS
II. TRUSTEES
1. INTRODUCTION
A person capable of holding property can be a trustee1 but where the trustee is required to exercise discretion he
must be competent to contract2. The trustee while having legal ownership or possession of, or dominion over, the
subject of the trust is bound to allow the beneficial enjoyment or usufruct of the property to another, who is cestui
que trust or the “beneficiary”. The trustee is destitute of any rights of beneficial enjoyment of the trust property3.
Where the instrument of a trust authorises a sole trustee to execute a trust and powers thereof, he is called a sole
trustee when he enters into an agreement of composition or other arrangement4. There may be a trustee de facto,
which refers to the criterion of actual possession and management as the distinguishing feature; a trustee de son
tort5, which refers to illegal trusteeship; and a constructive trustee6, which refers to the mode in which management
was taken up in absence of an express appointment as a trustee to the office in any document or through such
overt expression of intention of the founder of the trust7. A de facto trustee looking after the trust for some time can
maintain a suit for recovery of the trust property8.
Where none of the trusts created by the testator are in existence, the trustees become bare trustees and have no
right of suit with respect to the trusts properties9. A person entitled to the office of the trustee in futuro, has no
subsisting interest and cannot sue for the possession of trust properties in praesenti10.
The Indian Trusts Act 1882 uses the term “trustee” in a restricted and technical sense11 and expressly excludes the
manager of a religious endowment12. Thus, position of the trustee of a math is different from the position of a
trustee of a temple. A temple trustee has only duties while the trustee of a math has both duties and rights13. Where
a deity has no property of its own and the expenses of any celebrations are to be met from the contributions
procured of the villagers, despite that the villagers do not become the trustees of the temple14.
Furthermore, an employer creating bonus and dearness allowance in favour of employees and also taking income
tax benefits for it is a trustee for that amount15. However, a benamidar is not a trustee in the strict sense of the term
but is only a name lender for the real owner. He has some of the liabilities of a trustee but not all his rights16.
1 For instance, under Hindu and Muslim law a woman is capable of holding property: see further [150] FAMILY LAW and
[240] PROPERTY; see also Shib Nath v Alliance Bank of Simla AIR 1914 Lah 787; Mohammad Nasim v Mohammed
Ahmed AIR 1914 Oudh 408; T Krishnaji Bhat v Sadasiva Tawker AIR 1927 Mad 250; Mohammad Bibi v Sulaiman
Ahmed AIR 1926 Mad 1110 [LNIND 1925 MAD 244].
2 See the Indian Trusts Act 1882 section 10; see also sections 5-6.
Page 2 of 2
3 Re Barney, Barney v Barney [1892] 2 Ch 265 : the cestui que, trust may proceed against an agent of his trustee
where he has not confined himself to the duties of an agent but by accepting a delegation of the trust or by fraudulently
mixing himself up with a breach of trust he himself has becomes a trustee by construction of law, ie trustee de son tort.
4 Avergal v Kuppuswami Aiyar AIR 1921 Mad 394 [LNIND 1921 MAD 101]: 68 IC 352.
5 As to trustees de son tort see [290.044] and [290.098].
6 As to constructive trustees see [290.099].
7 Vankamammidi Balakrishnamurthi v Gogineni Sambayya AIR 1959 AP 186 [LNIND 1957 AP 134]: (1958) 2 Andh WR
164.
8 Lalta Prasad v Brahmanand AIR 1953 All 449 [LNIND 1952 ALL 262], referring to (Babu) Mahadeo Prasad Singh v
Karia Bharthi AIR 1935 PC 44 : 153 IC 1100 : 62 IA 47 (where a person managing the affairs of an institution over a
period, who was also regarded by people as the mahant, was allowed to recover, for the benefit of the institution, its
property which was being wrongly held by a trespasser); Subramania Gurukkul v Srinivasa Rao AIR 1940 Mad 617 (a
de facto trustee in possession and management of temple can bring a suit for the recovery of temple lands).
9 Srikissen v Tarachand AIR 1940 Cal 228 : (1940) 1 ILR 575 Cal : 188 Cal WN 454.
10 Ettisheri Edathil Samandan Chathappa Nambiar v Pothera Kalloor Koman AIR 1916 Mad 363 at 364 : 25 Mad LJ 288 :
(1973) Mad WN 387 (the plaintiffs were not urallars of the temple, though they may some day become so by becoming
the senior members of their tarwads).
11 Re Lalchand Deoomal AIR, 1925 Sind 259 (where a person sets apart a sum for charity and invests it with a merchant
and the interest paid by the merchant is spent on charity, the merchant is not a trustee in respect of that amount).
12 Ghulam Haider v Manager, Committee Samadh Baba Phula Singh 73 IC 711.
13 Ghatti Sitharamamma v Deputy Commr for Hindu Religious and Charitable Endowments, Masulipatam AIR 1958 AP
319 [LNIND 1957 AP 108]: (1958) 1 Andh WR 470 (a superior of the math, can, however, have his rights curtailed to
protect public interest).
14 Andavar v Periathambi Padyachi AIR 1952 Mad 257 [LNIND 1951 MAD 56]: (1952) 2 Mad LJ 767 (where the villagers
were contributing for the religious ceremonies it was held their activities were more in the nature of rendering
assistance for the ceremonies instead of exercising control over them).
15 Devar & Co represented by K Muthuswami Devar v C Radhakrishna Naidu AIR 1953 Mad 16 [LNIND 1951 MAD 333].
16 (Yelamanchili) Pitchayya v (Yelamanchili) Rattamma AIR 1929 Mad 268 [LNIND 1928 MAD 228]: 115 IC 340 (the
benamidar does not have any vested rights to the property in his name as they are with the real owner).
End of Document
[290.095] Who may be trustee
Charities, Vol 37) 2nd ed > Part One TRUSTS > II. TRUSTEES > 2. PERSONS QUALIFIED FOR
TRUSTEESHIP
Part One TRUSTS
II. TRUSTEES
2. PERSONS QUALIFIED FOR TRUSTEESHIP

Who must be appointed trustee to some extent depends upon the nature of the trust1, that is whether it is regarded
as a hereditary trust or whether the trusteeship of each holder ends with him and a fresh appointment by the court
or some other competent authority has to be made2. A trustee must be competent to hold a legal estate and must
possess natural capacity and legal ability to execute a trust. He must be domiciled within the jurisdiction of a court
of equity. It is doubtful whether the obligations of trustee can be fully enforced against the Crown in England. In
India also the earlier view was on the same lines3 but the later view is that the Secretary of State for India was
capable of being a trustee4.
A state is a competent trustee in a charitable trust but it has the same obligations as a private citizen when soliciting
and obtaining donations for a public purpose5.
Where a provident fund is established by a bank for the benefit of its employee and clearly meant for payment to
the employees or their legal representatives on the termination of services and the bank is not empowered to
operate it except for the given purpose, then the bank has a fiduciary relationship with the employees, holding the
money in trust for them6.
A person may hold a legal estate in property as trustee of that estate for himself and other beneficiaries7. He may
not, however, at the same time be sole trustee and sole beneficiary of commensurate legal and equitable estates in
property8, though he may be the legal owner of property and at the same time the equitable owner of a smaller
equitable estate or interest in the same property where that smaller estate or interest does not in equity merge in
the larger legal estate9. The Indian Trusts Act 1882 does not as such incapacitate a cestui que trust from being a
trustee for himself and others but as a general rule he is not considered altogether a fit person for the office in
consequence of the probability of a conflict between his interest and his duties10. A beneficiary must not be made a
trustee unless there are clear words indicating that he was intended to be made a trustee11.
An alien can be a trustee under the Indian law12. A life convict is capable of holding property and can be either a
trustee or a beneficiary13. Furthermore, an illegitimate person if otherwise fit is not disqualified from being a
trustee14.
Under Mohammedan law, a donor can constitute himself as a trustee and though remaining in actual possession
can transfer the legal possession by declaring his possession as a donee15.
Page 2 of 3
Every donor contributing at the time of the foundation of a trust does not necessarily become a founder of the trust.
It depends on the surrounding circumstances and subsequent conduct of the parties16. In case of religious and
charitable trusts, which are not governed by the Indian Trusts Act 1882, the author of the trust who has made
himself a sole trustee at the time of creation of the trust is not precluded, in the absence of express reservation of
power in that behalf, from appointing additional trustees to act jointly with him17.
Where no trust is declared a person will not be accountable as trustee until obligations in the nature of trusts are
found to have been created and under which he may be held to be what is termed in English law a constructive
trustee18. A mere covenant to pay money does not make one a trustee19.
1 H H Maharani Vijayakunverba Saheb v CIT Ahmedabad (1982) Tax LR 681 (Guj); State of UP v Shyam Sunder Ram
Chander AIR 1961 All 418 [LNIND 1960 ALL 185]; Civilian War Calimant Association v Rex (1932) AC 14 ; Ashidbai
v Abdulla ILR 31 Bom 371; Forsher v Abraham (1874) LR 27 Eq 351.
2 Kalandar Batcha Saib v Jailani Sahib AIR 1930 Mad 554 : 128 IC 171; see also [290.094] note 1.
3 In Kinlock v Secretary of the State of India (1879) 7 App Cas 619 (the government of India cannot be a trustee);
relied on in Mir Nasiruddin Ahmed Khan v Secretary of State AIR 1935 Bom 439 : 37 Bom LR 763.
4 Khurshida Begum v Secretary of State for India ILR 5 Pat 539 : 94 IC 433; see Secretary of State for India in Council v
Guru Proshad Dhur (with Abdul Bari v Secretary of State for India in Council and Secretary of State for India in Council
v Rambullur Das Chowdhry) 20 Cal 51 at 62, FB; Secretary of State for India v Pandit Radhika Prasad Bapuli AIR 1923
Mad 667 : ILR 46 Mad 259 : 74 IC 785 (the government was regarded as trustee of the funds for the purpose given in
the agreement).
5 State of UP Government v Sham Sunder Ram Charan AIR 1961 All 418 [LNIND 1960 ALL 185].
6 Sooniram v Alagu Nachiyar Koil AIR 1938 PC 259.
7 Burges v Lamb (1809) 16 Ves 174; Ex p Clutton (1853) 17 Jur 988; Forster v Abraham (1874) LR 17 Eq 351; Re
Courtier, Coles v Courtier, Courtier v Coles (1886) 34 ChD 136 , CA; Head v Gould [1898] 2 Ch 250 at 272. As to
the effect on the doctrine of conversion of the trustees and beneficiaries being the same persons see Re Newbould,
Anderton v Newbould [1913] WN 211; revsd on the facts sub nom Re Newbould, Carter v Newbould (1913) 110 LT 6,
CA. A tenant for life may also be a trustee of the settlement under the English Settled Land Act 1925: Re Jackson’s
Settled Estate [1902] 1 Ch 258 ; Re Davies and Kent’s Contract [1910] 2 Ch 35 , CA; Re Johnson’s Settled
Estates [1913] WN 222; Re Pennant’s Will Trusts, Pennant v Rylands [1970] Ch 75 : [1969] 2 All ER 862.
8 Habergham v Vincent (1793) 2 Ves 204 at 210 per Lord Loughborough LC; Brydges v Brydges, Philips v Brydges
(1796) 3 Ves 120 at 126-127 per Arden MR; Selby v Alston (1797) 3 Ves 339 at 341; Re Douglas, Wood v Douglas
(1884) 28 ChD 327 at 331 per Pearson J; Fung Ping Shan v Tong Shun [1918] AC 403 , PC. See also Goodright
v Wells (1781) 2 Doug KB 771 at 778 per Lord Mansfield CJ. Cf Re Cook, Beck v Grant [1948] Ch 212 : [1948] 1 All
ER 231.
9 Robinson v Cuming (1739) 1 Atk 473; Brydges v Brydges, Philips v Brydges (1796) 3 Ves 120 at 126-127. An equitable
estate tail does not merge in a legal fee simple: Merest v James (1821) 6 Madd 118.
10 Ashidbai wd/o Oosman Ahmed Bukhai v Abdulla Haji Mahomed 31 Bom 271 : 8 Bom LR 562.
11 Seshacharulu v Ramanujacharulu AIR 1938 Mad 789.
12 See Shib Nath v Alliance Bank of Shimla Ltd, Lahore AIR 1914 Lah 187(2) : 25 IC 480 (held that the trustees, who were
of alien race and religion, could hold that position for their duties did not interfere with the daily lives of the concerned
Hindu family).
13 See Byreddi Narakka v Chinna Narayana Reddi ILR 6 Mad 331 : 7 Ind Jur 357.
14 Maulvi Saadat Husain v Mohammad Haider AIR 1937 Oudh 193.
15 Mohomed Bi Bi v N P Sulaiman, Ahmed AIR 1926 Mad 1110 [LNIND 1925 MAD 244]: 98 IC 838 (for wakf a
declaration in a document of the wakf is enough; no delivery or possession is required).
16 Narasimhiah v Y H Venkataramanappa AIR 1976 Kant 43 [LNIND 1975 KANT 46]at 47 Para 29 : (1975) 2 Kant LJ
446, citing Kt N Rm Thenappa Chettiar v N S Kr Karuppan Chettiar AIR 1968 SC 915 [LNIND 1968 SC 21]: (1968) 2
SCJ 645 [LNIND 1968 SC 21].
17 Keshardeo Chamaria v Radha Kishen Chamaria 52 Cal WN 642.
Page 3 of 3
18 Nallangal v Arasappappillaipatti Co-Operative Society by Secretary, A Mangayana Pillai AIR 1940 Mad 779 at 781-782.
As to constructive trustees see [290.099].
19 Venkataraman v Official Liquidator AIR 1939 Mad 252.
End of Document
[290.096] Who may not be trustee
TRUSTEESHIP
Part One TRUSTS
II. TRUSTEES
[290.096] Who may not be trustee

An infant or a minor who requires a guardian to look after his property is incapable of acting as a trustee as it
involves the exercise of discretion1. Besides, a minor cannot be held guilty of breach of trust. In case of fraud, a
minor can be directed to restore the benefits that he may have obtained under a trust2. An insolvent is incapable of
acting as a trustee3.
A beneficiary or the husband of a beneficiary under the trust will not be appointed a trustee by the court4 except
where a suitable independent person cannot be found to undertake the office5 or there are other special
circumstances6. In that case an undertaking has been required from the person appointed that, if he becomes sole
trustee, he will use every endeavour to obtain the appointment of a co-trustee7.
1 Mahamad Nasim v Mohamed Ahmad 27 IC 389 : 1 OLJ 726.

2 Khan Gul v Lakha Singh AIR 1928 Lah 609 : (1928) ILR 9 Lah 701.
3 A Ramanathan Chettiar v Kanagasabapathy Chettiar AIR 1926 Mad 500 [LNIND 1925 MAD 221]: 94 IC 489: held that
a man in need is more likely to be tempted to misappropriate funds than a wealthy man. Besides, a man who cannot
prudently manage his own affairs cannot be trusted much with those of the others. See also [290.097] note 4.
4 Ex p Clutton (1853) 17 Jur 988 at 989 per Wood V-C; Ex p Conybeare’s Settlement (1853) 1 WR 458 per Turner LJ.
See also Re Hattatt’s Trusts (1870) 18 WR 416; Forster v Abraham (1874) LR 17 Eq 351; Re Parrott (1881) 30 WR 97;
Re Coode, Coode v Forster (1913) 108 LT 94.
5 Ex p Clutton (1853) 17 Jur 988; Re Clissold’s Settlement (1864) 10 LT 642; Re Burgess’ Trusts [1877] WN 87; Re
Parrott (1881) 30 WR 97; Re Lightbody’s Trusts (1884) 33 WR 452.
6 Ex p Conybeare’s Settlement (1853) 1 WR 458; Re Curtis’s Trust and Trustee Acts 1850 : 1852 (1871) IR 5 Eq 429.
7 Re Hattatt’s Trusts (1870) 18 WR 416; Re Burgess’ Trusts [1877] WN 87; Re Lightbody’s Trusts (1884) 33 WR 452.
End of Document
[290.097] Insolvent firm or person cannot remain trustee
TRUSTEESHIP
Part One TRUSTS
II. TRUSTEES

Under the Indian Trusts Act 1882, an insolvent is not a desirable person to be appointed a trustee and must be
replaced by a new trustee1. Similarly, under the Indian Trusts Act 1882, an insolvent firm must be replaced by fresh
trustees2. When the person accepting the trust becomes bankrupt, then the beneficiary and co-trustees are entitled
to a preferential charge3. Where money is deposited with the insolvent for safe custody, the insolvent holds the
deposit in a fiduciary capacity to the depositor. As such this deposit is not divisible among the creditors of the
insolvent4.
Upon insolvency the assets pass to the official assignee though subject to the charge5; but if the beneficiary takes a
personal judgement for the amount due to him without taking steps to preserve his remedies based on trusts, he
loses his right to enforce the charge6.
The goods entrusted to a person as agent7 for sale and stored by him in trust in the fiduciary capacity of agent are
not passed to the official assignee8. Where insurance money is paid to the official assignee for goods destroyed by
fire in the godown of the insolvent agent but belonging to the other person, it can be recovered by the owner who
had paid the premium. Even if this trust property has been changed into money, it can still be earmarked and
claimed by the cestui que trust9.
1 T Krishnajee Bhat v Sadasiva Tawker AIR 1927 Mad 249 [LNIND 1926 MAD 285].
2 Satya Kinkar Dutt v Kiron Chandra Sinha AIR 1954 Cal 432 [LNIND 1954 CAL 37]at 433 (the insolvency of a trustee
will not ipso facto discharge him but further steps will have to be taken to effect his discharge, ie the appointment of a
new trustee in his place.This conclusion is supported by the Indian Trusts Act 1882 section 73).
3 Krishnadas Govardhandas Madivale v Ratanbai Gokuldas Laxmandas AIR 1941 Bom 41 : 193 IC 718; A Ramanathan
Chettiar v Kanagasabapathy Chettiar AIR 1926 Mad 500 [LNIND 1925 MAD 221]at 503 : 94 IC 955 : 23 Mad LW 339
(where a certain amount is a trust withthe trustees to be invested in their business and is so invested, it must be taken
to have remained a part of the assets of that business and to have been there on the date of insolvency, the
beneficiaries being at all times entitled to a charge upon such assets with the trustees). See, however, Venkiah Amma
Row Bahadur v Official Assignee of Madras AIR 1916 Mad 274 : 29 IC 37 : 28 Mad LJ 403 (where sovereigns and gold
were entrusted to a jeweller to be converted into jewellery and the jeweller became insolvent, it was held that the
jeweller was a trustee; but as there was no evidence that the gold and sovereigns did not form a part of the estate the
claimants were to rank with the other creditors).
Page 2 of 2
4 Official Assignee of Madras v T Krishnaji Bhat AIR 1933 PC 148 at 150 : 37 Cal WN 713 : 143 IC 162. See also
Zamindar of Kalahasti v P R Ganapathi Iyer AIR 1918 Mad 56 : 1918 Mad WN 555, wherein Abdur Rehman and Burn
JJ observed that an insolvent ought not be appointed to a position of trust. A necessitous man is more likely to be
tempted to misappropriate trust funds than one who is wealthy. Besides, a man who has not shown prudence in
managing his own affairs is not likely to be a fit person to manage the affairs of other people. If an improper choice is
made by a person in a fiduciary capacity it seems to be wholly wrong to say that after all the choice was not improper
because as it turns out no material damage has been done to the institution through the improper appointment.
5 P L N K M Nagappa Chettiar v Official Assignee of Madras AIR 1931 Mad 251 [LNIND 1929 MAD 260]: 1930 Mad WN
1077 : 60 Mad LJ 355. See [242] INSOLVENCY.
6 See M P M Murugappa Chetti v Official Assignee, Madras AIR 1937 PC 296 : 170 IC 329 (when the agent without the
knowledge of the principal invests the money given by the principal into his own firm when he was required to invest it
in other firms, then, if his firm becomes insolvent the agent stands in a fiduciary relationship with the principal).
7 Re Firm of Gianchand Lilaram AIR 1931 Sind 70 : 131 IC 705 : 25 SLR 430; Re Syed Kazim (deceased) AIR 1927
Rang 140 at 141 : 102 IC 389 : ILR 5 Rang 73 (where a commission agent who holds the goods in trust for sale for a
principal becomes insolvent the property in the goods does not pass to the official assignee and the principal is entitled
to the goods).
8 U Po Hnyin v Official Assignee AIR 1929 Rang 59 at 60 : 117 IC 51 : ILR 6 Rang 689.
9 Kush Dan Khan Kabuli v Official Assignee, Madras AIR 1936 Mad 21 [LNIND 1935 MAD 202]at 24 : 160 IC 303 : 43
Mad LW 345. See Kodak Films Ltd v South Indian Film Corp Ltd AIR 1937 Mad 833 at 835 : (1938) 1 Mad LJ 293 : 46
Mad LW 260 (the money paid by a person as an anticipatory earnest payment in respect of an anticipated contract
which did not come into existence owing to withdrawal of the offer by the company will be held by the company as a
trustee for him when it is declared insolvent; such an amount is not generally divisible among creditors). H Hunter,
Liquidator, Bank of Upper, India Ltd v Rani Kaniz Abid AIR 1935 PC 104 at 107 : 40 Cal WN 33 : (1935) Mad WN 669
(where a person effects a mortgage in respect of his properties and subsequently effects a valid trust of the same
properties, he is left with no interest in the properties. If he becomes insolvent later on these properties do not vest in
the official receiver and cannot be administered by him on behalf of the other creditors).
End of Document
[290.098] Trustee de son tort
Charities, Vol 37) 2nd ed > Part One TRUSTS > II. TRUSTEES > 3. PARTICULAR TRUSTEES >
A. Kinds Of Trustee
Part One TRUSTS
II. TRUSTEES
3. PARTICULAR TRUSTEES
A. KINDS OF Trustee
[290.098] Trustee de son tort

The term “de son tort” means “of his own wrong”. The term trustee de son tort emphasises the unlawful nature of
assumption of trusteeship1. Where a person assumes the management of property without authority he is
considered a trustee de son tort. Thus, a person in whom the trust property never vested and who was never given
possession as trustee but who as manager of the company took upon himself the position and duties of trustees is
only trustee de son tort2.
1 Vankamammidi Balakrishnamurthi v Gogineni Sambayya AIR 1959 AP 186 [LNIND 1957 AP 134]: (1958) 2 Andh WR
164 (the question of bona fides in assumption of office is immaterial when the trustee takes on the management
unlawfully). see also Mahabir Prasad Mishra v Shyama Devi 2013 (9) ADJ 46 : 2013 (101) ALR 402 : 2013 121 RD
711.
2 Behari lal v Shiv Narain AIR 1924 All 884 : 84 IC 631.
End of Document
[290.099] Constructive trustee in default of express trustee
A. Kinds Of Trustee
Part One TRUSTS
II. TRUSTEES
A. KINDS OF Trustee

Where, owing to no person having been originally effectively appointed a trustee by the testator1, or to the trustees
having all predeceased the testator2, or to the trustees all disclaiming the will or inter vivos trust3, the trust property
becomes in law vested in a person who is a stranger to the trust, he is a constructive trustee of the property and
holds it upon the trust to which it is subject4. Where no trust has been declared, a person is not accountable as
trustee until it is found that obligations of trust are created which make such a person a constructive trustee5.
A constructive trust is a trust created by equity in the interests of good conscience and without any express or
implied intention of the parties. When a person holding property in fiduciary capacity obtains a personal advantage,
he becomes a constructive trustee of all profits for the person at whose expense the profits are made6.
1 Sonley v Clock-makers’ Co (1780) 1 Bro CC 81; Dodkin v Brunt (1868) LR 6 Eq 580; Re Davis’ Trusts (1871) LR 12 Eq
214.
2 A-G v Hickman (1732) 2 Eq Cas Abr 193 at 194; A-G v Lady Downing (1767) Wilm 1 at 19 : 22 24; Moggridge v
Thackwell (1792) 1 Ves 464 at 475 per Lord Thurlow LC (on rehearing (1803) 7 Ves 36; affd (1807) 13 Ves 416, HL).
3 Fletcher v Fletcher (1844) 4 Hare 67; Robson v Flight (1865) 4 De GJ & Sm 608; Mallott v Wilson [1903] 2 Ch 494 .
4 Sonley v Clock-makers’ Co (1780) 1 Bro CC 81; Re Davis’ Trusts (1871) LR 12 Eq 214.
5 Nallangal v Arasappappillaipatti Co-operative Society by Secretary, A Mangayana Pillai AIR 1940 Mad 779 : 193 IC 314
(held that the widow did not owe any duty to the respondent company, neither was she holding property for its benefit
thus she could not be regarded as a constructive trustee). As to obligations in the nature of trusts see the Indian Trusts
Act 1882 Ch 9 (sections 80-96).
6 DLF Universal Ltd, New Delhi v Arjan Singh AIR 1986 Del 381 [LNIND 1985 DEL 495]: (1986) 10 DRJ 200 [LNIND
1985 DEL 495] : (1986) 1 Curr CC 185 (there is no constructive trust where no transfer of property is made). See Bai
Dosabai v Mathurdas Govinddas AIR 1980 SC 1334 [LNIND 1980 SC 201]at 1339 : (1980) 3 SCC 545 [LNIND 1980
SC 201] : (1980) UJ (SC) 655 (obligation of the lessor to sell the land by public auction and pay the excess price to the
lessee is an obligation to the ownership of the property in the nature of trust); Saudagar Muhammad Abdul Rahim Baig
Saheb v Saudagar Muhammad Abdul Hakim Baig Saheb AIR 1931 Mad 553 [LNIND 1930 MAD 211]: 135 IC 357 :
Page 2 of 2
(1931) Mad WN 335 (the eldest son carrying on trade for the benefit of the other family members had a fiduciary
relationship with them and was accountable to the others for benefits acquired during that trade).
End of Document
[290.100] Trusteeship by devolution
A. Kinds Of Trustee
Part One TRUSTS
II. TRUSTEES
A. KINDS OF Trustee
[290.100] Trusteeship by devolution

Upon the death of a trustee leaving no co-trustee surviving, the terms of the instrument creating the trust may be
such as to invest the person on whom the trust property then devolves with the office and powers of a trustee1. If he
is the personal representative, such a person has an absolute right to decline to accept the position and duties of
trustee2 and is liable at any time to be deprived of the office and powers by the appointment of new trustees3; if
such an appointment is made, he ceases to be a trustee unless he is thereby appointed a new trustee4.
1 Re Morton and Hallett (1880) 15 ChD 143 at 146-147, CA, per Jessel MR and at 149 per James LJ; Re Jordan,
Hayward v Hamilton [1904] 1 Ch 260 at 262 per Byrne J; Re Waidanis, Rivers v Waidanis [1908] 1 Ch 123 , CA.
2 Re Benett, Ward v Benett [1906] 1 Ch 216 at 225, CA. As to disclaimer by a trustee see [290.119]-[290.120].
3 Re Morton and Hallett (1880) 15 ChD 143 at 149, CA; Re Jordan, Hayward v Hamilton [1904] 1 Ch 260 at 262;
Re Routledge’s Trusts, Routledge v Saul [1909] 1 Ch 280 .
4 Re Morton and Hallett (1880) 15 ChD 143 at 149, CA; Re Routledge’s Trusts, Routledge v Saul [1909] 1 Ch 280
.
End of Document
[290.101] Official trustee
A. Kinds Of Trustee
Part One TRUSTS
II. TRUSTEES
A. KINDS OF Trustee

The Official Trustees Act 1913 is an Act to consolidate and amend the law regarding official trustees1. The
government2 has the power to appoint the official trustee for each of the states3.
An official trustee must have been for at least4:

(1) seven years, an advocate; or
(2) seven years, an attorney of a high court5; or
(3) ten years, a member of the judicial service of a state; or
(4) five years, a deputy official trustee.
The government can also appoint a deputy or deputies to assist the official trustee, and such deputy, subject to the
control of the government and general or special orders of the official trustee, must be competent to discharge the
duties and exercise any powers of the official trustee. When acting in such a capacity, he will have the same
privileges and liabilities as that of an official trustee6.
An official trustee is a corporation sole by the name of the official trustee of the state for which he is appointed. He
has perpetual succession and an official seal and may sue and be sued in his corporate name7.
1 See the Official Trustees Act 1913 long title. As to the extent and commencement of the Act see section 1.
2 “Government” means, in relation to a state, the state government and, in relation to a union territory, the central
government: Official Trustees Act 1913 section 2(1).
3 See the Official Trustees Act 1913 section 4(1). The same person can be appointed as a trustee for two or more states:
section 4(1) proviso. As to the provisions regarding amendments of the Official Trustees Act 1913 see section 32A,
32B. Also see generally section 32.
4 See the Official Trustees Act 1913 section 4(2)(a)-(d).
5 The high court, in respect of proceedings instituted by or against the official trustee under the Official Trustees Act 1913
or the Indian Trusts Act 1882, is a competent court throughout the territories in relation to which it exercises civil
Page 2 of 2
appellate jurisdiction: section 3. This does not affect any jurisdiction of the district court: section 3 proviso. As to such
jurisdiction see [10] COURTS.
6 See the Official Trustees Act 1913 section 5(1). In order to be a deputy, a person must have been for at least three
years an advocate, an attorney of a high court or a member of the judicial service of a state: section 5(2)(a)-(d).
7 See the Official Trustees Act 1913 section 6. See also Official Trustee v Raeburn AIR 1940 Rang 207 at 210 : (1940)
RLR 273.
End of Document
[290.102] Appointment by author of trust
B. Official Trustee > (i) Appointment of Official Trustee
Part One TRUSTS
II. TRUSTEES
B. OFFICIAL Trustee
(i) Appointment of Official Trustee

A person intending to create a trust1 may by the instrument of trust and with the consent of the official trustee
appoint the official trustee by that name2 or any other sufficient description to be the trustee of the property subject
to such trust3. The instrument of the trust must bear the official trustee’s consent and must be duly executed by
him4. Upon such appointment the property subject to trust vests in the official trustee and is held by him upon the
trust declared in such instrument5.
When the official trustee has been appointed trustee under any will, the executor of that will or the administrator of
the testator’s estate must, after obtaining probate or letters of administration, notify him, in the prescribed6 manner,
of the contents of such will. If the official trustee accepts the trust, then upon the execution by such executor or
administrator of an instrument in writing, transferring the trust property to the official trustee, the property vests in
the official trustee and he holds it subject to the trusts expressed in the will7. The instrument of trust must bear the
official trustee’s consent and must be duly executed by him8.
1 Other than a trust which the official trustee is prohibited from accepting under the provisions of the Official Trustees Act
1913 section 8(1).
2 The entry of the official trustee by that name in the books of the company will not constitute notice of a trust. A company
cannot object to enter the official trustee’s name in its register by the reason only that the official trustee is a
corporation. In dealing with property the fact that the person dealt with is the official trustee will not itself constitute
notice of trust: see the Official Trustees Act 1913 section 14.
3 Official Trustees Act 1913 section 8(1).
4 Official Trustees Act 1913 section 8(1) proviso.
6 “Prescribed” means prescribed by rules under the Official Trustees Act 1913 section 2(3).
Page 2 of 2
7 Official Trustees Act 1913 section 9.

8 Official Trustees Act 1913 section 9 proviso.
End of Document
[290.103] Appointment by court
Part One TRUSTS
II. TRUSTEES
B. OFFICIAL Trustee

Where any property is subject to a trust1 and there is no trustee within the local limits of the ordinary or the
extraordinary original civil jurisdiction of the high court2 willing or capable to act in the trust, the high court can on
application make an order for the appointment of the official trustee by that name3 with his consent to be the trustee
of that property4. Upon such order the property vests in the official trustee upon the same trusts as those on which it
was held previously to such order and the previous trustee or trustees is or are liable only for acts done before the
date of such order5.
The power of the high court to appoint an official trustee is a secular one. As the law of limitation applies to such an
order, an application for declaring the order null and void filed after three years from the date of the order is barred
by limitation6.
1 Ie other than a trust which the official trustee is prohibited from accepting: Official Trustees Act 1913 section 10(1).
2 As to the extent of high court jurisdiction see [290.101] note 5.
3 See [290.102] note 2.
4 Official Trustees Act 1913 section 10(1). See Administrator General v Vinod Bhushan AIR 1996 All 350 : (1996) ALJ
1744 (where neither the official trustee nor any other person moves an application to appoint the official trustee, and
there is no order appointing the official trustee as a sole executor under the will of the deceased testator, the claim of
the administrator general to administer estate as official trustee is not tenable); Re Man Singh (Dr) AIR 1974 Del 228
[LNIND 1974 DEL 38]: (1974) Rajdhani LR 276 (where no trustee is willing to manage or capable of managing a public
charitable trust, the trustees may appoint the official trustee in their place by an instrument in writing or they may file an
application to the high court for him to be so appointed). See also the Official Trustees Act 1913 section 13 whereby an
official trustee is not required to give any bond or security by any court upon his appointment.
Page 2 of 2
6 Satya Narain v Official Trustee (1982) ALJ 886.
End of Document
[290.104] Appointment by existing trust
Part One TRUSTS
II. TRUSTEES
B. OFFICIAL Trustee
[290.104] Appointment by existing trust

Where any property is subject to a trust1 and all the trustees or the surviving or continuing trustee or trustees and all
persons beneficially interested in the trust are desirous that the official trustee be appointed in the room of such
trustee or trustees, it is lawful for such trustee or trustees, by an instrument in writing, to appoint the official trustee
by that name or any other sufficient description, with his consent, to be the trustee of such property2. Upon such
appointment the property vests in the official trustee upon the same trusts as those on which it was held previously
to such appointment and the previous trustee or trustees are liable only for the acts done before the date of such
appointment3. The consent of the official trustee must be recited in the instrument and such instrument duly
executed by the official trustee4.
1 Ie other than a trust which the official trustee is prohibited from accepting: Official Trustees Act 1913 section 11(1).
4 Official Trustees Act 1913 section 11(1) proviso.
End of Document
[290.105] Principal Civil Court of original jurisdiction
Part One TRUSTS
II. TRUSTEES
B. OFFICIAL Trustee

The petition must be filed before the court of principal civil court of original jurisdiction and the high court exercising
original jurisdiction may entertain a petition provided it is valued properly1. Where, however a suit for account and
administration is filed and it is established that the trustee is guilty of breach of mis-conduct, it would be fit and
proper for the court to invoke its summary jurisdiction and remove the trustee and appoint a new trustee2, but its
inquiry would be limited in its scope to matters which can be readily determined in any enquiry of summary nature3.
There is no provision for any appeal against any order passed in summary jurisdiction in this regard4 nor can a
receiver be appointed in a proceeding for removal of a trustee or for appointment of a trustee under the Act5 and
once the order has been passed the order becomes conclusive between the parties and it is not open to any party
to go behind it in subsequent proceedings6.
Where the trustee disputes the allegations the court would not invoke its summary jurisdiction and the appropriate
remedy would be to file a civil suit7.
1 W H Brady v Ganesh Flour Mills (1981) Rajdhani LR 364.

2 Patel Varajilal Bhagwandas v Patel Jamnadas AIR 1956 Sau 51; Tirathdas Dharamdas v Parameshwari AIR 1943 Sind
223.
3 V Satyanarayana v T V Narayanamurthy AIR 1944 Mad 574 [LNIND 1944 MAD 130]: (1944) 2 Mad LJ 302 : 57 Mad
LW 489.
4 Tirathdas Dharamadas v Parameshwari AIR 1943 Sind 223.
5 Assardas Manghumal v Thakurbai AIR 1927 Sind 237.
6 Khatoon Jajjat Bai v Syed Ali Ullah AIR 1949 All 310.
7 Nathaval Devidas v Vaghebai Jhaverbai AIR 1928 Bom 20 : ILR 52 Bom 32 : 29 Bom LR 1677.
Page 2 of 2
End of Document
[290.106] General powers and liabilities of official trustee
B. Official Trustee > (ii) Powers and Liabilities of Official Trustee
Part One TRUSTS
II. TRUSTEES
B. OFFICIAL Trustee
(ii) Powers and Liabilities of Official Trustee

The official trustee may be appointed by a court of competent jurisdiction as a trustee1 and may act2 as an ordinary
trustee3. He has the same powers, liabilities and privileges, and is subject to the same control and orders of the
court, as any other trustee acting in same capacity4. An official trustee cannot go behind the orders of the court5. He
can decline either absolutely or conditionally to accept the trust6. He cannot accept any trust of an estate known or
believed by him to be insolvent or any trust for the benefit of creditors7.
The official trustee can8 incur expenditure on acts that are necessary for the proper care and management of any
property of the trust and with the sanction of the high court9 on such religious, charitable, and other objects and on
such improvements as may be reasonable and proper10. He can transfer the trust property to the original trustee or
any other lawfully appointed trustee or any other person if the court so directs11. Upon such transfer the property
vests in the newly appointed trustee and the official trustee is exempt from all liabilities as trustee of such property
except for acts done before such transfer12.
Neither the old trustees nor the new trustees appointed have a right to take forcible possession of the trust property
in occupation of another when the enquiry regarding the dispute of such property between them is pending13.
The official trustee cannot administer a trust for a religious or commercial purposes unless he is authorised to do so
by law14 and neither can he administer the estate of any deceased person unless he is expressly appointed sole
executor and sole trustee under the will of such person15. Where the properties of the deceased were initially vested
in the official trustee as executor and as soon as he obtained probate of the will, vested in him as the trustee, he is
to be assessed as a trustee and not as an executor for the purposes of assessment of income tax16. He is a
government17 officer liable to be removed by the government and cannot therefore be appointed guardian of the
property of a minor18. An official trustee must always be a sole trustee19.
Page 2 of 2
1 See the Official Trustees Act 1913 section 7(1)(a).

2 Ie is subject to the provisions of the Official Trustees Act 1913: see section 7.
3 See the Official Trustees Act 1913 section 7(1)(a). An official trustee acting as an ordinary trustee is not acting as a
servant of the Crown: Official Trustee v Raeburn (Mrs) AIR 1940 Rang 207 at 210 : (1940) RLR 273; Official Trustees
of Madras v MM Srinivasan AIR 1955 NUC 3895 (Mad) (an official trustee acting as an ordinary trustee is not acting as
a servant of the government).
4 Ie is subject to the express provisions of the Act: see the Official Trustees Act 1913 section 7(2).
5 Official Trustee, West Bengal v Sachindra Nath Chatterjee AIR 1969 SC 823 [LNIND 1968 SC 373]: (1969) 2 SCJ 123.
8 Ie in addition to and not in derogation of any other powers of expenditure: Official Trustees Act 1913 section 28.
10 Official Trustees Act 1913 section 28(a)-(b).
11 Official Trustees Act 1913 section 29(1)(a)-(c).
12 Official Trustees Act 1913 section 29(2). In case of a transfer, the official trustee can retain out of the property any fees
leviable in accordance with the provisions of the Act: section 29(2) proviso. As to fees see sections 17 and 18.
13 Swami S Guru Ghanshyamji v Maganbhai AIR 1998 Guj 280 [LNIND 1998 GUJ 263]: (1998) 3 Guj LR 1933.
14 See the Official Trustees Act 1913 section 7(5); Satya Narain v Official Trustee 1982 ALJ 886 (the appointment can be
made only for the purposes of performing secular duties and not for performing any religious ceremonies like pooja).
However, see Sanat Kumar Mitra v Hem Chandra Dey AIR 1961 Cal 411 [LNIND 1960 CAL 126]: where the
testamentary instrument provided that in certain contingencies the official trustee of Bengal was to become the
executor and the trustee of the will and sole trustee of the debutter and a charitable institution to be created and
established, in which case heirs of the testator for the time being were to be shebait and he or they were to perform the
functions of such trust under the supervision of the official trustee, it was held that the provision of the religious part of
the trust being performed by the heirs of the testator removed the impediment in the way of the official trustee acting as
the trustee.
16 CIT, Madras v Estate of V L Ethiraj (1980) Tax LR 420.
17 As to the meaning of “government” see [290.101] note 2.
18 Omar Tyab Aba Shariff v Ismail Tyab Aba Shariff AIR 1928 Bom 69 : 108 IC 495.
End of Document
[290.107] Vesting of gift or legacy in official trustee
Part One TRUSTS
II. TRUSTEES
B. OFFICIAL Trustee
[290.107] Vesting of gift or legacy in official trustee

Where any minor or lunatic is entitled to any gift, legacy or share of the assets of a deceased person, the person by
whom the gift is made, or the executor or administrator by whom such legacy or share is payable or transferable, or
any trustee of such gift, legacy or share can transfer it by an instrument in writing to the official trustee by that
name1 or any other sufficient description with his consent2. The money or property thus transferred to an official
trustee will vest in him and is subject to the provisions of the Official Trustees Act 19133.
1 Official Trustees Act 1913 section 12(1). The instrument must recited the consent of the official trustee and be duly
executed by him: section 12(1) proviso.
2 See [290.102] note 2.
End of Document
[290.108] Administration vests with co-trustees
Part One TRUSTS
II. TRUSTEES
B. OFFICIAL Trustee
[290.108] Administration vests with co-trustees

Where the administration vests with co-trustees, they will form as it were but one collective trustee and must
execute the duties and directions of the trust in their joint capacity1.
1 R P Kapur v Kaushalaya Educational Trust (1982) ILR 1 Del 801.
End of Document
[290.109] Power of government to make rules
B. Official Trustee > (iii) Powers and Liabilities of Government with Respect to Official Trustee
Part One TRUSTS
II. TRUSTEES
B. OFFICIAL Trustee
(iii) Powers and Liabilities of Government with Respect to Official Trustee
[290.109] Power of government to make rules

The government1 has the power to make rules for carrying into effect the objects of the Official Trustees Act 1913
and for regulating the proceedings of the official trustee in discharge of his duties2.

2 Official Trustees Act 1913 section 30(1). As to particular aspects that the rules may cover see section 30(2). See also
section 30(3), (3A), (4) as to the making of such rules.
End of Document
[290.110] Powers of high court to make orders with respect to property
vested in official trustee
B. Official Trustee > (iii) Powers and Liabilities of Government with Respect to Official Trustee
Part One TRUSTS
II. TRUSTEES
B. OFFICIAL Trustee
(iii) Powers and Liabilities of Government with Respect to Official Trustee
[290.110] Powers of high court to make orders with respect to property

vested in official trustee
The high court1 can make such orders as it thinks fit in respect of any trust property vested in the official trustee or
the income or produce thereof2. Any order under the Official Trustees Act 1913 can be made on the application of
any person beneficially interested in the trust property or of any trustee thereof3. The application must be filed only
by a person interested in the trust property or a trustee, and not by any other person who is a stranger4.

2 Official Trustees Act 1913 section 25. The Official Trustees Act 1913 section 27: An order of the high court has the
same effect as a decree: section 27. See [65] CIVIL PROCEDURE.
4 Satya Narain v Official Trustee (1982) ALJ 886.
End of Document
[290.111] Liability of government
B. Official Trustee > (iv) Cost and Audit
Part One TRUSTS
II. TRUSTEES
B. OFFICIAL Trustee
(iv) Cost and Audit
[290.111] Liability of government

The government1 is liable to make good all sums required to discharge any liability which the official trustee, if he
were a private trustee, is personally liable to discharge, except when the liability is one to which neither the official
trustee nor any of his officers has in any way contributed or which neither he nor his officers despite the exercise of
reasonable diligence could have averted; in either of those cases neither the official trustee nor the government is
subject to any liability2. Thus where the permission of the high court3 is not obtained by the official trustee before
demolishing the existing structure and constructing a new one and incurring expenditure over that sanctioned by the
court, the trustee is guilty of breach of trust. He, however is, not personally liable for the breach4.

2 Official Trustees Act 1913 section 15(1). Neither the government nor the official trustee is liable for an act done by or on
behalf of an official trustee before the commencement of the Act: see the Official Trustees Act 1913 section 15(2).
3 As to the extent of high court jurisdictions see [290.101] note 5.
4 Official Trustee of Tamil Nadu v Udavumkarankal AIR 1993 SC 1472 [LNIND 1993 SC 72]: AIR 1993 SCW 1345. The
Code of the Civil Procedure 1908 section 80 does not apply to any suit against the official trustee in which no relief is
claimed against him personally: Official Trustees Act 1913 section 16. See further [65] CIVIL PROCEDURE.
End of Document
[290.112] Audit of accounts of official trustee
B. Official Trustee > (iv) Cost and Audit
Part One TRUSTS
II. TRUSTEES
B. OFFICIAL Trustee
(iv) Cost and Audit

The accounts of the official trustees are to be audited at least once annually or at any other time with the direction
of the government1. The auditor has to examine all the accounts and forward to the government a statement in the
prescribed2 form with a report thereon and a certificate signed by him showing whether:
(1) the audit has been done in the prescribed manner and the accounts contain full and authentic information;
(2) the books that are directed to be kept by the official trustee have been duly and regularly kept; and
(3) the trust funds and securities have been duly kept and invested and deposited in accordance with the
specified rules; or
that the accounts are deficient or that the official trustee has failed to comply with the statutory requirements, in
such respects as may be specified in the certificate3.
The auditor has powers of a civil court4. He has power to summon5 and to examine any person on oath6, to issue a
commission for the examination on interrogatories or otherwise of any person7, and to summon any person to
produce any document or thing which may be deemed necessary for the audit or examination8. A person
summoned refusing or, without reasonable cause, neglecting to attend or to produce any document or thing, or
attending but refusing to be sworn or examined, is guilty of an offence9. The auditor must report every such refusal
or neglect to the government10.
The government must in accordance with rules made by it determine the costs of the audit11. Every beneficiary
under a trust being administered by the official trustee is entitled, subject to prescribed conditions, to inspect at all
reasonable times the accounts of such trust and the report and certificate of the auditor. On payment of the
prescribed fee the beneficiary may be furnished with copies thereof or extracts therefrom12.
When any money payable to a beneficiary under a trust has been in the hands of the official trustee for a period of
12 years or above, before or after the commencement of the Official Trustees Act 191313, in consequence of the
official trustee being unable to trace the person entitled to receive it, such money must be transferred in the
prescribed manner to the account and credit of the government14. If a claim is made to any money so transferred
Page 2 of 2
and the claimant’s case regarding such money is established to the satisfaction of the prescribed authority then the
government must pay to the person the amount asked for15.
1 Official Trustees Act 1913 section 19(1). As to the meaning of “government” see [290.101] note 2.
2 For the meaning of “prescribed” see [290.102] note 3.
4 Ie under the Code of Civil Procedure 1908: see the Official Trustees Act 1913 section 20(1). See [10] courts.
5 Official Trustees Act 1913 section 20(1)(a).
6 Official Trustees Act 1913 section 20(1)(b).
7 Official Trustees Act 1913 section 20(1)(c).
8 Official Trustees Act 1913 section 20(1)(d).
9 Under the Indian Penal Code 1860 section 188: Offical Trustees Act 1913 section 20(2). See [105] CRIMINAL LAW AND
PROCEDURE.

13 Ie 1 April 1914.
14 Official Trustees Act 1913 section 23. No such money may be so transferred if any suit or proceeding is pending in
respect thereof in any court: section 23 proviso.
15 Official Trustees Act 1913 section 24(1). If such claim has not been well established before the prescribed authority, the
claimant can take a petition to the high court against the government: section 24(2). The court may direct by whom all
or any part of the costs of such proceedings are to be paid: section 24(3).
End of Document
Charities, Vol 37) 2nd ed > Part One TRUSTS > II. TRUSTEES > 4. RULES TO BE FOLLOWED
BY COURT IN APPOINTMENT OF TRUSTEE OR NEW TRUSTEE
Part One TRUSTS
II. TRUSTEES
4. RULES TO BE FOLLOWED BY COURT IN APPOINTMENT OF TRUSTEE OR NEW

TRUSTEE

Wherever any vacancy or disqualification occurs in the office of a trustee and it appears to be impracticable for a
new trustee to be appointed otherwise1, the beneficiary may, without instituting a suit, apply by petition to a principal
civil court of original jurisdiction2 for the appointment of a trustee or a new trustee3. The court may appoint a trustee
or a new trustee accordingly.
In appointing new trustees the court must have regard to:

(1) the wishes of the author of the trust, expressed or implied in the instrument of trust;
(2) the wishes of the person empowered to appoint new trustees;
(3) the question whether the appointment will promote or impede the execution of the trusts; and
(4) where there are more beneficiaries than one, the interests of all beneficiaries4.
Even in case of private trusts which are for charitable purposes, for appointment of new trustees, the principle
underlying section 73 of the Indian Trusts Act 1882 is applicable. In such cases, the continuing trustees can appoint
a suitable person irrespective of gender as new trustee/trustees for the smooth running, administration and fulfilling
the object of the trust. Such vacancy should be filled by persons who are best likely to discharge the duties imposed
upon them by the trust. When express power for the appointment of new trustees is contained in the instrument, the
same is required to be construed as directory in making an appointment of new trustees. In the modern world and
days of gender justice, the right of a woman to hold the office of shebait is well recognized5.
There is no right to appeal against an order passed under this provision but the order is revisable6. Every trustee
appointed by a court of competent jurisdiction has, as well before as after the trust property becomes by law or by
assurance or otherwise vested in him, the same powers, authorities and discretions, and may in all respects act, as
if he had been originally appointed a trustee by the instrument, if any, creating the trust7.
1 Ie under the Indian Trusts Act 1882 section 73: see [290.134].
2 See W H Brady v Ganesh Flour Mills (1981) Rajdhani LR 364, wherein it was held that the high court exercising original
jurisdiction may entertain a petition if the valuation is proper; see also Parbati Shankar Seal v Subal Charan Seal
(1980) 2 Cal LJ 330.
Page 2 of 2
3 Indian Trusts Act 1882 section 74.

4 Indian Trusts Act 1882 sections 74(a) and (b); Tirathdas Dharamdas v Parmeshwaribai AIR 1943 Sind 223 : (1943) ILR
Kant 213 (the Indian Trusts Act 1882 sections 73 and 74 are not intended to apply to contentious or disputed cases but
to cases involving summary proceedings, where the facts are not disputed or cannot reasonably be disputed; however
the application for removal of a trustee on grounds of his disclaimer and refusal to act is maintainable); Assanmal
Cooverjimal v Somimal AIR 1930 Sind 41 : 121 IC 875 (where one of the trustees is excluded from the administration of
trust estate in consequence of which the trustee renounces the trust, he thereby either disclaims or refuses within the
meaning of Indian Trusts Act 1882 section 73; hence an application for removal and appointment of trustee under
section 74 is competent).
5 Seth Soorajmul Jalan Trust v Tolaram Jalan (2015) 4 Cal LT 1 (HC).
6 Khatoon Jannat Bibi v Syed Wali Ullah AIR 1949 All 310 : (1948) All LJ 566 (the Indian Trusts Act 1882 section 74
contemplates also cases of breach of trust or unfitness of a trustee by reason of his mis-conduct and is not confined to
cases of physical unfitness).
7 See Re Smith, Eastick v Smith [1904] 1 Ch 139 at 144 per Farwell J.
End of Document
[290.114] Wishes of author of trust
Part One TRUSTS
II. TRUSTEES

TRUSTEE
[290.114] Wishes of author of trust

In all cases of appointment by the court of a new trustee1, the court must have regard to the wishes of the creator of
the trust expressed or implied in the instrument creating the trust2 and to the question whether the appointment will
promote or impede the execution of the trust3. It must not appoint a trustee with a view to the interests of some of
the beneficiaries in opposition to those of others4. However, the testator’s desire expressed in his will that a certain
person must not be associated in the management of a charity created by the will does not oust the jurisdiction of
the court to appoint that person as trustee5.
1 See [290.113].
2 Re Tempest (1866) 1 Ch App 485 at 487 per Turner LJ. The court will not appoint a person or the nominee of a person
whom the creator of the trust has evidently intended to exclude from all interest in or connection with the trust property:
see Re Tempest above at 487 per Turner LJ (where the proposed appointee was nominated by a relative of the testator
with whom the testator was on bad terms). Cf Re Badger, Badger v Woolley (1915) 84 LJ Ch 567 (where a sole trustee
was originally appointed).
3 Re Tempest (1866) 1 Ch App 485 at 488.
4 Re Tempest (1866) 1 Ch App 485 at 487.
5 Chittambala Mudaliar v Parthasarthy Mudaliar AIR 1925 Mad 194 [LNIND 1924 MAD 57]: 84 IC 905 (the property
improperly alienated by a trustee to the prejudice of the trust can be recovered by him; but where the plaintiff becomes
a trustee only under a probate obtained as result of compromise decree of a court, which restricted the endowment to
some of the properties dedicated by the will, the trustee cannot question the decree under which alone he gets his
trusteeship. The period of limitation for setting aside the decree is six years).
End of Document
[290.115] Whether appointment will promote or impede interest of trust
Part One TRUSTS
II. TRUSTEES

TRUSTEE
[290.115] Whether appointment will promote or impede interest of trust

An important consideration in the selection of a new trustee1 is that the appointment must promote the interests of
the trust2. The court must not select a person as trustee where there is a likelihood of conflict between his duty and
interests3.
1 Ie by the court under the Indian Trusts Act 1882 section 74: see [290.113].
2 Manohar Mookerjee v Peary Mohan Mookerjee AIR 1920 Cal 210 : 54 IC 6 : 30 Cal LJ 177.
3 Re Parsons, Barnsdale and Smallman v Parsons [1940] Ch 973 : [1940] 4 All ER 65. See Re Tempest (1866) 1 Ch
App 485.
End of Document
[290.116] Interest of beneficiaries
Part One TRUSTS
II. TRUSTEES

TRUSTEE
[290.116] Interest of beneficiaries

The welfare of the beneficiaries is a dominant consideration for the court to decide whether a trustee may be
retained or not1. A beneficiary or the husband of a beneficiary under the trust will not be appointed a trustee by the
court2 except where a suitable independent person cannot be found to undertake the office3 or there are other
special circumstances4.
1 Manohar Mookerjee v Peary Mohan Mookerjee AIR 1920 Cal 210 : 54 IC 6 : 30 Cal LJ 177; Re Tempest (1866) 1 Ch
App 485 at 488. See [290.113].
2 Ex p Clutton (1853) 17 Jur 988 at 989 per Wood V-C; Ex p Conybeare’s Settlement (1853) 1 WR 458 per Turner LJ.
See also Re Hattatt’s Trusts (1870) 18 WR 416; Forster v Abraham (1874) LR 17 Eq 351; Re Parrott (1881) 30 WR 97;
Re Coode, Coode v Forster (1913) 108 LT 94.
3 See note 2 above. Re Clissold’s Settlement (1864) 10 LT 642; Re Burgess’ Trusts [1877] WN 87; Re Parrott (1881) 30
WR 97; Re Lightbody’s Trusts (1884) 33 WR 452.
4 See note 2 above. Re Curtis’s Trust and Trustee Acts 1850 : 1852 (1871) IR 5 Eq 429.
End of Document
[290.117] When office is accepted
Charities, Vol 37) 2nd ed > Part One TRUSTS > II. TRUSTEES > 5. ACCEPTANCE AND
DISCLAIMER OF OFFICE > A. Acceptance of Trust
Part One TRUSTS
II. TRUSTEES
5. ACCEPTANCE AND DISCLAIMER OF OFFICE
A. ACCEPTANCE OF Trust

The creator of the trust1 generally appoints an original trustee. Nobody, however, is bound to accept a trust2. A
person who is appointed a trustee assumes the office upon his acceptance3. Upon acceptance, the trust property,
so far as transferred to him, vests in him indefeasibly4 and he cannot afterwards disclaim the trust5. A trust is
accepted expressly or impliedly6.
Acceptance of office by a trustee is best effected by his executing the deed of trust but any express declaration of
assent by him will suffice; and if he brings a suit on the footing of the trust or otherwise proceeds to act in the
execution of the duties of the trust he will be deemed to have accepted the office7. If the trustee executes the deed
he should be careful to see that the recitals are correct or the court may hold him liable for the consequences.
When two distinct trusts are comprised in the same instrument it is not competent to the trustee to accept one trust
and decline other but it is competent to the testator or settlor to appoint separate sets of trustee for separate parts
of the property and this course may be adopted where the testator has property in different countries8. Acceptance
of part of a trust is acceptance of the whole9. A trust in the accepted sense of the word is the creation of an
obligation by the owner to the intent that he may hold the property for the benefit of another person or an object.
Where the settlor constitutes himself as a trustee the question of acceptance of the trust does not arise10.
1 Milroy v Lord (1862) 4 De GF&J 264 at 267 per Turner LJ; Re Waidanis, Rivers v Waidanis [1908] 1 Ch 123 , CA;
Montford v Lord Cadogan (1816) 19 Ves 635.
2 Indian Trusts Act 1882 section 10; Doe v Harris 16 M&W 517; Jones v Higgins LR 2 Eq 538.
3 Shep Touch 284, 285; Bonifaut v Greenfeld (1587) Cro Eliz 80; Thompson v Leach (1690) 2 Vent 198 at 199; Townson
v Tickell (1819) 3 B & Ald 31. See also Doyle v Blake (1804) 2 Sch & Lef 231 at 239.
4 A person must give his assent before any interest in property can indefeasibly pass to him (Townson v Tickell (1819) 3
B & Ald 31 at 39 per Best J; Hill v Wilson (1873) 8 Ch App 888), but a transfer or other disposition of property to a
person without his knowledge vests the property in him at once, subject to his right to disclaim the property when
informed of it (Doe d Chidgey v Harris (1847) 16 M&W 517 at 520 per Parke B; Siggers v Evans (1855) 5 E&B 367 at
381; Standing v Bowring (1885) 31 ChD 282 at 288, CA, per Cotton LJ; Mallott v Wilson [1903] 2 Ch 494 ).
Page 2 of 2
5 Re Sharman’s Will Trusts, Public Trustee v Sharman [1942] Ch 311 : [1942] 2 All ER 74. See also Doe d Chidgey v
Harris (1847) 16 M&W 517 at 520, 524.
6 See Milroy v Lord (1862) 4 De GF&J 264 at 274 per Turner LJ; Re Waidanis, Rivers v Waidanis [1908] 1 Ch 123 ,
CA. The acceptance may be either express or implied: Lord Montford v Lord Cadogan (1816) 19 Ves 635 at 638 per
Lord Eldon LC; Montgomery v Johnson (1848) 11 I Eq R 476.
7 Doe v Harris 16 M&W 517; Jones v Higgins LR 2 Eq 538; Lord Montford v Lord Cadogan (1816) 19 Ves 635.
8 Lord Montford v Lord Cadogan (1816) 19 Ves 635 at 638 per Lord Eldon LC; Bence v Gilpin (1868) LR 3 Exch 76 at 81
per Kelly CB; Doyle v Blake (1804) 2 Sch & Lef 231; Urch v Walker (1838) 3 My & Cr 702; James v Frearson (1842) 1
Y&C Ch Cas 370; White v Barton (1854) 18 Beav 192. See also Robinson v Pett (1734) 3 P Wms 249. A release of the
trust property to the other trustees implies a disclaimer and not an acceptance of the trust: see Nicloson v Wordsworth
(1818) 2 Swan 365 at 371 per Lord Eldon LC; Lord Montford v Lord Cadogan (1816) 19 Ves 635; Cook v Fryer (1842) 1
Hare 498; James v Frearson (1842) 1 Y&C Ch Cas 370.
9 Re Lord and Fullerton’s Contract [1896] 1 Ch 228 (held that in case of an executor trustee the probate of the will is
an acceptance of the whole of the trusts of the will. It is not open to the executor trustee to renounce one office without
renouncing the other).
10 Narasingh Charan Mohapatra v Radhakant Mohapatra AIR 1951 Ori 132 : (1950) ILR Cut 374.
End of Document
[290.118] Mode of acceptance
DISCLAIMER OF OFFICE > A. Acceptance of Trust
Part One TRUSTS
II. TRUSTEES
A. ACCEPTANCE OF Trust

A trust is accepted by any words or acts of the trustee indicting with reasonable certainty such acceptance1. A
person expressly accepts the office of trustee by executing the instrument of trust in which he is named a trustee2,
or may do so by some other writing or orally3. However, an oral expression of acceptance does not bind him unless
it is unequivocal4.
A presumption of implied acceptance can arise where the person interferes with the trust property5 or otherwise
acts in the trust6 or permits an action concerning trust property to be brought in his name7 or otherwise allows the
property to be dealt with in his name8. However, acceptance of a trust is not implied from the trustee named in a
deed merely taking charge of the deed temporarily for safekeeping9.
A trustee is not bound to accept a trust even though he may have promised to do so10. However, where the trustee
accepts money in relation to a trust and agrees to undertake duties regarding the sum including investing it in his
firm and agrees to be bound by the instrument creating the trust, then he is estopped from denying his character of
a trustee later on11.
Instead of accepting a trust the intended trustee may within a reasonable period disclaim it. Such disclaimer will
prevent the trust property from being vested in him12. 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 or trustees from the date of creation of the
trust13.
A trust does not fail for want of a trustee and, even if the person named as a trustee refuses to accept it before the
trust takes effect, the possessor of the property becomes the constructive trustee14. Where no trustee is effectually
appointed by the creator of the trust15, or all the trustees appointed by him die or refuse to accept the trust before
the trust takes effect, the person in whom the trust property is vested by reason of the failure of appointment, death
or refusal is deemed in equity to be the trustee of the property for the purposes of the trust16.
Page 2 of 2
1 See the Indian Trusts Act 1882 section 10. Thus, where A transfers certain property to B in trust to sell it and to pay out
of the proceeds A’s debts, and B accepts the trust and sells the property, so far as B is concerned, a trust of the
proceeds is created for A’s creditors.
2 Lord Montford v Lord Cadogan (1816) 19 Ves 635 at 638; Jones v Higgins (1866) LR 2 Eq 538 at 543-544 per
Kindersley V-C. Thus, where A bequeaths certain property to B and C, his executors, as trustees for D, and B and C
prove A’s will, this in itself amounts to acceptance of trust: Indian Trusts Act 1882 section 10 illustration (a).
3 Doe d Chidgey v Harris (1847) 16 M&W 517 at 519, 524; Middleton v Pollick, ex p Elliott (1876) 2 ChD 104 ;
Middleton v Pollock, ex p Wetherall (1876) 4 ChD 49 . Where a person did nothing to accept the trusts of a
settlement except signing, many years afterwards, a memorandum indorsed upon it which related only to part of the
settled property, he was held liable as a trustee in respect of that part of the property only: Malzy v Edge (1856) 2 Jur
NS 80.
4 Doe d Chidgey v Harris (1847) 16 M&W 517 at 524.
5 Lord Montford v Lord Cadogan (1816) 19 Ves 635 at 638 per Lord Eldon LC; Bence v Gilpin (1868) LR 3 Exch 76 at 81
per Kelly CB.
6 Doyle v Blake (1804) 2 Sch & Lef 231; Urch v Walker (1838) 3 My & Cr 702; James v Frearson (1842) 1 Y&C Ch Cas
370; White v Barton (1854) 18 Beav 192. See also Robinson v Pett (1734) 3 P Wms 249. A release of the trust property
to the other trustees implies a disclaimer and not an acceptance of the trust: see Nicloson v Wordsworth (1818) 2 Swan
365 at 371 per Lord Eldon LC. If A bequeaths a lakh of rupees to B upon certain trusts and appoints him as executor,
and B severs the lakh from the general assets and appropriates it to the specific purpose, this amounts to an
acceptance of trust: see the Indian Trusts Act 1882 section 10 illustration (c).
7 Lord Montford v Lord Cadogan (1816) 19 Ves 635; Cook v Fryer (1842) 1 Hare 498.
8 James v Frearson (1842) 1 Y&C Ch Cas 370.
9 Evans v John (1841) 4 Beav 35 at 36-37 per Lord Langdale MR.
10 See the Indian Trusts Act 1882 section 10; see also Appasami Pillai v Ramu Tevar AIR 1932 Mad 267 [LNIND 1931
MAD 68]: 136 IC 340 (where the executor mentions the name of a person in the trust document as trustee, which is
also a fact within the knowledge of this person, yet he does not show any inclination to take the trust and dies during
the lifetime of the settlor, it was held that the trusteeship never vested in him and therefore did not descend to his
heirs).
11 Krishnadas Govardhandas Madivale v Ratanbai Gokuldas Laxmandas AIR 1941 Bom 41 : 193 IC 718.
12 See the Indian Trusts Act 1882 section 10. As to disclaimer see [290.119]-[290.120].
14 Narasingh Charan Mohapatra v Radhakanta Mohapatra AIR 1951 Ori 132 (1950) ILR Cut 374 (the test of existence of
trust is whether anything remains for the donor to do: in order to make the trust binding on the author of the trust, he
must part with all his interest in the property to the trustee or declare himself as the trustee for the benefit of the cestui
que trust). See also Moinul Mulk Matinuzzaman Khan v H Hunter, Liquidator, Bank of Upper India Ltd AIR 1939 Oudh
161 at 169- 170 : 181 IC 155 : (1939) OWN 420 [LNIND 1929 MAD 260]; Ellison v Ellison (1802) 6 Ves 656 at 663 per
Lord Eldon LC; Brown v Higgs (1803) 8 Ves 561 at 570 per Lord Eldon LC. It is of the essence of a trust that the
trustees selected by the settlor and no-one else are to act as the trustees and if those trustees cannot or will not
undertake the office, the trust must fail: Re Lysaght (deceased), Hill v Royal College of Surgeons of England [1966] Ch
191 at 207 : [1965] 2 All ER 888 at 896; and see Harris v Sharp (1987) unreported but discussed in [1988] Conv
288. See also Re Willis, Shaw v Willis [1921] 1 Ch 44 , CA; Re Armitage, Ellam v Norwich Corp [1972] Ch 438 :
[1972] 1 All ER 708.
15 Bennet v Davis (1725) 2 P Wms 316; Sonley v Clock-makers’ Co (1780) 1 Bro CC 81; A-G v Stephens (1834) 3 My & K
347.
16 Pits v Pelham (1670) 1 Lev 304, HL; Mallot v Wilson [1903] 2 Ch 494 at 502-503.
End of Document
[290.119] Disclaimer of office
DISCLAIMER OF OFFICE > B. Disclaimer of Office
Part One TRUSTS
II. TRUSTEES
B. DISCLAIMER OF Office

A person who is an intended trustee may, before he has accepted the office or in any way acted in the trust,
disclaim the office or refuse to serve1. He cannot, however, disclaim the office and retain the estate2. The disclaimer
involves disclaimer of any benefit annexed to the office3 but does not prevent acceptance of an independent benefit
conferred by the instrument of trust4.
No formal act or instrument is necessary to affect the refusal5; but in order to furnish evidence of the fact and to
render it impossible for the person subsequently either to assume to act or to be charged with acting as a trustee, a
disclaimer by deed is proper6. A trustee who has refused to act in a trust but has not executed a deed of disclaimer
may, in legal proceedings in relation to the trust, disclaim in court7.
Where a testator has appointed a person an executor and also a trustee, the fact of his renouncing probate and not
acting as trustee is strong evidence that he has refused the trust8, and is conclusive evidence of refusal if the duties
of executor are by the will inseparable from the duties of the trust9.
The execution of a formal disclaimer after a lapse of time is good if the trustee who executes it has never in the
meantime acted or consented to act in the trust10. The inference to be drawn from the conduct of a trustee who has
not over a long period of years executed a formal disclaimer, or expressly declined to act in the trust, is a matter in
respect of which there has been a difference of judicial opinion: one view is that the presumption of acceptance of
the trust increases with each year of the period of inaction11; the other view is that every year of the period of
inaction fortifies the presumption of disclaimer12.
1 See the Indian Trusts Act 1882 section 10; Smith v Wheeler (1671) 1 Vent 128 at 130 per Hale CJ; Nicloson v
Wordsworth (1818) 2 Swan 365 at 369 per Lord Eldon LC; Small v Marwood (1829) 9 B&C 300 at 309; Siggers v Evans
(1855) 5 E&B 367 at 381; White v M‘Dermott (1872) IR 7 CL 1. This applies equally to trustees by devolution: Legg v
Mackrell (1860) 2 De GF&J 551; Re Ridley, Ridley v Ridley [1904] 2 Ch 774 ; Re Benett, Ward v Benett [1906] 1 Ch
216 , CA. As to the effect of disclaimer see [290.120].
2 Re Martinez’ Trusts (1870) 22 LT 403.
Page 2 of 2
3 Slaney v Watney (1866) LR 2 Eq 418; Lewis v Mathews (1869) LR 8 Eq 277.

4 Pollexfen v Moore (1745) 3 Atk 272; Andrew v Trinity Hall, Cambridge (1804) 9 Ves 525 at 534; Talbot v Earl of Radnor
(1834) 3 My & K 252; Warren v Rudall, ex p Godfrey (1860) 1 John & H 1.
5 Townson v Tickell (1819) 3 B & Ald 31 at 39 per Holroyd J; Stacey v Elph (1833) 1 My & K 195 at 199 per Leach MR;
Doe d Chidgey v Harris (1847) 16 M&W 517 at 520 per Rolfe B; White v M‘Dermott (1872) IR 7 CL 1; Re Birchall,
Birchall v Ashton (1889) 40 ChD 436 , CA; Re Paradise Motor Co Ltd [1968] 2 All ER 625 : [1968] 1 WLR 1125 ,
CA. An oral disclaimer is sufficient: Bingham v Lord Clanmorris (1828) 2 Mol 253 per Hart LC.
6 Nicloson v Wordsworth (1818) 2 Swan 365 at 370 per Lord Eldon LC; Townson v Tickell (1819) 3 B & Ald 31 at 39;
Stacey v Elph (1833) 1 My & K 195 at 199 per Leach MR; Begbie v Crook (1835) 2 Scott 128. The deed operates as a
disclaimer of the trust property as well as of the trust; and a release of the trust property by a disclaiming trustee to his
co-trustees is improper, as purporting to accept and deal with the property (Crewe v Dicken (1798) 4 Ves 97; Urch v
Walker (1838) 3 My & Cr 702), but it is not fatal to the disclaimer if the intention to disclaim is otherwise clear (Nicloson
v Wordsworth (1818) 2 Swan 365; Sharp v Sharp (1819) 2 B & Ald 405; Lord Wellesley v Withers (1855) 4 E&B 750).
7 See Ladbroke v Bleaden (1852) 16 Jur 630; Foster v Dawber (1860) 1 Drew & Sm 172.
8 M’Kenna v Eager (1875) IR 9 CL 79; Re Gordon, Roberts v Gordon (1877) 6 ChD 531 at 534 per Jessel MR.
9 Re Gordon, Roberts v Gordon (1877) 6 ChD 531 at 534.
10 Peppercorn v Wayman (1852) 5 De G & Sm 230 at 235.
11 Re Uniacke (1844) 1 Jo & Lat 1 (a decision of Sugden LC (then Lord Chancellor of Ireland) in the case of a settlement);
Re Needham (1844) 1 Jo & Lat 34 (another decision of Sugden LC, but in connection with a will).
12 Re Clout and Frewer’s Contract [1924] 2 Ch 230 (where Lord Buckmaster (sitting as an additional judge of the
Chancery Division) doubted the decisions in Re Uniacke (1844) 1 Jo & Lat 1 and Re Needham (1844) 1 Jo & Lat 34
and applied the principles of Re Gordon, Roberts v Gordon (1877) 6 ChD 531 and Re Birchall, Birchall v Ashton
(1889) 40 ChD 436 , CA). It is considered that the view held by Lord Buckmaster is correct. Cf Noble v Meymott
(1851) 14 Beav 471; Paddon v Richardson (1855) 7 De GM&G 563.
End of Document
[290.120] Effect of disclaimer
DISCLAIMER OF OFFICE > B. Disclaimer of Office
Part One TRUSTS
II. TRUSTEES
B. DISCLAIMER OF Office

A disclaimer or refusal to act in the trust1 takes effect ab initio and vests the trust property, as from the date when
the trust disposition came into operation, exclusively in the trustees who consent to act2. If all the trustees disclaim,
the property revests in the disposer, or, if he is dead, in his legal representative, who becomes by operation of law
the trustee of the property for the purposes of the trust3.
A person who has disclaimed or refused a trust reposed in him cannot afterwards act in it, even by exercising the
power of appointing a new trustee4; and he does not become a trustee by subsequently acting in connection with
the trust as agent of the accepting trustees5 or as adviser of the beneficiaries6. A trustee who disclaims is entitled to
his expenses of disclaiming out of the trust fund7 and to his costs of any proceedings to which he is made a party
on the footing of being a trustee8, except so far as he incurs or occasions costs beyond those actually incidental to
making good his disclaimer9.
1 As to disclaimer see [290.119].

2 Smith v Wheeler (1671) 1 Vent 128; Adams v Taunton (1820) 5 Mad 435; Small v Marwood (1829) 9 B&C 300 at 307;
Doe d Chidgey v Harris (1847) 16 M&W 517 at 524 per Parke B; Peppercorn v Wayman (1852) 5 De G & Sm 230; Re
Birchall, Birchall v Ashton (1889) 40 ChD 436 , CA. Consequently, dispositions of the trust property by the other
trustees are effectual before the disclaiming trustee has executed the disclaimer or has even become aware of his
appointment as a trustee: Peppercorn v Wayman above at 235.
3 Mallot v Wilson [1903] 2 Ch 494 at 502-503 per Byrne J. After all, the settlor has done everything in his power to
constitute the trust: cf Re Rose, Rose v IRC [1952] Ch 499 : [1952] 1 All ER 1217, CA (where the settlor had
executed share transfers and delivered the share certificates when it was possible that the directors might refuse to
register the transfers).
4 Re Birchall, Birchall v Ashton (1889) 40 ChD 436 at 437, CA.
5 Dove v Everard (1830) 1 Russ & M 231; Lowry v Fulton (1839) 9 Sim 104 at 115, 124.
6 Stacey v Elph (1833) 1 My & K 195 at 198.
Page 2 of 2
7 Re Tryon (1844) 7 Beav 496.

8 Sherratt v Bentley (1830) 1 Russ & M 655; Norway v Norway (1834) 2 My & K 278; Bray v West (1838) 9 Sim 429;
Benbow v Davies (1848) 11 Beav 369; Bulkeley v Earl of Eglinton (1855) 1 Jur NS 994; Heap v Jones (1856) 5 WR
106; Legg v Mackrell (1860) 2 De GF&J 551. Cf Howard v Rhodes (1837) 1 Keen 581 (where costs were not allowed to
a trustee who, after having acted, declined to perform the trust reposed in him and thus, rendered necessary a suit for
the appointment of a new trustee).
9 Martin v Persse (1828) 1 Mol 146.
End of Document
[290.121] Vacation of office on death of trustee
Charities, Vol 37) 2nd ed > Part One TRUSTS > II. TRUSTEES > 6. HOW OFFICE OF TRUSTEE
IS VACATED > A. By Death
Part One TRUSTS
II. TRUSTEES
6. HOW OFFICE OF TRUSTEE IS VACATED
A. BY Death
[290.121] Vacation of office on death of trustee

The office of a trustee is vacated on his death1. Whenever, a trust is created and the execution of the trust fails by
the death of the trustee or by accident, the court executes the trust2. On the death of one of the trustees, the
surviving trustees can proceed with the legal proceedings without it being incumbent on them to implead the legal
representatives of the deceased trustee as the necessary party3.
Although, a death of a trustee causes a vacancy but the bankruptcy of the trustee does not ipso facto result in the
cessation of the office of the trustee and he can continue to function till a new trustee is appointed4.

2 Allahabad Bank Ltd v CIT, West Bengal AIR 1953 SC 476 [LNIND 1953 SC 83](where the whole scheme of the deed
of trust made for the payment of pensions to the staff of the bank invested the bank or its authorised officers with the
sole discretion of granting or of withdrawing, modifying or determining the pension and it was not at all obligatory on
them at any time to grant any pension or to continue the same for any length of time, it was held that there was no
power in the nature of a trust which could be exercised by the court, if the donee of the power for some reason or the
other did not exercise the same).
3 Karavadi Manikya Rao v Naluri Adenna AIR 1949 Mad 654 [LNIND 1948 MAD 266]: 62 Mad LW 202.
4 Sahyer Kinker Dutt v Kiran Chandra Sarker AIR 1954 Cal 432 [LNIND 1954 CAL 37].
End of Document
[290.122] Conditions under which trustee may be removed by court
IS VACATED > B. Removal of Trustee
Part One TRUSTS
II. TRUSTEES
B. REMOVAL OF Trustee

The court has inherent jurisdiction to supervise and control the activities of trustees and in exercise of this power it
can remove and appoint a new trustee in their place. It may, if the circumstances so demand, direct the removal of
a trustee although it has not been expressly asked for in the pleadings1. The welfare of the beneficiaries and of the
trust estate must be the primary consideration with the court2. For the court to order dismissal, the acts or omissions
of trustees must be such as to endanger the trust property or to show a want of honesty or a want of proper
capacity to execute the duties of the office or a want of reasonable fidelity3.
Friction or hostility between a trustee and the person who has the present beneficial interest in the trust property is
not of itself a reason for the removal of the trustee, but it is taken into account, where it is grounded on the mode in
which the trust has been administered, or where it has arisen wholly or partially out of substantial overcharges by
the trustee against the trust property4. Similarly, illiteracy, failure to maintain proper accounts as a result of that and
uncertainty of their legal position under the deed of grant are no reasons for removing the trustees unless it has
been proved that they have misappropriated the funds5.
A trustee may not be not disqualified for breach due to ignorance of the nature of the trust property with which he is
endowed6.
1 Re Wrightson, Wrightson v Cooke [1908] 1 Ch 789 ; Nathubhai Devidas v Vaghibhai Jhaverbhai AIR 1928 Bom 20 :
107 IC 49 (application for the removal of a trustee should undoubtedly be brought by a suit and where it is alleged that
the trustee has committed a breach that suit should ask for delinquent trustees to make good the breach of trust.
Further, the suit should normally ask for the administration of the trust estate by the court). See AC Chidambara
Mudaliar v N Krishnaswami Pillai AIR 1916 Mad 720 : 28 IC 221 (although a trustee can be removed from his office on
good cause being shown, it is not competent to a trustee to purchase his co-trustee out).
2 Manohar Mookerjee v Peary Mohan Mookerjee AIR 1920 Cal 210 : 54 IC 6 : 30 Cal LJ 177 (there must be a clear
necessity for interference to save trust property for the court to act); Mohamed Ismail Ariff v Ahmed Moola Dawood
(1916) ILR 43 Cal 1085 (the interests of the trust are supreme and the court must have regard to such interests in
Page 2 of 2
dealing with the question whether the persons appointed as trustees are persons who can be properly entrusted with
the management of the institution).
3 Zamindar of Kalahasti v P R Ganapathi Iyer AIR 1918 Mad 56(2) : 43 IC 1008 (if the continuance of a person who is a
hereditary trustee and a descendant of the founder in the office is likely to endanger the interests of the institution, he is
liable to be removed; also held that one of the important duties of trustees is to keep a distinct account of the trust
property and to keep the trust property separate from their property and the omission to perform this duty will entail
removal of the trustee); Nur Hussain Shah v Hussaini Bibi AIR 1926 Lah 16 : 89 IC 429 (where it was clearly proved
that the interests of the trust had not been kept in view and that the trustee’s conduct had not been such as to inspire
confidence, the court directed the removal of trustee); Srinivasa Ayyangar v Ramalinga Iyer 125 IC 250; TKrishnajee
Bhat v Sadasiva Tawker AIR 1927 Mad 249 [LNIND 1926 MAD 285]: 99 IC 713 (where the trustee has purchased
property with the beneficiary’s money and where the beneficiary cannot say in specie which particular goods were
bought with his money, he has a charge on the entire property that has been purchased; it is open to the author of the
trust to remove the disability of use of the trust money for his own purposes by the trustee).
4 Letterstedt v Broers (1884) 9 App Cas 371 at 389, PC; Chapsey Cooverji v Jethabhai 9 Bom LR 514.
5 Jakkamreddi Seshadu Reddy v S Subramania Aiyar AIR 1923 Mad 163 : 74 IC 35. See (Kosuri) Gopalacharyulu v
Gadde Lakshminarayana AIR 1929 Mad 87 [LNIND 1928 MAD 69]: 114 IC 650 (de facto trustees considering
themselves to be the “archakas” and appropriating the surplus income of the property for their own personal use where
the inam register showed that the property was granted to the temple must account for money received by them and be
removed for breach of trust); Zamindar of Kalahasti v P R Ganapathi Iyer AIR 1918 Mad 56(2) : 43 IC 1008 (where a
trustee is guilty of misappropriation, it is proper to dismiss him and not merely suspend him).
6 Ramaprasadgiri Guru Tokangir Gosavi v Krishnanandgiri Guru Purushottamanandgiri AIR 1938 Bom 23 : 173 IC 113.
See Vaithinatha Aiyar v S Thvagaraja Aiyar AIR 1921 Mad 563 : 68 IC 631 (where certain trustees aided and abetted
violations of the trust before their appointment knowing that the choultry (open shed used as rest house for travellers or
a temple colonnade) was a public property, they must be removed from their positions as trustees).
End of Document
[290.123] Procedure for removal of trustee
IS VACATED > B. Removal of Trustee
Part One TRUSTS
II. TRUSTEES
B. REMOVAL OF Trustee

The court1 cannot remove a trustee who has been appointed by the will of the author of the trust on the application
of a person who is not a beneficiary2. The omission to insert a specific prayer for removal of the trustees is not fatal
to the suit. The court may, if it deems fit, decree the removal after allowing an amendment of the plaint3. A suit for
the removal of the trustee can be referred for arbitration by the district judge4. All beneficiaries must be notified to
appear and the trustees must be given a notice before the removal of a trustee5. Application for the removal of a
trustee should undoubtedly be brought by a suit and where it is alleged that the trustees have committed a breach
of trust that suit must ask the delinquent trustees to make good the breach of trust. Further, the suit must normally
ask for the administration of the trust estate by the court6.
Where all the parties interested do not join in the application, it is usual to serve the application upon the other
persons who are interested in the trust either as trustees or as beneficiaries7.
1 Khetan Industries v Manju Ravindraprashad Khetan AIR 1999 Bom 43 (the principal civil court of original jurisdiction for
Greater Bombay is the high court and not the city civil court; the latter, therefore, cannot entertain a suit for removal of a
trustee).
2 Nathubhai Devidas v Vaghibhai Jhaverbhai AIR 1928 Bom 20 : 107 IC 49.
3 Ambalam Pakkiya Udayan v J M Bartle ILR 36 Mad 418 at 425 : (1912) Mad WN 152.
4 Nambi Aiyangar v Narayana 11 Mad LJ 337.
5 Patel Vrajlal Bhagwandas v Patel Jamnadas Tribhovandas AIR 1956 Sau 51 (persons cannot become executors or
continue as such merely because they style themselves as such when they are appointed trustees. Their duties are
different. An application under the Indian Succession Act 1925 section 301 is not maintainable for the removal of
trustees).
6 Nathubhai Devidas v Vaghibhai Jhaverbhai AIR 1928 Bom 20 : 107 IC 49; Patel Vrajlal Bhagwandas v Patel Jamnadas
Tribhovandas AIR 1956 Sau 51 (where a breach of trust is made a ground for removal of a trustee, the appropriate
remedy is by way of suit); Khatoon Jannat Bibi v Syed Wali Ullah AIR 1949 All 310 (application for removal of a trustee
must be brought by a suit); Assanmal Cooverjimal v Somimal AIR 1930 Sind 41 : 121 IC 875.
Page 2 of 2
7 Re Lonsdale’s Trust (1850) 14 Jur 1101; Re Thomas’ Trust (1851) 15 Jur 187; Re Maynard’s Settlement Trusts (1852)
16 Jur 1084; Re Richard’s Trust (1852) 5 De G & Sm 636; Re Sloper (1854) 18 Beav 596; Re Fellows’ Settlement
(1856) 2 Jur NS 62; Re Blanchard (1861) 3 De GF&J 131 at 137 per Turner LJ. The court may, however, dispense with
this service where good reason is shown for so doing: Re Smyth’s Settlement (1851) 2 De G & Sm 781; Re Richard’s
Trust (1852) 5 De G & Sm 636 at 637 per Parker V-C; Re Blanchard (1861) 3 De GF&J 131 at 137; Re Lightbody’s
Trusts (1884) 33 WR 452; Re Wilson (1886) 31 ChD 522 , CA. The application need not be served on a trustee who
has absconded (Re Harrison’s Trusts (1852) 22 LJ Ch 69; Hyde v Benbow [1884] WN 117), or who is permanently
resident abroad (Re Stewart (1860) 8 WR 297; Re Bignold’s Settlement Trusts (1872) 7 Ch App 223; Re Pye’s Trusts
(1880) 42 LT 247).
End of Document
[290.124] Vacation of office on discharge
IS VACATED > C. Other Conditions
Part One TRUSTS
II. TRUSTEES
C. OTHER Conditions

The office of the trustee is vacated by his discharge from his office1. The trustee may be discharged from his office
only under the following conditions2, that is, by:
(1) the extinction of the trust3;
(2) the completion of his duties under the trust4;
(3) such means as may be prescribed by the instrument of trust5;
(4) the appointment of a new trustee in his place6;
(5) the consent of himself and the beneficiary, or, where there are more beneficiaries than one, all the
beneficiaries being competent to contract7; or
(6) the court to which a petition for discharge is presented8.
After a trustee has accepted the office he cannot without communication with his cestui que trust denude himself of
the character of the trustee until he has performed the trust9.
1 See the Indian Trusts Act 1882 section 70.

2 Indian Trusts Act 1882 section 71; S K Subramaniam Pillay v P Govindaswamy Pillay 21 IC 232 : 6 Bur LJ 177 : 7 LBR
37 (the only modes in which a trustee can divest itself of his office are the following (1) by the universal consent of all
the parties; (2) by virtue of a special power in the trust instrument creating the trust or a statutory power applicable to
the trust; (3) by obtaining a release by application to the court).
3 Indian Trusts Act 1882 section 71(a); see also Darshan Lall v Dalliwali AIR 1952 All 825 [LNIND 1952 ALL 99]: (1952)
ALJ 259 : (1952) AWR (HC) 345.
4 Indian Trusts Act 1882 section 71(b).
5 Indian Trusts Act 1882 section 71(c).
6 Ie under the Indian Trusts Act 1882 section 71(d).
7 Indian Trusts Act 1882 section 71(e).
Page 2 of 2
8 Ie under the Indian Trusts Act 1882 section 71(f).

9 Chalmer v Bradley (1819) 1 J&W 68.
End of Document
[290.125] Trustee not to be relieved of the liability to render the accounts
Part One TRUSTS
II. TRUSTEES
C. OTHER Conditions
[290.125] Trustee not to be relieved of the liability to render the accounts

Where the trustee is discharged from the office of the trustee, the court has no jurisdiction to release him of his
liability to render accounts on account of his being dischasrged from the office1. The new trustee may ask the
discharged trustee to render account when he gets discharged and does not render accounts by adopting
obstructive attitude2.
1 Darshan Lal v Dalliwal AIR 1952 All 825 [LNIND 1952 ALL 99].
2 Sri Vedagiri Lakshmi Narasimha Swami Temple v Induru Pattabhiram Reddi AIR 1967 SC 781 [LNIND 1966 SC 175];
see also V K Kalu Achan v C S Sivarama AIR 1928 Mad 879 [LNIND 1927 MAD 355]; Devesthanam v Duraiswami
Nayadu AIR 1943 Mad 153 [LNIND 1942 MAD 247].
End of Document
[290.126] Vacation of office on extinction of trust
Part One TRUSTS
II. TRUSTEES
C. OTHER Conditions
[290.126] Vacation of office on extinction of trust

A trust is extinguished when the purpose of the trust is accomplished or it has become unlawful or imposssible1.
The trustee is then discharged2. When a trust has terminated, the persons who have become absolutely entitled to
the trust property may require the trustee to transfer it to them at their expense3 on furnishing to him clear proof that
his duties and responsibilities are at an end4.
1 Harbans Singh v Rajinder Kaur AIR 1925 All 277 : 85 IC 1047. See the Indian Trusts Act 1882 section 77. Where the
fulfilment of the purpose becomes impossible the trust is treated as extinguished: See Gela Ram v District Board,
Muzaffargarh AIR 1923 Lah 93 : 67 IC 434 (the land in suit was given to the district board to be used as a road to
connect the main road to the public gardens. The public gardens were sold. Held, that the district board was the trustee
of public as regards the land in suit but the trust was extinguished as its purpose, after the public gardens were sold,
had become impossible to perform. Also held that on the extinction of the trust the owner of the property is entitled to
recover).
2 Indian Trusts Act 1882 section 71(a).
3 Taylor v Glanville (1818) 3 Mad 176; Knight v Martin (1829) 1 Russ & M 70; Willis v Hiscox (1839) 4 My & Cr 197;
Poole v Pass (1839) 1 Beav 600; Saunders v Vautier (1841) Cr & Ph 240; Holford v Phipps (1841) 3 Beav 434; Re
Knight’s Trusts (1859) 27 Beav 45. As to the effect of a provision empowering trustees to pay a beneficiary before he
attains the age of 18: see Re Somech, Westminster Bank Ltd v Phillips [1957] Ch 165 : [1956] 3 All ER 523.
4 Holford v Phipps (1841) 3 Beav 434 at 440-441 per Lord Langdale MR; Warter v Anderson (1853) 11 Hare 301 at 303
per Wood V-C. If, in spite of adequate proof, the trustee refuses to make the transfer, he is liable to be ordered to pay
the costs of any proceedings rendered necessary thereby, Jones v Lewis (1786) 1 Cox Eq Cas 199; Wills v Hiscox
(1839) 4 My & Cr 197; Thorby v Yeats (1842) 1 Y&C Ch Cas 438; Re Cater’s Trusts (No 2) (1858) 25 Beav 366 at 367.
The fact of his having acted under the advice of counsel is not an absolute protection to him in such a case: Devey v
Thornton (1851) 9 Hare 222 at 232 per Turner V-C. If there are very special circumstances, the court may decline to
order the transfer of the trust property: Re Sandeman’s Will Trusts, Sandeman v Hayne [1937] 1 All ER 368 at 373.
End of Document
[290.127] Vacation of office on completion of duties
Part One TRUSTS
II. TRUSTEES
C. OTHER Conditions
[290.127] Vacation of office on completion of duties

Where a trustee has ceased to be a trustee by the fulfilment of his trust he stands automatically discharged from the
position of trustee1 but he still remains under a liability to render accounts to the beneficiaries2. Where two or more
persons together are the sole objects of a discretionary trust and between them are entitled to have the whole fund
applied for their benefit, they are to be treated as if they together formed one person and accordingly are entitled to
have the fund or its income, as the case may be, handed over to them3.
1 Indian Trusts Act 1882 section 71(b).

2 S Darshan Lal v R E S Dalliwall (Dr) AIR 1952 All 825 [LNIND 1952 ALL 99]: (1952) All LJ 259 (even on being
discharged, the trustee was liable to deliver the trust property to the beneficiaries).
3 Re Nelson, Norris v Nelson [1928] Ch 920 n, CA; Re Smith, Public Trustee v Aspinall [1928] Ch 915 ; cf Re Daw,
Binney v Daw (1917) 87 LJ Ch 441; Re WDJ [1934] Ch 174 at 182, CA; Re Beckett’s Settlement, Re Beckett, Eden
v Von Stutterheim [1940] Ch 279 . See also Re Chance’s Settlement Trusts, Chance v Billing (1918) 62 Sol Jo 349;
Thorn v IRC [1976] 2 All ER 622 at 631 : [1976] 1 WLR 915 at 921-922.
End of Document
[290.128] Vacation of office by means prescribed by instrument
Part One TRUSTS
II. TRUSTEES
C. OTHER Conditions
[290.128] Vacation of office by means prescribed by instrument

The office of trustee can be extinguished in accordance with a special provision in the instrument of trust1. Thus,
where the trust deed provided that the trust would end on the death of the settlor’s wife if his son had attained a
particular age, whichever was later, and that if the trust came to an end the property was to be divided in equal
shares between the two sons of the settlor, it was held that on the completion of the trust, the trustee automatically
stood discharged from the office of the trustee. The provision that the trust property or the sale proceeds be divided
equally between the two sons did not keep the trust continuing2.
1 See the Indian Trusts Act 1882 section 71(c).

2 S Darshan Lal v R E S Dalliwall (Dr) AIR 1952 All 825 [LNIND 1952 ALL 99]: (1952) All LJ 259 (on being discharged as
per the instrument of trust, the trustee is still liable to render accounts and deliver trust property to the beneficiaries).
End of Document
[290.129] Vacation of office on appointment of new trustee
Part One TRUSTS
II. TRUSTEES
C. OTHER Conditions
[290.129] Vacation of office on appointment of new trustee

A trustee may be discharged from his office by the appointment of a new trustee1. Where all the beneficiaries of the
trust deed expire and the deed directs the trustees as to how to convey and transfer property, then the question of
appointment of new trustees does not arise2. A trustee who has validly retired from the trust cannot after the lapse
of several years resume his position as trustee without being formally reappointed, notwithstanding that the
appointment of his successor was not formally effected3.
1 See the Indian Trusts Act 1882 section 71(d).

2 Ranjit Kumar Ghosh v Sirish Chandra Bose AIR 1994 SC 1254 : AIR 1994 SCW 568.
3 Lancashire v Lancashire (1848) 2 Ph 657.
End of Document
[290.130] Vacation of office by consent of beneficiaries
Part One TRUSTS
II. TRUSTEES
C. OTHER Conditions

Where all the actual or possible beneficiaries are in existence and sui juris1, they may together put an end to the
trust in whole or in part or discharge a trustee from it2. This right exists notwithstanding an intervening discretionary
trust, if the sole objects of that trust are sui juris and concur3.
Once the beneficiaries have determined to put an end to the trust, they are not entitled, unless by agreement, to the
further services of the trustees, who can be compelled to hand over the entire trust assets to a person selected by
them4.
There can be a partial termination of trusts by one of two or more beneficiaries5. One of several beneficiaries, being
sui juris and absolutely and indefeasibly entitled in possession to a share in the trust property, can generally require
a transfer of that share to him6.
A trustee cannot, however, by an act of his own, without communication with his beneficiary, divest himself of the
character of trustee until he has performed his trust7.
1 The principle has been held to apply not only to joint tenants and tenants in common but also to the certificate holders
under a unit trust (Re AEG Unit Trust (Managers) Ltd’s Deed, Midland Bank Executor and Trustee Co Ltd v AEG Unit
Trust (Managers) Ltd [1957] Ch 415 : [1957] 2 All ER 506) and cases where the beneficiaries are entitled in
succession (Anson v Potter (1879) 13 ChD 141 ; Re White, White v Edmond [1901] 1 Ch 570 ). As to the
possibility of childbearing preventing effective direction being given by the beneficiaries to the trustees cf Re
Whichelow, Bradshaw v Orpen [1953] 2 All ER 1558 : [1954] 1 WLR 5 ; Stephenson (Inspector of Taxes) v Barclays
Bank Trust Co Ltd [1975] 1 All ER 625 : [1975] 1 WLR 882 .
2 See the Indian Trusts Act 1882 section 71(e); Wilkinson v Parry (1828) 4 Russ 272 at 276 per Leach MR; Saunders v
Vautier (1841) Cr & Ph 240; King v Mullins (1852) 1 Drew 308; Gosling v Gosling (1859) John 265; Anson v Potter
(1879) 13 ChD 141 ; Re Coleman, Henry v Strong (1888) 39 ChD 443 , CA; Re Johnston, Mills v Johnston [1894]
3 Ch 204 ; Wharton v Masterman [1895] AC 186 , HL; Re Bowden, Hulbert v Bowden [1936] Ch 71 ; IRC v
Hamilton-Russell’s Executors [1943] 1 All ER 474, CA; Stephenson (Inspector of Taxes) v Barclays Bank Trust Co Ltd
Page 2 of 2
[1975] 1 All ER 625 at 637 : [1975] 1 WLR 882 at 889. Where a trustee is called upon to part with the trust property
on the ground that the beneficiary has put an end to the trust, he is entitled to clear evidence of the fact that the trust is
at an end, including the production of any deed or document which has effected that result, and he is entitled to his
costs of legal proceedings instituted to compel him to part with the trust property, where sufficient evidence of the
termination of the trust has not been previously produced to him: Holford v Phipps (1841) 3 Beav 434.
3 Re Smith, Public Trustee v Aspinall [1928] Ch 915 .
4 Stephenson (Inspector of Taxes) v Barclays Bank Trust Co Ltd [1975] 1 All ER 625 : [1975] 1 WLR 882 .
5 Re Marshall, Marshall v Marshall [1914] 1 Ch 192 at 199, CA; Stephenson (Inspector of Taxes) v Barclays Bank
Trust Co Ltd [1975] 1 All ER 625 : [1975] 1 WLR 882 ; Crowe v Appleby (Inspector of Taxes) [1975] 3 All ER 529 :
[1975] 1 WLR 1539 .
6 Re Marshall, Marshall v Marshall [1914] 1 Ch 192 at 199, CA; Stephenson (Inspector of Taxes) v Barclays Bank
Trust Co Ltd [1975] 1 All ER 625 : [1975] 1 WLR 882 ; Crowe v Appleby (Inspector of Taxes) [1975] 3 All ER 529 :
[1975] 1 WLR 1539 (affd without reference to this point [1976] 2 All ER 914 : [1976] 1 WLR 885 , CA). So far as
property is concerned, the rule will normally be applied, even though the undistributed shares may as a result lose
value; but in very special circumstances, where it would unduly prejudice the other beneficiaries, such a beneficiary
may be unable to insist on a transfer: Re Sandeman’s Will Trusts, Sandeman v Hayne [1937] 1 All ER 368; Re
Weiner’s Will Trusts, Wyner v Braithwaite [1956] 2 All ER 482 : [1956] 1 WLR 579 ; Lloyds Bank plc v Duker [1987] 3
All ER 193 : [1987] 1 WLR 1324 . Where, however, real estate is devised on trust for sale and to divide the proceeds
between A, B, C and D, A has no right to require the transfer to him of his undivided share of the real estate since to
allow that undivided share to be so taken by A would be detrimental to the other beneficiaries: Re Marshall, Marshall v
Marshall [1914] 1 Ch 192 at 199, CA (the principle may also apply to a case of a mortgage debt which cannot be
conveniently split into shares); Re Horsnaill, Womersley v Horsnaill [1909] 1 Ch 631 ; Re Kipping, Kipping v Kipping
[1914] 1 Ch 62 , CA. Quaere whether in a suitable case an appropriation could be required: see Re Weiner’s Will
Trusts, Wyner v Braithwaite [1956] 2 All ER 482 at 484-485 : [1956] 1 WLR 579 at 582-583 per Harman J.
7 Chalmer v Bradley (1819) 1 Jac & W 51 at 68 per Plumer MR. If, however, a beneficiary sui juris and absolutely entitled
(or two or more beneficiaries together so entitled) refused to accept a transfer of the trust funds, the trustees would be
entitled, if they wished, to pay them into court: IRC v Hamilton-Russell’s Executors [1943] 1 All ER 474, CA.
End of Document
[290.131] Vacation of office on application for discharge
Part One TRUSTS
II. TRUSTEES
C. OTHER Conditions

A trustee who has accepted a trust cannot from mere caprice or other trivial cause, or owing to some act or
circumstances affecting himself personally, abandon the trust at the expense of the beneficiaries1. He has,
however, always been able to insist on being discharged at the expense of the trust property if he has served for a
long time and is of advanced age and in failing health2, or other difficult circumstances have arisen in connection
with the trust which did not exist and were not contemplated when he undertook the office3. In such cases, if he
cannot otherwise obtain his discharge, he may apply for it to a court of competent jurisdiction in an action to
administer the trust4. He is not bound to show that there is some other person ready to accept the trust5. If no
person is willing to accept the trust, it may be necessary to postpone the discharge of the trustee and keep him
before the court; but, if this is done, the court takes care that he does not suffer thereby6. It would seem that a
trustee should now normally be allowed the costs of an application to the court if for any reason he is unable to take
advantage of the statutory provisions7.
An ex-trustee cannot claim adverse possession until he sets up a proper discharge. A trustee by being merely
removed from the office of a trusteeship is not discharged of his obligations towards the trust when as a trustee he
was in possession of the trust property. His fiduciary capacity as that of the trustee can be discharged only by
handing over possession of the trust property to the successive trustee8.
1 Howard v Rhodes (1837) 1 Keen 581; Courtenay v Courtenay (1846) 3 Jo & Lat 519 at 529 per Sugden LC; Forshaw v
Higginson (1855) 20 Beav 485 at 486.
2 Gardiner v Downes (1856) 22 Beav 395.
3 Coventry v Coventry (1837) 1 Keen 758 (where the tenant for life had charged the trust property with annuities and
other incumbrances); Greenwood v Wakeford (1839) 1 Beav 576 at 581-582 per Lord Langdale MR; Forshaw v
Higginson (1855) 20 Beav 485; Gardiner v Downes (1856) 22 Beav 395 at 397 per Romilly MR.
4 See the Indian Trusts Act 1882 section 71(f); Forshaw v Higginson (1855) 20 Beav 485 at 487 (where the persons
having the power of appointing a new trustee refused to exercise it); Re Chetwynd’s Settlement, Scarisbrick v Nevinson
[1902] 1 Ch 692 ; Re Stretton, Stretton v Clegg [1942] WN 95. Where administration is not asked for, the court
Page 2 of 2
cannot under the English Trustee Act 1925 section 41(1) (as amended) discharge a trustee without appointing a new
trustee in his place: Re Aston (1883) 23 ChD 217 , CA; Re Chetwynd’s Settlement, Scarisbrick v Nevinson [1902] 1
Ch 692 at 693 per Farwell J.
5 Courtenay v Courtenay (1846) 3 Jo & Lat 519 at 533 per Sugden LC.
6 Courtenay v Courtenay (1846) 3 Jo & Lat 519 at 533. See also Re Chetwynd’s Settlement, Scarisbrick v Nevinson
[1902] 1 Ch 692 at 694 per Farwell J.
7 See the English Trustee Act 1925 section 36(1) and Re Duke of Norfolk’s Settlement Trusts, Earl of Perth v Fitzalan-
Howard [1982] Ch 61 at 81 : [1981] 3 All ER 220 at 231, CA, per Brightman LJ.
8 Uppalapati Venkataratnam v Sri Chennakeswavaswami Temple, Uppalapadu AIR 1972 AP 152 [LNIND 1970 AP 252]:
(1971) 2 Andh WR 383, citing Srinivasa Moorthy v Venkata Varada Aiyangar (1911) ILR 34 Mad 257 (PC).
End of Document
[290.132] Vacation of office on disqualification of trustee by court
Part One TRUSTS
II. TRUSTEES
C. OTHER Conditions

The Indian Trusts Act 1882 not only provides for the possibility of trustee’s office falling vacant but also provides for
the possibility of disqualification of a trustee1. The Indian Trusts Act 1882 uses the term discharge and not removal
of the trustee as the former is more appropriate. When the trustee becomes or is declared unfit or personally
incapable of acting as the trustee, then the civil court of original jurisdiction can discharge him and appoint a new
trustee in his place2. Where he refuses to execute the trust3, or has mismanaged the trust4 or has disqualified
himself by his circumstances or conduct from continuing to hold the office5, and may perhaps do so if his
continuance in office is likely to be detrimental to the trust owing to his being out of sympathy with its objects6 or
with the beneficiaries7, he becomes liable to be removed by the court. A trustee cannot, however, be removed
against his will on account of a pecuniary embarrassment which has ceased to exist and which does not appear to
have imperilled the interests of the beneficiaries8. When a trustee is removed, he is usually ordered to pay the costs
of his removal9.
A trustee of a charitable endowment, who has long held the office, cannot be removed at the instance of strangers
who have no better title than the trustee, in the absence of clear proof of the trustee’s mis-conduct10.
The court distinguishes between discharge from liability of a trustee and discharge by vacation of office. No trustee
can obtain a discharge until he renders the accounts and this liability is irrespective of any question of negligence or
wilful default11. Payment into court by a trustee does not discharge him from his office12, or relieve him from liability
to account for trust money misapplied or not applied by him13, or from liability to be sued in respect of any other
breach of trust14. He, thereby, expresses a desire to be discharged within the meaning of a power authorising the
appointment of a new trustee in that event15; and he is no longer able to exercise any powers or discretion
previously vested in him over or in reference to the trust property16.
Where there is no dispute of fact, the court, in exercise of its statutory power to appoint new trustees, may order the
removal of a trustee against his will17. Where there is a dispute of fact, the proper course is to invoke the court’s
inherent jurisdiction over trustees in an action for the administration or execution of the trusts18.
Page 2 of 3
1 See the Indian Trusts Act 1882 sections 73 and 74.

2 Tirathdas Dharamdas v Parmeshwaribai AIR 1943 Sind 223 : (1943) ILR Kant 213. See the Indian Trusts Act 1882
section 74.
3 Palairet v Carew (1863) 32 Beav 564; Luke v South Kensington Hotel Co (1879) 11 ChD 121 at 127, CA, per Jessel
MR; If a trustee wilfully refuses to do an act which it is his duty to do in his position of trustee, he can be compelled by a
court of equity to do it: Lord Milsington v Earl of Mulgrave (1818) 3 Madd 491; Ouchterlony v Lord Lynedoch (1830) 7
Bli NS 448, HL; Mortimer v Watts (1852) 14 Beav 616; Re Burrage, Burningham v Burrage (1890) 62 LT 752 at 753 per
Chitty J. If, however, under the terms of the trust, the trustee has a discretion as to the time or manner of doing the act,
the court does not interfere with the exercise in good faith of that discretion: Tempest v Lord Camoys (1882) 21 ChD
571 , CA; Re Burrage, Burningham v Burrage (1890) 62 LT 752. Such a trustee may be ordered to pay the costs of
any legal proceedings rendered necessary by his refusal: Jones v Lewis (1786) 1 Cox Eq Cas 199; Southwell v Martin
(1869) 21 LT 135; Re Chapman, Freeman v Parker (1894) 72 LT 66, CA; Bowen-Jones v Bowen-Jones [1986] 3 All ER
163. Alternatively, he may be removed and a new trustee appointed to carry out the duties attached to the trusteeship:
see McPhail v Doulton [1971] AC 424 at 457 : [1970] 2 All ER 228 at 247, HL, per Lord Wilberforce.
4 Ex p Phelps (1742) 9 Mod Rep 357; Ex p Reynolds (1800) 5 Ves 707; Peatfield v Benn (1853) 17 Beav 522.
5 Millard v Eyre (1793) 2 Ves 94; Re Ledwich (1844) 6 I Eq R 561; Passingham v Sherborn (1846) 9 Beav 424 at 427;
Charitable Donations Commrs v Archbold (1847) 11 I Eq R 187; O’Reilly v Alderson (1849) 8 Hare 101; A-G v Murdoch
(1852) 1 De GM&G 86 (on further directions (1856) 2 K&J 571); Moore v M’Glynn [1894] 1 IR 74; Clarke v Heathfield
(No 2) [1985] ICR 606 . The court, on application, has removed a trustee who has committed a criminal offence (Re
Danson (1899) 48 WR 73), or a trustee who has become bankrupt, where in administering the trust he has to receive or
deal with trust money so that he has the opportunity of misappropriating it (Re Barker’s Trusts (1875) 1 ChD 43 ; Re
Adams’ Trust (1879) 12 ChD 634 ), or where, besides the bankruptcy, he has acted in a manner prejudicial to the
trust (Re Betts, Maclean v Betts (1897) 41 Sol Jo 209; affd by the Court of Appeal (unreported, but cited in Re Danson
(1899) 48 WR 73. Friction or hostility between a trustee and the person who has the present beneficial interest in the
trust property is not of itself a reason for the removal of the trustee, but it is taken into account, where it is grounded on
the mode in which the trust has been administered, or where it has arisen wholly or partially out of substantial
overcharges by the trustee against the trust property: Letterstedt v Broers (1884) 9 App Cas 371 at 389, PC. The
fact that the person appointed has acted as solicitor to the trustee making the appointment is not a sufficient ground for
the removal of the appointee by the court: Re Cotter, Jennings v Nye [1915] 1 Ch 307 .
6 A-G v Hardy (1851) 1 Sim NS 338 at 357 per Lord Cranworth V-C. See, however, A-G v Clapham (1855) 4 De GM&G
591 at 632 per Lord Cranworth LC; Letterstedt v Broers (1884) 9 App Cas 371 at 386-387, PC.
7 See note 5 above.
8 Re Bridgman (1860) 8 WR 598; Assets Realisation Co v Trustees, Executors and Securities Insurance Corp (1895) 65
LJ Ch 74.
9 A-G v Murdoch (1856) 2 K&J 571 at 573 per Wood V-C; Palairet v Carew (1863) 32 Beav 564.
10 T W Subbaroya Chetti v S Subramania Iyer AIR 1919 Mad 575 : (1918) Mad WN 786 : 48 IC 833.
11 Sri Vedagiri Lakshmi Narasmiha Swami Temple v Induru Pattabhirami Reddi AIR 1967 SC 781 [LNIND 1966 SC 175]:
[1967] 1 SCR 280 [LNIND 1966 SC 175] (the period for which the trustee is liable for rendition of accounts depends
upon the facts and circumstances of each case).
12 Thompson v Tomkins (1862) 2 Drew & Sm 8 at 21-22; Barker v Peile (1865) 2 Drew & Sm 340 at 342 per Kindersley V-
C. Notice of any dealing with an interest in the fund in court should be given to him as a trustee of the fund: Thompson
v Tomkins (1862) 2 Drew & Sm 8.
13 Goode v West (1851) 9 Hare 378; Beaty v Curson (1868) LR 7 Eq 194.
14 Re Waring (1852) 16 Jur 652; Thorp v Thorp (1855) 1 K&J 438; A-G v Alford (1855) 4 De GM&G 843. He is, however,
relieved as against claimants on the fund: Re Jephson (1859) 1 LT 5.
15 Re Bailey’s Trust (1854) 3 WR 31; Re Williams’ Settlement (1858) 4 K&J 87.
16 Re Coe’s Trust (1858) 4 K&J 199; Re Tegg’s Trusts (1866) 15 WR 52; Re Poplar and Blackwall Free School (1878) 8
ChD 543 ; Re Mulqueen’s Trusts, ex p. Mulqueen (1881) 7 LR Ir 127; Re Ashburnham’s Trust (1885) 54 LT 84, DC;
Re Nettlefold’s Trusts (1888) 59 LT 315. See, however, Re Landon’s Trusts (1871) 40 LJ Ch 370, which was dissented
from in Re Murphy’s Trusts [1900] 1 IR 145. Where, under the terms of the trust, trustees had a discretion as to the
mode of applying the capital and income of the trust fund for the benefit of the beneficiary, it was held that payment of
the fund into court put an end to their discretion, but that the court could deal with the fund in the way that it considered
best in his interest; and on his application the fund was ordered to be paid out to the trustees of a proper settlement
executed by him: Re Murphy’s Trusts above.
Page 3 of 3
17 See Re Henderson, Henderson v Henderson [1940] Ch 764 : [1940] 3 All ER 295; Re A Solicitor [1952] Ch 328 :
[1952] 1 All ER 133 (bankrupt solicitor removed from the trusteeship of the clients’ account). In proceedings under the
English Trustee Act 1925 the court cannot inquire as to the alleged incapacity of a trustee by reason of mental disorder
where it is denied by him: Re Combs (1884) 51 LT 45.
18 See Re Chetwynd’s Settlement, Scarisbrick v Nevinson [1902] 1 Ch 692 ; Re Henderson, Henderson v Henderson
[1940] Ch 764 at 767 : [1940] 3 All ER 295. See also Re Wrightson, Wrightson v Cooke [1908] 1 Ch 789 .
End of Document
[290.133] Trustee to apply for discharge to civil court
Part One TRUSTS
II. TRUSTEES
C. OTHER Conditions
[290.133] Trustee to apply for discharge to civil court

Every trustee may apply1 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. However, where there is no such reason the court will not discharge
him unless a proper person can be found to take his place2. The rule of equity is that the trust must never be
allowed to fail for want of a trustee. The trust will fasten upon the conscience of whosoever holds the property3. A
trustee who has accepted a trust is not to be permitted voluntarily from mere caprice or other trivial cause to throw it
up at the expense of the cestui que trust (that is, the beneficiary)4. No trustee can obtain a discharge for the office
unless he has satisfactorily furnished account of his management of the trust5.
1 Ie notwithstanding the provisions of the Indian Trusts Act 1882 section 11: section 72.
3 Sharf us Zaman v Stanyon AIR 1923 Oudh 80 : 74 IC 13.
4 Howard v Rhodes (1837) 1 Keen 581; Courtenay v Courtenay (1846) 3 Jo & Lat 519 at 529 per Sugden LC; Forshaw v
Higginson (1855) 20 Beav 485 at 486.
5 See [290.132] note 11.
End of Document
[290.134] Appointment of new trustee on death, etc.
Charities, Vol 37) 2nd ed > Part One TRUSTS > II. TRUSTEES > 7. APPOINTMENT OF NEW
TRUSTEE > A. When New Trustee is Appointed
Part One TRUSTS
II. TRUSTEES
7. APPOINTMENT OF NEW TRUSTEE
A. WHEN NEW TRUSTEE IS Appointed

Whenever any person appointed a trustee disclaims1, or any trustee, either original or substituted, dies2, or is for a
continuous period of six months absent from India or leaves India for the purpose of residing abroad, or is declared
insolvent, or desires to be discharged from the trust3, or refuses or becomes, in the opinion of a principal civil court
of original jurisdiction4, unfit or personally incapable to act in the trust5, or accepts an inconsistent trust, a new
trustee may be appointed in his place by:
(1) the person nominated by the instrument of trust (if any)6; or
(2) 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 contract, or the surviving or continuing trustees or trustee for the time being, or legal
representative of the last surviving and continuing trustee, or (with the consent of the court) the retiring
trustees, if they all retire simultaneously, or (with the like consent) the last retiring trustee7.
Every such appointment must be in the handwriting of the person making it. On the appointment of a new trustee,
the number of the trustees may be increased8. The official trustee9 may, with his consent and by the order of the
court, be appointed in any case in which only one trustee is to appointed and such trustee is to be the sole
trustee10. Relative to a trustee who is dead, these provisions include the case of a person nominated trustee in a
will but dying before the testator, and those provisions relative to a continuing trustee include a refusing or retiring
trustee if he is willing to act in the execution of the power11.
An appointment of new trustees is complete before the trust estate is transferred to them12. The costs of and
incidental to the appointment of a new trustee are payable out of the capital of the trust property13.
1 See [290.119]; see also Smith v Wheeler (1671) 1 Vent 128 at 130 per Hale CJ; Nicloson v Wordsworth (1818) 2 Swan
365 at 369 per Lord Eldon LC; Small v Marwood (1829) 9 B&C 300 at 309; Siggers v Evans (1855) 5 E&B 367 at 381;
White v M‘Dermott (1872) IR 7 CL 1; Re Ridley, Ridley v Ridley [1904] 2 Ch 774 ; Re Benett, Ward v Benett [1906] 1
Ch 216 .
2 See [290.121].
3 See [290.131].
Page 2 of 2
4 Khetan Industries v Krishna Row AIR 1995 Bom 43 [LNIND 1994 BOM 246].
5 See [290.135].
6 Tempest v Lord Camoys (1882) 21 ChD 571 at 578 : 51 LJ Ch 785 : 31 WR 326 : 48 LJ 13, CA, per Jessel MR (for
the appointment of a new trustee, a power needs to have been conferred by the trust disposition, for that purpose. The
power may be exercised even when the court is administering the trust). A power to appoint trustees of a settlement
may be imported by reference to an earlier settlement: Re Sichel’s Settlements, Sichel v Sichel [1916] 1 Ch 358 at
361 per Neville J.
7 See the Indian Trusts Act 1882 section 73; Patel Vrajlal Bhagwandas v Patel Jamnadas Tribhovandas AIR 1956 Sau
51 (the Indian Trusts Act 1882 sections 73 and 74 are not intended to apply to a contentious or disputed case where
proceeding by way of suit is appropriate. They apply to a case appropriate to summary procedures where facts are not
disputed or cannot reasonably be disputed). See Sir Dinsha Manekji Petit, Bart v Sir Jamshetji Jijibhai, Bart ILR 33 Bom
509 : 11 Bom LR 85.
8 Ie under the Indian Trusts Act 1882 section 73.
9 As to the official trustee see [290.101] and following.
12 Noble v Meymott (1851) 14 Beav 471 at 478 per Romilly MR. The heir of a removed trustee or even a beneficiary can
be appointed as a trustee: Khatoon Jannat Bibi v Syed Wali Ullah AIR 1949 All 310 : (1948) ILR All 406 (the trustee or
his legal representative could not subsequently after a lapse of time dispute the validity of the trust created by the will
when the trust was in respect of one third of the property left by the testator and there was no illegality about it. Also
held if a regular suit for the removal of a trustee and the appointment of another person in his place is maintainable it is
in an alternative procedure. For an appointment under the Indian Trusts Act 1882 section 74 all that is necessary is that
a disqualification as specified in section 73 should have occurred).
13 Re Fulham (1850) 15 Jur 69; Ex p Davies (1852) 16 Jur 882; Lord Brougham v Lord Poulett (1855) 19 Beav 119; Re
Fellows’ Settlement (1856) 2 Jur NS 62; Carter v Sebright (1859) 26 Beav 374 at 376-377 per Romilly MR; Harvey v
Olliver (1887) 57 LT 239 at 240-241 per Kay J.
End of Document
[290.135] When trustee is absent or “unfit”
TRUSTEE > A. When New Trustee is Appointed
Part One TRUSTS
II. TRUSTEES
A. WHEN NEW TRUSTEE IS Appointed

The Indian Trusts Act 1882 specifically provides that the appointment of new trustee is possible if the current
trustee is absent continuously for a period of six months, or leaves India for the purpose of residing abroad1.
The Act also provides that a trustee may be removed if he becomes, in the opinion of a principal civil court of
original jurisdiction, unfit or personally incapable to act in the trust2.The term “unfit”3 is interpreted not merely as
being physically incapable such as visually handicapped or partially paralysed but also covers cases wherein there
has been a breach of trust on the part of the trustee4. Where one of the trustees who was excluded from the
administration of the trust renounced it, it was treated as a disclaimer or refusal to act5. An alien enemy; a person
domiciled abroad; a person who is blind, deaf or dumb is considered personally incapable of acting6. However, until
such an unfit trustee is superseded and a fresh appointment made, he holds the office and is a necessary party to
all the proceedings instituted on behalf of the trust7.
Where there were number of trustees and one of them was guilty of breach of trust it was observed that till his
removal by a competent authority he was holding office and would be a necessary party to any proceedings
instituted on behalf of the trust as no temporary trustee may be appointed without removal of the existing trustee8.
1 See the Indian Trusts Act 1882 section 73. In England the absence of the trustee must be for 12 months: see the
English Trustee Act 1925 section 36. See also Re Moravian Society (1858) 26 Beav 101; Re Walker, Summers v
Barrow [1901] 1 Ch 259 .
3 Ie as used in the Indian Trusts Act 1882 section 73. See Nathubhai Devidas v Vaghibhai Jhaverbhai AIR 1928 Bom 20
: 107 IC 49 (the Indian Trusts Act 1882 section 73 does not entitle a beneficiary to ask for the verdict of the court as to
the unfitness of the sitting trustee; when he makes a petition under section 74 the court gets an opportunity to express
its opinion as to the fitness or unfitness of a trustee); Khatoon Jannat Bibi v Syed Wali Ullah AIR 1949 All 310 : (1948)
All LJ 566 (where section 74 gives power to the court to appoint a new trustee on the ground of unfitness or personal
incapacity of an existing trustee, the proceedings in its very nature may not be non-contentious); Nathubhai Devidas v
Vaghibhai Jhaverbhai above.
Page 2 of 2
4 Assanmal Cooverjimal v Somimal AIR 1930 Sind 41. See also Tirathdas Dharamdas v Parmeshwaribai AIR 1943 Sind
223 : (1943) ILR Kant 213 (under the Indian Trusts Act 1882 mere unfitness or personal incapacity is not in itself a
sufficient disqualification: it must be an unfitness or personal incapacity which in the opinion of the court disqualifies,
and when such disqualification exists, a vacancy occurs and a new appointment is to be made).
5 Assanmal Cooverjimal v Somimal AIR 1930 Sind 41.
6 Tirathdas Dharamdas v Parmeshwaribai AIR 1943 Sind 223 : (1943) ILR Kant 213; Turner v Maule (1850) 15 Jur 761;
Re Watts’s Settlement (1851) 9 Hare 106; Re Bignold’s Settlement Trusts (1872) 7 Ch App 223; Re East, Re
Bellwood’s Will Trusts (1873) 8 Ch App 735 (an appointment in the place of a trustee suffering from mental disorder is
authorised).
7 Satya Kinkar Dutt v Kiron Chandra Sinha AIR 1954 Cal 432 [LNIND 1954 CAL 37]: a bankrupt trustee can act as a
trustee after his order of adjudication and when his order of adjudication is in operation and has not been annulled, he
is competent to sell as trustee the trust property. Until a new trustee is appointed in the place of the bankrupt trustee,
the bankrupt trustee must be held to continue his office of trustee. After proceedings have been instituted in court for
administering the trust, the trustees can still exercise the power unless by the order made in the administration
proceedings the power is withdrawn from them and not merely suspended: Middleton v Reay (1849) 7 Hare 106; Re
Sales, Sales v Sales [1911] WN 194; Re Cotter, Jennings v Nye [1915] 1 Ch 307 ; but their nominee must be
approved by the court: Webb v Earl of Shaftesbury, Earl of Shaftesbury v Arrowsmith (1802) 7 Ves 480; Cafe v Bent
(1843) 3 Hare 245; Graham v Graham (1853) 16 Beav 550; Tempest v Lord Camoys (1882) 21 ChD 571 at 578,
CA, per Jessel MR; Re Gadd, Eastwood v Clark (1883) 23 ChD 134 , CA; Thomas v Williams (1883) 24 ChD 558
at 567-568; Re Norris, Allen v Norris (1884) 27 ChD 333 . Their proper course, after judgment has been obtained, is
to submit in chambers the names of the persons whom they propose to appoint: Re Hall, Hall v Hall (1885) 54 LJ Ch
527. Where the court deems these persons improper, the persons in whom the power of appointment is vested have
the right to propose others: Re Gadd, Eastwood v Clark (1883) 23 ChD 134 : CA. A judicial trustee is, however, an
officer of the court and has no power of appointing his successor: Re Johnston, Mills v Johnston [1911] WN 234.
8 Mahanth Ram Shankar v B S R T Board AIR 1999 Pat 55.
End of Document
TRUSTEE > B. Who May Appoint New Trustee
Part One TRUSTS
II. TRUSTEES
B. WHO MAY APPOINT NEW Trustee
The power of appointment of new trustee may be vested in the person or persons, if any, named or designated in
the instrument creating the trust1. A power of appointment of new trustees authorises the appointment of a trustee
in the place of a named original trustee who dies before the trust takes effect2, or who disclaims the trust without
having ever acted on it3, unless a contrary intention is indicated by the language of the instrument which contains
the power4.
The person in whom the power of appointing new trustees is vested cannot appoint himself as a new trustee if the
power directs the appointment of some “other” person or persons or if the power is vested in him by virtue of his
fiduciary position in relation to the trust5. The legal personal representative of a trustee, when invested with a power
of appointing new trustees in which the word “other” does not occur, may, however, exercise it by appointing
himself6. Where a power of appointing new trustees is conferred on a named person who is beneficially interested
in the trust property, he may exercise the power even though he has encumbered or alienated his beneficial
interest7.
A power to named beneficiaries to appoint new trustees with the consent or concurrence of the surviving or
continuing trustees or trustee for the time being is exercisable by them at their sole discretion when there is no
trustee living or continuing to act8.
The heirs of the founder or his legal representatives have a right to be appointed trustees where no trustees are in
existence or where no provision has been made by the founder for the appointment of fresh trustees after the death
of those originally appointed9. However, where a will founding a trust directs that the succession is to pass to the
descendants of the original trustee the direction cannot be said to have included their collaterals in whom there is
no reason to suppose that testator would have intended to repose any particular confidence10.
Where an executory trust disposition contemplates a future appointment of trustees without prescribing by whom it
is to be made, the tenant for life cannot for the time being make it the trust property11. The dismissal of a trustee for
the time being on account of gross neglect and violation of the trust does not entail a forfeiture of the hereditary
office, which descends to the next heir, if of full age. If the next heir is a minor, some other trustee will be appointed
until the minor attains majority12.
Page 2 of 2
1 See the Indian Trusts Act 1882 section 73. A minor may appoint a new trustee but will not be bound by an act which is
either imprudent or prejudicial to his interest or which, where he is executing an authority entrusted to him, touches his
interest: Re Parsons, Barnsdale and Smallman v Parsons [1940] Ch 973 : [1940] 4 All ER 65. The court usually
does not interfere with the appointment of new trustees by the persons in whom the power of appointment is vested: Re
Hodson’s Settlement (1851) 9 Hare 118; Thomas v Williams (1883) 24 ChD 558 at 567-568; Re Higginbottom
[1892] 3 Ch 132 ; Re Brockbank, Ward v Bates [1948] Ch 206 : [1948] 1 All ER 287. It is otherwise where the
donee of the power is a minor: Re Parsons, Barnsdale and Smallman v Parsons above. The court does not interfere
even though the appointment is undesirable: Re Coode, Coode v Foster (1913) 108 LT 94; cf Re Cotter, Jennings v
Nye [1915] 1 Ch 307 .
2 Eg, where a trustee named in a will predeceases the testator: Re Hadley, ex p Hadley (1851) 5 De G & Sm 67;
Nicholson v Wright (1857) 26 LJ Ch 312.
3 Noble v Meymott (1851) 14 Beav 471 at 477 per Romilly MR. See Re Roche (1842) 1 Con & Law 306; Re Wheeler and
De Rochow [1896] 1 Ch 315 : an appointment of a new trustee in the place of one who becomes bankrupt is
authorised by a power to appoint a new trustee in the place of a trustee who becomes unfit to act. However, it is not
authorised by a power to appoint in the place of one who is incapable of acting: Turner v Maule (1850) 15 Jur 761; Re
Watts’s Settlement (1851) 9 Hare 106; Re Bignold’s Settlement Trusts (1872) 7 Ch App 223.
4 Winter v Rudge (1847) 15 Sim 596.
5 Re Skeats’ Settlement, Skeats v Evans (1889) 42 ChD 522 ; Re Newen, Newen v Barnes [1894] 2 Ch 297 .
6 Re Jackson (1881) 7 LR Ir 318; Montefiore v Guedalla [1903] 2 Ch 723 ; see also Tempest v Lord Camoys (1888)
58 LT 221 at 224 per Chitty J. Where the power of appointment is vested in the acting trustee with the consent of the
tenant for life, he may appoint the tenant for life: Forster v Abraham (1874) LR 17 Eq 351.
7 Hardaker v Moorhouse (1884) 26 ChD 417 ; and see Raikes v Raikes (1863) 32 Beav 403.
8 Morris v Preston (1802) 7 Ves 547 at 551; Re Roche (1842) 1 Con & Law 306.
9 Kashinath Madadev v Gangubai Keshav AIR 1929 Bom 193 : 117 IC 523 : 31 Bom LR 349.
10 Balak Nath v Charanjit Rai AIR 1936 Lah 300 : 160 IC 283 (where the relatives of the trustee are specifically barred
from instituting a claim to the trust property in their personal capacity or to claim any right of interfering with the
management of the property during the lifetime of the trustees appointed by the founder or in the presence of any of
their defendants, the testator does not intend to provide that the management of the trust must not revert to his own
family, in case the line of succession which he had prescribed dies out); Fazlhussein Sharafally v Mahomedally
Abdulally Sasoor AIR 1943 Bom 366 : (1943) ILR 495 Bom : 210 IC 183 (the appointer of a trustee can appoint himself
a trustee. A trustee in possession under a void trust can acquire a good title by adverse possession. When asked to
account by his beneficiaries, a trustee cannot challenge the trust until he has obtained a proper discharge from the
trust).
11 Brasier v Hudson (1837) 9 Sim 1.
12 Muthukumara Mudaliar v Palaniappa Chettiar 9 Mad LT 495.
End of Document
[290.137] Power of surviving and continuing trustee to appoint new trustee
Part One TRUSTS
II. TRUSTEES

Where the power to appoint new trustees is vested in the trustees who are for the time being surviving, even though
it is given to the original trustees by name, it is annexed to their office1. Therefore, it may be exercised by a single
continuing trustee during the life of another of the original trustees who has disclaimed the trust2. Where an express
power of appointment is vested in the surviving or continuing trustees, it cannot be exercised by a trustee who
declines to act3, or who is retiring from the trust4, but is exercisable independently of him by the other trustees who
are actually continuing in the trust5. Where, however, the power is vested in the surviving or continuing or other
trustee or trustees, it is exercisable by a retiring trustee6. Where the author7 of the trust provides in his will that if
any of the trustees died during or after his life time, the surviving trustee has the power to appoint a new trustee in
the place of the deceased trustee and further that the newly appointed trustee will have the same power as the
deceased, then such a will takes effect only after their death8.
Where only some of the existing trustees appoint a new trustee, when the power of appointment is given to all, then
the new trustee is not considered to be appointed validly9. Where a sole trusteeship is found to be the characteristic
feature of the trust, the succeeding trustee has no power to alter the scheme of the institution at his own will and
pleasure10.
Where an express power of appointing new trustees is vested in the acting trustees or trustee for the time being or
the executors or administrators of the last acting trustee, the representatives of the last surviving trustee, having the
trust property vested in them and being capable in law of executing the trust, are acting trustees who may exercise
the power11. Similarly, where the power is vested in a named person, his executors or administrators or assignees,
it is validly exercised after his death by his acting executors without the concurrence of another who has renounced
probate of his will12.
1 Cafe v Bent (1845) 5 Hare 24 at 37 per Wigram V-C; cf Re Smith, Eastick v Smith [1904] 1 Ch 139 at 144; Re
Bacon, Toovey v Turner [1907] 1 Ch 475 .
2 Cafe v Bent (1845) 5 Hare 24 at 37.
Page 2 of 2
3 Nicholson v Wright (1857) 26 LJ Ch 312; Travis v Illingworth (1865) 2 Drew & Sm 344.
4 Stones v Rowton (1853) 17 Beav 308. A declining or retiring trustee may be, and often is, expressly or impliedly
empowered to appoint or join in the appointment in like manner as if he were a continuing trustee: Re Hadley, ex p
Hadley (1851) 5 De G & Sm 67; Emmet v Clark (1861) 3 Giff 32; Re Glenny and Harley (1884) 25 ChD 611 .
5 Re Norris, Allen v Norris (1884) 27 ChD 333 ; Re Coates to Parsons (1886) 34 ChD 370 .
6 Lord Camoys v Best (1854) 19 Beav 414.
7 Pannalal v Sen Ji Maharaj and Radha Kishan Ji through Satya Narain (1966) ALJ 567 (the author of the trust in case of
joint authors will include the surviving author in case of the death of one of them and he will be competent to exercise
the power of appointment).
8 Kalidas Damodar v Rukshamani 33 Bom LR 1285; Jarat Kumari Dassi v Shaligram Subhkaran Khemani AIR 1960 Cal
489 [LNIND 1959 CAL 202]: 64 Cal WN 488 (the provision in the trust deed for a particular number of trustees and for
filling up vacancies in their place does not in law necessarily or merely by itself debar the surviving trustees from
representing the estate, in case there is any outstanding vacancy in the number of trustees; where their number does
not fall below the minimum number of trustees required under the deed, the surviving trustee is competent to represent
the trust estate).
9 Mahomed Jaffar Haji Nazaralli Devji v Mahomed Janmahomed AIR 1944 Bom 222 : 46 Bom LR 340; Re Manohar Lal
AIR 1934 Lah 331 (in case of deadlock the court may be approached for the appointment of new trustee, but even
under compromise a trustee cannot be appointed by a person against the wishes of the surviving trustees).
10 Pratapa Simha Raja Saheb v Simji Raja Saheb AIR 1927 Mad 50 [LNIND 1926 MAD 205](a trustee has no power to
alter by will the natural course of devolution of a trust already in existence).
11 Re Cunningham and Frayling [1891] 2 Ch 567 . Where the power was vested in the acting executors or
administrators of the last surviving trustee, of whom, after his death, there was no legal personal representative,
administration of his estate was granted to the guardian of beneficiaries who were minors, limited to the appointment of
the guardian and another person as new trustees and to the obtaining of a transfer of the trust funds to them: Re
Jackson (1881) 7 LR Ir 318.
12 Earl Granville v M’Neile (1849) 7 Hare 156. Where the power of appointing new trustees is given to a corporation which
is dissolved, a surviving trustee may exercise the statutory power of appointment: Re Spencer, Duncan v Royal
Geological Society (1916) 33 TLR 16.
End of Document
[290.138] As prescribed by founder
Part One TRUSTS
II. TRUSTEES

Once the founder of a trust prescribes a line of devolution of the trusteeship in the instrument creating a trust, then
he has no right to alter it unless he has reserved such a power in the original document itself1. A founder can
establish the line of devolution by implication2. Where the testator prescribes a line of succession for the devolution
of the trusteeship only up to a point, then the trusteeship can be regulated by the ordinary rules of Mitakshara law,
once the directions contained in the will are exhausted3.
On failure of the line of the original trustee, the heirs of the founder can create a new line of trustees. This rule is
actually based on the presumed intention of the founder that the heirs are to have the liberty to make fresh
arrangements for devolution of the trust instead of leaving it to devolve on the family4. This rule is equally applicable
to public as well as private trusts5. Where an instrument creating a trust confers the power to appoint a successor
on the trustee himself, but it is silent about the successive appointment of the trustee, then it can be presumed that
the power of appointment will pass on to the successor’s nominee6.
1 Nallasivam v Ganapathy AIR 1940 Mad 633 [LNIND 1939 MAD 378]; Rambrahma Chatterjee v Kedar Nath Banerjee
AIR 1923 Cal 60 : 72 IC 1026 (a shebait is bound to carry the directions of the founder and at the same time, he is free
to manage the trust without interference by him or his representatives); Fatima Bibi v Hasan (1907) 9 Bom LR 1071
[LNIND 1907 BOM 129].
2 Where the testator creating a religious trust by his will appoints his son to the office of the trustee without any further
directions, he must be deemed to have prescribed a line of succession in that son and his heirs. However, if the
appointment to a grant of heritable trusteeship is to the particular son, other sons of the testator cannot claim to be
declared trustees on the ground that appointment of the first trustee was only for the lifetime: Putti Ramachar v P V
Venkata Row AIR 1938 Mad 661 [LNIND 1937 MAD 388]: 2 Mad LJ 623 (where a will creates a lawful and well
recognised mode of devolution, the courts are not at liberty to draw inferences: the testator must be held to have
intended the legal effects of his words).
3 Chockalinga Sethurayar v Arumanayakam AIR 1969 SC 569 [LNIND 1968 SC 246]: 2 Mad LJ 25 (a sister was one of
the heirs of a male person and was given a higher preference in the line of succession to the properties with regard to
the other claimant). Although a dharamkarta or manager of a Hindu temple has no personal interest of a beneficial
character in the institution, yet there is no prohibition under Hindu law as such against a scheme of succession to
Page 2 of 2
trusteeship or office of manager or dharamkarta: K Manathunainatha Desikar v Sundaralingam (minor represented by

his next friend M Swaminathan) AIR 1971 Mad 1 [LNIND 1970 MAD 206]: 2 Mad LJ 156, FB (in the absence of any
usage or custom of a different nature, the founder of a religious endowment has a right to dispose of the dharmakarta,
ie a religious endowment. When a founder on making dedication of his property provides for the management of the
property by persons in succession in a manner which according to him is proper in the interests of the foundation, he
makes no transfer or gift of the property but creates an office of perpetual obligation to the endowment). See also
[290.247] and following.
4 See Jayarama Naidu v Tirupathi AIR 1972 Mad 183 [LNIND 1971 MAD 232]: 1 Mad LJ 162 (heirs of the founder or his
nominee, be it even the widow of the founder, are competent to make nomination to such office) cf
Kothanadaramaswami Naidu v Pappammal AIR 1925 Mad 218 : 79 IC 891 wherein it was held that succession to the
trusteeship of property follows the ordinary rules of Hindu law and consequently a Hindu widow is entitled to succeed to
the trusteeship as heir to her husband in the absence of a son, if there be no special custom to the contrary.
5 Manohar Mookerjee v Peary Mohan Mookerjee AIR 1920 Cal 210 : 54 IC 6 : 30 Cal LJ 177; Hari Ram v Gokul Prasad
AIR 1930 All 624 : (1930) ALJ 1425 (in the absence of any proof that some other person is the trustee after the death of
the founder of a trust, the legal heirs of the founder would have a right to administer the trust); Ananda Chandra
Chakrabarti v Broja Lal Singha AIR 1923 Cal 142 : 74 IC 793 (if the shebait failed to appoint a successor, the office on
his death would revert to the founder or his legal heirs).
6 Sheo Prasad Sahu v Ram Chandra Prasad AIR 1946 All 362 (in the trust deed, where the power of appointing a trustee
is expressly given to one of the trustees with no further directions it can be presumed that the creator of the trust
intended that the power given to the trustee must pass to his nominee so that each successive trustee might be in a
position to appoint a person to act for him when he ceases to be a trustee himself). But, see Guru Gobinda Basu v
Sankari Prasad Ghosal AIR 1964 SC 254 [LNIND 1963 SC 186]: (1963) Cal LJ 156 [LNIND 1963 SC 186] (the son of a
trustee who resigns cannot claim to be an automatic trustee: he has to be appointed by the remaining trustees as per
the provision in the deed).
End of Document
[290.139] Power of heirs to appoint new Trustee
Part One TRUSTS
II. TRUSTEES
[290.139] Power of heirs to appoint new Trustee

The heir of the founder of the trust has the right to appoint a new trustee in the vacancy of a trustee being
discharged or removed1, but if the founder has prescribed the line of devolution, then it is not competent for him to
alter or revoke it unless the trust deed reserves such right in the founder2. Where, the trust is founded the
trusteeship vests in the founder and his heirs and if the founder has prescribed a line of succession to the office of
the trust but the succession to the office has entirely failed, the right of management reverts to the founder and his
heirs and they have the power to prescribe a new line of succession3, but once a founder has prescribed a line of
devolution as regards the trusteeship in the instrument of trust he has no right to alter the line of devolution of the
trusteeship unless he has reserved such a power in the instrument itself4.
1 Vaidyanath Ayyar v K Swaminatha Ayyar AIR 1924 PC 221 : 29 Cal WN 154 : 47 Mad LJ 361 (PC).
2 Ramaswamy Thevar v Madras Religious Endowment Board AIR 1954 Mad 1110 [LNIND 1954 MAD 132].
3 Vadivelu Mudaliar v C N Kuppuswami Mudaliar (1972) 1 Mad LJ 265.
4 Nallasivan Pillai v Ganapathi Mudaliar AIR 1940 Mad 633 [LNIND 1939 MAD 378].
End of Document
[290.140] Legal representative’s right to be appointed as trustees
Part One TRUSTS
II. TRUSTEES
[290.140] Legal representative’s right to be appointed as trustees

Where the founder has made no provision for appointment of fresh trustees his legal representatives are entitled to
be appointed1 and if a trustee is appointed by the will of the author of the trust, he cannot be removed by the court
on the application of any person other than that of the beneficiary2. The term descendants of the original trustee do
not include the collaterals3. Where a suit has been instituted for the administration of a trust and a decree has been
made that attracts the jurisdiction of the court and the trustee cannot afterwards exercise the powers given to him
by the settler to appoint new trustees without the concurrent sanction of the court and his power is reduced to
merely nominate the person to be confirmed by the court on consideration of fitness of the nominee to be the
trustee4.
1 Kashinath Mahadev v Gangubai AIR 1929 Bom 193.

2 Nathabai Devidas v Vaghjibhai Jhaverbai AIR 1928 Bom 20; see also Kothandaramaswami Naidu v Papparamal AIR
1925 Mad 218.
3 Balak Nath v Charanjit Rai AIR 1936 Lah 300.
4 Amrita Bibi v Kanhai Lal Agarwalla (1905) ILR 32 Cal 448.
End of Document
[290.141] Number of trustees to be appointed
TRUSTEE > C. Procedure Of Appointment
Part One TRUSTS
II. TRUSTEES
C. PROCEDURE OF Appointment

In appointing new trustees1, the court does not confine itself to the original number2 or insist on filling up the original
number3, but it does not appoint a sole trustee where originally there were more than one4. If there are two or more
continuing trustees, the court has in some cases authorised the continuing trustees to carry on the trust without
appointing a new trustee to act with them5.
The Indian Trusts Act 1882 provides that the number of trustees may be increased on an appointment of a new
trustees6. The number of trustees may be increased whether or not a contrary intention is expressed in the
instrument creating the trust7. The original number of trustees need not, however, be maintained on an appointment
of new trustees8 unless the language of the trust disposition expressly or impliedly so directs9.

2 Re Welch (1838) 3 My & Cr 292; Birch v Cropper (1848) 2 De G & Sm 255; Re Tunstall’s Will, ex p Tunstall (1851) 4
De G & Sm 421; Plenty v West (1853) 16 Beav 356; Re Boyce, Re Blackwood’s Trusts (1864) 4 De G J & Sm 205.
3 Bulkeley v Earl of Eglinton (1855) 1 Jur NS 994; Re Marriott’s Settlement (1868) 18 LT 749; Re Fowler’s Trusts (1886)
55 LT 546. A sole trustee can act alone in all matters involving no receipt of capital money: Re Myhill, Hull v Myhill
[1928] Ch 100 .
4 Re Dickinson’s Trusts (1855) 1 Jur NS 724; Re Ellison’s Trust (1856) 2 Jur NS 62. The court will never vest a minor’s
trust fund in a sole trustee (Re Dickinson’s Trusts above), but a sole new trustee has been appointed where there was
only one trustee originally and the trust would shortly come to an end (Re Reynault (1852) 16 Jur 233). It appears that,
as far as jurisdiction is concerned, the court may now appoint two trustees, or even a sole trustee, notwithstanding a
direction in the trust instrument that the number should never be reduced below three: Re Leslie’s Hassop Estates
[1911] 1 Ch 611 .
5 Re Leon [1892] 1 Ch 348 , CA; Re Price [1894] WN 196; Dugmore v Suffield [1896] WN 50; Re Lees’ Settlement
Trusts [1896] 2 Ch 508 ; Re Fitzherbert’s Settlement Trusts [1898] WN 58. Under former statutes the court would not
generally sanction a reduced number of trustees in the case of a continuing trust (Re Lamb’s Trusts (1884) 28 ChD 77
; Re Gardiner’s Trusts (1886) 33 ChD 590 ), but only when distribution of the trust fund was imminent or there
Page 2 of 2
were other special circumstances (Re Watson (1881) 19 ChD 384 ; Re Martyn, Re Toutt’s Will (1884) 26 ChD 745
; Davies v Hodgson (1886) 32 ChD 225 ).
6 Indian Trusts Act 1882 section 73; see also Shri Krishno Kanta Borooah v The State of Meghalaya (2011) 5 GLR 584;
Seth Soorajmul Jalan Trust v Tolaram Jalan (2015) 4 Cal LT 1 (HC).
7 Prayag Dosaji v Tirumala Srirangacharya 28 Mad 319; Meinertzhagen v Davis (1844) 1 Coll 335; Hillman v Westwood
(1854) 24 LJ Ch 57; but see Re Clark, ex p Davis (1843) 2 Y&C Ch Cas 468.
8 Emmet v Clark (1861) 3 Giff 32 at 35 per Stuart V-C.
9 Earl Lonsdale v Beckett (1850) 4 De G & Sm 73; Re Cunningham and Bradley’s Contract for Sale to Wilson [1877] WN
258; cf Cohen v Bayley-Worthington [1908] AC 97 , HL.
End of Document
[290.142] Appointment of new trustee to be in writing
TRUSTEE > C. Procedure Of Appointment
Part One TRUSTS
II. TRUSTEES
C. PROCEDURE OF Appointment

The appointment of a new trustee must be in the handwriting of the person making it1. It need not be by a registered
document2. It must be in accordance in all material respects with the terms of the power3. It must in strictness be
made by direct operative words4, but it may be effected by a recital or statement in a deed to which the appointer is
a party to the effect that he has appointed a certain person as a new trustee or that such person is the present
trustee5. Where several persons have a power of appointing a new trustee, they may, in the absence of any
direction to the contrary, exercise the power by separate instruments6.
Where the power of appointment is vested in the subsisting trustees, they should, before exercising it, communicate
with the beneficiaries who are sui juris, and take into account their reasonable wishes on the subject7. They are,
however, not bound to follow the beneficiaries’ wishes even if the beneficiaries are all sane, adult and collectively
entitled to the whole beneficial interest; the collective power is a power to determine the trust but not to appoint new
trustees under it while it still subsists8.
Where the provision of section 73 for the appointment of new Trustee along with the provisions of the Trust Deed
were not followed, the order of the government creating a new Board of Trustees was set aside9.
1 Ie under the Indian Trusts Act 1882 section 73; Shri Krishno Kanta Borooah v The State of Meghalaya (2011) 5 GLR
584; Seth Soorajmul Jalan Trust v Tolaram Jalan (2015) 4 Cal LT 1 (HC).
2 Suppiah Thevan v Krishna Row 6 Mad LT 240 : 3 IC 435.
3 Lancashire v Lancashire (1848) 2 Ph 657. In the case of a public trust, the non-compliance with a direction in the
instrument of trust that new trustees are to be [290.143] Trusts and Charities, vol 29(2) appointed by the surviving
trustees, whenever they are reduced to a certain number, does not vitiate the title of the trustees appointed by a smaller
number of surviving trustees: A-G v Cuming (1843) 2 Y&C Ch Cas 139.
4 Miller v Priddon (1852) 1 De GM&G 335.
5 Re Farnell’s Settled Estates (1886) 33 ChD 599 .
Page 2 of 2
6 Warburton v Sandys (1845) 14 Sim 622 at 631 per Shadwell V-C.

7 O’Reilly v Alderson (1849) 8 Hare 101 at 102 per Wigram V-C.
8 Re Higginbottom [1892] 3 Ch 132 ; Re Brockbank, Ward v Bates [1948] Ch 206 : [1948] 1.
9 Shri Krishno Kanta Borooah v The State of Meghalaya (2011) 5 GLR 584; Seth Soorajmul Jalan Trust v Tolaram Jalan
(2015) 4 Cal LT 1 (HC).
End of Document
[290.143] Vesting of property in new trustee
Charities, Vol 37) 2nd ed > Part One TRUSTS > II. TRUSTEES > 8. MISCELLANEOUS
Part One TRUSTS
II. TRUSTEES
8. MISCELLANEOUS
[290.143] Vesting of property in new trustee

Whenever any new trustee is appointed1, all the trust property for the time being vested in the surviving or
continuing trustees or trustee, or in the legal representatives of any trustee, become vested in such new trustee,
either solely or jointly with the surviving or continuing trustees or trustee as the case may require2. Although the
effectuation of transfer is often made previous to or by the same instrument as the appointment, it ought, in
strictness, to be made only after the appointment has been completed3. Every new trustee so appointed and every
trustee appointed by the court either before or after the passing of the Indian Trusts Act 1882, has the same powers
and must in all respect act as if he had been originally nominated a trustee by the author of the trust4.
1 Ie under the Indian Trusts Act 1882 sections 73 or 74.

2 Indian Trusts Act 1882 section 75. See Re Watt’s Settlement (1851) 9 Hare 106; Re Plyer’s Trust (1851) 9 Hare 220;
Re Fisher’s Will Trustees (1853) 1 WR 505; Smith v Smith (1854) 3 Drew 72; Re Marquis of Bute’s Will (1859) John 15;
Re Rathbone (1876) 2 ChD 483 , CA; Re Pilling’s Trusts (1884) 26 ChD 432 ; Re Rackstraw’s Trusts (1885) 52
LT 612; Re Bishop of Sarum [1886] WN 140; Re Williams’ Trusts (1887) 36 ChD 231 . See Re Templer’s Trusts
(1864) 4 New Rep 494; Re Greenwood’s Trusts (1884) 27 ChD 359 .
3 Noble v Meymott (1851) 14 Beav 471 at 478 per Romilly MR.
End of Document
[290.144] Power of new trustees
Part One TRUSTS
II. TRUSTEES
8. MISCELLANEOUS
[290.144] Power of new trustees

Where a person is appointed as a trustee and the property is vested in him he may continue a suit on a promissory
note filed by the deceased trustee before his death against the debtor of the trust estate1, but neither the old trustee
nor the newly appointed trustee has a right to take forcible possession of the trust property in occupation of another
when the enquiry regarding the dispute of such property between them is pending2.
1 Hasinabai v Shri Krishandas Tikandas AIR 1948 Ngp 60.

2 Swami S Guru Ghanshyamji v Maganbhai AIR 1998 Guj 280 [LNIND 1998 GUJ 263]: (1998) 3 Guj LR 1933.
End of Document
[290.145] Survival of trust
Part One TRUSTS
II. TRUSTEES
8. MISCELLANEOUS

The general rule is that no trust must fail or be prejudiced for want of a properly constituted trustee1. On the death
or discharge of any of the several co-trustees, the trust survives and the trust property passes to the others, unless
the instrument of the trust expressly declares otherwise2. The survivorship of the trust is not defeated because the
settlement contains a power for restoring the original number of trustees by new appointments, unless there be
something in the instrument that specifically manifests such an intention3. Unless this general rule relating to
survival of trustees is accepted there will be difficulty in the administration of the trust properties4.
Where, there is a provision for the appointment of a new trustee in place of the one who dies or the one who has
been discharged from the office that would not be construed as displacing the rule of survivorship of the surviving or
continuing trustees till the new trustees are appointed and in the meantime in accordance with the rule of
survivorship the surviving or continuing trustees would continue with the administration of the estate5, more so in
absence of any term in the instrument of trust indicating any intention to show that the conjoint act of whole body of
the trustees is necessary for the validity of any of the proceedings of the trust6.
Where the founder had appointed himself a trustee along with two others but the two others were not willing to act
as trustees it was observed that the trust did not come to an end7.
1 K Venkataraya Prabhu v Vasudev Prabhu AIR 1928 Mad 897 : 108 IC 294 (where an application for execution was filed
by a person who was not a properly constituted trustee, it was held that execution be continued by the next best friend
or the representative of the beneficiary pending the proper appointment of trustees). See Vaidyanatha Ayyar v
Swaminatha Ayyar AIR 1924 PC 221(2) : 51 IA 282 (a person falsely claimed the trust properties as his own and
professed to appoint a manager rather than a trustee for the same. It was held that the trustee was not properly
appointed). Where the trustee was appointed by the author of the trust and it was provided by him that the office of the
trustee would vest in the sons and grandsons and so on of the trustee but these nominated trustees died during the life
time of the author of the trust, the author was competent to appoint new trustees: Appasami Pillai v Ranu Tevar AIR
1932 Mad 267 [LNIND 1931 MAD 68]: 136 IC 340 (a de facto manager of a trust should be allowed to maintain a suit
which is for the benefit of benefit of the trust inspite of some defect in his title as trustee and also of the fact whether he
had prior possession or not).
3 Som Giri v Ram Ratan Giri AIR 1941 All 387 : 197 IC 696 (a surviving trustee can continue the trusts in absence of any
terms in the instrument itself indicating an intention to show that the joint act of the whole body of trustee is necessary
Page 2 of 2
for the validity of all or any of the proceedings under the trust); Salakshi Ammal v Doraimanikka Nanden (1926) 49 Mad
LJ 341 (Indian Trusts Act 1882 section 76 has adopted the principle of English law that the trustees are joint tenants
with the rights of survivorship; therefore the trust survives in spite of the death or discharge of the trustee or the
trustees).
4 Jurat Kumari Dassi v Shaligram Subhkaran Khemani AIR 1960 Cal 489 [LNIND 1959 CAL 202]: 64 Cal WN 488.
5 See note 4 above.
6 Somegiri v Ram Ratan Giri AIR 1941 All 387 : (1941) ILR All 711.
7 Vadevelu Mudaliar v C N Kuppuswami Mudaliar (1972) 1 Mad LJ 265.
End of Document
[290.146] Possession of title deeds
Charities, Vol 37) 2nd ed > Part One TRUSTS > II. TRUSTEES > 9. RIGHTS OF TRUSTEES
Part One TRUSTS
II. TRUSTEES
9. RIGHTS OF TRUSTEES
[290.146] Possession of title deeds

A trustee is entitled to have in his possession the instrument of trust and all the documents of title relating solely to
the trust property1. The title deeds refer to the title of the author of the trust, and they are accessories to the estate
itself and ought to pass with the estate2. The right to the custody of the title deeds is a necessary consequence of
the trustee’s duty to institute and defend all actions for the protection of the trust property3.

2 Bhavani Devi, of Fort Pratabgad, by members of the committee, Krishnaji Sakharam v Devrao Madhavrao ILR 11 Bom
485.
3 Goods v Burton 11 Jur 851.
End of Document
[290.147] Reimbursement and indemnity in respect of expenses and
liabilities
Part One TRUSTS
II. TRUSTEES
[290.147] Reimbursement and indemnity in respect of expenses and

liabilities
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 beneficiary1. In the event of the failure of the trust property, a trustee may recover his expenses from
a person sui juris who is beneficially entitled to the trust property on whose behalf he acted and at whose request,
express or implied, he made the payment2. The right of a trustee to be indemnified out of the trust estates covers
not only payments actually made by him but also his liability to pay3. His right extends to calls on shares which he
has been obliged to pay4, to liability on the covenants of a lease5, to liabilities incurred by him in properly carrying
on a trade or business under the provisions of the instrument creating the trust6, and to damages and costs
recovered against him as legal owner of the trust estate, where the injury in respect of which they were recovered
was not caused by his neglect or default7. A trustee is entitled to be reimbursed the money spent by him on a bona
fide litigation believed to be in the interest of the cestui que trust, but a person not really entitled to the office cannot
so claim8. As between the beneficiaries, a trustee’s costs and expenses are generally recoverable out of capital9,
and the trustee has a charge on both the capital and the income of the trust property in priority to the claims of
beneficiaries and persons claiming under them10. If, however, he has committed a breach of trust, he cannot
recover them until he has made good the breach11. Similarly, where the trustee has either mixed his own money
with the trust fund12 or expended his own money together with trust money in the purchase or improvement of
property13, the beneficiaries have a first claim in respect of the trust fund, and the trustee has only a subsequent
claim in respect of his own money.
Persons to whom a trustee has incurred liability have no original or direct right to claim payment out of the trust
estate14. The creditor, though, is not debarred from a right of subrogation by reason of the fact that he was on the
date of transaction aware that he was dealing with a trustee15, and where a trustee utterly fails to carry out the
directions of the trust and takes up an obstructing attitude during the course of litigation the court will be justified in
awarding costs against the trustee16.
A de facto trustee is allowed to recover the expenses incurred in making improvements in the trust property17, as is
a constructive trustee18. Where there is an appeal, for example on a point of construction, in proceedings to
determine the rights of beneficiaries under a trust, it seems that trustees will normally be allowed their costs of
appearing on the appeal by their own counsel19. When the proceedings are pending for his removal, he is entitled
only to, out of pocket expense incurred till the date of his removal from the office of trustees20.
Page 2 of 3
[290.147] Reimbursement and indemnity in respect of expenses and liabilities
1 Indian Trusts Act 1882 section 32. See also How v Godfrey and White (1678) Cas temp Finch 361; Balsh v Hyham
(1728) 2 P Wms 453; Worrah v Harford (1802) 8 Ves 4 at 8 per Lord Eldon LC; Re Ormsby (1809) 1 Ball & B 189 at
190 per Lord Manners LC; Dawson v Clarke (1811) 18 Ves 247 at 254 per Lord Eldon LC; Brocksopp v Barnes (1820)
5 Madd 90; Moore v Frowd (1837) 3 My & Cr 45; Re German Mining Co, ex p Chippendale (1853) 4 De GM&G 19 at 52
per Turner LJ; Morison v Morison (1855) 7 De GM&G 214; Batten, Proffitt and Scott v Dartmouth Harbour Commrs
(1890) 45 ChD 612 at 621 per Kekewich J; Budgett v Budgett [1895] 1 Ch 202 . A trustee is entitled as of right to
full indemnity out of the trust property against all his costs, charges and expenses properly incurred: Edgecumbe v
Carpenter (1839) 1 Beav 171; Stott v Milne (1884) 25 ChD 710 at 715, CA, per Lord Selborne LC; Re Beddoe,
Downes v Cottam [1893] 1 Ch 547 at 558, CA, per Lindley LJ; St Thomas’s Hospital Governors v Richardson [1910]
1 KB 271 at 283, CA, per Farwell LJ. A trustee may be allowed interest on sums advanced by him for the benefit of
the trust: Re Beulah Park Estate, Sargood’s Claim (1872) LR 15 Eq 43; Finch v Pescott (1874) LR 17 Eq 554. Pulin
Behary Ghosh v M A Davar AIR 1946 Cal 83 : 49 Cal WN 721 : 224 IC 32, DB (defaulting trustee already indebted to
the estate will have no right of indemnity for a subsequent liability even if incurred for benefit of estate).
2 Indian Trusts Act 1882 section 32. See also Balsh v Hyham (1728) 2 P Wms 453 at 455; Re German Mining Co, ex p
Chippendale (1853) 4 De GM&G 19 at 54 et seq per Turner LJ; James v May (1873) LR 6 HL 328; Jervis v Wolferstan
(1874) LR 18 Eq 18 at 24 per Jessel MR; Fraser v Murdoch (1881) 6 App Cas 855 at 872, HL, per Lord Blackburn;
Hobbs v Wayet (1887) 36 ChD 256 ; Hardoon v Belilios [1901] AC 118 , PC. The right may subsist after the
beneficiary has alienated his beneficial interest: Matthews v Ruggles-Brise [1911] 1 Ch 194 .
3 Mahabir Prasad Marwari v Syed Shah Mohamad Yehia AIR 1936 Pat 390 : 163 IC 869 : 15 Pat 88.
4 Re Universal Banking Corp, ex p Challis (1868) 17 LT 637; Re National Financial Co, ex p Oriental Commercial Bank
(1868) 3 Ch App 791; Castellan v Hobson (1870) LR 10 Eq 47; Hemming v Maddick (1872) 7 Ch App 395; James v
May (1873) LR 6 HL 328; Jervis v Wolferstan (1874) LR 18 Eq 18; Fraser v Murdoch (1881) 6 App Cas 855 at 866,
HL, per Lord Selborne LC; Hughes-Hallett v Indian Mammoth Gold Mines Co (1882) 22 ChD 561 at 564 per Fry J.
5 Matthews v Ruggles-Brise [1911] 1 Ch 194 . Cf Wise v Perpetual Trustee Co Ltd [1903] AC 139 , PC (where it
was held that the trustees of a club were entitled to an indemnity out of the property of the club but not from the
members personally, as clubs are ordinarily formed upon the tacit understanding that the members are not liable to
make payments beyond their subscriptions).
6 Ex p Garland (1804) 10 Ves 110; Re Johnson, Shearman v Robinson (1880) 15 ChD 548 ; Strickland v Symons
(1884) 26 ChD 245 at 248, CA, per Lord Selborne LC; Re Evans, Evans v Evans (1887) 34 ChD 597 , CA; Re
Blundell, Blundell v Blundell (1890) 44 ChD 1 , CA.
7 Benett v Wyndham (1862) 4 De GF&J 259; Re Raybould, Raybould v Turner [1900] 1 Ch 199 . The party injured has
the same right as the trustee against the trust estate: Re Raybould, Raybould v Turner above. As to trading trusts and
the rights of trustees and creditors, see H A J Ford “Trading Trusts and Creditors” Rights‘ (1981) Melb ULR 1.
8 Subramania Aiyar v Sabba Naidu 25 Mad LJ 452.
9 Powys v Blagrave (1854) 4 De GM&G 448; Carter v Sebright (1859) 26 Beav 374; Re Wood’s Trusts (1870) LR 11 Eq
155; Re Bullock’s Settled Estates, Lofthouse v Haggard (1904) 91 LT 651. See, however, Re Mason’s Trusts, ex p
Smithett (1871) LR 12 Eq 111.
10 Re Davis, ex p James (1832) 1 Deac & Ch 272; Re German Mining Co, ex p Chippendale (1853) 4 De GM&G 19; Re
Exhall Coal Co Ltd, Re Bleckley (1866) 35 Beav 449; Walters v Woodbridge (1878) 7 ChD 504 , CA; Re Knapman,
Knapman v Wreford (1881) 18 ChD 300 , CA; Dodds v Tuke (1884) 25 ChD 617 ; Stott v Milne (1884) 25 ChD
710 , CA; Staniar v Evans, Evans v Staniar (1886) 34 ChD 470 at 477; Re Spurling’s Will Trusts, Philpot v Philpot
[1966] 1 All ER 745 : [1966] 1 WLR 920 . See also Darke v Williamson (1858) 25 Beav 622 (lien of chapel trustee on
title deeds). Such a lien is not lost when the fund to which it attaches is ordered to be paid into court: Blenkinsop v
Foster (1838) 3 Y&C Ex 205. A trustee who successfully defends an action brought for the purpose of setting aside a
settlement has a lien for his costs against the trust estate notwithstanding that the settlement, although originally valid,
becomes void under bankruptcy law: Re Holden, ex p Official Receiver (1887) 20 QBD 43 . A trustee has no lien for
such costs, however, if the defence to such an action is unsuccessful: Re Butterworth, ex p Russell (1882) 19 ChD 588
at 602, CA; Re Holden, ex p Official Receiver above.
11 Re Knott, Bax v Palmer (1887) 56 LJ Ch 318. There is no lien for costs incurred by reason of a breach of trust
unauthorised by the beneficiary: Leedham v Chawner (1868) 4 K&J 458.
12 Lupton v White, White v Lupton (1808) 15 Ves 432; Pennell v Deffell (1853) 4 De GM&G 372; Re Hallett’s Estate,
Knatchbull v Hallet (1880) 13 ChD 696 , CA; Re Oatway, Hertslet v Oatway [1903] 2 Ch 356 ; James Roscoe
(Bolton) Ltd v Winder [1915] 1 Ch 62 ; Re Tilley’s Will Trusts, Burgin v Croad [1967] Ch 1179 : [1967] 2 All ER
303.
Page 3 of 3
[290.147] Reimbursement and indemnity in respect of expenses and liabilities
13 Re Pumfrey, Worcester City and County Banking Co v Blick (1882) 22 ChD 255 .
14 Mahanth Singh v U Aye AIR 1936 Rang 514 : 14 Rang 336 : 166 IC 247; Mahabir Prasad Marwari v Syed Shah
Mohamad Yehia AIR 1936 Pat 390 : 163 IC 869.
15 Mackintosh Burn Ltd v Shivakali Kumar AIR 1933 Cal 668 at 671 : 60 Cal 801.
16 Gutta Ramayya v Manipalli Satyanarayanamurthi AIR 1936 Mad 495 [LNIND 1935 MAD 241]at 497 (1935) Mad WN
1172 : 165 IC 63.
17 Narayanan v Lakshmana AIR 1931 Mad 196.
18 Hardoon v Bellilios [1901] AC 118 , PC.
19 Re Stuart, Johnson v Williams [1940] 4 All ER 80, CA (where the appeal was dismissed with costs and the trustees
obtained the difference between what used to be party and party costs and common fund costs out of the estate). In
this case Clauson LJ appears to have thought that there might be some cases in which it would be unreasonable for
the trustees to appear and that in such a case the court, in determining the liability of an unsuccessful appellant for
costs, might have regard to the fact that he had notified the trustees that he would object to their being separately
represented: Re Stuart, Johnson v Williams above at 81-82. Cf Catterson v Clark (1906) 95 LT 42, CA, per Romer LJ,
explaining dicta in Carroll v Graham [1905] 1 Ch 478 , CA. For a case where trustees were disallowed costs see Re
Barry’s Trusts, Barry v Smart [1906] 2 Ch 358 , CA. However, Luxmoore LJ thought that the more recent practice is
to say that the trustees ought to appear in the Court of Appeal, because it is necessary for them to see that the order
which relates to the administration of the estate is properly carried out, and that it would be contrary to that practice to
deprive trustees of their costs in the Court of Appeal: Re Stuart, Johnson v Williams above.
20 Kaliba Movulvija v Saran Devi Ammal AIR 1916 Mad 57.
End of Document
[290.148] Money expended in preserving trust property
Part One TRUSTS
II. TRUSTEES
[290.148] Money expended in preserving trust property

A trustee has a right to recover his expenses incurred from the trust property for money expended by him in its
preservation1; and a person who at his request advances money for its preservation obtains a similar right by
subrogation2. Thus, if a trustee has no trust funds for paying the premiums on a trust policy and applies his own
money for keeping up the policy, he has a charge on the policy for the amount advanced by him for the purpose of
keeping it on foot3. If, however, the beneficiaries supply funds or if the trustee, by duly performing his trust, ought to
be in possession of funds applicable to that purpose, he acquires no charge on the policy and cannot confer one on
another4. The trustee cannot destroy the trust by bringing it to a sale. However, he may enforce his charge by sale
when he loses the possession of the trust property5.
1 Indian Trusts Act 1882 section 32; Clack v Holland (1854) 19 Beav 262 at 273, 276-277 per Romilly MR; Re Leslie,
Leslie v French (1883) 23 ChD 552 at 560; Re Earl of Winchilsea’s Policy Trusts (1888) 39 ChD 168 ; Re
Jewell’s Settlement, Watts v Public Trustee [1919] 2 Ch 161 . See Re Regent’s Canal Ironworks Co, ex p Grissell
(1875) 3 ChD 411 , CA.
2 Clack v Holland (1854) 19 Beav 262 at 277; Todd v Moorhouse (1874) LR 19 Eq 69; Re Leslie, Leslie v French (1883)
23 ChD 552 at 560.
3 Clack v Holland (1854) 19 Beav 262 at 273, 276.
4 Clack v Holland (1854) 19 Beav 262 at 276-277.
5 Peary Mohun Mukerjee v Narendra Nath Mukerjee ILR 37 Cal 229 : 14 Cal WN 261; see also Kaliba Movulvija
Muhammad Usan Kadiri Abkan Sahib v Soran Bivi Saiba Ammal ILR 38 Mad 260; Niladri Sahu v Mahantan Mahant
Chaturbhuj Das AIR 1926 PC 112.
End of Document
[290.149] Liability of trustee for costs of proceedings
Part One TRUSTS
II. TRUSTEES

A trustee will not be allowed to charge against the trust property the costs of unnecessary proceedings1 or of
elaborate proceedings where he might have obtained his object by a simpler and less expensive procedure2.
Accordingly, where a trustee incurs or by his conduct occasions excessive or unnecessary costs in respect of the
trust estate, he is deprived of his costs3 and may be held personally liable to pay the costs of the proceedings so far
as they are excessive or unnecessary4. Counsel’s opinion does not always and necessarily justify a trustee in
bringing or defending an action5.
Where a trustee institutes or defends proceedings in order to have a point relating to his private interest decided at
the expense of the trust estate, he will be ordered to pay the costs of them6.
The costs of legal proceedings occasioned by the mis-conduct of a trustee are in the discretion of the court, which
will generally order the trustee to pay them7. The law of limitation applies to a suit by a trustee for recovery of
money spent by him out of his pocket for the trust8.
1 Norris v Norris (1785) 1 Cox Eq Cas 183; Knight v Martin (1829) 1 Russ & M 70; Angier v Stannard (1834) 3 My & K
566 at 572; Campbell v Home (1842) 1 Y&C Ch Cas 664 at 670; Cockcroft v Sutcliffe (1856) 2 Jur NS 323; Horner v
Wheelwright (1857) 2 Jur NS 367; Smith v Bolden (1863) 33 Beav 262; Re Cull’s Trusts (1875) LR 20 Eq 561; Re
England’s Settlement Trusts, Dobb v England [1918] 1 Ch 24 . In a proper case, a trustee ought to join with the
beneficiaries in instituting proceedings if requested to do so instead of being made a defendant to them: Reade v
Sparkes (1827) 1 Mol 8. Trustees who appeared in proceedings between beneficiaries without having been served
were not allowed their costs: Bennett v Biddles (1846) 10 Jur 534.
2 Thomas v Walker (1854) 18 Beav 521 (where a suit was instituted for the appointment of a new trustee instead of
recourse being had to the procedure corresponding to the modern procedure by summons); Wells v Malbon (1862) 31
Beav 48 (where a trustee instituted a suit instead of paying the trust fund into court). As to apportioning the costs of
administration proceedings between two estates see Re Allen, Wheeler v Foster [1889] WN 132; as to the costs of
trustees in connection with the payment out of court of funds paid in under an administration action see Lowe v Moore
[1906] WN 142; and as to the costs of administration proceedings generally see Day v Croft (1854) 19 Beav 518; Re
Mill’s Estate, ex p Works and Public Buildings Commrs (1886) 34 ChD 24 at 33, CA, per Cotton LJ.
3 Re Knight’s Will (1884) 26 ChD 82 , CA. See also Re Scowby, Scowby v Scowby [1897] 1 Ch 741 , CA.
4 Campbell v Campbell (1837) 2 My & Cr 25; Wilson v Wilson (1838) 2 Keen 249; Burrows v Greenwood (1840) 4 Y&C
Ex 251 at 255; Penfold v Bouch (1844) 4 Hare 271; Firmin v Pulham (1848) 2 De G & Sm 99; Price v Loaden (1856) 21
Page 2 of 2
Beav 508; Eddowes v Eddowes (1862) 30 Beav 603; Patterson v Wooler (1876) 2 ChD 586 ; Re Cabburn, Gage v
Rutland (1882) 46 LT 848; Re Chapman, Freeman v Parker (1894) 72 LT 66, CA; Re Holton’s Settlement Trusts,
Holton v Holton (1918) 88 LJ Ch 444; Bowen-Jones v Bowen-Jones [1986] 3 All ER 163.
5 Devey v Thornton (1851) 9 Hare 222 at 232 per Turner V-C; Stott v Milne (1884) 25 ChD 710 at 714, CA, per Lord
Selborne LC.
6 Henley v Philips (1740) 2 Atk 48; Irwin v Rogers (1848) 12 I Eq R 159. Where litigation is designed to define and secure
the personal rights of the trustees as individuals, there is no rule that the trustees are entitled to their costs on an
indemnity basis: Re Dargie, Miller v Thornton-Jones [1954] Ch 16 at 20-21 : [1953] 2 All ER 577 at 580.
7 Dawson v Parrot (1791) 3 Bro CC 236; Ankers v Sandford (1840) 4 Jur 817; Froste v Hamilton (1842) 6 Jur 525;
Turquand v Knight (1845) 14 Sim 643; Wilson v Parker (1846) 10 Jur 979; Byrne v Norcott (1851) 13 Beav 336 at 346
per Lord Langdale MR; Marshall v Sladden (1851) 4 De G & Sm 468; A-G v Murdoch (1856) 2 K&J 571; Kendall v
Marsters (1860) 2 De GF&J 200; Grierson v Astle (1860) 3 LT 288; Palairet v Carew (1863) 32 Beav 564; Birks v
Micklethwaite (1864) 34 LJ Ch 362; Hemry v Macdonald (1866) 15 WR 165; Naylor v Smith (1867) 15 WR 528; Gough
v Etty (1869) 20 LT 358; Griffin v Brady (1869) 39 LJ Ch 136; Easton v Landor (1892) 2 R 176, CA; Re Hodgkinson,
Hodgkinson v Hodgkinson [1895] 2 Ch 190 , CA; Re Knox’s Trusts [1895] 2 Ch 483 , CA. Trustees are not
relieved from liability to pay the costs of an action which their mis-conduct has occasioned by a direction in the trust
instrument that, if a beneficiary institutes proceedings for the administration of the trust estate, the costs of all parties
are to be paid out of his share: Re Williams, Williams v Williams [1912] 1 Ch 399 .
8 Kaliba Movulvija Muhammad Usan Kadiri Abkan Sahib v Soran Bivi Saiba Ammal ILR 38 Mad 260; Peary Mohun
Mukerjee v Narendra Nath Mukerjee ILR 37 Cal 229 : 14 Cal WN 261.
End of Document
[290.150] To be recouped for erroneous overpayment
Part One TRUSTS
II. TRUSTEES
[290.150] To be recouped for erroneous overpayment

Overpayment made by the trustee to the beneficiary is also treated like expenses incurred in execution of trust and
the trustee is entitled to recover it1. The term overpayment means in excess of and does not include wrongful
payment2 or payment made due to improper exercise of discretion3.

2 Ministry of Health v Simpson [1951] AC 251 [1950] 2 All ER 1137, HL.
3 Wilason v Turner (1883) 22 Ch. D 521 . See also Liversey v Liversey (1827) 3 Russ 287, wherein it was held that
where a trustee has made overpayment to a beneficiary in error he can recoup the trust out of any other interest if any
of the beneficiary. Also Dibbs v Goren (1849) 11 Beav 483; Cf Re Hatch, Hatch v Hatch [1919] 1 Ch 351 at 356-357
per Sargant J.
End of Document
[290.151] Indemnity from gainer by breach of trust
Part One TRUSTS
II. TRUSTEES
[290.151] Indemnity from gainer by breach of trust

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 amount1.
The trustee loses the right to indemnity if in committing the breach of trust, the trustee is guilty of fraud2.

End of Document
[290.152] To apply to court for opinion in management of trust property
Part One TRUSTS
II. TRUSTEES

A trustee can apply to the court to give its opinion in the management of the trust. 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 court’s opinion for summary disposal1.
Where a trustee is in doubt as to his right course of action, he is entitled to take the court’s opinion2. The jurisdiction
of the court will be a consultative jurisdiction, giving guidance to a trustee who asks for it as he wants it and intends
to follow it3. A trustee is always entitled to a reasonable protection and direction of a court of equity in the exercise
of his trust4. Where the matter is in doubt a trustee has a right to obtain the court’s opinion to ascertain whether any
amount is due from or to him or from his cestui que trust5. A trustee will be deprived of his costs where his motive in
applying to the court under this provision is found to be vexatious6. Only those who have accepted the trust are
entitled to an opinion from the court7. Where the trustees under a settlement differed in the exercise of discretion
vested in them it was held to be a proper case where the court might give its advice or opinion8. However, a
question whether a beneficiary under the trust is insane or not is wholly alien to the administration of the trust, and
the court cannot give its opinion on it9. The court has a discretion to refuse advice on a petition if it is of the opinion
that the question is of such unusual difficulty or importance that it is improper for disposing of in a summary way10; it
can give advice relating only to matters in which the trustee in order to protect himself asks the advice or the
opinion of the court on any question respecting the management or administration of the trust property11. Even
where the trustee has been given an absolute discretion he may still seek opinion of the court on its exercise of
jurisdiction12. An order made for the management of the trust will only indemnify the trustees upon the facts stated
in the petition13. While exercising its jurisdiction to give directions on a trustee’s application, the court is essentially
engaged solely in determining what ought to be done in the best interests of the trust estate and not in determining
the rights of adverse parties14.
If the court has to go into the details of the case which relate to contentious facts that cannot effectually be dealt
with in a summary petition, it is not bound to give an opinion15. An application under this provision is an independent
procedure analogous to originating summons for the direction or advice of the court in matters relating to trusts16.
The court can give an opinion, advice or direction on any presented question regarding the management or
administration of the trust property, and not on any other matter. If the relief asked for is not related to the
administration of the trust property, but for altering the terms of the trust deed, the court has limited powers17.
While providing a trustee with the right to apply to the court for an opinion on the management and administration of
a trust, a limitation governing the question is embodied in the statutory provisions. Any hypothetical question or any
question of detail, difficulty or importance will not be proper in the opinion of the court for a summary disposal18. The
Page 2 of 4
court will not give an opinion if the question involved is one of title or of construction of a will or in matters where
complicated questions of law are involved19. The court will not advise a trustee on disputed questions of law or fact,
but only on the undisputed matters of management or administration such as question of advancement,
maintenance, change of investment, or compromise20.
A trustee is not bound to seek the advice of the court21. As the opinion given by the court is not an order, a trustee
is not guilty of contempt of court for his failure to act according to the directions given22. Where a trustee once
applies for advice or opinion or direction and having ignored the advice given to him by the court applies for a
second time to the court, the court will refuse to act23. In giving directions the court cannot go behind the testator’s
will, nor direct that the trustees should follow any hard and fast rule in deciding within their discretion who should be
the beneficiaries from time to time of the trusts created, but what the court will do is to give general directions to
ensure so far as possible that the trust fund is administered properly24. The court has no powers to sanction a sale
of the trust property by trustees where no such power has been given by the trust deed25; but the court can do so
while exercising its extraordinary jurisdiction26. Similarly, the court may sanction a sale by trustees of immovable
properties vested in them27.
The jurisdiction given to the court is of delicate nature and has to be exercised with great caution with the court
taking care not to strain its powers28. As a rule the court has no jurisdiction to give its sanction to the performance
by trustees of acts with reference to the trust estate which are not on the face of it authorised by the trust deed29.
Thus the court may in an emergency do something not authorised by the trust under its extraordinary civil
jurisdition30. Where the trust properties are deteriorating and there is not enough money to effect repairs the court
may direct the sale31. It accordingly sanctioned the act of the trustee in spending a reasonable sum of money for the
benefit of the testator’s granddaughter as the deed disclosed a paramount intention to benefit such granddaughter,
who had a contingent interest in it. The deed made no provision for it except by way of maintenance. However, the
court refused to sanction the litigation expenses incurred by the widow who had only a life interest under the will32.
Similarly, where there is no emergency, vitally important questions such as those involving the conversion of the
entire trust property should not be dealt with by the court under this provision33.
The court while exercising its inherent power has directed trustees to make advances out of the capital for the
benefit of an infant; sanctioned the carrying on of a business which was not saleable until it could be sold as a going
concern; directed the sale of the business to a company in exchange for shares therein, and holding such shares
for a limited period34; approved a compromise or scheme of family arrangement on behalf of infants who were
interested under the trust35; and directed the making to an infant of a larger allowance for maintenance than the
settlor had named where the result would otherwise be to injure the infant’s prospects or to cause real property
belonging to him to fall into ruin36. It has also directed the sale of the entire jewellery in the trust property for the
benefit of the beneficiaries under the trusts37.
The court cannot direct a co-trustee to pay a certain sum of money to another co-trustee to defend a suit relating to
the trust property, although it can direct a trustee to advance money to himself to raise a loan on the security of the
trust property38. The proper course for the trustees for obtaining sanction as regards questions of detail or difficulty
concerning the trust estate is to institute a regular suit in the court’s original jurisdiction39. The court is competent to
answer questions and pass sanctions with respect to questions of detail and difficulty concerning the administration
of a trust in a regular suit40.
A trustee should not bring or defend an action without the court’s sanction, as otherwise he does so at his own risk
as to costs41. The decision of a court of first instance completely protects and indemnifies a trustee in respect of
what he does in accordance with it42. If he appeals from it to a higher tribunal, he does so at his own risk43; and, if
he fails, he will be ordered to pay the costs of the appeal44.
When no permission was obtained from the Court for creation of usufructuary mortgage over the Trust property
under section 34, the same was held not to be binding on the Trust45.
1 Indian Trusts Act 1882 section 34; Hasan Bin Mobarak v Chief Judge AIR 1999 AP 111; Dalim Kumar v Nanda Rani
AIR 1970 Cal 292 [LNIND 1969 CAL 188]: 73 Cal WN 877; R Sathyamoorthy v R Rukmani (1994) 1 LW 625;
Naraindas Menghraj Nagpal v Lalchand Menghraj Nagpal (1979) MahLJ 485; Kishen Kumar v Krishen Lal AIR 1979
J&K 13.
Page 3 of 4
2 Talbot v Earl of Radnor (1834) 3 My & K 252 at 253 per Leach MR; Iredell v Iredell (1854) 18 Beav 202; King v King
(1857) 1 De G & J 663; Merlin v Blagrave (1858) 25 Beav 125 at 137-138 per Romilly MR; Rose v Sharrod (1863) 11
WR 356; Re Earl of Radnor’s Will Trusts (1890) 45 ChD 402 at 423, CA, per Lord Esher MR. The trustee must
provide the court with all relevant material, for the court will not act on incomplete information: Marley v Mutual Security
Merchant Bank and Trust Co Ltd [1911] 3 All ER 198, PC. A trustee invested with an absolute discretion may obtain the
direction of the court as to its exercise: Law Guarantee Trust and Accident Society v Munich Re-insurance Co [1912] 1
Ch 138 at 156 per Warrington J.
3 Re Mahomad Hashim Guzdar AIR 1945 Sind 81, FB.
4 Taylor v Glanville (1818) 3 Medd 176; Taylor v Glanville (1818) 3 Madd 176 at 178 per Leach V-C; Curteis v Candler
(1821) 6 Madd 123; Goodson v Ellisson (1827) 3 Russ 583 at 589 per Lord Gifford MR; Gardiner v Downes (1856) 22
Beav 395 at 397 per Romilly MR; King v King (1857) 1 De G&J 663; Barker v Peile (1865) 2 Drew & Sm 340; Cook v
Harvey [1874] WN 69. Where the matter is in doubt, a trustee has a right to take proceedings to ascertain whether any
amount is due from or to him to or from his beneficiary: Singleton v Selwyn (1863) 9 LT 408 at 409 per Wood V-C.
5 Singleton v Selwyn (1863) 9 LT 408.
6 Courteis v Candler (1821) 6 Mad 123; Taylor v Glanville (1818) 3 Mad 176 at 178; Goodson v Ellisson (1827) 3 Russ
583 at 589; Re Cabburn, Gage v Rutland (1882) 46 LT 848.
7 Trimbak Mahadev Tilak v Narayan Hari Lele ILR 33 Bom 429 : 11 Bom LR 495.
8 Windham v Cooper (1871) 24 LTNS 793.
9 Hasan Bai Mubarak v Chief Judge City Civil Court, Hyderabad AIR 1999 AP 11 [LNIND 1998 AP 246](the mental
condition being an important personal problem, the court cannot dispose of the same in a summary manner under the
Indian Trusts Act 1882 section 34; as jurisdiction under the statutory provision is only in the nature of giving guidelines
or directions without entering into the merits, the application ought not to have been entertained by the court).
10 Re Madras Doveton Trust Fund ILR 18 Mad 443.
11 Narendra Nath Dey v Promilabala Dassi AIR 1926 Cal 1225.
13 Trimbak Mahadev Tilak v Narayan Hari Lele ILR 33 Bom 429 : 11 Bom LR 495.
14 Marley v Mutual Security Merchant Bank and Trust Co Ltd [1991] 3 All ER 198, PC.
15 Hasan Bai Mubarak v Chief Judge City Civil Court, Hyderabad AIR 1999 AP 11 [LNIND 1998 AP 246].
16 Narendra Nath Dey v Promilabala Dassi AIR 1926 Cal 1225.
17 Official Trustee, West Bengal v Sachindranath Chatterjee AIR 1969 SC 823 [LNIND 1968 SC 373](1969) 2 SCJ 123.
18 Armugam Chetti v Raja Jagaveera Rama Venkateswara Ettappa ILR 28 Mad 444 : 15 Mad LJ 292.
19 Re Goods of Akshoy Ghose AIR 1949 Cal 462.
20 Narain Das v Lal Chand AIR 1979 MP 99 : (1979) MP LJ 227 (the registrar is competent to apply to the court for
direction only when the original object of the trust has failed or the trust property is not properly managed or
administered or direction of the court is necessary for the administration of the trust).
21 Dalim Kumar v Nanda Rani AIR 1975 Cal 67 [LNIND 1973 CAL 269].
22 Re Mahomad Hashim Guzdar AIR 1945 Sind 81, FB; Adoch Jhevar v Chunnar AIR 1957 Ker 171 [LNIND 1957 KER
31].
23 Re New, Re Leavers, Re Morley [1901] 2 Ch 534 , CA.
25 Amina Bee v Mariam Bee Bee AIR 1939 Rang 347.
26 Re Manilal Hurgovan (a minor), Hurgovan v Manchand ILR 25 Bom 353 : 3 Bom LR 411 (thus exercising its extra
ordinary jurisdiction the court sanctioned the sale of minor’s interests in the joint Hindu family property).
27 Re Shirinbai Merwanji Dalal ILR 43 Bom 519 (the sale though not provided for by the trust instrument, happened in the
interest of all the beneficiaries, as it was an emergency not foreseen by the author of the trust).
28 Re New, Re Leavers, Re Morley [1901] 2 Ch 534 , CA, per Romer LJ.
29 See note 28 above.
30 De Souza v Daphtary AIR 1924 Bom 252.
31 Re D V Guruppa AIR 1951 Mys 6.
Page 4 of 4
32 Rajagopala v Baggaimmal AIR 1933 Mad 242 [LNIND 1932 MAD 239].
33 Re Moosaji AIR 1938 Sind 182.
34 Re Tollemache [1903] 1 Ch 457 .
35 Boyer v Maclean [1903] 1 Ch 848 .
36 Walker v Duncombe [1901] 1 Ch 879 .
37 Sahibzadi Amina v Syed Mohd Hussain AIR 1981 AP 340 [LNIND 1981 AP 59].
38 Narendra Nath Dey v Promilabala Dass AIR 1926 Cal 1225.
39 Re Barrington’s Settlement 1 John & H 142.
40 Conwey v Fenton (1888) 40 ChD 512 .
41 See Re Beddoe, Downes v Cottam [1893] 1 Ch 547 , CA; Dagness v JL Freedman & Co (a firm) [1993] 2 All ER 161
: [1993] 1 WLR 388 , HL. See also McDonald v Horn [1995] 1 All ER 961, CA.
42 Underwood v Hatton (1842) 5 Beav 36; Foster v M‘Mahon (1847) 11 I Eq R 287; Rowland v Morgan (1848) 13 Jur 23 at
26 per Lord Cottenham LC; Smith v Smith (1861) 1 Drew & Sm 384 at 387 per Kindersley V-C; Re Earl of Radnor’s Will
Trusts (1890) 45 ChD 402 at 423, CA.
43 Rowland v Morgan (1848) 13 Jur 23 at 26; Tucker v Hernaman (1853) 4 De GM&G 395 at 404; and see Re
Londonderry’s Settlement, Peat v Walsh [1965] Ch 918 : [1964] 3 All ER 855, CA (where contrasting views were
expressed by Harman and Salmon LJ).
44 Re Butterworth, ex p Russell (1882) 19 ChD 588 , CA; Re Earl of Radnor’s Will Trusts (1890) 45 ChD 402 at 423,
CA, per Lord Esher MR.
45 P R Pandurangan Chettiar and P Ramakrishnan v M Balakrishnan 2010 (4) CTC 202 [LNIND 2010 MAD 2257].
End of Document
[290.153] Court’s powers
Part One TRUSTS
II. TRUSTEES
[290.153] Court’s powers

The office is joint in case of co-trustees and all acts which trustees intend to take for executing the trust must be
taken by all of them acting together and if one of the trustee refuses to join the other trustees can apply to the court
so that the trust may accordingly be executed1, but if on a construction of instrument the court comes to the
conclusion that the instrument gave power to the trustees, to act according to unanimous or majority decisions, any
conveyance by a majority would be invalid if all the trustees were not inclined to join in the execution2. But if the
provisions of the trust deed are likely to result in the frustration of the objects of the trust the court is entitled to
permit deviation from the deed3.
Where a trust deed does not provide for the sale of the trust property and the trust was for the benefit of the poor
students and the consent of the beneficiaries could not be obtained, the court authorized the sale subject to such
conditions as it thought were necessary4, but where a trust empowered the settler to alter the quantum of interest
given to each beneficiary by “will alone” the court is not empowered to permit any alteration by a deed “inter vivos’5.
1 Jankirama Iyer v Neelakanta Iyer AIR 1962 SC 633 [LNIND 1961 SC 338].
2 See note 1 above.
3 Re Trust deed of Thomas Richmond AIR 1939 Mad 920 [LNIND 1939 MAD 203].
4 Re Gundappa AIR 1951 Mys 6.
5 Official Trustees v Sachindranath Chatterjee AIR 1969 SC 823 [LNIND 1968 SC 373]; see also Ittyavira Mathai v
Varkey AIR 1964 SC 907 [LNIND 1963 SC 4].
End of Document
[290.154] Jurisdiction advisory in nature
Part One TRUSTS
II. TRUSTEES
[290.154] Jurisdiction advisory in nature

The jurisdiction under section 34 of the Act is advisory in nature and thus there is no scope of dispossessing a
person in possession of a property by the appointment of a special officer1. Where the suit involved a debottar
property owned by a deity section 34 did not apply and even if section 34 were to apply to the property the
appointment of Shebaits contrary to the line of succession of Shebaits laid down in the Will of the author of the
Trust would be legally invalid2. Where the permission to sell the trust property is sought from the court, the
jurisdiction of the court is advisory in nature but while giving such permission the court should satisfy itself of the
need for sale and propriety of the sale proposed and the mere plea that it was difficult to protect property is meager
were not by themselves ground for direct or permit sale by the court3.
1 Moloy Kumar Das v Krishna Chandra Adhikari 2011 (3) CHN 691 [LNIND 2011 CAL 1608].
2 See note 1 above.
3 Joint Commissioner HR & CE Administration v Jayaraman AIR 2006 SC 104 [LNIND 2005 SC 849]: (2006) 1 SCC 257
[LNIND 2005 SC 849] : 2006 (1) All LT 9 (SC) : JT 2005 (10) SC 288 [LNIND 2005 SC 849]: 2006-1-LW 306.
End of Document
[290.155] Directions under the provision dealing with right to apply to court
for opinion in management of trust property
Part One TRUSTS
II. TRUSTEES
[290.155] Directions under the provision dealing with right to apply to court
for opinion in management of trust property
Where the trustee refuses to accept the advice or to obey the directions given, he may not be liable for contempt of
law but the trustee does it at his own peril because such failure to obey directions and doing contrary to it may
amount to breach of trust1. The court will not act when the question involved is one of title or of construction of will
or in matters when complicated questions of law are involved2.
1 Adoch Jhevor v Chunnar AIR 1957 Ker 171 [LNIND 1957 KER 31]: (1957) ILR Ker 381 : (1957) Ker LJ 295 : (1957)
Ker LT 461.
2 In the goods of Akshay Kumar Ghosh AIR 1949 Cal 462.
End of Document
[290.156] Advice sought from the court to sell the trust property
Part One TRUSTS
II. TRUSTEES
[290.156] Advice sought from the court to sell the trust property
For meeting the recurrent demands of the wealth tax the directions of the court was sought for to sell the jewellery
with the consent of both the beneficiaries as well as the trustee, the court observed that in light of the facts and
circumstances of the case the jewellery could be sold1. However, court’s jurisdiction may not be invoked in vital
matters of importance like sale and conversion of trust property and other contentious matters and the proper
remedy in such cases would be to seek determination by filing a regular civil suit2. The law does not permit the
court to direct sale of trust property if the trust deed expressly prohibits the trustees to sell the trust property3 but if
the deed is silent as to whether the property could be sold of or not then the court can be approached4.
1 Sahibzadi Amina v Syed Mohammed Hussain AIR 1981 AP 340 [LNIND 1981 AP 59]: (1981) 2 APLJ 64 : (1981) 2
Andh WR 217.
2 Re Moosaji Arnija Waliji AIR 1934 Sind 182 : 177 IC 907.
3 De Souza v Daphtary AIR 1924 Bom 252 : 25 Bom LR 610 : 87 IC 230.
4 Nilima v Prakrit AIR 1982 Cal 14 [LNIND 1981 CAL 183].
End of Document
[290.157] Provision dealing with right to apply to court for opinion in
management of trust property not to apply to public trust and religious
trusts
Part One TRUSTS
II. TRUSTEES
[290.157] Provision dealing with right to apply to court for opinion in

management of trust property not to apply to public trust and religious
trusts
The Indian Trusts Act 18821 does not apply to religious trust whether public or private2. Where the trustee of a
private trust which subsequently became a public trust filed a petition and obtained permission to utilise the fund for
the purposes of trust such permission became ineffective as the trust ceased to be a private trust3.
1 Ie the Indian Trusts Act 1882 section 34.

2 Joint Commr HR & CE Administration v Jayaraman AIR 2006 SC 104 [LNIND 2005 SC 849].
3 Trustees of HEH, the Nizam’s Pilgrimage Money Trust v CIT AIR 2000 SC 1802 [LNIND 2000 SC 696]: (2000) 4 SCC
179 [LNIND 2000 SC 696] : (2000) 243 ITR 676; Deputy Commr v Rama Iyengar (1992) 1 Mad LJ 47.
End of Document
[290.158] Order non appealable
Part One TRUSTS
II. TRUSTEES
[290.158] Order non appealable

Both the Supreme Court of India as well as the high courts have the general Parens Patriae jurisdiction and power
in respect to religious and charitable trusts1. An order under the Indian Trusts Act 18822 does not decide the rights
of the parties finally and is only in the nature of an advice or opinion of the court and is therefore non appealable3.
Further, no revision is maintainable against an order of the district court refusing to grant lease of the trust property
on the ground of its impermissibility under the terms of the trust deed4. Thus, where the court appointed a receiver
on the complaint of forcible dispossession of trust property, such an order is non appealable5.
1 Executive Officer v R Sathyamoorthy (1999) 3 SCC 115 [LNIND 1999 SC 121].

2 Ie under the the Indian Trusts Act 1882 section 34.
3 Ashok Kumar Kapur v Ashok Khanna AIR 2007 NOC 85 (Cal); Bishwanath Sarna Singh v Bishambhar Nath AIR 1936
Oudh 337; Mohammad Sadiq Ali Khan v Kazim Ali Khan AIR 1934 Oudh 72.
4 Managing Trustee v S S Sahib 1999 LW 615.
5 Bishwanath Sarna Singh v Bishambhar Nath AIR 1936 Oudh 337.
End of Document
[290.159] Settlement of accounts
Part One TRUSTS
II. TRUSTEES
[290.159] Settlement of accounts

Where the duties of a trustee are complete, 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, an acknowledgment to
that effect should be given to the trustee1. Where a beneficiary has settled his share of the trust property, the
trustee is entitled to a release from him, and can only obtain a receipt from the trustees to whom the property is to
be transferred2. A trustee is bound to hand over the trust property to the beneficiary on receiving a receipt from the
beneficiary, but he cannot insist on his giving him a release of all the claims under the trust3. In a suit by the cestui
que trust for accounts, the court can pass a decree in favour of the trustee if the balance is in his favour4.
1 Indian Trusts Act 1882 section 35; Chadwick v Heatley (1845) 2 Coll 137; Re Wright’s Trusts (1857) 3 K&J 419. If such
an acknowledgment is refused, the trustee may insist on the account being taken by the court: Chadwick v Heatley
above.
2 Re Cater’s Trusts (No 2) (1858) 25 Beav 366 at 367 per Romilly MR; Tiger v Barclays Bank Ltd [1951] 2 KB 556 :
[1951] 2 All ER 262, affd on a different point [1952] 1 All ER 85, CA.
3 Rajaram Devai v Lakshmi Sankara (1903) 13 Mad LJ 206.
4 Maharaja Sirish Chandra Nandy v Supravat Chandra Nandy AIR 1940 Cal 337 : (1940) ILR 1 Cal 372 : 190 IC 295.
End of Document
[290.160] General authority for protection of interest of trust
Part One TRUSTS
II. TRUSTEES

In addition to the powers expressly conferred on a trustee1 under the Indian Trusts Act 1882 and the trust deed, a
trustee is empowered to do all acts which are reasonable and proper for the realization, protection and benefit of
the trust property, and for the protection and support of a beneficiary who is not competent to contract2.
However, a trustee is prohibited from leasing out the trust property for more than 21 years or without reserving the
best yearly rent that can be reasonably obtained, except with the permission of the court3. A trustee cannot grant a
fresh lease in advance because that will tend to fetter the discretion of his successor. However, he is entitled to
obtain a surrender of a lease from the lessee before its expiry and to grant a fresh lease with effect from the date of
surrender4, though if there is an express prohibition against leasing under the trust document, the implied power of
the trustee will not exist5. Where temple properties are leased out by the trustee of a temple, the presumption is
against the existence of a permanent tenancy and the onus of proving such a tenancy is on those who allege its
existence6. The principle is that the lease of trust property, which is in excess of the trustee’s power is not void, but
only voidable. Where, the defendant trust, fails to take any action to declare the lease deeds as voidable, it would
be estopped from later denying the validity of the lease7. A lease of property of public trust for over a period of 21
years is void8.
A trustee can carry out any repairs regarding the trust property without going to the court9. The court will not
interfere with the discretionary powers of a trustee even at the behest of the beneficiaries, in the absence of an
allegation of mismanagement10. The general authority of a trustee will not include a right to sell the trust property,
which must be decided from the investment of the trust or from the directions of the court11. Where it is impractical
to have the property repaired and it will be an act of prudence to sell the property, though the trustee does not have
such power under the trust document, the trustee must invoke the jurisdiction of the court to sanction a sale12. The
act of a trustee will not be justified when he has the power to sell but he delivers possession of the property without
receiving the sale price13.
A lease which is executed by one of the trustees who is not the managing trustee, to the exclusion of other co-
trustees, is bad in the eyes of law and will not convey any right, title or interest to the lessee14. All trustees are one
collective trustee exercising their powers jointly15.
The principle underlying section 36 is based on equity and good conscience and can be applied to public trusts as
well16.
Page 2 of 2
1 See Mathu Sree Akkabai Ammani Charitable Trust v Samikkannu 2013 (1) LW 136; Karnataka Traders, Hubli v Hiren
Shamji Karamsey AIR 1987 Kant 204 [LNIND 1987 KANT 98]: (1987) ILR Kant 568 (the word “trustee” used in the
Indian Trusts Act 1882 section 36 though used singularly would include a body of trustees); see also PSomasundaram
Chettiar v Committee of Management AIR 1992 Mad 341 [LNIND 1992 MAD 164]; Shiv Prasad Singh v Prayag Kumari
AIR 1935 Cal 39; Muppidari v Pattamuthu Mudaliar AIR 1953 Mad 624 [LNIND 1951 MAD 388]; Dalip Kumar Sain v
Nanda Rani Dassi AIR 1970 Cal 292 [LNIND 1969 CAL 188]; Chidambaram Sivaprakasa Pandara Samadhigal v
Veerama Reddi AIR 1922 PC 292; Seturatnam Aiyar v Venkatachala Gounder AIR 1920 PC 67; Niamani Poricha v
Appanna Poricha AIR 1936 Mad 14 [LNIND 1935 MAD 278]; Ramabai v Raghunath Vasudeo AIR 1952 Bom 106
[LNIND 1951 BOM 106].
2 Indian Trusts Act 1882 section 36. This is subject to any restrictions contained in the trust instrument and to the
trustee’s duty to act impartially under section 17, as to which see [290.199].
4 State of Gujarat v Pirojsha P Contractor (1972) ILR Guj 45 (a lease by a trustee for a term exceeding 21 years is not
void and illegal under the Indian Trusts Act 1882 section 36 but only voidable at the instance of the beneficiary);
Neelayathakathoot Lakshmi Amma v Neelayathakathoot Kunhi Raman (1932) Mad WN 543 (it was held that no
anticipatory lease can be granted: a fresh lease may be affected for the expiry of the pending lease only after the
surrender of the pending lease is obtained). See also Karnataka Traders, Hubli v Hiren Shamji Karamsey AIR 1987
Kant 204 [LNIND 1987 KANT 98]: (1987) ILR Kant 568.
5 Kadir Ibrahi Rowthen v Arunachellam Chettiar ILR 33 Mad 397 : 19 Mad LJ 737; Sinaya Pillai v Munisami Avyan ILR 22
Mad 289 : 9 Mad LJ 64; Mayan Pathuti v Pakuran ILR 22 Mad 348 : 9 Mad LJ 98; Tumer v Bank of Bombay ILR 25
Bom 52 : 2 Bom LR 803.
6 Chinnammal v Patnasabapathy Chettiar 59 IC 241 : 12 LW 191 : (1920) Mad WN 532.
7 Mathu Sree Akkabai Ammani Charitable Trust v Samikkannu 2013 (1) LW 136.
8 Bishop of Bangor v Parry [1891] 2 QB 277 .
9 Dalim Kumar Sain v Nandarani Dassi AIR 1970 Cal 292 [LNIND 1969 CAL 188]: 73 Cal WN 877 (vide the Indian
Trusts Act 1882 sections 34 and 36).
10 Mawjibhai Herjee v Muljibhoy Rahimbhai 4 Bom LR 199.
11 Rambai Govind v Raghunath Vasudeo AIR 1952 Bom 106 [LNIND 1951 BOM 106]: 53 Bom LR 883 (the limitation
imposed by the Indian Trusts Act 1882 section 36 on long term leases suggests that a trustee has no general
discretionary power to sell the property).
12 Re Shirinbai Merwanji Dalal ILR 43 Bom 519.
13 Tirunarayana Pillai v P R Y Manikavachagam Chettiar AIR 1934 Mad 448 [LNIND 1933 MAD 267]: 67 Mad LJ 222 :
(1934) Mad WN 460 (the cause of action for breach of trust survives against the legal representatives of a deceased
trustee, and does not die with him).
14 Karnataka Traders, Hubli v Hiren Shamji Karamsey AIR 1987 Kant 204 [LNIND 1987 KANT 98]: (1987) ILR Kant 568.
15 Janakirama L Iyer and S R Koothananiar Pillai v P M Nilakanta Iyer AIR 1962 SC 633 [LNIND 1961 SC 338](as per the
Indian Trusts Act 1882 section 48).
16 Sanjay Gupta and Picnic Park Hotels Pvt Ltd v The Corp of Chennai and Victoria Public Hall Trust 2011 (3) CTC 58
[LNIND 2011 MAD 1704].
End of Document
[290.161] Acceptance of tender for the development of the trust property
Part One TRUSTS
II. TRUSTEES
[290.161] Acceptance of tender for the development of the trust property

Where tenders were floated for the development of trust property by the trustees and the tender of a contractor was
approved in accordance with proper rules, the Joint Commissioner upheld the tender, as the same was made
bonafide and without any intention to favour one contractor over another1.
1 A R Khan Construwell Co v Youth Educaiton and welfare Society, Nasik AIR 2005 Bom 123 [LNIND 2004 BOM 1053].
End of Document
[290.162] Power of sale of trust property
Part One TRUSTS
II. TRUSTEES
[290.162] Power of sale of trust property

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 directs1.
The trustee has no power to sell the property unless the trust deed empowers him to do so2. Even where he has the
power to sell the property he must exercise it in good faith3 and should receive the purchase price4. Where the
trustee sells the property and misapplies the proceeds but there is nothing to show that the purchaser had colluded
with the executor to obtain trust property at a nominal price or at fraudulent undervalue or in order to extinguish the
private debt of the executor, he may not be said to be a participant in the breach of trust and held for mis-
application5.
1 See the Indian Trust Act 1882 section 37; see also Foulkes Chettiar v Suppan Chettiar AIR 1951 Mad 296 [LNIND 1949
MAD 274]; Kaushlendra Prasad Narain Singh v State of Bihar AIR 1978 Pat 64; Khajamian Wakf Estates v State of
Madras AIR 1971 SC 161 [LNIND 1970 SC 455].
2 Ramabai v Raghunath Vasudeo AIR 1952 Bom 106 [LNIND 1951 BOM 106].
3 Fatima Fronzia v Sayeed-ul-Mulk (1978) 2 Andh LT 124.
4 Tirunarayan Pillai v P R Y M Chettiar AIR 1934 Mad 448 [LNIND 1933 MAD 267].
5 Joesph Carlos Xavier Louis Anthony Benedict Aldo Costa v Stanislaus V Costa AIR 1968 Mad 161 [LNIND 1965 MAD
118].
End of Document
Charities, Vol 37) 2nd ed > Part One TRUSTS > II. TRUSTEES > 10. DISABILITIES OF
TRUSTEES > A. Trustee Cannot Renounce After Acceptance
Part One TRUSTS
II. TRUSTEES
10. DISABILITIES OF TRUSTEES
A. TRUSTEE CANNOT RENOUNCE AFTER Acceptance
A trustee who has accepted the trust cannot afterwards renounce it except:
(1) with the permission of a principal civil court of original jurisdiction;
(2) if the beneficiary is competent to contract, with his consent; or
(3) by virtue of a special power in the instrument of trust1.
A person who has once undertaken the office of a trustee either by actual or constructive acceptance cannot
escape liability by a mere subsequent renunciation2 which is not in accordance with the conditions laid down3.
Where 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 trustee in respect thereto and further agrees to confirm to the terms of the instrument
creating the trust, the defence that the transaction in relation to the amount is not a trust is not open to him. In those
circumstances the beneficiary and the co-trustees will be entitled to a preferential charge over the outstanding debts
in the event of his bankruptcy4.
The power to appoint new trustees will not empower the existing trustees to substitute new trustees in their own
place, that is, in place of the existing trustees5. A trustee acting under a trust which he knows or subsequently
discovers to be void or invalid is not bound to surrender the possession of the property before he can be allowed to
repudiate by giving evidence to explain away his admissions arising out of his conduct as a so-called trustee6.

2 Sheikh Abdul Kayum v Mulla Alibai AIR 1963 SC 309 [LNIND 1962 SC 268]: (1963) Mad LJ 49, wherein it was held
that the trustees cannot renounce nor delegate their powers in spite of there being a clause in the deed that they can
appoint new trustees from time to time.
3 Ie as under the Indian Trusts Act 1881 section 46; Vrandavan Bhaichand Shah v Parshottam Motichand Shah AIR
1927 Bom 75 : 99 IC 763.
4 Krishnadas Govardhandas Madivale v Ratanbai Gokuldas Laxmandas AIR 1941 Bom 41 : 193 IC 718: it is not open to
the trustee to contend that the character in which he holds the property is different from that of the trustee.
Page 2 of 2
5 Sheikh Abdul Kayum v Mulla Alibai AIR 1963 SC 309 [LNIND 1962 SC 268]: (1963) Mad LJ 49.
6 Krishna Bai v Dhondo Ramchandra AIR 1924 Ngp 129 : 78 IC 542.
End of Document
TRUSTEES > B. Bar Against Delegation
Part One TRUSTS
II. TRUSTEES
B. BAR AGAINST Delegation
Fiduciary duties cannot be made the subject of a delegation1. A trustee cannot delegate the performance of acts
that he ought personally to perform2. An agreement to do so is illegal and void3. He cannot delegate his office or
any of his duties either to a co-trustee or to a stranger4.
The principles of private charitable trusts are applicable to public charitable trusts as well, which includes the bar on
delegation provided under section 47 and thus where the power of electing the office bearers was delegated by the
Trustee of a public trust it was considered dereliction of duty5.
1 Fazaa Foundation Trust rep by its duly authorized and constituted Attorney, Sri Munnavar H Mehdi v Shaheda H Mehdi
2009 (5) Andh LD 30 : 2009 (5) All LT 429; Shyamabai Wd/o Surajkaran Joshi v Madan Mohan Mandir Sanstha a
Public Trust by Trustee Bhaiji Kanji Ganatra AIR 2010 Bom 88 [LNIND 2009 NGP 547]: 2010 (1) ALL MR 648 : 2010
(1) Bom CR 294 [LNIND 2009 NGP 547] : 2011 (2) CHN 473 : 2011(1) CTC 771; Ch Hoshiar Singh Mann v Charan
Singh 162 (2009) DLT 208; M/s RS Puran Mull Trust v M/s Dyal Sons 2013(2) RCR (Rent) 507; Shyamabai Wd/o
Surajkaran Joshi v Madan Mohan Mandir Sanstha 2014 (2) Bom CR 436 : 2014 (1) ALL MR 810 : 2014 (2) Mah LJ
547; K S Bonnerji, Official Receiver v Sitanath Das AIR 1922 PC 209 : (1922) Mad WN 98.
2 Re H E H the Nizam’s Jewellery Trust (with Shanti Vijay & Co v Princess Fatima Fauzia) AIR 1980 SC 17 : (1979) 4
SCC 602.
3 Mahadeo Jew v Balkrishna Vyas AIR 1952 Cal 763 [LNIND 1951 CAL 226].
4 Indian Trusts Act 1882 section 47; Shyamabai Wd/o Surajkaran Joshi v Madan Mohan Mandir Sanstha a Public Trust
by Trustee Bhaiji Kanji Ganatra AIR 2010 Bom 88 [LNIND 2009 NGP 547]: 2010 (1) ALL MR 648 : 2010 (1) Bom CR
294 [LNIND 2009 NGP 547] : 2011 (2) CHN 473 : 2011 (1) CTC 771; Fazaa Foundation Trust rep by its duly authorized
and constituted Attorney, Sri Munnavar H Mehdi v Shaheda H Mehdi 2009 (5) Andh LD 30 : 2009 (5) All LT 429; Ch
Hoshiar Singh Mann v Charan Singh 162 (2009) DLT 208; RS Puran Mull Trust v Dyal Sons 2013 (2) RCR (Rent) 507;
Shyamabai Wd/o W Surajkaran Joshi v Madan Mohan Mandir Sanstha 2014 (2) Bom CR 436,2014 (1) ALL MR 810 :
2014 (2) Mah LJ 547.
5 Ch Hoshiar Singh Mann v Charan Singh 162 (2009) DLT 208.
Page 2 of 2
End of Document
[290.165] Powers which cannot be delegated
Part One TRUSTS
II. TRUSTEES

Where the instrument of the trust appoints three persons to act as trustees it is the duty of every one of them to
exercise and give the benefit of his individual discretion in all matters concerning the trust1. Trustees empowered to
appoint successors cannot delegate that power. Where the right to appoint the trustees of a trust fund belonged to a
certain community and it did not delegate to the trustees appointed by it the power of appointing their successors,
and even though the power was exercised (rightly or wrongly) by the trustees for 50 to 60 years, the successor
trustees thus appointed were not validly appointed trustees and could not claim a legal right to nominate or appoint
their successors without the intervention of the community2. Where the trustee was under an obligation to sell the
trust property and pay off the debts, and the trustee after selling the property left it to the purchasers to pay off the
creditors, the court held that it was a delegation of the duty of the trustees and hence would be struck by the
statutory prohibition3. Where the directors of an insurance company are authorised to invest the policy-holder’s trust
fund in the purchase of house property, the duty of deciding which property is to be purchased cannot be delegated
to a committee but must be decided unanimously by the directors4.
A trustee cannot appoint an agent to do acts in which judicial discretion was intended to be exercised by himself5.
The power of appointment and dismissal of hereditary temple servants is not one of the powers which can be
delegated to an agent6. However, it does not prohibit the appointment of a power of attorney to represent the trust,
but where the trust has not passed a resolution to that effect and furnished reasons for the appointment of the
power of attorney, such appointment could not take place7.
A trustee who renounces after acceptance cannot delegate his duties to others8. Where the founder of a religious
endowment may be supposed to have established a corporation with the distinct object of securing the due
performance of the worship and the due administration of the property by the instrumentality and at the discretion of
its members, they have no power under the common law of India to transfer that right9. It is open to the trustee or
the shebait to appoint a sub-agent, but this appointment must only be as a means of carrying out his duties himself
and not for the purposes of delegating those duties by means of such appointment10. The mahant of an Asthan and
temple is in a position of a mere trustee. He has no power to appoint a trustee of the property of which he is the
trustee. Consequently the deed by which such a person creates a trust is void. A trustee has no power to transfer
his trust to another person11. The statement by the benamidar in a compromise in a suit that certain properties
standing in his name belong to a person other than the true owner of the properties would, even assuming they had
the effect of a conveyance for transfer of the office of trustee, be invalid in operation12.
Page 2 of 2
If the trustees voluntarily agree to an arrangement by which one of them is entitled to manage either by turn or for a
certain period, he is bound by the action of all; but the majority of trustees cannot claim that one of them will have
all rights of management and prevent the others who are the minority from taking part in the management13 or that
some of the trustees would act according to their directions14.
1 Sri Mahadeo Jew v Balkrishna Vyas AIR 1952 Cal 763 [LNIND 1951 CAL 226]: where a subsequent settlement
provides that one of the trustees called a managing trustee should be supreme trustee and the other trustees should
act according to his directions such a provision is illegal as violating the Indian Trusts Act 1882.
2 Sir Dinshah v Sir Jamshedji 2 IC 701.
3 Ie by the Indian Trusts Act 1882 section 17: Janakirama L Iyer and S R Koothananiar Pillai v P M Nilakanta Iyer AIR
1962 SC 633 [LNIND 1961 SC 338].
4 United India Life Assurance Co v S Krishna Rao AIR 1934 Mad 411 [LNIND 1933 MAD 276]: 152 IC 965.
5 Parasurama Udayan v A Vedaji Baskar Thirmal Row 44 Mad 636. See Krishnamacharlu v Rangacharlu ILR 16 Mad 73
(the person in possession of certain lands subject to the performance of a religious trust from the income thereof
executed a document empowering the plaintiff to hold the possession of the land for a certain number of years and to
collect the income and apply it properly for the purposes of the trust. Though the document was headed “Trust Deed”
and the plaintiff was styled as trustee, there was no assignment of the trust so as to render the trust inoperative. It was
held that the relation created thereby was only of the principal and agent for a limited period without empowering the
original trustees with responsibility to carry on the trust).
6 Parasurama Udayan v A Vedaji Baskar Thirmal Row 44 Mad 636; see also Krishnamacharlu v Rangacharlu 16 Mad 73.
7 Fazaa Foundation Trust rep by its duly authorized and constituted Attorney, Sri Munnavar H Mehdi v Shaheda H Mehdi
2009 (5) Andh LD 30 : 2009 (5) All LT 429.
8 Fatima Fauzia v Syed Ul-Mulk AIR 1979 AP 229 [LNIND 1979 AP 47]: (1979) 1 AP LJ (HC) 264 [LNIND 1979 AP 47].
9 Rajah Vurma Vahi v Ravi Vurmah Kunhi Kutty 1 Mad 235 : 4 IA 76.
10 Gopal Sridhar Mahadev v Sashi Bhushan Sarkar AIR 1933 Cal 109 : 142 IC 465.
11 Sridhar v Dharam Das 3 IC 549 : 12 OC 236.
12 Visvanatha Aiyar v Vengama Naidu AIR 1924 Mad 749 : 78 IC 52.
13 D Gopalaswami Mudaliar v Subramanya Pillai AIR 1942 Mad 397 [LNIND 1942 MAD 33]: 55 Mad LW 98. See also
Kishor Joo v G B Joo AIR 1978 All 1 [LNIND 1977 ALL 2], wherein it was held that one trustee alone cannot apply for
the execution of the trusts where the instrument of trust provided otherwise.
14 Mahadeo Jew v Balkrishna Vyas AIR 1952 Cal 763 [LNIND 1951 CAL 226].
End of Document
[290.166] Exceptions to bar on delegation
Part One TRUSTS
II. TRUSTEES

Delegation by a trustee of his powers and duties is permissible in the following circumstances1:
(1) if permitted by the trust instrument2;
(2) if it is in the regular course of business3;
(3) if delegation is necessary4;
(4) if the beneficiary consents to delegation5.
It is evident from the plain language of section 47 of the Indian Trusts Act 1882 that a trustee cannot delegate his
office or any of his duties either to a co-trustee or to a stranger. There can be delegation in the regular course of
business and if the delegation is necessary, a resolution passed by all the trustees authorizing the honorary
secretary to file an eviction petition would be such a valid delegation of powers and would be necessary and
permissible6. A trustee is not bound to undertake a business for which he is not qualified. He can appoint an agent
to do that7. Thus the power to appoint an agent exists in a trustee where expert knowledge is required or where it is
usual according to the course of business8. The appointment of an attorney by the guardian of a minor for the
purposes of securing a loan would be an act which is in the regular course of business9. Independently of the
provisions in the instrument creating the trust10, a trustee may allow a co-trustee, or employ an accountant, bailiff,
banker broker, solicitor, workman or other agent, to act for him in the affairs of the trust, and to receive and hold
trust money and property where he is obliged to do so by common usage and would, if he were a prudent man of
business, do so in a similar affair of his own11. In every case the trustee must select the agent prudently and in good
faith12 and may employ him only so far as the matter properly lies within his professional capacity or his position as
agent13. The trustee should supervise him with common prudence and allow him to retain trust property only so long
as the matter requires14. A trustee cannot, however, divest himself of the trust by employing an agent, and may not,
therefore, entrust the agent with duties to any extent which the agent is willing to undertake, or pay to him any
remuneration which he sees fit to demand15.
The appointment of an attorney or proxy to do an act merely ministerial and involving no independent discretion is
not a delegation and can be done16.
Delegation to a committee of trustees by all the trustees of powers of management is not invalid17. Arrangements
among trustees for the management of the institution of trust are not an alienation of the office or delegation of the
duties of the office, because ex hypothesi the arrangement is made between persons who are jointly entitled to act
Page 2 of 3
as trustees18. Appointment of a managing trustee does not involve a legal question of the trustees delegating their
powers to others19. The mere act of registration of a document of alienation requires no further exercise of
discretion on the part of the trustee and can be delegated to an agent20.
A trustee is not vicariously liable for the default of his agent21 if he employs a properly qualified agent22. However, a
trustee who employs a solicitor, auctioneer, broker or other agent in connection with the trust estate enters into a
personal contract with him and is personally liable on it23.
1 As exceptions to the general bar on delegation, as to which see [290.164]: see the Indian Trusts Act 1882 section 47;
see also Fazaa Foundation Trust rep by its duly authorized and constituted Attorney, Sri Munnavar H Mehdi v Shaheda
H Mehdi 2009 (5) Andh LD 30 : 2009 (5) All LT 429; Ch Hoshiar Singh Mann v Charan Singh 162 (2009) DLT 208; M/s
RS Puran Mull Trust v M/s Dyal Sons 2013(2) RCR (Rent) 507; Shyamabai Wd/o Surajkaran Joshi v Madan Mohan
Mandir Sanstha 2014 (2) Bom CR 436 : 2014 (1) ALL MR 810 : 2014 (2) Mah LJ 547; Koka Sivananda Sastry v
Samasthanam Choultry (1968) 2 Andh WR 260; Re H E H The Nizam Jewellary Trust AIR 1980 SC 17; Dulichand v
Mahabir Pershad Trilokchand Charitable Trust AIR 1984 Del 145 [LNIND 1983 DEL 272]; Atmaram Ranchhodbhai v
Ghulam Hussain Ghulam Muhiyadin AIR 1973 Guj 113 [LNIND 1972 GUJ 97]; Jankirama Iyer v Neelakanta Iyer AIR
1962 SC 633 [LNIND 1961 SC 338]; United India Life Associaiton Co v Krishna Rao AIR 1934 Mad 411 [LNIND 1933
MAD 276]; K S Bonnerji v Sitanath Das AIR 1922 PC 202; Viswanatha Aiyar v Vengama Naidu AIR 1924 Mad 729
[LNIND 1923 MAD 305]; Firm Ramlochan Ram Lakshmi Prasad v Maikha Sethani AIR 1960 Pat 271; Sri
Thiveruvengada Ramanujachariar v Governemtn of Tamil Nadu (1978) ILR 3 Mad 278.
2 Sheikh Abdul Kayum v Mulla Alibai AIR 1963 SC 309 [LNIND 1962 SC 268]: (1963) Mad LJ 49: where the trust deed
empowered the existing trustees to appoint new trustees from time to time, the trustees were not empowered to
delegate their powers to the new trustees completely but could merely add to the number of trustees.
3 Indian Trusts Act 1882 section 47; RS Puran Mull Trust v Dyal Sons 2013(2) RCR (Rent) 507; Fazaa Foundation Trust
rep by its duly authorized and constituted Attorney, Sri Munnavar H Mehdi v Shaheda H Mehdi 2009 (5) Andh LD 30 :
2009 (5) All LT 429; Shyamabai Wd/o Surajkaran Joshi v Madan Mohan Mandir Sanstha a Public Trust by Trustee
Bhaiji Kanji Ganatra AIR 2010 Bom 88 [LNIND 2009 NGP 547]: 2010 (1) ALL MR 648 : 2010 (1) Bom CR 294 [LNIND
2009 NGP 547] : 2011 (2) CHN 473 : 2011 (1) CTC 771; Ch Hoshiar Singh Mann v Charan Singh 162 (2009) DLT 208;
Shyamabai Wd/o Surajkaran Joshi v Madan Mohan Mandir Sanstha 2014 (2) Bom CR 436 : 2014 (1) ALL MR 810 :
2014 (2) Mah LJ 547.
4 Parasurama Udayan v A Vedaji Baskar Thirmal Row 44 Mad 636; Firm Ramlochan Ram Lakshmi Prasad v Maikha
Sethania AIR 1960 Pat 271 : (1959) BLJR 769 (for looking after the property and managing the ancestral business of a
minor the guardian, who herself was a pardanashin lady, could validly appoint a special power of attorney).
5 Indian Trusts Act 1882 section 47; Ch Hoshiar Singh Mann v Charan Singh 162 (2009) DLT 208; Shyamabai Wd/o
Surajkaran Joshi v Madan Mohan Mandir Sanstha a Public Trust by Trustee Bhaiji Kanji Ganatra AIR 2010 Bom 88
[LNIND 2009 NGP 547]: 2010 (1) ALL MR 648 : 2010 (1) Bom CR 294 [LNIND 2009 NGP 547] : 2011 (2) CHN 473 :
2011 (1) CTC 771; M/s RS Puran Mull Trust v M/s Dyal Sons 2013(2) RCR (Rent) 507; Fazaa Foundation Trust rep by
its duly authorized and constituted Attorney, Sri Munnavar H Mehdi v Shaheda H Mehdi 2009 (5) Andh LD 30 : 2009 (5)
All LT 429; Shyamabai Wd/o Surajkaran Joshi v Madan Mohan Mandir Sanstha 2014 (2) Bom CR 436 : 2014 (1) ALL
MR 810 : 2014 (2) Mah LJ 547.
6 R S Puran Mull Trust v Dyal Sons 2013 (2) RCR (Rent) 507.
7 Robinson v Harkin [1896] 2 Ch 415 . An agent of a trustee is not liable to the cestui que trust though a substitute
trustee is: Myler v Fitzpatrick (1820) 6 Madd 363. See also Chidambaram Chetti v Pichappa Chetti 30 Mad 243 : 2 Mad
LT 236.
8 Parasurama Udayan v A Vedaji Baskar Thirumal Row AIR 1921 Mad 623 [LNIND 1921 MAD 7]: 63 IC 364.
9 K S Banerjee, Official Receiver v Sitanath Dass AIR 1922 PC 209. See also Firm Ramlochan Ram Lakshmi Prasad v
Maikha Sethania AIR 1960 Pat 271 : (1959) BLJR 769.
10 As to provisions in the trust instrument see Doyle v Blake (1804) 2 Sch & Lef 231 at 245 per Lord Redesdale LC;
Shepherd v Harris [1905] 2 Ch 310 . The nomination in the trust instrument of a particular agent has always been
held to relieve trustees from any responsibility for employing him in the absence of laches on their part (Gibbs v Herring
(1692) Prec Ch 49; Kilbee v Sneyd (1828) 2 Mol 186 at 200), but a person nominated as agent has no right to compel
the trustees to employ him (Finden v Stephens (1846) 2 Ph 142), or to continue him in employment (Shaw v Lawless
(1838) 5 Cl & Fin 129, HL; Belaney v Kelly (1871) 19 WR 1171; Foster v Elsley (1881) 19 ChD 518 ; but see
Williams v Corbet (1837) 8 Sim 349).
11 Bonithon v Hockmore (1685) 1 Vern 316; A-G v Scott (1750) 1 Ves Sen 413 at 417-418 per Lord Hardwicke LC; Re
Parsons, ex p Belchier, ex p Parsons (1754) Amb218; Henderson v M‘Iver (1818) 3 Madd 275; Clough v Bond (1838) 3
My & Cr 490 at 497 per Lord Cottenham LC; Wilks v Groom (1856) 3 Drew 584; Wilkinson v Bewick (1858) 4 Jur NS
Page 3 of 3
1010; Benett v Wyndham (1862) 4 De GF&J 259 at 263; Re Bird, Oriental Commercial Bank v Savin (1873) LR 16 Eq
203; Speight v Gaunt (1883) 9 App Cas 1 , HL (broker); Re Brier, Brier v Evison (1884) 26 ChD 238 , CA; Learoyd
v Whiteley (1887) 12 App Cas 727 at 731, 734, HL; Shepherd v Harris [1905] 2 Ch 310 ; Re Munton, Munton v
West [1927] 1 Ch 262 , CA; Re Lucking’s Will Trusts, Renwick v Lucking [1967] 3 All ER 726 : [1968] 1 WLR 866 .
A trustee may employ an agent to collect small debts (Re Brier, Brier v Evison above), and may remit or collect money
through a bank and keep a bank account for the purpose in his name as a trustee (Knight v Earl of Plymouth (1747) 1
Dick 120; Re Parsons, ex p Belchier, ex p Parsons above at 219 per Lord Hardwicke LC; Wren v Kirton (1805) 11 Ves
377; Johnson v Newton (1853) 11 Hare 160; Fenwick v Clarke (1862) 4 De GF&J 240). Where there are several
trustees, the bank account must be in the names of all, and they may not authorise the bank to pay cheques signed by
one of their number: Clough v Bond (1838) 3 My & Cr 490 at 497-498; Trutch v Lamprell (1855) 20 Beav 116. A
crossed cheque signed by all may, however, be entrusted to one of them for delivery to a beneficiary: Re Lake Bathurst
Australasian Gold Mining Co, Barnard v Bagshaw (1862) 3 De GJ & Sm 355. A trustee may allow an auctioneer who
sells trust property to receive the deposit money (Edmonds v Peake (1843) 7 Beav 239), and a solicitor to receive
money on payment off of a mortgage (Wyman v Paterson [1900] AC 271 at 288, HL, per Lord Davey), but not to
retain it unduly (Wyman v Paterson above; Williams v Byron (1901) 18 TLR 172; Re Sheppard, De Brimont v Harvey
[1911] 1 Ch 50).
12 Fry v Tapson (1884) 28 ChD 268 at 281 per Kay J; Re Weall, Andrews v Weall (1889) 42 ChD 674 at 678 per
Kekewich J; Rochfort v Seaton [1896] 1 IR 18 at 24-25 per Chatterton V-C; Robinson v Harkin [1896] 2 Ch 415 at
423-424 per Stirling J. Neither the creator of the trust nor the beneficiaries may dictate to a trustee what particular
person he is to employ (Shaw v Lawless (1838) 5 Cl & Fin 129, HL; Foster v Elsley (1881) 19 ChD 518 ; Re Duke of
Cleveland’s Settled Estates [1902] 2 Ch 350 ); but see Williams v Corbet (1837) 8 Sim 349. He must select a broker
or valuer himself and not leave the choice to his solicitors (Fry v Tapson (1884) 28 ChD 268 at 281; Robinsons v
Harkin [1896] 2 Ch 415 ) and, when lending on mortgage, he should not employ as a valuer the agent of the
mortgagor (Fry v Tapson above).
13 Rowland v Witherden (1851) 3 Mac & G 568 at 574; Fry v Tapson (1884) 28 ChD 268 at 281; Re Dewar, Dewar v
Brooke (1885) 33 WR 497; Re Weall, Andrews v Weall (1889) 42 ChD 674 at 678; Robinson v Harkin [1896] 2 Ch
415 at 423-424.
14 Matthews v Brise (1843) 6 Beav 239 at 244 (affd (1845) 15 LJ Ch 39); Wyman v Paterson [1900] AC 271 , HL; Re
Lucking’s Will Trusts, Renwick v Lucking [1967] 3 All ER 726 : [1968] 1 WLR 866 . A trustee must not leave trust
money in a bank for an unduly long time: Moyle v Moyle (1831) 2 Russ & M 710; Matthews v Brise (1843) 6 Beav 239;
Challen v Shippam (1845) 4 Hare 555; Gibbins v Taylor (1856) 22 Beav 344; Rehden v Wesley (1861) 29 Beav 213;
Cann v Cann (1884) 51 LT 770.
15 Re Weall, Andrews v Weall (1889) 42 ChD 674 at 678. Where a trustee is under a court order allowed a
commission for managing the trust estate and receiving the rents, he may not pay out of the trust fund a further
commission to a rent collector employed by him: Cox v Bennett (No 1) (1891) 39 WR 308, CA.
16 Indian Trusts Act 1882 section 47 explanation. The appointment of a sub-agent by a trustee is not a delegation of
powers, but an appointment to perform ministerial duties without involving independent discretion: Gopal Sridhar
Mahadeb v Sashi Bhushan Sarkar AIR 1933 Cal 109 : 142 IC 465. See also Elizabeth May Toomey v Bhupendra Nath
Bose AIR 1928 Pat 304 : 111 IC 57.
17 Meppalli Raman Nambudri v Uralars Committee Members of Taliparamba Trichambaram and Kanhirangat Devaswoms
AIR 1934 Mad 672 : 152 IC 632.
18 Nilamani Poricha v Appanna Poricha AIR 1936 Mad 14 [LNIND 1935 MAD 278]: 160 IC 511.
19 Shanmuga Mudali v Arunagiri Mudali AIR 1932 Mad 658 [LNIND 1932 MAD 89]: 140 IC 443.
20 Elizabeth May Toomey v Bhupendra Nath Bose AIR 1928 Pat 304 : 111 IC 57.
21 Re Parsons, ex p Belchier, ex p Parsons (1754) Amb 218; Benett v Wyndham (1862) 4 De GF&J 259; Speight v Gaunt
(1883) 9 App Cas 1 , HL; Re Weall, Andrews v Weall (1889) 42 ChD 674 at 678 per Kekewich J.
22 Re Weall, Andrews v Weall (1889) 42 ChD 674 at 678; Re Duke of Cleveland’s Settled Estate [1902] 2 Ch 350
at 353 per Joyce J.
23 Staniar v Evans, Evans v Staniar (1886) 34 ChD 470 at 476-477 per North J; Re Blundell, Blundell v Blundell (1888)
40 ChD 370 at 376 per Stirling J. A solicitor employed by a trustee has no lien on the trust estate for his costs:
Staniar v Evans, Evans v Staniar (1886) 34 ChD 470 at 477.
End of Document
[290.167] Delegation when permissible
Part One TRUSTS
II. TRUSTEES
[290.167] Delegation when permissible

All trustees must execute the duties of their office jointly regarding the trust and the delegation is improper1 but
when the trustees authorise one of them to file the petition then the filing of petition by one of the trustees would be
valid2. Where the co trustees allow the co trustee to receive the trust property but fails to make due enquires as to
how his co-trustees deal therewith or allows him to retain it longer than the circumstances of the case reasonably
require he would be liable3.
Even though sections 47 and 48 of the Indian Trusts Act 1882 do not apply in terms to public trusts, there are some
common principles, which are not out of bounds or which do not become “untouchable” when it comes to their
application to public trusts. One such principle is of the general rule against delegation which also applies to public
trusts, but it is subject to certain exceptions, such as where there is express sanction or approval of the act by the
co-trustees or where the delegation of power is necessary or where the beneficiaries competent to contract consent
to the delegation or where the delegation to a co-trustee is in regular course of business etc4.
1 Luke v South Kinsington Hotel Co (1879) 11 ChD 121 ; Shyamabai W Surajkaran Joshi v Madan Mohan Mandir
Sanstha 2014 (2) Bom CR 436 : 2014 (1) ALL MR 810 : 2014 (2) Mah LJ 547.
2 JP Srivastava v Gwalior Sugar Co (2005) 1 SCC 172 [LNIND 2004 SC 1096] : (2004) 122 Comp Cas 696.
3 Vrandaban Bhaichand v Purshttam Motichand AIR 1927 Bom 25 : 28 Bom LR 1481.
4 Shyamabai W Surajkaran Joshi v Madan Mohan Mandir Sanstha 2014 (2) Bom CR 436 : 2014 (1) ALL MR 810 : 2014
(2) Mah LJ 547.
End of Document
[290.168] Delegation of power to agent
Part One TRUSTS
II. TRUSTEES
[290.168] Delegation of power to agent

The trustee must decide the matter relating to alienation of trust property himself by exercising his independent
judgment1 and thus this power may not be delegated to an agent2. Decisions to remove the Konam by the trustee in
conjunction with a stranger would be an illustration of invalid delegation of power and the trustee would be liable for
breach of trust3. The question of whether to appoint a servant for the temple or not is a matter the decision of which
cannot be delegated by the trustee and he must take a decision personally4. However, a notice to terminate lease
given by the power of attorney on behalf of the trustees is valid5.
1 Gopal Sridhar Mahadev v Sashi Bhusan Sankar AIR 1933 Cal 109 : 60 Cal 111 : 36 Cal WN 1108 : 73 IC 491.
2 Robson v Flight (1865) 4 De GJ & Sm 691.
3 Shankaran Nambi v Devagi AIR 1922 Mad 259 [LNIND 1922 MAD 7]: 48 Mad LJ 572 : (1922) Mad WN 428 : 16 Mad
LW 26 : 73 IC 491.
4 Parasurama Udaiyar v Tirumal Rao AIR 1921 Mad 623 [LNIND 1921 MAD 7]: 44 Mad 636 : 41 Mad LJ 17 : 1921 Mad
WN 533 : 63 IC 364; Kirshnamachrylu v Rangachaylu (1893) 16 Mad 73.
5 Prem Prakash v Narsingh Bahadur AIR 1989 All 51 [LNIND 1988 ALL 301]: (1989) All WC 197. Under what
circumstances can an agent become constructive trustee see Koka Sivananda Shastry v Samasthanam Choultry
(1968) 2 Andh WR 260.
End of Document
[290.169] Trustee’s personal responsibility
TRUSTEES > C. Duty to Act Personally and Jointly
Part One TRUSTS
II. TRUSTEES
C. DUTY TO ACT PERSONALLY AND Jointly

Subject to the rights of delegation and the employment of agents1 a trustee is personally responsible for the
exercise of his judgment and for the performance of his duty and cannot escape responsibility by leaving to another
person the exercise of that judgment2 or the performance of that duty3, even if he is one of several trustees and the
person to whom he leaves it is his co-trustee4; nor may he allow a stranger to participate in the management and
control of the trust5. If he leaves a trust matter to a co-trustee or employs an agent, he remains liable to his
beneficiary for the acts and conduct of the co-trustee or agent6, except so far as the law allows him to transact the
affairs of the trust through a co-trustee or responsible agent7.
A trustee is liable if he allows the trust property to remain in the custody or under the control of another person8.
Where there are several trustees, one of them may not safely leave the trust property in the sole possession or
under the sole control of another of them9, except where the other is acting in the capacity of broker or agent of the
trustees and is dealing with the property in that capacity10, and except as regards title deeds and documents which
for the sake of convenience may be kept by one of several co-trustees11.
1 See Nagar Machan Mandir v Akber Ali Abdullah Hussain 1994 Mah LJ 280 : (1994) 2 Bom CR 251 [LNIND 1993 BOM
176]; Duli Chand v Mahabir Pershad Trilokchand Charitable Trust AIR 1984 Del 145 [LNIND 1983 DEL 272]; Birdhi
Chand Jain v Kanhaiyalal Shamlal (1972) Rajdhani LR 142; Chettikulam Sri Ekambareshwaraswami v Arunabal
Gounder AIR 1942 Mad 92; Krishnaswami Naidu v V Pillai AIR 1926 Mad 1199 [LNIND 1925 MAD 334]; Kolagada
Poranna v Palthur Veshweshwarayya AIR 1962 Mys 71; Abdul Rahman v Angur Bala AIR 1974 Cal 16 [LNIND 1973
CAL 56]; Mahadeo Vyas v Balakrishna Vyas AIR 1952 Cal 763 [LNIND 1951 CAL 226]; Vadakannu v Anandana
Chatram AIR 1938 Mad 982 [LNIND 1938 MAD 341]; Atmaram Ranchhodhbhai v Ghulam Husien Gulam Mohiyaddin
AIR 1973 Guj 113 [LNIND 1972 GUJ 97].
2 A-G v Scott (1750) 1 Ves Sen 413 at 417-418 per Lord Hardwicke LC; Taylor v Tabrum (1833) 6 Sim 281; Robson v
Flight (1865) 4 De GJ & Sm 608 at 613; Luke v South Kensington Hotel Co (1879) 11 ChD 121 , CA; Re Parry,
Dalton v Cooke [1969] 2 All ER 512 : [1969] 1 WLR 614 . A trustee may, however, consult with the beneficiaries, if
he does not surrender the ultimate exercise of his own judgment: Fraser v Murdoch (1881) 6 App Cas 855 at 864,
HL, per Lord Selborne LC. See also A-G v Scott (1750) 1 Ves Sen 413; Offen v Harman (1859) 1 De GF&J 253; Re
Page 2 of 2
Hetling and Merton’s Contract [1893] 3 Ch 269 at 280, CA, per Lindley LJ; Re Airey AIRey v Stapleton [1897] 1 Ch
164 . As to agents see [35] BUSINESS ASSOCIATIONS (PARTNERSHIP).
3 Chambers v Minchin (1802) 7 Ves 186 at 196; Adams v Clifton (1826) 1 Russ 297; Wood v Weightman (1872) LR 13
Eq 434; Re Bellamy and Metropolitan Board of Works (1883) 24 ChD 387 , CA; Robinson v Harkin [1896] 2 Ch 415
at 422. A trustee cannot delegate a power to lease or sell the trust property: Hardwick v Mynd (1793) 1 Anst 109 at
110; Hawkins v Kemp (1803) 3 East 410 at 427; Oliver v Court (1820) 8 Price 127 at 166-167.
4 Brice v Stokes (1805) 11 Ves 319; Langford v Gascoyne (1805) 11 Ves 333; Underwood v Stevens (1816) 1 Mer 712;
Re Chertsey Market, ex p Walthew (1819) 6 Price 261 at 285 per Richards CB; Oliver v Court (1820) 8 Price 127 at
166-167; Re Dixon, ex p Griffin (1826) 2 Gl & J 114 at 116; Clough v Bond (1838) 3 My & Cr 490 at 497; Bulteel v Lord
Abinger (1842) 6 Jur 410; Cowell v Gatcombe (1859) 27 Beav 568; Robinson v Harkin [1896] 2 Ch 415 .
5 Salway v Salway (1831) 2 Russ & M 215 at 219 per Lord Brougham LC; White v Baugh (1835) 3 Cl & Fin 44, HL;
Kingham v Lee (1846) 15 Sim 396 at 399-400 per Shadwell V-C; Pearce v Pearce (1856) 22 Beav 248. Where trust
property is sold with other property, the purchase money must be apportioned before completion of the purchase, and
the amount attributable to the trust property must be separately paid to the trustees: Re Cooper and Allen’s Contract for
Sale to Harlech (1876) 4 ChD 802 at 815 per Jessel MR.
6 Re Earl of Litchfield and Williams (1737) 1 Atk 87; Chambers v Minchin (1802) 7 Ves 186 at 196; Re French, ex p
Townsend (1828) 1 Mol 139; Hanbury v Kirkland (1829) 3 Sim 265; Bacon v Clark (1836) 3 My & Cr 294; Turner v
Corney (1841) 5 Beav 515 at 517 per Lord Langdale MR; Egbert v Butter (1856) 21 Beav 560; Bostock v Floyer (1865)
LR 1 Eq 26; Hopgood v Parkin (1870) LR 11 Eq 74; Rodbard v Cooke (1877) 25 WR 555; Davis v Hutchings [1907] 1
Ch 356 at 365 per Kekewich J.
7 Re Speight, Speight v Gaunt (1883) 22 ChD 727 at 762, CA, per Lindley LJ (affd 9 App Cas 1, HL); Re Weall,
Andrews v Weall (1889) 42 ChD 674 ; Shepherd v Harris [1905] 2 Ch 310 ; Re Lucking’s Will Trusts, Renwick v
Lucking [1967] 3 All ER 726 : [1968] 1 WLR 866 .
8 Gregory v Gregory (1836) 2 Y&C Ex 313; Ghost v Waller (1846) 9 Beav 497; Waught or Wyche (1854) 2 Drew 318 at
326 per Kindersley V-C; Browne v Butter (1857) 24 Beav 159; Robinson v Harkin [1896] 2 Ch 415 ; Carruthers v
Carruthers [1896] AC 659 , HL.
9 Scurfield v Howes (1790) 3 Bro CC 90; Hanbury v Kirkland (1829) 3 Sim 265; Trutch v Lamprell (1855) 20 Beav 116;
Candler v Tillett (1855) 22 Beav 257; Thompson v Finch (1856) 8 De GM&G 560; Lewis v Nobbs (1878) 8 ChD 591 ;
Re C Flower and Metropolitan Board of Works, Re M Flower and Metropolitan Board of Works (1884) 27 ChD 592
at 596 per Kay J.
10 Re Gasquoine, Gasquoine v Gasquoine [1894] 1 Ch 470 , CA.
11 Cottam v Eastern Counties Rly Co (1860) 1 John & H 243; Re Sisson’s Settlement, Jones v Trappes [1903] 1 Ch 262
; Welch v Bank of England [1955] Ch 508 at 537-538 : [1955] 1 All ER 811 at 824.
End of Document
[290.170] Trustees to act jointly
Part One TRUSTS
II. TRUSTEES

When there is more than one trustee all must join in the execution of the trust, except where the instrument of the
trust provides otherwise1. Where the trust instrument provides that the trustees must arrive at a decision either
unanimously or by a majority, even then a decision taken by two out of three trustees to sell the property will not be
valid2. The naming by the author of the trust deed one of the trustees to be in day-to-day charge of income and
expenditure of the trust property will not in any way affect the joint responsibility of the trustees in respect of the
management and administration of the trust3. Decision-making by co-trustees must be joint in absence of severalty
in the trust deed, although a merely formal act by one is permissible4.
The general principle of law is that the office of the trustee, irrespective of the number of the trustees, is a joint one
and co-trustees form, as it were, one trustee and must therefore execute the duties of their office jointly5. The
possession of one of the co-trustees must in law be considered to be the possession of the other trustees as well6.
They all form one collective trustee7 and must execute their duties in their joint capacity8. The reason is that the
settlor has trusted all the trustees and it is the duty of every one of them to exercise his individual judgment and
discretion in respect of all matters concerning the trust property and the beneficiaries are entitled to the benefit of
their collective wisdom and experience9. In trusts of a public or charitable nature a majority of the trustees may as a
rule bind the minority10; but in a private trust, where there is more than one trustee, the concurrence of all is, in
general11, necessary in a transaction affecting the trust property and a majority cannot bind the minority12. Thus, a
receipt for money given by one of two trustees will not be a discharge13. One trustee in minority has no right to set
aside a majority vote even when strict obedience to technical rules has not been observed if in substance the rules
have been complied with14. A trivial deviation from the formal compliance with the rules under the scheme will not
do any real injury to any party and no injury is done if the rules have been substantially complied with of the temple,
a practice which has often been condemned15. The act must be the act of all. This is subject to any express
direction given by the settlor16. The execution of any document even by a de facto trustee or manager alone will be
ineffective in conveying a valid claim to the property17. Where all the assistant shebaits18 do not join in electing the
shebait, the election will not be valid19.
Managing trustees, acting singly, do not have the power to create a lease without the concurrence of the other
trustees20. Where the trust is managed by a number of trustees, a lease executed by one of the trustees alone who
is not shown as the managing trustee is bad in law21. One of two trustees cannot grant a mortgage or effect a
similar transactions in respect of the trust property so as to bind the trust without the consent of the other trustee
Page 2 of 4
even though the latter on consultation wrongfully refuses his consent22. Thus two out of five trustees of a temple
property can sue the tenants of the property for rent and the suit will not be bad for non-joinder23 but trustees acting
without any authority in themselves cannot validly discharge third parties from payment of rent due by them to the
trust24; neither can a trustee and manager of temple properties sue singly for rent without impleading the co-
trustees as parties25.
Where one of the trustees institutes a suit without consulting the others26 or without making other trustees either as
plaintiffs or defendants27 the suit is not maintainable. There is nothing improper in one of the trustees being
permitted to supervise the routine work in the temple; but there can be no general authorisation by the other
trustees permitting the so-called managing trustees to incur debts on behalf of the temple and create a charge on
the temple properties. For doing so the express consent and authorisation of other trustees beforehand is
essential28. The delegation by the trustees of an institution to one among themselves in the regular course of
business is not improper. The managing trustee has the power in that case to act for and on behalf of his co-
trustees in the regular course of business and all acts done by him, if not objected to by the others, are valid29.
Furthermore, where the co-trustee refuses to join as plaintiff to a suit for eviction of the lessee of a trust property
and has been made a defendant, such suit by the other trustee alone is maintainable30.
Where one of the co-trustees held a bona fide belief that he was entitled to call himself a hereditary trustee and as
such had the preferential right to management and did not consult his other co-trustees, the court held that he
should not be totally expelled from the management but should have a probationary period wherein he could show
his readiness to act in co-operation with the other cotrustees31. Where there were two trustees and the trust deed
provided for joint management, on the death of one the surviving trustee could administer the trust estate32. A suit
by one co-trustee against other co-trustee can be brought without joining the other trustees33. Similarly, in a suit for
removal of some of the trustees on ground of misappropriation and breach of trust it is not necessary for the
coshebaits to be impleaded as co-plaintiffs or defendants34. A suit by a trustee against his co-trustee for rendition of
accounts is maintainable35. A suit for rendition of accounts filed against a trustee by a co-trustee cannot be said to
abate with the death of the trustee but such a suit can be continued against the legal representative with the
change in obligation necessarily caused by the death of the trustee36.
A subsequent approval by one trustee of the exercise of discretion by the other seems, however, to be sufficient37;
and a notice of intention to renew a lease is good if given to one of two trustees38.
1 Indian Trusts Act 1882 section 48; see also Fazaa Foundation Trust rep by its duly authorized and constituted Attorney,
Sri Munnavar H Mehdi v Shaheda H Mehdi 2009 (5) Andh LD 30 : 2009 (5) All LT 429; Ch Hoshiar Singh Mann v
Charan Singh 162 (2009) DLT 208; RS Puran Mull Trust v Dyal Sons 2013(2) RCR (Rent) 507; Shyamabai W
Surajkaran Joshi v Madan Mohan Mandir Sanstha 2014 (2) Bom CR 436 : 2014 (1) ALL MR 810 : 2014 (2) Mah LJ
547; Shyamabai Surajkaran Joshi v Madan Mohan Mandir Sanstha a Public Trust by Trustee Bhaiji Kanji Ganatra AIR
2010 Bom 88 [LNIND 2009 NGP 547]: 2010 (1) ALL MR 648 : 2010 (1) Bom CR 294 [LNIND 2009 NGP 547] : 2011
(2) CHN 473 : 2011 (1) CTC 771; Prasaddas Pal v Jagannath Pal AIR 1933 Cal 519 : 144 IC 894 : 60 Cal 538: in case
of a private trust, where there are more than one trustees all must join in the execution of the trust; see also JP
Srivastava v Gwalior Sugar Co (2005) 1 SCC 172 [LNIND 2004 SC 1096]; (2004) 122 Comp Cas 696; Luke v South
Kinsington Hotel Co (1879) 11 ChD 121 ; Vrandaban Bhaichand v Purshttam Motichand AIR 1927 Bom 25 : 28 Bom
LR 1481.
2 IL Jankirama Iyer and S R Koothananiar Pillai v P M Nilakanta Iyer AIR 1962 SC 633 [LNIND 1961 SC 338](1962) 2
SCJ 162; see also Karnataka Traders, Hubli v Hiren Shamji Karamsey AIR 1987 Kant 204 [LNIND 1987 KANT 98]:
(1987) ILR Kant 568 (if all the trustees do not join in execution of the conveyance of the trust property, the conveyance
is invalid and such a conveyance passed no title to the alienees. All trustees form one collective trustee and must
exercise powers in joint capacity and not separately).
3 R S Shri Ram Pershad v Chhano Devi AIR 1969 Del 75 [LNIND 1967 DEL 133].
4 Atmaram Ranchodbhai v Gulamhusein Gulam Mohiyaddin AIR 1973 Guj 113 [LNIND 1972 GUJ 97]: (1972) Ren CJ
838.
5 Vedakannu Nadar v Nanguneri Taluk Singikulam Annadana Chatram AIR 1938 Mad 982 [LNIND 1938 MAD 341]:
(1938) Mad WN 983.
6 Durai v Duraiswami Pillai AIR 1927 Mad 948 : 39 Mad LT 214.
7 Lakha Singh Hamir Singh v Harbhajan Singh Sunder Singh AIR 1958 Punj 102.
Page 3 of 4
8 Norendra Nath Kumar v Atul Chandra Bandopadhya 41 IC 837.

9 See Re HEH the Nizam’s Jewellery Trust (with Shanti Vijay & Co v Princess Fatima Fauzia) AIR 1980 SC 17 : (1979) 4
SCC 602.
10 Re Whiteley, Bishop of London v Whiteley [1910] 1 Ch 600 ; Ponnamabala Pillai v Muthu Chettiar 33 IC 524 : 30
Mad LJ 619; wherein it was held that even if it is a private trust, all trustees must be made parties.
11 The trust instrument may expressly authorise a majority to bind the minority: Re Butlin’s Settlement Trusts, Butlin v
Butlin [1976] Ch 251 : [1976] 2 All ER 483.
12 Leyton v Sneyd (1818) 8 Taunt 532; Luke v South Kensington Hotel Co (1879) 11 ChD 121 at 125–126, CA, per
Jessel MR; Tempest v Lord Camoys (1882) 21 ChD 571 , CA; Re C Flower and Metropolitan Board of Works, Re M
Flower and Metropolitan Board of Works (1884) 27 ChD 592 ; Astbury v Astbury [1892] 2 Ch 111 at 115–116 per
Stirling J Where there is a trust for sale, with discretionary power to postpone the sale, the sale must take place unless
all the trustees agree to its postponement: Re Roth, Goldberger v Roth (1896) 74 LT 50. A sale must take place unless
the trustees unanimously agree to a postponement not only where the instrument creating the trust contains an express
trust for sale, but also where a statutory trust for sale arises, and even a majority of trustees will be directed, in the case
of land, to concur in an immediate sale: Re Mayo, Mayo v Mayo [1943] Ch 302 : [1943] 2 All ER 440. This principle
will not, however, prevail where the trust itself or the circumstances in which it was made show that there was a
secondary or collateral object besides that of sale: see Jones v Challenger [1961] 1 QB 176 at 181 : [1960] 1 All ER
785 at 787, CA (where it was held not inequitable that one of two trustees for sale who had been husband and wife but
who were divorced should wish the matrimonial home to be sold, and the court ordered a sale). See also Re Evers’s
Trust, Papps v Evers [1980] 3 All ER 399 : [1980] 1 WLR 1327 , CA; Re Holliday (a bankrupt), ex p Trustee of the
Property of the Bankrupt v Holliday [1981] Ch 405 : [1980] 3 All ER 385, CA; Re Lowrie (a bankrupt), ex p the
Trustee of the Bankrupt v The Bankrupt [1981] 3 All ER 353; Bernard v Josephs [1982] Ch 391 : [1982] 3 All ER
162, CA; Chhokar v Chhokar [1984] FLR 313 at 323, CA; Re Citro (a bankrupt) [1991] Ch 142 : [1990] 3 All ER 952,
CA; Lloyds Bank plc v Byrne and Byrne [1993] 1 FLR 369, CA; Abbey National plc v Moss [1994] 1 FLR 307, CA.
13 Lee v Sankey (1873) LR 15 Eq 204. See also Walker v Symonds (1818) 3 Swan 1 at 63; Hall v Franck (1849) 11 Beav
519. An acknowledgment by one of two trustees was held insufficient to prevent time running under a former English
limitation enactment which required any acknowledgment to be signed personally by the party to be sued and
contained no provision as to signature by an agent: Richardson v Younge (1871) 6 Ch App 478.
14 Shanmuga Mudali v Arunagiri Mudali AIR 1932 Mad 658 [LNIND 1932 MAD 89]: 36 Mad LW 669.
16 Re H E H the Nizam’s Jewellery Trust (with Shanti Vijay & Co v Princess Fatima Fauzia) AIR 1980 SC 17 : (1979) 4
SCC 602.
18 Lala Man Mohan Das v Janki Prasad AIR 1945 PC 23 : 221 IC 408.
19 Prasaddas Pal v Jagannath Pal AIR 1933 Cal 519 : 144 IC 894 : 60 Cal 538; Maharaj Bahadur Singh v Taj Bahadur
Singh AIR 1940 Cal 416 : 190 IC 144 : 44 Cal WN 688 (where one of the co-trustees keeps the entire trust properties
under his control, refuses to render accounts of the trust properties and deprives the other co-trustee of his right to
manage the trust properties, the latter is entitled to institute a suit against the former to assert his right of management
and is entitled to have an inspection of the accounts of the trust properties).
20 Abdul Rehaman v Angur Bala Manna AIR 1974 Cal 16 [LNIND 1973 CAL 56].
21 Karnataka Traders, Hubli v Hiren Shamji Karamsey AIR 1987 Kant 204 [LNIND 1987 KANT 98]: (1987) ILR Kant 568.
22 Cheeru v Narayan Nambudiri ILR 42 Mad 335.
23 Ponnamabala Pillai v Muthu Chettiar 33 IC 524 : 30 Mad LJ 619 (dismissal of trustees by temple committee held invalid
as the trustees were not given chance to answer charges). See also Charavur Teramath v Urath Lakshmi ILR 6 Mad
270; Natesa v Ganapati ILR 14 Mad 104 (suit not bad for misjoinder); see S V Daniels v Gregory Warden Friendly Trust
AIR 1959 All 579 [LNIND 1958 ALL 38]: (1958) ALJ 437 (defect of non-joinder of other trustees would not render the
plaint a nullity). See also Abdul Rehaman v Angur Bala Manna AIR 1974 Cal 16 [LNIND 1973 CAL 56].
24 Ullattil Kalathil Nethiri Menon v Mullapulli Gopalan Nair AIR 1916 Mad 692 : 30 IC 713.
25 Vavattu Naicken v Venkata Sesha Aiyar AIR 1914 Mad 119. See also Prem Prakash Johar v Narasingh Bahadur AIR
1989 All 51 [LNIND 1988 ALL 301]: (1989) All WC 197, where notice of termination of tenancy issued by attorney was
held as valid as he was authorised by the trustees to institute legal proceedings.
26 Duli Chand v Mahabir Pershad Trilok Chand Charitable Trust AIR 1984 Del 145 [LNIND 1983 DEL 272]: (1984) 25
DLT 70 [LNIND 1983 DEL 272]; Ramdass Trust v Damodardas (1967) RajLW 273; Peria Karuppan v Velayuthan Chetti
ILR 29 Mad 302 (where some only of out several persons jointly interested in a cause of action bring a suit impleading
Page 4 of 4
the others as defendents, such a suit is sustainable though it is not shown that parties joined as defendants refused to
join as plaintiffs); Maryil Nair v K M Narayanan Nambudripad ILR 26 Mad 461. See also Bishwa Nath Saravan Singh v
Bishambar Nath Srivastava AIR 1936 Oudh 337 : (1936) OLR 339, Government of the Province of Bombay v Pestonji
Ardehir Wadia AIR 1949 PC 143 : 53 Cal WN 489. Cf Atmaram Ranchodbhai v Gulamhusein Gulam Mohiyaddin AIR
1973 Guj 113 [LNIND 1972 GUJ 97]: (1972) Ren CJ 838; and Kolagada Poranna v Palthur Vishwarayya AIR 1962 Mys
71.
27 Vedakannu Nadar v Nanguneri Taluk Singikulam Annadana Chatram AIR 1938 Mad 982 [LNIND 1938 MAD 341]:
(1938) 2 Mad LJ 663 : (1938) Mad WN 983.
28 Krishnaswami Naidu v S Varnikalingam Pillai AIR 1926 Mad 1199 [LNIND 1925 MAD 334]: 97 IC 433.
29 Manikkam Pillai v Rathnasami Naddar AIR 1919 Mad 1186 : 36 Mad LJ 684.
30 Shukoor v Jagaiyya AIR 1924 Ngp 335 : 78 IC 347.
31 Sheoram v Rambhau AIR 1927 Ngp 323 : 103 IC 710.
32 A Raghavachariar v Chakrapani Naidu (1932) Mad WN 297.
33 RS Sri Ram Perhsad v Channo Devi AIR 1969 Del 75 [LNIND 1967 DEL 133].
34 Nirmal Chandra Banerjee v Jyoti Prosad Bandopadhyaya AIR 1941 Cal 562 : 45 Cal WN 709.
35 RS Sri Ram Perhsad v Channo Devi AIR 1969 Del 75 [LNIND 1967 DEL 133].
37 Messeena v Carr (1870) LR 9 Eq 260 at 262-263 per Romilly MR.
38 Nicholson v Smith (1882) 22 ChD 640 .
End of Document
[290.171] Plea of non joinder
Part One TRUSTS
II. TRUSTEES
[290.171] Plea of non joinder

The plea of non joinder must be raised at the initial stage and will not be entertained at the appellate stage1. Where
the suit was filed by the trustee for cancellation of the sale deed, the suit may not be bad for non joinder of
necessary party when the plaintiffs are not able to show the names of the alleged co-trustees2.
1 Sreenikbhai Kashurbhai v Chandulala AIR 1997 Pat 179 : (1998) 2 BLJ 438.
2 Savita Agarwalla v Sarada Nath Vyas AIR 2006 NOC 955 (UTR).
End of Document
[290.172] Circumstances in which trustee is personally liable
Part One TRUSTS
II. TRUSTEES
[290.172] Circumstances in which trustee is personally liable

A trustee is personally liable on the contracts into which he enters, unless he excludes personal liability by express
stipulation, and the knowledge of those who deal with him that he is contracting in his capacity as trustee is
immaterial1. Accordingly, where a trustee trades or otherwise deals with trust property, he is deemed, as against all
persons other than the beneficiaries, to do so on his own account2, and is consequently personally liable for all
debts incurred in the course of the trade or dealing3 and may be made bankrupt in respect of them4.
1 Lumsden v Buchanan (1865) 4 Macq 950 at 955, HL, per Lord Westbury LC; Muir v City of Glasgow Bank (1879) 4 App
Cas 337 at 355, HL, per Lord Cairns LC and at 368 per Lord Penzance. See also Watling v Lewis [1911] 1 Ch 414
; Re Robinson’s Settlement, Gant v Hobbs [1912] 1 Ch 717 at 728-729, CA, per Buckley LJ.
2 Re Hodson, ex p Richardson (1818) 3 Madd 138 at 157 per Leach V-C; Cutbush v Cutbush (1839) 1 Beav 184 at 187
per Lord Langdale MR; Lumsden v Buchanan (1865) 4 Macq 950 at 955, HL, per Lord Westbury LC; Re Leeds Banking
Co, Fearnside and Dean’s Case, Dobson’s Case (1866) 1 Ch App 231.
3 Ex p Garland (1804) 10 Ves 110 at 118-119 per Lord Eldon LC; Owen v Delamere (1872) LR 15 Eq 134 at 138-139 per
Bacon V-C; Muir v City of Glasgow Bank (1879) 4 App Cas 337 at 368, HL, per Lord Penzance; Re Johnson,
Shearman v Robinson (1880) 15 ChD 548 at 552-553 per Jessel MR. A trustee has a lien on the trust property for
expenses properly incurred in administering the trust, and a third person may be subrogated to this right: see Stott v
Milne (1884) 25 ChD 710 , CA; Dowse v Gorton [1891] AC 190 , HL; Re Frith, Newton v Rolfe [1902] 1 Ch 342
; [290.106].
4 Ex p Garland (1804) 10 Ves 110 at 119; Re Johnson, Shearman v Robinson (1880) 15 ChD 548 at 552.
End of Document
[290.173] Civil court’s power to control discretion of trustee
Part One TRUSTS
II. TRUSTEES

Where a discretionary power conferred on a trustee is not exercised reasonably and in good faith1, such power may
be controlled by a principal civil court of original jurisdiction2. The principle embodied here is equally applicable to
public trusts3. Where, however, the trustees deliberately refuse to exercise their discretion or use it vicariously,
there is no provision for the court to enforce4. Where the sale executed by the trustees is challenged in a court of
law, the duty of the court is to see whether the trustee has acted reasonably and in good faith or has committed a
breach of trust by benefiting himself from the transaction in an indirect manner5. Except on a properly instituted suit
the court will not order the trustee to invest the trust money according to the directions of the beneficiary6.
Where an emergency or a state of circumstances exists which it may reasonably be supposed was not foreseen or
anticipated by the author of the trust and is unprovided for by the trust instrument, and which renders it desirable
and perhaps even essential, in the interests of the beneficiaries that certain acts should be done by the trustees
which they themselves have no power to do, and to which the consent of all the beneficiaries cannot be obtained by
reason of some not being sui juris or not yet in existence, the court will exercise its general administrative
jurisdiction on behalf of all the parties interested, those acts being done by the trustees concerned7.
What the provision dealing with control of discretionary power under the Indian Trusts Act 18828 enjoins upon the
trustee is to exercise the discretion in a reasonable manner and in good faith and if he does not exercise such
discretion reasonably and bonafide the court will intervene9. Thus, where the trustees acted to the detriment of the
trust property and sought permission from the court to develop the trust property, permission would be denied to
them by the court10.
1 Fatima Fauzia v Syed Ul-Mulk AIR 1979 AP 229 [LNIND 1979 AP 47]: (1979) 1 AP LJ (HC) 264 [LNIND 1979 AP 47]:
good faith normally implies not only an upright mental attitude and a clear conscience of a person but also the doing of
an act indicating that ordinary prudence has been exercised according to the standards of a reasonable person.
2 Indian Trusts Act 1882 section 49; see also Fatima Fauzia v Syed Ul-Mulk AIR 1979 AP 229 [LNIND 1979 AP 47]:
(1979) 1 AP LJ (HC) 264 [LNIND 1979 AP 47].
Page 2 of 2
3 Sheik Davud Saiba v Hussain Saiba ILR 17 Mad 212 : 4 Mad LJ 48. See also Ganapathi Ayyar v Vedavyasa Alasinga
Bhattar ILR 29 Mad 534 : 16 Mad LJ 435.
4 Re HEH the Nizam’s Jewellery Trust (with Shanti Vijay & Co v Princess Fatima Fauzia) AIR 1980 SC 17 at 29 Para 52 :
(1979) 4 SCC 602 : [1980] 1 SCR 459. See also Allahabad Bank Ltd v CIT, West Bengal AIR 1953 SC 476 [LNIND
1953 SC 83](wherein it was held that the court cannot execute the purely discretionary powers of the trustee, which are
not imperative, and on failure of the trustees to exercise them, they cannot be executed vicariously by the court).
5 M V Ramasubbier v Manicka Narasimachari AIR 1979 SC 671 [LNIND 1979 SC 72]at 673 : (1979) 2 SCC 65 [LNIND
1979 SC 72] : [1979] 2 SCR 1177 [LNIND 1979 SC 72].
6 Tara Chand v Harnam Singh AIR 1928 Lah 237 (2) at 238 : 106 IC 672.
7 P Rajagopala Gramani v Baggiammal AIR 1933 Mad 242 [LNIND 1932 MAD 239]at 243 : 142 IC 108 : 64 Mad LJ 235,
citing Re New, Re Leavers, Re Morley [1901] 2 Ch 534 , CA.
9 K H Chowhan v G M Chowhan AIR 2005 Bom 35 [LNIND 2004 BOM 746].
10 Balai Das Dutt v Administrator General of West Bengal AIR 2005 Cal 69 [LNIND 2004 CAL 335]; see also G S Pathak v
S S Nisal AIR 1955 Bom 93 [LNIND 1954 BOM 16]; Parnakesti v Dewan Seth AIR 1961 All 564 [LNIND 1960 ALL 135];
Fatima Fauzia v Syed-ul-Mulk AIR 1979 AP 229 [LNIND 1979 AP 47]; MV Ramasubbier v Manicka Narasimha Chari
AIR 1979 SC 671 [LNIND 1979 SC 72]: (1979) 2 SCC 65 [LNIND 1979 SC 72] : [1979] 2 SCR 1177 [LNIND 1979 SC
72].
End of Document
[290.174] Trustee’s general disentitlement to remuneration
TRUSTEES > D. Disability to Receive Remuneration
Part One TRUSTS
II. TRUSTEES
D. DISABILITY TO RECEIVE Remuneration

A trustee has no right to remuneration for his trouble, skill and loss of time in executing the trust1. He is not entitled
to a salary2 or compensation for personal trouble and loss of time3. Where it is by virtue of his position as trustee
that a trustee has acquired the position in respect of which he drew remuneration, he is not entitled to retain the
remuneration4. He is, however, entitled to retain remuneration received by virtue of an independent bargain with the
firm employing him5.
The disability to receive remuneration exists even where the trustee acts as a solicitor or in some other professional
capacity6, or where he carries on or transacts a trade or business in connection with and for the benefit of the trust7.
It extends to the firm of the professional trustee and to his partners individually8, unless the trustee arranges that
the partner employed is alone to be entitled to the remuneration9. The rule also extends to executors and to
trustees not holding on an express trust10. It does not, however, apply to the costs of a solicitor-trustee acting in
legal proceedings for himself and his co-trustees jointly, or for himself and his beneficiaries11, or where he acts
separately for a person to whom trust money is lent on mortgage12, or as between him and a stranger who
unsuccessfully brings an adverse action against the trust13.
1 Indian Trusts Act 1882 section 50. See Balkishan Dass v Parmeshri Dass AIR 1963 Punj 187 at 196 : (1963) ILR 1 320
Punj : 65 Punj LR 236.
2 Taylor v Taylor (1843) 4 Dr & War 124; Re Bedingfield, Bedingfield v D’Eye (1887) 57 LT 332.
3 How v Godfrey and White (1678) Cas temp Finch 361; Bonithon v Hockmore (1685) 1 Vern 316; Robinson v Pett
(1734) 3 P Wms 249; Re Ormsby (1809) 1 Ball & B 189 at 190; Pince v Beattie (1863) 9 Jur NS 1119; Barrett v Hartley
(1866) LR 2 Eq 789 at 796; Re Accles Ltd, Hodgson v Accles Ltd [1902] WN 164. Cf D’Arcy v O’Kelly (1921) 55 ILT 48.
The fact that the trustee has benefited the trust property to the prejudice of his own affairs cannot be taken into
consideration: Robinson v Pett above. He may not charge or take a commission or other remuneration for performing
any duty in connection with the trust unless he is specially authorised to do so: Arnold v Garner (1847) 2 Ph 231 at 235
per Lord Cottenham LC; Nicholson v Tutin (No 2) (1857) 3 K&J 159. As to a trustee who is an auctioneer see Matthison
v Clarke (1854) 3 Drew 3; Douglas v Archbutt (1858) 2 De G&J 148.
Page 2 of 2
4 Re Macadam, Dallow v Codd [1946] Ch 73 : [1945] 2 All ER 664 (where trustees who became directors of a
company by exercising a discretionary power under the trust were held accountable to the trust estate for the
remuneration received); Re Keeler’s Settlement Trusts, Keeler v Gledhill [1981] Ch 156 : [1981] 1 All ER 888
(although this is no longer authoritative as to future fees, owing to Re Duke of Norfolk’s Settlement Trusts, Earl of Perth
v Fitzalan-Howard [1982] Ch 61 : [1981] 3 All ER 220, CA, as to which see [290.175]).
5 Re Lewis, Lewis v Lewis (1910) 103 LT 495 (where a person who had acted as salesman for a firm at a salary was
appointed by his father’s will trustee of a share in the firm and was held entitled to retain the salary in addition to certain
remuneration which he obtained under the will for acting as managing partner); Re Gee, Wood v Staples [1948] Ch 284
: [1948] 1 All ER 498. A director of a company who holds his qualification shares as trustee for another company is
not accountable to that company for his director’s fees: Re Dover Coalfield Extension Ltd [1908] 1 Ch 65 , CA.
6 New v Jones (1833) 1 Mac & G 668 note (d); Moore v Frowd (1837) 3 My & Cr 45; Fraser v Palmer (1841) 4 Y&C Ex
515; Bainbrigge v Blair (1845) 8 Beav 588; Stanes v Parker (1846) 9 Beav 385 at 389 per Lord Langdale MR; Todd v
Wilson (1846) 9 Beav 486; Gomley v Wood (1846) 3 Jo & Lat 678; Re Wyche (1848) 11 Beav 209; Cradock v Piper
(1850) 1 Mac & G 664; Lincoln v Windsor (1851) 9 Hare 158; Broughton v Broughton (1855) 5 De GM&G 160; Re
Barber, Burgess v Vinicome (1886) 34 ChD 77 ; Re Worthington, ex p Leighton v Macleod [1954] 1 All ER 677 :
[1954] 1 WLR 526 .
7 Burden v Burden (1813) 1 Ves & B 170; Stocken v Dawson (1843) 6 Beav 371; Barrett v Hartley (1866) LR 2 Eq 789;
Re Norrington, Brindley v Partridge (1879) 13 ChD 654 at 662-663 per Bacon V-C.
8 Christophers v White (1847) 10 Beav 523; Broughton v Broughton (1855) 5 De GM&G 160; Re Corsellis, Lawton v
Elwes (1887) 34 ChD 675 , CA; Re Gates, Arnold v Gates [1933] Ch 913 ; Re Hill, Claremont v Hill [1934] Ch 623
, CA (held to extend where the solicitor-trustee was a partner in a firm at a fixed salary payable out of the partnership
profits). Where the partner of a solicitor-trustee was appointed steward of a manor forming part of the trust estate, the
firm was not accountable to the trust estate for fees received by him for manorial business and brought into the
partnership accounts, since they were received by him as steward and not as a solicitor: Re Corsellis, Lawton v Elwes
above.
9 Clack v Carlon (1861) 7 Jur NS 441; Re Doody, Hibbert v Lloyd [1893] 1 Ch 129 , CA. A solicitor-trustee who, in a
trust matter, employs his firm (as opposed to one or more of his partners) is under the general disability in respect of
profit costs, even though there is an agreement that the solicitor-trustee is not to share in the profit costs: Re Gates,
Arnold v Gates [1933] Ch 913 . If a solicitor-trustee agrees with a partner in his firm to transact the trust business on
the footing that the partner alone is entitled to the remuneration, the agreement is good, even though it is not in writing:
Re Gates, Arnold v Gates above at 919 per Clauson J.
10 Carmichael v Willson (1830) 4 Bli NS 145, HL; Pollard v Doyle, Kearns v Doyle (1860) 1 Drew & Sm 319; Macartney v
Dickey (1865) 16 I Ch R 409.
11 Cradock v Piper (1850) 1 Mac & G 664; Lincoln v Windsor (1851) 9 Hare 158.
12 Whitney v Smith (1869) 4 Ch App 513.
13 Pince v Beattie (1863) 9 Jur NS 1119.
End of Document
[290.175] Exceptions
Part One TRUSTS
II. TRUSTEES
The trustee can receive remuneration1 if there is:
(1) an express provision in the instrument2;
(2) provision under a contract with the beneficiary3; or
(3) a direction of the court to this effect4.
The creator of a trust may expressly declare that a trustee who is a solicitor or acts in some other professional
character is to receive his usual professional remuneration for it5. Such a declaration in a will amounts to a legacy to
the trustee; it is, therefore, void if he is an attesting witness to the will6. It does not take effect if the testator’s estate
is insolvent7, although it operates notwithstanding the bequest of a legacy to the trustee conditionally upon his
accepting the trust8. The declaration does not authorise charges for services not strictly professional unless
expressly so worded9. A constructive trustee may be entitled to an allowance or remuneration in respect of the time
and trouble expended by him on property of which he is rightfully in possession but of which he is in equity a
constructive trustee10.
The court has inherent jurisdiction to increase the amount of remuneration already allowed by the trust instrument if
it concludes that this would be in the interest of the beneficiaries, having regard to the nature of the trust, the
experience and skill of a particular trustee and the amount which he seeks to charge when compared with what
other trustees might require to be paid for their services, and to all the other circumstances of the case11.
1 As to a trustee’s general disentitlement to remuneration see [290.174].

2 Ellison v Airey (1748) 1 Ves Sen 111 at 115 per Lord Eldon LC; Webb v Earl of Shaftesbury, Earl of Shaftesbury v
Arrowsmith (1802) 7 Ves 480; Willis v Kibble (1839) 1 Beav 559; Re Sherwood (1840) 3 Beav 338; Re Thorley, Thorley
v Massam [1891] 2 Ch 613 , CA; Jobson v Palmer [1893] 1 Ch 71 . Trusteeship is an office, and, where the
instrument creating the trust provides for a trustee to be remunerated, it is an office of profit for tax purposes: Dale v
IRC [1954] AC 11 : [1953] 2 All ER 671, HL. As to the remuneration of trustees for debenture holders see Re
Piccadilly Hotel Ltd, Paul v Piccadilly Hotel Ltd [1911] 2 Ch 534 ; Re Locke and Smith Ltd, Wigan v Locke and Smith
Ltd [1914] 1 Ch 687 , CA.
Page 2 of 2
3 Christophers v White (1847) 10 Beav 523 at 524 per Lord Langdale MR; Douglas v Archbutt (1858) 2 De G&J 148; Re
Fish, Bennett v Bennett [1893] 2 Ch 413 , CA; Re Webb, Lambert v Still [1894] 1 Ch 73 , CA. Where in a will
appointing professional trustees there was a provision entitling trustees to receive their ordinary professional charges,
another professional trustee substituted by codicil was held entitled to the benefit of the provision: Re Campbell [1954]
1 All ER 448 : [1954] 1 WLR 516 .
4 Indian Trusts Act 1882 section 50. See Re Pooley (1888) 40 ChD 1 , CA; Re White, Pennell v Franklin [1898] 2 Ch
217 , CA; Re Brown, Wace v Smith [1918] WN 118. It is, however, earned income for tax purposes (Dale v IRC
[1954] AC 11 : [1953] 2 All ER 671, HL); and it is not regarded as a beneficial interest in relation to the principle laid
down in Chapman v Chapman [1954] AC 429 : [1954] 1 All ER 798, HL, as to the general inability of the court under
its inherent jurisdiction to vary beneficial interests (Re Duke of Norfolk’s Settlement Trusts, Earl of Perth v Fitzalan-
Howard [1982] Ch 61 : [1981] 3 All ER 220, CA). An attesting witness who becomes a trustee of a will under an
appointment of a new trustee made after the will has come into effect is not, however, debarred from benefiting from
the provisions in the will entitling trustees to remuneration: Re Royce’s Will Trusts, Tildesley v Tildesley [1959] Ch 626
: [1959] 3 All ER 278, CA; Re Duke of Norfolk’s Settlement Trusts, Earl of Perth v Fitzalan-Howard above.
5 Re White, Pennell v Franklin [1898] 2 Ch 217 , CA. Where the estate is insufficient to pay general legacies in full,
such a legacy abates with other general legacies and has no priority: O’Higgins v Walsh [1918] 1 IR 126; Re Brown,
Wace v Smith (1918) 62 Sol Jo 487.
6 Re Fish, Bennett v Bennett [1893] 2 Ch 413 , CA.
7 Re Ames, Ames v Taylor (1883) 25 ChD 72 ; Clarkson v Robinson [1900] 2 Ch 722 . A paid trustee is expected to
exercise a higher standard of diligence and knowledge than an unpaid trustee: Re Waterman’s Will Trusts, Lloyds Bank
Ltd v Sutton [1952] 2 All ER 1054 at 1055 per Harman J; Barlett v Barclays Bank Trust Co Ltd (No 1) [1980] Ch 515
: [1980] 1 All ER 139.
8 Brown v Litton (1711) 1 P Wms 140; Brown v De Tastet (1819) Jac 284; Wedderburn v Wedderburn (No 4) : (1856) 22
Beav 84; Boardman v Phipps [1967] 2 AC 46 : [1966] 3 All ER, 721, HL; Re Berkeley Applegate (Investment
Consultants) Ltd (in liquidation), Harris v Conway [1989] Ch 32 : [1988] 3 All ER 71.
9 Ayliffe v Murray (1740) 2 Atk 58 at 59-60 per Lord Hardwicke LC; Re Accles Ltd, Hodgson v Accles Ltd [1902] WN 164.
If, before accepting the office, a trustee openly tells a beneficiary that he will not act unless the beneficiary will give him
a remuneration not contemplated by the terms of the trust, and the beneficiary contracts that he is to have it, the
transaction may be upheld: Ayliffe v Murray above. A trustee who has accepted the office without any stipulation on the
subject cannot afterwards refuse to continue to act unless he is remunerated, even though, by performing his duties, he
has greatly benefited the beneficiaries: Bainbrigge v Blair (1845) 8 Beav 588 at 596; Barrett v Hartley (1866) LR 2 Eq
789 at 796 per Stuart V-C.
10 Brocksopp v Barnes (1820) 5 Madd 90 at 90-91 per Leach V-C; Marshall v Holloway (1820) 2 Swan 432 at 453-454;
Bainbrigge v Blair (1845) 8 Beav 588 at 596-597 per Lord Langdale MR; Re Freeman’s Settlement Trusts (1887) 37
ChD 148 ; Re Bignell, Bignell v Chapman [1892] 1 Ch 59 , CA; Re Masters, Coutts & Co v Masters [1953] 1 All
ER 19 : [1953] 1 WLR 81 ; Re Worthington, ex p Leighton v Macleod [1954] 1 All ER 677 : [1954] 1 WLR 526 .
The court will only allow a trustee remuneration in exceptional cases (Re Worthington, ex p Leighton v Macleod above)
as for example where his duties have proved unexpectedly onerous (see Re Duke of Norfolk’s Settlement Trusts, Earl
of Perth v Fitzalan-Howard [1982] Ch 61 : [1981] 3 All ER 220, CA).
11 Re Duke of Norfolk’s Settlement Trusts, Earl of Perth v Fitzalan-Howard [1982] Ch 61 : [1981] 3 All ER 220, CA.
See also Re Keeler’s Settlement Trusts, Keeler v Gledhill [1981] Ch 156 : [1981] 1 All ER 888; Re Berkeley
Applegate (Investment Consultants) Ltd (in liquidation), Harris v Conway [1989] Ch 32 : [1988] 3 All ER 71.
End of Document
[290.176] Bar against use of trust property for own use
Part One TRUSTS
II. TRUSTEES

A trustee may not use trust property for his own profit or for any other purpose unconnected with the trust1. Though
the words used in this provision of the Indian Trusts Act 1882 are “may not”, it should be interpreted as “must not”
or “shall not’2. Voluntary service is the foundation underlying all trusteeship and the law precludes a trustee from
making a profit or acquiring a benefit from his office3. However, it is open to the author of the trust to make a
provision to the contrary and remove this disability of the trustee4. The principle underlying this provision is that a
person who has accepted the position of a trustee and has acquired property in that capacity will not be permitted to
assert an adverse title on his own behalf until he has obtained a proper discharge from the trust with which he has
clothed himself5. When the Trustee and his brother borrowed money from the trust and deposited it in their own
names it was held to be in violation of section 51 as no trustee cannot make profit or acquire benefit from his
position as a trustee6. If the trustee employs the trust funds in his own business he must account for all the profits to
his cestui que trust7. Even an agent who subsequently becomes a trustee must not obtain a benefit for himself8. A
person in a fiduciary position like a trustee is not entitled to make a profit for himself or a member of his family. It
can also not be said that he is not allowed to put himself in any such position in which a conflict may arise between
his duty and personal interest9. Where the beneficiary abandons his interest in the trust property which is then
acquired by the trustee as a result of his own exertions, the trustee may hold the property for his benefit10.
1 Indian Trusts Act 1882 section 51; P R Pandurangan Chettiar and P Ramakrishnan v M Balakrishnan 2010 (4) CTC
202 [LNIND 2010 MAD 2257]. A sale by trustee of the trust property to his own son at a much lower price would be hit
by section 51: M V Ramasubbier v Manicka Narasimachari AIR 1979 SC 671 [LNIND 1979 SC 72]at 673 : (1979) 2
SCC 65 [LNIND 1979 SC 72] : [1979] 2 SCR 1177 [LNIND 1979 SC 72]. The trustee of a Devaswom must not use or
deal with the trust property to his advantage: Samanthan Karakkattidathil Unnamman Nayanar v Theyakkandi Edathil
Kuniraman Nambiar AIR 1964 Ker 204 at 205 : (1963) Ker LT 263.
2 D C Mukherjee v M L Mukherjee 14 Bom LR 284.
3 P R Pandurangan Chettiar and P Ramakrishnan v M Balakrishnan 2010 (4) CTC 202 [LNIND 2010 MAD 2257]; Diltor
Koer v Harkoo Singh AIR 1916 Pat 167 : 37 IC 367.
4 T Krishnajee Bhat v Sadasiva Tawker AIR 1927 Mad 249 [LNIND 1926 MAD 285]at 252 : 24 Mad LW 869 : 99 IC 713.
Page 2 of 2
5 Srinivasa Moorthy v Venkatavarada Iyengar 11 IC 447.

6 P R Pandurangan Chettiar and P Ramakrishnan v M Balakrishnan 2010 (4) CTC 202 [LNIND 2010 MAD 2257].
7 See Ranchode Doss Govardhan Doss v Krishna Doss Vittal Doss (1911) 2 Mad WN 271 (the trustee would be
accountable for the losses); P Viswanathan v P Brahmanadhan AIR 1917 Mad 455 (1) : 34 IC 900 (the trustee would
be accountable for the breach of trust and bound to replace minor’s money and account for any profits made there).
8 Ramaswami v Karuppan 29 Mad LJ 551.
9 M V Ramasubbier v Manicka Narasimachari AIR 1979 SC 671 [LNIND 1979 SC 72]at 673 : (1979) 2 SCC 65 [LNIND
1979 SC 72] : [1979] 2 SCR 1177 [LNIND 1979 SC 72].
10 Harihar Prasad Singh v Maharaja Kesho Prasad Singh AIR 1925 Pat 68 at 98 : 5 PLT Supp 1.
End of Document
[290.177] Disqualification for acquiring trust property by trustee or his
agent
Part One TRUSTS
II. TRUSTEES
[290.177] Disqualification for acquiring trust property by trustee or his agent

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 same1 or any interest therein, on his own account or as an agent of a third
person2. Any such purchase is automatically voidable at the instance of any beneficiary no matter how honest and
fair the purchase may be3. A trustee cannot sell any of his properties to the trust either, the mischief in both cases
being the likelihood of conflict between his interests and his duties as a trustee. The law does not go into the
question whether the transaction is beneficial or not4. If a trustee desires to purchase trust property, he must first be
discharged from his trusteeship5. And even then, in order that the transaction may be unimpeachable, it must be
clear that, in purchasing it, he is not taking an advantage of knowledge, which he has acquired in respect of it
during his trusteeship6.
Moreover, he cannot sell the property to himself jointly with others, or to a trustee for himself7, or to another person
with a view to its resale to himself8. Similarly, a trustee for sale who acquires and exercises a right of pre-emption
conferred by the relevant trust instrument cannot purchase for himself if the purchase would involve a conflict of
duty and interest9. The disability to purchase the trust property extends to a person who is the agent of a trustee for
sale and is employed by the trustee in connection with the sale10. A purchase by a trustee can be set aside against
a subsequent purchaser from him with notice11. Any one who is in a fiduciary position cannot sell to himself12.
If a trustee mixes trust funds with his own, the whole will be treated as the trust property except so far as he may be
able to distinguish what is his own13. The beneficiary will have a charge on the property bought or acquired out of
mixed funds to the extent of the trust funds applied, however much it may have changed or altered in its nature or
character. Accordingly the funds of the trust estate with interest invested in the property remain at all times a charge
on such property so acquired14. Where a trustee wrongfully mingles trust property with his own and becomes
insolvent, the beneficiary is entitled to a charge on the trustee’s property which vests in the official assignee, but if
the beneficiary takes a personal judgement for the amount due to him without taking steps to preserve his remedies
based on the trust, he loses his right to enforce his charge15.
Page 2 of 3
1 See Raja Peary Mohan Mukerji v Manohar Mukerji AIR 1922 PC 235 : 26 Cal WN 133 : ILR 48 Cal 1019, PC;
KSwaminatha Aiyar v Jambukeswaraswami Temple AIR 1930 Mad 372 [LNIND 1928 MAD 137]at 374 : 117 IC 143.
2 Indian Trusts Act 1882 section 52. In India, the trustee is not competent to buy the trust property. It is doubtful whether
the court would permit him to buy such interest under section 53; as to which see [290.178]. See M V Ramasubbier v
Manicka Narasimachari AIR 1979 SC 671 [LNIND 1979 SC 72]: (1979) 2 SCC 65 [LNIND 1979 SC 72] : [1979] 2 SCR
1177 [LNIND 1979 SC 72]. See also Whelpdale v Cookson (1747) 1 Ves Sen 9; Mackreth v Fox (1791) 4 Bro Parl Cas
258, HL; Ex p Lacey (1802) 6 Ves 625 at 626 per Lord Eldon LC; Ex p James (1803) 8 Ves 337; Randall v Errington
(1805) 10 Ves 423; Re Bloye’s Trust (1849) 1 Mac & G 488 at 495 et seq per Lord Cottenham LC; Knight v
Marjoribanks (1849) 2 Mac & G 10 at 12; Lewis v Hillman (1852) 3 HL Cas 607; Denton v Donner (1856) 23 Beav 285
at 290 per Romilly MR; Plowright v Lambert (1885) 52 LT 646 at 652 per Field J; Beningfield v Baxter (1886) 12 App
Cas 167 , PC; Silkstone and Haigh Moor Coal Co v Edey [1900] 1 Ch 167 . The rule that, where a trustee
purchases trust property from himself, any beneficiary may have the sale set aside, however fair the transaction, has
been called the “self-dealing rule”: see Tito v Waddell (No 2) [1977] Ch 106 at 225, 241 : [1977] 3 All ER 129 at 228,
241 per Megarry V-C. The rule also applies to a trustee who concurs in a transaction in which he has an interest and
which cannot be carried into effect without his concurrence: Re Thompson’s Settlement, Thompson v Thompson [1986]
Ch 99 : [1985] 2 All ER 720; Whichcote v Lawrence (1798) 3 Ves 740; Ex p Reynolds (1800) 5 Ves 707; Morse v
Royal (1806) 12 Ves 355 at 372 per Lord Erskine LC; Re Norrington, Brindley v Partridge (1879) 13 ChD 654 .
3 Janaki Raman v Neelkantha (1954) 2 Mad LJ 486; Ex p James (1803) 8 Ves 337; Holder v Holder [1968] Ch 353 at
397-398 : [1968] 1 All ER 665 at 677, CA. However, in Holder v Holder above the Court of Appeal uniquely refused to
set aside a purchase by a beneficiary who had been appointed executor and trustee (with two others) of a will but who
had renounced his office after taking some minor incidental steps in administering the estate which were conceded to
render his renunciation ineffective. He was tenant of a farm comprised in the estate and purchased the freehold at
auction. The court stressed that he had played no real part in the administration of the estate and had not been
involved in instructing valuers and arranging the auction sale and so was not both vendor and purchaser, any special
knowledge he had being acquired as tenant, and the beneficiaries knew he was a prospective purchaser and did not
look to him to protect their interests.
4 K Swaminatha Aiyar v Jambukeswaraswami Temple AIR 1930 Mad 372 [LNIND 1928 MAD 137]at 374 : 117 IC 143.
5 Campbell v Walker (1800) 5 Ves 678 at 681 per Arden MR; Ex p Lacey (1802) 6 Ves 625 at 626-627; Ex p James
(1803) 8 Ves 337 at 348; Re Boles and British Land Co’s Contract [1902] 1 Ch 244 . If the trustee desires to
purchase, and is willing to give more for the property than anyone else, he should apply to a court of competent
jurisdiction which would then assume conduct of the sale divesting him of his character of trustee in respect of it, and
authorising him to bid at it: Campbell v Walker (1800) 5 Ves 678 at 681.
6 Ex p Lacey (1802) 6 Ves 625 at 626-627; Holder v Holder [1968] Ch 353 at 397-398 : [1968] 1 All ER 665 at 677,
CA.
7 Robertson v Norris (1857) 1 Giff 421 (affd (1858) 4 Jur NS 443); Farrar v Farrars Ltd (1888) 40 ChD 395 at 409, CA,
per Lindley LJ. There is no absolute rule precluding the wife of a trustee purchasing from the trustees: Burrell v Burrell’s
Trustees 1915 SC 333; Tanti v Carlson [1948] VLR 401 (where, however, the opinion was expressed that the special
nature of the matrimonial relationship renders such a transaction open to suspicion, the court presuming that the sale is
for the benefit of the trustee and required evidence to rebut this presumption); Re King’s Will Trust, Newman v Andrews
(1959) 173 Estates Gazette 627; Tito v Waddell (No 2) [1977] Ch 106 at 241 : [1977] 3 All ER 129 at 241.
8 Sanderson v Walker, Campbell v Walker (1807) 13 Ves 601; Cook v Collingridge (1823) Jac 607.
9 Wright v Morgan [1926] AC 788 , PC (where the price was to be fixed by valuation, although it was up to the trustees
to decide when the land was first to be offered for sale). A person who subsequently becomes a trustee is not,
however, precluded from exercising a right of pre-emption contained in a contract made before the fiduciary relationship
arose: Re Mulholland’s Will Trusts, Bryan v Westminster Bank Ltd [1949] 1 All ER 460.
10 Twining v Morrice (1788) 2 Bro CC 326; York Buildings Co v Mackenzie (1795) 8 Bro Parl Cas 42; Ex p Bennett (1805)
10 Ves 381; Whitcomb v Minchin (1820) 5 Madd 91; Re Bloye’s Trust (1849) 1 Mac & G 488 at 494 et seq per Lord
Cottenham LC; Lewis v Hillman (1852) 3 HL Cas 607; Cookson v Lee (1853) 23 LJ Ch 473; Spring v Pride (1864) 4 De
G J & Sm 395; King v Anderson (1874) IR 8 Eq 625, CA (Ir); Martinson v Clowes (1882) 21 ChD 857 (on appeal
(1885) 52 LT 706, CA); Luddy’s Trustee v Peard (1886) 33 ChD 500 ; Farrar v Farrars Ltd (1888) 40 ChD 395 at
409, CA, per Lindley LJ. Where a sale by trustees for sale to their solicitors is set aside, a mortgage of the property by
the solicitors to persons who have constructive notice of the circumstances of the sale is also set aside: Cookson v Lee
(1853) 23 LJ Ch 473.
11 Cookson v Lee (1853) 23 LJ Ch 473; Aberdeen Town Council v Aberdeen University (1877) 2 App Cas 544 , HL. If
the trustee has resold at a profit, the beneficiaries may adopt the sale and recover the profit: see Baker v Carter (1835)
1 Y&C Ex 250.
Page 3 of 3
12 Kanhaya Lal v National Bank of India Ltd, Delhi AIR 1923 PC 114 at 117 : 25 Bom LR 1248 : 45 Mad LJ 497 (an
ordinary trustee cannot buy trust property nor can an official appointed to conduct a sale for creditors be himself the
purchaser). See also Gokuldas v Valibhai 15 Bom LR 343.
13 P L N K M Nagappa Chettiar v Official Assignee of Madras AIR 1931 Mad 251 [LNIND 1929 MAD 260]: 1930 Mad WN
1077 : 60 Mad LJ 355. See also T W Subbaroya Chetti v S Subramania Iyer AIR 1919 Mad 575 at 576 : (1918) Mad
WN 786 : 48 IC 833, wherein it was held that the onus is on the trustee to show that any portion of the mixed fund is his
private property.
14 Jayanta Mohan Chatterjee v Jagat Mohan Chatterjee AIR 1972 Cal 88 [LNIND 1971 CAL 179]at 93 : 76 Cal WN 127.
15 Official Assignee of Bombay v Abdul Hayee AIR 1933 Bom 437 at 438 : 35 Bom LR 946 : 146 IC 984.
End of Document
TRUSTEES > E. Bar Against Buying Beneficiary’s Interest Without Permission
Part One TRUSTS
II. TRUSTEES
E. BAR AGAINST BUYING BENEFICIARY’S INTEREST WITHOUT Permission
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 is not to be given unless the proposed purchase, mortgage or lease is manifestly for the advantage of
the beneficiary1. No trustee whose duty is to buy or obtain a mortgage or lease of particular property for the
beneficiary may buy it, or any part thereof, or obtain a mortgage or lease of it, or any part thereof, for himself2. Once
the trust is accepted, the bar applies. It does not render void a mortgage in favour of a person before he became
the trustee of the property by the deed of the trust itself as a condition of the trust imposed by the settlor3. A
successor trustee who was not a party to the misappropriation of his predecessor trustee will acquire a good title4.
Similarly, a trustee contracting to purchase property in the course of execution of his trust does so as an individual
and is personally liable for it in the absence of an express or clearly implied stipulation as part of the contract itself
that he is not to be liable as an individual and that his liability is in the same way to be limited5. In the case of a sale
by a trustee to his wife, the court will seek to be certain, by vigilant scrutiny, of the true nature of such a transaction,
because one can readily see that the close relationship between husband and wife may, unless the nature of the
transaction is explained, give rise to the not unnatural inference that the husband was truly the party intervening in
the case, and that it was not without benefit to himself6.
1 Indian Trusts Act 1882 section 53. Compare the disqualification in section 52.
3 Ashidbhai v Abdulla Haji Mahomed ILR 31 Bom 271.
4 C Doraivalu Mudaliar v C Coday Audikesavalu Naidu AIR 1922 Mad 409 at 412 : 1922 Mad WN 620 : 70 IC 87.
5 Shyam Sundardas v Gouri Nath Seth AIR 1942 All 73 at 73 : 1941 AWRHC 352 : 198 IC 304.
6 Achi Thayar Ammal v Balkis Nachial AIR 1931 PC 68 at 70 : 131 IC 781 : 61 Mad LJ 456, citing Ferraby v Hobson
(1846) 2 Ph 255 : 16 LJ Ch 499.
Page 2 of 2
End of Document
[290.179] Exception
Part One TRUSTS
II. TRUSTEES
[290.179] Exception
A trustee may acquire from the beneficiaries who are sui juris an estate in which they are interested provided he
makes full disclosure to them of all the relevant and material information within his knowledge affecting or which
might affect the value and condition of the estate1.
1 Raja Peary Mohan Mukerji v Manohar Mukerji AIR 1922 PC 235 at 236 : 26 Cal WN 133 : ILR 48 Cal 1019, PC; Clarke
v Swaile (1762) 2 Eden 134; Coles v Trecothick (1804) 9 Ves 234; Randall v Errington (1805) 10 Ves 423; Morse v
Royal (1806) 12 Ves 355; Sanderson v Walker, Campbell v Walker (1807) 13 Ves 601; Dover v Buck (1865) 5 Giff 57;
Tito v Waddell (No 2) [1977] Ch 106 at 225 : [1977] 3 All ER 129 at 228 per Megarry V-C, who referred to this as the
fair dealing rule. See also Motivex Ltd v Bulfield [1988] BCLC 104 at 121 (where Vinelott J observed that a trustee who
is in breach of the fair dealing rule is not strictly guilty of a breach of trust but of the duty he owes to the beneficiary to
make full disclosure and to deal fairly with him arising from his fiduciary position); Hill v Langley (1988) Times, 28
January, CA. For the general rule [290.126].
End of Document
[290.180] Co-trustees not to lend to one of themselves
Part One TRUSTS
II. TRUSTEES
[290.180] Co-trustees not to lend to one of themselves

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-trustees1. However, it is open to the author of
the trust to make a provision to the contrary and remove the disability which prevents the trustee from using the
property for his own benefit2.
1 Indian Trusts Act 1882 section 54. See also P L N K M Nagappa Chettiar v Official Assignee of Madras AIR 1931 Mad
251 [LNIND 1929 MAD 260]: (1930) Mad WN 1077 : 60 Mad LJ 355; TKrishnajee Bhat v Sadasiva Tawker AIR 1927
Mad 249 [LNIND 1926 MAD 285]: 24 Mad LW 869 : 99 IC 713.
2 Official Assignee of Madras v T Krishnaji Bhat AIR 1933 PC 148 : (1933) Mad WN 575 : 143 IC 162.
End of Document
[290.222] Definition
Charities, Vol 37) 2nd ed > Part One TRUSTS > IV. BREACH OF TRUST AND LIABILITY OF
TRUSTEES > 1. BREACH OF TRUST
Part One TRUSTS
IV. BREACH OF TRUST AND LIABILITY OF TRUSTEES
1. BREACH OF TRUST
A breach of any duty imposed on the trustee, by any law for the time being in force, is called a breach of trust1.
Thus, any act in excess of those duties2 by a trustee with reference to the trust property and any neglect or
omission on his part to fulfil those duties3, and the concurrence or acquiescence by one of several trustees in a
similar act, neglect or omission on the part of a co-trustee4, constitutes a breach of trust5. Liability for a breach of
trust extends to a constructive trustee and trustee de son tort6. An official trustee7 is required by law to seek
permission of the High Court before making any alterations to the trust property. Although if he fails to obtain such
permission he will be guilty of breach of trust yet he will not be personally liable for the breach8.
1 Indian Trusts Act 1882 section 3; see also Pye v Gorges (1710) Prec Ch 308; Mansell v Mansell (1732) 2 P Wms 678;
Charitable Corp v Sutton (1742) 9 Mod Rep 349; Clough v Bond (1838) 3 My & Cr 490 at 496 per Lord Cottenham LC;
Harrison v Randall (1851) 9 Hare 397 at 407 per Turner V-C; Reid v Thompson and M‘Namara (1851) 2 I Ch R 26;
Dance v Goldingham (1873) 8 Ch App 902 at 909-910 per James LJ.
2 Adair v Shaw (1803) 1 Sch & Lef 243 at 274 per Lord Redesdale LC; Collier v McBean (1865) 34 Beav 426 at 431.
3 Charitable Corp v Sutton (1742) 9 Mod Rep 349; Lord Montford v Lord Cadogan (1810) 17 Ves 485; Moyle v Moyle
(1831) 2 Russ & M 710 at 715 per Lord Brougham LC; Taylor v Tabrum (1833) 6 Sim 281; Clough v Bond (1838) 3 My
& Cr 490 at 496 per Lord Cottenham LC; Fenwick v Greenwell (1847) 10 Beav 412; Dix v Burford (1854) 19 Beav 409
at 413 per Romilly MR; Stone v Stone (1869) 5 Ch App 74; Jefferys v Marshall (1870) 19 WR 94; Re Brogden, Billing v
Brogden (1888) 38 ChD 546 at 567-568, CA, per Cotton LJ; Evans v London Co-operative Society (1976) Times, 6
July; Bartlett v Barclays Bank Trust Co Ltd (No 1) [1980] Ch 515 : [1980] 1 All ER 139. A trustee who at the request
of one beneficiary neglects to sell the trust property when it can be sold advantageously, and afterwards sells it at a
reduced price is liable to make good the loss to the trust estate: Taylor v Tabrum above; Fry v Fry (1859) 27 Beav 144.
Cf Re Evans, Jones v Evans [1913] 1 Ch 23 at 33.
4 Chambers v Minchin (1802) 7 Ves 186; Brice v Stokes (1805) 11 Ves 319; Munch v Cockerell (1840) 5 My & Cr 178;
Brumridge v Brumridge (1858) 27 Beav 5; Earl of Gainsborough v Watcombe Terra Cotta Clay Co Ltd, Dunning v Earl
of Gainsborough (1885) 54 LJ Ch 991 at 996; Re Bennison, Cutler v Boyd (1889) 60 LT 859; Re Lucking’s Will Trusts,
Renwick v Lucking [1967] 3 All ER 726 : [1968] 1 WLR 866 .
5 Adair v Shaw (1803) 1 Sch & Lef 243 at 272. It is a breach of trust, notwithstanding that the trust was voluntarily
created by the trustee himself without any valuable consideration (Drosier v Brereton (1851) 15 Beav 221 at 225-226),
and notwithstanding that the trustee derives no personal advantage from it (Adair v Shaw above at 272; Lord Montford
v Lord Cadogan (1810) 17 Ves 485 at 489). The fact of the trustee being remunerated for his services does not
Page 2 of 2
necessarily increase his liability (Jobson v Palmer [1893] 1 Ch 71 at 76 per Romer J), but may in some
circumstances do so (National Trustees Co of Australasia Ltd v General Finance Co of Australasia Ltd [1905] AC 373
at 381, PC; Re Windsor Steam Coal Co (1901) Ltd [1928] Ch 609 (affd [1929] 1 Ch 151 , CA); Re
Waterman’s Will Trusts, Lloyds Bank Ltd v Sutton [1952] 2 All ER 1054 at 1055 per Harman J). A higher duty of care is
expected from bodies such as trust corporations, which carry on a specialised business of trust management; a
professional corporate trustee is liable if it neglects to exercise the special care and skill which it professes to have:
Bartlett v Barclays Bank Trust Co Ltd (No 1) [1980] Ch 515 : [1980] 1 All ER 139.
6 Re Earl of Wilton’s Settled Estates [1907] 1 Ch 50 at 55-56 per Warrington J; Rackham v Siddall (1849) 1 Mac & G
607 at 621 per Lord Cottenham LC; Pearce v Pearce (1856) 22 Beav 248; Lee v Sankey (1873) LR 15 Eq 204 at 211
per Bacon V-C; Wassell v Leggatt [1896] 1 Ch 554 .
7 As to Official Trustees see [290.101]-[290.110].
8 Official Trustee of Tamil Nadu v Udavumkarankal AIR 1993 SC 1472 [LNIND 1993 SC 72](in this case, the official
trustee demolished the existing structure and constructed a new one in its place; it was found that he had committed a
breach of trust under the Indian Trusts Act 1882).
End of Document
[290.223] Instances of breach of trust
TRUSTEES > 1. BREACH OF TRUST
Part One TRUSTS
1. BREACH OF TRUST

Misappropriation of trust funds and their use by the trustee amounts to a breach of trust1. Some instances of breach
of trust are:
(1) where a guardian uses the property in his own business2;
(2) where the trustee wrongfully appropriates the trust money and fails to utilise it in redeeming the
beneficiary’s property in accordance with the directions given by the author of the trust3;
(3) where the trustee sells the trust property at a lower price4;
(4) where the trustee makes a benami purchase5;
(5) where the trustee invests the trust funds in his own business6;
(6) where the trustee fails to sell the trust property within the specified time7;
(7) where the trustee makes an unauthorised delegation of power to sell and shows preference to one
unsecured creditor to the detriment of interests of other creditors8.
Where the scheme of a temple prohibits the trustee from borrowing money and the trustee inspite of the prohibition
borrows money, he commits a breach of trust9. Where the official trustee did not take the permission of the High
Court before proceeding to demolish the existing structure and to construct a new one in its place and agreed to
incur an expenditure over and above that sanctioned earlier, he committed a breach of trust10. Thus, where it was
found that the trustee had not spent all the moneys from the trust fund on charity but applied some for his own use
and that while he used the money necessary to prosecute certain litigation from the trust funds, he had represented
in his accounts that he had borrowed those moneys at high interest rates from outside lenders, so that in the name
of expenditure which he had never made he might retain for himself a rate of interest which could not be claimed by
a trustee in respect of advances made by himself, the trustee had committed serious breach of trust11.
Also, when the terms of a trust for payment of creditors gave the trustee a power to mortgage and the trustee
purported to give a security of a portion of the trust estate to the settlor for obtaining his assent to raise a loan for
the payments of debts of the estate, it was found that in the absence of evidence that the financiers would not have
agreed to finance the loan without such consent, there was no consideration for the security in favour of the settlor
and the discretionary power of the trustee to mortgage given in the terms of settlement was not exercised properly
and reasonably12.
A change of the name of a charity by the trustees will not amount to a breach of trust thus resulting in their
Page 2 of 2
removal13. A mere error of judgment does not in itself constitute a breach of trust14 and where a trustee is presumed
to have dealt honestly and properly with the trust estate he will not be removed15 until the contrary is shown16.
1 Gulzari Lal v Collector of Etah AIR 1931 PC 121 : 132 IC 745.

2 Labhu Ram v Bhag Mal 54 IC 926.
3 Krishnaswami Iyer v Thathia Raghaviah Chetty AIR 1928 Mad 43 : 53 Mad LJ 679 : 107 IC 423 (relying on Eastern
Shipping Co Ltd v Quah Beng Kee [1924] AC 177 , PC).
4 M V Ramasubbier v Manicka Narasimachari AIR 1979 SC 671 [LNIND 1979 SC 72]: (1979) 2 SCC 65 [LNIND 1979
SC 72] : [1979] 2 SCR 1177 [LNIND 1979 SC 72] (in this case, the trustee made a sale to his son at a much lower
price).
5 Janakirama L Iyer and S R Koothananiar Pillai v P M Nilakanta Iyer AIR 1962 SC 633 [LNIND 1961 SC 338](the Indian
Trusts Act 1882 section 52 states that no trustee whose duty it is to sell trust property and no agent employed by such
trustee may, for the purpose of the sale, directly or indirectly, buy the same or any interest in it, on his own account or
as agent for a third person).
7 Banarasi Lal v Central Bank (1972) Cal WN 807.
8 L Janakirama Ayyar v P M Nilkanta Ayyar (1954) ILR Mad 537.
9 Bava C Gopalswami Mudaliar v Annadana Kattalai of Sri Tyagarajaswami, Temple, Tiruvarur by trustee, Vaithilinga
Pandarasannadhi AIR 1940 Mad 719 [LNIND 1940 MAD 7].
10 Official Trustee of Tamil Nadu v Udavumkarankal AIR 1993 SC 1472 [LNIND 1993 SC 72]AIR 1993 SCW 1354. As to
official trustees see [290.101]-[290.110].
12 Subramanian Chettiar v Raja Rajeswar Dorai AIR 1915 PC 33 : 20 Cal WN 201 : 29 Mad LJ 856.
13 Shivanarayan Sarupchand v Bilasrai Juharmal AIR 1942 Bom 208 : 202 IC 68.
14 Wilkinson v Stafford (1789) 1 Ves 32 at 41 per Lord Thurlow LC; Garrett v Noble (1834) 6 Sim 504; Buxton v Buxton
(1835) 1 My & Cr 80; Selby v Bowie (1863) 9 Jur NS 425 at 426 per Turner LJ; Stott v Milne (1884) 25 ChD 710 at
713-714, CA, per Lord Selborne LC; Re Hurst, Addison v Topp (1892) 67 Lt 96 at 100, CA, per Lindley LJ; Re Beddoe,
Downes v Cottam [1893] 1 Ch 547 at 562, CA, per Bowen LJ; Re Chapman, Cocks v Chapman [1896] 2 Ch 763
at 778, CA, per Lopes LJ; Re Kensit [1908] WN 235.
15 As to the removal of trustees from office see [290.122]-[290.123].
16 Taylor v Millington (1858) 4 Jur NS 204 at 205 per Wood V-C.
End of Document
TRUSTEES > 2. LIABILITY OF TRUSTEES > A. Restoration of Loss
Part One TRUSTS
2. LIABILITY OF TRUSTEES
A. RESTORATION OF Loss
Where a trustee commits a breach of trust, he is liable to make good the loss which the trust property or the
beneficiary has sustained1. Liability for breach of trust attaches only to trustees as defined in the Indian Trusts Act
18822. Therefore, since administrators do not fall within the definition they cannot be made liable for breach of trust
under this provision3.
A trustee will be liable even though he has not benefited from the breach of trust4. However, he will be liable only
when he is guilty of wilful default or neglect, that is, for failure to deal with the property as prudently as he would
deal with his own5. Breach of trust is both a civil and a criminal wrong, though there can be situations where it may
not amount to a criminal wrong6. If a guardian uses the trust money in his business, he would be bound to account
for the profits he had made out of the use of that money or could have made but for his gross or wilful default7.
Where the person liable to account for produce rent to his employer without fraud converts it to his own use, his
liability cannot be measured by the price at which the produce was subsequently sold. The value of produce rent at
the time and place of receipt is the measure of liability8.
Where an injury has been caused to the beneficiary by an act done by the trustee in violation of his duty, he is
entitled to claim from him the damages he has sustained by his breach of trust9.
In an action for breach of trust against a trustee, where he is charged with misappropriation of funds he cannot
escape liability by claiming that in the earlier days of trusteeship he had performed meritorious services in relation
to the trust10. Where a trustee commits a breach of trust and dies before he has repaid his liability, his legal
representatives can be proceeded against in respect of the breach of trust to the extent of the assets that they have
received11.
If, through the acts or by default of the trustees, the trust property is damaged, the cestuis que trust are entitled to
sue the trustees for compensation for the loss which has been sustained, and the trustees will be liable to make
good such loss personally12. Where a trustee wrongfully appropriates the trust money and fails to utilise it in
redeeming the beneficiary’s property as directed by the author of the trust, the cestuis que trust have a right to be
indemnified13. If a trustee personally makes a profit out of a breach of trust, he is liable to account to the
beneficiaries for that profit unless the apparent breach was authorised by the trust instrument or by the
beneficiaries14. Where a trustee who is also a beneficiary commits a breach of trust, his beneficial interest in the
Page 2 of 3
trust property is liable for making good the loss occasioned before he can claim anything for himself15. A beneficiary
or agent or other person renders himself liable for the consequent loss to the trust estate where he knowingly
becomes an active party to a fraudulent or improper disposition of the trust property in breach of the trust affecting
it16, or knowingly receives trust property and deals with it in a manner inconsistent with the trust17, or where in acting
for the trustee he commits a wrong for which he is liable to the trustee18. However, he is not liable for a breach of
trust where he has no knowledge of the trust19 or of the intended breach of trust20, or where he merely acts as an
agent for the trustee21. Where a trustee mixes trust money with his own money, the beneficiary has a charge on the
entire amount of money or the securities which represent it against the trustee; and, if the mixed fund has
appreciated in value, the charge will not be just for the amount of the trust money but for an amount corresponding
to the proportion of the mixed fund that represents the trust money22.
Trust money or property which has been wrongfully alienated or converted in breach of trust, or the money or
property into which it has been converted, can be followed and recovered so long and so far as it is capable of
being identified or disentangled, unless the money or property has come into the hands of a purchaser for valuable
consideration without notice of the trust23.
1 Indian Trusts Act 1882 section 23; see also Vitthal Das v Rupchand AIR 1967 SC 188 [LNIND 1966 SC 117]: [1966]
SCR 164 (Supp) : (1966) 2 SCWR 98 : (1967) 2 SCJ 681; Maine and New Brunswick Electrical Power Co Ltd v Hard
AIR 1929 PC 195 : 116 IC 388; Bengal Railway Co Ltd Ruttanji Ramji AIR 1938 PC 67 [LNIND 1937 PC 91]: (1938) 1
Mad LJ 640 : (1938) All LJ 169; Kotrabasappa S v Indian Bank (1987) 2 Ker LJ 95; Neelam T Naidu v Vinjamuri
Lakshmanarasamma AIR 1916 Mad 897; K Manga Raju v Venugopalaswamivaru AIR 1964 AP 412 [LNIND 1963 AP
6]; Tirunarayana Pillai v P R Y Manikavachagam Chettiar AIR 1934 Mad 448 [LNIND 1933 MAD 267]: 67 Mad LJ 222 :
(1934) Mad WN 460.
3 Ardeshir Shapurji Narielwala v Manchershaw Shapurji 12 Bom LR 53.
4 New Fleming Spinning and Weaving Co Ltd v Kessowjinaik ILR 9 Bom 373.
5 K Manga Raju v Venugopalaswamivaru AIR 1964 AP 412 [LNIND 1963 AP 6]: (1963) 2 Andh WR 1.
6 Madhavarao Jiwaji Rao Scindia v Sambhajirao Chandrojirao Angre AIR 1988 SC 709 [LNIND 1988 SC 100]: (1988) 1
JT 279 [LNIND 1988 SC 100]. See also Maharaja Sirish Chandra Nandy v Supravat Chandra Nandy AIR 1940 Cal 337
: (1940) ILR 1 Cal 372 : 190 IC 295, where it was held that a breach of trust is not a tortious action but a breach of
fiduciary relation.
7 Labhu Ram v Bhag Mal 54 IC 926.
8 Harihar Prasad Singh v Kesho Prasad Singh AIR 1922 Pat 598.
9 See Neelam Tirupathirayudu Naidu Guru v Vinjamur Lakshminarasamma Guru AIR 1916 Mad 897(2) : 23 Mad LJ 599 :
17 IC 597.
11 Tirunarayana Pillai v P R Y Manikavachagam Chettiar AIR 1934 Mad 448 [LNIND 1933 MAD 267]: 67 Mad LJ 222 :
(1934) Mad WN 460.
12 Neelam Tirupathirayudu Naidu Guru v Vinjamur Lakshminarasamma Guru AIR 1916 Mad 897(2) at 900 : 23 Mad LJ
599 : 17 IC 597.
13 Krishnaswami Iyer v Thathia Raghaviah Chetty AIR 1928 Mad 43 : 53 Mad LJ 679 : 107 IC 423; Eastern Shipping Co
Ltd v Quah Beng Kee [1924] AC 177 , PC.
14 Swain v The Law Society [1981] 3 All ER 797 at 813 : [1982] 1 WLR 17 at 37, CA, per Oliver LJ (approved [1983] 1
AC 598 at 619 : [1982] 2 All ER 827 at 838, HL, per Lord Brightman, although the House of Lords reversed the
decision of the Court of Appeal on the basis that the Law Society was performing a public duty). See also Brown v IRC
[1965] AC 244 : [1964] 3 All ER 119, HL; Boardman v Phipps [1967] 2 AC 46 : [1966] 3 All ER 721, HL;
O’Sullivan v Management Agency and Music Ltd [1985] QB 428 : [1985] 3 All ER 351, CA; Aliman Computer
Systems v Radcliffe & Co (1991) Times, 6 November.
15 Fox v Buckley (1876) 3 ChD 508 at 509 note (1), CA, per Little V-C; Re Brown, Dixon v Brown (1886) 32 ChD 597
; Chillingworth v Chambers [1896] 1 Ch 685 , CA; Re Rhodesia Goldfields Ltd, Partridge v Rhodesia Goldfields
Ltd [1910] 1 Ch 239 ; Re Towndrow, Gratton v Machen [1911] 1 Ch 662 ; Re Dacre, Whitaker v Dacre [1916] 1
Page 3 of 3
Ch 344 , CA; Selangor United Rubber Estates Ltd v Cradock (a bankrupt),(No 4) [1969] 3 All ER 965 : [1969] 1 WLR
1773 .
16 M‘Leod v Drummond (1810) 17 Ves 152 at 154 per Lord Eldon LC; Fyler v Fyler (1841) 3 Beav 550; Pannell v Hurley
(1845) 2 Coll 241; Bodenham v Hoskyns (1852) 2 De GM&G 903; Bridgman v Gill (1857) 24 Beav 302; Rolfe v Gregory
(1865) 4 De G J & Sm 576; Gray v Johnston (1868) LR 3 HL 1 at 11 per Lord Cairns LC; Clark v Hoskins (1868) 37 LJ
Ch 561, CA; Nelson v Larholt [1948] 1 KB 339 : [1947] 2 All ER 751; Belmont Finance Corp Ltd v Williams Furniture
Ltd [1979] Ch 250 : [1979] 1 All ER 118, CA. His liability does not depend on his knowing the actual terms of the
trust: Foxton v Manchester and Liverpool District Banking Co (1881) 44 LT 406; Blyth v Fladgate, Morgan v Blyth,
Smith v Blyth [1891] 1 Ch 337 .
17 M‘Leod v Drummond (1810) 17 Ves 152 at 154; Keane v Robarts (1819) 4 Madd 332 at 357-358 per Leach V-C;
Wilson v Moore (1833) 1 My & K 126 (affd (1834) 1 My & K 337); Morgan v Stephens (1861) 3 Giff 226 at 236; Dettmar
v Metropolitan and Provincial Bank Ltd (1863) 1 Hem & M 641; Hardy v Caley (1864) 33 Beav 365; Gray v Johnston
(1868) LR 3 HL 1 at 11; Burdick v Garrick (1870) 5 Ch App 233; Pearson v Scott (1878) 9 ChD 198 ; Re Bell, Lake v
Bell (1886) 34 ChD 462 ; Staniar v Evans, Evans v Staniar (1886) 34 ChD 470 at 476; Magnus v Queensland
National Bank (1888) 37 ChD 466 , CA; Lyell v Kennedy, Kennedy v Lyell (1889) 14 App Cas 437 , HL; Belmont
Finance Corp Ltd v Williams Furniture Ltd (No 2) [1980] 1 All ER 393, CA. Knowledge must be of facts and not of
doubtful claims: Carl Zeiss Stiftung v Herbert Smith & Co (No 2) [1969] 2 Ch 276 : [1969] 2 All ER 367, CA.
18 Sadler v Lee (1843) 6 Beav 324.
19 Williams v Williams (1881) 17 ChD 437 ; Coleman v Bucks and Oxon Union Bank [1897] 2 Ch 243 ; Union Bank
of Australia Ltd v Murray-Aynsley [1898] AC 693 , PC; Competitive Insurance Ltd v Davies Investments Ltd [1975] 3
All ER 254 : [1975] 1 WLR 1240 .
20 Shields v Bank of Ireland [1901] 1 IR 222. As to the type of knowledge required see Baden v Société Générale pour
Favoriser le Développement du Commerce et de l’Industrie en France SA [1992] 4 All ER 161 : [1993] 1 WLR 509 n
(affd [1992] 4 All ER 279n, CA), which emphasises the principle that the courts will not readily import a duty to inquire in
the case of commercial transactions, citing Manchester Trust v Furness [1895] 2 QB 539 at 545, CA, per Lindley LJ.
21 M‘Leod v Drummond (1810) 17 Ves 152 at 154; Keane v Robarts (1819) 4 Madd 332; Myler v Fitzpatrick (1822) 6
Madd 360 per Leach V-C; Robertson v Armstrong (1860) 28 Beav 123; Morgan v Stephens (1861) 3 Giff 226 at 236;
Gray v Johnston (1868) LR 3 HL 1; Rae v Meek (1889) 14 App Cas 558 , HL; Brinsden v Williams [1894] 3 Ch 185
; Coleman v Bucks and Oxon Union Bank [1897] 2 Ch 243 ; Stokes v Prance [1898] 1 Ch 212 at 224; Bath v
Standard Land Co Ltd [1911] 1 Ch 618 at 633, CA, per Fletcher Moulton LJ. A solicitor does not become liable as a
constructive trustee by having been paid an undue amount for costs out of the trust estate: Maw v Pearson (1860) 28
Beav 196; Re Spencer, Spencer v Hart (1881) 51 LJ Ch 271, CA.
22 See Re Tilley’s Will Trusts, Burgin v Corad [1967] Ch 1179 : [1967] 2 All ER 303.
23 Re Diplock, Diplock v Wintle [1948] Ch 465 at 540 : [1948] 2 All ER 318 at 357, CA (affd sub nom Ministry of Health
v Simpson [1951] AC 251 : [1950] 2 All ER 1137, HL); Banker’s Trust Co v Shapira [1980] 3 All ER 353 : [1980] 1
WLR 1274 , CA.
End of Document
[290.225] Trustee to make good any depreciation and damage suffered by
the estate
TRUSTEES > 2. LIABILITY OF TRUSTEES > A. Restoration of Loss
Part One TRUSTS
A. RESTORATION OF Loss
[290.225] Trustee to make good any depreciation and damage suffered by

the estate
The extent of liability incurred by a trustee who is responsible for a breach of trust1 is measured by the extent of
loss or depreciation which his act or omission has caused to the trust estate and he is liable to restore the property
to the estate which it has lost or its value and to make good any depreciation and damage, which the estate has
suffered2. The restitutionary obligation of a trustee who is held liable for a breach of trust is fundamentally different
from the obligation of a contractual or tortious wrongdoer. The liability of a trustee extends to profits which he would
have received but for his wilful default or neglect3; it is not limited to what the trustee charged with default has
actually received and still less to any benefit which he may have personally derived from the breach4. There is no
authority for the existence of any distinction in this respect between a case where a trust fund has been collected
and subsequently lost and a case of a fund lost through the neglect of a trustee to collect it5. If the trustee makes an
unauthorised investment, he is liable for the loss incurred on realising it6.
A person who is neither a trustee nor a beneficiary under a trust deed will have no locus standi to correct private
breaches of trust unless such breaches are unconstitutional or ultra vires7.
1 As to breach of trust see [290.222]-[290.223]. As to relief for liability for breach of trust see [290.228]-[290.233].
2 Younge v Combe (1798) 4 Ves 101; Caffrey v Darby (1801) 6 Ves 488; French v Hobson (1803) 9 Ves 103; Bennett v
Colley (1833) 2 My & K 225; Morris v Livie (1842) 1 Y&C Ch Cas 380; Challen v Shippam (1842) 4 Hare 555; Robinson
v Robinson (1851) 1 De GM&G 247 at 255 per Lord Cranworth LJ; Gibbins v Taylor (1856) 22 Beav 344; Craven v
Craddock [1868] WN 229; Re Biddulph, ex p Norris [1869] 4 Ch App 280; Cann v Cann (1884) 51 LT 770; Re Deane,
Bridger v Deane [1889] 42 Ch D 9 , CA; Re Newen, Smiles v Carruthers (1912) 133 LT Jo 589; Radcliffe v Abbey
Road and St John’s Wood Permanent Building Society (1918) 87 LJ Ch 557. Where a trustee incautiously invests trust
money on a security authorised by the terms of the trust but of insufficient value, he is liable for the deficiency on a
realisation of the security: Re Salmon, Priest v Uppleby (1889) 42 ChD 351 , CA. The court will not assent to any
Page 2 of 2
[290.225] Trustee to make good any depreciation and damage suffered by the estate
compromise which does not replace the whole of the trust money, where the trustee is able to pay it: Re Dewar, Dewar
v Brooke (1885) 54 LJ Ch 830 at 833 per Kay J.
3 Howell v Howell (1837) 2 My & Cr 478 at 486; Barlett v Barclays Bank Trust Co Ltd (No 2) [1980] Ch 515 : [1980] 2
All ER 92.
4 Adair v Shaw (1803) 1 Sch & Lef 243 at 272.
5 See Re Godwin’s Settlement, Godwin v Godwin (1918) 87 LJ Ch 645 at 647.
6 Knott v Cottee (1852) 16 Beav 77 (where improper investments were ordered into court and sold at a loss, the trustees
were held liable for that loss even though at the date of the subsequent court decree there would have been no loss if
the investments had been retained).
7 Jatindra Nath Set v Jadhavpur University AIR 1960 Cal 120 [LNIND 1959 CAL 141].
End of Document
[290.226] Rights of creditors of trustees
TRUSTEES > 2. LIABILITY OF TRUSTEES > B. Rights of CreditorS
Part One TRUSTS
B. RIGHTS OF CREDITORS

The rights of the creditors of trustees are as follows. A decree may be passed against a trustee who has made
contracts or borrowed money enforceable against the trustee personally. It may also be enforced against his
beneficial interest in the estate. However, the creditor has no right to obtain a decree executable against the estate.
The creditor is not debarred from a right of subrogation to obtain the benefit of the trustee’s right of indemnity by
reason of the fact that he was not at the date of the transaction aware that he was dealing with a trustee; but
obstacles which the estate could raise against the trustee or executor1 may impede the creditor. Where the money
is lent or goods are sold to the trustee on his personal security though for the purposes of the trust, the creditor
cannot realise the debt out of the trust property. The fact that money was utilised and was intended to be utilised for
the benefit of the trust will not entitle the creditor to a decree charging the amount due against the trust property2.
Where a debt is incurred by the trustee for the benefit of the estate and the creditor sues such trustee personally
and obtains a decree and in execution of that decree attaches the trust property and obtains an order for sale of the
property, only the beneficial interest of such trustee in the trust property can be sold and the question of indemnity
and subrogation cannot be gone into in execution but such relief must be sought in an independent proceedings3.
Where it appears to a creditor advancing money to a trust that the money is being used for the trust and not for the
trustee’s private purposes and where the money is definitely applied, the creditor’s claim that the duties could have
been performed on a less elaborate scale is sustainable only where a trustee acts in the discharge of his duties as
trustee. That principle cannot be applied where a trustee is acting contrary to the trust or to the rules imposed on
him by a scheme4.
1 Mackintosh Burn Ltd v Shivakali Kumar AIR 1933 Cal 668 : 60 Cal 801.
2 Swaminatha Aiyar v Srinivasa Aiyar AIR 1918 Mad 533.
3 See note 1 above.
4 Bava C Gopalaswami Mudaliar v Annadana Kattalai of Sri Tyagarajaswami Temple, Tiruvarur by trustee Vaithilinga
Pandarasannadi AIR 1940 Mad 719 [LNIND 1940 MAD 7].
Page 2 of 2
End of Document
[290.227] Trustee committing breach of trust
TRUSTEES > 2. LIABILITY OF TRUSTEES > B. Rights of CreditorS
Part One TRUSTS
B. RIGHTS OF CREDITORS
[290.227] Trustee committing breach of trust

Even if a trustee is guilty of committing breach of trust he does not ipso facto cease to be a trustee1. A de facto
trustee may be allowed to maintain a suit on behalf of the beneficiary if he is in possession and management of an
institution for the time being till the de jure trustee is appointed and may maintain a suit for recovery of possession
of the trust property which is in possession of a stranger by way of adverse possession so long as the action is for
the benefit of the beneficiary of the trust estate2.
1 Aravumudhu Ayyangar v Ramanuja Ayyangar AIR 1929 Mad 154.

2 Mohideen Khan v Gani Khan AIR 1956 AP 19; Ram Charan Das v Naurungilal AIR 1933 PC 75; Kasi Chetty v Srimathu
Devasikamany Nataraja Dikshithar (1913) Mad WN 181; Mahadeo Prosad Singh v Karia Bharti AIR 1935 PC 44;
Sankaranarayan v Poovanatha Swami Temple AIR 1949 Mad 721 [LNIND 1949 MAD 266]; Gopal Krishanji Ketar v
Mahomed Jaffer AIR 1954 SC 5; Mohammed Ibrahim v Sundaram Chetti AIR 1926 Mad 1066; see also Kishen Devi v
Ram Chand AIR 1927 Lah 773; Ram Das v Girdhari Das Radhakrishnadas AIR 1947 Sind 187; Khiarul Bashar v
Thannulal AIR 1957 All 553 [LNIND 1957 ALL 71]; Soondardas Thakersey v Bai Lakshmibai AIR 1946 Bom 131.
End of Document
[290.228] Breach fraudulently induced by beneficiary
TRUSTEES > 3. RELIEF FROM LIABILITY FOR BREACH OF TRUST
Part One TRUSTS
3. RELIEF FROM LIABILITY FOR BREACH OF TRUST

A trustee will not be liable for breach of trust if the beneficiary fraudulently induced the trustee to commit the
breach1. Where a trustee commits a breach of trust2 at the instigation or request3, or with the consent in writing, of a
beneficiary4, the court, if it thinks fit5, may make such order as it deems just for impounding all or any part of the
beneficiary’s interest in the trust estate6 by way of indemnity7 to the trustee8 or persons claiming through him9. A
beneficiary who induces a trustee to commit a breach of trust is primarily liable for it and will be ordered to recoup
that amount to the trustee which is required to make good the loss to the trust estate10. Where one of several
beneficiaries procures trust money to be improperly laid out or to be paid away under a fraudulent appointment by
him, or otherwise commits a breach of the terms of the trust and part of the trust estate is consequently lost, the
other beneficiaries are entitled as against him to have their shares made good out of his share of what is ultimately
recovered11 or out of any benefit which he has himself derived from the breach of trust12.
1 Indian Trusts Act 1882 section 23. See also Mara v Browne [1895] 2 Ch 69 at 94.
2 The act or omission instigated or requested must itself be a breach of trust and not merely an act or omission which
becomes a breach of trust by reason of want of care on the trustees’ part: Re Somerset, Somerset v Earl Poulett [1894]
1 Ch 231 at 265, CA, per Lindley LJ.
3 The instigation or request need not be in writing: Griffith v Hughes [1892] 3 Ch 105 ; Mara v Browne [1895] 2 Ch 69
at 92.
4 The beneficiary must know what he is instigating or requesting or consenting to: Re Somerset, Somerset v Earl Poulett
[1894] 1 Ch 231 at 270, 274, CA.
5 See Ricketts v Ricketts (1891) 64 LT 263 at 265; Griffith v Hughes [1892] 3 Ch 105 at 107; Re Somerset, Somerset
v Earl Poulett [1894] 1 Ch 231 at 274, CA; Bolton v Curre [1895] 1 Ch 544 .
6 See Booth v Booth (1838) 1 Beav 125; Lincoln v Wright (1841) 4 Beav 427 at 432; Bentley v Robinson (1859) 9 I Ch R
479. The interest must be in the actual estate of which the trustee seeking to impound is trustee: Ricketts v Ricketts
(1891) 64 LT 263 at 265. The power applies where the beneficiary is one of the trustees: Chillingworth v Chambers
[1896] 1 Ch 685 , CA. The beneficiary’s interest may be impounded as against a person to whom it has been
assigned subsequently to the breach of trust (Bolton v Curre [1895] 1 Ch 544 at 548-549), and as against the
beneficiary’s trustee in bankruptcy (Fletcher v Collis [1905] 2 Ch 24 at 39, CA).
Page 2 of 2
7 A trustee does not waive his right to the indemnity by declining to take a mortgage of the beneficiary’s interest as
security for the breach of trust at the time of its commission: Bolton v Curre [1895] 1 Ch 544 at 549-550.
8 An order for an indemnity may be made in favour of a former trustee, as the right does not depend upon the claimant
having possession of the trust fund: Re Pauling’s Settlement Trusts, Younghusband v Coutts & Co (No 2) [1963] Ch
576 : [1963] 1 All ER 857.
9 Trafford v Boehm (1746) 3 Atk 440 at 444 per Lord Hardwicke LC; Raby v Ridehalgh (1855) 7 De GM&G 104; Sawyer
v Sawyer (1885) 28 ChD 595 at 598, CA, per Chitty J; Re Somerset, Somerset v Earl Poulett [1894] 1 Ch 231 at
275, CA, per Davey LJ; Bolton v Curre [1895] 1 Ch 544 at 549 per Romer J; Fletcher v Collis [1905] 2 Ch 24 at
34-35, CA, per Romer LJ.
10 Trafford v Boehm (1746) 3 Atk 440 at 444; Keays v Lane (1869) IR 3 Eq 1.
11 Phillipson v Gatty, Gatty v Phillipson (1850) 2 H&Tw 459. The other beneficiaries have no claim on the beneficiary’s
share in a fund held under another trust: Edgar v Plomley [1900] AC 431 , PC.
12 Greenwood v Wakeford (1839) 1 Beav 576; Williams v Allen (No 2) (1863) 32 Beav 650; Re Deane, Bridger v Deane
(1889) 42 ChD 9 , CA.
End of Document
[290.229] Beneficiary’s concurrence in breach
Part One TRUSTS

Beneficiaries who actively concur or passively acquiescence without original concurrence in a breach of trust1 can
obtain no relief against the trustee in respect of it2, if at the time of their concurrence or acquiescence they were of
full age3, suffered no incapacity4, were not acting under undue influence5 and were fully informed of the
circumstances6. Concurrence of the beneficiary in the breach need not be expressed in writing7. Thus, where
certain trustees made a marriage settlement by way of trust and sought to escape liability on the ground that the
beneficiary happened to know that the trust fund or any part of it were to be invested in a particular manner and
consents to it, the court held that the trustees would not be absolved from the liability unless the concurrence or
acquiescence was with full knowledge of the facts of the case and of her rights as against the trustees as required
by the Indian Trusts Act 18828.
Acquiescence need not merely be shown by an active, intelligent consent but it may be implied where a person is
content not to oppose irregular acts which he knows are being done9. It imports full knowledge and a cestui que
trust cannot be bound by acquiescence unless he has been fully informed of his rights and of all material facts and
circumstances of the case10. In order that acquiescence may be alleged as a bar to a suit for relief in respect of a
breach of trust there must have been such delay as amounts to laches on the part of the cestui que trust11. The
onus is on the trustees, as soon as it is established that a breach of trust has been committed, to satisfy the court
that the beneficiary concurred or acquiescenced in the breach of trust with full knowledge of the facts of the case
and of her rights as against the trustees12. Though it is difficult to lay down examples for each case, as it must be
dealt with according to its own facts and circumstances, yet the court will be hesitant to exercise discretion in favour
of a trustee who is remunerated for his services13. A person who actively concurs in the division of a trust fund in
ignorance that he has an interest in it and that the division is a breach of trust cannot afterwards make the trustee
liable for the amount of his interest in it14. A person claiming under a beneficiary stands in the same position as the
beneficiary himself15.
Where a beneficiary sues in respect of a breach of trust, then if his consent or concurrence is relied on as a defence
to his proceedings, the court has to consider all the circumstances with a view to deciding whether it is fair and
equitable that he should sue the trustees; but it is not necessary for the purpose of protecting them that the
beneficiary should have known that it was a breach of trust in which he concurred, if he fully understood in what he
concurred16 nor is it necessary that he himself should have benefited from the breach17. There is no hard and fast
rule that ignorance of a legal right prevents an effective consent from being given but all the circumstances must be
looked at to see whether it is just that the complaining beneficiary should succeed against the trustee18. There must
be a full and frank disclosure so that the beneficiary is clearly a party to the suit19.
Page 2 of 3
1 See the Indian Trusts Act 1882 section 23; see also Mohideen Khan v Gani Khan AIR 1956 AP 19; Ram Charan Das v
Naurungilal AIR 1933 PC 75; Kasi Chetty v Srimathu Devasikamany Nataraja Dikshithar (1913) Mad WN 181;
Mahadeo Prosad Singh v Karia Bharti AIR 1935 PC 44; Sankaranarayan v Poovanatha Swami Temple AIR 1949 Mad
721 [LNIND 1949 MAD 266]; Gopal Krishanji Ketar v Mahomed Jaffer AIR 1954 SC 5; Mohammed Ibrahim v Sundaram
Chetti AIR 1926 Mad 1066; see also Kishen Devi v Ram Chand AIR 1927 Lah 773; Ram Das v Girdhari Das
Radhakrishnadas AIR 1947 Sind 187; Khiarul Bashar v Thannulal AIR 1957 All 553 [LNIND 1957 ALL 71]; Soondardas
Thakersey v Bai Lakshmibai AIR 1946 Bom 131.
2 Brice v Stokes (1805) 11 Ves 319 at 325-326 per Lord Eldon LC; Walker v Symonds (1818) 3 Swan 1 at 64; Byrchall v
Bradford (1821) 6 Madd 13; Nail v Punter (1832) 5 Sim 555; Lincoln v Wright (1841) 4 Beav 427 at 432 per Lord
Langdale MR; Stretton v Ashmall (1854) 3 Drew 9; Re Biddulph, ex p Barnewall, Countess De Front’s Executors’ Case
(1855) 6 De GM&G 801 at 812; Hope v Liddell, Liddell v Norton (1855) 21 Beav 183 at 210; Re M‘Kenna’s Estate, ex p
Busteed (1861) 5 LT 241, CA; Butler v Carter (1868) LR 5 Eq 276 at 281 per Lord Romilly MR; Sleeman v Wilson
(1871) LR 13 Eq 36; Phipps v Boardman [1964] 2 All ER 187 : [1964] 1 WLR 993 (no appeal on this point); Fletcher
v Collis [1905] 2 Ch 24 at 32, CA, per Romer LJ.
3 Adye v Feuilleteau (1783) 3 Swan 84n at 87n-88n per Lord Loughborough LC; Wilkinson v Parry (1824) 4 Russ 272 at
276; March v Russell (1837) 3 My & Cr 31 at 42; Walker v Symonds (1818) 3 Swan 1 at 69 per Lord Eldon LC.
4 Crosby v Church (1841) 3 Beav 485 at 489; Mara v Manning (1845) 2 Jo & Lat 311 at 318; Cresswell v Dewell (1863) 4
Giff 460 at 465; Fletcher v Green (1864) 33 Beav 426 at 429; Fletcher v Collis [1905] 2 Ch 24 at 31-32, CA, per
Vaughan Williams LJ.
5 Lloyd v Attwood, Attwood v Lloyd (1859) 3 De G&J 614 at 649 per Turner LJ. If a trustee knows or ought to know that
the beneficiary was acting under the undue influence of another, the beneficiary’s consent or acquiescence is no
defence: Re Pauling’s Settlement Trusts, Younghusband v Coutts & Co [1964] Ch 303 : [1963] 3 All ER 1, CA. As to
undue influence see [150] FAMILY LAW.
6 Ryder v Bickerton (1743) 3 Swan 80n at 83n; Walker v Symonds (1818) 3 Swan 1 at 69, 73; Adams v Clifton (1826) 1
Russ 297; March v Russell (1837) 3 My &Cr 31 at 42-43; Fyler v Fyler (1841) 3 Beav 550 at 560 per Lord Langdale
MR; Burrows v Walls (1855) 5 De GM&G 233 at 251-252 per Lord Cranworth LC; Thompson v Finch (1856) 8 De
GM&G 560 at 566; Bullock v Downes (1860) 9 HL Cas 1 at 19; Rehden v Wesley (1861) 29 Beav 213 at 215 per
Romilly MR; Westmoreland v Holland (1871) 23 LT 797 at 799 per Stuart V-C; Dixon v Dixon (1878) 9 ChD 587 ; Re
Jackson, Wilson v Donald (1881) 44 LT 467; Crichton v Crichton [1896] 1 Ch 870 at 875, CA, per Lindley LJ. In the
case of a person of full age there may be a prima facie presumption that he is acting with a full knowledge of all the
circumstances: Sawyer v Sawyer (1855) 28 ChD 595 at 604, CA, per Fry LJ. See also the observations of Nicholls J
in John v James [1991] FSR 397 at 439.
7 Macleod v Annesley (1853) 16 Beav 600 at 607; Fletcher v Collis [1905] 2 Ch 24 at 33, CA.
8 Furha Khatoon Aron v E Sadka AIR 1935 Rang. 146.
9 Ananda Chandra Sen v Parbati Nath Sen 4 Cal LJ 198.
11 Athikarath Nanu Menon v Erathanikat Komu Nayar ILR 21 Mad 42.
13 National Trustees Co of Australasia Ltd v General Finance Co of Australasia Ltd [1905] AC 373 , PC.
14 Evans v Benyon (1887) 37 ChD 329 at 344, CA, per Cotton LJ.
15 Williams v Lomas (1852) 16 Beav 1; Brewer v Swirles (1854) 2 Sm & G 219; Fletcher v Collis [1905] 2 Ch 24 , CA.
16 See Re Pauling’s Settlement Trusts, Younghusband v Coutts & Co [1961] 3 All ER 713 at 730 : [1962] 1 WLR 86 at
108 per Wilberforce J (applied in Holder v Holder [1968] Ch 353 at 394, 399, 406 : [1968] 1 All ER 665 at 673, 678,
683, CA; and in Re Freeston’s Charity, Sylvester v University College, Oxford [1979] 1 All ER 51 at 62 : [1978] 1 WLR
741 at 754, CA); on appeal [1964] Ch 303 : [1963] 3 All ER 1, CA, no opinion was expressed on this point.
17 Re Pauling’s Settlement Trusts, Younghusband v Coutts & Co [1961] 3 All ER 713 at 730 : [1962] 1 WLR 86 at 108
(approved by the Court of Appeal: see note 16 above); on appeal [1964] Ch 303 : [1963] 3 All ER 1, CA. See also
Chillingworth v Chambers [1896] 1 Ch 684 at 700, CA, per Lindley LJ; Fletcher v Collis [1905] 2 Ch 24 at 32 et
seq, CA, per Romer LJ.
18 Holder v Holder [1968] Ch 353 at 394 : [1968] 1 All ER 665 at 673, CA; Re Freeston’s Charity, Sylvester v
University College, Oxford [1979] 1 All ER 51 at 62 : [1978] 1 WLR 741 at 754, CA. Even where a beneficiary is not
precluded from suing the trustees by his consent at the time of the transaction, he may be precluded from doing so on
Page 3 of 3
the ground of acquiescence, if by his conduct after he has properly appreciated the position he has done anything
which is equivalent to a release of his claims or on which an estoppel may be found against him: see Re Pauling’s
Settlement Trusts, Younghusband v Coutts & Co [1961] 3 All ER 713 at 735-736 : [1962] 1 WLR 86 at 115-116; on
appeal [1964] Ch 303 : [1963] 3 All ER 1, CA. See also Re Jarvis, Edge v Jarvis [1958] 1 All ER 336 : [1958] 1 WLR
815 ; Shaw v Applegate [1978] 1 All ER 123 : [1977] 1 WLR 970 , CA; Swain v The Law Society [1981] 3 All ER
797 : [1982] 1 WLR 17 , CA (revsd without affecting this point [1983] 1 AC 598 : [1982] 2 All ER 827, HL); Taylor
Fashions Ltd v Liverpool Victoria Trustees Co Ltd, Old & Campbell Ltd v Liverpool Friendly Society [1982] QB 133 n
: [1981] 1 All ER 897.
19 hipps v Boardman [1964] 2 All ER 187 : [1964] 1 WLR 993 .
End of Document
[290.230] Condonation
Part One TRUSTS
A trustee is relieved from liability in respect of a breach of trust1 if he is released or indemnified by all the
beneficiaries or other persons entitled to enforce the liability2, provided that they are of full age3 and under no
incapacity, and are not acting under undue influence4 and have full information as to all material circumstances
connected with the breach of trust5. Where all do not join in the release, those who join are precluded from
enforcing the liability6. A release of one of several trustees may operate to release the others also7. A beneficiary
who, knowing of a breach of trust, obtains from the trustee a part of the trust property to which he is entitled does
not lose his right to a further claim against the trustee in respect of the rest of the property unless an intention to
abandon that right can be gathered from the surrounding circumstances8.
Where a beneficiary receives more than he is entitled to from the trustee, whether in respect of capital or income,
he may be liable to refund the excess to the trust estate which ought not to have been paid to him9. So far as it is
capable of being identified or disentangled, money or property wrongly paid or transferred to a beneficiary or the
money or property into which it has been converted may be recovered, unless it has come into the hands of a
purchaser for valuable consideration without notice of the trust10. Where possible, the court corrects errors of
account between a trustee and a beneficiary, and if the administration is out of court, directs the appropriate
adjustment11. In administering the estate, the court will cause the amount wrongly paid to the beneficiary in respect
of one interest to be deducted from any other share in the estate to which he is entitled12. Thus, a trustee who
overpays a beneficiary may adjust accounts by retaining the overpayments out of other interests of the beneficiary,
such as future income as it arises13.
However, it seems that a trustee who is also a beneficiary is not entitled to recover from the other beneficiaries,
amounts that he has overpaid them in excess of their share14.
1 As to breach of trust see [290.222]-[290.223]. As to liability for breach of trust see [290.224]-[290.226].
2 Stackhouse v Barnston (1805) 10 Ves 453 at 466 per Grant MR; Williams v Lomas (1852) 16 Beav 1; Farrant v
Blanchford (1863) 1 De GJ & Sm 107 at 119-120 per Lord Westbury LC; Aveline v Melhuish (1864) 2 De GJ & Sm 288;
Evans v Benyon (1887) 37 ChD 329 at 342, CA, per Cotton LJ.
Page 2 of 2
3 A minor who fraudulently consents to a breach of trust cannot later bring a claim against the trustee in respect of it:
Overton v Banister (1844) 3 Hare 503. A release executed by a person immediately after he attains his majority is
viewed with suspicion: Wade v Cox (1835) 4 LJ Ch 105; Parker v Bloxam (1855) 20 Beav 295.
4 Bowles v Stewart (1803) 1 Sch & Lef 209 at 226-227; Lloyd v Attwood, Attwood v Lloyd (1859) 3 De G & J 614 at 649;
Farrant v Blanchford (1863) 1 De GJ & Sm 107 at 119-120 per Lord Westbury LC; Reade v Reade (1881) 9 LR Ir 409.
5 Walker v Symonds (1818) 3 Swan 1; Hore v Becher (1842) 12 Sim 465; Stanes v Parker (1846) 9 Beav 385; Aspland v
Watte (1855) 20 Beav 474; Lloyd v Attwood, Attwood v Lloyd (1859) 3 De G&J 614 at 649-650; Farrant v Blanchford
(1863) 1 De GJ & Sm 107 at 119-120; Thomson v Eastwood (1877) 2 App Cas 215 at 233-234, HL; Reade v Reade
(1881) 9 LR Ir 409; Re Garnett, Gandy v Macaulay (1885) 31 ChD 1 , CA. As to the advisability of the beneficiary
having independent legal advice see Re Pauling’s Settlement Trusts, Younghusband v Coutts & Co [1964] Ch 303 :
[1963] 3 All ER 1, CA.
6 Aylwin v Bray (1822) cited in 2 Y&J at 518n; Morley v Lord Hawke (circa 1801) cited in 2 Y&J 520; Bather v Kearsley
(1844) 7 Beav 545.
7 Blackwood v Borrowes (1843) 4 Dr & War 441.
8 Re Cross, Harston v Tenison [1882] 20 Ch D 109 at 122, CA.
9 Brooksbank v Smith (1836) 2 Y&C Ex 58; Fuller v Knight (1843) 6 Beav 205 at 210; M‘Gachen v Dew, Dew v
M‘Gachen (1851) 15 Beav 84 at 90 per Romilly MR; Baynard v Woolley, Wearing v Baynard (1855) 20 Beav 583; Re
Smith’s Estate, Clifford v Washington (1879) 48 LJ Ch 205; Re Brown, Dixon v Brown (1886) 32 ChD 597 ; Re
Robinson, McLaren v Public Trustee [1911] 1 Ch 502 at 513 per Warrington J.
10 See eg Re Diplock, Diplock v Wintle [1948] Ch 465 : [1948] 2 All ER 318, CA; affd sub nom Ministry of Health v
Simpson [1951] AC 251 : [1950] 2 All ER 1137, HL.
11 Re Musgrave, Machell v Parry [1916] 2 Ch 417 , following Re Ainsworth, Finch v Smith [1915] 2 Ch 96 . An
honest mistake of law, not being a mistake of public law, does not exclude this relief: Re Musgrave, Machell v Parry
above. See also Re Wooldridge, Wooldridge v Coe [1920] WN 78.
12 Dibbs v Goren (1849) 11 Beav 483; Re Robinson, McLaren v Public Trustee [1911] 1 Ch 502 . It makes no
difference that the other shares have been assigned for a valuable consideration: Dibbs v Goren (1849) 11 Beav 483;
Re Brown, Dixon v Brown [1886] 32 Ch D 597 .
13 Livesey v Liveseyk (1827) 3 Russ 287; Re Musgrave, Machell v Parry [1916] 2 Ch 417 ; Re Reading, Edmonds v
Reading [1916] WN 262.
14 Re Horne, Wilson v Cox Sinclair [1905] 1 Ch 76 . However, in Re Ainsworth, Finch v Smith [1915] 2 Ch 96 and in
Re Reading, Edmonds v Reading (1916) 60 Sol Jo 655, Re Horne, Wilson v Cox Sinclair above was criticised and held
to lay down no rule of general application.
End of Document
[290.231] Relief from paying interest
Part One TRUSTS
[290.231] Relief from paying interest

A trustee committing a breach of trust is liable to pay interest only subject to the conditions imposed by the Indian
Trusts Act 18821.
1 See the Indian Trusts Act 1882 section 23. See also Vithal Dass v Rup Chand AIR 1967 SC 188 [LNIND 1966 SC
117](the fact that the co-owner in possession of all joint properties can collect rent does not make him a trustee. In
order to be a trustee, it must be shown that by availing himself of the position of a co-owner he gained an advantage in
derogation of other co-owners interested in the property).
End of Document
[290.232] Non liability of trustees paying without notice of transfer by
beneficiary
Part One TRUSTS
[290.232] Non liability of trustees paying without notice of transfer by

beneficiary
When a 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 in the absence of such vesting, the
trustee is not liable for the property so paid or delivered1.
End of Document
[290.233] Liability of trustee when beneficiary’s interest is forfeited to
government
Part One TRUSTS
[290.233] Liability of trustee when beneficiary’s interest is forfeited to

government
When the beneficiary’s interest is forfeited or awarded by legal adjudication 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 the State
Government may direct in this behalf.1.
1 Indian Trusts Act 1882 section 29; Lakshmichand Nemchand v Jai Kumar Bai 29 Bom 170 : 6 Bom LR 90.
End of Document
[290.234] Successor trustee not liable for predecessor’s default
Part One TRUSTS
[290.234] Successor trustee not liable for predecessor’s default

Where a trustee succeeds another, he is not, as such, liable for the acts or defaults of his predecessor1.
End of Document

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Date and Time: 11 January 2020 19:24:00 IST

Job Number: 107109359

Part One TRUSTS

Part One TRUSTS

2. PERSONS QUALIFIED FOR TRUSTEESHIP

[290.095] Who may be trustee

Part One TRUSTS

2. PERSONS QUALIFIED FOR TRUSTEESHIP

[290.096] Who may not be trustee

1 Mahamad Nasim v Mohamed Ahmad 27 IC 389 : 1 OLJ 726.

Part One TRUSTS

2. PERSONS QUALIFIED FOR TRUSTEESHIP

[290.097] Insolvent firm or person cannot remain trustee

Part One TRUSTS

[290.098] Trustee de son tort

Part One TRUSTS

[290.099] Constructive trustee in default of express trustee

Part One TRUSTS

[290.100] Trusteeship by devolution

Part One TRUSTS

[290.101] Official trustee

An official trustee must have been for at least4:

Part One TRUSTS

(i) Appointment of Official Trustee

[290.102] Appointment by author of trust

7 Official Trustees Act 1913 section 9.

Part One TRUSTS

(i) Appointment of Official Trustee

[290.103] Appointment by court

6 Satya Narain v Official Trustee (1982) ALJ 886.

Part One TRUSTS

(i) Appointment of Official Trustee

[290.104] Appointment by existing trust

Part One TRUSTS

(i) Appointment of Official Trustee

[290.105] Principal Civil Court of original jurisdiction

1 W H Brady v Ganesh Flour Mills (1981) Rajdhani LR 364.

Part One TRUSTS

(ii) Powers and Liabilities of Official Trustee

[290.106] General powers and liabilities of official trustee

1 See the Official Trustees Act 1913 section 7(1)(a).

Part One TRUSTS

(ii) Powers and Liabilities of Official Trustee

[290.107] Vesting of gift or legacy in official trustee

Part One TRUSTS

(ii) Powers and Liabilities of Official Trustee

[290.108] Administration vests with co-trustees

1 R P Kapur v Kaushalaya Educational Trust (1982) ILR 1 Del 801.

Part One TRUSTS

(iii) Powers and Liabilities of Government with Respect to Official Trustee

[290.109] Power of government to make rules

1 As to the meaning of “government” see [290.101] note 2.

Part One TRUSTS

(iii) Powers and Liabilities of Government with Respect to Official Trustee

[290.110] Powers of high court to make orders with respect to property

1 As to the extent of high court jurisdiction see [290.101] note 5.

Part One TRUSTS

(iv) Cost and Audit

[290.111] Liability of government