A trust is created for the benefit of a third person called the beneficiary
and the duties of the trust (to see that it functions properly) are carried out
by the trustee.
Who is a Trustee?
The person who accepts the confidence is called the "Trustee". It is his duty to
see that the trust functions properly and there is no misuse of the trust
property at any stage. The duties of a trustee are defined from Sections 11 to
22 of the Indian Trust Act of 1882.
Section 11- Trustee to execute a trustAs laid down by the section, a trustee
- is bound to fulfill the purpose of the trust; and
- to obey the author's directions contained in the instrument.
Where the directions of the author are illegal, impracticable, or manifestly
injurious to the beneficiaries, they need not be obeyed. Besides, where all the
beneficiaries are competent to contract and they collectively consent to modify
the directions or where a court allows a departure from them, the original
directions need not be followed. A trust is obligatory and the fulfillment of
its purpose in a directed manner is the fundamental duty of a trustee.
finds expression in an adage giving homely truth in a condensed manner, that "he
who pays the piper, calls the tune", or "one who pays, dictates". Where such
directions are given after a trust has been created, they are ineffective and of
no consequence because on the creation of a trust its property is transferred to
the trustee, and the owner losses all control over it.
The gist of Section 11 which lays down a general principle can be stated this
way, a trustee is to execute the trust as far as it is legally, practicable, and
- A, a trustee is simply authorized to sell certain land by public
auction. He cannot sell the land by private contract.
- A, a trustee of certain land for X, Y, and Z, is authorized to sell the
land for a specified sum. X, Y, and Z are competent to contract and consent
that A may sell the land to C for a less sum. A may sell accordingly.
Section 12- Trustee to inform himself of state of trust property
The second duty of a trustee is:
- To acquaint himself with the nature in circumstances of trust property as
soon as possible after his appointment.
- He must also obtain a transfer of such property to himself, and
- Get in trust money invested on insufficient or hazardous securities.
For example, if the trust money is a debt or a chose-in-action, a trustee should
take immediate steps to recover it or to reduce it into possession immediately
unless he can show founded justification for his delay or default.
- The trust property is a debt outstanding on personal security. The
instrument of trust gives the trustee no discretionary power to leave the
debt so outstanding. The trustee must recover the debt without unnecessary
Section 13- Trustee to protect the title of the trust property
It is the most fundamental duty of a trustee to secure and place the trust
property in a state of security. He has to maintain and defend suits for the
assertion and protection of its title and for this purpose must take all
reasonable and possible steps suitable to the occasion. A trust property is
given to the author of the trust by an unregistered deed, it is his duty to get
such an instrument registered. This situation of a trustee requires the utmost
diligence, exacta diligentia, and fidelity on his part. And in doing so he
cannot deviate from the letter of the trust.
- The trust property is an immovable property that has been given to the
author of the trust by an unregistered instrument. Subject to the provision
of the Indian Registration Act, of 1877, the trustee, duty is to cause the
instrument to be registered.
Section 14- Trustee not to set up title adverse to beneficiary
The trustee must not for himself or another setup or aid any title to the trust
property adverse to the interest of the beneficiary.
Venkatraman V Jayamal 
In this case, it was held that the trustee's interest should not conflict with
that of the beneficiary and if it is so, he cannot be allowed to do so unless he
obtains a proper discharge from the trust which he has clothed himself.
Asharam V Ludheshwar
In this case, it was held that a trustee cannot impeach the trust.
Narayan B Gosavi V G.V Gosavi
A trustee consequently cannot mix his property with that of the trust. If he
does so, a burden lies heavily upon him to prove that any particular property
belongs to him as distinct from the trust property.
Section 15- Care required from the trustee
This section informs about the care required of a trustee in dealing with the
trust property. The trustee is bound to deal with the trust property as
carefully as a man of ordinary prudence would deal with the such property if it
were his own.
In absence of a contract to the contrary, if a trustee in dealing with trust
property suffers any damage, he is not responsible for the loss, destruction, or
deterioration of the trust property.
- A, a trustee for B, allows the trust to be executed solely by his
co-trustees, C. C misapplies the trust property. A is personally answerable
for the loss resulting to B.
- A, living in Calcutta, is a trustee for B, living in Bombay. A remits
trust funds to B by bills drawn by a person of undoubted credit in favour of the
trustee as such, and payable at Bombay. The bills are dishonoured. A is not
bound to make good the loss.
Section 16- Conversion of perishable property
Where the trust property is created for the benefit of several persons in
succession and the trust property is of a wasting nature or a future or
revisionary interest, the trustee is bound, unless an intention to the contrary
may be inferred from the instrument of trust, to convert the property into
property of permanent and immediately profitable character.
Howe V Earl of Dartmouth
A, a trustee for B, C, and D is empowered to choose between several specified
modes of investing the trust property. A in good faith chooses one of these
modes. The court will not interfere, although the result of the choice may be to
vary the relative right to B, C, and D.
- A bequeaths to B all his property in trust for C during his life, and on
his death for D, and on his death for E. A's property consists of three
leasehold houses and there is nothing in A's will to show that he intended
the houses to be enjoyed in specie. B should sell the houses and invest the
proceeds in accordance with section 20.
- A bequeaths to b his three leaseholds house in Calcutta and all the
furniture there in trust for C during his life, and on his death for D, and
on D's death for E. Here an intention that the houses and furniture should
be enjoyed in specie appears clearly and B should not sell them.
Section 17- Trustee to be Impartial
Where there are more beneficiaries than one, he cannot execute the trust in
favour of one at the expense of another. He has to be impartial. He has not to
pat and choose between beneficiaries; that is not given to him. He should not
honour a tenant for life by investing in a more productive but less secure
Where the trustee has discretionary power, nothing in this section shall be
deemed to authorize the court to control the exercise reasonably and in good
faith of such discretion.
- A, a trustee for B, C, and D is empowered to choose between several
specified modes of investing the trust property. A in good faith chooses one
of these modes. The court will not interfere, although the result of the
choice may be to vary the relative right to B, C, and D.
Section 18- Trustee to prevent waste
Where out of several beneficiaries in succession, one in possession of the
property commits or threatens to commit or threatens to commit any act which is
destructive or permanently injurious thereto, the trustee is bound to take
measures to prevent the such act.
Lalit Mohan V Kishan Mohan Laxmichand 
In this case, it was held that a trustee is bound to prevent waste unless they
are permissive in their character.
Section 19- Accounts and Information
A trustee is bound to maintain clear and proper accounts of trust property and
must be prepared to produce it on demand by the beneficiaries. He should not
conceal anything. He is also bound to render such accounts in respect of the
state of the trust property.
He is at the same time entitled under Section 35 to get his accounts settled and
examined on completion of his office and to receive an acknowledgment from the
beneficiaries that there is nothing due in the trust.
He cannot advance his illiteracy and incapability as a defense for his fault.
Lakhmichand V Jaykuvashi
In this case, it was held that if there is any fault in the accounts of trust,
the trustee becomes prime facie liable for the loss that thereby occurs.
Vasudeva V Bhavadasan
A trustee is not only liable for amounts of money received in his possession but
also liable for his possession had acted with suitable alertness and diligence.
Section 20- Investment of Trust Money
Where the trust property consists of money and cannot be applied immediately or
at an early date to the purpose of the trust, the trustee is bound 9subject to
any direction contained in the instrument of trust) to invest the money.
Section 20A- Power to Purchase redeemable stock at Premium
A trustee may invest in any of the securities referred to in Section 20
notwithstanding that the same may be redeemable and that the price extends the
Mortgage of land pledged to Government under the Act 26 of 1871,
deposit in government saving bank
Nothing in Section 20 shall apply to investments made before this Act comes into
force, or shall be deemed to preclude or investment in a mortgage of immovable
property already pledged as security for an advance under the Land Improvement
Act, 1871 or, in case the trust money does not exceed three thousand rupees, a
deposit thereof in a Government Savings Bank.
Section 22- Sale by trustee directed to sell within the specified period
When a trustee is directed to sell within a specified time and if it extends the
such time, the burden proving, as between himself and the beneficiary, that the
latter is not prejudiced by the extension lies upon the trustee, unless the
extension has been authorized by a Principal Court of original jurisdiction.
Ratilal v/s State of Bombay
A trustee should not keep unnecessary cash with him which is not required for
immediate expenses. This should be avoided.
A bequeaths property to b, directing him with all convenient speed and within
five years to sell it and apply proceeds for the benefit of C. In the exercise
of reasonable discretion. B postpones the sale for six years. The sale is not
thereby rendered invalid, but C, alleging that he has been injured by the
postponement, institutes a suit against B to obtain compensation. In the such
suit the burden of proving that C has been injured on B.
The relationship between trust is compared to a glass, as it is claimed. It is
never the same again after being broken. A cursory examination of the Indian
Trust Act reveals that, in addition to its legal provisions, its obligations and
authority are intended to safeguard the delicate relationship of trust, allowing
it to be maintained and the purpose for which it was established to be achieved.
We may now wrap up this section by discussing the responsibilities granted to
trustees under the Indian Trust Act of 1882.
- AIR 1963 Mad 353
- AIR 1931 Nag 335 (FB)
- AIR 1960 SC 100
- (1904) 6 Bomb LR 907
- 6 BLR 907
- AIR 1934 Mad 115
- AIR 1954 SC 388
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