POWER OF TRUSTEE

1. Power to Sell in Lots- Section 37 of the Indian Trust act provides that a trustee is
empowered to sell any trust property then he can do the following things:
 He may sell the same subject to prior charges or not; and
 Either together in lots, by public auction or private contract; and
 Either at one time or several times
2. Power to Sell in special conditions- Section 38 of the Indian trust act provides allows the
trustee to set reasonable conditions for the sale, decide on matters related to the property's
title, and take other actions like buying the property back at auction or canceling and
changing contracts if needed. The trustee can then resell the property without being held
liable for any loss to the beneficiary resulting from these actions.
3. Power to Convey- Section 39 provides that the trustee shall have power to convey or
dispose the property in a manner which is necessary
4. Power to vary investments- Section 40 provides that the trustee may call for trust property
invested in a security and invest the same into any other security from time to time.
5. Power with regard to maintenance of minor beneficiaries- Section 41 provides that a
trustee has power to pay to the guardians of a minor beneficiary, either the whole of the
income of the trust property or a part of it, as is suitable to the occasion for the minor`
maintenance, education, advancement of life, religious worship, marriage or funeral.

If anything remains from the income thereafter shall be invested in accordance with section
20 of the act. If the income accruing from the trust property is insufficient, then such
property must be applied with the permission of court.
6. Power to give receipts- Section 42 provides that a trustee can pass a valid receipt for the
money etc. received by him and the receipt so obtained shall discharge the payer from all
his liabilities with regard to ir.
7. Power to Compound- Section 43 of the Indian trust act gives the following powers to two
or more trustees acting together:
 Accept any composition or any security any debt or property claimed
 Allow time for payment of debt
 compromise, compound, abandon, submit to arbitration or otherwise settle any
debt, account, claim or thing whatever relating to the trust
 for any of those purposes, enter into, give, execute and do such agreements,
instruments of composition or arrangement, releases and other things as to them
seem expedient.
8. Power to several trustee of whom one may disclaim or die- Section 44 of the Indian
Trust act provides that When an authority is given to one or more trustee and any of them
dies, then the remaining trustees must exercise the authority unless it is contrary to the
terms of instrument of trust.

DISABILITY OF TRUSTEE
1. Trustee cannot renounce- Section 46 of the Indian Trust act provides that a trustee who
has accepted the trust cannot renounce the trust except in following conditions:
i) With the permission of principal civil court
ii) With the consent of beneficiary, if he is competent to contract
iii) By virtue of special power in the instrument of trust
2. Trustee cannot delegate- Section 47 of the Indian Trust act provides that a trustee cannot
delegate his office. This section is based on the legal maxim of ‘delegatus non potest
delegare’ which means that delegate cannot further delegate. This section has the following
exceptions:
i) Delegation is provided by the instrument of trust.
ii) Delegation is in the regular course of business
iii) Delegation is necessary
iv) Competent beneficiary gives consent to delegation
Case- J.P. Srivastava & Sons Ltd. Vs M/S Gwalior Sugar Co. Ltd.- In this case it was held
that trustee could act on behalf of others, if there is a clause in the Trust Deed authorizing the
execution of the Trust to be carried out by "one or more or by majority of the trustees".
Therefore although as a rule, trustees must execute their duties of their office jointly, this general
principle is subject to the following exceptions when one trustee may act for all
(1) where the Trust Deed allows the trusts to be executed by one or more or by majority of trustees
(2) where there is express sanction or approval of the act by the co-trustees;
(3) where the delegation of power is necessary;
(4) where the beneficiaries competent to contract consent to the delegation;
(5) where the delegation to a co-trustee is in the regular course of the business;
(6) where the co-trustee merely gives effect to a decision taken by the trustees jointly.
3. Co Trustees cannot singly- Section 48 of the Indian Trust act provides that the trustees
must act jointly in the execution of trust.
4. Discretionary Power- Section 49 of the Indian Trust act provides that when discretionary
power of a trustee is not exercised reasonably and in good faith, such a power shall be
controlled by Principal Civil court.
5. No right to Remuneration- Section 50 of the Indian Trust act provides that a trustee has
no right to charge remuneration for his trouble, skill and loss of time in executing the trust.
Non Applicability- This section is not applicable on any Official Trustee, Administrator
General, Public Curator, or person holding a certificate of administration.

6. Not to use Trust property- Section 51 of the Indian Trust act provides that a trustee may
not use or deal with the trust property either for his own profit or for any other purpose
unconnected with the trust.
7. Agent of Trustee cannot buy- Section 52 of the Indian Trust act provides that No trustee
whose duty is to sell trust property, nor his agent employed for the purchase may
i) Buy the trust property
ii) Any interest therein, on his own account or as agent for third person
8. Trustee may not buy beneficiary`s interest without permission- Section 53 of the Indian
Trust act provides that A trustee, or someone who was recently a trustee, cannot buy,
mortgage, or lease any part of the trust property without approval from a principal Civil
Court of original jurisdiction. Such approval will only be granted if the proposed
transaction is clearly beneficial to the beneficiary.
9. Co- trustee may not lend to one of themselves- Section 54 of the Indian trust act provides
that a trustee responsible for investing trust money on mortgage or personal security cannot
invest it in a mortgage or personal security involving themselves or a co-trustee.

LIABILITY OF TRUSTEE
1. Liability for breach of trust- Section 23 provides that when the trustee commits a breach
of trust, he is liable to make good of the loss which the trust property or beneficiary has
sustained.
A trustee committing a breach of trust is liable to pay interest only in the following cases:
(a) Where he actually received interest
(b) Where breach consist of unnecessary delay in paying trust money to beneficiary
(c) Where trustee has ought to received interest
(d) Where he has fairly presumed to have received interest.
(e) Where the breach consist of investing the trust money and to accumulate the interest or
dividends.
(f) Where the breach consists in the employment of trust-property or the proceeds thereof
in trade or business, he is liable to account, at the option of the beneficiary.
2. Several liability of co trustees- Section 27 provides that in case where co trustees jointly
commit a breach of trust or one of them by his neglect enable the other to commit breach,
then each of them is liable to beneficiary for the whole of loss due to the breach

DISCHARGE OF TRUSTEE
Section 71 of the Indian Trust act provides that the trustee may be discharged from his office in
the following ways:

1) By extinction of trust
2) By completion of his duties under trust
3) By such means as prescribed in the trust instrument
4) By appointment of new trustee
5) By consent of himself and the beneficiary or beneficiaries
6) By the court in response to a petition presented under Section 72.

PETITION FOR DISCHARGE

Section 72 of the Indian Trust act deals with the petition of discharge of trustee. This section
provides that a trustee may apply petition in the Principal civil court for discharge of his duties and
if the court finds sufficient reason for such discharge, then the trustee may be discharged from his
office and give directions for his cost to be paid out.

While if the reason presented in the petition are not sufficient the court appoints a proper person
to take his place without discharging him from duties.

TRUST HOW EXTINGUISHED

Section 77 of the Indian trust act defines the ways in which the trust can be extinguished such as:
(a) When purpose is completely fulfilled or
(b) When purpose becomes unlawful or
(c) When fulfilment of purpose becomes impossible due to destruction of trust property
(d) Trust is revoked.

PYQ
Q. Meaning of Laches and acquiescence(2014) 1 marks
Q. Can a trustee delegate his office(2018) 1 marks

Q. A, a trader, bequeaths his property to B in trust for C, appoints B as sole executor, and dies. B,
enters in partnership with X and Y in same trade, and employs A`s assets in partnership business.
B gives an indemnity to X and Y against the claims of C. Determine the liability(2022) 1 marks
Q. Explain powers of the trustees(2016) 4 marks

Q. What are the requisites of proper delegation of rights of trustee(2018) 4 marks

Q. Write a detailed note on disabilities of trustee(2022) 8 marks