A trust is an acceptance of an obligation by a person in against of some property or funds to use it or hold it for the benefit for the person whom the trust is created. The Indian Trust act is related to Private Trust and Trustees. The Indian Trusts Act is an Act related to private trusts and trustees in India. The act defines what exactly will be called a Trust, and who exactly can be a trustee legally and also provides a definition for them. The Indian Trusts Amendment Bill of 2015 enabled the government to scrutinize the trusts’ investment at will, but at the same time also removed some restrictions on monetary assets investment, etc. The act also defines and states how the author of the trust can assign his assets to be controlled by the trust, and how he can appoint trustees and beneficiaries.

  1. The person who declares the confidence is called the author of the trust.
  1. The person who accepts the confidence is called trustee.
  2. The subject matter of the trust is called trust property or trust monetary.
  3. The written document through which trust is created is called instrument of trust.
  4. The person whose benefit the confidence is accepted is called beneficiary.


As per the Indian Trust act,1882, trust means – an obligation annexed to the ownership of property, & arising out of a confidence reposed in & accepted by the owner for the benefit of another or for another and owner.

Creation of Trust:

The elements of valid trust are presented in section-6. The act defines how the author could create the trust, assign trustees and give them his monetary assets to be controlled by the trust. It may be express or implied. It includes-

  1. Intention of the author to create the trust.
  2. Purpose of the trust.
  3. The monetary asset is assigned for the benefit of the trustee.
  4. Gives control or transfer the trust property to the trustee which includes intention of the author.
  5. Trustee can claim expenses & salary from the benefits from the trust of his work.

The requirement of the trust law is that the author should indicate by words or conduct with the reasonable intention to create a trust. In simple terms we can define, Trust as a belief upon some person to do certain acts.

Trust can be categorized into two types:

  1. Public or Charitable Trust
  2. Private Trust. ( it is made certain individual)

The Private can be categorized in three different types:

  1. Express Trust.

It is in a written form. The trust is created by way of an instrument with all the facts and conditions specified. There is an agreement for the creation of Trust.

  • Implied Trust :

It is based on the Presumption. There are things which are not expressed then it can be said to be implied.

  • Constructive Trust.

It is by way of Operation of law. When by the operation of law certain property is given or has been given then it is also provided with some Rights and Liabilities.

The Indian Trust Act, 1882 was enforced on 1st March 1882. It consists of IX chapter and 96 Sections. Under this Sec 61 to 69 talks about – Of the Rights and Liabilities of the Beneficiary.

The Beneficiary has certain rights and liabilities and these Rights and Liabilities are enshrined in these section. The Beneficiary is the person on whose favour the Trust has been created.

SECTION – 61[1]

Right to compel to any act of duty — the beneficiary has a right that his trustee shall be compelled to perform any particular act of his duty as such, and restrained from committing any contemplated or probable breach of trust.

This section raises a right in the favor of the beneficiary and a duty to be followed by the trustee. When a trust has been created then the trustee has to act accordingly, he is bound to do that act and he is even compelled to do such act.


A, a trustee has been asked to sale certain land and pay the amount equally to B and C. now A made the sale which was improper so B can put an injunction to the sale by A and he can do so on behalf of C also.

SECTION – 62[2]

Wrongful purchase by trustee — where a trustee has wrongfully bought trust-property, the beneficiary has a right to have the property declared subject to the trust or retransferred by the trustee, if it remains in his hands unsold, or, if it has been bought from him by any person with notice of the trust, by such person. But in such case the beneficiary must repay the purchase -money paid by the trustee, with interest, and such other expenses (if any) as he has properly incurred in the preservation of the property; and the trustee or purchaser must (a) account for the net profits of the property, (b) be charged with an occupation-rent, if he has been in actual possession of the property, and (c) allow the beneficiary to deduct a proportionate part of the purchase -money if the property has been deteriorated by the acts or omissions of the trustee or purchaser.

Nothing in this section— (a) impairs the rights of lessees and others who, before the institution of a suit to have the property declared subject to the trust or retransferred, have contracted in good faith with the trustee or purchaser; or (b) entitles the beneficiary to have the property declared subject to the trust or retransferred where he, being competent to contract, has himself, without coercion or undue influence having been brought to bear on him, ratified the sale to the trustee with full knowledge of the facts of the case and of his rights as against the trustee.

In this section when the trustee has wrongfully brought trust property by inducing or fraudulently then in such case trustee is liable and the beneficiary has the right to declare such property to trust or retransfer it to as trust property. But the beneficiary must repay the money which has been provided to him by the trustee.


A, a trustee by wrongful means sold the trust property to a relative B, with the intention to latter transfer the property to himself. Here the beneficiary has the right to claim the Trust property.

 SECTION – 63[3]

Following trust-property— into the hands of third persons;—

Where trust-property comes into the hands of a third person inconsistently with the trust, the beneficiary may require him to admit formally, or may institute a suit for a declaration, that the property is comprised in the trust.

 Into that into which it has been converted.—

Where the trustee has disposed of trust-property and the money or other property which he has received therefore can be traced in his hands, or the hands of his legal representative or legatee, the beneficiary has, in respect thereof, rights as nearly as may be the same as his rights in respect of the original trust-property.

In this section 63, where trust property has been transferred to third person wrongfully, then the beneficiary has the right to make the trustee admit formally or institute a suit for the declaration that the trust has been compromised.

There is a proviso attached to the section is that when the property which has been sold by the trustee or misappropriated by the trustee then such property should be reimbursed by the trustee or his legal representative.


(a)  A, a trustee for B of Rs. 10,000, wrongfully invests the Rs. 10,000 in the purchase of certain land. B is entitled to the land.

 (b) A, a trustee, wrongfully purchases land in his own name, partly with his own money, partly with money subject to a trust for B. B is entitled to a charge on the land for the amount of the trust-money so misemployed.

SECTION – 64[4]

Saving of rights of certain transferees.—

Nothing in section 63 entitles the beneficiary to any right in respect of property in the hands of—

 (a) A transferee in good faith for consideration without having notice of the trust, either when the purchase-money was paid, or when the conveyance was executed, or

(b) A transferee for consideration from such a transferee.

A judgment-creditor of the trustee attaching and purchasing trust-property is not a transferee for consideration within the meaning of this section.

In this section, it is the saving clause of Trustee where trustee has transferred the trust property for the benefit of beneficiary.


Acquisition by-trustee of trust-property wrongfully converted.—

Where a trustee wrongfully sells or otherwise transfers trust-property and afterwards himself becomes the owner of the property, the property again becomes subject to the trust, notwithstanding any want of notice on the part of intervening transferees in good faith for consideration.

In this section it is provided that when the trustee wrongfully sells the trust property and then become the owner of such property, then such property again become subject to the trust without any want of notice on the part of intervening transferee in good faith.


A, a trustee sells the Trust property, wrongfully without letting it know to the beneficiary with the intent to convert such trust property into his private property, then the beneficiary may direct the trustee to return the property to the trust.


Right in case of blended property.—

Where the trustee wrongfully mingles the trust-property with his own, the beneficiary is entitled to a charge on the whole fund for the amount due to him.

In this section, if the trustee mixes the Trust- property with the property of himself, then the beneficiary will have the charge upon such extent of the property where the debt stands.

Example- A, a trustee buys several property and mixes it with the trust-property, then the beneficiary is entitled to such extent as his beneficial interest are not fulfilled.


Wrongful employment by partner-trustee of trust-property for partnership purposes —

If a partner, being a trustee, wrongfully employs trust-property in the business or on the account of 20 the partnership, no other partner is liable therefore in his personal capacity to the beneficiaries, unless he had notice of the breach of trust. The partners having such notice are jointly and severally liable for the breach of trust.  

This section is a saving clause as well as a liability clause. It is the saving clause for a Partner in the partnership firm. This section defines that when the Trustee deploys Trust-property in the Partnership firm and if the partners are unaware of the fact that the other partner invested the trust property in the Partnership Firm.

The Trustee is liable to pay the amount which has been generated from the Trust Property.

Example –

A and B are partners. A dies, having bequeathed all his property to B in trust for Z, and appointed B his sole executor. B, instead of winding up the affairs of the partnership, retains all the assets in the business. Z may compel him, as partner, to account for so much of the profits as are derived from A’s share of the capital. B is also answerable to Z for the improper employment of A’s assets.


Liability of beneficiary joining in breach of trust. —

Where one of several beneficiaries—

(a) joins in committing breach of trust, or

 (b) Knowingly obtains any advantage there from, without the consent of the other beneficiaries, or

 (c) becomes aware of a breach of trust committed or intended to be committed, and either actually conceals it, or does not within a reasonable time take proper steps to protect the interests of the other beneficiaries, or

 (d) Has deceived the trustee and thereby induced him to commit a breach of trust,

the other beneficiaries are entitled to have all his beneficial interest impounded as against him and all who claim under him (otherwise than as transferees for consideration without notice of the breach) until the loss caused by the breach has been compensated.

When property has been transferred or bequeathed for the benefit of a married woman, so that she shall not have power to deprive herself of her beneficial interest, nothing in this section applies to such property during her marriage.

This section mentions about the liability of the Beneficiary where the beneficiary has been a part of the breach of Trust. This section mentions that

  1. If one of the beneficiary,
  2. Knowingly has obtained undue advantage, without the consent of the other beneficiary.
  3. And if one of the beneficiary knows about the breach of trust and still conceals it, and without reasonable step do not protect the interest of the beneficiaries.

Then such Beneficiary shall be liable to pay the losses and all his beneficial interest transfer to other beneficiaries.

Example –

A, a Trustee and B, one of the several Beneficiary committed the breach of Trust without letting know the other beneficiary.

Then B shall be liable to compensate the loss and all his beneficial interest shall transfer to the other beneficiaries.


Rights and liabilities of beneficiary’s transferee.—

Every person to whom a beneficiary transfers his interest has the rights, and is subject to the liabilities, of the beneficiary in respect of such interest at the date of the transfer.

In this section it is mentioned that when the beneficiary transfer his beneficial interest then his Rights and liabilities also transfer to such person from the date of transfer.

Example –

A, is the beneficiary and he transfer his beneficial interest in the favour of B, then all the Rights and Liabilities of such beneficiary transfer to B.’

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.


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In the year 2021, we wrote about 1000 Inspirational Women In India, in the year 2022, we would be featuring 5000 Start Up Stories.

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