By Tashmayee Sarkhel

Published on: 03 September 2022 at 09:06 IST

This article includes information about what is a trust and the objective behind its creation, who can be stated as a trustee, and its duties under the Indian Trusts Act, 1882[1].

A trustee is required by the Indian Trusts Act, 1882, to keep clear and accurate accounts of the trust property and to provide the full and correct information as to the quantity and state of trust property to beneficiaries at all reasonable times upon their request.

Trust and its objectives:

The English Trust Law[2] brought trust laws to India, establishing dual ownership of trust property, with legal titles vesting with the trustee and equitable titles vesting with the beneficiary. The Indian Trusts Act of 1882 was enacted on this basis. Private or family trusts are covered, while wakfs and public or private charity or religious endowments are not.

The Indian Trusts Act of 1882 codifies the legislation governing private trusts and trustees. The term ‘trust’ can be traced back to ancient times when the human motivation to do charity and dedicate property for charitable and religious purposes manifested itself in the form of dharmashalas, annachatras, sadavarts, educational and medical institutions, the construction of water tanks and wells, and so on.

It also came into existence with the emergence of idol worship, temples, and idols. Private trusts, in addition to state endowments or wakfs, can be established to care for the welfare, age, disease, disability, or any other reason.

The definition of ‘trust’ according to Section 2[3] under the Indian Trusts Act, 1882 is stated as, “trust means an obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner.”

The following are key trust terms:

  • The person who repossesses or declares the confidence is the trust’s author.
  • The individual who accepts the trust is known as the trustee.
  • The beneficiary is the individual who benefits from the trust. The beneficiary’s interest is the beneficial interest.
  • Trust property or trust money is the trust’s subject matter.

A trust is usually established for the benefit of a group of people or individuals. For instance:

  • An individual has mobile and immovable property. The individual has children, but they are unable to keep such property for the time being.
  • A wealthy senior citizen wishes to establish a charitable institution to help the poor and needy. Such a person could establish a charitable trust and designate a suitable trustee. The impoverished and needy people of society would be the beneficiaries in this instance.
  • A mutual fund is likewise a trust, with the trustee typically being an artificial person, such as a corporation. The instrument of trust is the paper or writing that establishes trust.
  • A debenture trust must be constituted and a Debenture trustee must be appointed if a company issues a debenture, subject to certain restrictions set out in the Companies Act[4].


A Trustee is a person who is appointed to manage the Trust’s assets. A trustee should have the ability to hold property and contracts. A trustee can also be a corporation, which is an artificial person constituted by law. A Trustee must expressly or by his acts accept or disclaim the trust placed in him. In a single Trust, there might be more than one trustee. The subject of who is eligible to be a trustee is addressed under Section 10[5] of the trust laws. The section states that “every person capable of holding property may be a trustee”,

  • A corporation can operate as a trustee since it is capable of accepting property ownership with a responsibility attached to it for the benefit of another person or group of people. There is no legal prohibition against a corporation acting as a trustee. A person is not obligated to accept the trust.
  • Under English law, an alien can be a trustee; but, under Indian law, this is not the case.
  • A trustee can be a married woman.
  • A trustee can be an infant. A minor, on the other hand, is incapable of occupying a position of public trust.
  • A convicted person can serve as a trustee.
  • A trustee can be an illegitimate child.
  • The capacity of an insolvent to act as a trustee.

Instead of accepting the trust, the intended trustee can disclaim it. However, he must accomplish so in a reasonable amount of time. Under Indian trust statutes, his disclaimer will prohibit the trust property from vesting in him. If more than one proposed trustee disavows, the property will devolve in the other or others, and he will become the sole trustee or co-trustees.

A proposed trustee is someone who agrees to become a trustee as soon as the trust is established under the trust statutes. When a person leaves specific property in trust for another in his will and the proposed trustees prove his will, it amounts to their acceptance of the trust.

Similarly, when goods are transferred in trust to a person to realize and pay his debts, and the transferee realizes the value of the goods, or when money is transferred in trust and the proposed trustee separates the money from the rest of the assets, this behavior amounts to acceptance of the trust under Indian trust laws.

Duties and liabilities of the trustee under the law:

The Indian Trusts Act of 1882 establishes various obligations and responsibilities for a Trustee, which we will go over in-depth,

  • Execution of Trust – The trustee is responsible for carrying out the trust’s purpose as stated in the trust deed. The trustee must also follow the instructions given by the Author of the Trust when the trust was established. If the directions are impractical or illegal, the trustee is not compelled to follow them.
  • Acquaintance of Trust Property – The trustee must be aware of the details, whereabouts, and current condition of the trust property, as well as take adequate security precautions.
  • Protection of Title of Trust Property – The trustee must defend all claims made against the trust property’s title and take reasonable steps to assert and safeguard the property’s title.
  • Not to set up Title adverse to the beneficiary – The trustee is entrusted with the trust property and is expected and required to keep it in good working order for the beneficiaries. Consider the following scenario: the trustee is entrusted with immovable property and is obligated to apply the property’s rents and earnings for the benefit of the beneficiaries.

The trustee also has the authority to sell the property. The trustee is expected not to sell such property to himself, any of his family or friends, or anybody else of a similar sort because such an action on the trustee’s side would be detrimental to the beneficiaries, and the trust component upon which the trust is constructed would be lost.

  • Take care of the Trust Property – The trustee is obligated to establish adequate safeguards and to treat the trust property with the same caution that an ordinary person would use with his own. The Trustee, on the other hand, would not be liable for any loss to the trust property or the advantages resulting from it if he had exercised the same caution that an ordinary person would exercise with his property, according to the Act.
  • Convert perishable property – If the trust property is of such a character that it would deteriorate and lose value over time, the trustee is compelled to convert, i.e., sell and convert the property into cash proceeds, and use the revenues for the beneficiaries’ advantage. This is especially true when the trust is established for the benefit of numerous people in succession.
  • Be impartial among the beneficiaries – When a trust is established for the benefit of multiple beneficiaries, the trustee is obligated to distribute the trust property’s benefits fairly among the beneficiaries, without favoring anyone or any group of beneficiaries.
  • Protect the trust property from the adverse beneficiary – When there are numerous beneficiaries to a trust, and one or more of those beneficiaries commits or threatens to commit, an act that would be detrimental to the interests of other beneficiaries and the trust as a whole, the trustee is compelled to take action to prevent such an act.
  • To maintain and keep books and accounts – The trustee is obligated to maintain a clear and accurate account of the trust property and to deliver it to the beneficiary upon request at all times.
  • Investment of Trust money – When the trust property consists of money and it is not necessary to be immediately employed for the benefit of the beneficiaries, the Act specifically requires the trustee to invest the money in the instruments specified in the Act. The Act covers instruments such as Central Government promissory notes and other securities, stock or debentures issued by the Railways or other government corporations, Units issued by the Unit Trust of India, and so on.


A cursory examination of the Indian Trust Act reveals that, in addition to the legal features, the Act’s obligations and powers are intended to sustain the delicate relationship of trust, allowing the trust to be kept and the goal for which the trust was founded to be fulfilled. As a result, we can now move on to the duties and powers of a Trustee as defined by the Indian Trust Act of 1882.

Author – Tashmayee Sarkhel, currently pursuing a B.A.LL.B. (Hons.) at University Law College and Department of Studies in Law, Bangalore University.

  1. The Indian Trusts Act, 1882
  2. The English Trust Law
  3. The Indian Trusts Act, 1882, Sec. 2
  4. The Companies Act
  5. The Indian Trusts Act, 1882, Sec.10

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