Rights to rents
and profits.
55. The
beneficiary has, subject to the provisions of the instrument of trust, a right
to the rents and profits of the trust property.
56. The
beneficiary is entitled to have the intention of the author of the trust
specifically executed to the extent of the beneficiary's interests;
Right to transfer of
possession.
and, where there is only one beneficiary and he is competent
to contract, or where there are several beneficiaries and they are competent to
contract and all of one mind, he or they may require the trustee to transfer
the trust-property to him or them, or to such person as he or they may direct.
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
the second clause of this section applies to such property during her marriage.
Illustrations
(a) Certain Government securities are
given to trustees upon trust to accumulate the interest until A attains the
age of 24, and then to transfer the gross amount to him. A on attaining
majority may, as the person exclusively interested in the trust-property,
require the trustees to transfer it immediately to him.
(b) A bequeaths Rs. 10,000 to
trustees upon trust to purchase an annuity for B, who has attained his majority
and is otherwise competent to contract, B may claim the Rs. 10,000.
(c) A transfers certain property to B and directs him to
sell or invest it for the benefit of C, who is competent to contract. C may
elect to take the property in its original character.
Right
to inspect and take copies of instrument of trust, accounts, etc.
57. The beneficiary has a right, as against the trustee and
all persons claiming under him with notice of the trust, to inspect and take
copies of the instrument of trust, the documents of title relating solely to
the trust-property, the accounts of the trust-property and the vouchers (if
any) by which they are supported, and the cases submitted and opinions taken by
the trustee for his guidance in the discharge of his duty.
Right
to transfer beneficial interest.
58. The beneficiary, if competent to contract, may transfer
his interest, but subject to the law for the time being in force as to the
circumstances and extent in and to which he may dispose of such interest:
Provided that when
property is 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 shall authorize her to transfer such interest during
her marriage.
Right
to sue for execution of trust.
59. Where no trustees are appointed or all the trustees die,
disclaim, or are discharged, or where for any other reason, the execution of a
trust by the trustee is or becomes impracticable, the beneficiary may institute
a suit for the execution of the trust, and the trust shall, so far as may be
possible, be executed by the Court until the appointment of a trustee or new
trustee.
60. The beneficiary has a right (subject to the provisions
of the instrument of trust) that the trust-property shall be properly protected
and held and administered by proper persons and by a proper number of such
persons.
Explanation I.: The following
are not proper persons within the meaning of this section:—
A person domiciled abroad: an alien enemy: a person having
an interest inconsistent with that of the beneficiary: a person in insolvent
circumstances; and, unless the personal law of the beneficiary allows
otherwise, a married woman and a minor.
Explanation II: When the
administration of the trust involves the receipt and custody of money, the
number of trustees should be two at least.
Illustrations
(a) A, one of several beneficiaries,
proves that B, the trustee, has improperly disposed of part of the
trust-property, or that the property is in danger from B's being in insolvent
circumstances, or that he is incapacitated from acting as trustee. A may obtain
a receiver of the trust-property.
(b) A bequeaths certain jewels to B in trust for C.
B. dies during A's lifetime; then A dies; C is entitled to have the property
conveyed to a trustee for him.
(c) A conveys certain property to four trustees in trust for
B. Three of the trustees die. B may institute a suit to have three new trustees
appointed in the place of the deceased trustees.
(d) A conveys certain property to
three trustees in trust for B. All the trustees disclaim. B may institute a
suit to have three trustees appointed in place of the trustees so disclaiming.
(e) A, a trustee for B, refuses to act, or goes to
reside permanently out of India or is declared an insolvent, or compounds with
his creditors, or suffers a co-trustees to commit a breach of trust. B may
institute a suit to have A removed and a new trustee appointed in his room.
Right
to compel to any act of duty.
61. 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.
Illustrations
(a) A contracts with B to pay him
monthly Rs. 100 for the benefit of C. B writes and signs a letter declaring
that he will hold in trust for C the money so to be paid. A fails to pay the
money in accordance with his contract. C may compel B on a proper indemnity to
allow C to sue on the contract in B's name.
(b) A is trustee of certain land,
with a power to sell the same and pay the proceeds to B and C equally. A is
about to make an improvident sale of the land. B may sue on behalf of himself
and C for an injunction to restrain A from making the sale.
62. 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.
Following
trust property— into the hands of third persons; into that into which it has
been converted.
63. Where trust-property comes into the hands of a third
person is consistently 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.
Where the trustee has disposed of trust-property and the
money or other property which he has received therefor 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.
Illustrations
(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.
Savings
of rights of certain transferees.
64. 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.
Nothing in
section 63 applies to money, currency notes and negotiable instruments in the
hands of a bona fide holder to whom they have passed in circulation, or
shall be deemed to affect the Indian Contract Act, 1872 (9 of 1872), section
108, or the liability of a person to whom a debt or charge is transferred.
Acquisition
by trustee of trust-property wrongfully converted.
65. 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.
Right
in case of blended property.
66. 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.
Wrongful
employment by partner-trustee of trust-property for partnership purposes.
67. If a partner, being a trustee, wrongfully employs
trust-property in the business or on the account of the partnership, no other
partner is liable therefor 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.
Illustrations
(a) 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, retain 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.
(b) A, a trader, bequeaths his
property to B in trust for C. Appoints B his sole executor, and dies. B enters
into partnership with X and Y in the same trade, and employs A's assets in the
partnership-business. B gives an indemnity to X and Y against the claims of C.
Here X and Y are jointly liable with B to C as having knowingly become parties
to the breach of trust committed by B.
Liability
of beneficiary joining in breach of trust.
68. Where one of
several beneficiaries—
(a) joins in
committing breach of trust, or
(b) knowingly
obtains any advantage therefrom, 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.
Rights
and liabilities of beneficiary's transferee.
69. 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.