Disabilities of a Trustee

Introduction

The Indian Trusts Act, 1882 not only gives powers to trustees but also imposes restrictions. These restrictions are called disabilities. They prevent misuse of trust property and ensure that trustees act honestly for the benefit of beneficiaries.

Meaning / Definition

Disabilities of a trustee are legal limitations (restrictions) on what a trustee cannot do. These rules ensure that trustees do not misuse their position or gain personal benefit from trust property.

Modes or Types

Trustee cannot renounce after acceptance

• Once a trustee accepts the trust, he cannot resign freely.
• He can resign only:
  • With permission of court
  • With consent of competent beneficiaries
  • If allowed by trust deed

Trustee cannot delegate duties

• Trustee cannot transfer his duties to another person.
• Exceptions:
  • If trust deed allows
  • If necessary in normal business
  • With consent of beneficiaries
• Can appoint agents (workers, lawyers, etc.) when required

Co-trustees must act jointly

• All trustees must act together.
• One trustee cannot act alone unless allowed by trust deed.
• They are treated as one unit in law.

Trustee cannot act arbitrarily

• Trustee must act:
  • In good faith (honestly)
  • Reasonably
• Court can interfere if:
  • Decision is unfair
  • Harmful to beneficiaries

Trustee cannot charge for services

• Trustee generally works without payment.
• Payment allowed only if:
  • Trust deed provides for it
• Exception: Official trustees and similar authorities can be paid

Trustee cannot make personal profit

• Trustee cannot use trust property for personal gain.
• Must avoid conflict between:
  • Personal interest
  • Duty to beneficiary
• Can only recover legitimate expenses

Trustee for sale cannot purchase trust property

• Trustee cannot buy trust property himself.
• Reason: Same person cannot be both seller and buyer.
• Exceptions:
  • Sale at public auction with court permission
  • Fair price and no conflict of interest
  • Trustee has no active duties

Trustee cannot buy beneficiary’s interest without permission

• Trustee (or former trustee) can purchase trust property only:
  • With permission of court
• Court ensures fairness and benefit to trust

Co-trustees must not lend to themselves

• Trust money cannot be:
  • Lent to trustee or co-trustee
  • Secured on their personal guarantee

Important Case Law

Janakirama Iyer’s Case
Held that co-trustees must act jointly in executing the trust.

Robinson v. Pett
Established that trustees are generally not entitled to remuneration (payment).

Bray v. Ford
Laid down the principle that a person in fiduciary position (position of trust) must not make personal profit.

Peari Mohan Mukerji v. Manohar Mukerji
Held that trustee for sale cannot purchase trust property.

Practical Example

A trustee managing trust land:

• Cannot sell land to himself without court permission
• Cannot delegate full responsibility to another person
• Cannot earn profit from trust property

If there are two trustees:

• One cannot act alone without approval

Summary

• Trustee cannot resign freely after accepting trust
• Cannot delegate core duties except in limited cases
• Co-trustees must act together
• Must act honestly and reasonably
• Cannot take payment unless allowed
• Cannot make personal profit from trust
• Cannot buy trust property without court approval
• Cannot use trust money for personal benefit