A trustee is usually considered as the legal owner of the trust

property or to the trust estate, and holds it for the benefit of the
beneficiary. However, the trustee is under the obligation to perform
his duties and any breach of his obligation inevitably imposes a
liability upon him, although he may have acted with the most
perfect ‘bona fide’ and under the most expert advice.
Briefly speaking the duty of a trustee is an obligation the failure to
fulfill that will hold the trustee to legal liability for the breach of trust.
It must always be remembered that a trustee cannot deal with trust
property as an absolute owner can deal with his own property, his
powers are always fiduciary.
Maitland lays down the following rules as to the duties of a trustee:
1. A trustee is bound to do anything that he is expressly “bidden”
to do by that instrument.
2. A trustee is bound to refrain from doing anything that is
expressly “forbidden” by that instrument.
Position Of Trustees And Beneficiaries
The definition in Section 3 emphasizes that the trustee is the owner
of the trust property and the beneficiary only has a right against the
trustee as owner of the trust property. The trustee is thus the legal
owner or the trust property and property vests in him as such. The
trustee no doubt holds the trust property for the benefits of the
beneficiaries but does not hold it on their behalf. The
expressions ‘for the benefit of’ and ‘on behalf of’ are not synonyms
with each other as they convey different meanings.
Duties of Trustee
The duties of a trustee have been provided in Section 11 to 20 in
Chapter 3 of the Indian Trust Act. They may be summarized as under:
Trustee to Execute Trust (Section 11)
The trustee is bound to fulfill the purpose of the trust, and to obey
the directions of the author of the trust given at the time of its
creation, except as modified by the consent of all the beneficiaries
being competent to contract. The Trustee is bound to do the thing
prescribed and has no discretion, if he fails to comply with the
discretion he commits a “Breach Of Trust”.
Exception
However, this duty provides two exceptions to the general rule that a
trustee must obey the direction given by the author of the trust at
the time of its creation. They are as follows:
1. The trustee with the consent of the beneficiaries, if they are all
competent to contract, can alter the management of the trust.
2. They can avoid fulfilling the directions which are impracticable,
illegal or manifestly injurious to the beneficiaries.
Case Law: Addison vs Topper (1892)
Where the trustee acted properly with reference to the facts and
circumstances which existed at that time, but going to circumstances
which subsequently secured, loss was caused to some of the
beneficiaries. The court held that the Trustee was not liable.
Trustee To Inform Himself Of State Of Trust Property ( Section 12)
Trustee is bound to acquaint himself, as soon as possible, with the
nature and circumstances of the trust property, to obtain, where
necessary, a transfer or trust property to himself and (subject to the
provisions of the instrument of trust) to get interest money invested
on insufficient or hazardous security.
It may be noted that this duty does not prescribe any time limit
within which the trustee must realize the assets. In each case, the
trustee would have to use his own discretion, and the court will only
see whether he acted prudently, honestly and in the interest of all
beneficiaries.
Case Law: Taylor vs Millington, 204
“Where a Trustee not enquiry and not taking any steps to get in any
part of the trust fund which may be outstanding or improper security
will be liable for the consequence of a neglect like any executor who
knows that a depth is due to his status state and omits to get in any
part of the trust fund which may be outstanding on improper
security will be liable for the consequence of his neglect, like any
executor who knows that a debt is due to his testator’s estate and
omits to get in.”
Trustee To Protect Title To Trust Property (Section 13)
A trustee is bound to maintain and defend all such suits, and (subject
to the provisions of the instrument of trust) to take such other steps
as, regard being had to the nature and amount or value of the trust
property, may be reasonably requisite for the preservation of the
trust property and the assertion or protection of title thereto.
The trustees are required to protect the title of trust property
collectively and to exercise good faith and care and diligence as a
man of ordinary diligence would protect the title of his own
property.
Case Laws: Ramesh Chandra Roy vs Hendra Kumar Roy, 1945.
It was held that, “All the trustees should be made parties to a suit to
be filed. The trustees who are unwilling to join as co-plaintiffs, or
where they have done some act precluding them from being
plaintiffs must be joined as defendants.”
Trustee not to set up title adverse to beneficiary (Section 14)
The trustee must not, for himself or another, set up or aid any title to
the trust property adverse to the interest of the beneficiary.
Following are the duties of a trustee under this heading:
 Trustee cannot set up or aid a third party’s title against the
trust.
 Trustee not to set up or aid adverse titles.
 Trustee not to put himself in a position where there is a conflict
between his interest and duty.
 Duty of trustee on receipt of notice of adverse claim.
Case Law: Narayan B. Gosavi vs G.V. Gosai, AIR 1960
“A Trustee cannot consequently mix his own property with that of
the trust. If he does so, the burden lies heavily upon him to prove
that any particular property belongs to him as distinct from the trust
properly.”
Care Required From Trustee (Section 15)
Trustee is bound to deal with the trust property as carefully as a man
of ordinary prudence, would deal with such property if it were his
own, and in the absence of a contract of to the contrary, a trustee so
dealing is not responsible for the loss, destruction or deterioration of
the trust property.
In the Case of Re Stuart (1897), it was held that “A trustee is bound
to exercise the same degree of diligence and care in the execution of
his office, as a man of ordinary prudence would exercise in the
management of his own affairs. Care and attention of an ordinary
man, which is needed, is not more than that is expected of him. He is
to act reasonably and honestly and the burden of proving this lies on
the trustee.”
Conversion Of Perishable Property (Section 16)
Where the trust is created for the benefit of several persons in
succession, and the trust property is of a wasting nature or a future
or reversionary interest, the trustee is bound, unless an intention to
the contrary may be inferred from the instrument of trust, to convert
the property into property of a permanent and intermediately
profitable character.
Snell points out the limitations of the rule in Howe vs Earl Of
Dartmouth, (1802)
Wasting and hazardous securities are to be converted in the interest
of the remainder man, reversionary interest for the benefit of the
tenant for life. But this duty to convert does not arise of—
 Where the property is settled by deed.
 Where the bequest is not residuary but specific nor does it
apply to reality.
Exception
In De Souza vs De Souza, it was held that “The rule will not apply if
the property is specially given to persons in succession, even though
a discretionary power of changing the property is given to the
trustee”
Trustee To Be Impartial ( Section 17)
When there are more beneficiaries than one, the Trustee is bound to
be Impartial, and must not execute the trust for the advantage of one
at the expense of another. The trustee is bound to be Impartial in
executing the trust, and must not benefit one cestui que trust at the
expense of another.
Case Law: Baby vs Ridehalgh, 104 DMCG
“Where the Trustee has the discretionary power, nothing in this
section shall be deemed to authorize the court to control the
exercise reasonably and in good faith of such discretion.”
To Prevent Waste (Section 18)
When the trust is created for the benefit of several persons in
succession and one of them is in possession of the trust properly, if
he commits, or threatens to commit any act which is destructive or
permanently injurious thereto, the trustee is bound to take measures
to prevent such act.
Thus, if wasting property such
as leaseholds, terminable annuities etc, were to be retained, the
tenant for life would profit at the expense of the remainder man and
if the reversionary property were not converted, the remainder man
would profit at the expense of the tenant for life.
Thus, the purpose of this section is to protect the trust property
against improper acts of the beneficiary who is only a tenant for
life. Section 18 would come into operation if such a person destroys
houses or cuts down timber. However, it would have no application in
case of permissive waste such as non-repair in cases where the
beneficiary has no duty to repair.
Trustee To Keep Account and Information (Section 19)
A trustee is bound to keep a clear and accurate account of the trust
property, and at all reasonable times, and at the request of the
beneficiary to furnish him with all full and accurate information as to
the amount and state of the trust property. A cestui que trust is
entitled to inspect the accounts at reasonable times and to see the
vouchers, but he is not entitled to a copy of the accounts saved at his
own expenses.
Case Law: Paugh vs Vanghan, 12 Barr. 517
“It is the duty of the trustees to afford to their cestui que trust an
accurate information of the disposition of the trust fund regarding all
information of which they ought to be in possession, and to keep
clear and distinct amounts of property.”
Investment Of Trust Property (Section 20)
Where the trust property consists of money and cannot be applied
immediately of at an early date to the purposes of the trust, the
trustee is bound (subject to any direction contain in the instrument
of the trust) to invest the money on the following security and or no
others:-
 On Government Securities.
 Securities Charged On Government Revenues.
 Securities Under Government Guarantee For Interest.
 Securities Of Mortgage.
 In Debentures Or Other Securities for money issued.
Liabilities Of Trustees
The liabilities of a trustee are dealt with in Section 23 to 29 of the
Indian Trusts Act. They are as follows:
Liabilities For Breach Of Trust ( Section 23)
Where the trustee commits a breach of trust, he is liable to make
good the loss, which the trust property or the beneficiary hss thereby
sustained, unless the beneficiary has by fraud induced the trustee to
commit the breach or the beneficiary, being competent to contract,
has himself, without coercion or undue influence having been
brought to bear on him concurred in the breach, or subsequently
acquiesced therein, with full knowledge of the facts of the case and
of his right as against the trustee
If the cestui que trust joins with the trustee in that which is a breach
of trust, knowing provides that a “breach of trust means a breach of
any duty imposed on a trustee by any law for the time being in
force”.
In Jankiraman Iyer v. Nilkanta Iyer, the trustees neglected their
duties by not securing the highest price for the property, and instead
sold it to a person who was aware that he was purchasing the same
from trustees for a lower price in contravention of the trust
obligations. The Madras High Court held that this was a gross breach
of trust.
No Set Off Allowed To Trustee (Section 24)
A trustee who is liable for a loss occasioned by a breach of trust in
respect of one portion of the trust property, cannot set-off against his
liability a gain which has accrued to another portion of the trust
property through another and distinct breach of trust.
Thus, where there are two separate funds subject to trusts, and the
trustee commits a breach of trust as to one, by which it is lost, it is
impossible to permit the trustees to say that they have improved the
other fund, and that fund is bound to make up for the loss of the
others.
In Vyse vs Poster, “it has been held that the trustee is liable for
actual loss in each distinct and complete transaction which amounts
to a breach of the trust and not for the loss in each particular item of
it.”
Liability Of Trustee For Breach Of Trust By Co-trustee ( Section 25)
Subject to the provision of Section 13 & 15 one trustee is not as such
liable for a breach of trust committed by his co-trustee. However the
general rule is that a trustee is not liable for breach of trust unless he
is personally guilty of default.
Exceptions to the rule
A trustee will be liable for breach of trust by his co- trustee, where he
is himself guilty of some neglect of duty’
  Where he has delivered trust-property to his co-trustee without
seeing to its proper application;
 Where he allows his co-trustee to receive trust property and
fails to make due enquiry as the co-trustee’s dealings therewith,
or allows him to retain it longer than the circumstances of the
case reasonably require;
 Where he becomes aware of a breach of trust committed or
intended by his co-trustee, and either actively conceals it or
does not within a reasonable time take proper steps to protect
the beneficiary’s interest.
Contribution As Between Co- Trustees
The following are the cases where a contribution as between co-
trustees will be affected:
 As between the trustees themselves, if one is less guilty than
another and has to refund the loss; the former may compel the
latter, or his legal representative to the extent of the assets he
has received, to make good such loss.
 If all are equally guilty, one or more of the trustees who had to
refund the loss may compel the others to contribute.
 Nothing, however authorizes a trustee who has been guilty of
fraud to institute a suit to compel contribution.
Conclusion
Thus, we can say that the trustee has various duties and
responsibilities towards the beneficiaries and the trust property.
These duties are to be exercised in consonance to the principles laid
down in the Indian Trust Act. And if the trustee is found guilty of any
breach of his liability, he shall be punished accordingly.