Beneficiary is the person for whose benefit the trust is made. A beneficiary is also known as cesstui que trust, i.e., the person who gets the benefit from the trust. Under the Indian Trusts Act, 1882, there are various rights, liabilities, and remedies available to the beneficiary, which are discussed below.
Table of Contents
RIGHTS OF BENEFICIARY
1. Right to Rents and Profits- Section 55 provides that the beneficiary has the right to receive rents and profits from the trust property.
2. Right to Specific Execution- Section 56 provides that the beneficiary is entitled to specific execution of the trust, as per the intention of the author of the trust.
3. Right to Transfer of Possession- Section 56 provides that if all beneficiaries are competent to contract and agree unanimously, they may require the trustee to transfer possession of the trust property to themselves or to a chosen person.
Exception: A married woman who is the sole beneficiary does not have this right. This is currently under legal scrutiny by the Law Commission.
4. Right to Inspect and Take Copies- Section 57 provides that the beneficiary may inspect and obtain copies of:
- Trust instrument
- Documents of title related to the trust
- Accounts of the trust property
- Vouchers (if any)
- Legal opinions obtained by the trustee for guidance
5. Right to Transfer Beneficial Interest- Section 58 provides that a competent beneficiary may transfer their beneficial interest.
Exception: A married woman cannot transfer her interest.
6. Right to Sue for Execution of Trust- Section 59 provides that if no trustees are appointed or existing ones are unable to act, the beneficiary may sue for the execution of the trust.
7. Right to Proper Trustees- Section 60 provides that the beneficiary has the right to expect proper management and protection of the trust property by capable trustees.
8. Right to Compel Performance of Duty- Section 61 provides that beneficiaries can compel trustees to perform required duties and restrain them from breaching the trust.
LIABILITY OF BENEFICIARY
Liability under Section 68- A beneficiary is liable when they:
- Join in committing a breach of trust
- Knowingly gain an advantage without the consent of others
- Fail to protect other beneficiaries when aware of a breach
- Deceive the trustee into committing a breach
👉 In such cases, the defaulting beneficiary’s interest can be impounded until the loss is recovered.
Remedies of Beneficiary
1. To Take Action Against Trustee Personally- This remedy is also known as personal remedy of beneficiary. Section 62 provides that if a trustee wrongfully buys the trust property, the beneficiary can claim it, provided they:
- Reimburse the trustee with purchase price of property + interest + preservation expenses
- He Can also:
- Claim net profits
- Charge occupation rent
- Deduct value for any deterioration caused
2. To Have the Trust Property- Section 63 provides following remedies to the beneficiaries:
- In Third-Party Hands: If the property is in the hands of third party hands then beneficiary can ask the third party to recognize the trust or file a suit.
- Converted Property: If the original trust property is exchanged, the beneficiary retains the right to the new asset.
3. Property Wrongfully Converted- Section 65 of the Indian trust act provides that When trustee wrongfully sells or transfer trust property and later becomes the owner of such property, then the property again becomes the subject to the trust.
4. In Case of Blended Property- Section 66 provides that if a trustee mixes trust property with his personal assets, the beneficiary can place a charge on the whole fund to secure their due.
References:
- Indian Trusts Act, 1882 – Bare Act
- Equity and Specific Relief by B.M. Gandhi
