Section 17 of The Indian Trust Act, 1882
Where 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. Where the trustee has a discretionary power, nothing in this section sha ll be deemed to authorize the Court to control the exercise reasonably and in good faith of such discretion. Illustrations A, a trustee for B, C and D, is empowered to choose between several specified modes of investing the trust - property. A in good faith chooses one of these modes. The Court will not interfere, although the result of the choice may be to vary the relative rights of B, C and D.
Summary
- When a trust has more than one beneficiary, the trustee must remain completely neutral and unbiased.
- The trustee is strictly forbidden from running the trust to favor one beneficiary over another.
- If the trust document gives the trustee a discretionary power, which means the personal freedom to make choices, the court cannot interfere if that power is used reasonably and in good faith.
- Impartiality applies to all aspects of administering the trust, including making investments and distributing trust benefits.
Practical examples
FAQ
1. What is the main duty of a trustee under Section 17 of the Indian Trusts Act, 1882?
Under Section 17 of the Indian Trusts Act, 1882, the main duty is to be impartial when there are multiple beneficiaries, ensuring the trust is not executed to benefit one at the expense of another.
2. Can a court override a trustee's choice of investment under Section 17 of the Indian Trusts Act, 1882?
No, under Section 17 of the Indian Trusts Act, 1882, if the trustee has discretionary power and exercises it reasonably and in good faith, the court is not authorized to control or interfere with that choice.
3. Does Section 17 of the Indian Trusts Act, 1882 apply if there is only one beneficiary?
No, Section 17 of the Indian Trusts Act, 1882 specifically states that the duty of impartiality applies "where there are more beneficiaries than one".
4. What happens if a trustee has discretionary power under Section 17 of the Indian Trusts Act, 1882?
Under Section 17 of the Indian Trusts Act, 1882, if a trustee has discretionary power, the Court is only barred from interfering if the trustee exercises that discretion reasonably and in good faith.
Test yourself
Q1.Under Section 17 of the Indian Trusts Act, 1882, what is a trustee required to do if a trust has multiple beneficiaries?
Q2.Under Section 17 of the Indian Trusts Act, 1882, under what condition is the court barred from controlling a trustee's discretionary power?
Q3.Under Section 17 of the Indian Trusts Act, 1882, if a trustee is empowered to choose between several investment modes and chooses one in good faith, what is the court's role?
Q4.Under Section 17 of the Indian Trusts Act, 1882, the trustee is forbidden from doing which of the following?