OF THE DISABILITIES OF TRUSTEESCentral

Section 49 of The Indian Trust Act, 1882

Where a discretionary power conferred on a trustee is not exercised reasonably and in good faith, such power may be controlled by a principal Civil Court of original jurisdiction.

Summary

Trustees are often given discretionary powers, meaning they can make personal choices about how to manage the trust.
A principal Civil Court of original jurisdiction has the authority to control a trustee's discretionary power.
The court will only step in and control this power if the trustee fails to exercise it reasonably.
The court can also intervene if the trustee does not exercise their discretionary power in good faith.

Practical examples

1David is a trustee with discretionary power to distribute monthly maintenance funds to the beneficiary, an orphaned student, up to ten thousand rupees. Out of a personal grudge, David decides to reduce the payment to just fifty rupees a month, leaving the student unable to buy food. The student can petition the principal Civil Court, which can control David's power because he is not exercising it reasonably or in good faith.

2Latika has the discretion to select which government securities to invest trust money in. She chooses a low-yield bond over a high-yield one in good faith, believing it is safer. The beneficiaries are unhappy and want the court to force her to change the investment. The court will decline to interfere because Latika acted reasonably and in good faith.

FAQ

1. Can a court interfere with a trustee's discretion under Section 49 of the Indian Trusts Act, 1882?

Yes, under Section 49 of the Indian Trusts Act, 1882, a principal Civil Court of original jurisdiction can control a trustee's discretionary power, but only if that power is not exercised reasonably and in good faith.

2. What is the standard for court intervention in a trustee's decisions under Section 49 of the Act?

The court will not interfere with a trustee's discretion under Section 49 of the Act unless there is proof that the trustee acted unreasonably or did not act in good faith.

3. Which court has the power to control a trustee's discretion under Section 49 of the trust law?

Under Section 49 of the trust law, a principal Civil Court of original jurisdiction has the power to control the trustee's discretionary authority.

Test yourself

Q1.Under Section 49 of the Indian Trusts Act, 1882, on what grounds can a principal Civil Court of original jurisdiction control a trustee's discretionary power?

Q2.Under Section 49 of the Indian Trusts Act, 1882, if a trustee exercises their discretionary power reasonably and in good faith, what is the role of the court?

Q3.Under Section 49 of the Indian Trusts Act, 1882, how does this section's rule on court control relate to the trustee's duty to be impartial under Section 17?

Q4.Which of the following courts is specified in Section 49 of the Indian Trusts Act, 1882, as having the power to control a trustee's discretionary power?

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