Section 65 of The Indian Trust Act, 1882
Where a trustee wrongfully sells or otherwise transfers trust-property and afterwards himself becomes the owner of the property, the property again becomes subject to the trust, notwithstanding any want of notice on the part of intervening transferees in good faith for consideration.
Summary
- Rules that if a trustee wrongfully sells trust property and later buys it back, the property immediately becomes subject to the trust again.
- Prevents the trustee from keeping the property even if intermediate buyers bought it in good faith without knowing of the trust.
- Stops a trustee from hiding behind the clean title of an innocent intermediate purchaser.
- Restores the beneficiary's original rights over the property the moment it returns to the trustee's ownership.
Practical examples
FAQ
1. What happens under Section 65 of the Indian Trusts Act, 1882 if a trustee wrongfully sells trust property and then buys it back?
Under Section 65 of the Indian Trusts Act, 1882, if a trustee wrongfully sells trust property and later becomes the owner of that same property again, the property automatically becomes subject to the trust once more.
2. Does a good faith intermediate buyer prevent the trust from reclaiming property under Section 65 of the Indian Trusts Act, 1882?
No. Section 65 of the Indian Trusts Act, 1882 states that even if there were intermediate buyers who purchased the property in good faith for value and without notice, the property becomes trust property again once the trustee reacquires it.
3. Can a trustee who wrongfully sold trust property claim a clean title under Section 65 of the Indian Trusts Act, 1882?
No, under Section 65 of the Indian Trusts Act, 1882, a trustee cannot escape their duties or claim a clean title by purchasing the wrongfully converted property back from an innocent owner.
Test yourself
Q1.Under Section 65 of the Indian Trusts Act, 1882, if a trustee wrongfully sells a trust asset to an innocent buyer, and later buys it back from that buyer, what is the legal status of the asset?
Q2.Under Section 65 of the Indian Trusts Act, 1882, how does the lack of notice of the trust by intervening good faith buyers affect the property once the trustee buys it back?
Q3.Under Section 65 of the Indian Trusts Act, 1882, if a trustee wrongfully transfers trust land, which is later gifted back to them by an innocent party, what happens to the land?
Q4.Under Section 65 of the Indian Trusts Act, 1882, if we look at Section 64's protection of good faith buyers, what is the main exception created when the property returns to the trustee?