Law Governing Execution of Trusts

Shanti Vijay & Co. Etc vs Princess Fatima Fouzia & Ors. 1980 AIR 17, 1980 SCR (1) 459 http://indiankanoon.org/doc/906879/

The law governing the execution of trusts is well settled. In the case of a private trust, where there are more trustees than one, all must join in the execution of the trust. The concurrence of all is in general necessary in a transaction effecting the trust property, and a majority cannot bind the trust estate. In order to bind the trust E. estate, the act must be the act of all. They constitute one body in the eye of law, and all must act together. This is, of course, subject to any express direction given by the settlor. The Judicial Committee in Lala Man Mohan Das v. Janki Prasad quoted a passage from Lewin's Law of Trusts, 15th ed., p. 190, to the effect :

"In the case of co-trustees the office is a joint one. Where the administration of the trust is vested in co-trustees they all form as it were but one collective trustee, and there fore must execute the duties of the office in their joint capacity. It is not uncommon to hear one of several trustees spoken of as the acting trustee but the Court knows no such distinction: all who accept the office are in the eye of the law acting trustees. If any one refuses or be incapable to join, it is not competent for the others to proceed without him, but the administration of the trust must in that case devolve upon the Court. However, the act of one trustee done with the sanction and approval of a co- trustee may be regarded as the act of both. But such sanction or approval must be strictly proved."

The decision in Lala Man Mohan Das's case has been followed with approval by this Court in L. Jankirama Iyer & Ors. v. Neelakanta Iyer & Ors.

where there are several trustees they must act unanimously in making a sale or a contract of sale, unless it is provided otherwise by the terms of the deed. In exercising the power of sale, as in the exercise of other powers, a trustee cannot, therefore, properly delegate the performance of the acts which he ought personally perform. Although a trustee may listen to the opinions and wishes of others, he must exercise his own judgment. Thus a trustee for sale of property, cannot leave the whole conduct of the sale to his co-trustees. The reason for this is the settlor has entrusted the trust property and its management to all the trustees, and the beneficiaries are entitled to the benefit of their collective wisdom and experience: Underhill's Law of Trusts and Trustees, 12th Ed., pp. 434, 442-43: Scot on Trusts, vol. 2, p. 1033.

Section 48 of the Trusts Act provides as follows:

"48. When there are more trustees than one, all must join in the execution of the trust, except where the instrument of trust otherwise provides."

It is axiomatic that where there are more trustees than one, all must join in the execution of the trust, except where the instrument of trust otherwise provides. 

If the validity of an alienation effected by the trustees falls to be considered only in the light of s 48, the fact that out of the three trustees only two have executed the sale deed would by itself make the transaction invalid and would not convey a valid title to the transferee.

A trustee cannot delegate his functions except as provided in s. 47, which reads:

"47. A trustee cannot delegate his office or any of his duties either to a co-trustee or to a stranger, unless (a) the instrument of trust so provides, or (b) the delegation is in the regular course of business, or

(c) the delegation is necessary, or (d) the beneficiary, being competent to contract, consents to the delegation."

Section 48 is a corollary of s. 47 for, if the trustees cannot delegate their duties, it follows that they must all personally perform those duties, and not appoint one of themselves to manage the business of the trust; for the settlor has trusted all his trustees, and it behoves each and every one of them to exercise his individual judgment and discretion on every matter, and not blindly to leave any questions to his co-trustees or co-trustee.