The Rights and Liabilities of the Beneficiary
Chapter- VI of Trust Ordinance
(Section-57- Section-71)
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Rights and Liabilities of the Beneficiary
▪ Beneficiary has the exclusive interest over trust property.(after attain the
competent to contract) and he can transfer to someone else too.
▪ Beneficiary has the rights to get the profit from the trust property.
▪ When no trustees are appointed or all the trustees are die, disclaim, discharge or
impracticable beneficiary can file a case to make the trustee become
practicable.
▪ Beneficiary has the right to inspect the trust property.
EX- Remove the improper person and appoint new one.
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Ask the courts to replace the gap.
▪ Beneficiary has the right to prevent the breach of right.
▪ Wrongful purchase by trustee may terminate by the beneficiary
however he must consider about the bonafide purchaser.
▪ If trustee blended the trustee money into own property, beneficiary
entitle for the amount due to him.
▪ Beneficiary also jointly contributing breach of trust entitles to
compensate to other beneficiary too.
▪ When the beneficiary transferring his right and liability the person
who gets the trust property in his name has the power equal to other
beneficiary. 2/27/2022 3
Rights of beneficiaries
1. Beneficiary’s rights against the trustee.
2. Beneficiary’s rights in respect of the trust property.
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1. Beneficiary’s rights against the trustee
❖ Section-57- Right to rents and profits
Subject to the provisions of the instrument of trust, beneficiary has a right to the rents and profits of the trust property.
➢ Ratgama V. Caldera(1956) 58 N.L.R.331
❖ Section-58 -Right to specific execution
-Right to transfer of possession
➢ The beneficiary is entitled to have the intention of the author of the trust specifically executed to the extent of the
beneficiary’s interest.
➢ Right to transfer of possession- Where there is only one beneficiary and he is competent to contract, or where there are
several beneficiaries and they are competent to contract, and all of one mind, he or they may require the trustee to transfer
the trust property to him or them or to such person as he or they may direct.
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❖ Section-59- Right to inspect and take copies of instrument of trust,
account, &
➢ The beneficiary has a right, as against the trustee and all persons claiming
under him with notice of the trust, to inspect and take copies of the instrument
of trust, the documents of title relating solely to the trust property, the accounts
of the trust property and the vouchers(if any) by which they are supported, and
the cases submitted and opinion taken by the trustee for his guidance in the
discharge of his duty.
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❖ Section-60- Right to transfer beneficial interest
➢ The beneficiary, if competent to contract, may transfer his interest,
but subject to the law for the time being in force as to the
circumstances and extent in and to which he may dispose of such
interest.
❖ Section-61- Right to sue for execution of trust
➢ When no trustee are appointed, or all the trustees die, disclaim, or
are discharge, or where for any other reason the execution of a trust
by the trustee is or becomes impracticable, the beneficiary may
institute a suit for the execution of the trust, and the trust shall, so
far as may be possible, be executed by the court until the appointment
of a trustee or new trustee, or until the execution of the trust becomes
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practicable.
❖ Section-62- Right to proper trustees
➢ Subject to the provisions of the instrument of trust, the beneficiary
has a right to require that the trust property shall be properly
protected and held and administered by proper persons and by a
proper number of such persons.
❖ Section-63- Right to compel to perform any act of duty.
➢ The beneficiary has a right to require that his trustee shall be
compelled to perform any particular act of his duty as such, and
restrained from committing any contemplated or probable breach of
trust.
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3. Beneficiary’s right to follow trust property
➢ Right to follow trust property is important where the trustee is insolvent.
➢ The beneficiary has a personal remedy against the trustee for loss caused by a
breach of trust.
➢ Beneficiary in certain situations follow the trust property. This remedy has 03
aspects in EL.
1. The beneficiary can follow the trust property into the hands of the trustee.
2. The beneficiary can follow the trust property into the hands of third person.
3. The beneficiary can follow the trust property into the hands of another
beneficiary.
➢ The beneficiary’s right to follow trust property was recognized prior to 1918.
(Harvey Brand V. Hedges, 1882) 2/27/2022 9
Following trust property into the hand of another beneficiary
❖ A trustee may overpay, or transfer the trust property to, another
beneficiary.
❖ The beneficiary may sue the trustee for breach of trust or follow the
trust property into the hands of the overpaid beneficiaries under 65
and 66.
❖ Section-33(4) and 34(1) of the Trusts Ordinance provide remedies to
a trustee against an overpaid beneficiary.
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❖ Section-67- Acquisition by trustee of trust property wrongfully
converted.
➢ 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.
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END
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