A trust is controlled not only by the instrument of trust and the court but also by the beneficiaries and the rules of equity. In other words, a trustee is the owner of trust property for the purpose of its administration and for no other purpose.
The beneficiary has a right to obtain his beneficial interest or interest against the trustees as owner of the trust property. Sections 55 to 69 of the Indian Trust Act lay down some more rights and liabilities of the beneficiaries.
Rights of the beneficiary
Right to rents and profits [S. 55] – A beneficiary is entitled to the rents and profits of the trust-property. This right lasts so long as the trust-property exists or so long as the trust is not validly terminated and it is controlled by the instrument of trust.
Right to specific execution [S. 56] – The beneficiary is entitled to have the intention of the author of the trust specifically executed to the extent of his interest. A trustee is thus bound to carry out the specific execution of the author’s intention.
Right to terminate a trust [S. 56] – Adult beneficiaries who together are absolutely entitled to the trust-property may terminate the trust and demand that the fund be handed over to them; but not if any interests are outstanding.
Right to sue for execution of trust [S. 59] – Where the execution of a trust becomes impracticable due to non-appointment, death, disclaimer or discharge of a trustee or for any other reason, the beneficiary may file a suit for execution of the trust.
Remedies of the beneficiary
A beneficiary may adopt a breach of trust and accept all the benefits arising therefrom or may condone the breach and bear the consequences thereof. For every breach of trust a beneficiary has a twofold remedy:
(a) relief against the trustee himself personally, called a personal remedy against the trustee; and
(b) relief against the trust-property or the property into which the trust-property has been converted. This is a called a proprietary remedy against the trust-property.
Personal liability of a trustee is essentially a liability for his own acts and defaults and not for those of others. The subject of breach of trust has been considered before and accordingly a trustee has to compensate the trust for the loss caused by him.
His personal liability is therefore of a compensatory nature, and it is enforced against him irrespective of his fraud, intention, efficiency or otherwise. It does not depend on the nature of his lapse or default.
Right to against trustee personally (Personal Remedy)
A proprietary remedy available to the beneficiary is more powerful than a personal remedy because of the following reasons:
(a) The plaintiff’s demand does not depend, in the former, on the solvency of the defendant; so that if the defendants become insolvent, even then the property can be recovered by the plaintiff and he obtains priority in comparison to the rights of other creditors. In the latter it is not so.
(b) A plaintiff in the former is entitled to the accretions to the property and its higher value, in the latter the question does not arise.
(c) A plaintiff pursuing a proprietary remedy can receive interest from the date the defendant obtained it; in case of personal remedy interest is granted from the date of the decision.
(d) Propriety remedy generates a right in rem whereas a personal remedy gives a right in personam only, which is narrower than a right in rem.