Appointment of New Trustees, Vesting and Survival of the Trust (Sections 73 to 76)

When a trustee dies, disclaims, leaves, becomes unfit or wishes to retire, someone must take his place. Sections 73 to 76 provide the machinery: they list the occasions for appointing a new trustee, the persons who may appoint (Section 73), the court's power where private appointment is impracticable (Section 74), the automatic vesting of the trust property in the new trustee (Section 75), and the survival of the trust to continuing trustees (Section 76). This note explains them.

1. When a New Trustee May Be Appointed (Section 73)

Section 73 lists the occasions on which a new trustee may be appointed in place of an existing or intended one:

Occasion	Comment
A person appointed trustee disclaims	Before acceptance (Section 10)
A trustee, original or substituted, dies	Includes a person named trustee in a will who dies before the testator
He is absent from India for a continuous period of six months	Absence makes administration impracticable
He leaves India for the purpose of residing abroad	Even before six months have passed
He is declared an insolvent	Insolvency calls his fitness into question
He desires to be discharged	A voluntary retirement
He refuses to act, or becomes, in the opinion of a principal Civil Court of original jurisdiction, unfit or personally incapable to act	Unfitness and incapacity require the court's opinion
He accepts an inconsistent trust	A trust whose duties conflict with this one

2. Who May Appoint (Section 73)

Section 73 sets out an order of priority for making the appointment:

The person nominated for the purpose by the instrument of trust, if any;
If there is no such person, or none able and willing to act: the author of the trust, if alive and competent to contract; or the surviving or continuing trustees or trustee; or the legal representative of the last surviving and continuing trustee; or, with the consent of the court, the retiring trustees if they all retire simultaneously, or (with like consent) the last retiring trustee.

Form: every appointment must be in writing under the hand of the person making it.
Number: on an appointment, the number of trustees may be increased.
Official Trustee: with his consent and by order of the court, the Official Trustee may be appointed where only one trustee is to be appointed and he is to be the sole trustee.
Continuing trustees: a refusing or retiring trustee who is willing to act in exercising the power counts as a continuing trustee for this purpose.

3. Appointment by the Court (Section 74)

Section 74, Indian Trusts Act, 1882 (appointment by Court)

Whenever any such vacancy or disqualification occurs and it is found impracticable to appoint a new trustee under section 73, the beneficiary may, without instituting a suit, apply by petition to a principal Civil Court of original jurisdiction for the appointment of a trustee or a new trustee, and the Court may appoint a trustee or a new trustee accordingly.

Where private appointment under Section 73 is impracticable, for example because there is no nominator, the author is dead, and no trustee survives, or those with the power refuse or disagree, the beneficiary may petition the court without filing a suit. In choosing a trustee, the court must have regard to:

Consideration	Purpose
(a) The wishes of the author, expressed in or inferred from the instrument	Respects the author's choice of the kind of person who should administer the trust
(b) The wishes of the person, if any, empowered to appoint new trustees	Respects the instrument's appointment mechanism
(c) Whether the appointment will promote or impede the execution of the trust	Ensures the appointee is suitable and will work effectively
(d) Where there are several beneficiaries, the interests of all of them	Prevents an appointment that favours one beneficiary

Courts generally avoid appointing a beneficiary, or a close relative of one beneficiary, as sole trustee where there are competing interests, and prefer independent and responsible persons, professional trustees or, for public trusts, official bodies.

4. Vesting in the New Trustee (Section 75)

Section 75 (vesting of trust property in new trustees)

Whenever any new trustee is appointed under section 73 or section 74, all the trust property for the time being vested in the surviving or continuing trustees or trustee, or in the legal representative of any trustee, shall become vested in such new trustee, either solely or jointly with the surviving or continuing trustees or trustee as the case may require.

Every new trustee so appointed, and every trustee appointed by a Court either before or after the passing of this Act, shall have the same powers, authorities and discretions, and shall in all respects act, as if he had been originally nominated a trustee by the author of the trust.

Section 75 has two important effects:

Automatic vesting: the trust property vests in the new trustee (alone or jointly with continuing trustees) by force of the statute, without a separate conveyance. In practice, the new trustee must still complete the formalities that third parties require, such as mutation of land records, transfer of shares and change of signatories on bank accounts, and Section 12 obliges him to obtain any transfer needed.
Same powers: the new trustee has all the powers, authorities and discretions of an original trustee. Discretions given to "my trustees" are exercisable by the trustees for the time being, not only by those the author personally chose.

5. Survival of the Trust (Section 76)

Section 76 (survival of trust)

On the death or discharge of one of several co-trustees, the trust survives and the trust property passes to the others, unless the instrument of trust expressly declares otherwise.

Co-trustees hold as joint tenants: on the death or discharge of one, the property passes to the others, not to the deceased trustee's heirs. The trust survives and the remaining trustees continue to administer it, exercising the powers that Section 44 preserves for continuing trustees (Topic 18). The instrument may provide otherwise, for example by requiring a minimum number of trustees before any act can be done, in which case a new appointment must be made first.

⚠ Key point

A new trustee may be appointed where a trustee disclaims, dies, is absent from India for six months, leaves to reside abroad, is declared insolvent, wishes to be discharged, refuses or becomes unfit or incapable, or accepts an inconsistent trust (Section 73). The appointment is made, in writing, by the person nominated in the instrument, failing whom the author, the continuing trustees, the legal representative of the last trustee, or retiring trustees with court consent; numbers may be increased and the Official Trustee may be appointed sole trustee. Where this is impracticable, the beneficiary may petition the court, which considers the author's wishes, the appointor's wishes, the execution of the trust and all beneficiaries' interests (Section 74). The property vests automatically in the new trustee, who has the same powers as an original trustee (Section 75). On the death or discharge of a co-trustee, the trust survives to the others unless the instrument expressly provides otherwise (Section 76).

6. Related Topics and Provisions

Parties to a trust (Topic 9): disclaimer under Section 10
Co-trustees (Topic 18): survival of powers under Section 44
Vacating office and discharge (Topic 29): Sections 70 to 72
Statutory regulation of public trusts (Topic 42): the Official Trustee and Treasurer of Charitable Endowments