Suits against Trustees: Section 10, Limitation Act

A trustee holds property for others, and the beneficiaries are entitled to trust him. The law therefore refuses to let a trustee keep trust property merely because time has passed. Section 10 of the Limitation Act provides that a suit against a trustee for a specific purpose, to follow the trust property or for an account, is never barred. The protection is real but narrow: it depends on an express trust, on who holds the property, and on the relief claimed. Once the property passes to a purchaser for value, specific articles in the Schedule take over. This note explains section 10, its limits, endowments, and Articles 92 to 96.

1. The Rule

Figure 1: Conditions of section 10

• Text, s.10. Notwithstanding the foregoing provisions of the Act, no suit against a person in whom property has become vested in trust for any specific purpose, or against his legal representatives or assigns (not being assigns for valuable consideration), for the purpose of following in his or their hands such property or its proceeds, or for an account of such property or proceeds, shall be barred by any length of time.
• Overrides the Act. The opening words exclude every other provision, including the articles of the Schedule, within the field of the section.
• Persons covered. The trustee, his legal representatives and his assigns who are volunteers. A purchaser for value is outside the section.
• Relief covered. Only following the property or its proceeds, and an account. Other claims arising from a breach of trust fall under the ordinary articles.

2. Who Is a Trustee

Figure 2: The reach of section 10

• Express trust. The property must be vested in the trustee for a specific purpose. The section is generally confined to express trusts; constructive and resulting trusts do not ordinarily qualify.
• Section 2(y). 'Trustee' does not include a benamidar, a mortgagee remaining in possession after the mortgage has been satisfied, or a person in wrongful possession without title. Each holds for another in some sense, but none can claim, or be denied, the benefit of limitation as a trustee.
• Strangers. A person who takes trust property adversely to the trust, with no title from the trustee, is not covered; the suit against him is governed by the general articles, such as Article 65.

3. Religious and Charitable Endowments

• Explanation. Property comprised in a Hindu, Muslim or Buddhist religious or charitable endowment is deemed to be property vested in trust for a specific purpose, and its manager is deemed to be the trustee.
• Managers covered. A mahant, shebait or mutawalli managing endowment property is treated as a trustee for s.10, though not a trustee in the strict English sense.
• History. In Vidya Varuthi v Balusami (1921) the Privy Council held that the head of a math is not a trustee in the English sense and that math property is not vested in him in trust. The Legislature responded by amending the 1908 Act in 1929; the 1963 Act carries the deeming rule in the Explanation.

4. Transfers for Value: Articles 92 to 96

Figure 3: Articles on trust and endowment property

• Why separate articles. A purchaser for value is excluded from s.10, so the Schedule fixes periods for recovering trust property from him or setting aside the transfer.
• Starting point. For Articles 92 to 95, time runs from when the transfer becomes known to the plaintiff, not from the date of transfer.
• Article 96. Gives a new manager 12 years from the later of the previous manager's death, resignation or removal, or his own appointment, so that the endowment is not prejudiced by a manager who would not sue to undo his own transfer.

5. Frequently Asked Questions

Is a suit against a purchaser of trust property also free from limitation?

No. Section 10 excludes assigns for valuable consideration. A suit to recover trust property from a purchaser for value is governed by Article 92 for immovable property (12 years) and Article 93 for movable property (3 years), both running from when the transfer becomes known to the plaintiff.

Is a benamidar a trustee for section 10?

No. Section 2(y) expressly excludes a benamidar from the definition of trustee, along with a mortgagee who remains in possession after the mortgage has been satisfied and a person in wrongful possession without title.

Does section 10 cover every claim for breach of trust?

No. It protects only suits to follow the trust property or its proceeds in the hands of the trustee, his legal representatives or volunteers, and suits for an account. Other claims arising from a breach of trust are governed by whichever article of the Schedule fits them.

Is the mutawalli of a waqf a trustee for section 10?

Yes, for this purpose. The Explanation deems property comprised in a Muslim religious or charitable endowment to be vested in trust for a specific purpose and its manager to be the trustee, so a suit against the mutawalli for an account of waqf property is not barred by time.

6. Related Topics

• Topic 2: Definitions and Computation of Time. Section 2(y) and other definitions.
• Topic 28: Schedule, Division I: Suits. The trust and endowment articles in context.