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Lotus Trust has two trustees, Mehta and Rao. Mehta dies, and a new trustee, Iyer, is appointed under the Indian Trusts Act, 1882. Rao asks whether Iyer will have fewer powers than the original trustees because he was not named by the author of the trust. What is the correct position?

Iyer has the same powers, authorities and discretions as if the author had originally nominated him, and the trust property held by Rao vests in him jointly with Rao. No fresh deed or court confirmation is needed for the vesting or powers.

  1. AIyer holds only limited powers of management until the Court confirms him
  2. BIyer has the same powers, authorities and discretions as if originally nominated by the author of the trust, and the trust property vests in him jointly with RaoCorrect
  3. CIyer has only the powers of a beneficiary, and the property stays with Rao alone
  4. DIyer has the powers but the trust property cannot vest in him until a new deed is executed

Explanation

Under section 75, on appointment of a new trustee the trust property held by continuing trustees becomes vested in the new trustee, solely or jointly as required. He has the same powers, authorities and discretions as if originally nominated by the author. So Iyer shares the property with Rao and has full powers.

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