A. Section 10 of -the Limitation Act declares that where a trust has been created expressly for some specific purpose or object and property has become vested in a trustee upon such trust (either from such person having been originally named or trustee or having become so subsequently by operation of law), the beneficiary (the person, who, for the time being, may be beneficially interested in the trust), may bring a suit against such trustee, or his legal representatives to enforce that trust at any distance of time without being barred by the law of limitation.
As a result of this section, an apparently fraudulent trustee who has put trust money into his own pocket cannot escape by reason of lapse of time. The section declares that trust properties shall not be subject to any law of limitation but when trust-property finds its way into the hands of an assignee for valuable consideration, the ordinary law of limitation shall apply ; and the assignee shall have the same benefit as an ordinary purchaser of property would have.
In other words, a person who is beneficiary interested in the trust cannot bring a suit to recover the trust property in the hands of an assignee for consideration at any time. He must bring the suit within the prescribed period of limitation.
Image Source: blog.nclife.com
ADVERTISEMENTS:
The following conditions must be fulfilled before benefit of section 10 can be had:
1. There must be property which has become vested in a person in trust for a Specific Purpose.
2. The suit must be against such person or his legal representative or assign (not being an assign for valuable consideration). The section has no application in a suit between the beneficiary and the trustee on the one hand and strangers on the other.
3. The suit must be for the purpose of following in the hands of such person the trust property or its proceeds or for an account of such property or proceeds.
ADVERTISEMENTS:
Problems under Section 10
A creates an express trust on the 1st January, 1932, and dies on the 1st January, 1933. B, the heir of A, of repudiating the trust, claims the property back from the trustee. He files his suit on the 1st May, 1946. The trustee says that the suit is barred by Articles 142 and 144, having been filed beyond 12 years. B claims that the property is the subject of express trust and section 10 declares that there is no limitation for recovery of property subject to express trust. Decide the point.
A. The suit is barred by limitation. Section 10 applies only to suits for following trust-property or the proceeds thereof or for an account of such property of proceeds. It does not apply to a suit by the heir of a settlor for recovery of property on the ground that the trust-deed is void and that; therefore, the heir is entitled to recover it.
The idea is that the property which has vested in trust must be applied for the purpose for which it is meant and if a trustee commits breach of trust, he should not get the aid of. Limitation in his nefarious act. But at the same time the very purpose of the section would be frustrated if the settlor or his heir were entitled to revoke the trust at any period of time.