Sections 31-32 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Chapter IV of the Act turns from a trustee's duties to his rights and powers. Section 31 gives him the right to hold the trust deed and the title documents. Section 32 lets him reimburse himself, or pay out of the trust property, expenses properly incurred, gives him a first charge if he pays from his own pocket, and lets him recover from the beneficiary personally if the trust property falls short. If you are about to act as trustee, a legal consultation on how to record and claim expenses can prevent disputes later.
Section 31: a trustee is entitled to have in his possession the instrument of trust and all documents of title (if any) relating solely to the trust property. Section 32: he may reimburse himself, or pay out of the trust property, all expenses properly incurred in or about the execution of the trust; if he pays them from his own pocket he has a first charge on the trust property for those expenses and interest; and if the trust property fails he may recover from the beneficiary personally on whose behalf and at whose request he paid. He may also recoup a mistaken over-payment.
Scope of the Act
The Act deals with private trusts. Public, charitable and religious trusts are governed by other laws; see private trust vs public trust. Both sections concern the trustee of a private trust.
Section 31: the right to the documents
Section 31 reads: "A trustee is entitled to have in his possession the instrument of trust and all the documents of title (if any) relating solely to the trust-property." The key word is "solely": a document that relates to the trust property and also to other property of someone else is not covered by the wording. The words "if any" accept that some trust property (for example cash) has no title document. The section prints no illustration.
Section 32: reimbursement of expenses
The first paragraph reads: "Every trustee may reimburse himself, or pay or discharge out of the trust-property, all expenses properly incurred in or about the execution of the trust, or the realization, preservation or benefit of the trust-property, or the protection or support of the beneficiary."
Further paragraphs follow in our source:
| Paragraph | What it says |
|---|---|
| First charge | If he pays such expenses out of his own pocket he has a first charge upon the trust property for the expenses and interest thereon |
| How the charge is enforced | Unless the expenses were incurred with the sanction of a principal Civil Court of original jurisdiction, the charge is enforced only by prohibiting any disposition of the trust property without previous payment of the expenses and interest |
| Failure of trust property | If the trust property fails, the trustee may recover the expenses from the beneficiary personally on whose behalf he acted and at whose request, "expressed or implied", he made the payment |
| Over-payment by mistake | If he has by mistake over-paid the beneficiary, he may reimburse the trust property out of the beneficiary's interest; if that fails, he may recover the amount from the beneficiary personally |
Points to notice.
- "Properly incurred" is the test. The section does not list items; the rest of the sentence ties them to executing the trust, realising, preserving or benefiting the property, or protecting or supporting the beneficiary.
- The first charge is a limited one. Without the Court's sanction, it works by stopping any disposition of the property until the trustee is paid. The text does not say that the trustee can sell the property himself on that footing.
- Personal recovery needs the beneficiary's request. The words are "at whose request, expressed or implied". The text does not define "implied".
- Over-payment may be recouped out of the beneficiary's interest first.
Our guide on rights of trustees: reimbursement and indemnity gives a practical view.
The Act's illustrations
None are printed under sections 31 or 32 in our source. The publisher's case-law paragraph under section 32 is not part of the Act and is not used here.
A modern example of our own
Sneha Kapoor settles a flat in Chandigarh in trust for her disabled brother Arjun, with her friend Dhruv as trustee. The deed is silent on expenses. Dhruv holds the trust deed and the flat's title papers in his safe (section 31). When the building needs urgent waterproofing, he pays Rs 80,000 from his own pocket because the trust has no cash.
- Under section 32, the expense is properly incurred for preserving the trust property, so he may reimburse himself from the trust property, or claim reimbursement later.
- Having paid from his pocket, he has a first charge on the flat for the Rs 80,000 and interest. He cannot, on the text, simply sell the flat for repayment without the Court's sanction; he can ask that the flat not be dealt with until he is repaid.
- If the flat were later destroyed and nothing was left, he could recover the amount from Arjun personally, but only if he paid on Arjun's behalf and at Arjun's request, expressed or implied.
- If Dhruv by mistake paid Arjun a month's allowance twice, he may recoup the extra from Arjun's interest, and if that fails, from Arjun personally.
What the instrument of trust can change
Sections 31 and 32 print no "subject to the instrument of trust" wording. A deed may deal with expenses (for example by fixing a budget or requiring beneficiary consent for spending above a limit) and may deal with where the documents are kept. Whether such terms override the section is not stated in the text; draft with care.
Practical points
- Trustees: keep bills and a running statement of what you paid; keep the trust deed and title papers safe, and give copies to the beneficiaries on request.
- Beneficiaries: ask for vouchers for large items; "properly incurred" has to be shown.
- Settlors: decide whether a spending cap is appropriate and say so in the deed.
- Advisers: link this with the settlement of accounts in section 35, covered in our article on sections 33 to 35.
Need help recording or claiming trustee expenses?
If you are a trustee out of pocket, or a beneficiary asked to meet a trustee's claim, our legal consultation service can review the position. Bring the deed, the bills and the account statements.
Key takeaways
- A trustee is entitled to hold the instrument of trust and the documents of title relating solely to the trust property (s.31).
- He may reimburse himself, or pay from the trust property, all expenses properly incurred (s.32).
- Paying from his pocket gives a first charge on the trust property for the expenses and interest.
- Without Court sanction, the charge is enforced only by prohibiting disposition until he is paid.
- If the property fails, he may recover from the beneficiary personally, on whose behalf and at whose request he paid; a mistaken over-payment can be recouped.
Read next
- Section 30: indemnity of trustees
- Sections 33-35: indemnity from gainer, opinion of the Court and settlement of accounts
- Section 36: general authority of a trustee
Disclaimer: Based on the text of the Indian Trusts Act, 1882 as consulted on 1 October 2026 from a scanned copy; the Act applies to private trusts, and public, charitable and religious trusts are governed by other laws. This article is general information, not legal advice; check the official text and take advice before acting.