Sections 43-45 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.
Sections 43, 44 and 45 deal with powers that depend on who is acting and what a Court has said. Section 43 lets two or more trustees acting together settle claims on the trust's behalf. Section 44 says that if one of several trustees disclaims or dies, the continuing trustees can generally act. Section 45 says that once a decree has been made in a suit for execution of the trust, the trustee must act only in conformity with it. If you hold a disputed debt or claim for a family trust, a legal consultation before you settle it is sensible.
Section 43: two or more trustees acting together may accept a composition or security, allow time, compromise, compound, abandon, submit to arbitration or otherwise settle any debt, account, claim or thing relating to the trust, without being responsible for loss from anything done in good faith; a sole acting trustee may do so if the deed authorises a sole trustee. Section 44: if one of several trustees disclaims or dies, the continuing trustees may exercise the authority, unless the deed shows a greater number is needed. Section 45: after a decree in a suit for execution of the trust, the trustee must not exercise his powers except in conformity with the decree or with the Court's sanction.
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. These sections concern private trusts.
Section 43: power to compound
Section 43 begins: "Two or more trustees acting together may, if and as they think fit,—" and lists four powers.
| Limb | Power |
|---|---|
| (a) | Accept any composition or any security for any debt or for any property claimed |
| (b) | Allow any time for payment of any debt |
| (c) | Compromise, compound, abandon, submit to arbitration or otherwise settle any debt, account, claim or thing whatever relating to the trust |
| (d) | For any of those purposes, enter into, give, execute and do such agreements, instruments of composition or arrangement, releases and other things as to them seem expedient, "without being responsible for any loss occasioned by any act or thing so done by them in good faith" |
Further paragraphs:
- The powers of two or more trustees acting together "may be exercised by a sole acting trustee when by the instrument of trust, if any, a sole trustee is authorised to execute the trusts and powers thereof."
- "This section applies only if and as far as a contrary intention is not expressed in the instrument of trust, if any, and shall have effect subject to the terms of that instrument and to the provisions therein contained."
- "This section applies only to trusts created after this Act comes into force." The commencement date is in section 1 (see our article on sections 1 and 2); for trusts created before it, the section is not stated to apply.
The good-faith protection in limb (d) is limited to acts done "in good faith". A settlement made to favour a trustee's own interest does not fit.
Section 44: one of several trustees disclaims or dies
Section 44 reads: "When an authority to deal with the trust-property is given to several trustees and one of them disclaims or dies, the authority may be exercised by the continuing trustees, unless from the terms of the instrument of trust it is apparent that the authority is to be exercised by a number in excess of the number of the remaining trustees." In plain words, the remaining trustees can act, unless the deed clearly needs more people than remain. Whether a trustee who has accepted can later leave is a different matter (section 46, covered in our article on renouncing the trust).
Section 45: suspension of powers by decree
Section 45 reads: "Where a decree has been made in a suit for the execution of a trust, the trustee must not exercise any of his powers except in conformity with such decree, or with the sanction of the Court by which the decree has been made, or, where an appeal against the decree is pending, of the Appellate Court." So after such a decree, the trustee's room to act is tied to the Court. The text does not say what happens if an appeal is pending and no sanction is sought; it names the Appellate Court's sanction as an alternative.
The Act's illustrations
None are printed under sections 43, 44 or 45 in our source.
A modern example of our own
Vijay Thakur's family trust has three trustees: his wife Sarita, his brother Dinesh and his friend Ajit. A tenant owes the trust Rs 6 lakh in arrears and offers Rs 4 lakh now in full settlement.
- Section 43: Sarita, Dinesh and Ajit, acting together, may accept the composition, release the rest and sign the settlement, and are not responsible for loss from acts done in good faith. The deed does not exclude the section.
- Section 44: Ajit disclaims before accepting and Dinesh later dies. The authority to deal with the trust property may be exercised by the continuing trustee, Sarita, unless the deed's terms show it must be exercised by a larger number. If the deed said "no sale without three trustees", it would be apparent that a number in excess of the remaining trustees is needed.
- Section 45: a beneficiary sues for execution of the trust and a decree is made. From then on Sarita should exercise powers only as the decree provides or with the Court's sanction, or the Appellate Court's if an appeal is pending.
What the instrument of trust can change
Section 43 is expressly subject to a contrary intention and to the terms of the instrument; a deed can narrow or exclude the power to compromise. Section 44 gives way where the deed shows a larger number is needed. Section 45 has no deed qualifier in the text.
Practical points
- Settlors: decide whether trustees should be allowed to compromise claims and whether a sole trustee may do so.
- Trustees: record why a compromise is in the beneficiaries' interest; act together; keep a signed resolution.
- Beneficiaries: ask for the reasons behind a settlement; the protection is for good faith.
- Advisers: before any act after a decree, check the decree and the Court's directions.
Need help with a trust claim or settlement?
If you are a trustee considering a compromise, or the number of trustees has changed and you need to know who can act, our legal consultation service can help. Bring the trust deed and details of the claim.
Key takeaways
- Two or more trustees acting together may compromise and settle claims relating to the trust, protected for acts done in good faith (s.43).
- A sole acting trustee may do so only if the deed authorises a sole trustee.
- Section 43 yields to a contrary intention in the deed and applies only to trusts created after the Act came into force.
- If one of several trustees disclaims or dies, the continuing trustees may act, unless the deed needs more (s.44).
- After a decree in a suit for execution of the trust, powers are exercised only as the decree or the Court allows (s.45).
Read next
- Sections 40-42: power to vary investments, maintain minors and give receipts
- Section 46: trustee cannot renounce after acceptance
- Appointment of a new trustee: resolution and deed
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.