Section 62 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.
Section 62 says what the beneficiary can do when a trustee has wrongfully bought trust property: have it declared subject to the trust, or retransferred, on conditions that protect the trustee's honest outlay. It follows the bars on purchase in sections 52 and 53. The Act deals with private trusts; public, charitable and religious trusts are governed by other laws (see private vs public trust). If a trustee has bought trust property and you want to challenge it, our legal dispute resolution team can look at the papers.
Where a trustee has wrongfully bought trust property, the beneficiary has a right to have the property declared subject to the trust or retransferred by the trustee, if it remains in his hands unsold, or by a person who bought it from him with notice of the trust. But the beneficiary must repay the purchase money with interest and his proper preservation expenses. The trustee or purchaser must account for the net profits, bear an occupation-rent if in actual possession, and allow a deduction if the property has deteriorated. The right is lost where the beneficiary, competent to contract, ratified the sale with full knowledge and without coercion.
What the section says
Section 62 sets out one main rule and two limits.
The rule. "Where a trustee has wrongfully bought trust-property, the beneficiary has a right to have the property declared subject to the trust or retransferred by the trustee, if it remains in his hands unsold, or, if it has been bought from him by any person with notice of the trust, by such person."
So there are two targets. If the trustee still holds the property, he can be made to retransfer it, or it can be declared subject to the trust. If he has sold it on to someone who knew of the trust, that person can be required to do the same. The section is silent on a buyer without notice; see sections 63-64, where the Act protects certain transferees in good faith for consideration without notice.
What the beneficiary must do in return
The right is not unconditional. The section says "the beneficiary must repay the purchase-money paid by the trustee, with interest, and such other expenses (if any) as he has properly incurred in the preservation of the property".
| Beneficiary must | Trustee or purchaser must |
|---|---|
| Repay the purchase money paid by the trustee, with interest | (a) Account for the net profits of the property |
| Repay proper expenses of preserving the property | (b) Be charged with an occupation-rent, if in actual possession |
| (c) Allow the beneficiary to deduct a proportionate part of the purchase money if the property has deteriorated through his or the purchaser's acts or omissions |
The Act does not state a rate of interest or the rent figure. The text is silent, so these are matters for the Court on the facts. The aim is to put both sides back where they stood: the trustee is repaid what he laid out, but may not keep what the property earned or what he saved by living in it.
The two limits
The section ends with two things that it does not do: "Nothing in this section—
(a) impairs the rights of lessees and others who, before the institution of a suit to have the property declared subject to the trust or retransferred, have contracted in good faith with the trustee or purchaser; or
(b) entitles the beneficiary to have the property declared subject to the trust or retransferred where he, being competent to contract, has himself, without coercion or undue influence having been brought to bear on him, ratified the sale to the trustee with full knowledge of the facts of the case and of his rights as against the trustee."
The first protects people such as tenants who dealt in good faith with the buyer before a suit was filed. The second is ratification: a beneficiary who is competent to contract and who, without coercion or undue influence, approved the sale knowing the facts and his rights, cannot later undo it under this section. The words "with full knowledge" make the test strict. A signature given without the facts will not necessarily be enough, though the text does not say how a Court weighs this.
The Act's illustrations
In the scanned copy consulted, no illustrations are printed under section 62, so none are restated here.
A modern example of our own
Ritu Bansal is trustee of a family trust that owns a plot in Gurugram, held for the benefit of her nephew Siddharth. In breach of the Act she buys the plot from the trust herself for Rs 80 lakh and starts a small warehouse on it. Siddharth later finds out.
- Siddharth may seek a declaration that the plot is subject to the trust, or that Ritu must retransfer it.
- He must repay the Rs 80 lakh she paid, with interest, plus any expenses properly spent to preserve the plot.
- Ritu must account for the warehouse's net profits and may be charged an occupation-rent because she was in actual possession.
- If she had sold the plot on to a buyer who knew of the trust, the same right could be pressed against that buyer.
- If Siddharth, an adult, had signed a letter approving the sale after full disclosure and without pressure, the second limit would stop him from using this section.
What the instrument of trust can change
Section 62 does not mention the instrument of trust. The text does not say whether a deed can authorise a trustee to buy trust property, and sections 52 and 53 contain their own rules about such purchases; see sections 51-52 and sections 53-54. Take advice before treating any deed clause as a permission.
Practical points
- Beneficiaries: act promptly once you learn of a purchase, and do not sign anything that approves the sale without taking advice, because ratification can end your right under this section. The Act's text prescribes no time limit in this section; any limitation period comes from other law.
- Trustees: do not buy trust property without the Court's permission under section 53, and do not assume a fair price cures the wrong.
- Buyers from a trustee: check whether the seller is a trustee of the property and what the deed says; notice of the trust puts you in the line of section 62.
Need help challenging a trustee's purchase?
If a trustee has bought trust property, gather the deed of trust, the sale deed, proof of price and any record of the beneficiary's knowledge or consent. Our legal dispute resolution team can review them and explain your position under section 62 and the sections around it.
Key takeaways
- Section 62 lets the beneficiary have wrongfully bought trust property declared subject to the trust or retransferred.
- The right extends to a buyer from the trustee who had notice of the trust.
- The beneficiary must repay the purchase money with interest and proper preservation expenses.
- The trustee or purchaser must account for net profits, bear an occupation-rent if in possession, and allow a deduction for deterioration.
- It does not impair the rights of lessees who contracted in good faith, and it does not apply if the beneficiary ratified the sale with full knowledge, without coercion or undue influence.
Read next
- Sections 63-64: following trust property into third-party hands and saving of transferees
- Sections 59-61: suit for execution of trust, proper trustees and compelling duty
- Liabilities of trustees for breach of trust
- Rights of beneficiary under trust
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.