Indian Trusts Act,1882
Act No : 2
Section : Advantage gained by fiduciary
88. Advantage gained by fiduciary.-Where a trustee, executor,partner, agent, director of a company, legal adviser, or other personbound in a fiduciary character to protect the interests of anotherperson, by availing himself of his character, gains for himself anypecuniary advantage, or where any person so bound enters into anydealings under circumstances in which his own interests are, or maybe, adverse to those of such other person and thereby gains forhimself a pecuniary advantage, he must hold for the benefit of suchother person the advantage so gained. Illustrations (a) A, an executor, buys at an undervalue from B, a legatee, hisclaim under the will. B is ignorant of the value of the bequest. Amust hold for the benefit of B the difference between the price andvalue. (b) A, a trustee, uses the trust-property for the purpose of hisown business. A holds for the benefit of his beneficiary the profitsarising from such user. (c) A, a trustee, retires from his trust in consideration of hissuccessor paying him a sum of money. A holds such money for thebenefit of his beneficiary. (d) A, a partner, buys land in his own name with funds belongingto the partnership. A holds such land for the benefit of thepartnership. (e) A, a partner, employed on behalf of himself and his co-partners is negotiating the terms of a lease, clandestinely stipulateswith the lessor for payment to himself of a lakh of rupees. A holdsthe lakh for the benefit of the partnership.50 (f) A and B are partners. A dies. B, instead of winding up theaffairs of the partnership, retains all the assets in the business. Bmust account to A's legal representative for the profits arising fromA's share of the capital. (g) A, an agent employed to obtain a lease for B, obtains thelease for himself. A holds the lease for the benefit of B. (h) A, a guardian, buys up for himself incumbrances on his wardB's estate at an undervalue. A holds for the benefit of B theincumbrances so bought, and can only charge him with what he hasactually paid.
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