The instrument of trust directs the trustee to invest trust-money in any of the securities mentioned in…
Where the breach is a failure to invest and accumulate, section 23 makes the trustee account "for compound interest (with half-yearly rests)". Illustration (f) to section 23…
Choose your answer
The instrument of trust directs the trustee to invest trust-money in any of the securities mentioned in section 20 and to accumulate the dividends. The trustee disregards the direction. Under section 23 of the Indian Trusts Act, 1882, what may the beneficiary claim?
Answer and explanation
Correct answer D
Where the breach is a failure to invest and accumulate, section 23 makes the trustee account "for compound interest (with half-yearly rests)". Illustration (f) to section 23 gives the beneficiary the option of principal with compound interest, or the securities that could have been bought together with the accumulation a proper investment would have produced. Simple interest would ignore the direction to accumulate.