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Lala Goverdhonedas Vs. Harish Chandra and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKolkata
Decided On
Reported inAIR1934Cal609,152Ind.Cas.198
AppellantLala Goverdhonedas
RespondentHarish Chandra and anr.
Excerpt:
- .....has also relied upon the terms of the will in which the testator directed that all his debts be paid out of his estate in the first instance including the charities and subscriptions promised. that only expresses what is the ordinary rule and does not carry the matter any further. mr. pugh on behalf of the respondent has laid great emphasis upon the circumstance that the executors who are also the residuary legatees took two lacs of rupees out of the estate and were subsequently directed to give security for the restoration of the money if it should be found on an account being taken that they were not entitled to that amount. the order of security was made by my learned brother ameer ali, j., as an alternative to bringing the money into court and his order was taken to the.....
Judgment:

Buckland, J.

1. By his will one Lala Raghumull Khandelwal, who died on 5th September 1926, bequeathed to Sm. Chameli Debi, his brother's widow an annuity of Rs. 500 a month and a house at Delhi of the value of Rs. 20,000 and directed that certain sradh expenses should be met out of the general assets and the following sum to be spent therefor among others for the widow of Jaggumull, that is to say the legatee, Rs.5,000. Probate of the will was granted to the executor Lala Goverdhoned as on 10th January 1927. In the year 1929 a suit for the administration of the estate of the deceased was instituted in this Court and in that suit the Official Receiver was appointed on 16th June 1931. This was followed by an administration decree in the usual form on 2nd February 1932 and the usual accounts are now, we are informed, in the course of being taken. This is an application made in that suit by the executor of Sm. Chameli Debi, deceased, for an order that the Official Receiver be directed to pay to him the sum of Rs., 2,500 being the arrears of annuity due to Sm. Chameli Debi, deceased, and Rs. 1753-12-0 being the balance of the sum of rupees 5,000 directed to be paid for the sradh expenses of Chameli Debi under the will. The application also prayed that the Receiver be directed to make over to the applicant a house at Delhi of the value of Rs. 20,000 or in the alternative a sum of Rs. 20,000 with interest and concluded with the usual prayer for payment of costs.

2. On this application my learned brother Ameer Ali, J., made an order for payment to the executor of Chameli Debi of Rs. 2,500, provided the Official Receiver was satisfied that that was the correct amount of the arrears of the annuity but as regards the balance of Rs. 1,753-12-0 he gave liberty to the Official Receiver to pay a sum not exceeding that amount, provided he wa3 satisfied that the money in addition to the other sums already paid on the same account had been properly and legitimately paid for sradh expenses prior to the date of the application. With the exception of the directions as to costs, that was the order of the learned Judge on the application.

3. The learned Advocate-General has contended that the order is premature. He relies on the administration decree on the ground that the debts have not been ascertained. He has referred to the evidence for the purpose of establishing that in fact the estate is insolvent; but actually it is not possible to say that the estate is either solvent or insolvent. One cannot go beyond asserting that so far the debts have not been ascertained. Ha also refers, as a bar, to Section 325, Succession Act of 1925, which says that debts of every description must be paid before any legacy. This cannot mean that it is the duty of the executor in every case, whether the estate is solvent or insolvent to pay each creditor before he pays any legatee, a construction for which, if I understood him correctly, the learned Advocate General contended. It only lays down, in my view priority; and though the matter does not arise in this appeal I should not be prepared to lend support to the view that it would stand in the way, in an admittedly solvent estate, of the executor paying a legatee before he has discharged the debts of the deceased. Section 325, in my view, does not affect the matter either way which has to be considered rather from the standpoint of the solvency or insolvency of the estate. The learned Advocate-General has also relied upon the terms of the will in which the testator directed that all his debts be paid out of his estate in the first instance including the charities and subscriptions promised. That only expresses what is the ordinary rule and does not carry the matter any further. Mr. Pugh on behalf of the respondent has laid great emphasis upon the circumstance that the executors who are also the residuary legatees took two lacs of rupees out of the estate and were subsequently directed to give security for the restoration of the money if it should be found on an account being taken that they were not entitled to that amount. The order of security was made by my learned brother Ameer Ali, J., as an alternative to bringing the money into Court and his order was taken to the appeal Court in Gobardhan-das v. Gopaldas Modi : AIR1933Cal286 . There is no need to refer to the matter further in this appeal. It has, I conceive, been rather introduced for the purpose of prejudice. The question of the executor's right in the matter does not arise; but if they were wrong in what they did that would not justify payments to the legatees if the legatees are not other, wise entitled now to receive the legacies. I rather inter that learned counsel for the respondent appreciated the weakness of his position when he offered on behalf of his client, if the appeal were dismissed, to give security for the amount ordered by my learned brother to be paid to his client. It appears to me that the order cannot be supported. As a matter of general principle, it is the duty, no doubt, of an executor first to ascertain what the position is and, unless it is sufficiently clear to him that the estate is solvent, not to pay the legacies before the debts have been dis charged. If there has been an administration decree, the same principle applies. The debts will of course be ascertained and until the position has been clarified by an account being taken or it having reached such a state when it becomes apparent that these payments can be made without risk to the creditors, no payment should be made There is considerable force in what the learned Advocate-General has said that if this were allowed every legatee would expect to be paid on giving security, and if that were done and eventually it were found that legatees should restore the money, it is not difficult to imagine the confusion that might arise.

4. In my judgment therefore this appeal should be allowed so far as it provides for payment out to the executor of Rs. 2,500 and Rs. 1,753-12-0 or any other sum as balance of the sradh expenses I am not prepared to disturb the order as to costs made by the learned Judge and I would add that the order made in this appeal will be without prejudice to any further application which may be made by the respondent after the accounts in the administration decree have been concluded, or I may even say have arrived at such a stage that the application would not be open to the objections which I have stated. For these reasons I would make an order in these terms allowing the appeal and make no order as to costs of this appeal.

Costello, J.

5. I am of the same opinion


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