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1931 Supreme(Cal) 43

CALCUTTA HIGH COURT
(Maharaja Sir) Manindra Chandra Nandi - Appellant
Versus
Sudir Krishna Banerjee & Ors. - Respondent
Decided On : 22-04-1931

Headnote:

executor - loans and promissory notes - [Probate and Administration Act, 1881, Negotiable-Instruments Act, Contract Act] - The court analyzed the legal provisions related to the liability of an executor for loans and promissory notes, considering the powers and duties of an executor under the Probate and Administration Act, 1881, and the principles of personal liability under the Negotiable-Instruments Act and Contract Act. The court emphasized the need to establish the executor's right to indemnity from the estate and ordered a further trial to determine the extent of the executor's entitlement to be indemnified.

Fact of the Case:

The plaintiff alleged that the defendant, as an executrix, borrowed money on hand-notes for legal necessities and for the benefit of the estate. The defendant contended that the loans were taken in her personal capacity and that the estate was not liable for them. The Subordinate Judge found the executor alone liable and gave a decree against her in her personal capacity.

Finding of the Court:

The court found that the executor's right to indemnity from the estate needed to be established and ordered a further trial to determine the extent of the executor's entitlement to be indemnified.

Issues: The main issue was whether the plaintiff was entitled to a decree against the estate and the other defendants, and whether the executor had lost her right to indemnity from the estate.

Ratio Decidendi: The court emphasized the need to establish the executor's right to indemnity from the estate and ordered a further trial to determine the extent of the executor's entitlement to be indemnified.

Final Decision: The appeal was allowed, and the suit was remanded to the Court below for further trial to determine the executor's right to indemnity from the estate.

JUDGMENT

1. The plaintiff is the appellant in this appeal. The allegations on which his suit was founded were the following: That the husband of defendant 1 left a will appointing her and some other persons as executors, giving her permission to adopt and providing that she would remain in management of the properties until the adopted son came to be of 21 years of age; that defendant 1 obtained probate of the will and acted as executrix; that defendant 1 took defendant 2 in adoption, and the latter had instituted a suit against defendant 1 in which defendant 3 had been appointed administrator pendente lite; that defendant 1 as such executrix borrowed money on hand-notes (seven in number) for paying the Government revenue due on the estate but never repaid the same. It was further alleged in the plaint that the loans were taken for legal necessities and that the estate was benefited thereby. In the suit as originally laid defendant 1 was impleaded in her capacity as executrix, and it was prayed that a decree might be passed for the amounts due together with interest etc. against all the defendants and for recovery thereof from the estate itself. The original plaint was filed on 6th February 1926.

2. The answer of defendant 1 was that the loans were taken for legal necessity and for payment of Government revenue due on the estate, that she had been removed from her position as executrix and defendant 2 had taken over the estate as malik, and that therefore defendants 2 and 3 and not she, were liable. She also averred that the account given in the plaint was not correct and that the claim for interest was unjust and exorbitant.

3. Defendant 2 in his written statement made various allegations, most of which are immaterial now as they are either not proved or are untrue. The only averments that require mention are the following: "Para. 6.--That this defendant does not admit that there were any legal necessities for taking loans of the money covered by those handnotes or that the sums were borrowed for the benefit of the estate, or that the same wore spent for the preservation of the estate."

Para. 7.--That even admitting for arguments' sake that the handnotes wore legally executed and the sums were borrowed for the benefit of the estate, the estate is not legally liable for them. They should be regarded as the personal debts of defendant 1 and a decree for the same may be passed against her only. No decree can be passed for the said sums against the estate.

Para. 8.--That the late Upendra Krishna Bandopadhya the adoptive father of this defendant, in the will executed by him, did not give any powers to the executors to raise any loan or to charge the estate in any way. On the other hand he made provisions so that the debts ho had at the time of his death might be paid off early. Under such circumstances even if defendant 1 borrowed any money in any way, she alone is liable-for that and the same is not binding on the estate nor is the estate legally liable for that.

Para. 9.--That shortly after defendant 1 had taken probate of the will ... a valuable property named (?) belonging to the estate was sold at public auction for the sum of Rs. 39,000 and by that all the debts of the time of: her husband were paid off and about Rs. 8,000 remained as surplus to the estate. The net income of the said estate would be a little over Rs. 7,000. Defendant 1 has either misappropriated or squandered away the said cash sum in hand. And further by spending at her pleasure the income of the estate, she had also incurred debts to the extent of Rs. 60,000 during her time of management. If the estate has been run into debts through her mismanagement, the estate is not liable for that and oven if a decree for the sum claimed in the suit is passed against defendant 1, she cannot got any indemnity for the said sum from the estate.

Para 13.--Even if the plaintiff was entitled to get any decree, he could not get a decree against the estate, nor was defendant 1 entit

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