New India Motors Pvt. Ltd. (In ... vs Smt. S.P. Duggal And Ors.
1979 Latest Caselaw 52 Del

JUDGMENT

S. Ranganathan, J.

1. This is an application by the official liquidator in the case of New India Motors Private Ltd., which is in liquidation, the company having been wound up by an order of this court dated May 9, 1972.

2. The applicant seeks to recover a sum of Rs. 1,737.74 in respect of the sale price of a Fiat motor car sold by the company to one S. P. Duggal. The car was sold and delivery thereof was given on 14th July, 1970. Shri Duggal was charged a sum of Rs. 18,814.57 but this was subject to the condition that the price would be revised in conformity with the decision of the Supreme Court in Writ Petition No. 327 of 1969 filed by the manufacturers of the motor-cars, M/s. Premier Automobiles. This condition was stipulated in the order of allotment and it was also mentioned in the bill drawn up by the company on 14th July, 1969. The car is stated to have been delivered, to Sri B. R. Duggal, son of Sri S. Pi Duggal, and he has signed the condition specified in the bill. Sri S. P. Duggal also entered into an agreement with the company on July 11, 1970, stating that he would pay on demand the amount of price difference based on the decision of the Supreme Court. Based on the above agreement and on the decision of the Supreme Court which is reported in Premier Automobiles Ltd. v. Union of India , the applicant filed the present application on November 12, 1975, against Shri S. P. Duggal seeking from him the recovery of the sum of Rs. 1,737'34.

3. During the pendency of the above application, Sri S. P. Duggal died on 3rd March, 1976. Thereupon, the official liquidator imp leaded Mrs. S. P. Duggal, Sri J. R. Duggal and Sri. K. R. Duggal as the legal representatives of the deceased respondent. Thereafter; it was pointed out that there were three more legal representatives of the deceased, namely, Sri T. R. Duggal, Sri B. R. Duggal and Sri N. K. Duggal. Thereupon, these persons were also brought on record. This was done by the order dated August 19, 1976, in C.A. No. 350 of 1976 and the order dated July 29, 1977, in C.A. No. 595 of 1976.

4. On behalf of the legal representatives of Sri S. P. Duggal (hereinafter referred to collectively " as the respondents "), the claim of the official liquidator is resisted on merits. It is also pleaded that the application is barred by limitation but in addition to the above pleas, the main contention urged on behalf of the respondents is that they have not inherited any property, movable or immovable, from the late Sri S. P. Buggal and that consequently no payment order can be passed making them liable to pay any amounts to the applicant. In the affidavit filed on behalf of Sri K. R. Duggal, it is stated that Sri S. P. Duggal was living separately from three of his sons. Two of them were living in the same house as the deceased but were having separate kitchens. It is stated that at the time of retirement of Sri S. P. Duggal from service, he was maintaining a savings bank account with the Syndicate Bank. The Fiat car was sold on June 14, 1974, and the proceeds were deposited in another savings bank account with the United Commercial Bank opened on June 15, 197.4. It is stated that at the time of his death, the deceased was having a cash balance of Rs. 214.08 in the Syndicate Bank and Rs. 24.44 in the United Commercial Bank. These amounts aggregating to Rs. 238.53 were received by the widow of late Sri Duggal but the expenses on the funeral of Sri Duggal were much more than the above amount. It is thus stated that there being no movable or immovable property which had devolved on the respondents from the deceased, the present application is not maintainable and should be dismissed.

5. When the affidavit of Sri K. R. Duggal by way of evidence was filed on 18th September, 1978, counsel for the official liquidator wanted time to file a rejoinder as well as to take steps to meet the objections in the said affidavit by oral or other documentary evidence. However, after taking some time for this purpose, the counsel stated that the applicant did not want to lead any further evidence in the matter and that the application may be heard on the evidence on record, namely, the affidavit of Shri J. K. Jain, on behalf of the official liquidator, and the affidavit of Sri K. R. Duggal, on behalf of the respondents.

6. From the above discussion it will be seen that the statement made in the counter-affidavit of Sri K. R. Duggal that the deceased had not left any property has not been controverter. Though at the time of arguments Mrs. Jain contended that late Sri S. P. Duggal had retired as a Sr. Divisional Manager in the Life Insurance Corporation of India and that it was incredible that he would not have left even any movable property for his wife and sons to inherit, the objections have not been put in the form of any counter-affidavit nor is there any positive material to rebut the sworn statements in the affidavit filed on behalf of the respondents. This application has, therefore, to be dealt with on the footing that the respondents had not received any of the assets of the deceased.

7. In the above situation it is contended on behalf of the official liquidator that the merits of the official liquidator's claim should be gone into and that if it was found to be in order then a payment order should be passed against the respondents leaving it to the official liquidator to work out in execution proceedings his rights against the various respondents after establishing, if he can, the existence of the property of the deceased in the hands of one or more of such respondents. On the other hand, on behalf of the respondents it is contended that this is not an issue to be postponed to the execution proceedings and that since the legal representatives of a deceased person have no liability to pay the debts of the deceased except out of the assets of the deceased, no payment order could be passed against them in the face of their denial of having in their possession any property whatever of the deceased.

8. Talking of the rights and liabilities of the representatives of deceased persons, Salmond observes I " Just as many of a man's rights survive him, so also do many of his liabilities; and these inheritable obligations pass to his representative, and must be satisfied by him. Being, however, merely the representative of another, he is not liable in propria persona, and his responsibility is limited by the amount of the property which he has acquired from deceased." Salmond on Jurisprudence (12th Edn., para. 120, p. 443).

9. The above rule has also been incorporated in Sections 50 and 52 of the CPC as well as in the provisions of Order 22. Section 50 enacts that where a judgment-debtor dies before the decree has been fully satisfied the holder of the decree may apply to the court which passed it to execute the same against the legal representatives of the deceased. Where the decree is executed against such legal representative, he shall be liable only to the extent of the property of the deceased which has come into his bands and has not been duly disposed of. For this purpose, the court executing the decree may compel the legal representatives to produce such accounts of the estate of the deceased as it may think fit. Section 52 provides for a case where a decree is passed against a party as the legal representative of a deceased person for the payment of money out of the property of the deceased. Such a decree can be executed by the attachment and sale of any such property. Here again the executing court can go into the question regarding the extent of the property of the deceased which has come into his possession and the extent to which he has duly applied such property after the death and explain how such a decree is to be executed. These provisions deal with cases where the decree is obtained against a person before his death or against his legal representatives.

10. The procedure to be followed where one of the defendants to a suit dies during the pendency of the suit is laid down in Order 22 of the Code.

11. Rule 1 lays down the general rule that the death of a plaintiff or a defendant shall not cause the suit to abate if the right to sue survives. The general rule is that the right of action against a person survives against his legal representatives. Section 37 of the Indian Contract Act, s. 306 of the Indian Succession Act and s. 146 of the CPC lay down the general rule i " that all rights of actions and demands whatever existing in favor or against a person at the time of his death which are not personal to the deceased, would survive to or against his legal representatives." (vide Kedar Nath v. Mohani Devi, ).

12. The Supreme Court has pointed out that the maxim to the contrary; Actio personalis moritur cum persona has a narrow application to a limited class of actions ex delicto or actions where after the death of the party the relief granted could not be enjoyed or granting it would be nugatory. (See Girijanandini Devi v. Bijendra Narain, ). There cannot, therefore, be any doubt that in the present case the right to sue survives against the legal representatives of the deceased respondent. In such a case, Order 22, Rule 4 prescribes that the court, on an application made in that behalf, shall cause the legal representatives of the deceased defendant to be made a party And may proceed with the suit. It has been held that it is not necessary for the court at this stage (i.e., at the stage of bringing on record the legal representatives of a deceased defendant) to decide whether such legal representative is in possession of the estate belonging to the deceased or whether at all the deceased had left an estate (vide Dhool Chand v. Ganpat Lal, ), except perhaps where a person other than a personal heir is sought to be made liable as legal representative for having intermeddled with the estate of the deceased by invoking the extended meaning of the definition in Section 2(11) of the Code. In the circumstances of this case, therefore, the applicant rightly took steps to bring on record the respondents who are the widow and sons of the deceased as his legal representatives.

13. But does this mean that the applicant is entitled to a payment order against them--if his claim is well founded on merits, even though they plead that they have not at all derived any property from the deceased ?

14. This question is one of some difficulty on which there appears to be a conflict of judicial decisions. The Allahabad High Court in Tamiz Bano v. Nand Kishore and Sumeshar Bind v. Baldeo Sahu , the Rangoon High Court in Motiram v. Daw Hunin, AIR 1934 Rang 196 and the Nagpur High Court in Shankarlal v. Ganesh Singh, AIR 1926 Nag 170 and in Ranjitsingh v. Mi. Narmadi, AIR 1931 Nag 173, have taken the view that in a suit by a creditor against the heirs of a deceased debtor the plaintiff is entitled to a decree against the defendants on proof of the debt whether the deceased left any property or not. If the deceased had not left any property it only meant that the decree could not be executed against the legal representatives for want of assets of the deceased. On the other hand, a Full Bench of the Bombay High Court in Jamburao Satappa Kochari v. Annappa Ramchandrappa Kabbur, AIR 1941 Bom 23 ; [1941] 192 1C 198, and the Lahore High Court in Bhag Mal Daya Ram v. Garimju Mal, AIR 1923 Lah 471, have taken a contrary view. Chitaley has expressed a preference for the former view (9th Edn, Vol. 1, p. 884). Mulla has also summarised the position thus on p. 271 (Vol. I, 13th Edn.):

"The suit is not the stage at which the question whether the deceased has left behind assets can be gone into. It is a matter which must bs properly determined in execution proceedings."

15. I have already set out the provision in Order 22, Rule 4. Under this all that the plaintiff can ask is that the legal representatives of the deceased defendant should he brought on record and that he be permitted to proceed with the suit. Rule 4(2) makes it clear further that in these proceedings, the person made party as legal representative " may make any defense appropriate to his character as legal representative of the defendant". Such a legal representative no doubt cannot put forward a new claim or plea not open to the deceased or inconsistent with or contrary to the defense put forward by the deceased because he only steps into the shoes of the deceased himself. It is, however, open to him to put forward any plea in his character as legal representative. In Mt. Moti Bala Debi v. Satyanand Tirtha Swami, AIR 1930 All 348, a preliminary decree on the basis of a mortgage had been obtained against one Kalkanand Swami. He died shortly afterwards. One Satyanand was brought on record as the legal representative of the deceased and he took the objection that the property which had been mortgaged and to which the preliminary decree related was the property of a mutt of which the deceased was the mahant and that the mortgage not being for any legal necessity was not binding on the mahant and on the respondent who was a successor mahant in the mutt. These pleas were permitted and upheld and, on further appeal, the High Court held (p. 349, col. 2):

" We are of opinion that the view taken by the courts below is correct. While under the ordinary [circumstances the provisions of Order 34, Rule 5, Civil P.C., being imperative in their character should be followed, but taking them with the provisions of Order 22, Rule 4(2), Civil P.C., it is clear to us that the legal representative is at liberty to take any defense which may be appropriate to his character as the legal representative of the deceased defendant. Satyanand Swami having been found to be the mahant of the mutt to which the mortgaged property appertains is bound to protect the interest of the mutt and is entitled to oppose further proceedings being taken for the enforcement of the invalid mortgage deed executed by his predecessor-in-office. It is obvious that if he does not put forward an appropriate defense for the protection of the interests of the mutt of which he is the present mahant and allows a final decree to be passed, complications of a serious character will be introduced. It may be too late for him to prevent the sale which must in the ordinary course follow the final decree. The learned advocate for the plaintiff-respondent has suggested a course which does not appeal to us. He contends that Mahant Satyanand Swami should submit to a final decree being passed and the sale held there under and should vindicate the right of the mutt by instituting a regular suit. We are of opinion that this circuitous course is not only undesirable but legally objectionable. The policy of the law is always to avoid multiplicity of proceedings, and to take a course of this kind will be to multiply litigation, if nothing worse. Proceedings following an application for preparation of a final decree are proceedings in the suit. It is, therefore, not too late for the respondent to show that the mortgage sought to be enforced is not valid and binding on him against whom the final decree is applied for. For these reasons we are clearly of opinion that the orders passed by the courts below are correct. This appeal fails and is dismissed with costs."

16. In this situation, I am unable to see any ground on which the present respondents can be precluded from putting forward the plea that no decree can be passed against them because, they, not being in possession of any assets of the deceased, are not liable for the obligations of the deceased. To say that they should reserve this plea for execution proceedings after defending the suit on the merits and submitting to a decree appears only to lead to unnecessary proceedings, duplication of claims and harassment which should be avoided. In the Bombay Full Bench case, referred to earlier (AIR 1941 Bom. 23; 192 IC 198, 199 (Col. 1), Beaumont C.J. observed:

" I think that Lallu Bhagvan v. Tribhuvan Motiram [1889] 2nd 13 Bom 653 goes too far in saying that a decree is bound to be passed against a son of a Hindu on proof of debt and: without any evidence that there are assets of the father which have come to the son's hands. The court seems to have overlooked the Bombay Hindu Heirs' Relief Act (Bom. VII of 1866), which provides that no son of a deceased Hindu shall, merely, by reason of his being such son, be liable to be sued for any of the debts of such deceased Hindu, and then in effect provides that he is only liable; to the extent of the deceased's assets which have come to his hands and have not been duly accounted for. It seems clear therefore that the son can plead in defense that no assets of the father have come to his bands."

17. The illogicality of denying the right to a legal representative to raise such a plea in the suit itself, particulary where the defendants have raised clear objections that the deceased had left no property, has been pointed out in the Lahore case earlier referred to (AIR 1923 Lah 471) in the following words (p. 473, col. 1):

" The plaintiff-appellant's counsel, Mr. Tek Chand, urges that the question whether Indar possessed an estate of his own, may be left to be decided in the execution proceedings. But the defendants had pleaded in clear terms that Indar left no property as he died in the lifetime of his father, and that the plaintiffs could have no cause of action against them without establishing that 'such and such property of Indar deceased was in their possession'. The plaintiffs failed to mention any such property, and therefore according to no rule of law their claim can be decreed on the ground that they may be able to indicate in execution proceedings the property, if any, left by the deceased debtor. This would amount to giving them further opportunities to harass the defendants."

18. The decisions to the contrary have mainly based themselves on the decisions of the Bombay High Court in Girdharlal Krishnavalabh v. Baishiv [1884] 2nd 8 Bom 309 and Lallu Bhagvan v. Tribhuvan Motiram [1889] 2nd 13 Bom 653 and, as has been pointed out earlier, the Full Bench of the Bombay High Court doubted the correctness of the decision in [1884] 2nd 1-3 Bom 653. Further, so far as the Allahabad High Court is concerned, it is seen that on this very point there was a difference of opinion between Mukerji J. and Ashworth J. in the earlier Allahabad decision of Tamiz Bano v. Nand Kishore (see the discussion at p. 462). As pointed out by Ashworth J., in the said passage, the language of s. 52 of the CPC cannot be construed as laying down by implication that the question of possession of assets can be gone into only in execution proceeddings. Sections 50 and 52 deal with a situation where a decree has been obtained, either against the deceased or against the legal representative and outline the mode of execution of such a decree. They do not lay down the scope of the pleas which will be open to the legal representatives of a deceased defendant when they are brought on record in the suit under Order 22, Rule 4. Again, so far as the Nagpur High Court is concerned, it is seen that in an earlier decision in Laxman v. Babusa, AIR 1925 Nag 380, it has been observed that the question of possession of assets by the legal representatives may be investigated in the course of the suit or may be left to be decided in execution proceedings. In these circumstances, I am of opinion that the view taken by the Bombay High Court and the Lahore High Court is to be preferred and that it is open to the legal representatives of the deceased to raise a contention in the suit itself that they are not liable because no property of the deceased has come into their hands. If, however, the plaintiff is able to show, prima facie; that some assets have come into their hands or that otherwise they are liable for the debt of the deceased then the plaintiff would be entitled to a decree and the extent of recovery possible will be left open to be gone into in the course of the execution proceedings.

19. Before concluding I may . also refer to the decision in Sheonarayan Harlal Maheshwari v. Kanhaiyalal Devidin, AIR 1948 Nag 168. In that case a suit had been filed against the legal representatives of a debtor, the plaint alleging that the defendant was the legal representative of the debtor and that he was in possession of the assets of the deceased. The defendant did not appear and the case proceeded ex parte. In the course of his evidence the plaintiff admitted that the deceased and the defendant were joint in an estate and that the defendant was in possession of all the joint family property. But holding that there was no evidence to show that the deceased had any separate property and that the defendant was in possession of it, the suit was dismissed. The question, therefore, arose whether the plaintiff was bound to prove that the defendant was possessed of the deceased assets at the stage of the suit or in execution. Bose J. (as he then was) pointed out that there was a difference of opinion on this issue. He observed (p. 169, col. 2):

" On the first point there is a difference of opinion. I concede that when a person is not an heir but is sued as a legal representative on the sole assertion that he is an intermeddler in the estate it will be necessary for the plaintiff to establish in the suit itself that there is an estate, that is to say, the plaintiff must prove that the estate which the defendant is said to be intermeddling with belonged to the deceased. Otherwise, of course, the defendant is not a legal representative and unless it can be established that he is a legal representative no decree can be passed. But when the defendant is proved to be an heir the position is not the same and there a difference of opinion emerges. Some judges hold that in such a case the plaintiff is entitled to a decree the moment he proves that the defendant is an heir and that the correct stage at which to ascertain whether there are assets is in execution. Others hold that the existence of assets must be disclosed in the trial itself. I need not decide this matter in revision. All that it is necessary to state in this case is that there is a difference of opinion on this point which has not been settled in this Province. The practice accordingly varies and litigants are at a loss to know what to do. That being the case I think the plaintiff ought to have been told that he would be required to establish 'this in the suit and that it would not be enough to leave the matter to the execution stage. I think this was all the more necessary in case where the defendant did not appear."

20. In the present case both parties are represented and the respondents have specifically taken, the plea that no property of the deceased was inherited by any of them. The applicant took time to controvert this, if possible, but ultimately has not filed any rejoinder. In the circumstances; it must be taken that the averments in the reply of the respondents are not denied. That being so, one has to proceed on the footing that the respondents have not inherited any property from the deceased and this being so they are not liable for the debt of the deceased. A decree or a payment order in this case cannot, therefore, be passed against them.

 21. The application is, therefore, dismissed.    There will, however, be no order as to costs in the circumstances of the case.