[Indian Succession Act] Executor's Imprisonment Affects Management And Administration Of Deceased's Large Estates: Bombay High Court
The Bombay High Court has observed that the incarceration of an executor of a will, who has to administer and manage 'large' estates and business ventures, would operate as a 'legal disability' for the executor to manage such estates.“If the estate is such that it does not require active management as is in the case of a passive investment, the incarceration of the executor may not have...
The Bombay High Court has observed that the incarceration of an executor of a will, who has to administer and manage 'large' estates and business ventures, would operate as a 'legal disability' for the executor to manage such estates.
“If the estate is such that it does not require active management as is in the case of a passive investment, the incarceration of the executor may not have a bearing. However, whether the estate is large and comprises running business ventures, which require day to day management, it would be difficult to accede to the submission that the incarceration does not operate as a legal disability.”
Background
A single judge bench of Justice N. J. Jamadar was considering the applicant's (defendant no.1) plea for appointment on 'Administrator pendente lite' (till pendency of litigation/suit) for certain properties in place of the plaintiff/executor.
The applicant's father had appointed the plaintiff as the executor of his will. After her father's death, the applicant claimed that the plaintiff/executor took complete control of the deceased's estate. When disputes arose between the plaintiff and defendants, the plaintiff filed a testamentary suit in 2003.
Meanwhile, the plaintiff was convicted by a Sessions Court under Section 326 IPC (grievous hurt) and was sentenced to 3 years of rigorous imprisonment. However, in appeals, the Bombay High Court convicted him under Section 307 IPC (attempt to murder) and sentenced him to 10 years of rigorous imprisonment.
In the present application, the applicant contended that the plaintiff is not fit and capable of administering the deceased's estate either personally or through an agent due to his conviction. misappropriated funds.
On the other hand, the plaintiff/executor contended that an incarcerated person is not per se disqualified to continue to act as executor under Section 223 of the Indian Succession Act, 1925 and thus, the executor's incarceration cannot be a ground for appointment of an administrator pendente lite. The executor also contended that the present application was filed after 20 years of filing the testamentary petition and thus suffered from delays and laches.
Imprisonment of executor acts as incapacitation to manage huge estates
The Court firstly opined that strong grounds are required to appoint an administrator pendente lite as the testator places an 'implicit confidence' on the executor through the appointment.
“Normally, where an executor is named by he testator, the Court is not inclined to appoint an administrator pendente lite unless there is gross misconduct or mis-management or waste of the estate on the part of executor. In the very appointment of the executor by the testator is the implicit confidence that the testator has reposed in the executor. Strong grounds are, therefore, required to appoint an administrator pendente lite displacing the executor.” it said.
On the executor's contention that he is not disqualified under Section 223, the Court noted that if a Testamentary Court comes to a conclusion that an executor deserves to be divested from the deceased's estate, it can do so even if the executor is not disqualified under Section 223 of Succession Act.
It observed that the court could appoint an administrator pendent lite under Section 247 and that Section 223 cannot be construed as a bar for the court to appoint such an administrator.
On the contention of delays and laches, the Court noted that even though the plaintiff has filed an appeal before the Supreme Court, his sentence has not yet been suspended and he continues to be in jail.
Here, it was of the view that the 10 years imprisonment constitute a “significant change in circumstances” from when the plaintiff was accused of attempt to commit murder under Section 307 IPC and the Sessions Court convicted him under Section 326 IPC.
The Court noted that the applicant's father (testator) had large number of properties and running business concerns along with liquid and financial assets. It thus stated that incarceration of the executor would act as an incapacitation to manage large estates and business ventures.
“In the facts of the case, having regard to the large number of properties, which include business concerns, it would be naive to believe that the incarceration of the plaintiff does not affect the management and administration of the estate of the deceased.”
The Court however observed that the appointment of an administrator pendente lite completely displacing the executor may not be justifiable. Therefore, it appointed a Court Receiver who would be a 'joint administrator; along with the plaintiff/executor.
Case title: Laura D'Souza vs. Lalit Timothy D'Souza (Interim Application No.2827 of 2022 In Testamentary Suit No. 16 of 2004 In Testamentary Petition No. 491 of 2003)