Supreme Court Rules Legal Representatives Not Liable for Personal Obligations

Supreme Court LAW INSIDER

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Published on: March 02, 2024 at 16:50 IST

Supreme Court ruled that legal representatives are not obligated to fulfill personal obligations of the deceased under contracts. The apex court’s decision came in response to an appeal arising from a consumer dispute case.

The case involved a sole proprietor who passed away during the pendency of consumer proceedings. The legal heirs, representing the estate of the deceased, were brought into the dispute. The Division bench, comprising Justices BV Nagarathna and Ujjal Bhuyan, observed that obligations based on the skills and expertise of the deceased sole proprietor cease upon his demise. Therefore, the court ruled that his legal heirs cannot be held responsible for such obligations.

Referring to relevant sections of the Indian Contract Act, the Supreme Court emphasized that personal contracts, especially those requiring special skills, cannot be transferred to legal representatives. However, the court clarified that legal representatives would be liable for monetary obligations to the extent of the deceased’s estate.

The court’s decision underscores the distinction between personal obligations and monetary liabilities, providing clarity on the extent of responsibility inherited by legal heirs in such cases.

Moreover, the judgment referenced the Ajmera Housing Corporation vs. Amrit M. Patel case, highlighting that legal representatives lack the capacity or specialized skills to fulfill personal obligations under contracts.

Consequently, the Supreme Court set aside the orders passed by the consumer forums, reaffirming that personal obligations are to be fulfilled by the deceased sole proprietor in his personal capacity. However, the court upheld the direction for monetary payments by the legal representatives.

This ruling sets a precedent in delineating the responsibilities of legal heirs in cases involving personal obligations under contracts. The case title is “Vinayak Purushottam Dube (D) vs Jayashree Padamkar Bhat,” with Diary No. 42688 – 2018.

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