Are Legal Heirs Liable for Debt if Borrower Dies?

It is a common law truism that a person’s personal action or claim dies with the death of that person. This truism has been aptly captured by the common law maxim of ‘actio personalis moritur cum persona’, which when translated from Latin stands for ‘a personal right of action dies with the person’. However, the maxim is only applicable in certain circumstances, such as:

• In the event of a defamation,
• In the event that the personal injury does not amount to murder,
• In cases where the grant of relief in the suit would be null and void due to the death of the party, etc.

In case the judgment debtor dies prior to the money payment decree being entirely executed, the decree-holding individual can apply to the Court that had passed the decree to enforce and execute the decree against the judgment debtor’s legal representatives and/or their legal heirs. However, the maxim mentioned above is not applicable in this case.

Liability of legal representatives/heirs

Remedy for decree holders who have received decrees pertaining to payment of money from the assets of deceased judgment debtor is provided under Section 50 (1) of the Code of Civil Procedure, 1908 (‘CPC’). This remedy allows the execution of a decree against Class I or Class II heirs of a deceased judgement debtor by submitting an application to the court that issued the decree.

Section 50 (2) seeks to protect the legal representative of the deceased judgment debtor by providing that the legal representative shall be liable only for the share/amount of the property they receive and no more.

Further, Rule V Order XXII of CPC provides that in the matter that a question arises as to whether or not a person is the legal representative or not of the deceased party (whether a claimant or a defendant) the Court shall determine the question.

Section 47 (3) of CPC provides that the Court executing a decree shall determine whether a party is a representative for the purpose of execution of decree. In the light of the foregoing, it follows that, in order for the judgment to be enforceable against the deceased party’s legal representatives, the Court must have exercised reasonable cause of action.

Court’s Interpretation

The Supreme Court in the matter of Andhra Bank vs. N. Srinivasan, while mentioning to the Salmond’s Jurisprudence, deduced that the deceased judgement debtor’s legal personality (at whose instigation the decree remains outstanding) will survive his death and, in that sense, the liability in relation to the estate of that deceased will survive and outlive his natural personality.

The Court also noted that the concept of ‘legal representative’ is a broad one, which includes any person who legally intervenes or represents the deceased’s estate. However, the extent of liability of a person acting on behalf of a deceased judgement debtor is confined to the amount of property that that person actually holds.

On similar lines, the High Court of Kerala, in the case of Ambili Devi vs. Kerala State Road Transport Corporation held that Ambili Devi was entitled to compassionated employment after the demise of her spouse, and the Respondent endeavored to ascribe her salary from such an employment to secure the outstanding debt from her late spouse. Further the court interpreted Section 50 of CPC and found that legal representatives can only be held liable for the assets secured by them from the estate of the deceased. The Court, therefore, did not order attachment of her salary against the debts owed by her late husband.

Further, in Jaladi Suguna (Deceased) through LRs vs. Satya Sai Central Trust & Others, the Supreme Court discussed the definition of ‘legal representative’ mentioned in Section 2(11) of CPC, it states that a ‘legal representative’ is any person who intervenes in the affairs of the decedent’s estate and who legally represents the decedent's estate.

The Court went on to state that when an application is made for the court to record the legal representative of the deceased, the mere fact that the application is made does not necessarily mean that the legal representative is successful in bringing the suit before the court. The question of whether a person is a ‘legal representative’ should be examined by the court in case of a dispute, and there must be an application of mind on the part of the court to determine whether the legal representatives are liable for impleadment.

Execution of Decree Against Legal Representatives

As mentioned above, execution of a decree refers to the execution, enforcement, or giving effect of a judgment handed down by a court and which allows a decree-holder to reclaim assets in accordance with the terms of the decree handed down by the court on behalf of the judgment-debtor.

However, what happens when a person passes away before the decree is executed?

In that case, the legal representative of the judgement-debtor is responsible for ensuring that the terms and conditions of the decree are fulfilled and that the decree-holder is compensated accordingly. This power of execution against the legal heirs of the Judgment-debtor and the rights of the decree-holder is defined in:

• Section 50(1) of CPC: Upon the death of the judgment-debtor, their legal representatives may be called upon to enforce the decree that the decree-holder has applied to the court to execute before it is fully executed by the judgment-derivative.
• Section 50(2) of CPC: The legal representative is liable only for the property or consent acquired by them upon the death of the judgment-debtor, or which has come into their possession and has not been properly disposed of, and the court, when executing the decree for the purpose of ascertaining such liability, may compel the accounts of that legal representative with its own power or at the request of the decree-holder if it deems it appropriate. Even a foreign person who holds the deceased judgment-debtor’s property can be sued as a legal representative, so it is generally accepted that legal representatives of judgment-debtor are responsible for the debts of their predecessors to the extent of any estate acquired by them from their predecessors.
• Section 52(1) of CPC: The decree-holder has the power to enforce the decree against the deceased person’s property in the possession of the legal representative. If the decree is for payment of money from the deceased person’s property, it can be enforced by attachment and sale.
• Section 52(2) of CPC: It gives powers to the decree-holder for the execution of the decree if there is no property left in the possession of the judgment-debtor and the decree-holder does not apply for the properties they have received from the deceased person and fails to satisfy the Court of First Instance that they have received the property, the decree can be executed against them to the extent that they failed to satisfy the court in the same way as if the decree were to be executed against them personally. The judgment-debtor’s legal representative would not proceed against them personally until it is established that none of them has any other property belonging to the deceased.

Also, Section 50 isn’t limited to a specific type of order or cause of action either. For instance, in the case of Prabhakaran Adiga vs. Gowri, in the context of the original suit, the defendant was selling 1.68 acres of land, but he was allotted 1.58 acres of land on partition. He then removed and destroyed the wooden fence, and tried to forcefully evict the plaintiff, owner of the adjacent property, which led to a permanent injunction in the matter. After the death of the deceased, the heirs of the deceased violated the order for permanent injunction and attempted to forcefully evict the decree-holders from their property. In this case, the court ruled that the property will also bind the judgment debtor’s legal representatives. Although personal action usually ends with the death of the person, a decree may be enforced against legal representative in accordance with section 50 of CPC, which is why the court observed that if an order for enforceability can be enforced against someone other than the person, then it is equally enforceable against legal representative.

Conclusion

From the above-mentioned Supreme Court and High Court judgments it is evident that a court should not simplify the process of impleading a proposed legal representative to execute a decree against a deceased judgement debtor unless that proposed legal representative has actually received the deceased judgment debtor’s property in the form of inheritance or otherwise, and the property can be properly applied to extinguish the deceased judgment debtor's liability. Provided that the property has not been properly disposed of in the event of a dispute, as to the liability of a proposed legal representative, the court must consider and adjudicate on the question of the liability of those legal representatives in order to prevent any injustice or harm to them. It is an axiom of law that any proceeding/litigation must be prevented at all costs as it amounts to an abuse of process which is grossly contrary to the principle of the rule of law.

Since a person’s actions die with them and a dead man can’t be heard, it’s hard for the court to pass an order or decree against the dead person and it also puts the decree-holder in a disadvantageous position. Therefore, a decree-holder can’t file a lawsuit against the dead party. However, where there’s a right, there’s also a remedy.

There are remedies available to the decree-holder, which are defined in the CPC under Sections 50 and 52. These remedies allow a decree-holder to exercise rights and recover the money from the deceased person’s properties. Court keeps ‘rule of law’ as the top priority in their decision to make legal representation of the deceased liable as they are the next person and successor of the deceased person's estate.