The Aryavarth Express
Agency(New Delhi): In a landmark judgment dated March 1, the Supreme Court has shed light on the extent of liability that legal representatives bear in fulfilling the contractual obligations of a deceased individual. The case arose from a consumer dispute involving a sole proprietor responsible for property development who passed away during the proceedings. The Division Bench of Justices BV Nagarathna and Ujjal Bhuyan clarified that legal heirs are not obliged to fulfill personal obligations that were specifically tied to the skills and expertise of the deceased.
The Court explained, “In instances where a contract imposes a personal obligation on an individual, and upon that individual’s death, their estate does not inherit this liability. Consequently, legal representatives, who embody the estate of the deceased, cannot be mandated to fulfill the contractual duties initially ascribed to the deceased.”
This ruling came to light in a scenario where the legal heirs of the deceased, a sole proprietor in charge of a development project, were initially directed by consumer forums to execute obligations beyond monetary compensation. These included tasks like constructing a compound wall and obtaining necessary certificates, which were based on the personal commitment and expertise of the sole proprietor.
However, the Supreme Court differentiated between the types of obligations, stating that while the legal heirs must satisfy monetary dues, they cannot be held accountable for duties that hinge on the personal abilities or commitments of the deceased. This interpretation is rooted in the principles of the Code of Civil Procedure, 1908, and the Indian Contract Act, 1872, particularly emphasizing that a deceased’s estate is liable for monetary judgments but not for specific personal performances.
The Court’s decision was influenced by precedents and the fundamental legal understanding that contracts involving personal service or skill cannot be transferred to or imposed upon the successors of the deceased. It underscored that legal representatives are responsible only to the extent of the inherited estate and not beyond, for fulfilling monetary obligations.
This clarification provides a significant distinction in contract law, particularly in cases involving sole proprietorships where the business and personal obligations are closely intertwined. It assures that while the financial responsibilities of a deceased can be claimed from their estate, obligations that require personal expertise or involvement expire with the individual.
The judgment, thus, offers relief to legal heirs from carrying out specific performances that were uniquely tied to the deceased’s personal qualifications, reiterating that their liability extends only to monetary commitments as per the estate’s capacity. This ruling not only resolves the dispute at hand but also sets a precedent for future cases involving the transfer of obligations after a party’s demise.
