Administration of Estate | Family Law - CLAT PG PDF Download

Administration of Estate

• Muslim law did not recognize the concept of administration of estates but laid down a machinery for the distribution of the estate of the deceased among the legatees and the heirs.
• The concept of administration of estates was introduced in India by the British through the Probate and Administration Act, 1881, which was later replaced by the Indian Succession Act, 1925.

Administration of Estates Under Indian Succession Act, 1925 

• In modern India, the administration of the estate of the deceased, regardless of religion, is governed by the Indian Succession Act, 1925.
• Administration of estates  involves the application of the deceased's estate successively to various expenses, including:
• Funeral expenses:  Costs related to the funeral, excluding expenses for ceremonies aimed at securing peace for the deceased's soul.
• Probate/Letters of administration:  Expenses incurred in obtaining probate or letters of administration.
• Wages and services:  Payments for services rendered to the deceased within three months of their death.
• Debts:  Debts owed by the deceased.
• Legacies:  Specific gifts or bequests made in the will.
• After these expenses are settled, the remaining estate is distributed among the heirs.

Legal Representatives 

• Legal representatives  of a deceased Muslim include the executor, administrator, or heirs. All assets of the deceased vest in the legal representatives.
• When a deceased person leaves a will, probate can be obtained. If the person dies intestate (without a will), letters of administration can be obtained.
• If a successor cannot manage the property during the deceased's lifetime, they can appoint a successor. Otherwise, the court will appoint one after the deceased's death.
• Traditionally, Muslim law did not allow non-Muslims to be executors. However, modern Indian law permits this.
• Letters of administration can be granted to an heir, legatee, or creditor of the deceased.

Vesting of Estate 

The estate of the deceased vests in the executor, where there is one, and it vests in him even if no probate was obtained by him.

Vesting of Estate Explained 

• Executor Present:  If there is an executor appointed, the deceased's estate automatically vests in them, regardless of whether they have obtained probate.
• No Executor or Administrator:  If there is neither an executor nor an administrator, the property vests in the heirs of the deceased.

Rules Regarding Vesting in Muslim Succession 

When a Muslim passes away, the distribution and management of their estate can vary depending on whether they left a will and other circumstances. Here’s a simplified breakdown of the rules regarding vesting in such cases:

1. When a Muslim Dies Leaving a Will (Testate) 

• Appointment of Executor:  If the deceased appointed an executor in their will, the estate vests in the executor as the legal representative of the deceased.
• Bequeathable 1/3rd:  The bequeathable 1/3rd of the estate vests in the executor for the purpose of the will.
• Rest of the Estate:  The remaining portion vests in the executor as a bare trustee for the heirs.
• Executor’s Responsibilities:  The executor is required to:
  • Collect all assets and debts of the deceased. 
  • Pay all charges against the estate.
  • Pay debts.
  • Pay legacies.
  • Distribute the remaining property among the heirs.

2. When a Muslim Dies Intestate (Without a Will) 

• If a Muslim dies intestate and letters of administration are obtained, the assets vest in the administrator, who becomes the legal representative of the deceased.
• The administrator has the same responsibilities as an executor.

3. When a Muslim Dies Without an Executor or Letters of Administration 

• If a Muslim dies without appointing an executor or if no letters of administration are obtained, the property of the deceased vests in the heirs.
• The heirs can become legal representatives, but no adverse orders can be passed unless an heir obtains a Succession Certificate under Section 15 A of the Indian Succession Act, 1925.
• The estate vests in the heirs not jointly but in severalty, from the time of the deceased's death, in proportion to their respective shares.

Legal Action Regarding the Estate of the Deceased

UnderMuslim Law  , the estate of a deceased person is passed on to the heirs immediately upon their death. The heirs have the freedom to distribute the estate among themselves. However, each heir is responsible for paying the deceased's debts in proportion to their share of the estate.

1. Suit by Creditors 

Creditors have the right to file a lawsuit against the executor, administrator, or legal heirs to recover the debts owed to them.

Md. Suleman vs. Md. Ismail 1966 SC 794 

Facts:  In the case where the deceased was a Muslim, three individuals A, B, and C mortgaged certain immovable properties in favor of R. After A's death, R filed a lawsuit to enforce the mortgage against B, C, and A's three widows and a daughter. The court decreed the suit. During execution, the properties were sold through the court and purchased by R. R later alienated that property to someone else. Subsequently, a plaintiff claiming to be A's son filed a suit for partition of the mortgaged properties or, alternatively, sought to redeem the properties or partition them equal to his share in the mortgaged properties. R resisted the plaintiff's suit, arguing that the decree obtained by R was binding on the plaintiff because the estate of the deceased was fully represented by those in possession at that time.

Held: 

1. The plaintiff was bound by the decree as the estate of A was fully represented.
2. The creditor is not required to sue all the heirs, and the decree may be enforced against individual heirs in proportion to their shares in the estate.

2. Recovery of Debts due to the deceased: 

By filing a suit by an executor, administrator, or heir.

3. Heirs liability to pay debts: 

Each heir is responsible for paying debts in proportion to the estate they inherit.

4. Alienation: 

1) By an heir of his share before payment of debts:  Heirs can freely alienate property without settling debts first and pass a good title to a bona fide purchaser.

a. Land Mortgage Bank Vs. Bilaya Uddin (1870) 7 Cal LR 460 

Facts:  The heirs sold the entire estate of the deceased to P without discharging the debts of the deceased. After the sale, Q, a creditor of the deceased, obtained a decree for his debts and sought execution by attaching property in the possession of P. The attachment application of Q was dismissed, ruling that a creditor of a deceased Muslim cannot follow the estate in the hands of a bona fide purchaser for value.

b. Wahid Missa Vs. Shubrattun (1970) 5 IA 211 

Facts:  A Muslim died leaving behind two sisters as his only heirs. Subsequently, P, a creditor of A, obtained a decree against the sisters. Later, Q, a creditor of the sisters, also obtained a money decree against them. In execution of Q’s decree, the property was sold at court sale and purchased by R. Then P filed a proceeding to attach property of A in the hands of R. The Court denied the request as the sisters passed good title.

c. Bazayat Hussain Vs Dooli Chand (1878) 5 IA 211 

Facts:  A, a Muslim, died leaving behind a widow and a son's widow, with an outstanding dower debt against A. S mortgaged his share in the estate to P without paying the dower. Subsequently, the widow obtained a money decree for her dower debt against S and got his share in the estate attached. Then P obtained a decree on the mortgage against S for the sale of S’s share, which was purchased by Q. It was held that since the mortgage was made by S before the widow got her share attached in execution of the decree, Q was entitled to the property.

d. Mohemed Wazid Vs. Bazayat Hussein (1874) 4 Cal 402 

Facts:  A, a Muslim, died leaving behind three widows X, Y, and Z, and sons. X, Y, and Z brought a suit against S, who was in possession of A’s estate, for administration and payment of the dower debt. The suit was decreed, creating a charge on the estate, and S was directed to render an account. The widows applied for execution. During the pendency of execution, S mortgaged his share to P. P sued S and obtained a decree for sale, and sold to Q. Held, on the suit of X, Y, and Z, Q took the properties subject to the charge of X, Y, and Z.

2) Alienation by an heir for payment of debt:  an heir can sell only that part of the property which is his share for payment of debt.