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2024 (3) TMI 1541
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....ave Petition (Civil)... CC Nos.24515-24516 of 2016 granting liberty to the appellants to resort to remedy of review before the NCDRC. 2. The brief facts giving rise to the present appeal are as follows: 2.1 The appellants herein are the legal heirs of the original opposite party in the consumer complaint before the District Forum. All the respondents herein are the complainants. 2.2 For the sake of convenience, the parties shall be referred to as complainants and opposite party. 2.3 The complainants, Jayashree Padmakar and others, owners of property CTS Nos.1465/1 and 1465/2, 'C' Ward, Kolhapur, had entered into a Development Agreement dated 30.07.1996 with the opposite party. According to the agreement, the complainants were entitled to receive eight residential flats and Rs. 6,50,000/- as consideration. Allegedly, the opposite party failed to fulfill the payment obligations, resulting in payment of a balance amount and accruing interest at 18% per annum with effect from 01.04.1997. The complainants alleged breaches of the agreement, including deviations from sanctioned plan, non-construction of a compound wall impacting parking and issues regarding access and ....
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....Rs. l,65,000/- along with interest at the rate of 18% per annum with effect from 01.05.1997 till payment; an amount of Rs. 1,85,000/- along with interest at the rate of 18% per annum with effect from 31.08.1997 till payment; and an amount of Rs.1,50,000/- at the time of conveyance. 2.7 Both the parties challenged the order of the District Forum before the Consumer Disputes Redressal Commission, Maharashtra State, Mumbai (for short, "the State Commission"). The State Commission, vide its common judgment dated 08.04.2008 in First Appeal Nos.2570 of 2006 and 1115 of 2007, partly modified the order of the District Forum by setting aside the directions to pay Rs. 1.85 lakhs and Rs. 1.65 lakhs as the said claims were held to be time-barred but upheld the direction to pay Rs. 1.5 lakhs. However, the State Commission placed reliance on some other clauses of the Development Agreement such as clause 4(k), to hold that the building was incomplete and that the opposite party was liable to get the construction of the compound wall and give separate access in terms of Schedule-II of the Development Agreement. The opposite party was further directed to obtain and handover the Completion Certif....
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....nsumers and the relief being in excess of the payment made by the complainants. Further, NCDRC refused to accept the contention of the appellants-opposite party that after the death of the original owner, the legal representatives are not accountable for the liabilities under the agreement. In paragraph 12 of the order, the NCDRC held that the death of a developer has no effect upon the obligations of the developer under the Development Agreement and the same have to be executed by the legal heirs of the developer. The relevant part of the said paragraph 12 is extracted as under: "12. Further, we have no reason to agree with the contention raised by the review applicant that after the death of the original owner, the legal representatives are not accountable for the liabilities under the agreement. In the eventuality of death of the developer, it cannot be stated that various clauses of the development agreement between the parties becomes redundant or the complainant is not entitled to seek execution of the provisions of the development agreement. Such execution has to be made by the legal heirs of the developer only." 5. The legal representatives of the opposite party....
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.... to comply. It was contended that the original opposite party had skills and expertise to comply with the said directions as a developer but on his demise, his legal representatives, namely, his widow and two sons, cannot be compelled to carry out those directions as they neither possess the necessary skills nor expertise and further, they are not continuing the proprietorship concern of the original opposite party which has now been wound up on the demise of the sole proprietor. Therefore, learned counsel for the appellants-opposite party contended that the various clauses of the Development Agreement which had placed duties and obligations on the original opposite party, who is since deceased, cannot now be enforced against and performed by his legal representatives or heirs. 10. Per contra, learned counsel for the complainants- respondents submitted that no doubt the legal representatives of the original opposite party would comply with the directions for payments from out of the estate of the deceased opposite party but the complainants would be left high and dry insofar as the other obligations which had to be discharged by the opposite party and therefore, the NCDRC was ju....
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....urisdictions." [Source: Report of the Insolvency Law Committee, Page No.117-118, Government of India (Ministry of Corporate Affairs, February, 2020).] 14. According to Salmond, there are five important characteristics of a legal right: 1. It is vested in a person who may be distinguished as the owner of the right, the subject of it, the person entitled, or the person of inherence. 2. It avails against a person, upon whom lies the correlative duty. He may be distinguished as the person bound, or as the subject of duty, or as the person of incidence. 3. It obliges the person bound to an act or omission in favour of the person entitled. This may be termed the content of the right. 4. The act or omission relates to something (in the widest sense of that word), which may be termed the object or subject matter of the right. 5. Every legal right has a title, that is to say, certain facts or events by reason of which the right has become vested in its owner. [Source: PJ Fitzgerald, Salmond on Jurisprudence, Page No.221 (Universal Law Publishing Co. Pvt. Ltd., 12th Edition, 1966)] 15. Salmond also believed that no right ca....
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....ferable and also not inheritable. Correspondingly, Section 306 of the Indian Succession Act, 1925 (for short, "1925 Act") applies the maxim "actio personalis moritur cum persona" (a personal right of action dies with the person) which is limited to a certain class of cases and would apply when the right litigated is not heritable. By the same logic, a decree holder cannot enforce the same against the legal representatives of a deceased judgment debtor unless the same survives as against his legal representatives. Section 306 of the 1925 Act reads as under: "Section 306 - Demands and rights of action of or against deceased survive to and against executor or administrator.- All demands whatsoever and all rights to prosecute or defend any action or special proceeding existing in favor of or against a person at the time of his decease, survive to and against his executors or administrators; except causes of action for defamation, assault, as defined in the Indian Penal Code, 1860 (45 of 1860) or other personal injuries not causing the death of the party; and except also cases where, after the death of the party, the relief sought could not be enjoyed or granting it wo....
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....ersonal to the promisor. This is because when a person contracts with another to work or to perform service, it is on the basis of the individual's skills, competency or other qualifications of the promisor and in circumstances such as the death of the promisor he is discharged from the contract. 22. Correspondingly, duties or obligations which are personal in nature cannot be transmitted from a person who had to personally discharge those duties, on his demise, to his legal representatives. Just as a right is uninheritable and the right personal to him dies with the owner of the right, similarly, a duty cannot be transferred to the legal representatives of a deceased if the same is personal in nature. In Raghu Lakshminarayanan vs. Fine Tubes, (2007) 5 SCC 103, while distinguishing a juristic person such as a company, a partnership or an association of persons from a proprietary concern, it was observed that a person who carries on business in the name of a business concern, but he being a proprietor thereof, would be solely responsible for conduct of its affairs. A proprietary concern is not a company. Further, a proprietary concern is only the business name in which the pro....
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....n estate of a deceased person which would devolve on his legal representatives and where the decree has to be executed vis-à-vis such an estate. In such a case, the heirs of the deceased judgment debtor would be under a legal obligation to discharge their duties to satisfy the decree or an order from the estate of a deceased. But in the case of sole proprietorship, which is a common form of business in India, when a legal obligation arises under a contract which has to be discharged personally by the sole proprietor, who is since deceased, had entered into the agreement, such as, in the case of a Development Agreement in the instant case, can such obligations be imposed on his legal representatives or heirs who are not parties to the Development Agreement and where the obligations under such an agreement per se cannot be fulfilled inasmuch as they neither have the skills nor the expertise to do so and those obligations depend purely on the skills and expertise of the deceased sole proprietor? In other words, where the decree or order is not against the estate of a deceased sole proprietor but based on the skills and expertise of the sole proprietor, we are of the view that i....
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....st any action either civil or criminal suit proceedings, damages, penalties or any other similar actions which may be initiated, made or ledged by any person or persons by reason of the failure of the developer to comply with, carry out or perform any such legal and contractual obligations." 25. In this regard, it would be useful to illustrate that in a general sense, an injunction is a judicial mandate operating in personam by which upon certain established principles of equity, a party is required to do or refrain from doing a particular thing. On the other hand, a direction to pay money either by way of final or interim order is not considered to be an injunction. An order of injunction is normally issued against a named person and is addressed to the defendant personally and on his demise the cause of action would come to an end insofar as such a person who is since deceased even if it relates to a proprietary right unless his legal representatives are also causing a threat in which case the cause of action would continue vis-à-vis the legal representatives also. 26. Therefore, if the estate of the deceased becomes liable then the legal representatives who in law r....