Report No. 110
III. Disposal of Property
40.23. Section 307.- Section 307 reads:-
"307. Power of executor or administrator to dispose of property.-(1) Subject to the provisions of sub-section (2) an executor or administrator has power to dispose of the property of the deceased, vested in him under section 211, either wholly or in part, in such manner as he may think fit.
(i) The deceased has made a specific bequest of part of his property. The executor, not having assented to the bequest, sells the subject of it. The sale is valid.
(ii) The executor in his discretion mortgages a part of the immovable estate of the deceased. The mortgage is valid.
(2) If the deceased was a Hindu, Muhammadan, Buddhist, Sikh or Jain or an exempted person, the general power conferred by sub-section (i) shall be subject to the following restrictions and conditions, namely:-
(i) The power of an executor to dispose of immovable property so vested in him is subject to any restrictions which may be imposed in this behalf by the will appointing him, unless probate has been granted to him and the Court which granted the probate permits him by an order in writing, notwithstanding the restriction, to dispose of any immovable property specified in the order in a manner permitted by the order.
(ii) An administrator may not, without the previous permission of the Court by which the letters of administration were granted,-
(a) mortgage, charge or transfer by sale, gift, exchange or otherwise any immovable property for the time being vested in him under section 211, or
(b) lease any such property for a term exceeding live years.
(iii) A disposal of property by an executor or administrator in contravention of clause (i) clause (ii) as the case may be, is voidable at the instance of any other person interested in the property.
(3) Before any probate or letters of administration is or are granted in such a case, there shall be endorsed thereon or annexed thereto a copy of sub-section (1) and clauses (i) and (iii) of sub-section (2), as the case may be.
(4) A probate or letters of administration shall not be rendered invalid by reason of the endorsement or annexure required by sub-section (3) not having been made thereof or attached thereto, nor shall the absence of such an endorsement or annexure authorise an executor or administrator to act otherwise than in accordance with the provisions of this section."
40.24. Question of detail.-
Various questions of detail have arisen under this section as to powers of the executor, such as the power to refer to arbitration the question of genuineness of the will, power to determine questions arising in administration when such a discretion is given to the executor by the will, power to employ agents and servants, power in regard to the performance of contracts, carrying on of business, personal liability of the executor, unsecured loans and proper expenses for improvement of the property. The determination of such questions, however, depends on the facts of each case, and there is no need to amplify the section on this score.
40.25. Section 308-Power of executor of administrator.- This takes us to section 308.
The section deals with the general powers of administration of an executor or administrator. It provides that an executor or administrator may, in addition to and not in derogation of any other power of expenditure lawfully exercisable by him, incur expenditure-
(a) on such acts as may be necessary for the proper care or management of any property belonging to an estate administered by him; and
(b) with the sanction of the High Court, on such religious, charitable and other objects, and on such improvement, as may be reasonable and proper in the ease of such property,
The section needs no change.
40.26. Section 309-Recommendation.-
Section 309 provides that an executor or administrator shall not be entitled to receive or retain any commission or agency charges at a higher rate than that for the time being fixed in respect of the Administrator-General by or under the Administrator-General's Act, 1913. This should not be read as referring1 to the Administrator-General's Act, 1963.
1. Section 45 of the 1963 Act.
40.27. Background of section 309.-
The legal background in which this section was considered necessary may be briefly explained. Ordinarily, at common law, a legal representative is not entitled to any allowance for this time and trouble spent by him. He is entitled only to out of pocket expenses.1 In the absence of a special clause in the will authorising a charge for professional services, even a Solicitor-Executor or a Solicitor-Administrator is not allowed such remuneration.2
It has, therefore, become a practice to insert in the will a clause authorising the Solicitor-Executor to charge and be paid the usual professional charges for the business done by him or his firm in relation to the execution of trusts, whether in the ordinary course of his profession or business' or not, and although of a nature requiring the employment of a solicitor or other professional person. Even where such a clause is inserted, it is regarded itself as a legacy, and not as a debt3 due from the estate to the executor.
1. Akshay Kumar Ghose (in re:), AIR 1949 Cal 462.
2. Robinson v. Pett, (1734) 3 P Williams 249.
3. Agha Mohmad v. Koolson Beebee, (1897) Law Reports 24 India Appeals 196 (Privy Council).
40.28. Incompleteness in form and also need for change in substance.-
This is the legal background of the section and the full scope of the section cannot be understood unless that background is kept in mind. However, there seems to be a certain amount of incompleteness in form, which arises from the fact that the section, does not tell is clearly whether such commission or agency can be claimed only if the will allows it, or whether it can be claimed unless the will prohibits it. The letter may be a more practical approach and we think that there should be a specific provision on the subject.
40.29. Charges in excess of those allowed under Administrator-General's Act.-
Then, there is need for change in the substance of the section, arising from the tact that it is not clear whether a provision in the will allowing charges in excess of those allowed under the Administrator-General's Act1 would be valid. Of course, it would be reasonable to take the view that it is valid, but the statement of the position could be made explicit in this regard also.
1. Now see section 45, the Administrator-General's Act, 1963.
40.30. Bank as executor-position of.-
In this context, in particular, the case where a bank is appointed as an executor requires to be considered. Where the will itself provides for the payment of charges, the bank may be entitled to the ordinary charges for the work which is done in administering the estate.1 However, it is possible that a bank may refuse to accept executorship if its charges, which may be more than those permitted under the Administrator-General's Act, are not paid. In order to meet such cases, the court should be given a power to relax the rule contained in section 3G9.
1. Gambell (in re:), 1934 All ER 448.
40.31. Recommendation to amend section 309.-
On a consideration of all aspects of the matter, it seems to us that section 3091 should be modified on the following lines:
(1) Whether or not the will provides for the payment of remuneration, so long as the will does not prohibit such payment, an executor or administrator shall be entitled to receive or retain reasonable commission or agency charges.
(2) Unless the will otherwise provides or the court otherwise permits, those charges shall not be at a higher rate than that for the time being fixed in respect of the Administrator-General by or under the Administrator-General's Act, 1963.2
As already stated above,3 the proposed relaxing power of the Court would be particularly useful where a bank is appointed an executor.
The following is a suggested draft:
1. Para. 40.28, supra.
2. Paras. 40.28 and 40.29, supra.
3. Para. 40.30, supra.
Revised section 309
"309. (1) Whether or not the will provides for the payment of remuneration, if the will does not prohibit such payment, an executor or administrator shall be entitled to receive or retain reasonable commission or agency charges.
(2) Unless the will otherwise provides or the court otherwise permits, such commission or charges shall not be at a higher rate than that for the time being fixed in respect of the Administrator General by the Administrator General's Act, 1963."
40.32. Section 310-Recommendation.-
Section 310 provides that if any executor or administrator purchases, either directly or indirectly, and part of the property of the deceased, the will is voidable at the instance of any other person interested in the property sold. This section is based on the rule that a legal representative shall not derive any pecuniary benefit from his office.1 With reference to this section, it is desirable to introduce an exception for the case where the purchase is done with the sanction of the court. At present, the section does not admit of any such exception, but the reasonableness of such an exception is obvious. We recommend that the section should be so amended.
1. Paruck Indian Succession Act, (1977), p. 733.
40.33. Section 311 provides that where there are several executors or administrators, the powers of all may, in the absence of any direction to the contrary, be exercised by any one of them who has proved the will or taken out administration.
There are six illustrations to the section. The gist of the first live may be represented by stating that one of several executors has power to realise a debt due to the deceased, surrender a lease, sell the property of the deceased (whether movable or immovable), assent to a legacy and endorse a promissory note payable to the deceased. But the powers of one of them may be restricted if the testator so directs-a situation illustrated in illustration (vi).1
In the illustration, the will appoints A, B, C and D to be executors, and directs that two of them shall be a quorum. No act can then be done by a single executor.
1. Sanat Kumar v. Hem Chandra, AIR 1961 Cal 411 (418).
A matter of detail may now be dealt with. The section speaks of a "direction to the contrary", but does not specify where the direction is to be contained. The view expressed by one commentator1 is that the restriction contemplated in the section, must be either in the will or in the grant. It appears to be desirable to codify this position, and we, therefore, recommend that in section 311, after the words "either in the will or in the probate" should be inserted.
1. Paruck Indian Succession Act, (1977), p. 734.
40.34. Section 312.-
This takes us to section, 312, which lays down that upon the death of one or more of several executors or administrators, in the absence of any direction to the contrary in the will or grant of letters of administration, all the powers of the office become vested in the survivors or survivor.
The section does not appear to need any change.
40.35. Section 313.-
Section 313 provides that the administrator of effects unadministered has, with respect to such effects, the same powers as the original executor or administrator.
This section also needs no change.
40.36. Section 314.-
Section 314 provides that an administrator during minority has all the powers of an ordinary administrator. No changes are needed in the section.
40.37. Section 315-Powers of married executrix or administratrix.-
Section 315 provides that when a grant of probate or letters of administration has been made to a married woman, she has all the powers of an ordinary executor or administrator.
This section also needs no change.