Report No. 110

II. Refund

46.2. Section 356-Refund of legacy paid under Court's orders.-

Section 356 provides that when an executor or administrator has paid a legacy under the order of a Court, he is entitled to call upon the legatee to refund in the event of the assets proving insufficient to pay all the legacies. The section thus confers power to call for refund in case of a payment under the order of a court. It needs no change, not having created any problems.

46.3. Section 357.-

Section 357, presenting a contrast with section 356, provides that when an executor or administrator has voluntarily paid a legacy, he cannot call upon a legatee to refund, in the event of the assets proving insufficient to pay all the legacies.

The section needs no change.

46.4. Section 358-Refund when legacy has become due on performance of condition within further time allowed under section 137.-

Section 358 provides that when the time prescribed by the will for the performance of a condition has elapsed, without the conditions having been performed, and the executor or administrator has thereupon, without fraud, distributed the assets, in such a case, if further time has been allowed under section 137 for the performance of the condition, and the condition has been performed accordingly, the legacy cannot be claimed from the executor or administrator, but those to whom he has paid it are liable to refund the amount.

The section needs no change, not having created any problems.

46.5. Section 359-When each legatee compellable to refund in proportion.-

Section 359 lays down that when an executor or administrator has paid away the assets in legacies, and he is afterwards obliged to discharge a debt of which he had no previous notice, he is entitled to call upon each legatee to refund in proportion.

This section also needs no comments.

46.6. Section 360-Distribution of assets.-

Section 360 reads as under:

"360. Where an executor or administrator has given such notice as the High Court may, by any general rule, prescribe or, if no such rule has been made, as the High Court would give in an administration-suit, for creditors and others to send in to him their claims against the estate of the deceased, he shall, at the expiration of the time therein named for sending in claims, be at liberty to distribute the assets, or any part thereof, in discharge of such lawful claims as he knows of, and shall not be liable for the assets so distributed to any person of whose claim he shall not have had notice at the time of such distribution:

Provided that nothing herein contained shall prejudice the right of any creditor or claimant to follow the assets, or any part thereof, in the hands of the persons who may have received the same respectively". The section needs no comment."

46.7. Section 361-Creditor may call upon legatee to refund.-

Section 361 provides that a creditor who has not received payment of his debt may call upon a legatee who has received payment of his legacy to refund, whether the assets of the testator's estate were or were not sufficient at the time of his death to pay both debts and legacies and whether the payment of the legacy by the executor or administrator was voluntary or not. The section needs no change. The contest here is between an unsatisfied creditor and satisfied legatees. The next two sections deal with a contest between legatees.

46.8. Section 362-When legatee, not satisfied or compelled to refund under section 361, cannot oblige one paid in full to refund.-

This takes us to section 362, which reads as under:-

"362. If the assets were sufficient to satisfy all the legacies at the time of the testator's death, a legatee who has not received payment of his legacy, or who has been compelled to refund under section 361, cannot oblige one who has received payment in full to refund, whether the legacies were paid to him with or without suit, although the assets have subsequently become deficient by the wasting of the executor."

The section needs a verbal change namely, the last four words should read "wasting on the part of the executor".

46.9. Section 363-When unsatisfied legatee must first proceed against executor, if solvent.-

Section 363 provides that if the assets were not sufficient to satisfy all the legacies at the time of the testator's death, a legatee who has not received payment of his legacy must, before he can call on a satisfied legatee to refund; first proceed against the executor or administrator if he is solvent, but if the executor or administrator is insolvent or not liable to pay, the unsatisfied legatee can oblige each satisfied legatee to refund in proportion.

The principle underlying the section is that where assets are insufficient to pay ail the legacies, the executor must satisfy the legacies proportionately1. So, if the legatee has been paid nil, he must have a right of action against the executor.

The section needs no change.

1. Cf. sec. 368.

46.10. Section 364-Limit to refunding of one legatee to another.-

Section 364 provides that the refunding of one legatee to another shall not exceed the sum by which the satisfied legacy ought to have been reduced if the estate had been properly administered.

The illustration to the section reads as under:-

"A has bequeathed 240 rupees to B, 480 rupees to C, and 720 rupees to D.*The assets are only 12,00 rupees and, if properly administered, would give 200 rupees to B, 400 rupees to C, and 600 rupees to D. C and D have been paid their legacies in full, leaving nothing to B. B can oblige C to refund 80 rupees, and D to refund 120 rupees."

The section needs no change, not having raised any difficulties.

46.11. Section 365-Refunding to be without interest.-

Section 365 provides that the refunding shall in all cases be without interest. The section needs no change.