"Legal Representatives Not Liable for Personal Obligations of Deceased Developer in Development Agreement" The Supreme Court held that the legal heirs of a deceased sole proprietor are not responsible for discharging personal contractual obligations related to the development of a property under a Development Agreement.


CASE NOTE & SUMMARY

The Supreme Court dealt with the obligations of legal representatives of a deceased developer under a Development Agreement. The Court held that while the legal heirs are liable for monetary payments from the estate of the deceased, they are not obligated to perform personal contractual duties requiring specific skills or expertise of the deceased developer.


Acts and Sections Discussed:

  1. Indian Succession Act, 1925 - Section 306: "Actio personalis moritur cum persona" (a personal right of action dies with the person).
  2. Indian Contract Act, 1872 - Sections 37 and 40: Performance of promises and personal contracts by legal representatives.
  3. Civil Procedure Code, 1908 - Section 50: Execution of a decree against legal representatives.
  4. Consumer Protection Act - Relevant sections concerning consumer disputes and liabilities of service providers.

1. Introduction (Para 1-3):
The appellants, legal heirs of the deceased developer, challenged the order passed by the National Consumer Disputes Redressal Commission (NCDRC) which directed them to discharge the personal obligations of the developer under a Development Agreement.

2. The Development Agreement (Para 2.3-2.4):
The original Development Agreement between the complainants (owners of property) and the deceased developer included the construction of eight residential flats and additional payments. Breaches by the developer led the complainants to file a complaint before the District Forum under the Consumer Protection Act.

3. District and State Commission Decisions (Para 2.6-2.7):
The District Forum found the developer liable for certain monetary payments, and the State Commission further directed the developer to complete construction-related obligations. The NCDRC upheld these orders, holding that both monetary and construction obligations were valid against the developer's legal heirs.

4. The Legal Issue (Para 7-9):
The main issue was whether the legal representatives of the deceased developer were liable to perform obligations such as construction of a compound wall and obtaining completion certificates.

5. Legal Representatives' Argument (Para 9-11):
The appellants argued that personal obligations requiring specific skills of the deceased developer could not be imposed on them, as they lacked the expertise to carry out the tasks.

6. Supreme Court's Analysis (Para 12-31):
The Court discussed the nature of proprietary and personal rights, citing legal principles from the Indian Succession Act, Indian Contract Act, and case law. It was emphasized that personal obligations, especially those requiring specialized skills, are not inheritable.

7. Conclusion (Para 31-32):
The Supreme Court ruled that the legal heirs are not liable to fulfill the personal obligations of the deceased developer but are responsible for monetary payments from the estate.


Ratio Decidendi:
The Court held that personal obligations under a contract, particularly those requiring specialized skills, do not survive the death of the obligor. Legal heirs are only liable for monetary obligations to the extent of the deceased's estate, not for tasks that demand personal performance, such as construction work by a developer.


Subjects:
Consumer Dispute, Proprietary Obligations, Legal Heir's Liability.

Consumer Protection, Developer Obligations, Legal Heirs, Contractual Liabilities, Proprietorship.

Citation: 2024 LawText (SC) (3) 2

Case Number: CIVIL APPEAL NOS.7768-7769 OF 2023

Date of Decision: 2024-03-01

Case Title: Vinayak Purshottam Dube (Deceased), Through Lrs Versus Jayashree Padamkar Bhat & Others

Before Judge: (B.V. Nagarathna, J ; Ujjal Bhuyan, J)

Advocate(s): Aniruddha Deshmukh, Braj Kishore Mishra, Abhishek Yadav, Ruchit Mohan, Priyadarshi Kumar, Mini Kishore

Appellant: Vinayak Purshottam Dube (Deceased), Through Lrs

Respondent: Jayashree Padamkar Bhat & Others