DHARMASHASTRA NATIONAL LAW
UNIVERSITY , JABALPUR.
Session-2023-24.
Subject- Law Of Contracts I.
CASE NAME: Vinayak Purshottam Dube (Deceased) through L.Rs. Vs.
Respondent: Jayashree Padamkar Bhat and Ors.(2024).
SUBMITTED TO-
Mr.Utkarsh Kumar Mishra.
Assistant Professor at DNLU, Jabalpur.
SUBMITTED BY-
Vidisha Banerjee
BA.LL.B(HONS.) Batch of 2028.
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ACKNOWLEDGEMENT.
I am very grateful to Dharmashastra National law University for providing me the privilege
of being a part of it. I feel grateful to be studying as a law student in this esteemed University.
I am also grateful to our adept and reassuring professor, Mr.Utkarsh Kumar Mishra for
providing us the requisite guidance for the successful accomplishment of this project. I owe my
profound gratitude to him whose untiring efforts in teaching us in class are the reason of my
excitement in learning more about this subject through a project work on the previously
mentioned topic.
I am also thankful to our Vice-Chancellor Dr.Manoj Kumar Sinha for maintaining a condusive
environment in the university for the completion of this project work. It has been an gratifying
experience learning through the project. This project work has been helpful for me in fostering a
better understanding of the topic, which would have not been possible otherwise.
Last but not the least, I would like to thank almighty for his blessings that I could be a student
here in Dharmashastra National Law University. Grateful for the learning experience that came
my way through the means of this project.
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ABSTRACT.
The case of Vinayak Purushottam Dubey through LRS v. Jayshree Padamkar Bhatt and others
revolves around disputes arising from a development agreement. Allegations include breaches
and deviations from the contract terms. The case is also concerned about the transfer of
contractual obligations to the legal heirs of a deceased party. The case raises fundamental
questions about the enforceability of contracts upon the demise of a party and the extent of
liability borne by their legal representatives. Through a critical analysis, this paper discusses the
balance between ensuring fairness to both parties involved and the preservation of personal
rights of the legal heirs as well.
The legal battle stems from a final judgment and order issued on May 2, 2018, by the National
Consumers Dispute Redressal Commission in New Delhi. The case delves into the application of
Sections 37 and 40 of the Indian Contract Act, 1872, in resolving the contractual issues. This
research aims to analyse the case comprehensively, focusing on the legal principles applied and
their impact on contractual relationships. By examining how the court interpreted relevant
contractual provisions, this study seeks to provide insights into the legal considerations guiding
the resolution of similar contractual disputes within the Indian legal framework.
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TABLE OF CONTENTS.
CONTENT PAGE NO.’S
(1) COVER PAGE 01
(2) ACKNOWLEDGEMENT 02
(3) ABSTRACT 03
(4) TABLE OF CONTENTS 04
(5) ANALYSIS OF FACTS. 5-6
(2) QUESTIONS OF LAW 06
(3) QUESTIONS OF FACTs 06
(4) EVIDENCE APPRECIATED BY THE COURT. 7-8
(5) DECISION OF THE COURT 8-9
(6) RATIO DECIDENDI 9-11
(7) SIGNIFICANCE OF THE CASE 11-12
(8) CRITIQUE. 12
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(1)ANALYSIS OF FACTS.
CASE NAME: Vinayak Purshottam Dube (Deceased) through L.Rs. Vs. Respondent: Jayashree
Padamkar Bhat and Ors. (2024).
JUDGES: B.V. Nagarathna and Ujjal Bhuyan, JJ.
□ The appeals in question were lodged by the legal representatives of a sole proprietor in
response to a ruling issued by the National Consumer Disputes Redressal Commission (NCDRC)
regarding review applications.
□ The primary parties involved in the dispute are the complainants, led by Jayashree Padmakar
and others, who are owners of property located in Kolhapur, and the opposite party, which
initially was a sole proprietor with whom the complainants had entered into a development
agreement.
□ An agreement, dated July 30, 1996, entailed the provision of eight residential flats and a sum
of Rs. 6,50,000/- to the complainants. The complainants raised several allegations against the
opposite party, including deviations from the sanctioned plan, failure to construct a compound
wall impacting parking, issues concerning access, and unauthorized constructions beyond the
sanctioned plans.
□ Subsequently, the complainants initiated a consumer complaint before the District Consumer
Forum, Kolhapur, seeking redress for the aforementioned breaches and grievances.
□ The District Consumer Forum partly allowed the complaint, directing the opposite party to
pay certain amounts. However, complaints regarding defects in construction were not considered
due to lack of evidence.
□ Both parties appealed to the State Commission, which modified the District Forum's order,
upholding some directions regarding incomplete construction and provision of amenities.
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□ Further appeal was made to the NCDRC, which partly modified the State Commission's order,
upholding some directions and setting aside others.The legal representatives of the opposite party
appealed to the Supreme Court, but were granted the liberty to seek a review before the NCDRC.
□ The NCDRC upheld its earlier findings including the liability of the legal representatives of the
deceased developer. The legal representatives appealed against this decision.
(2) QUESTIONS OF LAW.
□ Is it legally permissible to impose the contractual obligations of a deceased contracting party
onto their legal heirs, thereby requiring the heirs to fulfill the terms and conditions of the contract
entered into by the deceased individual?
□ What is the legal interpretation of the principle "actio personalis moritur cum persona" in the
context of contractual obligations?
□ How does Section 306 of the Indian Succession Act, 1925, apply to obligations under a
contract when the promisor is deceased?
□ What is the legal definition and scope of "legal representative" as per Section 2(11) of the
Code of Civil Procedure, 1908, in the context of contractual obligations?
(3) QUESTIONS OF FACT.
□ What were the specific terms and conditions outlined in the development agreement between
the complainants and the original opposite party?
□ Did the original opposite party breach the development agreement with the complainants by
deviating from the sanctioned plan and failing to construct a compound wall as per the
agreement?
□ Did the legal representatives of the deceased opposite party possess the necessary skills and
expertise to comply with the obligations under the development agreement?
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(4) EVIDENCE APPRECIATED BY THE COURT.
The court appreciated several pieces of evidence in reaching its decision, which are listed in the
points below:
□ Development Agreement: The court considered the terms and conditions outlined in the
Development Agreement dated July 30, 1996, between the complainants and the deceased
opposite party. This agreement outlined the obligations and responsibilities of both parties
regarding the development of the property and the exchange of consideration.
□ Jurisprudential Analysis: In its deliberation, the court engaged in a comprehensive
examination of jurisprudential principles related to contractual rights and personal obligations.
For example, the court referred to the distinction between proprietary concerns and other legal
entities, citing Raghu Lakshminarayanan v. Fine Tubes1, where the court differentiated
between a proprietary concern and a company, emphasizing that obligations under contracts
entered into by a sole proprietor are inherently tied to the individual and may not extend to their
legal representatives. Additionally, the court invoked provisions of the Indian Contract Act, 1872,
such as Section 37, which addresses the binding nature of promises made by a promisor and its
implications for legal representatives, to contextualize the issue of contractual obligations vis-à-
vis the deceased party's heirs.
□ Case Precedents: The court considered relevant case precedents, such as Raghu
2
Lakshminarayanan v. Fine Tubes and Ajmera Housing Corporation v. Amrit M. Patel 3, to
draw parallels and distinctions with the present case. These precedents provided guidance on
similar legal issues and helped establish a legal basis for the court's decision.
□ Statutory Provisions: The court analyzed provisions of relevant statutes, including the Indian
Succession Act, 1925, the Indian Contract Act, 1872, and the Code of Civil Procedure, 1908.
These statutory provisions outlined the legal framework governing succession, contractual
obligations, and the execution of decrees against legal representatives of deceased individuals.
These case precedents and statutory provisions are explained in detail in the analysis of the
decision of the court below.
1
(2007) 5 SCC 103
2
Ibid.
3
AIR 1998 SC 2542
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(5) DECISION OF THE COURT.
In its decision, the court ruled that the legal representatives of the deceased party were not liable
to discharge the contractual obligations that were personal to the deceased. The judges based
their decision on several legal principles and precedents.
Firstly, the court emphasized the distinction between obligations that are personal in nature and
those that can be vicariously performed by legal representatives. It noted that contracts involving
the exercise of individual skills or expertise of the promisor, or which depend upon personal
qualifications or competency, cannot be transferred to the promisor's legal representatives upon
their demise.
Secondly, the court cited Section 306 of the Indian Succession Act, 1925, which specifies that
demands and rights of action against a deceased person's estate survive to and against their
executors or administrators. However, such liability is limited to the assets inherited by the legal
representatives. Also, Section 50 of the Code Of Civil Procedure (CPC) allows execution of
decrees against the legal representatives of a deceased judgment debtor, but only upto the limit of
the assets inherited by them.
Furthermore, the judges referred to Section 37 of the Indian Contract Act, 1872, which states that
promises made by a promisor are binding on their representatives in case of their death, unless
the contract indicates otherwise. This provision highlights the liability of legal representatives in
the context of this case.
Additionally, the court drew upon precedents such as the case of Ajmera Housing Corporation v.
Amrit M. Patel,4 where it was observed that contractual rights and duties could be personal to the
contracting parties based on their skills and capacity to perform. Legal representatives may not
possess the same capacity or expertise as the deceased, thereby limiting their ability to fulfil such
obligations.
Based on these legal principles and precedents, the court concluded that the legal representatives
of the deceased party could not be compelled to discharge the contractual obligations that were
4
Ibid.
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personal to the deceased. While they were liable for obligations relating to the estate inherited
from the deceased, obligations requiring personal performance by the deceased could not be
transferred to them. Therefore, the court set aside the portion of the impugned orders holding the
legal representatives liable for such obligations, affirming that they were only responsible for
payments from the estate, if not already satisfied.
(6) RATIO DECIDENDI.
The answers to the questions of law as given by the court are enumerated below:
(A)Is it legally permissible to impose the contractual obligations of a deceased contracting party
onto their legal heirs, thereby requiring the heirs to fulfil the terms and conditions of the contract
entered into by the deceased individual?
-The court concluded that it is not legally permissible to impose the contractual obligations of a
deceased contracting party onto their legal heirs. This decision was based on the principle "actio
personalis moritur cum persona," which signifies that personal rights extinguish upon the death
of the individual and not all contracts are binding upon the legal representatives of a party in its
entirety. The court also differentiated between a proprietary concern and a company, emphasizing
that obligations under contracts entered into by a sole proprietor are inherently tied to the
individual and may not extend to their legal representatives.Therefore, the legal representatives
of the deceased cannot be compelled to fulfil the contractual obligations, given that were
personal to the deceased.
(B)What is the legal interpretation of the principle "actio personalis moritur cum persona" in the
context of contractual obligations?
-The court interpreted the principle "actio personalis moritur cum persona" to mean that personal
rights of action die with the person. It applied this principle to contractual obligations, stating
that personal obligations under a contract do not survive the death of the party unless expressly
stipulated otherwise. Contracts requiring specific performance or skill set unique to the
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individual cannot be passed unto legal heirs considering the lack of ability to perform due to
absence of the specific skill set.
(C)How does Section 306 of the Indian Succession Act, 1925, apply to obligations under a
contract when the promisor is deceased?
-In the judgment, the court extensively discussed the application of Section 306 of the Indian
Succession Act, 1925, to obligations under a contract when the promisor is deceased. Section
306 states that demands and rights of action of or against a deceased person survive to and
against their legal representatives, except in certain specified cases such as defamation or
personal injuries not causing death.
In the context of contractual obligations, the court explained that if a decree or right of action
arises from a contract and the promisor dies before fulfilling those obligations, the legal
representatives become liable to the extent of the estate inherited from the deceased. This means
that any contractual obligations owed by the deceased, which are capable of being enforced
against their estate, can be pursued by the legal representatives. However, this liability is limited
to the extent of the assets inherited by the legal representatives and not beyond.
The court emphasized that Section 306 provides a framework for determining the extent of
liability of legal representatives in cases involving contractual obligations of a deceased person.
It ensures that creditors or parties to the contract are not left without recourse in seeking
fulfillment of the contract, while also protecting the legal representatives from being unduly
burdened with obligations that exceed the assets of the deceased's estate.
(D)What is the legal definition and scope of "legal representative" as per Section 2(11) of the
Code of Civil Procedure, 1908, in the context of contractual obligations?
-The court provided the legal definition and scope of "legal representative" as per Section 2(11)
of the Code of Civil Procedure, 1908, in the context of contractual obligations. It stated that legal
representatives represent the estate of a deceased person and may include heirs or persons who
represent the estate, whether or not they are heirs, executors, or administrators.
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This definition, thus, encompasses individuals who intermeddle with the estate, whether or not
they are legal heirs. Hence, this provision also seeks to assert that legal representatives are liable
only to the extent of the estate inherited from the deceased, re-emphasizing the limitation of their
liability in fulfilling contractual obligations.
(7)SIGNIFICANCE OF THE CASE
The significance of the case with respect to contract law lies in clarifying the legal principles
surrounding the transfer of contractual obligations to the legal representatives of a deceased
contracting party. It underscores the distinction between personal obligations that cease upon the
death of an individual and those that can be inherited by their legal heirs.
The Indian Contract Act of 1857 stipulates that parties to a contract are obligated to fulfill their
promises, unless exempted by the law. If a promisor dies before performing their promise, their
representatives are still bound by the contract unless the contract specifies otherwise5. The Act
also specifies that if the contract permits, the promisor has the option to involve their
representative or a competent individual to fulfil the obligation.6
These provisions, prima facie, holds the legal representatives of the deceased party responsible
for fulfilling the contractual obligations and compensating for any breaches. However, certain
sections of the Indian Succession Act, as well as the Code of Civil Procedure (CPC), specify that
the liability of inheriting parties is limited to the extent of the estate inherited by them. Similarly,
the definition of legal representative provided in the CPC also underscores this
limitation on liability.
This case, thus, sets a precedent for interpreting contractual obligations in the context of
succession and underscores the importance of clarity in contractual terms regarding personal
duties and inheritable obligations, as outlined in Section 306 of the Indian Succession Act, 1925,
Section 50 and 2(11) of the Code of Civil Procedure and Sections 37 and 40 of the Indian
Contract Act, 1872.
5
Indian Contract Act 1857, s 37
6
Indian Contract Act 1857, s 40
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(8)CRITIQUE.
When one party to a contract dies before fulfilling their obligations, it presents a complex
challenge in resolving the contractual matter. This predicament gives rise to two conceivable
outcomes: either the contractual terms are honoured by the legal successors, or they are deemed
null and void, thereby resulting in detriment to one of the parties involved. The latter outcome
appears inequitable, as it imposes an unreasonable loss upon the surviving party, merely by
virtue of their continued existence. Conversely, the former outcome may also be perceived as
unjust, as it coerces legal heirs into assuming responsibilities for which they did not provide
explicit consent. Consequently, it becomes imperative to strike a harmonious equilibrium that
ensures equitable treatment for all stakeholders. One plausible prudent strategy can be to hold the
legal heir accountable, but solely within the confines of the inheritance of the deceased party's
estate or assets. This modus operandi ensures that the assets bequeathed by the deceased are
leveraged to mitigate losses incurred by the other party, without entailing personal
liabilities upon the legal heirs for a contractual pact into which they did not actively enter.
Such an approach underscores the paramount importance of upholding fairness in dispute
resolution, recognizing that while individual rights are extinguished upon demise, they may still
be exercised to a delimited extent through the estate of the deceased, sans encroachment upon the
personal assets of their successors.
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