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Key Takeaways

  • A legal representative, as defined by section 2(11) of the C.P.C., is a person in law who represents the estate of a deceased person.
  • The representative who can be sued for executing the decree in a suit is defined in Section 50 of the Civil Procedure Code of 1908.
  • The term "legal representative" has the meaning assigned to it in clause (11) of section 2 of the Code of Civil Procedure, 1908, according to section 2(29) of the Income-tax Act of 1961.
  • Sections 397 and 398 of the Companies Act of 1956 address the issue of bringing legal representatives of a deceased party into a proceeding.

Introduction

A person in possession of a person's estate is legal, which intermingles with the deceased's estate.Even if they are not the deceased legal heirs, anyone in possession of a person's estate that intermingles with the deceased's estate is a legal representative. A legal representative is defined in Section 2(11) of the C.P.C. Other parts of the Indian legal system have provisions for these L.R.s as well. This article will concentrate on the provisions concerning Legal Representatives.

Definition of a Legal Representative

As per Section 2(11) of the C.P.C, a legal representative is a person in law who represents the estate of a deceased person. This includes anyone who interferes with the estate of a deceased person, as well as the person to whom the estate devolves upon the death of the party. This person is also capable of suing or being sued in a representative capacity. This definition is inclusive and broad in scope; it encompasses legal heirs and individuals who may or may not be heirs but are eligible to inherit and represent the deceased's estate.

In other words, it refers to all individuals and heirs who hold assets but do not own them, such as an executor or administrator of an estate or a court-appointed guardian of a minor or incompetent person. A legal representative is a person who acts in the place of another and represents their interests. A person who is in charge of another's legal affairs. All of these people are covered by the legal representatives' expression. The deceased's estate may be represented by anyone in good faith who is not involved in any fraud or collusion.

The Court found that Section 2(11) C.P.C. is inclusive, and its scope is broad in the case of Custodian of Branches of BANCO National Ultramarino v. Nalini Bai Naique (19892SCR 810). The Court explained that a person who may or may not be a legal heir and thus qualified to inherit the deceased's property can represent the estate, as long as they are willing to do so. It also includes heirs as people representing the estate even if they don't have the title of executors or administrators in charge of the deceased's estate. The term 'Legal Representative' would be used to describe all of these people.

Who can be a Legal Representative

This is a frequently asked question that Indian courts have attempted to answer through various judgments. Anyone can act as a representative for a deceased person's estate. There is no provision for a legal representative to receive a deceased person's property; however, if a person receives any part of the property through a will, he may be eligible to act as a legal representative for his estate.

The Supreme Court held in Andhra Banks Ltd. v. R. Srinivasan and ors. (1962 AIR 232) that a legal representative is a "person representing the estate of the deceased" in law. However, the estate does not necessarily mean the entire estate. A legatee who receives only a portion of the deceased's estate under a will can be said to represent the deceased's estate and thus be a legal representative under section 2(11) C.P.C.

The Rajasthan high court held in Dhool Chand v. Ganpat Lal and anr. (A.I.R. 1957 Raj 283), It is not necessary to inquire immediately whether or not the deceased person has left any estate and to what extent to determine whether or not a person is a legal representative. It could be the subject of a follow-up investigation to determine the legal representatives' liability. A person who is the heir of a deceased person represents the deceased person's estate, except in certain special cases where someone other than the heir, such as an administrator or executor, may represent the estate of the deceased person. Regardless of whether or not the deceased judgment-debtor left an estate, the sons of the deceased judgment-debtor would be his legal representatives.

Provisions related to Legal Representatives

Provisions under the Code of Civil Procedure, 1908

The definition of Legal Representative is found in Section 2(11) of the Civil Procedural Code, 1908, which states that a Legal Representative is "any person who has been given the authority to act in charge of the person who has died and also has to act as the representative in matters of estate."

In the case of a deceased judgement holder, Section 50 of the Civil Procedure Code of 1908 defines the representative who can be sued for executing the decree in a suit. In other words, the Legal Representative acts on behalf of the deceased person who can no longer manage the estate, as well as the party being sued or sued. Executors, administrators, reversioners, residuary legatees, and other legal representatives may be appointed.

The aggrieved person does not need to apply to the High Court under Order XXII, Rule 3 or 4 C.P.C. to bring on record the legal representatives of the deceased-appellant or respondent if the party died after the appeal was heard but before the judgement. To represent the estate of the deceased respondent/appellant, it is sufficient that the legal representatives of the deceased party are impleaded as co-nominees in the appeal filed against the judgement.

When a person is impleaded as the defendant's legal representative as a party defendant after the defendant's death, all rights and defences available to the deceased under Order XXII, Rule 4(2), become available to such person.

Suppose such a person wishes to assert their own independent right, title, and interest in the property. In that case, they must be named as a party defendant in the lawsuit. In that case, they could establish their independent right, title, and interest to oppose the plaintiff's claim or challenge the Court's decision.

Defence available to the legal representative of the deceased

A legal representative had asked for permission to file a second written statement. He didn't say what kind of defence he was trying to incorporate. It was unclear whether he had made any additional written statements that he had not disclosed. It was unclear whether such a written statement was necessary for his role as a legal representative or an individual right. The order denying permission to file an additional written statement was proper, according to the Court. It will not, however, take away his right to make changes to his written statement.

A personal cause of action, such as the landlord's requirement of the premises, must end with the plaintiff's death, and his legal representative cannot continue the proceedings after he passes away. Suppose the legal representatives are allowed to continue the proceedings. In that case, the lis will take on a new appearance that is completely unrelated to the original cause of action. Indeed, it's difficult to see how the case could be continued without a significant change in the pleadings. Under a most liberal interpretation of Order VI, Rule 17, C.P.C., such an alteration would be outside the scope of permissible pleadings amendments.

The entire suit would be dismissed if one of the defendants had a joint and indivisible interest and failed to bring legal representatives upon their death. In this case, the proper course of action is to file a formal application or memo designating the existing defendant as the deceased defendant's legal representative.

When it comes to determining whether or not someone is the legal representative of a deceased plaintiff or defendant, the Court has the final say. (Rule 5 of Order XXII). Even if the same parties or their successors-in-interest or privies were allowed to contest the issue and lead evidence on it, a decision made under Order XXII, Rule 5, C.P.C. would not serve as res judicata in a subsequent proceeding between the same parties or their successors-in-interest or privies. Such a proceeding is very brief, and there is no right of appeal against the outcome.

Provisions under the Income Tax Act, 1961

Section 2(29) of the Income-tax Act, 1961, states that the term "legal representative" has the meaning assigned to it in clause (11) of section 2 of the Code of Civil Procedure, 1908. The legal representative doesn't need to be the estate's beneficial owner. He also doesn't have to be in possession of any of the deceased's belongings. It is enough that the estate falls to him. According to the Act, the legal representative is deemed to be an assessee for the purpose of this Act.

Liability of a Legal Representative

According to Section 159(1) of the Income Tax Act of 1961, a person's legal representatives are responsible for paying any sum that the deceased would have been liable to pay if he hadn't died, in the same manner, and to the same extent as the deceased. The legal representatives of a deceased person are liable to pay any tax, penalty, interest, or other sum that would have been due from the deceased's estate.

The preceding words do not imply that a separate assessment should be made in respect of the deceased estate (separate from the personal assessment of legal representatives), but rather that the deceased estate's income must be computed in the status applicable to the deceased, granting all reliefs that the deceased may be entitled to in that status, and calculating the deductions.

Section 159 only applies to the deceased's income up to the date of death, not to the end of the accounting year in which the death occurs. If a deceased person leaves a will and an executor is named, the income of the deceased's estate will be taxed in the hands of the executors from the date of the deceased's death to the end of the accounting year until the estate of the deceased is distributed among legal heirs of the deceased.

In the case, C.I.T. Vs. Hukumchand Mohanlal (1971) 82ITR624(SC), it was held that Although income earned after a person's death is treated as estate income and is taxable in the hands of the executors under Section 168, it is assessed in the hands of the legal representatives under Section 159.

In the case of C.I.T. Vs. Dalumal Shyamuchand (2005) 276 ITR 62 (MP); it was held that when an assessee dies while an assessment proceeding is pending, it is the Assessing Officer's responsibility to ensure that Section 159(2) is followed by recording legal representatives before passing any assessment order. As a result, the Assessing Officer's assessment order was not justified because the legal representatives were not present.

Consequences When a Legal Representative Is Taxable? [ Sections 151(2) & (3)]

The following procedure shall apply for the purpose of making an assessment or reassessment [ Section 147] of the deceased's income and for the purpose of levying any sum in the hands of the legal representatives:

i) Any action taken against the deceased prior to his death is deemed to have been taken against the legal representative. The action may be pursued against the legal representative from that point forward.

ii) Any legal action that could have been brought against the deceased if he had lived could be brought against the legal representative;

iii) All of the Act's provisions will apply in this case;

iv) The deceased's legal representative will be treated as a deemed assessee under Section 159(3).

The legal representative's liability is limited to the extent that the deceased's estate is capable of paying the tax debt.

Personal Liability of Legal Representative [ Section 159(4)]

According to Section 159 (4), if a legal representative creates a charge on, sells, or parts with any asset of the deceased's estate. In contrast, the deceased's tax liability remains unpaid. The legal representative is personally liable for any tax owed in his capacity as the legal representative. On the other hand, such liability is limited to the value of the assets charged, sold, or parted with. In this case, the legal representative's personal liability is limited to the amount of tax due, not to interest or penalty charges.

Penalty on Legal Representatives:

Section 221 of the Income Tax Act of 1961 allows a legal representative to be penalised for his own failure under various provisions. A legal representative is liable to a penalty if he fails to file the deceased's return by the due date or files the deceased's income tax return incorrectly, according to Section 271(1).

In Tapati Pal Vs. C.I.T. (2000) 241 ITR 468(Kolkata),it was determined that a penalty proceeding for a default committed by the deceased could be initiated or continued against the legal representatives under Section 159, which applied not only to the amount of tax but also to any other sum, such as penalty and interest.

On the other hand, a legal representative is not subject to prosecution for violations of the Act. Also, no penalty can be imposed on a legal representative for a deceased assessee's default under Wealth Tax because the provisions of Section 18 of the Wealth Tax Act, 1957 (relating to penalties) are outside the scope of Section 19, which deals with liability to assessment in special cases.

Provisions under the Companies Act, 1956

The issue of bringing legal representatives of a deceased party into a proceeding under section 397/398 of the Companies Act, 1956 is not the same as bringing legal representatives of a living person into a civil suit. It is customary in a normal Civil Suit before a Civil Court for the legal representatives of a deceased person to be impleaded in the case. When it comes to legal representatives' liability, it is well established that it is contingent on the nature of the liability.

It is a personal liability if it is solely a matter of personal liability, such as facing criminal charges for an act of omission or commission. As a result, the legal representatives' liability for the deceased's actions is determined by the type of liability. A party to a proceeding under section 397/398 may seek immediate relief and be intolerant of the delay. At the same time, another may look for ways to prolong the matter and raise technical objections. The legal position on the impleadment of the deceased's legal representatives has been established. It is the same in both the Civil Court and the Company Law Board.

The exception to the general rule concerning the imposition of legal representatives to a proceeding before the Company Law Board under section 397/398 appears that the proceeding continues even if the deceased Petitioner's legal representatives are not impleaded. It is based on the Companies Act of 1956, specifically sections 397 and 398 of the Act.

Conclusion

Legal Heirs and Legal Representatives are a very important part of the Indian Legal system. Through the laws of descent and distribution, a legal heir receives an interest in, or ownership of, land, tenements, or here ditaments from an ancestor who died intestate. An heir was a person appointed by law to inherit an ancestor's estate if they died without a will under Common Law.

Section 2(11) is broad in scope and inclusive in nature. It is not limited to only legal heirs. Instead, it specifies a person who may or may not be an heir and is competent to inherit the deceased's property, but who must represent the deceased's estate. It includes heirs and people who represent the estate even if they don't have the title of executor or administrator in charge of the deceased's estate. The term "legal representative" refers to all of these people.

Questions

  • Under which Section of the C.P.C is "Legal Representative" defined?
  • Under which Section of the Income-tax Act, 1961 does "Legal Representative" defined?

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