Father death makes it a son's liability to pay debts in absence of assets?

Karan Govel (Querist) 25 February 2015 This query is : Resolved
Person A is into the business of garments and deals in credit for buying raw materials. person A buys cloths worth 40 lakhs and goes out of business and is not in a position to repay the money. Supplier X files a case and case is referred to mediation. In the mediation person A tell the Judge that he will sell his property and pay the supplier X. In between A passes away. person X sends a legal notice to the Legal heirs of the A. it is observed that the property A had quoted in front of the mediator belongs to B and and A just had the possession and nothing else. Does X have any claims over the property or claims?
Additional Facts:
All bills were made in A's company name which was sole proprietorship.
Further B is A real brother but the property is question is B's own made property.
A has left no additional assets.
does A's Legal heir become liable to pay the amount.
If not can anyone help me with appropriate sections and citations of HC and SC.
Thanks in advance.

Follow Query

Report Abuse

SAINATH DEVALLA (Expert) 26 February 2015
One word answer is that A's legal heirs are responsible for the liabilities as successors.

Guest (Expert) 26 February 2015
Hypothetical academic query! Not a real problem.

The question arises, where the sale proceeds and the material have gone worth 40 Lakhs when A has gone out of business and after he died? Neither a supplier can supply material of such a huge amount of 40 lakhs without checking the worth of a businessman, nor a business can vanish like this as stated.

So, it is purely a hypothetical query, may that be a good question for law students to test their legal knowledge.

Karan Govel (Querist) 28 February 2015
Dear Sir thank you for the above replies.
This is a case pending in front of the Hon'ble registrar of High Court.
Ill help you with certain more facts.
1. The busniessman has been into this business for over 2decades and buying the cloth from the same supplier.
2.he went on a heavy loss in 2011.
3. this resulted in A not paying to the supplier.
4. all the material left in the factory was auctioned by the Noida Authority for the recovery of unpaid rent.

Since No assets have been left is the legal heir is still liable?

SAINATH DEVALLA (Expert) 28 February 2015

answer to your 1st point is ok
No one will be concerned with the losses,they will be concerned only about the money they have lent
Whether he has left any assets or not the successors are solely responsible for the liabilities.only had he applied for IP when he was alive that could have been somewhat helpful.

Previous

Next

You need to be the querist or approved LAWyersclub expert to take part in this query .

Click here to login now