2008 (11) TMI 660 - SC - Indian Laws

Whether the sole Executor could be discharged of his obligation on deposit of the amount as set out in the Chamber Summons was surely within the exclusive jurisdiction of the Testamentary Court?

Issues Involved:
1. Application of Section 302 of the Indian Succession Act, 1925.
2. Validity and enforceability of the development agreement.
3. Jurisdiction of the testamentary court in enforcing the development agreement.
4. Applicability of the principles of res judicata.

Issue-wise Detailed Analysis:

1. Application of Section 302 of the Indian Succession Act, 1925:
The primary issue in this case was the application of Section 302 of the Indian Succession Act, 1925, which allows the High Court to give directions to the executor or administrator regarding the estate or its administration. The court noted that a probate binds the whole world and is a judgment in rem. Therefore, the executor must administer the estate according to the testator's wishes as expressed in the Will. The court held that Section 302 could not be used to enforce terms of an agreement that were inconsistent with the Will. The court emphasized that any conflict between the terms of the Will and the settlement must be resolved in favor of the Will.

2. Validity and Enforceability of the Development Agreement:
The development agreement, which was part of a family arrangement, stipulated the payment of Rs. 19,00,000 in installments. The appellants argued that the entire amount was not paid, leading to the termination of the agreement. The court noted that the agreement, although part of the settlement, could not form part of a decree granting probate. The agreement was considered a collateral document and not part of the Will. The court also highlighted that the agreement was not registered, raising questions about the validity of any charge created on the property.

3. Jurisdiction of the Testamentary Court in Enforcing the Development Agreement:
The court held that the testamentary court could not enforce the development agreement under Section 302 of the Act. The testamentary court's jurisdiction is limited to administering the estate according to the Will. The court stated that any disputes arising from the development agreement should be resolved through an independent suit and not within the testamentary jurisdiction. The court found that the executor's role as a developer was separate from his duties as an executor and that the testamentary court could not enforce a contract simply because the executor was a party to it.

4. Applicability of the Principles of Res Judicata:
The respondents argued that the previous decision of the Division Bench upholding the maintainability of the proceedings under Section 302 constituted res judicata. The court rejected this argument, stating that while the maintainability of the application under Section 302 was upheld, the specific issue of whether the executor could be discharged of his obligations was not finally decided. The court emphasized that an order passed without jurisdiction is a nullity and principles of res judicata do not apply to such cases. The court cited precedents to support this view, including Chief Justice of Andhra Pradesh v. L.V.A. Dixitulu, Union of India v. Pramod Gupta, and National Institute of Technology v. Niraj Kumar Singh.

Conclusion:
The Supreme Court set aside the impugned judgment, holding that Section 302 of the Indian Succession Act, 1925, was not applicable in enforcing the development agreement. The court clarified that the testamentary court's jurisdiction is limited to administering the estate according to the Will and cannot enforce agreements contrary to the testator's wishes. The appeal was allowed, and the respondents' arguments regarding res judicata were rejected.

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