LETTER OF ADMINISTRATION UNDER SUCCESSION LAW
One of the most important decisions a person must make when preparing his or her Will is who to appoint as executor or executors. An executor appointed under a Will, in effect, stands in the testator’s place after death. Similarly, an administrator stands in the place of the deceased even though he or she is appointed by the court. An executor is usually appointed by name in the Will. An executor may also be appointed by implication from the wording used in the Will such as where the testator fails to nominate a person in express terms but, on construction of the Will, it appears that a particular person has been appointed to perform the essential duties of an executor. In such a case, the executor is known as an “executor according to the tenure” of the Will.
If someone dies interstate before administration of estate is entrusted to someone or when no executor is appointed under the will of deceased or when executor is appointed but he refuses to act, then Letters of administration may be issued to entitle the administrator to all rights required for effective administration of the estate of deceased. An application is to be filed to a civil court of competent jurisdiction which will then appoint the Administrator to dispose off the debts.
If a person is appointed an executor under a Will but does not wish to take on the role, he or she can “renounce Probate” by filing the appropriate documents with the Supreme Court.
Difference between Succession Certificate and Letter of Administration
In the absence of a will, if there is no survivor amongst the account holders and a no nomination had been done by the holder(s) earlier, a Succession Certificate is to be the primary document through which the heirs can stake a claim to the assets of a deceased relative. A succession certificate, under the Indian Succession Act, is a document that gives authority to the person who obtains it, to represent the deceased for the purpose of collecting debts and securities due to him or payable in his name.
It establishes the authenticity of the heirs and give them the authority to inherit debts, securities and other assets that the deceased may have left behind.
The beneficiary has to approach the district or the high court within whose jurisdiction, i.e. legal territory, the assets fall (where the properties of your deceased relative are situated) and file a petition for a succession certificate.
The court, after examining the petition, issues a notice to all those concerned. It also issues a notice in a newspaper and specifies a time frame (usually one-and-a-half months) within which anyone who has objections may raise them. If no one contests the notice and the court is satisfied, it passes an order to issue a succession certificate to the petitioner.
Once you have the certificate, you are authenticated to distribute the assets to the legal heirs as per the succession laws.
A Succession Certificate is not granted in cases where obtaining a Probate of Letter of Administration is necessary such as when there is a valid will.
How to apply for Letter of Administration – For obtaining a letter of administration the beneficiary has to apply to the court. The court on receiving satisfactory proof of valid execution of the will issues letter of administration to the beneficiary. The application for letter of administration has to contain the following details:
a) The time of the testator’s death.
b) Annexed in his last will and testament. It was duly executed.
c) The amount of assets which are likely to come to the petitioner’s hands.
d) The petitioner also the executor named in the will.
Procedure- Form for the grant of Letters of Administration is in Schedule VII of Indian Succession Act, 1925, contains the form for grant of Letters of Administration. This application can be made 14 days after the death. The court grants the letter to beneficiary on being satisfied and if no one applies it may be granted to the creditor of the deceased. Will has to be duly executed and petitioner’s name must be there. Details like time of death, amounts of assets have to be mentioned.
Section 278 in The Indian Succession Act, 1925
278. Petition for letters of administration. -
(1) Application for letters of administration shall be made by petition distinctly written as aforesaid and stating -
(a) the time and place of the deceased’s death;
(b) the family or other relatives of the deceased, and their respective residences;
(c) the right in which the petitioner claims;
(d) the amount of assets which are likely to come to the petitioner’s hands;
(e) when the application is to the District Judge, that the deceased at the time of his death had a fixed place of abode, or had some property, situate within the jurisdiction of the Judge; and
(f) when the application is to a District Delegate, that the deceased at the time of his death had a fixed place of abode within the jurisdiction of such Delegate.
(2) Where the application is to the District Judge and any portion of the assets likely to come to the petitioner’s hands is situate in another State, the petition shall further state the amount of such assets in each State and the District Judges within whose jurisdiction such assets are situate.
Form Of Letters Of Administration
As per Schedule VII of Indian Succession Act, 1925
I, ……………………….. , Judge of the District of……………………………….. [or Delegate appointed for granting probate or letters of administration in (here insert the limits of the Delegate's jurisdiction)], hereby make known that on the day of letters of administration (with or without the will annexed, as the case may be), of the property and credits of, late of, deceased, were granted to, the father (or as the case may be) of the deceased, he having undertaken to administer the same and to make a full and true inventory of the said property and credits and exhibit the same in this Court, within six months from the date of this grant or within such further time as the Court may, from time to time, appoint, and also to render to this Court a true account of the said property and credits within one year from the same date, or within such further time as the Court may, from time to time, appoint.
Powers of the Administrators
Chapter 6 of the Indian Succession Act deals with the Powers of the Administrators. Administrators and executors are an important part of the Succession. In respect of causes of action surviving deceased and debts due at death.-An executor or administrator has the same power to sue in respect of all causes of action that survive the deceased, and may exercise the same power for the recovery of debts as the deceased has when living. Demands and rights of action of or against deceased survive to and against executor or administrator.
All demands whatsoever and all rights to prosecute or defend any action or special proceeding existing in favour of or against a person at the time of his decease, survive to and against his executors or administrators; except causes of action for defamation, assault, as defined in the Indian Penal Code, (45 of 1860.) or other personal injuries not causing the death of the party; and except also cases where, after the death of the party, the relief sought could be granted.
Section 307 in The Indian Succession Act, 1925 - Power of executor or administrator to dispose of property —
(1) Subject to the provisions of sub-section (2), an executor or administrator has power to dispose of the property of the deceased, vested in him under section 211, either wholly or in part, in such manner as he may think fit. Illustrations
(i) The deceased has made a specific bequest of part of his property. The executor, not having assented to the bequest, sells the subject of it. The sale is valid.
(ii) The executor in the exercise of his discretion mortgages a part of the immovable estate of the deceased. The mortgage is valid.
(2) If the deceased was a Hindu, Muhammadan, Buddhist, Sikh or Jaina or an exempted person, the general power conferred by sub-section (1) shall be subject to the following restrictions and conditions, namely:—
(i) The power of an executor to dispose of immovable property so vested in him is subject to any restriction which may be imposed in this behalf by the Will appointing him, unless probate has been granted to him and the Court which granted the probate permits him by an order in writing, notwithstanding the restriction, to dispose of any immovable property specified in the order in a manner permitted by the order.
(ii) An administrator may not, without the previous permission of the Court by which the letters of administration were granted,—
(a) mortgage, charge or transfer by sale, gift, exchange or otherwise any immovable property for the time being vested in him under section 211, or
(b) lease any such property for a term exceeding five years.
(iii) A disposal of property by an executor or administrator in contravention of clause (i) or clause (ii), as the case may be, is voidable at the instance of any other person interested in the property.
(3) Before any probate or letters of administration is or are granted in such a case, there shall be endorsed thereon or annexed thereto a copy of sub-section (1) and clauses (i) and (iii) of sub-section (2) or of sub-section (1) and clauses (ii) and (iii) of sub-section (2), as the case may be.
(4) A probate or letters of administration shall not be rendered invalid by reason of the endorsement or annexure required by sub-section (3) not having been made thereon or attached thereto, nor shall the absence of such an endorsement or annexure authorise an executor or administrator to act otherwise than in accordance with the provisions of this section.
General powers of administration - An executor or administrator may, in addition to, and not in derogation of, any other powers of expenditure lawfully exercisable by him incur expenditure
(a) on such acts as may be necessary for the proper care or management of any property belonging to any estate administered by him, and
(b) with the sanction of the High Court, on such religious, charitable and other objects, and on such improvements, as may be reasonable and proper in the case of such property.
Commission or agency charges - An executor or administrator shall not be entitled to receive or retain any commission or agency charges at a higher rate than that for the time being fixed in respect of the Administrator-General by or under the Administrator-General’s Act, 1913 (3 of 1913).
Purchase by executor or administrator of deceased’s property - If any executor or administrator purchases, either directly or indirectly, any part of the property of the deceased, the sale is voidable at the instance of any other person interested in the property sold.
Powers of several executors or administrators exercisable by one - When there are several executors or administrators, the powers of all may, in the absence of any direction to the contrary, be exercised by any one of them who has proved the will or taken out administration like that,
(i) One of several executors has power to release a debt due to the deceased.
(ii) One has power to surrender a lease.
(iii) One has power to sell the property of the deceased whether moveable or immoveable.
(iv) One has power to assent to a legacy.
(v) One has power to endorse a promissory note payable to the deceased.
(vi) The will appoints A, B, C and D to be executors, and directs that two of them shall be a quorum. No act can be done by a single executor.
Survival of powers on death of one of several executors or administrators- Upon the death of one or more of several executors or administrators, in the absence of any direction to the contrary in the will or grant of letters of administration, all the powers of the office become vested in the survivors or survivor.
Powers of the administrator of effects unadministered - The administrator of effects unadministered has, with respect to such effects, the same powers as the original executor or administrator.
Powers of the administrator during minority - An administrator during minority has all the powers of an ordinary administrator.
Powers of married executrix or administratrix - When a grant of probate or letters of administration has been made to a married woman, she has all the powers of an ordinary executor or administrator.
Duties of an Executor or Administrator
( Section 316 to 331 - Indian Succession Act, 1925 )
1. Deceased’s funeral – It is the duty of an executor to provide funds for the performance of the necessary funeral ceremonies of the deceased in a manner suitable to his condition, if he has left property sufficient for the purpose.
2. Inventory and account -
(1) An executor or administrator shall, within six months from the grant of probate or letters of administration, or within such further time as the Court which granted the probate or letters may appoint, exhibit in that Court an inventory containing a full and true estimate of all the property in possession, and all the credits, and also all the debts owing by any person to which the executor or administrator is entitled in that character; and shall in like manner, within one year from the grant or within such further time as the said Court may appoint, exhibit an account of the estate, showing the assets which have come to his hands and the manner in which they have been applied or disposed of.
(2) The High Court may prescribe the form in which an inventory or account under this section is to be exhibited.
(3) If an executor or administrator, on being required by the Court to exhibit an inventory or account under this section, intentionally omits to comply with the requisition, he shall be deemed to have committed an offence under section 176 of the Indian Penal Code (45 of 1860.).
(4) The exhibition of an intentionally false inventory or account under this section shall be deemed to be an offence under section 193 of that Code.
3. Inventory to include property in any part of India in certain cases - In all cases where a grant has been made of probate or letters of administration intended to have effect throughout India, the executor or administrator shall include in the inventory of the effects of the deceased all his moveable and immoveable property situate in India, and the value of such property situate in each state shall be separately stated in such inventory, and the probate or letters of administration shall be chargeable with a fee corresponding to the entire amount or value of the property affected thereby wheresoever situate within India.
4. As to property of, and debts owing to, deceased - The executor or administrator shall collect, with reasonable diligence, the property of the deceased and the debts that were due to him at the time of his death.
5. Expenses to be paid before all debts - Funeral expenses to a reasonable amount, according to the degree and quality of the deceased, and death-bed charges, including fees for medical attendance, and board and lodging for one month previous to his death, shall be paid before all debts.
6. Expenses to be paid next after such expenses - The expenses of obtaining probate or letters of administration, including the costs incurred for or in respect of any judicial proceedings that may be necessary for administering the estate, shall be paid next after the funeral expenses and death-bed charges.
7. Wages for certain services to be next paid, and then other debts - Wages due for services rendered to the deceased within three months next preceding his death by any labourer, artizan or domestic servant shall next be paid, and then the other debts of the deceased according to their respective priorities (if any).
8. Save as aforesaid, all debts to be paid equally and rateably - Save as aforesaid, no creditor shall have a right of priority over another; but the executor or administrator shall pay all such debts as he knows of, including his own, equally and rateably as far as the assets of the deceased will extend.
9. Application of moveable property to payment of debts where domicile not in India -
(1) If the domicile of the deceased was not in India, the application of his moveable property to the payment of his debts is to be regulated by the law of India.
(2) No creditor who has received payment of a part of his debt by virtue of sub-section (1) shall be entitled to share in the proceeds of the immoveable estate of the deceased unless he brings such payment into account for the benefit of the other creditors.
(3) This section shall not apply where the deceased was a Hindu, Muhammadan, Buddhist, Sikh or Jaina or an exempted person.
10. Debts to be paid before legacies - Debts of every description must be paid before any legacy.
11. Executor or administrator not bound to pay legacies without indemnity - If the estate of the deceased is subject to any contingent liabilities, an executor or administrator is not bound to pay any legacy without a sufficient indemnity to meet the liabilities whenever they may become due.
12. Abatement of general legacies - If the assets, after payment of debts, necessary expenses and specific legacies, are not sufficient to pay all the general legacies in full, the latter shall abate or be diminished in equal proportions, and, in the absence of any direction to the contrary in the will, the executor has no right to pay one legatee in preference to another, or to retain any money on account of a legacy to himself or to any person for whom he is a trustee.
13. Non-abatement of specific legacy when assets sufficient to pay debts - Where there is a specific legacy, and the assets are sufficient for the payment of debts and necessary expenses, the thing specified must be delivered to the legatee without any abatement.
14. Right under demonstrative legacy when assets sufficient to pay debts and necessary expenses - Where there is a demonstrative legacy, and the assets are sufficient for the payment of debts and necessary expenses, the legatee has a preferential claim for payment of his legacy out of the fund from which the legacy is directed to be paid until such fund is exhausted and if, after the fund is exhausted, part of the legacy still remains unpaid, he is entitled to rank for the remainder against the general assets as for a legacy of the amount of such unpaid remainder.
15. Rateable abatement of specific legacies - If the assets are not sufficient to answer the debts and the specific legacies, an abatement shall be made from the latter rateably in proportion to their respective amounts.
16. Legacies treated as general for purpose of abatement - For the purpose of abatement, a legacy for life, a sum appropriated by the will to produce an annuity, and the value of an annuity when no sum has been appropriated to produce it, shall be treated as general legacies.
What is an Executor's or Administrator's year?
An Executor or an Administrator is not bound to dispose of assets of the deceased until one year from the date of death. This is so even if a testator desires that it should be paid earlier. This provision in law gives time to the Executor or Administrator to act. However, an Executor or Administrator can act within one year, but they cannot be compelled to do so.
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BN - 20122019
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