VINAYAK PURSHOTTAM DUBE (DECEASED), THROUGH LRS.versusJAYASHREE PADAMKAR BHAT & OTHERS

                  [2024] 3 S.C.R. 127 : 2024 INSC 159

      Vinayak Purshottam Dube (Deceased), Through Lrs
                            v.
             Jayashree Padamkar Bhat & Others
                   (Civil Appeal Nos. 7768-7769 of 2023)
                                 01 March 2024
              [B.V. Nagarathna* and Ujjal Bhuyan, JJ.]

                            Issue for Consideration
       Appellants, legal representatives of the original opposite party-a sole
       proprietor (since deceased) who had entered into a Development
       Agreement with the respondents-complainants, if liable to discharge
       the obligations which had to be discharged by him in his personal
       capacity based on his skills and expertise.

                                    Headnotes
       Consumer Protection – Legal representatives of sole
       proprietor-developer (since deceased), if liable for personal
       contract of the deceased – Contract Act, 1872 – ss.37, 40
       – Code of Civil Procedure, 1908 – s.2(11) – Sole proprietor-
       developer entered into a Development Agreement with the
       respondents-complainants – Complainants alleged failure
       to fulfill payment obligations, breaches of the agreement
       including deviations from sanctioned plan, non-construction
       of a compound wall, etc. – Sole proprietor died during the
       pendency of the matter before NCDRC – NCDRC held that
       appellants-legal representatives of the sole proprietor were
       liable both w.r.t the monetary payments that he was directed
       to pay and also to comply with the other directions issued
       – Appellants, if liable to comply with obligations such as
       construction to be made and certain approvals etc. to be
       obtained on completion of the construction which had to
       be performed by sole proprietor-developer in his personal
       capacity based on his skills and expertise:
       Held: s.37, Contract Act states that a promise made by a promisor
       is binding on his representatives in case of his/her death, unless a
       contrary intention appears from the contract – Legal representatives
       are liable for the debts of their predecessor, but their liability is
       limited to the extent of the estate of the deceased inherited by them
       – Thus, the representatives of a promisor are bound to perform
* Author
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       the promisor’s contract to the extent of the assets of the deceased
       falling in their hands – But they are not personally liable under
       the contracts of the deceased and are also not liable for personal
       contracts of the deceased – When personal considerations are the
       basis of a contract they come to an end on the death of either party,
       unless there is a stipulation express or implied to the contrary –
       This is especially so when the contracts involve exercise of special
       skills such as expressed in s.40, Contract Act – A contract involving
       exercise of individual’s skills or expertise of the promisor or which
       depends upon his/her personal qualification or competency, the
       promisor has to perform the contract by himself and not by his/her
       representatives – s.2(11), CPC defines a “legal representative –
       Legal representatives of a deceased are liable only to the extent
       of the estate which they inherit – Where the decree or order is
       not against the estate of a deceased sole proprietor but based
       on the skills and expertise of the sole proprietor, the obligations
       which had to be performed by the sole proprietor would come to
       an end on his demise and the same cannot be imposed on his
       legal heirs or representatives – Such a position is distinguished
       from a position where the estate of the deceased sole proprietor
       would become liable to satisfy the decree in monetary terms as a
       proprietorship firm is not a separate legal entity as compared to
       the proprietor and his estate would become liable only to satisfy a
       decree or an order in monetary terms on his demise – In the case
       of a personal obligation imposed on a person under the contract
       and on the demise of such person, his estate does not become
       liable and therefore, the legal representatives who represent the
       estate of a deceased would obviously not be liable and cannot be
       directed to discharge the contractual obligations of the deceased –
       Legal representatives of the deceased opposite party-appellants not
       liable to discharge the obligation which had to be discharged by the
       deceased opposite party in his personal capacity and hence that
       portion of the impugned orders of the NCDRC, State Commission
       and District Forum are set aside. [Paras 20, 21, 23, 24, 27, 31]
       Proprietary concern – Jurisprudential status – Discussed.
       Legal right – Characteristics of, according to Salmond –
       Salmond’s classification of proprietary and personal rights;
       inheritable and uninheritable rights – Discussed.
       Contract – Contract of service, personal to the promisor and
       on his death he is discharged from the contract:
[2024] 3 S.C.R.                                                                   129

          Vinayak Purshottam Dube (Deceased), Through Lrs
                v. Jayashree Padamkar Bhat & Others

     Held: A contract of service is also personal to the promisor – This is
     because when a person contracts with another to work or to perform
     service, it is on the basis of the individual’s skills, competency or other
     qualifications of the promisor and in circumstances such as the death
     of the promisor he is discharged from the contract – Correspondingly,
     duties or obligations which are personal in nature cannot be transmitted
     from a person who had to personally discharge those duties, on his
     demise, to his legal representatives – Just as a right is uninheritable
     and the right personal to him dies with the owner of the right, similarly,
     a duty cannot be transferred to the legal representatives of a deceased
     if the same is personal in nature. [Paras 21, 22]
     Code of Civil Procedure, 1908 – s.50:
     Held: Any decree which is relatable to the extent of the property
     of the deceased which has come to the hands of the legal
     representatives and has not been duly disposed of, the same would
     be liable for execution by a decree holder so as to compel the
     legal representatives to satisfy the decree – In this context, even
     a decree for preventive injunction can also be executed against
     the legal representatives of the deceased judgment-debtor if such
     a decree is in relation to the property or runs with the property if
     there is a threat from such legal representatives. [Para 30]
     Words and expressions – “legal representative” – Code of
     Civil Procedure, 1908 – s.2(11) – Discussed. [Para 23]

                                Case Law Cited
           Raghu Lakshminarayanan v. Fine Tubes, [2007] 4 SCR
           885 : (2007) 5 SCC 103; Ajmera Housing Corporation
           vs. Amrit M. Patel (Dead) through LRs, (1998) 6 SCC
           500 – relied on.
           Custodian of Branches of Banco National Ultramarino
           vs. Nalini Bai Naique, [1989] 2 SCR 810 : AIR 1989
           SC 1589 – referred to.

                        Books and Periodicals Cited
           Report of the Insolvency Law Committee, Page
           No.117-118, Government of India (Ministry of Corporate
           Affairs, February, 2020); PJ Fitzgerald, Salmond on
           Jurisprudence, Page Nos.220, 221 (Universal Law
           Publishing Co. Pvt. Ltd., 12th Edition, 1966) – referred to.
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                                  List of Acts
       Contract Act, 1872; Code of Civil Procedure, 1908; Indian
       Succession Act, 1925.

                               List of Keywords
       Consumer Protection; Legal representatives; Personal liability for
       personal contracts of the deceased; Obligations to be discharged
       in personal capacity; Development Agreement; Sole proprietor;
       Special skills; Expertise; Contract of service; Personal obligation;
       Injunction; Vinculum juris.

                              Case Arising From
       CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 7768-7769
       of 2023
       From the Judgment and Order dated 02.05.2018 of the National
       Consumers Disputes Redressal Commission, New Delhi in RA Nos.
       26 and 27 of 2017
                           Appearances for Parties
       Aniruddha Deshmukh, Adv. for the Appellants.
       Abhishek Yadav, Ruchit Mohan, Braj Kishore Mishra, Advs. for the
       Respondents.
                  Judgment / Order of the Supreme Court

                                     Judgment
       Nagarathna, J.
       These appeals have been filed by the legal representatives of the
       opposite party-sole proprietor against the common final judgment
       and order dated 02.05.2018 passed by the National Consumer
       Disputes Redressal Commission (hereinafter referred to as “NCDRC”)
       in Review Application No.26 of 2017 in Review Petition No.3283
       of 2008 and Review Application No.27 of 2017 in Review Petition
       No.2794 of 2008.
       The NCDRC vide the impugned order dismissed the review
       applications while affirming its earlier order dated 31.05.2016 passed
       in review petition with reference to the order dated 03.01.2017 passed
       by this Court in Special Leave Petition (Civil)… CC Nos.24515-
[2024] 3 S.C.R.                                                         131

          Vinayak Purshottam Dube (Deceased), Through Lrs
                v. Jayashree Padamkar Bhat & Others

     24516 of 2016 granting liberty to the appellants to resort to remedy
     of review before the NCDRC.
2.   The brief facts giving rise to the present appeal are as follows:
     2.1 The appellants herein are the legal heirs of the original opposite
         party in the consumer complaint before the District Forum. All
         the respondents herein are the complainants.
     2.2 For the sake of convenience, the parties shall be referred to
         as complainants and opposite party.
     2.3 The complainants, Jayashree Padmakar and others, owners
         of property CTS Nos.1465/1 and 1465/2, ‘C’ Ward, Kolhapur,
         had entered into a Development Agreement dated 30.07.1996
         with the opposite party. According to the agreement, the
         complainants were entitled to receive eight residential flats and
         Rs.6,50,000/- as consideration. Allegedly, the opposite party
         failed to fulfill the payment obligations, resulting in payment
         of a balance amount and accruing interest at 18% per annum
         with effect from 01.04.1997. The complainants alleged breaches
         of the agreement, including deviations from sanctioned plan,
         non-construction of a compound wall impacting parking and
         issues regarding access and unauthorized constructions beyond
         sanctioned plan, subsequently sold to third parties. They also
         noted defects in the building construction, such as cracks, in
         the building, terrace work being not completed and the absence
         of provision for electricity meters. Despite notices issued by
         the complainants, the opposite party denied the allegations
         asserting that the complainants owed them Rs.8,60,000/- for
         construction and amenities.
     2.4 Seeking a resolution of the ongoing breaches under the
         Consumer Protection Act, the complainants pursued their
         legal recourse to address the deadlock by filing Complaint
         No.184 of 2005 before the District Consumer Forum, Kolhapur.
         Their prayers for relief were several: they demanded payment
         of outstanding dues inclusive of interest; reimbursement of
         expenses incurred and compensation for the mental distress
         caused to them. Additionally, they sought structural rectification,
         emphasizing on the removal of unauthorized constructions;
         rectification of construction defects; completion of pending work
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            and the provision of essential amenities as initially agreed
            upon.
       2.5 In his version, the original opposite party disputed the existence
           of any consumer relationship, denied breaches and argued for
           the resolution of contractual disputes through the civil court. The
           opposite party claimed that the complaint was time-barred and
           sought its dismissal with compensatory costs of Rs.10,000/-.
       2.6 The District Consumer Forum at Kolhapur, vide order dated
           16.10.2006, on perusal of various supporting documents,
           including the Development Agreement, building plans, notices,
           replies, certificates, estimates, receipts and affidavits partly
           allowed the Consumer Complaint No.184 of 2005 filed against
           the opposite party. The District Forum observed that as per the
           Development Agreement between the parties, the transaction
           between the parties was not one of sale and purchase of property
           but of development of property. Since the services regarding
           construction are covered by the Consumer Protection Act, the
           dispute was held to be a consumer dispute. Further, the District
           Forum refused to take into consideration the points raised by
           the complainants regarding defects in construction, amenities
           and facilities due to lack of evidence provided in that regard.
           However, the opposite party was found to be liable to pay to
           the complainants an amount of Rs. l,65,000/- along with interest
           at the rate of 18% per annum with effect from 01.05.1997 till
           payment; an amount of Rs. 1,85,000/- along with interest at the
           rate of 18% per annum with effect from 31.08.1997 till payment;
           and an amount of Rs.1,50,000/- at the time of conveyance.
       2.7 Both the parties challenged the order of the District Forum before
           the Consumer Disputes Redressal Commission, Maharashtra
           State, Mumbai (for short, “the State Commission”). The State
           Commission, vide its common judgment dated 08.04.2008 in
           First Appeal Nos.2570 of 2006 and 1115 of 2007, partly modified
           the order of the District Forum by setting aside the directions
           to pay Rs. 1.85 lakhs and Rs. 1.65 lakhs as the said claims
           were held to be time-barred but upheld the direction to pay
           Rs. 1.5 lakhs. However, the State Commission placed reliance
           on some other clauses of the Development Agreement such
           as clause 4(k), to hold that the building was incomplete and
           that the opposite party was liable to get the construction of the
[2024] 3 S.C.R.                                                      133

          Vinayak Purshottam Dube (Deceased), Through Lrs
                v. Jayashree Padamkar Bhat & Others

           compound wall and give separate access in terms of Schedule-II
           of the Development Agreement. The opposite party was further
           directed to obtain and handover the Completion Certificate to
           the complainants; to execute the Conveyance Deed and to
           give electricity connections to the complainants for which they
           had already paid Rs.15,000/- to the developer-opposite party.
     2.8 The complainants as well as the opposite party approached the
         NCDRC by filing Revision Petition Nos.3283 of 2008 and 2794
         of 2008. During the pendency of the petition before the NCDRC,
         the original opposite party-Vinayak Purushottam Dube died
         and his legal representatives i.e., his wife and two sons were
         brought on record, who are the appellants before this Court. The
         NCDRC, vide order dated 31.05.2016, again partly modified the
         order of the State Commission. The NCDRC disagreed with the
         finding and conclusion of the State Commission with respect
         to the time-barred transaction of Rs. 1.85 lakhs and Rs. 1.65
         lakhs, by observing that the limitation of the said claims had to
         be adjudged by looking at the transaction between the parties
         as a whole, which established a continuous cause of action
         in the matter. The NCDRC upheld the directions given by the
         State Commission with respect to the Completion Certificate;
         Conveyance Deed; Electricity Connection, etc., since the
         developer did not challenge any part of those directions as the
         same were in accordance with the Development Agreement. In
         other words, the NCDRC upheld the order of payment of 1.65
         lakhs and 1.85 lakhs along with interest as directed by the
         District Forum, and also upheld the slew of directions issued
         by the State Commission to the developer-opposite party.
3.   The appellants-opposite party thereafter approached this Court by
     preferring Special Leave Petition (Civil)…. CC Nos.24515-24516
     of 2016 to challenge the order of the NCDRC dated 31.05.2016 in
     Revision Petition Nos.3283 of 2008 and 2794 of 2008. This Court,
     vide order dated 03.01.2017, refused to interfere with the view taken
     by the NCDRC and disposed of the same by granting liberty to the
     appellants-opposite party herein to resort to the remedy of review
     before the National Commission.
4.   Thereafter, the appellants-opposite party filed Review Application
     No.26 of 2017 and the complainants filed Review Application No.27
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       of 2017, both before the NCDRC and the order of review proceeding
       is assailed in the present case. The NCDRC, vide order dated
       02.05.2018, upheld its earlier findings on the question of limitation,
       status of complainants as consumers and the relief being in excess
       of the payment made by the complainants. Further, NCDRC refused
       to accept the contention of the appellants-opposite party that after
       the death of the original owner, the legal representatives are not
       accountable for the liabilities under the agreement. In paragraph 12
       of the order, the NCDRC held that the death of a developer has no
       effect upon the obligations of the developer under the Development
       Agreement and the same have to be executed by the legal heirs
       of the developer. The relevant part of the said paragraph 12 is
       extracted as under:
            “12. Further, we have no reason to agree with the
            contention raised by the review applicant that after the
            death of the original owner, the legal representatives are
            not accountable for the liabilities under the agreement.
            In the eventuality of death of the developer, it cannot be
            stated that various clauses of the development agreement
            between the parties becomes redundant or the complainant
            is not entitled to seek execution of the provisions of the
            development agreement. Such execution has to be made
            by the legal heirs of the developer only.”
5.     The legal representatives of the opposite party being aggrieved by
       the aforesaid reasoning of the NCDRC have preferred these appeals.
6.     We have heard learned counsel Sri Aniruddha Deshmukh for
       the appellants and learned counsel Sri Abhishek Yadav for the
       respondents and perused the material on record.
7.     The controversy in these appeals is in a very narrow compass. No
       doubt, the complainants succeeded before the District Forum, the
       State Commission as well as the NCDRC. During the pendency
       of the revision preferred by the original opposite party before the
       NCDRC, the original opposite party died. His legal representatives
       i.e. his widow and two sons were brought on record. In fact, the
       complainants also had preferred their Revision Petition. The NCDRC
       reasoned that the legal representatives of the opposite party were
       liable both with regard to the monetary payments that the original
       opposite party was directed to pay and also liable to comply with
[2024] 3 S.C.R.                                                         135

          Vinayak Purshottam Dube (Deceased), Through Lrs
                v. Jayashree Padamkar Bhat & Others

     the other directions issued by the District Forum as modified by the
     State Commission and thereafter modified by the NCDRC.
8.   Learned counsel for the appellants submitted that the appellants as
     the legal representatives of the deceased opposite party are willing
     to make the payment as directed. But as far as the other set of the
     directions are concerned, it is not permissible for them to comply
     with them inasmuch as the said directions were issued by the District
     Forum as well as the State Commission personally against the
     opposite party who is since deceased. Those directions are with regard
     to construction of compound wall so as to give separate access in
     terms of Schedule II of the Development Agreement; to obtain and
     handover completion certificate to the complainants-respondents;
     to execute the conveyance deed and to give electricity connection
     and such other directions.
9.   Learned counsel for the appellants contended that the aforesaid
     directions cannot now be complied with by the legal representatives
     of the deceased - original opposite party inasmuch as those were
     personal directions as issued against the original opposite party. He
     contended that the original opposite party was having the proprietorship
     concern and therefore, the estate of the deceased proprietor would
     be liable insofar as the satisfaction of the compensatory payments
     only but not for complying the other directions issued which cannot
     now fall on his legal representatives to comply. It was contended
     that the original opposite party had skills and expertise to comply
     with the said directions as a developer but on his demise, his
     legal representatives, namely, his widow and two sons, cannot be
     compelled to carry out those directions as they neither possess the
     necessary skills nor expertise and further, they are not continuing
     the proprietorship concern of the original opposite party which has
     now been wound up on the demise of the sole proprietor. Therefore,
     learned counsel for the appellants-opposite party contended that the
     various clauses of the Development Agreement which had placed
     duties and obligations on the original opposite party, who is since
     deceased, cannot now be enforced against and performed by his
     legal representatives or heirs.
10. Per contra, learned counsel for the complainants–respondents
    submitted that no doubt the legal representatives of the original
    opposite party would comply with the directions for payments from
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       out of the estate of the deceased opposite party but the complainants
       would be left high and dry insofar as the other obligations which had
       to be discharged by the opposite party and therefore, the NCDRC
       was justified in directing the legal representatives of the deceased
       opposite party to take steps for also complying with those directions.
11. Having heard learned counsel for the respective parties, we note
    that admittedly the original opposite party was in the business of
    real estate and as a developer, had entered into the Development
    Agreement dated 30.07.1996 with the complainants. According to
    the complainants-respondents herein, they were entitled to eight
    residential flats and there were various other terms and conditions
    of the said Development Agreement which imposed an obligation
    on the original opposite party.
12. The question is: what would happen to the obligations imposed
    personally on the original opposite party on his demise? No doubt, the
    estate of the original opposite party would be liable for any monetary
    decree or directions for payment issued in the present case. However,
    what about the obligations which had to be performed under the
    Development Agreement such as certain construction to be made
    and certain approvals etc. to be obtained by him on completion of
    the construction. Can the legal representatives be liable to comply
    with those obligations under the Development Agreement on the
    demise of the original opposite party?
13. In this regard, it is necessary to discuss the jurisprudential status of
    a proprietary concern. In a report of the Insolvency Law Committee
    submitted in February, 2020, the definition of ‘Proprietorship Firms’
    reads as under:
            “2. DEFINITION OF ‘PROPRIETORSHIP FIRMS’
            2.2 Proprietorship firms are businesses that are owned,
            managed and controlled by one person. They are the
            most common form of businesses in India and are based
            in unlimited liability of the owner. Legally, a proprietorship
            is not a separate legal entity and is merely the name
            under which a proprietor carries on business. [Raghu
            Lakshminarayanan vs. Fine Tubes (2007) 5 SCC 103.]
            Due to this, proprietorships are usually not defined in
            statutes. Though some statutes define proprietorships,
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          Vinayak Purshottam Dube (Deceased), Through Lrs
                v. Jayashree Padamkar Bhat & Others

           such definition is limited to the context of the statute. For
           example, Section 2 (haa) of the Chartered Accountants Act,
           1949 defined a ‘sole proprietorship’ as “an individual who
           engages himself in practice of accountancy or engages
           in services…”. Notably, ‘proprietorship firms’ have also
           not been statutorily defined in many other jurisdictions.”
           [Source: Report of the Insolvency Law Committee, Page
           No.117-118, Government of India (Ministry of Corporate
           Affairs, February, 2020).]
14. According to Salmond, there are five important characteristics of a
    legal right:
     1.    It is vested in a person who may be distinguished as the owner
           of the right, the subject of it, the person entitled, or the person
           of inherence.
     2.    It avails against a person, upon whom lies the correlative duty.
           He may be distinguished as the person bound, or as the subject
           of duty, or as the person of incidence.
     3.    It obliges the person bound to an act or omission in favour of
           the person entitled. This may be termed the content of the right.
     4.    The act or omission relates to something (in the widest sense
           of that word), which may be termed the object or subject matter
           of the right.
     5.    Every legal right has a title, that is to say, certain facts or events
           by reason of which the right has become vested in its owner.
           [Source: PJ Fitzgerald, Salmond on Jurisprudence, Page
           No.221 (Universal Law Publishing Co. Pvt. Ltd., 12th
           Edition, 1966)]
15. Salmond also believed that no right can exist without a corresponding
    duty. Every right or duty involves a bond of legal obligation by which
    two or more persons are bound together. Thus, there can be no
    duty unless there is someone to whom it is due; there can be no
    right unless there is someone from whom it is claimed; and there
    can be no wrong unless there is someone who is wronged, that is
    to say, someone whose right has been violated. This is also called
    as vinculum juris which means “a bond of the law”. It is a tie that
    legally binds one person to another. [Source: PJ Fitzgerald, Salmond
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       on Jurisprudence, Page No.220 (Universal Law Publishing Co. Pvt.
       Ltd., 12th Edition, 1966)].
16. Salmond’s classification of proprietary and personal rights are
    encapsulated as under:

            Proprietary Rights                 Personal Rights
       1    Proprietary rights means a         Personal rights are
            person’s right in relation to      rights arising out of any
            his own property. Proprietary      contractual obligation or
            rights have some economic          rights that relate to status.
            or monetary value.
       2    Proprietary rights are             Personal rights are not
            valuable.                          valuable in monetary terms.
       3    Proprietary rights are not         Personal rights are the
            residual in character.             residuary rights which
                                               remain after proprietary
                                               rights have been subtracted.
       4    Proprietary rights are             Personal rights are not
            transferable.                      transferable.
       5    Proprietary rights are the         Personal rights are merely
            elements of wealth for man.        elements of his well-being.
       6    Proprietary rights possess         Personal rights possess
            not merely judicial but also       merely judicial importance.
            economic importance.
       [Source: PJ Fitzgerald, Salmond on Jurisprudence, Page No.238
       (Universal Law Publishing Co. Pvt. Ltd., 12th Edition, 1966)].
17. Salmond’s classification of inheritable and uninheritable rights is
    stated as under:

       Inheritable Rights                   Uninheritable Rights
       A right is inheritable if it         A right is uninheritable if it dies
       survives the owner.                  with the owner.
       [Source: PJ Fitzgerald, Salmond on Jurisprudence, Page Nos.415
       & 442 (Universal Law Publishing Co. Pvt. Ltd., 12th Edition, 1966)].
18. On a reading of the above, it is clear, when it comes to personal
    rights (as opposed to a proprietary rights) are rights arising out of any
[2024] 3 S.C.R.                                                           139

          Vinayak Purshottam Dube (Deceased), Through Lrs
                v. Jayashree Padamkar Bhat & Others

     contractual obligations or the rights that relate to status. Such personal
     rights are not transferable and also not inheritable. Correspondingly,
     Section 306 of the Indian Succession Act, 1925 (for short, “1925
     Act”) applies the maxim “actio personalis moritur cum persona” (a
     personal right of action dies with the person) which is limited to a
     certain class of cases and would apply when the right litigated is
     not heritable. By the same logic, a decree holder cannot enforce
     the same against the legal representatives of a deceased judgment
     debtor unless the same survives as against his legal representatives.
     Section 306 of the 1925 Act reads as under:
           “Section 306 – 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 favor 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, 1860 (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
           not be enjoyed or granting it would be nugatory.”
19. We may also advert to Sections 37 and 40 of the Indian Contract
    Act, 1872, which read as under:-
           “37. Obligation of parties to contracts.—The parties
           to a contract must either perform, or offer to perform,
           their respective promises, unless such performance is
           dispensed with or excused under the provisions of this
           Act, or of any other law.
           Promises bind the representatives of the promisors in case
           of the death of such promisors before performance, unless
           a contrary intention appears from the contract.
                                    xxx
           40.Person by whom promise is to be performed.—If it
           appears from the nature of the case that it was the intention
           of the parties to any contract that any promise contained
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          in it should be performed by the promisor himself, such
          promise must be performed by the promisor. In other
          cases, the promisor or his representatives may employ a
          competent person to perform it.”
20. Section 37 of the aforesaid Act states that a promise made by
    a promisor is binding on his representatives in case of his/her
    death, unless a contrary intention appears from the contract. Legal
    representatives are liable for the debts of their predecessor, but
    their liability is limited to the extent of the estate of the deceased
    inherited by them. Therefore, the representatives of a promisor are
    bound to perform the promisor’s contract to the extent of the assets
    of the deceased falling in their hands. But they are not personally
    liable under the contracts of the deceased and are also not liable
    for personal contracts of the deceased. Therefore, when personal
    considerations are the basis of a contract they come to an end on
    the death of either party, unless there is a stipulation express or
    implied to the contrary. This is especially so when the contracts
    involve exercise of special skills such as expressed in Section 40
    of the Indian Contract Act, 1872.
21. Thus, a contract can be performed vicariously by the legal
    representatives of the promisor depending upon the subject matter
    of the contract and the nature of performance that was stipulated
    thereto. But a contract involving exercise of individual’s skills or
    expertise of the promisor or which depends upon his/her personal
    qualification or competency, the promisor has to perform the contract
    by himself and not by his/her representatives. A contract of service
    is also personal to the promisor. This is because when a person
    contracts with another to work or to perform service, it is on the
    basis of the individual’s skills, competency or other qualifications of
    the promisor and in circumstances such as the death of the promisor
    he is discharged from the contract.
22. Correspondingly, duties or obligations which are personal in
    nature cannot be transmitted from a person who had to personally
    discharge those duties, on his demise, to his legal representatives.
    Just as a right is uninheritable and the right personal to him dies
    with the owner of the right, similarly, a duty cannot be transferred
    to the legal representatives of a deceased if the same is personal
    in nature.
[2024] 3 S.C.R.                                                            141

          Vinayak Purshottam Dube (Deceased), Through Lrs
                v. Jayashree Padamkar Bhat & Others

           In Raghu Lakshminarayanan vs. Fine Tubes, (2007) 5
           SCC 103, while distinguishing a juristic person such as a
           company, a partnership or an association of persons from
           a proprietary concern, it was observed that a person who
           carries on business in the name of a business concern, but
           he being a proprietor thereof, would be solely responsible
           for conduct of its affairs. A proprietary concern is not
           a company. Further, a proprietary concern is only the
           business name in which the proprietor of the business
           carries on the business. A suit by or against a proprietary
           concern is by or against the proprietor of the business. In
           the event of the death of the proprietor of a proprietary
           concern, it is the legal representatives of the proprietor who
           alone can sue or be sued in respect of the dealings of the
           proprietary business which is by representing the estate
           of the deceased proprietor. The real party who is being
           sued is the proprietor of the said business. Therefore, if
           a proprietor had to carry on certain obligations personally
           under a contract, the same cannot be fastened on his
           legal representatives.
23. Further, Section 2(11) of the Code of Civil Procedure, 1908 (for short,
    “CPC”) defines a “legal representative” to mean a person who in
    law represents the estate of a deceased person, and includes any
    person who intermeddles with the estate of the deceased and where
    a party sues or is sued in a representative character the person on
    whom the estate devolves on the death of the party so suing or
    sued. Thus, the legal representatives of a deceased are liable only
    to the extent of the estate which they inherit.
     In Custodian of Branches of Banco National Ultramarino vs.
     Nalini Bai Naique, AIR 1989 SC 1589, it was observed that the
     expression “legal representative” as defined in the CPC is applicable
     to proceedings in a suit. It means a person who in law represents
     the estate of a deceased person and includes any person who
     intermeddles with the estate of the deceased and where a party
     sues or is sued in a representative character the person on whom
     the estate devolves on the death of the party so suing or sued.
     The definition is inclusive in character and its scope is wide as it is
     not confined to legal heirs only, instead, it stipulates a person who
     may or may not be a heir, competent to inherit the property of the
142                                                         [2024] 3 S.C.R.

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       deceased or he should represent the estate of the deceased person.
       It includes heirs as well as persons who represent the estate even
       without title, either as executors or administrators in possession of
       the estate of the deceased. All such persons would be covered by
       the expression “legal representative”. If there are many heirs, those
       in possession bona fide, without there being any fraud or collusion,
       are also entitled to represent the estate of the deceased.
24. The aforesaid judgment refers to representation of an estate of a
    deceased person which would devolve on his legal representatives
    and where the decree has to be executed vis-à-vis such an estate.
    In such a case, the heirs of the deceased judgment debtor would
    be under a legal obligation to discharge their duties to satisfy the
    decree or an order from the estate of a deceased.
       But in the case of sole proprietorship, which is a common form of
       business in India, when a legal obligation arises under a contract
       which has to be discharged personally by the sole proprietor, who
       is since deceased, had entered into the agreement, such as, in the
       case of a Development Agreement in the instant case, can such
       obligations be imposed on his legal representatives or heirs who are
       not parties to the Development Agreement and where the obligations
       under such an agreement per se cannot be fulfilled inasmuch as
       they neither have the skills nor the expertise to do so and those
       obligations depend purely on the skills and expertise of the deceased
       sole proprietor? In other words, where the decree or order is not
       against the estate of a deceased sole proprietor but based on the
       skills and expertise of the sole proprietor, we are of the view that
       in the latter case, the obligations which had to be performed by the
       sole proprietor would come to an end on his demise and the same
       cannot be imposed on his legal heirs or representatives. We reiterate
       that such a position is distinguished from a position where the estate
       of the deceased sole proprietor would become liable to satisfy the
       decree in monetary terms. This is because a proprietorship firm is
       not a separate legal entity as compared to the proprietor and his
       estate would become liable only to satisfy a decree or an order in
       monetary terms on his demise.
       In this context, the following terms of the Development Agreement
       dated 30.07.1996 would clearly indicate that the obligations on the
       opposite party were to be carried out personally by him:
[2024] 3 S.C.R.                                                         143

          Vinayak Purshottam Dube (Deceased), Through Lrs
                v. Jayashree Padamkar Bhat & Others

           “NOW THIS AGREEMENT WINESSETH AND IS
           AGREED BY AND BETWEEN THE PARTIES HERETO
           AS FOLLOWS:
           1.1 The owners hereby grant to the developer sole and
           exclusive development rights in respect of the property
           bearing C.S. No. C. 1465 situated in ‘C’ Ward, Laxmipuri
           Kolhapur -416002 in the form of license to enter upon the
           said property in the capacity of the licensee of the owners
           for the sole purpose of developing the said property and
           selling the offices/premises / shops to the extent and
           in the manner stipulated hereafter and upon the terms
           and conditions agreed by the between the parties hereto
           and set out here below in this agreement. Subject to
           clause No. 2. the license hereby granted is irrevocable
           till the entire property is developed and all the premises
           constructed thereon are sold out. It is however, hereby
           expressly understood that the right of entry granted under
           this clause is for the sole purpose of developing the said
           property selling all premises (except those to be allotted
           to owners) including the shop/s basement/offices therein
           and common restricted areas or facilities as the case may
           be and such entry shall not be construed to mean that
           the owners have placed the developer in legal or physical
           possession of the said property.
                                   xxx
           16. The developer undertakes to comply with and carry
           out all the legal and contractual obligations that may be
           entered into for the construction of the buildings and for
           the sale of the various premises in the said buildings.
           The developer further undertakes to indemnify and keep
           indemnified the owners from and against any action either
           civil or criminal suit proceedings, damages, penalties or
           any other similar actions which may be initiated, made or
           ledged by any person or persons by reason of the failure
           of the developer to comply with, carry out or perform any
           such legal and contractual obligations.”
25. In this regard, it would be useful to illustrate that in a general sense,
    an injunction is a judicial mandate operating in personam by which
144                                                           [2024] 3 S.C.R.

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       upon certain established principles of equity, a party is required to
       do or refrain from doing a particular thing. On the other hand, a
       direction to pay money either by way of final or interim order is not
       considered to be an injunction. An order of injunction is normally
       issued against a named person and is addressed to the defendant
       personally and on his demise the cause of action would come to
       an end insofar as such a person who is since deceased even if it
       relates to a proprietary right unless his legal representatives are also
       causing a threat in which case the cause of action would continue
       vis-à-vis the legal representatives also.
26. Therefore, if the estate of the deceased becomes liable then the legal
    representatives who in law represent the estate of a deceased person
    or any person who intermeddles with the estate of the deceased
    and where a party sues or is sued in a representative character,
    the person on whom the estate devolves on the death of the party
    so suing or sued is liable to the extent the estate has devolved.
    Hence, what is crucial is that the estate of a deceased person which
    becomes liable and the legal representatives must discharge their
    liability to a decree holder or a person who has been granted an
    order to recover from the estate of the deceased which they would
    represent and not beyond it.
27. But in the case of a personal obligation imposed on a person under
    the contract and on the demise of such person, his estate does not
    become liable and therefore, the legal representatives who represent
    the estate of a deceased would obviously not be liable and cannot
    be directed to discharge the contractual obligations of the deceased.
28. In Ajmera Housing Corporation vs. Amrit M. Patel (Dead) through
    LRs, (1998) 6 SCC 500, this Court observed that the defendants in
    the said case had no privity of contract with the plaintiff therein and
    the contract had been entered into on the basis of the skills and
    capacity of the party to perform under the contract and the rights
    and duties were also personal to the party who had to discharge the
    obligations under the contract. In the circumstances, it was observed
    that the legal representatives of the builder under the contract had
    neither the capacity nor the special skills to discharge the obligations
    of the deceased.
29. This position is also clear on a reading of Section 50 of the CPC
    which states as under:
[2024] 3 S.C.R.                                                          145

          Vinayak Purshottam Dube (Deceased), Through Lrs
                v. Jayashree Padamkar Bhat & Others

           “Section.50:- (1) Where a judgment-debtor dies before the
           decree has been fully satisfied, the holder of the decree
           may apply to the Court which passed it to execute the
           same against the legal representative of the deceased.
           (2) Where the decree is executed against such legal
           representative, he shall be liable only to the extent of the
           property of the deceased which has come to his hands
           and has not been duly disposed of; and, for the purpose of
           ascertaining such liability, the Court executing the decree
           may, of its own motion or on the application of the decree-
           holder, compel such legal representative to produce such
           accounts as it thinks fit.”
30. Thus, any decree which is relatable to the extent of the property of the
    deceased which has come to the hands of the legal representatives
    and has not been duly disposed of, the same would be liable for
    execution by a decree holder so as to compel the legal representatives
    to satisfy the decree. In this context, even a decree for preventive
    injunction can also be executed against the legal representatives
    of the deceased judgment-debtor if such a decree is in relation to
    the property or runs with the property if there is a threat from such
    legal representatives.
31. In view of the aforesaid discussion, we hold that the legal
    representatives of the deceased opposite party-appellants herein are
    not liable to discharge the obligation which had to be discharged by
    the deceased opposite party in his personal capacity and hence that
    portion of the impugned orders of the NCDRC, State Commission and
    District Forum are set aside. Needless to observe that the direction
    for payments shall be made by the legal representatives from the
    estate of the deceased opposite party if not already satisfied.
32. The appeals are allowed in the aforesaid terms.
33. Parties to bear their respective costs.


     Headnotes prepared by: Divya Pandey                  Result of the case:
                                                            Appeals allowed.