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Section 165: Stock specifically bequeathed lent to third party on condition that it be replaced

Indian Succession Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1925
Section 164 All 391 Sections of Indian Succession Act Section 166

Legal Commentary & Landmark Judgments: Section 165

Section 165 provides that where stock specifically bequeathed is lent to a third party on condition that it be replaced, the legacy is not adeemed.

  • Stock Lending Transaction: Where the testator lends specifically bequeathed stock or securities to a third person on an express agreement that an equal amount of the same stock shall be replaced, the legacy does not adeem.
  • Survival of Right to Replacement: The legatee is entitled to receive the replacement stock when returned, or to enforce the contractual right of replacement against the borrower.
  • Preservation of Substantial Ownership: The temporary loan does not evidence an intention by the testator to extinguish his proprietary interest.
Key Landmark Precedents:
  • Ashburner v. Macguire (1786) 2 Bro CC 108: Applied in India to establish that temporary bailment or securities lending with a right of return preserves the specific character of the legacy under Section 165.
  • Subramaniam v. Ramaswamy (1932) 34 BOMLR 1612: Affirmed that contractual rights of return pass to the specific legatee upon the testator's death.
Courtroom Practice & Strategic Litigation Guidance:

In probate proceedings involving modern securities lending and borrowing (SLB) transactions, executors cannot claim ademption under Section 158; under Section 165, the estate's right to receive replacement shares belongs exclusively to the specific legatee.

Section 164 All 391 Sections of Indian Succession Act Section 166