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Section 177: Creditor prima facie entitled to legacy as well as debt

Indian Succession Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1925
Section 176 All 391 Sections of Indian Succession Act Section 178

Legal Commentary & Landmark Judgments: Section 177

Section 177 establishes that a creditor who is bequeathed a legacy by his debtor is prima facie entitled to receive both the legacy and payment of his debt.

  • Presumption Against Satisfaction: Where a debtor bequeaths a legacy to his creditor, the legacy is presumed not to be in satisfaction of the debt unless an intention to satisfy the debt appears from the will.
  • Cumulative Entitlement: The creditor is entitled to prove and recover his debt against the estate and also claim the testamentary legacy in full.
  • Rebuttal by Express Words: The presumption is rebutted only if the will states that the bequest is in full discharge of the debt, or if the debt and legacy amounts and dates are mathematically identical.
Key Landmark Precedents:
  • Ranganathan Chettiar v. Periakaruppan Chettiar AIR 1957 SC 815: The Supreme Court recognized that Indian law under Section 177 decisively rejects the harsh English equitable presumption of satisfaction, entitling creditors to both debt and legacy unless contrary intent is clear.
  • Subramaniam v. Ramaswamy (1932) 34 BOMLR 1612: Affirmed that the burden of proving that a legacy was intended to extinguish a debt rests entirely on the executor.
Courtroom Practice & Strategic Litigation Guidance:

In estate debt settlement, if an executor refuses to pay a creditor's promissory note claiming 'the testator already left you Rs. 5 Lakhs in his will', cite Section 177; the creditor is legally entitled to collect 100% of his debt and keep the Rs. 5 Lakhs legacy.

Section 176 All 391 Sections of Indian Succession Act Section 178