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Section 340: Refunding where legacy has become due after payment

Indian Succession Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1925
Section 339 All 391 Sections of Indian Succession Act Section 341

Legal Commentary & Landmark Judgments: Section 340

Section 340 governs the refund of legacies paid prematurely, providing that if an executor pays a legacy before it is due and the estate subsequently becomes deficient to pay debts, the legatee must refund the sum.

  • Premature Payment by Executor: Applies where an executor discharges a legacy before the expiration of the executor's year or prior to the happening of a testamentary contingency or date fixed for payment.
  • Subsequent Asset Deficiency: The net estate proves inadequate to satisfy outstanding debts or higher-priority testamentary charges which were unknown or underestimated at the time of premature payment.
  • Mandatory Duty to Restitute: The legatee who received premature payment is legally bound to refund the excess to the executor to enable debt liquidation.
Key Landmark Precedents:
  • Jervis v. Wolferstan (1874) LR 18 Eq 18: Held that an executor who pays a legacy before debts are satisfied may compel the legatee to refund if unexpected debts emerge, provided the executor did not act in reckless disregard.
  • Whittaker v. Kershaw (1890) 45 Ch D 320: Affirmed that where an executor distributed estate assets prior to calls on shares held by the deceased, the legatees were bound to refund rateably to meet the company's liquidation calls.
Courtroom Practice & Strategic Litigation Guidance:

Executors distributing assets early should obtain a formal indemnity bond with sureties from the legatee. In defending a legatee against a refund claim, counsel must establish whether the executor had statutory notice of debts or acted negligently, which bar recovery under Section 357.

Section 339 All 391 Sections of Indian Succession Act Section 341