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Section 342: Investment of general legacy, to be paid at future time: disposal of intermediate, interest

Indian Succession Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1925
Section 341 All 391 Sections of Indian Succession Act Section 343

Legal Commentary & Landmark Judgments: Section 342

Section 342 regulates the investment of general legacies payable at a future date and determines the disposal of intermediate interest earned prior to the date of distribution.

  • General Legacy with Deferred Payment: Covers pecuniary bequests where payment is postponed to a specified future date, majority, or the happening of an event.
  • Compulsory Investment in Government Securities: The executor must set apart and invest a sum sufficient to meet the future legacy in government securities to protect against market fluctuations.
  • Intermediate Interest Allocation: Unless the will directs accumulation or exhibits an intention to benefit the legatee with interim income, intermediate interest belongs to the residuary estate.
Key Landmark Precedents:
  • In re George (1877) 5 Ch D 837: Established that a contingent or deferred general legacy does not carry intermediate interest unless given to a minor child by a parent or person in loco parentis without providing maintenance.
  • Broughton v. Broughton (1855) 5 De GM & G 160: Held that intermediate income of a deferred pecuniary bequest falls into the residue unless expressly directed otherwise by the testator.
Courtroom Practice & Strategic Litigation Guidance:

In drafting wills, always clarify whether deferred bequests carry intermediate income. In litigation involving child maintenance, invoke the exception recognized in equity where the testator stands in loco parentis, claiming intermediate interest for schooling and sustenance despite Section 342.

Section 341 All 391 Sections of Indian Succession Act Section 343