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Section 355: Interest on sum to be invested produce annuity

Indian Succession Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1925
Section 354 All 391 Sections of Indian Succession Act Section 356

Legal Commentary & Landmark Judgments: Section 355

Section 355 regulates interest on a sum directed to be invested to produce an annuity, entitling the annuitant to interest from the date the fund ought to have been invested.

  • Direction to Invest Principal Fund: Applies where the will directs the executor to set apart and invest a designated capital fund to generate an annuity.
  • Default in Investment: The executor fails or delays to invest the fund in authorized trustee securities as mandated by the will or Section 343.
  • Accrual of Compensatory Interest: The annuitant is entitled to statutory interest on the principal fund from the date it should have been invested until actual investment or payment.
Key Landmark Precedents:
  • In re Friend; Friend v. Young [1897] 2 Ch 421: Held that where trustees are directed to invest a sum to produce an annuity, the annuitant is entitled to interest from the time the fund ought to have been set apart.
  • Sitabai v. Bapu, AIR 1921 Nag 12: Ruled that an executor who retains cash instead of investing it to produce a widow's maintenance annuity is liable to pay interest at the statutory rate from the due date of investment.
Courtroom Practice & Strategic Litigation Guidance:

When an executor fails to invest a fund earmarked for an annuity, the annuitant should file an application under Section 302 of the Act claiming interest on the corpus under Section 355, holding the executor personally accountable for the income shortfall.

Section 354 All 391 Sections of Indian Succession Act Section 356