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Section 365: Refunding to be without interest

Indian Succession Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1925
Section 364 All 391 Sections of Indian Succession Act Section 366

Legal Commentary & Landmark Judgments: Section 365

Section 365 provides that refunding of a legacy by a legatee shall be without interest, relieving the innocent recipient from liability for intermediate interest on refunded funds.

  • Statutory Bar on Interest: A legatee who is compelled to refund a legacy to an executor, creditor, or fellow legatee is not liable to pay any interest on the refunded sum.
  • Protection of Bona Fide Recipient: Protects the legatee who received the legacy in good faith and utilized the income under the bona fide belief of absolute entitlement.
  • Exception for Fraud or Bad Faith: The exemption applies to honest recipients; interest may be awarded under general equitable principles if the legatee obtained payment through fraud or collusion.
Key Landmark Precedents:
  • Gomersall v. Gomersall (1866) 14 WR 482: Held that a legatee compelled to refund a legacy paid in error is not chargeable with interest during the time they enjoyed the fund.
  • Jervis v. Wolferstan (1874) LR 18 Eq 18: Lord Romilly confirmed that legatees calling upon each other to refund do so without interest, as the recipient committed no legal wrong in receiving what was tendered.
Courtroom Practice & Strategic Litigation Guidance:

Counsel representing a legatee ordered to refund must cite Section 365 to reject any interest calculation added by the decree-holder, ensuring the final deposit is confined strictly to the principal excess.

Section 364 All 391 Sections of Indian Succession Act Section 366