Section 386 Succession Act: Validation of certain payments made in good faith to holder of invalid certificate

Section 386 of Indian Succession Act: Testamentary & Estate Administration Procedure

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

Where a certificate under this Part has been superseded or is invalid by reason of the certificate having been revoked under section 383,or by reason of the grant of a certificate to a person named in an appellate order under section 384, or by reason of a certificate having been previously granted, or for any other cause, all payments made or dealings had, as regards debts and securities specified in the superseded or invalid certificate, to or with the holder of that certificate in ignorance of its super session or invalidity, shall be held good against claims under any other certificate.

Legal Commentary & Landmark Judgments: Section 386

Section 386 validates payments made in good faith to the holder of a succession certificate before its revocation or supersession, protecting debtors from duplicate liability.

Payment in Good Faith: The debtor pays a debt or delivers securities to the holder of a succession certificate with honest belief in its validity, without knowledge of invalidating circumstances.
Subsistence of Apparent Authority: The payment is made prior to the formal revocation, supersession, or surrender of the certificate under Section 383 or 389.
Statutory Discharge of Debtor: The payment operates as a complete legal discharge of the debtor, protecting them from subsequent claims by a newly appointed administrator or true heir.

Key Landmark Precedents:

State of Bihar v. Radha Krishna Singh, (1983) 2 SCC 118: The Supreme Court noted that summary grants like succession certificates are designed to protect third-party debtors paying in good faith, providing full statutory discharge under Section 386.
Mathura Prasad v. Ramcharan, AIR 1953 All 208: Held that a bank or debtor paying the holder of a succession certificate is fully discharged under Section 386, even if the certificate is subsequently cancelled for fraud or concealment.

Courtroom Practice & Strategic Litigation Guidance:

Banks, insurance companies, and debtors sued by heirs after paying out on a succession certificate must invoke Section 386 in their written statement, proving bona fide disbursal prior to any court injunction or revocation notice.

Section 386: Validation of certain payments made in good faith to holder of invalid certificate

Section 386 of Indian Succession Act: Testamentary & Estate Administration Procedure

Legal Commentary & Landmark Judgments: Section 386