Facts of the Case
- X executed a promissory note in favor of Z, promising to pay a certain sum of money.
- Before making the payment, X passed away.
- Z wishes to recover the amount by filing a claim against the legal heirs of X.
Issues in the Case
- Whether the liability under a promissory note survives after the death of the promisor (X).
- Whether legal heirs of X are bound to fulfill the liability of the deceased under the Negotiable Instruments Act.
- Whether Z can legally enforce the payment from the estate of the deceased.
Principles Associated with It
- Under Section 31 of the Indian Contract Act, contractual liabilities survive the death of the person and can be enforced against their legal representatives.
- As per the Negotiable Instruments Act, a promissory note is a binding financial instrument and creates a legal debt.
- The legal heirs are liable only to the extent of the property or estate inherited from the deceased—not personally.
- A validly executed promissory note remains enforceable against the estate of the deceased promisor.
Judgement
- Yes, Z can claim against the legal heirs of X, but only to the extent of the estate inherited by them from X.
- The legal heirs are not personally liable beyond the value of the assets they have received from X’s estate.
- The court would allow Z to recover the debt, but it must be satisfied out of the property or assets left behind by X.