Insolvency of parties
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This article is written by Gurkaran Babrah a first-year law student at Symbiosis Law School Noida. This article provides an overview to death, marriage and insolvency of parties under the CPC.

Introduction

Death, marriage and insolvency of parties, these are three different concepts. These are mentioned and discussed under the Civil Procedure Code, 1908. What happens in cases of death, marriage and insolvency of parties all this is discussed under their relevant headers. There are different provisions for each of these three cases. One general rule in cases of death says that the suit shall not be gone with the death of any one party. In a similar way in this article, all the provisions are discussed according to the Code of Civil Procedure and relevant case laws are cited.

Death of party

During the proceeding if one of the parties dies or what will happen when the contingencies of suit like death, marriage or insolvency of parties occur? 

What is the standard procedure or standard practice under the law for these kind of situations? It naturally leads us to the concept of pendency of suit because now it has somehow been struck between the step which is the institution and passing of judgement.

Such a situation calls for something which helps to solve the problem of pendency of the suit and the same can be dealt with by the creation of assignment or by the devolution of the interests of the parties.

The procedure for creating an assignment and devolution of interests is very exhaustive and it is defined under the Order XXII of the Code of Civil Procedure, 1908. The procedure prescribed under Order XXII of this code shall be applied and considered to meet the ends of justice. 

What will happen in case of death of one of the parties? Or what procedure should be followed in this type of situation? The answers to all these kind of questions are resolved under order XXII of the Code of Civil Procedure, 1908. In that kind of situation, the fundamental question which is considered is as the test for creation of any interest thereof is the survival of right to sue. The suit should not be gone with the death of any of the party. If the suit will be continued the matter will further have no legs to stand. These provisions are explicitly provided under Rule 1-6, 9 and 10-A of the order XXII of the code.

The first one talks about the cases in which there are co-plaintiff or co-defendants and the right to sue has survived. A situation where one of the several plaintiffs has died and the right to sue has survived in favour of the surviving plaintiff or plaintiffs in such a case the court shall record such fact and shall proceed with the suit.

On the other hand, a situation where one of the several defendant or defendants has died and the right to sue has survived in favour of the surviving defendant or defendants in such as case the court shall record the fact and shall proceed with the suit.

On the contrary, a situation where the right to sue does not survive or where one of the several plaintiffs dies and the right to sue does not survive to the surviving plaintiff or plaintiffs alone or even a situation where the sole surviving plaintiff dies and the right to sue survives in such case, on an application being made by the legal representative, the court shall make the legal representatives of the deceased party to proceed with the suit.

And, if there is no application made within the prescribed period, the suit shall abate so far as the deceased plaintiff is concerned. If an application is made by the defendant, the court shall award him the costs which he/she may have incurred in defending the suit from the estate of the deceased plaintiff.

In a similar situation, if one of the several defendants dies and the right to sue does not survive against the surviving defendant or defendants alone or where a sole surviving defendant dies and the right to die survives, in such a case on an application being made by the legal representatives, the court shall make the legal representative of the deceased defendant party to proceed or go ahead with the suit.

But there is also a condition in it that if no application is made within the specified time period, the suit shall abate against the deceased defendant and also the discretion of the court to exempt the plaintiff from substituting the legal representatives’ of a non-contesting or Pro-forma defendant and pronounce the judgement notwithstanding the death of such defendant. 

A case in which the plaintiff had no knowledge or if he was ignorant of the death of the defendant and as a consequence of that he/she could not make an application within the prescribed period and the suit is abated, then the plaintiff can thereby may make an application for such abatement within the prescribed period and considering the said application, the court shall have due regard to the fact of such ignorance of the plaintiff since it is the court who has to determine the interests of a deceased person. 

A situation where either party dies during the process of hearing and the pronouncement of judgement, that situation is one of the most confusing one. The solution to this kind of situation has been provided under Rule 6 Order XXII of the Code of Civil Procedure, 1908. In such type of situation, the suit shall not abate regardless of the survival of the right to sue and cause of action. But if a situation in which where a suit is instituted against the person who is already deceased, it will be considered as null and void and it will have no legal effect.

Death of plaintiff

Order XXII of the Code of Civil Procedure, 1908 talks about the provision that what happens when there is a death of plaintiff. Rule 2 of Order XXII of the CPC says that “ Procedure where one of several plaintiffs or defendants dies and right to sue survives- Where there are more plaintiffs or defendants than one, and any of them dies, and where the right to sue survives to the surviving plaintiff or plaintiffs alone, or against the surviving defendant or defendants alone, the Court shall cause an entry to the effect to be made on the record, and the suit shall proceed at the instance of the surviving plaintiff or plaintiffs, or against the surviving defendant or defendants.” 

Radhu Napit v. Tarapdo Napit

In the landmark case of Radhu Napit v. Tarapdo Napit, the Hon’ble High Court of Jharkhand in a single Judge bench of Justice Shree Chandrashekhar, he dismissed a writ petition which was filed against the order of the trial judge, whereby petitioner’s application seeking abatement of partition suit on the ground of death of one of the defendants was rejected.

Issue

The fundamental question or say issue which arose before the court, in this case, was whether the suit can be abated in case of death of either party or not?

Held

The honourable high court in its judgement observed the Rule I of Order XXII of the Code of Civil Procedure, 1908. Rule of 1 of CPC explicitly says that the suit can not be abated on the mere ground of death of either party if the right to sue still survives. Rules 1, 2, and 4 of Order 22 of CPC provides different procedures. These rules talks about different situations like the death of a party, the death of one of several plaintiffs or defendants but survival of right to sue and death of one of several defendants or sole defendant only.

The court in its judgement held that according to the provisions mentioned under the Order XXII of the Code of Civil Procedure, 1908 it can be reasonably observed that cases or situations in which either of the party or parties dies and their right to sue survives there shall be no abatement of the suit. Further, the court held that this case is not any exception and the petitioner falls within the ambit of Order XXII rule 1 and said that the application of the petitioner for the abatement of suit is rejected.

Death of defendant

Order XXII of the Code of Civil Procedure, 1908 talks about the provision that what happens when there is a death of defendant. Rule 4 of Order XXII of the CPC says that “Procedure in case of death of one of several defendants or of sole defendant- Where one of two or more defendants dies and the right to sue does not survive against the surviving defendant or defendants alone, or a sole defendant or sole surviving defendant dies and the right to sue survives, the Court, on an application made in that behalf, shall cause the legal representative of the deceased defendant to be made a party and shall proceed with the suit.”

Further, it says that when no application is made within the prescribed time limit of ninety days, the suit shall abate as against the deceased defendant the court can exempt the plaintiff from substituting the legal representative of a non-contesting and may pronounce the judgment notwithstanding the death of such defendant.

There can be a situation where the plaintiff is not aware or if he/she is ignorant of the death of the defendant and is unable to make the application for the substitution of legal representative of the deceased defendant within the period of limitation, and the suit stands abated, he/she in that situation can make an application to set aside such abatement within the period of limitation, stating that due to ignorance of the death of the defendant he could not make application within time. The court shall consider the application, having its due regard to the fact of such circumstances.

Elliott v. Cline was one of the landmark judgement in legal history. In this case, the court observed that a cause of action for an injunction survives the death of either party, where if the acts are completely of personal nature, the right of action abates upon the death of the defendant. However, a situation in which if a suit is for damages and injunction, then the right to damages will survive the death of the defendant.

Further, it was also discussed that where the defendant dies after hearing but before pronouncement of judgement, the suit shall not abate. The suit shall also not abate on account of the death of an unimportant party. 

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Jitendra Ballav Burdhan vs Dhirendranath Burdan

This is another landmark case, in which the plaintiff filed a suit for partition of land and claimed I/5th share in the property. This suit was successfully contested and a decree was declared saying I/5 share of the plaintiff by a preliminary decree. This was challenged in court but it was withdrawn. Then the final decree proceedings were initiated and the decree was made final.

During the final decree proceedings, the defendant no.4 died. Therefore, an application for substitution was filed in the said decree proceeding with a prayer to substitute the legal heirs of the deceased defendant no.4. Notices were issued to the proposed legal heirs of the deceased defendant no.4.

The defendant who died i.e. defendant no.4, he did not contest the suit and I/5th share was granted in favour of defendant no.1 to defendant no.5 jointly as they all hailed from a common ancestor that was Jagat ballav. The order was passed by the honourable High Court of Odisha in the final decree proceedings.

Actio personalis moritur cum persona

The literal meaning of this maxim is that a personal right of action of a person dies with the death of that person. This maxim was quoted for the first time in 1496. There was a case in which a woman against whom a defamation judgment was issued died before paying the damages to the tortfeasor. After this In the Uk, the kings’ bench used this maxim for the first time in Cleymond v. Vincent (1523). Some academicians contended that this is the principle of early law that the death of either party to a personal duty takes away all remedy and destroys the duty.

In some legal situations, the cause of action can survive the death of the plaintiff, for example, actions or situations under the Contract Law. There are some actions which are considered personal to the plaintiff for example defamation. Therefore, a situation where an action which somehow relates to the private character of the plaintiff, comes to a death on his or her death but such an action for publication of a false, derogatory or malicious statement which causes damage to the plaintiff’s personal estate will survive to the benefit of his or her personal representatives. This principle also protects the executor and the estate from liability for strictly personal acts of the deceased for example charges for fraud. 

Illustration

If A commits battery on C and if either party dies, the right which C got by the reason but if A commits battery on C, or does other injury to C, then any right of action which accrues to third person will not be affected by the death of C. 

Further, in the landmark case of Nurani Jamal and others vs. Naram Srinivasa Rao the learned judge agreed that this maxim “actio personalis moritur cum persona” is applicable in respect of all personal wrongs but with that, he also recognised an exception to it he said “where a tort-feasor is benefitted by the wrong done, an action would lie against the representatives of a wrong-doer.” therefore, this decision did not help the third respondent. 

Right to sue

The right to sue is similar to that maxim “Actio personalis moritur cum persona”. A personal right of action dies with the death of that person, is a deviation which derived from this Latin maxim. 

To check that when and how a right to sue survives regardless of the death of either party there is a simple experiment for that. There are certain cases where the plaintiff mostly sues with regard to a claim which is associated with or which vests in their individuality. A suit for damages is one such category for that. If in a case where the plaintiff died during the pendency of suit for damages, the right to sue, which in other words can also be termed as a right to seek relief, will not survive but if the plaintiff succeeds in getting, a decree for damages and dies during the pendency of his opponent’s appeal, the right will survive to his or her legal representatives.

A case in which the survival of the right to sue is there, the suit does not abate on the death of a party but the substitution to his or her legal heirs becomes necessary within a period of 90 days. This is because the surviving right is now vested in the legal heirs so long as a right an individual has, it does not survive at the death of that person. The common or say the general rule is that all causes of action and all demands which are existing in favour or against a person at the time of his or her death survive to or against his or her legal representatives. This principle is also mentioned under the succession act as well, but in that, there is only one exception to it which says that rights intimately connected with the individuality of the deceased will not survive based on this maxim Actio personalis moritur cum personal- a right of action dies with the death of the person.

 

Abatement

Abatement refers to a situation in which when any of the party in a civil suit dies and if their right to sue survives then the suit can be continued by the legal representative or legal heirs of the deceased party. But if in a situation or a case where the right to sue does not survive then the suit will automatically come to an end. The fundamental part of an important part which the effects the abatement is the right to sue after the death of either party because after the death of the party if the right to sue survives then the suit can be continued.

The general rule in this is that an action or suit can be prosecuted by and against only living parties. If in a situation where the person against whom a personal action is brought and dies before suit papers naming that person as the defendant, then in such a situation the suit papers can be changed by substituting the deceased’s personal representative or legal representative.

Enactments which set up legal procedure for revival seeks to prevent the arbitrary cessation of a proceeding where the cause of action survives and provide for substitution of the personal representative or other proper party and the continuation of the matter in that party’s name. A situation where there is a death of an important party, the action is abated till the deceased party’s state or legal representative has been substituted.

A deceased party is not eligible to be a party to a legal proceeding and on the death of either party, its effect is to suspend the action as to the decedent until his or her legal represented is substituted.as a party. A deceased person cannot be a party to any legal proceeding.” while the death of a party does not abate a pending action but cases where the cause of action survives, though the effect of death is to suspend the action as to the decedent until someone is substituted for the decedent as a party to a legal proceedings. Till a person is properly substituted as a party after the action is suspended, any further proceedings in that particular case are void as to the decedent. 

Understanding the matter of abatement of an action by the death of a party, as well as the survival and revival of the action, there is a complete difference between the cause of action and an action. A cause of action may survive though a particular action is based on whether it is abated by the death of a party or not.

In legal terminology, abatement means elimination, cessation or discontinuation. This is used widely in several different contexts. Abatement is nothing but it is discontinuation of a judicial proceeding due to some fact not affecting the merits of the controversy. The most common grounds for abatement are the death of either party or the pendency of another suit. There are also other grounds for abatement of suits. These grounds are defects of the parties like incapacity or misnomer, invalid jurisdiction of the court, premature commencement of an action, dissolution of a corporation, and transfer of a party’s interest in the lawsuit.

As we all know there are always two parties involved i.e plaintiff and defendant. The party which files a suit or initiates a lawsuit is known as plaintiff and the party against whom the action is brought is known as the defendant. Laws relating the concept of abatement differs from state to state but the plaintiff generally claims for recovery against the defendant and monetary relief.

The ending before the actual time or say premature ending of a suit is called abatement. If the reason for abatement are not clear on the pleading filed by the plaintiff, then the defendant can move to abate the case. But if the defendant fails to claim for abatement, the defence will be waived. Court considers a plea for abatement of an action before proclaiming a judgement as the judgment on the plea will affect the final decision of the court.

Marriage of party

A marriage of a party does not have any substantial effect on the suit but there is an exception to it. A case or a situation in which a decree has been executed against a female who is married, the decree shall be executed against her only. It has been mentioned under Rule 7 of Order XXII of CPC that a decree which is in favour or against a wife, where the husband is legally entitled to the subject matter of the decree or if he is liable for the debt of his wife may, with the explicit permission of the court, it should be executed by or against him.

Insolvency of party

Insolvency of the party is defined and discussed under Rule XXII of the Code of Civil Procedure, 1908. Rule 8 of Order XXII says:

  • Where a plaintiff becomes insolvent and a receiver or assignee may want to maintain the suit for the benefit of the creditors of the plaintiff, the suit should not abate except in cases where the assignee or the receiver declines to continue the suit, or in certain cases in which the court itself directs the assignee or receiver to pay the security for costs and the assignee or receiver declines to neglects to pay the same.
  • Where the receiver or the assignee wishes to proceed with the suit or fails to pay the security for the costs within the time limit, the defendant then may make an application to the court and may claim in that for dismissal of the suit.
  • Further, the court can order that costs be paid to the defendant and the same should be deemed to be a debt against the estate of the plaintiff.
  • This rule is not at all applicable to the insolvency of the defendant. In these type of cases, the court may put a stay on the proceedings or suit against such defendant.
  • Rule 9 of the same Order says that where a suit is abated, the receiver or assignee in cases where the plaintiff becomes insolvent he or she may make application to the court to set aside the abatement,
  • The receiver or assignee will have to show that there was reasonable cause for not continuing with the suit and if the court is satisfied with the same then it may pass an order in this regard.
  • The application to the court should be filed within the time limit as prescribed under Section 5 of the Limitation Act.

Conclusion

Earlier under the common law system, a lawsuit was used to automatically abate on the death of a party. However, whether the cause of action is abated or not depends on whether or not the lawsuit was considered personal to the parties or not. For example, property and contract cases were thought to involve separate issue from the parties themselves and did not necessarily abate on the death of a party. On the other hand, personal injury cases including those injuries to the person as well as cases of libel, slander, and malicious prosecution were considered personal and did abate at death of the party.

Today, there are a number of states which have their statues which permits the revival of an action that was pending when a party died. But in the usual course of action, an administrator or executor is substituted for the deceased party and the lawsuit continues. There can be a situation where the lawsuit may not be revived unless the underlying cause of action continues to have its legal existence. Every state has its own revival statutes and they vary from state to state, but today many lawsuits do not abate due to the death of either party.

In a situation if two or more persons bring an action to the court and if in that course one of them dies then the action will not abate if the cause of action survives. The action will continue in the name of the surviving party, or by the representatives of decedent. After the death of a party, if the right to be enforced survives against or in favour of the surviving party, then the action will not abate but will continue against and for the surviving parties. In common law, if the defendant dies, it will not abate an action against the other defendants entirely either in tort actions or in contract law. If the rights of the deceased party, or of his/her successors remain in the cause of action then the matter is either suspended or abated until the action is properly revived and a successor is named. A judgment is not entered against the decedent’s successors in interest or against her/his former rights until these steps are taken. 

If one of the two co-parties is a necessary party, and if the judgement will not have any meaning without him/her as party, then the action will abate upon the party’s death and cannot be revived. However, if a valid judgment is given against the remaining defendants, the death of a party for whom no substitution can be made abates the action only as to the decedent, without possibility of reviver. 

References

  1. https://www.legalbites.in/death-marriage-insolvency-parties/
  2. https://lawtimesjournal.in/consequences-death-marriage-insolvency-parties/

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