Sections 362-367 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The last group of sections in Chapter XII of Part IX deals with a messy situation: an executor has paid some legatees in full and the estate then falls short, leaving others unpaid. Can the unpaid legatee make a paid legatee refund? Sections 362 to 365 answer. Section 366 says the residue goes to the residuary legatee, and s.367 allows assets to be transferred to the country of domicile. This article explains them, with the Act's illustration, as per the text of the Act consulted.
If the assets were sufficient to satisfy all the legacies at the time of the testator's death, an unpaid legatee cannot oblige one paid in full to refund, even though the assets later become deficient by the executor's wasting (s.362). If they were not sufficient, the unpaid legatee must first proceed against the executor or administrator if he is solvent; if not, he can oblige each satisfied legatee to refund in proportion (s.363). Refunding is limited to the sum by which the satisfied legacy ought to have been reduced had the estate been properly administered (s.364), and is without interest (s.365). The surplus or residue after debts and legacies goes to the residuary legatee (s.366).
Section 362: assets were sufficient at the death
If the assets were sufficient to satisfy all the legacies at the time of the testator's death, a legatee who has not received payment of his legacy, or who has been compelled to refund under section 361, cannot oblige one who has received payment in full to refund. This holds whether the legacy was paid to him with or without suit, "although the assets have subsequently become deficient by the wasting of the executor".
So where the estate was good enough at the death, a later loss caused by the executor's wasting does not allow the unpaid legatee to claim from a legatee already paid in full. The unpaid legatee's complaint then lies elsewhere; for the executor's liability for loss, see our article on sections 368 and 369.
Section 363: assets were not sufficient at the death
If the assets were not sufficient to satisfy all the legacies at the time of the testator's death, a legatee who has not received payment of his legacy must, before he can call on a satisfied legatee to refund, first proceed against the executor or administrator if he is solvent. If the executor or administrator is insolvent or not liable to pay, the unsatisfied legatee can oblige each satisfied legatee to refund in proportion.
If you are an unpaid legatee deciding whom to approach first, or a paid legatee asked to refund, early advice on legacy disputes can help you read these sections against the facts.
Section 364: the limit on refunding
The refunding of one legatee to another "shall not exceed the sum by which the satisfied legacy ought to have been reduced if the estate had been properly administered".
The Act's illustration
A has bequeathed 240 rupees to B, 480 rupees to C and 720 rupees to D. The assets are only 1,200 rupees and, if properly administered, would give 200 rupees to B, 400 rupees to C and 600 rupees to D. C and D have been paid their legacies in full, leaving nothing to B. B can oblige C to refund 80 rupees and D to refund 120 rupees.
The working shows the rule. C was paid 480 against a proper share of 400, so the excess is 80. D was paid 720 against a proper share of 600, so the excess is 120. The two refunds, 80 and 120, together make the 200 that B should have received. These are the Act's own old figures, used as an illustration only.
| Legatee | Bequeathed | Proper share (assets 1,200) | Paid | Refund B can demand |
|---|---|---|---|---|
| B | 240 | 200 | Nothing | Not applicable |
| C | 480 | 400 | 480 in full | 80 |
| D | 720 | 600 | 720 in full | 120 |
An invented example in the same pattern: three cousins are left Rs. 20,000, Rs. 40,000 and Rs. 60,000, but the estate yields only Rs. 60,000. Properly administered, they would get Rs. 10,000, Rs. 20,000 and Rs. 30,000. If the second and third have been paid in full, the first can ask each to refund only the amount by which their legacy ought to have been reduced: Rs. 20,000 from the second and Rs. 30,000 from the third. That is the limit set by s.364.
Section 365: without interest
The refunding "shall in all cases be without interest".
Section 366: residue to the residuary legatee
The surplus or residue of the deceased's property, after payment of debts and legacies, shall be paid to the residuary legatee when any has been appointed by the will. For the residuary legatee more generally, see our post on sections 102 and 103 and the residuary legatee. The text says nothing here about when the residue is paid beyond "after payment of debts and legacies".
Section 367: transfer of assets to the country of domicile
The section applies where a person not having his domicile in India has died leaving assets both in India and in the country in which he had his domicile at death, and there has been a grant of probate or letters of administration in India with respect to the assets there, and a grant of administration in the country of domicile with respect to the assets in that country. (The word "India" appears in square brackets in the copy.)
In that case, the executor or administrator in India, after having given such notices as are mentioned in section 360, and after having discharged, at the expiration of the time named, such lawful claims as he knows of, may, instead of himself distributing any surplus or residue to persons residing out of India who are entitled to it, transfer the surplus or residue, with the consent of the executor or administrator in the country of domicile, to him for distribution to those persons.
Note the word "may": the transfer is an option. And note the conditions: the notices in s.360 and the discharge of known claims must come first. For wills with assets in more than one country, see our guide on NRI wills, probate and ancillary probate. An invented example: Mr. Fernandes, domiciled in another country, dies leaving a bank balance in India and property in his home country. Probate is granted in India for the assets here and administration in his home country for the assets there. After giving notice and discharging known claims, the Indian executor may, with the consent of the executor in the country of domicile, transfer the Indian surplus to him for distribution to the entitled persons living abroad.
How the six sections fit
| Section | Question answered |
|---|---|
| 362 | Assets sufficient at death: can an unpaid legatee make a paid legatee refund? No |
| 363 | Assets not sufficient: whom to approach first? The executor, if solvent |
| 364 | How much can be refunded? No more than the reduction the satisfied legacy should have borne |
| 365 | Interest on refunds? None |
| 366 | Who gets the residue? The residuary legatee, if appointed |
| 367 | Assets in India and abroad? Surplus may be transferred to the executor in the country of domicile |
For the earlier refund rules, see our article on sections 356 to 361. Later amendments are not shown in the text consulted and should be checked.
Need help with a refund or a cross-border estate?
If you are a legatee involved in a refund, or an executor with assets in India and abroad, we can explain what the Act provides and help you plan the steps. Start with our legal consultation service.
Key takeaways
- Where assets were sufficient at the death, a paid legatee need not refund to an unpaid one (s.362).
- Where not sufficient, the unpaid legatee must first proceed against a solvent executor, then can call on each satisfied legatee in proportion (s.363).
- Refund is capped at the reduction that proper administration would have required, and carries no interest (ss.364, 365).
- The residue goes to the residuary legatee (s.366); the surplus may be transferred to the executor in the country of domicile in the case s.367 describes.
Read next
- Sections 356-361: refund of legacies and distribution of assets after notice
- Sections 368-369: liability of executor or administrator for devastation and neglect
- NRI wills and OCI wills: probate, apostille and ancillary probate
- Residuary legatee: sections 102 and 103 and challenging a will after death
Disclaimer: Based on an unofficial print of the Indian Succession Act, 1925 showing amendments up to the Indian Succession (Amendment) Act, 2002 (26 of 2002), as consulted on 2 October 2026. It explains the words of the statute only; later amendments, State amendments and rules, court fees and the way courts apply these sections should be checked. This article is general information, not legal advice; check the official text before acting.