Rajasthan High Court Quashes ₹2.25 Crore Security Bond Imposed 'Without Reasons' For Issuing Succession Certificate
The Rajasthan High Court has held that while exercising discretionary powers under Section 375 of the Indian Succession Act, 1925, a District Judge must record at least some justification or reasons before imposing a condition requiring an applicant to furnish a security bond for the grant of a succession certificate.The bench of Justice Sudesh Bansal set aside the order of the trial court...
The Rajasthan High Court has held that while exercising discretionary powers under Section 375 of the Indian Succession Act, 1925, a District Judge must record at least some justification or reasons before imposing a condition requiring an applicant to furnish a security bond for the grant of a succession certificate.
The bench of Justice Sudesh Bansal set aside the order of the trial court as well as the appellate court that had imposed the condition of furnishing security bond of Rs. 2.25 Crores on the petitioners for issuance of succession certificate, without any reason mentioned in the relevant orders.
For context, after the death of their father, the petitioners wanted to get the value of certain shares that were held by their father. For this purpose, they had applied for succession certificate under Section 372 of the Act,
While granting the succession certificate, the trial court imposed the condition of furnishing the security bond as per Section 375 of the Act, along with a joint written undertaking (commitment bond).
This was challenged by the petitioners, submitting that the condition of security bond was onerous, unwarranted and arbitrary. It was argued that the power under Section 375 was discretionary that might not be incorporated in a routine and usual course.
Further, the petitioners argued that not a single reason was assigned by the trial court while imposing this condition, to record his satisfaction that it was just and proper to furnish the security bond. Hence, the petitioners sought quashing of the condition or alternatively furnishing a indemnity bond instead of a security bond.
After hearing the contentions, the Court observed,
“…while exercising discretionary powers and jurisdiction by District Judge under Section 375 of the Act of 1925, at least some justifications or reasons should be recorded for laying down the condition of furnishing the security bond by the applicant(s) for the purpose of granting the succession certificate. In the case at hand, no such exercise was done by the District Judge…”
It was held that the imposition of security bond was onerous and unwarranted, and deserved to be quashed.
Accordingly, the petition was allowed, and the State was directed to issue succession certificate after the petitioners furnished indemnity bond worth Rs. 2.25 Crores in place of the security bond, along with the commitment bond.
Title: Ajay Sarin & Anr. v MRF Limited & Anr.
Citation: 2026 LiveLaw (Raj) 333