High Court Can Order Criminal Investigation To Protect Estate Even While Exercising Testamentary Jurisdiction: Supreme Court

"If the Court discovers that parties are employing deceit, suppressing bank accounts, and using shell trusts to siphon funds, it is entirely within its plenary jurisdiction to direct a police investigation to unearth the fraud." Supreme Court, in a significant ruling dated May 25, 2026, held that a High Court, while exercising its testamentary jurisdiction, does not cease to be a Constitutional Court of Record and retains its inherent powers to order a criminal investigation to safeguard an estate.

A bench of Justice Prasanna B. Varale and Justice Pankaj Mithal observed that when an estate is in custodia legis, the Court cannot remain a silent spectator to blatant siphoning or intermeddling with the deceased’s assets.

The dispute involved the estate of Purvez Burjor Dalal, a Parsi Zoroastrian who left behind assets valued at over Rs. 100 Crores. Following his death, two rival Wills surfaced, leading to testamentary suits in the Bombay High Court. An Administrator pendente lite was appointed, who subsequently reported that funds had been siphoned off to private entities and shell trusts before his appointment. The High Court Single Judge directed a court-monitored criminal investigation into these transactions, a decision later upheld by the Division Bench.

The primary question before the Court was whether a Testamentary Court, whose jurisdiction is generally confined to the genuineness of a Will, can invoke plenary powers to direct a criminal investigation. The Court was also called upon to determine whether such an order bypassed the mandatory procedure prescribed under Section 340 of the Code of Criminal Procedure (CrPC) and whether the Indian Succession Act (ISA) acted as a self-contained code barring such investigations.

High Court Retains Plenary Powers Under Article 215

The Supreme Court rejected the argument that a Testamentary Court’s jurisdiction is strictly limited to the execution of a Will when the protection of the estate is at stake. It observed that the High Court, as a superior Court of Record under Article 215 of the Constitution, possesses inherent and plenary powers to prevent the abuse of its process and to protect property in medio.

The bench noted that while the primary function of a Probate Court is to adjudicate the execution of a Will, this does not denude it of its constitutional powers. Citing M.V. Elisabeth v. Harwan Investment & Trading Pvt. Ltd., the Court emphasized that High Courts have unlimited jurisdiction to determine their own powers and devise procedural rules to suit the peculiar facts and circumstances of a case.

Administrator Is The Hand Of The Court - Status Of Property In Custodia Legis

The Court explained that an Administrator appointed under Section 247 of the ISA is an officer of the Court and acts as its "hand." Once such an appointment is made, the estate comes under the protective umbrella of the Court, and any interference with the assets without the Court's leave is prohibited. The Court held that the Administrator is duty-bound to take all reasonable steps for the preservation of the estate, including seeking criminal action if necessary.

In this context, the bench relied on Anthony C. Leo v. Nandlal Bal Krishnan, affirming that a court officer is under an obligation to draw the attention of the Court to facts necessitating legal action. It held that the High Court was justified in acting upon the Administrator’s report which highlighted non-cooperation and suspicious financial dealings by the propounders of the rival Will.

ISA Is Not A Shield Against Criminal Accountability - Succession Act Does Not Grant Immunity For Fraud

The Appellants argued that the ISA is a self-contained code that precludes criminal investigations in civil testamentary disputes. The Supreme Court termed this contention "fallacious," stating that while the ISA governs the administration of estates, it does not grant immunity to individuals who commit criminal breach of trust, forgery, or conspiracy to siphon off funds.

The bench clarified that the ratio in Fuerst Day Lawson Ltd. v. Jindal Exports Ltd. pertains to the exclusion of general appellate remedies when a special statute provides a specific mechanism, but it does not prevent a Constitutional Court from ordering an investigation if a crime is committed in relation to the subject matter of a civil suit.

Scope Of Section 340 CrPC vs Inherent Powers - Procedural Bars Under Section 341 CrPC Inapplicable

Addressing the contention that the High Court bypassed Section 340 of the CrPC, the Supreme Court held that the direction for a criminal investigation was not passed strictly for offences affecting the administration of justice alone, such as perjury. Instead, the Court exercised its broader inherent powers to investigate a larger conspiracy of siphoning through shell entities.

The bench observed that Section 340 of the CrPC does not restrict the Court's power to set the investigative machinery in motion when it is satisfied that the interest of justice so requires. It noted that the information gathered by the police would ultimately assist the Testamentary Court in tracing siphoned assets and bringing the civil matter to its logical conclusion.

Executor's Authority Is Not A License To Plunder - Suspension Of Executor's Power Under Section 247

The Appellants claimed absolute authority to deal with the estate under Sections 211 and 307 of the ISA prior to probate. The Court emphatically rejected this, stating that while an executor derives authority from a Will, such authority is not a "license to plunder." Where rival Wills are contested and the matter is in medio, an executor cannot unilaterally dispose of assets to dormant trusts.

The Court pointed out that the appointment of an Administrator pendente lite under Section 247 specifically suspends the powers of the executor. It found the revival of a dormant trust in 2011, coinciding with the execution of the rival Will, to be a "classic hallmark of intermeddling and siphoning" under the garb of charity.

The Supreme Court concluded that the High Court was perfectly justified in refusing to be a "mute spectator" to the blatant abuse of process. It held that the investigation does not infringe upon personal liberty but merely seeks to uncover the truth regarding the estate's dissipation. The appeals were dismissed, and the investigating authorities were directed to proceed expeditiously and submit progress reports to the High Court.

Date of Decision: May 25, 2026