In view of the clear legal position, it is made
abundantly clear that the amount in any head can be received by the nominee,
but the amount can be claimed by the heirs of the deceased in accordance with
law of succession governing them. In other words, nomination does not confer
any beneficial interest on the nominee. (Para 19)
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.809 OF 2002
Shipra Sengupta .. Appellant
Versus
Mridul Sengupta & Others .. Respondents
J U D G M E N T: Dalveer Bhandari, J.
1.
This appeal is directed against the judgment dated 12.9.2000
passed by the High Court of Madhya Pradesh at Jabalpur in Miscellaneous Civil
Case No. 1209 of 1998.
2.
The appellant is
the wife of Late Shri Shyamal Sengupta who was a Head Clerk in the State Bank
of India, Bhopal, Madhya Pradesh. He was initially an employee of the Imperial Bank
of India and after constitution of the State Bank of India under the State Bank
of India Act, 1955, the business of the Imperial Bank of India was taken over
by the State Bank of India as per the
provisions of the State Bank of India Act, 1955. Shyamal Sengupta died
issueless on 8.11.1990 at Bhopal. He left behind him his widow Smt. Shipra
Sengupta, his mother Niharbala Sengupta, his brothers Pushpal Sengupta and
Mirdul Sengupta.
3.
It may be
pertinent to mention that Shyamal Sengupta was unmarried at the time when he
joined the service of the bank and he nominated his mother as his nominee.
4.
The appellant
herein Smt. Shipra Sengupta filed an application under section 372 of the
Indian Succession Act, 1956, in which she claimed that she was entitled to her
share of insurance, gratuity, public provident fund etc. etc. According to the
appellant, her claim was based on the principle that any nomination made by
Shyamal Sengupta prior to his marriage would automatically stand cancelled after
his marriage.
5.
The appellant
submitted that after the death of her husband both, she and mother of the
deceased Niharbala Sengupta, were Class-I heirs under the schedule of the Hindu
Succession Act, 1956 and consequently she was, therefore, equally entitled to
succeed to the property along with her mother-in-law Niharbala Sengupta.
6.
The Trial Court
granted succession certificate to the appellant and the mother of the deceased
in respect of total amount of life insurance, gratuity, public provident fund
and general provident fund due to Shyamal Sengupta. The Trial Court held that
both of them shall be entitled to half share in the aforesaid amounts due to
Shyamal Sengupta from different heads. As to rest of the items mentioned in paragraph
6 of the application, the Trial Court held that the appellant alone was
entitled to a succession certificate.
7.
In an appeal
jointly filed by the mother of the deceased Niharbala Sengupta and brother of
the deceased Pushpal Sengupta, the Appellate Court rejected the contention of
the applicants that on account of nomination made in favour of Niharbala
Sengupta, in respect of the aforesaid items, the appellant Smt. Shipra Sengupta
would not get any share in the amount credited or payable to Shyamal Sengupta.
The learned District Judge held that the nomination did not confer any
beneficial interest in the amount due towards life insurance, gratuity, public
provident fund and general provident fund.
8.
The learned
District Judge relied on the decision of this Court in Smt. Sarbati Devi
& Another v. Smt. Usha Devi (1984) 1 SCC 424 and on Om
Wati v. Delhi Transport Corporation, New Delhi & Others 1988
Lab. I.C. 500 and modified the order of the Civil Judge in respect of other
items holding that the mother of the deceased Niharbala Sengupta being the
Class-I heir under the Hindu Succession Act, 1956 was equally entitled to the
half share along with the appellant Smt. Shipra Sengupta. Accordingly, the
learned District Judge modified the order passed by the Civil Judge and directed
him to issue succession certificate in accordance with the modifications made
by him in the order of the Civil Judge.
9.
Niharbala Sengupta
and Pushpal Sengupta, aggrieved by the order of the District Judge, filed a
Civil Revision before the High Court. During the pendency of the said civil revision,
Niharbala Sengupta died and her other son Mirdul Sengupta was substituted in
her place on the basis of an alleged Will executed by her prior to her death in
favour of Mirdul Sengupta. The Will expressly dealt with the amount to which
she was entitled to receive as a consequence of grant of a succession
certificate.
10.
Pushpal Sengupta
did not challenge the Will by which he was affected. Therefore, the position
that emerged was that the court must presume for the purpose of this revision that
the Will is validly executed in favour of Mirdul Sengupta.
11.
In the impugned
judgment, the High Court relied on the judgment of Sarbati Devi (supra)
and observed that the nomination did not confer any beneficial interest on the nominee.
The High Court passed the following order:
“(i) The amount of General Provident Fund deposited
in the name of Shyamal Sengupta declaring that Mirdul Sengupta shall be entitled
to entire sum due to Shyamal Sengupta together with interest to which he is entitled
as per rules of deposit by the Bank till he is paid in full.
(ii) So far as rest of the items mentioned in paragraph 6(a) of the application
under section 372 are concerned it is declared that after the death of
Niharbala Sengupta, Mirdul Sengupta is entitled to succession certificate along
with Shipra Sengupta. Both of them shall be entitled to 1/2 share each as
directed by the District Judge.
(iii) The Civil Judge shall also direct non-applicant No. 2 or any other
authority to pay the interest on the amount mentioned in paragraph 2 till that
is paid to them at the usual rate of 9% from the date of death of Shyamal
Sengupta or the usual rate available to the depositor/subscriber whichever is
less.”
12.
The appellant, aggrieved by the impugned
judgment of the High Court, preferred this appeal. The following questions have
been raised by the appellant in this appeal:
“I. Whether nomination of mother by a member of a Provident fund governed by the Imperial Bank
of India Employees’ Provident Fund Rules before his marriage confers ownership
on the nominee and destroys right of succession of the widow under Succession
Act?
II. Whether nomination only indicates the hand which is authorized to receive
the amount on the payment of which trustees of the provident fund get a valid
discharge?
III. Whether the provident fund can be claimed by the heirs of the member of
the provident fund in accordance with the law of succession governing them?
IV. Whether it was proper for the High Court to rely upon a forged and
fabricated Will which was not even signed by Niharbala?
V. Whether it was proper for the High Court to accept the alleged Will on
record in its revisional Jurisdiction, in absence of any application to that
effect?
VI. Whether the High Court was entitled to take Will on record without giving
fresh opportunity to lead evidence on it?
VII. Whether the High Court was right in interpreting and relying upon section
3(2) of Provident Fund Act, 1925?”
13.
The appellant
submitted that according to the settled legal position crystallized by the
judgment of Sarbati Devi (supra), the principle of law is that
the nomination is only the hand which accepts the amount and a nomination does
not confer any beneficial interest in the nominee.
14.
In Sarbati Devi (supra), this
Court has laid down that a mere nomination does not have the effect of
conferring to the nominee any beneficial interest in the amount payable under the
life insurance policy, on death of the insurer. The nomination only indicates
the hand which is authorized to receive the amount on payment of which the
insurer gets a valid discharge of its liability under the policy. The amount, however,
can be claimed by the heirs of the assured in accordance with the law of succession.
15.
The appellant also placed reliance on the
judgment of this Court in Vishin
N. Khanchandani & Another v. Vidya Lachmandas Khanchandani
& Another (2000) 6 SCC 724, wherein this Court held that the law
laid down in Sarbati Devi (supra) holds the field and is equally
applicable to the nominee becoming entitled to the payment of the amount on account
of National Savings Certificates received by him under Section 6 read with
Section 7 of the Act who in turn is liable to return the amount to those in whose
favour the law creates a beneficial interest, subject to the provisions of
subsection (2) of Section 8 of the Act.
16.
Learned counsel for the appellant also placed
reliance on a Division Bench judgment of the Delhi High Court in Ashok Chand
Aggarwala v. Delhi Administration & Others (1998) VII
AD (Delhi) 639. This case related to the Delhi Cooperative Societies Act. The
High Court while following Sarbati Devi case (supra) held that it
is well settled that mere nomination made in favour of a particular person does
not have the effect of conferring on the nominee any beneficial interest in
property after the death of the person concerned. The nomination indicates the
hand which is authorized to receive the amount or manage the property. The
property or the amount, as the case may be, can be claimed by the heirs of the
deceased, in accordance with the law of succession, governing them.
17.
The controversy
involved in the instant case is no longer res integra. The nominee is entitled
to receive the same, but the amount so received is to be distributed according
to the law of succession.
18.
In terms of the
factual foundation laid in this case, the deceased died on 8.11.1990 leaving
behind his mother and widow as his only heirs and legal representatives entitled
to succeed. Therefore, on the day when the right of succession opened, the
appellant, his widow became entitled to one half of the amount of the general
provident fund, the other half going to
the mother and on her death, the other surviving son getting the same.
19.
In view of the
clear legal position, it is made abundantly clear that the amount in any head
can be received by the nominee, but the amount can be claimed by the heirs of
the deceased in accordance with law of succession governing them. In other
words, nomination does not confer any beneficial interest on the nominee. In
the instant case amounts so received are to be distributed according to the Hindu
Succession Act, 1956. The State Bank of India is directed to release half of
the amount of general provident fund to the appellant now within two months
from today along with interest.
20.
The appeal filed
by the appellant is accordingly allowed and disposed of, leaving the parties to
bear their own costs.
……….…………………………….J.
(Dalveer Bhandari)
..……..….………...……….…….J.
(Dr. Mukundakam Sharma)
New Delhi;
August 20, 2009.
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