Shipra Sengupta vs Mridul Sengupta & Ors

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 sub-

section (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 Co-

operative 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.