Bombay High Court
Nilima Yogesh Madhvani vs Sheela Padamkumar Gupta And Anr And Bank ... on 26 October, 2018
Author: R. G. Ketkar
Bench: R. G. Ketkar
NMTL180_18.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
TESTAMENTARY AND INTESTATE JURISDICTION
NOTICE OF MOTION (L) NO. 180 OF 2018
IN
NOTICE OF MOTION (L) NO.267 OF 2017
IN
TESTAMENTARY SUIT NO.83 OF 2016
IN
TESTAMENTARY PETITION NO.659 OF 2015
Shanti Swaroop Singh ... Applicant
In the matter between
Nilima Yogesh Madhvani ... Plaintiff
Vs.
Sheela Padamkumar Gupta and another ... Defendants
and
Bank of Baroda ... Respondent
Mr. Ashish Mishra for Applicant.
Mr. Rajiv Jain a/w. Mr. Bhavesh Wadhwani i/b. Mr. Devang D. Parmar for
Plaintiff.
Mr. Ronak K. Parekh i/b. Interjuris for Respondent Bank.
CORAM : R. G. KETKAR, J.
DATE : OCTOBER 26, 2018 P.C. :
Heard Mr. Mishra, learned Counsel for the applicant, Mr. Jain, learned Counsel for the plaintiff and Mr. Parekh, learned Counsel for the respondent Bank at length.
2. This Motion is taken out by Shanti Swaroop Singh, hereinafter referred to as 'applicant', for modification of the order dated 24.08.2017 passed by this Court and for issuing direction to Bank of Baroda to release / liquidate the amount in respect of two Fixed Deposit Receipts bearing No.005654/TBM/TDR/2007/D for an amount of Rs.1,35,000/- dated 09.04.2010 and Fixed Deposit Receipt bearing No.734557/ TDR/ 2011/PP for an amount of Rs.2,00,000/- dated 25.10.2012, Gamdevi 1/5 ::: Uploaded on - 29/10/2018 ::: Downloaded on - 01/11/2018 23:30:19 ::: NMTL180_18.doc Branch deposited by Kiran Ajitkumar Jhaveri (for short 'deceased') on the ground that applicant is nominee.
3. In support of this Motion, Mr. Mishra submitted that by order dated 24.08.2017, Notice of Motion (L) No.267 of 2017 taken out in Testamentary Suit No.83 of 2016 arising from Testamentary Petition No.659 of 2015 was made absolute in terms of prayer clauses (a), (b) and (c) with no order as to costs after recording no objection by learned Counsel for the defendants.
4. Mr. Mishra submitted that basically, the Testamentary Court is not empowered to pass interim order in relation to the protection of property. The Court also does not have inherent power to pass interim orders. In support of this proposition, he relied upon decision in Rupali Mehta Vs. Smt. Tina Narinder Sain Mehta, AIR 2007 Bombay 62 and Ramchandra Ganpatrao Hande Vs. Vithalrao Hande, 2011 (4) Bom.C.R. 326. He, therefore, submitted that order dated 24.08.2017 may be modified and Motion may be made absolute in terms of prayer clauses (a) and (b).
5. On the other hand, Mr. Jain submitted that admittedly, applicant claims to be nominee of the deceased. He submitted that basically he has no locus to maintain the Motion. In any case, applicant is not entitled to relief in terms of prayer clause (b) of the Motion whereby he has sought direction against the bank to release the amount invested in fixed deposits. In support of this submission, he relied upon the decision of the Apex Court in Ram Chander Talwar Vs. Devender Kumar Talwar, (2010) 10 SCC 671 to contend that all the monies receivable by the nominee by virtue of Section 45 ZA(2) of the Banking Regulation Act, 1949 (for short 'Regulation Act') would, therefore, form part of the estate of the deceased depositor and devolve according to the rule of 2/5 ::: Uploaded on - 29/10/2018 ::: Downloaded on - 01/11/2018 23:30:19 ::: NMTL180_18.doc succession to which the depositor may be governed. He also relied upon the decision in Shakti Yezdani Vs. Jayanand Jayant Salgaonkar, 2017(1) B.C.R. 319 and submitted that in paragraph 34, the Division Bench has considered decision in Ram Chander Talwar (supra). The Division Bench has held that nominee does not become owner of the shares on the death of the share holder. He continues to hold the securities in trust and in a capacity as a beneficiary for the legal representatives who are entitled to inherit securities or shares under the law of inheritance.
6. I have considered the rival submissions advanced by the learned Counsel appearing for the parties. I have also perused the material on record. It is not in dispute that the applicant claims to be the nominee of the deceased. Applicant has, therefore, sought modification of the order dated 24.08.2017 and further releasing amount invested in Fixed Deposits of the deceased. In the case of Ram Chander Talwar (supra), the Apex Court extracted Section 45ZA(2) of the Regulation Act and observed thus, "Section 45ZA(2) merely puts the nominee in the shoes of the depositor after his death and clothes him with the exclusive right to receive the money lying in the account. It gives him all the rights of the depositor so far as the depositor's account is concerned. But it by no stretch of imagination makes the nominee the owner of the money lying in the account. It needs to be remembered that the Banking Regulation Act is enacted to consolidate and amend the law relating to banking. It is in no way concerned with the question of succession. All the monies receivable by the nominee by virtue of section 45 ZA(2) would, therefore, form part of the estate of the deceased depositor and devolve according to the rule of succession to which the depositor may be governed."
7. In the case of Shakti Yezdani (supra), Division Bench of this Court, following decision in Ram Chander Talwar (supra) observed in paragraph 34 thus, 3/5 ::: Uploaded on - 29/10/2018 ::: Downloaded on - 01/11/2018 23:30:19 ::: NMTL180_18.doc "34. The provisions relating to nominations under the various Enactments have been consistently interpreted by the Apex Court by holding that the nominee does not get absolute title to the property subject matter of the nomination. The reason is by its very nature, when a share holder or a deposit holder or an insurance policy holder or a member of a Co- operative Society makes a nomination during his life time, he does not transfer his interest in favour of the nominee. It is always held that the nomination does not override the law in relation to testamentary or intestate succession. The provisions regarding nomination are made with a view to ensure that the estate or the rights of the deceased subject matter of the nomination are protected till the legal representatives of the deceased take appropriate steps. None of the provisions of the aforesaid Statutes providing for nominations deal with the succession, testamentary or non- testamentary. As observed by the Apex Court, the legislative intention is not to provide a third kind of succession. In Sarbati Devi, the Apex Court held in paragraph 5 which reads thus:
" ......But the summary of the relevant provisions of Section 39 given above establishes clearly that the policy-holder continues to hold interest in the policy during his lifetime and the nominee acquires no sort of interest in the policy during the lifetime of the policy-holder. If that is so, on the death of the policy- holder the amount payable under the policy becomes part of his estate which is governed by the law of succession applicable to him. Such succession may be testamentary or intestate. There is no warrant for the position that Section 39 of the Act operates as a third kind of succession which is styled as a 'statutory testament' in para 16 of the decision of the Delhi High Court in Uma Sehgal case [AIR 1982 Del 36]. If Section 39 of the Act is contrasted with Section 38 of the Act which provides for transfer or assignment of the rights under a policy, the tenuous character of the right of a nominee would become more pronounced. It is difficult to hold that Section 39 of the Act was intended to act as a third mode of succession provided by the statute. The provision in sub-section (6) of Section 39 which says that the amount shall be payable to the nominee or nominees does not mean that the amount shall belong to the nominee or nominees. We have to bear in mind here the special care which law and judicial precedents take in the 4/5 ::: Uploaded on - 29/10/2018 ::: Downloaded on - 01/11/2018 23:30:19 ::: NMTL180_18.doc matter of execution and proof of wills which have the effect of diverting the estate from the ordinary course of intestate succession and that the rigour of the rules governing the testamentary succession is not relaxed even where wills are registered."
(emphasis added) The object of the provisions of the Companies Act is not to either provide a mode of succession or to deal with succession. The object of the Section 109A is to ensure that the deceased shareholder is represented by some one as the value of the shares is subject to market forces. Various advantages keep on accruing to shareholders. For example, allotment of Bonus shares. There are general meetings held of the Companies in which a shareholder is required to be represented. The provision is enacted to ensure that the commerce does not suffer due to delay on the part of the legal heirs in establishing their rights of succession and claiming the shares of a Company."
8. In view of the decisions in Ram Chander Talwar (supra) and Shakti Yezdani (supra), I do not find that applicant being nominee is entitled to any relief in this Motion. Basically, applicant has no locus to maintain this Motion. Hence, Motion fails and the same is dismissed.
9. Mr. Parekh, learned Counsel for the respondent-Bank states that within one week from today, Bank of Baroda will deposit the amount invested in Fixed Deposits along with accrued interest with the Prothonotary and Senior Master / Registrar (O.S.) under intimation in writing to the learned Counsel for the plaintiff and defendants. Statement made by Mr. Parekh, on instructions, is recorded.
10. Order accordingly.
(R. G. KETKAR, J.) Minal Parab 5/5 ::: Uploaded on - 29/10/2018 ::: Downloaded on - 01/11/2018 23:30:19 :::