Kerala High Court
A.Chandrasekharan Nair vs The Union Of India on 30 January, 2007
Bench: M.Ramachandran, S.Siri Jagan
IN THE HIGH COURT OF KERALA AT ERNAKULAM
MFA No. 1250 of 2000()
1. A.CHANDRASEKHARAN NAIR
... Petitioner
Vs
1. THE UNION OF INDIA
... Respondent
For Petitioner :SRI.SANTHEEP ANKARATH
For Respondent :SRI.P.V.SURENDRANATH
The Hon'ble MR. Justice M.RAMACHANDRAN
The Hon'ble MR. Justice S.SIRI JAGAN
Dated :30/01/2007
O R D E R
(M.RAMACHANDRAN & S.SIRI JAGAN, JJ)
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M.F.A.No. 1250 of 2000-A
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Dated this the 30th day of January, 2007
JUDGMENT
Ramachandran, J:
An Original Petition had been filed, under Section 372 of the Indian Succession Act, before the Subordinate Judge's Court, Ottapalam, by four persons, who are brothers and sisters of Sri.A.Narayanankutty. That gentleman had expired on 07-08-1997 while at Sanjeevani Hospital, Kulappully. Sri.Narayankutty was unmarried and his parents had pre-deceased him. Petitioners claimed that they were the only legal heirs of the deceased person, and required the certificates for claiming assets locked in by way of securities in Banking Institutions at Ottapalam.
2. Assets described were (1) a Fixed Deposit for Rs.one lakh in the State Bank of India, Ottapalam, (2) a Fixed Deposit for Rs.80,000/- in the Nedungadi Bank, Ottapalam and (3) funds remaining in Savings Bank Account [S.B.A/c.No.3403] in the same Bank. In respect of the Fixed [MFA No.1250 of 2000] -2- Deposit Account with the State Bank of India, Narayanankutty had presented Ext.B2 nomination, wherein the name of the nominee had been shown as Prime Minister's National Relief Fund. Likewise, in respect of the accounts in the Nedungadi Bank, he had addressed a letter (Ext.B1) dated 04-07-1996 to the Manager of the Bank, requesting that in the event of his death, he desired that the proceeds are to be transferred to the Chief Minister's Relief Fund, Trivandrum, Kerala State.
3. Sri.Narayanankutty had died intestate. The submission made before the Court was that the nominations, if any, were not valid or legally enforceable and the legal heirs alone are entitled to the estate and not the nominees. Further contention raised was that the right of the nominees necessarily was confined to a duty of accepting the amounts, in due course, for distributing it as among the legal heirs. A certificate would have therefore avoided a circuitous course.
4. The Government of India and the State Government were made parties to the proceedings for obvious reasons. The two banking institutions also were impleaded as respondents. Documentary and oral evidence had come as adduced by the parties. The court below held [MFA No.1250 of 2000] -3- that the nomination in respect of the amounts in deposit with the State Bank of India could not be considered as valid, since it did not conform to the prescriptions of Section 45ZA of the Banking Regulations Act, 1949. It should have been in the name of a person. Since it was not so earmarked, it continued to be an asset of Narayanankutty, who had died intestate. According to the Court, the claim therefore required to be allowed. Petitioners were declared as entitled to receive the amounts together with interest accrued thereon.
5. However, in respect of the amounts in deposit with the Nedungadi Bank, the Court below was of the view that Ext.B1 letter dated 04-07-1996 in definite terms divulged the desire of the deceased person to donate the amount of the Fixed Deposit as well as the outstanding balance in the Savings Bank Account to the Chief Minister's Relief Fund. Even though the letter was not in the prescribed form, as specified under the Banking Companies (Nomination) Rules, 1985, the recitals in the letter addressed to the Bank Manager adequately revealed that the depositor desired to donate the entire amounts to the Relief Fund after his death. [MFA No.1250 of 2000] -4- Consequently, it would not have been possible to issue a Succession Certificate in respect of such assets to the petitioners/appellants.
6. The appellants had challenged that part of the order, adverse to them. There is no appeal filed by the respondents. In respect of the amount that is lying with the State Bank of India, therefore the directions in the judgment have attained finality. It may not, therefore, be necessary to interfere with that part of the finding, although left to ourselves, we would have had reservations about the wisdom of the order.
7. Of course, as observed by the court below, while interpreting the nominee's interest, the Supreme Court had held, in Sarbati Devi v. Usha Devi [AIR 1984 SC 346], that amounts received under a policy when the assured died intestate shall be subject to the claim of the heirs of the assured under the Law of Succession. Naming a nominee therefore was not equivalent to conferment of a status as heir or a legatee. The court below had also adverted to two other judgments of this Court in Bhaskaran v. Kalliani [1990 (2) KLT 749] and Saraswathi Amma v. Padmavathi Amma [MFA No.1250 of 2000] -5- [1992 (2) KLT 276], which were cases under the Family Welfare Benefits Scheme. The principle was that nominee was only a trustee competent to act on behalf of legal heirs and the right of legal heirs were not extinguished because of such nomination.
8. However, nomination referred to in section 45ZA, coming under Part IIIB of the Banking Regulation Act, is not at all a nomination of a genre, which had been considered by the court in the above three decisions. Such provisions were incorporated in the said Act for facilitating certain operations of the banking companies, more in their own interest than that of the customers. Sub-section (4) made it clear that payment by a banking company shall constitute a full discharge of its liability in respect of the deposit. It is necessary to note that similar provisions are brought in by the amendments, in the matter of return of articles kept in safe custody and release of contents of safety lockers. However, the provision as above was not to affect the right or claim, which any person may have, against the person to whom any payment is made, as above stipulated.
[MFA No.1250 of 2000] -6-
9. We have to agree with the ultimate view that was taken by the Subordinate Judge that a nomination as presented before the State Bank of India was not one which was envisaged by the provisions in the Banking Regulation Act and the very acceptance of the nomination was therefore misconceived. We may now go to examine the claims as urged in the appeal, in respect of the deposits in Nedungadi Bank Ltd.
10. Mr.Santheep submits that the defect as attached to the nomination pertaining to State Bank of India account is equally applicable in respect of the other deposit as well. Further, he alleges that the letters have not been appropriately proved, so as to divest the appellants of their status as heirs of the person, who died intestate. At least in such cases we are afraid such a technical stand have no place. The documents kept in regular course of business have been made available by a financial institution, and for the fancy of it, they cannot be sidelined. Evidently, larger issues are there and the objections of the appellants are self serving and do not appear to be sustainable. It is well settled that properties of a person can devolve in others after his death in [MFA No.1250 of 2000] -7- more than one manner. Some assets may be governed by law of inheritance, simultaneously when another segment of the properties can go by bequeath [see Section 30 of the Indian Succession Act]. As in the present case, gifts which satisfy preconditions can also come to operation in yet other instances.
11. We may examine the relevance of Ext.B1 letter in this context. The Chief Minister's Relief Fund was the nominee, and perhaps the idea was to treat it as coming under Section 45ZA of the Banking Regulation Act. But, in addition thereto, the letter as above completely altered the situation. This authorises the Bank Manager to transfer the amounts to the Chief Minister's Welfare Fund in the event of death of the depositor. We feel that even in the absence of a Will or codicil, this document, independently in existence, cannot at all be ignored.
12. The Hindu Succession Act refers to the general rules of succession in the case of males, who die intestate. It is to be applied to the relatives specified in Class I of the Schedule and so on. However Section 30 of Chapter III of the Act provides that any Hindu may dispose of by will or other [MFA No.1250 of 2000] -8- testamentary disposition any property, which is capable of being so disposed of by him in accordance with the provisions of the Indian Succession Act 1925, as applicable to Hindus. Of course, there is no Will available here, but Ext.B1, according to us, could be equated to a disposition, as coming under the said Act. It may not be objectionable at all, since we may directly go over to Section 191 of the Indian Succession Act. It refers to gifts in contemplation of death. A man may dispose of any movable property, by gift made in contemplation of death, which he could dispose of by Will. The section clarifies that a gift so made is valid. The contingency provided is that when a man, who is ill and expects to die shortly of his illness, if delivers to another the possession of any movable property to keep as a gift, in case the donor shall die of that illness, it remains as a valid transfer. Such gift of course may be resumed by the giver and shall not take effect if he recovers from the illness.
13. In the present case, the gift, evidenced by Ext.B1, although has not reached the donee, who is nominated, as the same was entrusted with an Institution in whom the person has confidence, it bears all the trappings of a gift [MFA No.1250 of 2000] -9- contemplated by the section. The illustrations given in the statute are sufficient to cover the position available here. If that be so, it may not be possible for us to uphold the contention of Sri.Santheep Ankarath that succession always has to be only on the basis of the Hindu Succession Act, when a person dies intestate. We can assume from the recitals in Ext.B1 that Sri.Narayanankutty was always having the intention to donate substantial amounts to the Chief Minister's Relief Fund and this was to go over to the Fund after his death. His other properties could be inherited by his legal heirs, but the deposit, about which we are concerned, cannot go over to them. The proximity of the letter to the date of his death compels us to conclude that way, and there was no revocation at any time, and the property continued to retain its character as a gift during his life time. The nominee was authorised and entitled to receive and appropriate the amounts. They are not accountable to the legal heirs. It may be preposterous to suggest that the Chief Minister's Welfare Fund was to accept the amount from the bank and was to distribute it after ascertaining the legal heirs of the deceased person. We have no doubt in our mind that a [MFA No.1250 of 2000] -10- nominee, in such cases, is totally different from the (statutory) nominees referred to in the Insurance Act, Welfare Fund legislations and the like. The person or institution nominated by the deceased person is entitled to appropriate the amount to the exclusion of any others, and any other contention we feel would be only violation of the wishes of the departed individual.
14. The appeal is therefore dismissed. We make no order as to costs.
M.RAMACHANDRAN (JUDGE) S.SIRI JAGAN (JUDGE) mks/ [MFA No.1250 of 2000] -11- (M.RAMACHANDRAN & S.SIRI JAGAN, JJ) ================================ M.F.A.No.1250 of 2000-A ================================ JUDGMENT
-C.R.-
================================ Dated: 3oth January, 2007