Karnataka High Court
Smt. Laxmibai W/O Yamanappa Chalawadi ... vs Shrikant Hanamappa Chalavadi on 11 July, 2023
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MFA No. 101529 of 2021
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 11TH DAY OF JULY, 2023
BEFORE
THE HON'BLE MRS. JUSTICE M.G.UMA
MISCELLANEOUS FIRST APPEAL NO.101529/2021 (ISA)
BETWEEN:
1. SMT. LAXMIBAI,
W/O. YAMANAPPA CHALAWADI ALIAS HUNSHYAL,
AGE: 50 YEARS, OCC: ANGANAWADI WORKER,
R/O: HONSHYAL, TQ: B-BAGEWADI,
DIST: VIJAYAPUR, NOW AT BEVOOR,
TQ AND DIST: BAGALKOT - 587 101.
2. PRAVINKUMAR,
S/O. YAMANAPPA CHALAWADI ALIAS HUNSHYAL,
AGE: 25 YEARS, OCC: PRIVATE SERVICE,
R/O: HONSHYAL, TQ: B-BAGEWADI,
DIST: VIJAYAPUR, NOW AT BEVOOR,
TQ AND DIST: BAGALKOT - 587 101.
3. PRADEEP,
Digitally S/O. YAMANAPPA CHALAWADI ALIAS HUNSHYAL,
signed by
VINAYAKA AGE: 23 YEARS, OCC: STUDENT,
BV R/O: HONSHYAL, TQ: B-BAGEWADI,
DIST: VIJAYAPUR, NOW AT BEVOOR,
TQ AND DIST: BAGALKOT - 587 101.
...APPELLANTS
(BY SRI M.G. KULKARNI, ADVOCATE FOR
SRI J. S. SHETTY, ADVOCATE)
AND:
1. SHRIKANT HANAMAPPA CHALAVADI,
AGE: 45 YEARS, OCC: AGRICULTURE,
R/O: HONISHYAL P.K., TQ: B-BAGEWADI,
DIST: VIJAYAPUR 586 203.
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MFA No. 101529 of 2021
2. THE BRANCH MANAGER,
BANK OF BARODA (VIJAYA BANK),
BAGALKOT - 587 101.
3. THE BRANCH MANAGER,
CANARA BANK (SYNDICATE BANK),
VANDAL, TQ: B-BAGEWADI,
DIST: VIJAYAPUR - 586 203.
...RESPONDENTS
(NOTICE TO R1 IS HELD SUFFICIET;
NOTICE TO R2 AND R3 ARE SERVED)
MFA IS FILED UNDER SECTION 384 OF THE INDIAN
SUCCESSIONS ACT, PRAYING THAT THE ORDER DATE
15.04.2021 PASSED BY THE FIRST ADDITIONAL SENIOR CIVIL
JUDGE AND JMFC, BAGALKOT, IN P AND SC NO.2/2021 MAY
KINDLY BE SET ASIDE AND THE PETITION FILED BY THE
APPELLANTS HEREIN UNDER SECTION 372 OF THE INDIAN
SUCCESSION ACT FOR GRANTING OF SUCCESSION
CERTIFICATE, IN THEIR FAVOUR, MAY KINDLY BE ALLOWED BY
ALLOWING THIS APPEAL WITH COST THROUGHOUT IN THE
ENDS OF JUSTICE AND EQUITY.
THIS APPEAL, COMING ON FOR FURTHER HEARING, THIS
DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
The petitioners in P & SC No.2/2021 on the file of the learned I Additional Senior Civil Judge and JMFC, Bagalkot (henceforth referred to as 'the trial Court'' for brevity), are impugning the judgment dated 15.04.2021, dismissing the petition filed under Section 372 of Indian Succession Act.
2. Parties shall be referred to as per their ranking before the trial Court.
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3. Brief facts of the case are that, the petitioners have filed P & SC No.2/2021 before the trial Court against respondent Nos.1 to 3, claiming grant of Succession Certificate in their favour, to receive the amount in Savings Bank Account and Fixed Deposits standing in the name of deceased Yamanappa, S/o. Hanamantappa Chalawadi @ Hunshyal, with respondent Nos.2 and 3. It is contended that petitioner No.1 is the wife and petitioner Nos.2 and 3 are the children of late Yamanappa Chalawadi, who was working as an Assistant Teacher. He retired from his service on 31.05.2017. The pensionary benefits were settled in his favour. He died on 23.12.2020. He had Savings Bank Account bearing No.73610100000922 and was also having two Fixed Deposits bearing FD No.3/239 for Rs.2,50,000/- and FD No.3/240 for Rs.2,50,000/- with respondent No.2 and another SB account bearing No.08412200068497 and two fixed deposits account bearing No.08414050040450 for Rs.2,00,000/- and FD No.08414050040464 for Rs.3,00,000/- with respondent No.3. Respondent No.1 being brother of late Yamanappa Chalawadi was the nominee to the fixed deposits. Since the petitioners are wife and children of the deceased Yamanappa Chalawadi, being -4- NC: 2023:KHC-D:7010 MFA No. 101529 of 2021 the legal heirs of the deceased are entitled to receive the amount in SB account and fixed deposits. Therefore, they sought for issuance of Succession Certificate in their favour.
4. Respondent Nos.1 to 3 remained absent and not contested the matter, in spite of service of notice.
5. Petitioner No.1 examined herself as PW-1 and got marked Exs.P1 to 13 in support of her contention. The trial Court after taking into consideration all these materials on record, came to the conclusion that since respondent No.1 is named as nominee to receive the fixed deposits, he is entitled to receive the same and that the petitioners are not having any right over the same. Accordingly, the petition filed by the petitioners for issuance of Succession Certificate was came to be dismissed.
6. Being aggrieved by the same, petitioners are before this Court.
7. Heard Sri M.G.Kulkarni on behalf of Sri J.S.Shetty, learned counsel for the appellants.
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8. Respondent Nos.1 to 3 remained absent in spite of service of notice, while notice.
9. Learned counsel for the appellants contended that deceased Yamanappa Chalawadi is the husband of petitioner No.1 and father of petitioner Nos.2 and 3. Their relationship with the deceased is not disputed. He retired from service on attaining superannuation, on 31.05.2017 and he had Savings Bank accounts and also Fixed Deposit accounts with respondent Nos.2 and 3. Respondent No.1 is the brother of the deceased Yamanappa Chalawadi and his name was mentioned as nominee to receive the amount kept in fixed deposits. The petitioners being the legal representatives of late Yamanappa Chalawadi are claiming to be entitled to receive the same.
10. It is further submitted that nominating respondent No.1 as nominee is only as trustee to enable him to receive the amount in deposit, but he cannot claim the deposits as of right when the deceased is having legal representatives. In support of his contention, learned counsel has placed reliance on the -6- NC: 2023:KHC-D:7010 MFA No. 101529 of 2021 decision in Smt. Sarbati Devi & Another Vs. Smt. Usha Devi1. Accordingly, he prays for allowing the appeal.
11. Perused the materials on record including the trial Court records.
12. The point that would arise for my consideration is as under;
"Whether the impugned judgment and decree passed by the trial Court calls for any interference by this Court?"
13. My answer to the above point is in the 'affirmative' for the following;
REASONS
14. The claimants said to be wife and children of late Yamanappa Chalawadi, have filed the petition seeking issuance of Succession Certificate, under Section 372 of Indian Succession Act. It is their contention that Yamanappa Chalawadi was working as Assistant Teacher and he retired from 1 (1984) I SCC 424 -7- NC: 2023:KHC-D:7010 MFA No. 101529 of 2021 his service on 31.05.2017. He died on 23.12.2020. At the time of his death, he was having bank accounts with respondent Nos.2 and 3 and was also having fixed deposits as mentioned above. Being the legal representatives of deceased Yamanappa Chalawadi, the petitioners are claiming Succession Certificate to receive the amount from respondent Nos.2 and 3.
15. In spite of issuance of notice to respondent No.1, he remained absent, who is the nominee for the fixed deposits with respondent Nos.2 and 3. The claim of the petitioners to get the Succession Certificate was rejected by the trial Court only on the ground that respondent No.1 is the nominee. Therefore, he is entitled to receive the fixed deposits held with respondent Nos.2 and 3 and that the petitioners are not having any title over the same.
16. Section 45-ZA of the Bank Regulation Act, 1949 reads as under;
"45ZA. Nomination for payment of depositors' money.--
(1) Where a deposit is held by a banking company to the credit of one or more persons, the depositor or, as the case may be, all the depositors together, may nominate, in the prescribed manner, one person to whom in the event of the death of the sole depositor or -8- NC: 2023:KHC-D:7010 MFA No. 101529 of 2021 the death of all the depositors, the amount of deposit may be returned by the banking company. (2) Notwithstanding anything contained in any other law for the time being in force or in any disposition, whether testamentary or otherwise, in respect of such deposit, where a nomination made in the prescribed manner purports to confer on any person the right to receive the amount of deposit from the banking company, the nominee shall, on the death of the sole depositor or, as the case may be, on the death of all the depositors, become entitled to all the rights of the sole depositor or, as the case may be, of the depositors, in relation to such deposit to the exclusion of all other persons, unless the nomination is varied or cancelled in the prescribed manner.
(3) Where the nominee is a minor, it shall be lawful for the depositor making the nomination to appoint in the prescribed manner any person to receive the amount of deposit in the event of his death during the minority of the nominee.
(4) Payment by a banking company in accordance with the provisions of this section shall constitute a full discharge to the banking company of its liability in respect of the deposit:
Provided that nothing contained in this sub-section shall affect the right or claim which any person may have against the person to whom any payment is made under this section."
(emphasis supplied)
17. Thus, bare reading of this Section discloses that nomination for payment of money belonging to the depositor in case of his death will enable the nominee to receive the same and give full discharge to the bank concerned. The proviso appended to Section makes it clear that nomination shall not -9- NC: 2023:KHC-D:7010 MFA No. 101529 of 2021 effect the right or claim which any person may have against the person to whom any payment is made under the Section.
18. The Hon'ble Apex Court in Ram Chander Talwar and Another Vs. Devender Kumar Talwar and Others2, considering the legal position of nomination for the deposits held in para No.5 as under;
"5. 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."
(emphasis supplied)
19. The Hon'ble Apex Court in Sarbati Devi (supra) considering Section 39 of Life Insurance Act, 1938 and the decisions of various High Courts, held in para No.12 as under;
"12. Moreover there is one other strong circumstance in this case which dissuades us from taking a view contrary to the decisions of all other High Courts and accepting the 2 (2010) 10 SCC 671
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NC: 2023:KHC-D:7010 MFA No. 101529 of 2021 view expressed by the Delhi High Court in the two recent judgments delivered in the year 1978 and in the year 1982. The Act has been in force from the year 1938 and all along almost all the High Courts in India have taken the view that a mere nomination effected under section 39 does not deprive the heirs of their rights in the amount payable under a life insurance policy. Yet Parliament has not chosen to make any amendment to the Act. In such a situation unless there are strong and compelling reasons to hold that all these decisions are wholly erroneous, the Court should be slow to take a different view. The reasons given by the Delhi High Court are unconvincing. We, therefore, hold that the judgments of the Delhi High Court in Fauja Singh's case (supra) and in Mrs. Uma Sehgal's case (supra) do not lay down the law correctly. They are, therefore, overruled. We approve the views expressed by the other High Courts on the meaning of section 39 of the Act and hold that a mere nomination made under section 39 of the Act does not have the effect of conferring on the nominee any beneficial interest in the amount payable under the life insurance policy on the death of the assured. The nomination only indicates the hand which is authorised to receive the amount, on the 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 governing them."
(Emphasis supplied)
20. Thus the proposition of law is very well settled that nominee being the trustee will be entitled to receive the amount in deposit and give full discharge to the Bank concerned, but he cannot have the preferential right to claim the amount exclusively, to the exclusion of the legal representatives of the deceased as their right to succeed to the estate of the deceased
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NC: 2023:KHC-D:7010 MFA No. 101529 of 2021 in accordance with the rule of Succession with which they are governed is unaffected.
21. In the present case, there is no dispute that the petitioners are the wife and children of deceased Yamanappa Chalawadi. Even though respondent No.1 is the nominee named for the deposits held with respondent Nos.2 and 3, he has not chosen to dispute the claim of the petitioners. Under such circumstances, the petitioners are entitled for Succession Certificate for the purpose of receiving the amount in Savings Bank and Fixed Deposit account held with respondent Nos.2 and 3 to the exclusion of respondent No.1. If in case the prayer of the petitioners is rejected their that will drive them to go after respondent No.1- the nominee to get the monies which they are entitled under law and thus it will lead to multiplicity of proceedings.
22. I have gone through the impugned judgment and decree passed by the trial Court. It has committed an error in holding that respondent No.1 being the nominee is entitled to receive the same and the petitioners being the legal heirs of late Yamanappa Chalawadi are not having any right over the same.
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NC: 2023:KHC-D:7010 MFA No. 101529 of 2021 Therefore, I am of the opinion that the impugned judgment and decree is liable to be set aside.
23. Accordingly, I answer the above point in the 'affirmative' and proceed to pass the following;
ORDER
1) The appeal is allowed with costs.
2) The impugned judgment and decree dated 15.04.2021 passed in P & SC No.2/2021 by the Principal Senior Civil Judge, Bagalkot, is set aside.
3) The petition filed by the petitioners in P & SC No.2/2021 is allowed.
4) It is held that the petitioners are entitle for issuance of Succession Certificate.
5) Office is directed to issue Succession Certificate in favour of the appellants in accordance with law. Send back the trial Court records along with a copy of judgment.
SD/-
JUDGE PN List No.: 1 Sl No.: 35