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2010 Supreme(Bom) 521
IN THE HIGH COURT OF JUDICATURE AT BOMBAY (PANAJI BENCH)
N. A. BRITTO, J.
Mr. Antonio Joao Fernandes
Vs.
The Assistant Provident Fund Commissioner, Goa & Ors.
First Appeal No.291 of2007
Decided on : 6th April, 2010
Shri. S.G. Gessai, Senior Advocate with Mr. V. Parsekar, Advocate for the Appellant.
Shri. J. Vaz, Central Government Standing Counsel for Respondent No.1.
Shri. Sudesh Usgaonkar, Advocate for Respondent No. 2.
Shri. V.A. Lawande, Advocate for Respondent No.3.
Headnote:Employees Provident Funds and Miscellaneous Provisions Act, 1952 - Sections 2(1), 5(1-A), (1-B) and 10 - Portuguese Civil Code, 1867, Article 1969 - Provident Fund Scheme - Nominee’s right - Defendant-3, sister of deceased received full amount of provident fund - Amount towards arrears at pay paid by employer to plaintiff-petitioner, a co-nominee with defendant-3 - Challenged - Contention, defendant-3 receiving amount as for heirs, has to account for it to petitioner plaintiff - Trial Court wrongly rejected claim of plaintiff of 1/2 of provident fund paid to defendant-3 - Held - Defendant-3, sister entitled to succeed estate of deceased as he left no other heirs as per Article 1969 of Code - Petitioner being cousin only excluded by sister - In view of P.F. Scheme framed under Section 5(1-A), nomination to be in name of only one member of family of deceased - Nominee entitled to receive amount - Defendant-3 alone entitled to succeed estate of deceased - Payment of entire amount due in provident fund account to defendant-3 justified - Cousin-petitioner not being a heir not entitled to any amount. - With respect, it is not possible for Court to agree with the view expressed by the Division Bench of Calcutta High Court nor the submissions made by the Senior Counsel. The controversy has now been set at rest by other decisions as well, particularly, that of the Court in the case of Nozer Gustad Commissariat v. Central Bank of India and others, 1993 (2) Bom CR 8 (T. & I.J.) : 1993 Mh LJ 228 relied upon by the Advocate Shri Usgaonkar. Shri Vaz, Counsel appearing on behalf of defendant No. 1 has also placed reliance on the case of G.L. Bhatia v. Union of India and another, 1999 DGLS (soft) 500 : 1999 (5) SCC 237 which dealt with a nomination in relation to family pension under CCS (Pension) Rules, 1972. It has been held by the Apex Court that a nomination by the deceased contrary to the Statute was inoperative and cannot be defeated by making a nomination to the contrary. That was a case where the husband and wife were residing separately and the expression "family" was inter alia, defined to mean the wife in the case of a male Government servant, or husband in the case of a female Government servant. In the case of Vishin N. Khanchandani and another v. Vidya Lachmandas Khanchandani and another, 2000 (4) Bom CR 626 (SC) : 2000 DGLS (soft) 1265 : 2000 (6) SCC 724 the Apex Court held with reference to the Government Savings Certificate Act, 1959 that the nominee was entitled to receive the sum due on the savings certificates, yet he retains the same for the persons entitled to it under the relevant law of succession. The contention that the non obstante clause in Section 6 entitles the nominee to utilise the sum so received by him, in the manner he liked, was rejected.
As already seen, Section 5(I-A) of the Act of 1952 provides that the Fund shall vest in, and be administered by, the Central Board constituted under Section 5-A. Likewise, Section 10(2) on which strong reliance was placed on behalf of the plaintiff, speaks of amount vesting in the nominee. The word "vests" has different connotations. In the case of Nozer Gustad Commissariat v. Central Bank of India and others, (supra), the Court refereed to the The Fruit and Vegetable Merchants’ Union v. The Delhi Improvement Trust 1956 DGLS (soft) 87 : AIR 1957 SC 344 to find out the meaning of the word "vests". The Apex Court stated in the aforesaid decision that;
"The expression "vests" has a variety of meanings and that in all cases it did not mean that the property was owned by the person or the authority in whom it vested. It may vest in title, or it may vest in possession, or it may vest in a limited sense, as indicated in the context in which it may have been use in a particular piece of legislation. It was held in terms in that case that in the context the word "vest" may mean mere possession of property for a particular purpose."
The Court further held that the word "vests" is a word of variable import as shown by provisions of various Indian statues and further held that the use of the word "vest" in Section 10(2) of the Act of 1952 does not clothe a nominee with absolute title or beneficial title in respect of provident fund amount lying to the credit of the deceased. The Court further held that the nominee is merely authorized to receive the amount for the benefit of heirs of the deceased. In other words, vesting of the amounts in the nominee is for limited purpose of receiving the amount from employer and handing over the same to the heirs entitled thereto. The Court also referred to the case of Smt. Sarbati Devi v. Smt. Usha Devi (supra) which was in relation to the interpretation of Section 39 of Insurance Act, 1938 and reiterated that the Apex Court held that the nomination only indicated the hand which was authorised to receive the amount, on the payment of which the insurer gets a discharge of its liability under the policy and noted that it was held by the Apex Court that the amount can be claimed by the heirs of the assured in accordance with law of succession governing them. The Court also took note of two dissenting judicial opinions expressed in Shaikh Dawood v. Mahmooda Begum, AIR 1985 AP 321 and Smt. Usha Majumdar v. Smt. Smriti Basu (supra) and ultimately came to the conclusion that the principle laid down by the Hon’ble Supreme Court in the case of Smt. Sarbati Devi v. Smt. Usha Devi (supra) are applicable to the cases under the Provident Funds Act also and that it was not correct view to hold that the principles laid down in this case are liable to be restricted to cases under Section 39 of the Insurance Act only. The Court also noted that the nomination in that case was invalid as no nomination could be made under the Provident Funds Scheme in favour of a person who is not a member of the family as defined in para 2(g) of Employees’ Provident Fund Scheme, 1952 and further held that brother was not a member of the family within the meaning of the word family as defined in the Scheme and came to the conclusion that the nominee has no title whatsoever in respect of the provident fund amount lying to the credit of deceased merely by virtue of his nomination and the provident fund amount belongs to the petitioner minor and forms part of estate of the deceased. Accordingly the said amount including all other amounts forming part of the estate of the deceased must be made available to the petitioner on issue of succession certificate.
In Court’s view, the effort made by counsel is an effort to distinguish something which is indistinguishable. In Court’s opinion, the principle laid down in Nozer Gustad Commissariat v. Central Bank of India and others (supra) as well as Om Wati v. Delhi Transport Corpn. New Delhi and others (supra) are required to be followed and they are in consonance with the law laid down by the Apex Court in Smt. Sarbati Devi v. Smt. Usha Devi (supra).
The entire amount due in the Provident Fund Account of the deceased has been paid to defendant No. 3. It is she alone who was entitled to succeed to the estate of the deceased. Plaintiff being her cousin is not entitled to any share. Even if he had received 50% of the amount due, he was liable to pay the same to defendant No. 3 as the successor of the deceased Joazinho Dias.
Employees Provident Funds and Miscellaneous Provisions Act, 1952 - Section 2(9) - Claim of 50% amount lying in fund - Nomination made by deceased in favour of plaintiff i.e. cousin and defendant No. 3 i.e. sister - Whole amount given to defendant No. 3 - Challenged - Held - No nomination can be made in favour of person under scheme of 1952, who is not member of family - It is defendant No. 3 i.e. sister of deceased alone who was entitled to succeed to the estate of deceased - Plaintiff being her cousin is not entitled to any share. [Employees Provident Funds Scheme, 1952, Para 61].
Employees Provident Funds and Miscellaneous Provisions Act, 1952 - Section 5(1-A) - Vesting of amount - Meaning thereof - Held - Vesting of amounts in nominee is for limited purpose of receiving the amount from employer and handing over the same to the heirs entitled thereto.
Employee’s Provident Funds Scheme, 1952 - Para 61 - Nomination - Held - If at the time of nomination the member has no family the nomination may be in favour of any person - But if the member subsequently acquires a family, such nomination shall forthwith be deemed to be invalid - Any nomination made by such member in favour of person not belonging to his family shall be invalid.
The appellant herein is plaintiff in Civil Suit No.60/2005. This appeal has been filed by him against judgment/decree dated 7/08/2007, by which the suit filed by him has been dismissed by the learned District Judge, Panaji.
2. Some facts are required to be stated to dispose of the present appeal. The parties hereto shall be referred to in the names as they appear in the cause title of the said Civil Suit.
3. The plaintiff is a cousin of one Joazinho Dias, whose sister is defendant no.3 Smt. Libania Dias. The said Joazinho Dias was employed with defendant no.2, Goa Shipyard Ltd., as a welder. He voluntarily retired from service on 31/ 1 0/200 1. The said Joazinho Dias had filed his nomination and declaration form as required under the Employees' Provident Fund Act, 1952 and the Scheme framed thereunder. In the first nomination dated 29/ 05/1998, the plaintiff nominated his sister, the defendant no.3. In the second nomination, dated 23/0212001, he nominated the plaintiff and defendant no.3 as persons entitled to receive the amount due, upon his death. By virtue of the said nomination, the plaintiff and defendant no.3 were required to receive the amounts due in the said provident fund on 50:50 basis.
4. The said Joazinho Dias expired on 9/1212001. After his death, the plaintiff and defendant no.3 submitted a joint letter on or about 15/01/2002, claiming that the payment be made to them on 50:50 basis. However, the fact remains that a sum of Rs.2,80,909/from the provident fund of Joazinho Dias was exclusively paid on 19/06/2002 to defendant no.3, being the sister of the deceased Joazinho Dias.
5. A sum of Rs.72,179.50 was paid to the plaintiff by the employer, the said Goa Shipyard Ltd., on account of revised salary due to the deceased Joazinho Dias.
6. The Plaintiff therefore filed the said suit claiming that he was entitled to receive 50% of the said dues in the provident fund account of the said Joazinho Dias and so also half of the pension amount, which was already paid to defendant no.3. It was contended on behalf of defendant no.3, Smt. Libania Dias that the nominee had a limited right to receive the amount as a trustee on behalf of the heirs and that her right was not ousted by nominating the plaintiff to receive half of the amount due in the provident fund account. The defendant no.3 had also raised a counter claim for the recovery of the said amount of Rs.72,179.50 received by the plaintiff but that counter claim has been dismissed as time barred and defendant no.3 has not filed any appeal against the same.
7. The only point which remains to be considered by this Court is whether the plaintiff would be entitled for 50% amount paid to defendant no.3, by virtue of the nomination filed by the deceased Joazinho Dias on 2312/ 200 1 and that question in fact has been answered in the negative by the learned District Judge. It appears that the entire dues in the provident fund account was paid to defendant no.3 by defendant no. 1 based on the earlier nomination made by the said Joazinho Dias on 29/05/1998.
8. There is no dispute that in terms of the general law of succession and particularly Article 1969 of the Civil Code, 1867 defendant no.3 would be entitled to succeed to the estate of the deceased Joazinho Dias as he had neither descendants or ascendants, she being the sister of the deceased and the plaintiff being excluded therefrom, being only a cousin.
9. The Provident Funds Act, 1925 had Section 5 which dealt with the rights of nominees and sub-section (1) thereto provided that;
"Subject to the provisions of this Act, but otherwise (1) Notwithstanding anything contained in any law for the time being or in any disposition, whether testamentary or otherwise, by subscriber to or deposition in, a Government or Railway Provident Fund of the sum standing to his credit in the Fund, or of any part thereof, where any nomination, duly made in accordance with the rules of the Fund, purports to confer upon any person the right to,
