2016 Supreme(Cal) 830

IN THE HIGH COURT AT CALCUTTA
DIPANKAR DATTA, J.
Communist Party of India (Marxist) - Petitioner
Vs.
United Bank of India & ors. – Respondents
W.P. No. 983 of 2015
Decided On : 30-03-2016

A nomination made by a depositor/account holder is the reflection of his wish upon identification by him of the recipient of the deposit lying in an account in the event of death of such depositor/account holder and to hold the same in his (recipient’s) custody for being distributed according to the law of succession. Nomination, which is made without any coercion, undue influence or misrepresentation and is accepted by a banking company upon a satisfaction that the nomination does not suffer from any of the vitiating factors and clothes the nominee to receive the amount, ought to be acted upon after the death of the depositor/account holder, for, that would result in honouring his wish.

Headnote:

BANKING - NOMINATION - VALIDITY - POLITICAL PARTY AS NOMINEE: Whether a political party can be nominated to receive the amount of deposit in the event of the death of the depositor under section 45ZA of the Banking Regulation Act, 1949. Whether the nomination made by the customer in favour of the Secretary, Kolkata District Committee of the petitioner is valid.

Fact of the Case:

Tushar Kanti Das Purakayastha, during his lifetime, maintained a savings bank account with the Syed Amir Ali Avenue Branch of the United Bank of India (UBI). Being a member of the Communist Party of India (Marxist) [hereafter the petitioner], late Tushar Kanti Das Purakayastha [hereafter the customer] had nominated the Secretary, Kolkata District Committee of the petitioner to whom the amount lying in deposit in such account may be returned by the said branch in the event of his death. After his death on January 20, 2014, the petitioner by its letter dated February 17, 2014 requested the Manager of the said branch, the respondent no. 2, to release and disburse the available credit balance in its favour since it was the lawful nominee. The respondent no. 2 by his letter dated March 28, 2014 informed the petitioner that the nomination made by the customer is not a valid one under section 45ZA of the Banking Regulation Act, 1949 (hereafter the Act) and rule 2(1) of the Banking Companies (Nomination) Rules, 1985 (hereafter the Rules) and consequently, did not accept the petitioner’s request.

Finding of the Court:

The Court held that the nomination made by the customer in favour of the Secretary, Kolkata District Committee of the petitioner is valid and the respondents are bound to release and disburse the amount of credit balance in the savings bank account of the customer to the petitioner.

Issues: 1. Whether a political party can be nominated to receive the amount of deposit in the event of the death of the depositor under section 45ZA of the Banking Regulation Act, 1949? 2. Whether the nomination made by the customer in favour of the Secretary, Kolkata District Committee of the petitioner is valid?

Ratio Decidendi: 1. The word “person” in section 45ZA(1) of the Act, who may be nominated by a depositor for receiving the amount of deposit in the event of his death, has not been defined in the Act. It would, therefore, be useful to refer to the definition of “person” in the General Clauses Act, 1897. 2. Section 3(42) of the General Clauses Act defines “person” as “includes any company or association or body of individuals, whether incorporated or not”. 3. Perusal of the contents of Form DA-1 also reveals that it refers to the “person” nominated by the depositor who would be entitled to return of the amount of deposit by the banking company. 4. There is no legal bar in construing the word “person” in section 45ZA(1) of the Act bearing in mind its definition in the General Clauses Act and having regard to the decisions cited by Mr. Sen, there is no real difficulty in construing the word “person” to include a political party. 5. The problem, if at all, seems to have arisen because firstly, rule 2 of the Rules and the master circular do not refer to “person” but to an “individual” who can be nominated by the depositor to receive the amount of deposit in the event of his death and secondly, the master circular expressly prohibits nomination for such purpose in favour of any association, trust, society or any other organisation or any office-bearer thereof in his official capacity. 6. A rule framed under an enactment can only supplement such enactment and not supplant it; likewise, a circular cannot supplant a rule, it can only supplement. 7. Bearing in mind the contours of the Act, it seems to be wrong in principle to interpret the rule/circular in such manner that would result in the amplitude of the word “person” in section 45ZA(1) being abridged, abrogated or cut down to mean an “individual”. 8. As the stream can rise no higher than its source, a rule/circular cannot rise above the enactment that is its source. 9. The word “individual” cannot thus be construed in a narrow manner so as not to cover a body, which is covered by the meaning of the word “person”, and it must receive the same meaning as “person”. 10. That apart, Mr. Sen is right in his contention that the master circular cannot have any application in a case where Form DA-1 has been filled up prior to its birth. 11. A party cannot ordinarily be denied of a vested right that has accrued to it in terms of the laws in force at the relevant point of time. 12. The circular has no retrospective application. 13. Form DA-1 is part of the counter affidavit of the respondents whereby on December 1, 2009, the customer had made the relevant nomination for receiving the amount of deposit, and such form was duly accepted by the branch without any demur. 14. If at all any rectification/alteration were required, it was the duty of the respondent no.2 to have the same effected by informing the customer. 15. Admittedly, no such effort was made. 16. There is a presumption that official acts have been regularly performed. 17. When the nomination was made by the customer in Form DA-1 on December 1, 2009, the respondent no. 2 must be presumed to be well and truly aware of the implications of the statutory provisions or else, the nomination in the manner the same was made would not have been allowed. 18. The respondent no. 2 could not have declined to accept the request of the petitioner merely because of introduction of the master circular of 2013 in the interregnum. 19. If indeed the master circular was binding on the UBI, it was the duty of the respondent no. 2 to check up the records to find out as to whether any nomination had been made by any depositor which is inconsistent with such master circular. 20. As has been noted above, the customer was alive and if approached could have rectified/altered the nomination according to his free will. 21. The respondent no. 2 not having so done, it must be held to have waived any right of objection based either on the rules or the master circular.

Final Decision: The writ petition was allowed and the respondents were directed to release and disburse the amount of credit balance in the savings bank account of the customer to the petitioner with 10% interest.