The legal effect of a nomination in a provident fund is that the right vests in the nominee until another nomination is made, as per Section 5 of Act 19 of 1925.

Horwill, J.

1. The appellant and the respondent are step-brothers, being the sons of one K. Adinarayana Patnaik, who had been subscribing to a provident fund according to the rules of the Bengal Nagpur Railway Co., and who, at the time of his death, had a sum of Rs. 7200 odd standing to his credit. He had nominated his first wife under the rules as the person to whom the sum standing to his credit in the provident fund should be paid on his death. She died as early as August 1929; but he made no change in the nomination. Upon his death in 1941, he left a second wife, whom he married after the death of his first wife, and two sons, one by the first wife and the other by the second wife. The latter is the appellant and the former the respondent. The learned advocate for the appellant contends that as the nominee had predeceased her husband, the sum due to Adinarayana Patnaik was a sum belonging to him and undisposed of by will, and therefore belonged equally to his two sons. The respondent, on the other hand, contends that the sum vested in his mother, the nominee, and that therefore he was entitled to the same exclusively. That view was upheld by the Subordinate Judge of Chicacole, and it is against that decision that the appellant has appealed. The learned Subordinate Judge came to the conclusion he did on the wording of Section 5 of Act 19 of 1925 which states, " Subject to the provisions of this Act ... any nomination, duly made in accordance with the rules of the fund, which purports to confer upon any person the right to receive the whole or any part of such sum on the death of the subscriber or depositor, shall be deemed to confer such right absolutely, until such nomination is varied by another nomination made in like manner or is expressly cancelled by the subscriber or depositor by notice given in such manner and to such authority as is prescribed by those rules."

2. If a nomination is to be deemed to confer a right absolutely to receive money standing in the provident fund until another nomination is made, it means that the right vests in the nominee. This was pointed out by Beasley C.J. and Stodart J. in Mon Singh v. Mothibai A.I.R. 1936 Mad. 477. The learned advocate for the appellant seeks, however, to distinguish that case, because it relates to a nominee who was not a dependant; and he contends that Section 5(1) applies only to nominees who are not dependants. Section 5 does not purport to have that limited application; but it is argued that unless Section 5 is given this restricted application, it is not in consonance with Sections 3 and 4. We do not however find that Section 5 cannot be reconciled with Section 3 or Section 4 without restricting the application of Section 5. Section 3 purports to protect compulsory deposits against claims by creditors or assignees, and Section 4 contains provisions regarding the payments out by the officer whose duty it is to make such payments. Neither Section 3 nor Section 4 purports to lay down the legal effect of a nomination that is the purpose of Section 5. The most that can be said for the appellant is that if there had been no Section 5, a view different from that come to by the lower Court would be possible upon a reading of Sections 3 and 4. That does not mean that Sections 3 and 4 cannot be reconciled with Section 5 unless this section is restricted in its application. The learned Counsel for the appellant relies on the decision of Beasley J. in Cuffley v. M. S. M. Ry. Co. Ltd. 1928 M.W.N. 402, who adopted a line of reasoning not unlike that put forward here on behalf of the appellant. Beasley J.s decision was however largely influenced by the Provident Fund Rules framed by the Railway Company, which have since been considerably altered, as was pointed out by a Bench of this Court in Lakshmamma v. Subramanyam A.I.R. 1939 Mad. 489. This last-mentioned decision distinctly laid down the rule that if a person has been nominated, the sum lying to the credit of the de