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High Court Of Madhya Pradesh
S. C. Pandey
MIRDUL SENGUPTA - Appellant
Versus
SHIPRA SENGUPTA - Respondents
Civil Revision 1641 Of 1994
Decided On : 10/30/1998
SUCCESSION CERTIFICATE - NOMINATION - PROVIDENT FUND - INSURANCE - GRATUITY - HINDU SUCCESSION ACT, 1956 - PAYMENT OF GRATUITY ACT, 1972 - PUBLIC PROVIDENT FUND ACT, 1968 - PROVIDENT FUNDS ACT, 1925 - INTERPRETATION - BENEFICIAL INTEREST - VESTING.
Fact of the Case:
Shyamal Sengupta, an employee of State Bank of India, died leaving behind his widow, mother, brothers, and nominees for various funds and benefits. The widow filed an application under Section 372 of the Indian Succession Act, 1956, claiming a share in the insurance, gratuity, public provident fund, and general provident fund. The nominees, Shyamal Sengupta's mother and brother, contested the claim, asserting their entitlement based on prior nominations.
Finding of the Court:
The court held that: 1. Nominations in respect of life insurance policies did not confer any beneficial interest on the nominees, and the insurance amount remained the estate of the deceased, subject to distribution among class-I heirs under the Hindu Succession Act, 1956. 2. The nomination in favor of Shyamal Sengupta's mother for gratuity under the Payment of Gratuity Act, 1972, did not confer absolute ownership, and the amount was liable to be distributed among class-I heirs as per the Hindu Succession Act, 1956. 3. The nomination in favor of Shyamal Sengupta's mother for public provident fund under the Public Provident Fund Act, 1968, did not confer absolute ownership, and the amount was liable to be distributed among class-I heirs as per the Hindu Succession Act, 1956. 4. The nomination in favor of Shyamal Sengupta's mother for general provident fund under the Provident Funds Act, 1925, conferred an absolute right and beneficial interest in the fund, and she was entitled to the entire amount.
Issues: 1. Whether nominations in respect of life insurance policies confer beneficial interest on the nominees? 2. Whether the nomination in favor of Shyamal Sengupta's mother for gratuity under the Payment of Gratuity Act, 1972, conferred absolute ownership? 3. Whether the nomination in favor of Shyamal Sengupta's mother for public provident fund under the Public Provident Fund Act, 1968, conferred absolute ownership? 4. Whether the nomination in favor of Shyamal Sengupta's mother for general provident fund under the Provident Funds Act, 1925, conferred an absolute right and beneficial interest in the fund?
Ratio Decidendi: 1. The court relied on the Supreme Court decision in Smt. Sarbati Devi and Anr. v. Smt. Usha Devi, which held that nominations in respect of life insurance policies did not confer any beneficial interest on the nominees. 2. The court interpreted Section 4(c) of the Payment of Gratuity Act, 1972, and held that the nomination in favor of Shyamal Sengupta's mother did not confer absolute ownership, and the amount was liable to be distributed among class-I heirs as per the Hindu Succession Act, 1956. 3. The court interpreted Section 8 of the Public Provident Fund Act, 1968, and held that the nomination in favor of Shyamal Sengupta's mother did not confer absolute ownership, and the amount was liable to be distributed among class-I heirs as per the Hindu Succession Act, 1956. 4. The court interpreted Section 3(2) of the Provident Funds Act, 1925, and held that the nomination in favor of Shyamal Sengupta's mother conferred an absolute right and beneficial interest in the fund, and she was entitled to the entire amount.
Final Decision: The court partly allowed the revision petition and modified the order passed by the District Judge. It directed the Civil Judge to issue a succession certificate declaring that: 1. Mirdul Sengupta, the son of Niharbala Sengupta, was entitled to the entire general provident fund deposited in the name of Shyamal Sengupta, along with interest. 2. Mirdul Sengupta and Shipra Sengupta, the widow of Shyamal Sengupta, were entitled to a 1/2 share each in the remaining items mentioned in paragraph 6(a) of the application under Section 372. 3. The non-applicant or any other authority was directed to pay interest on the amounts mentioned in paragraph 2 at the usual rate of 9% from the date of Shyamal Sengupta's death or the usual rate available to the depositor/subscriber, whichever was less.
( 1 ) THIS revision is directed against the order dated 5. 9. 1994, passed by District Judge, Bhopal, in Misc. Civil appeal No. 11/94, arising out of order dated 13. 6. 1994 in Misc. Judicial Case No. 79/71 passed by IIIrd Civil Judge, Class-1, Bhopal.
( 2 ) SHORTLY stated the undisputed facts of this case are as follows. Shri Shyamal Sengupta was a Head Clerk in State Bank of India, bhopal. He was initially an employee of Imperial bank of India. After the constitution of State bank of India under the State Bank of India act, 1955, the business of Imperial Bank of india was taken over by the State Bank of India as per provisions of the State Bank of India act, 1955. Shyamal Sengupta died issue-less on 8. 11. 1990 at Bhopal, He left behind him his widow Smt. Shipra Sengupta, his mother Niharbala Sengupta, his brothers pushpal Sengupta and Mirdul Sengupta.
( 3 ) THE non-applicant No. 1, the widow of Shyamal Sengupta filed an application under section 372 of the Indian Succession Act (henceforth 'the Act' ). She stated that she was entitled to Rs. 8,930. 20 (Rupees Eight Thousand nine Hundred Thirty and Paise Twenty)out of the amount of life insurance payable to legal heirs of Shyamal Sengupta. It was further claimed by her that Shyamal Sengupta was entitled to receive Rs. 90,499. 25 (Rupees ninety thousand four hundred ninety-nine and paise twenty five) by way of gratuity. Out of that amount, her share of 1/2 came to the extent of Rs. 45,224. 87 (Rupees forty-five thousand two hundred twenty-four and paise eighty seven ). She estimated her share to the tune of rs. 50,000/- (Rupees fifty thousand) approximately in respect of Public Provident Fund credited in the name of Shyamal Sengupta without mentioning exactly the amount of Public provident Fund deposited in the name of shyamal Sengupta. She cfaimed again that she was entitled to Rs. 1,14,882. 47 (Rupees one lakh fourteen thousand eight hundred eighty-two and paise forty-seven) out of total General provident Fund deposited in thej name of shyamal Sengupta. The total amount of General provident Fund comes to Rs. 2,29,764. 25 (Rupees two lakhs twenty-nine thousand seven hundred sixty-four and paise twenty-five ). The non-applicant No. 1 - Shipra Sengupta also made claim in respect of other items mentioned in paragraph 6 of her application. However, it is not necessary to deal with them as there are only four items involved in this revision.
( 4 ) THE claim of non-applicant No. l was based upon the proposition that any nomination, made by Shyamal Sengupta prior to his marriage with her, automatically stood cancelled by the fact of her marriage. After death of her husband, she, alongwith mother of the deceased niharbala Sengupta, was Class-1 heir under the schedule of the Hindu Succession act, 1956. She was, therefore, equally entitled to succeed to the property with Niharbala sengupta. Therefore, she claimed that the Trial court be pleased to award a succession certificate in respect of the aforesaid amount, alongwith the other items, mentioned and detailed in paragraph 6 of the application. She further made a claim in the application that the Court be pleased to declare other nominations as invalid or in the alternative it be declared that the nominees are not to lay their claim on the basis of nominations existing in favour of Niharbala Sengupta or Pushpal sengupta, who was the brother of the deceased shyamal Sengupta.
( 5 ) THE applicant No. 2-Pushpal Sengupta and Niharbala Sengupta contested the claim of the non-applicant No. 1 that the prior nomination in favour of Niharbala Sengupta in respect of amount of Insurance, Gratuity and general Provident Fund absolutely vested in niharbala Sengvipta. So far as Public Provident fund was concerned, it was Pushpal sengupta who was entitled to that amount. The case of Niharbala Sengupta and applicant no. 2 appears to have been based on previous nominations.
( 6 ) THE non-applicant No. 2, the State bank of India took t
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