JUDGMENT

Dated this the 08th day of July, 2022 Petitioner's uncle Shekhara Pillai had two fixed deposits of Rs.5 lakhs each with the respondent Bank. The petitioner is named as his nominee in both deposits. Shekhara Pillai expired on 05.02.2022. Shekhara Pillai died issuless and his wife had predeceased him. Hence, there are no Class-I heirs in his line of succession. The petitioner was looking after Shekhara Pillai during his old age and her needs and requirements were being met by him. After Shekhara Pillai's death, she approached the respondent Bank for getting release of the fixed deposits. Thereupon, the bank issued Ext.P6 letter informing the petitioner that she should settle her disputes with one Rajamma and Radhakrishan, who have also raised claims for the fixed deposits. The petitioner was also asked to produce appropriate order from the competent civil court or submit legal heirship certificate. Aggrieved, this writ petition is filed.

2. Adv.Kaveri S.Thampi, learned Counsel appearing for the petitioner, contended that, since the petitioner is indisputably the nominee of the account holder, the Bank is liable to release the amounts in fixed deposit without insisting on settlement of disputes with other claimants or for production of documents to substantiate her claim. Reference is made to Ext.P7 notification issued by the Reserve Bank of India, to contend that, banks cannot object to the disbursal of amounts in fixed deposits to the nominee of the account holder. Reliance is placed on Sections 45ZA and 45ZB of the Banking Regulation Act, 1949, to bolster the contention.

3. Adv.K.Madhusoodanan, learned Standing Counsel for the Bank, submitted that late Shekhara Pillai had two accounts at the Poonithura Branch of the Federal Bank. Initially, Radhakrishnan Nair was shown as nominee of one account and Rajamma, of the other. The interest generated on the fixed deposits was being credited to the savings bank account of Shekhara Pillai. Later, the account holder substituted petitioner as nominee for the fixed deposit and savings bank accounts. The deposit holder died on 05.02.2022. After the account holder's death, Radhkrishan Nair submitted Ext.R1(d) letter stating that the petitioner had obtained nomination in her name by misrepresentation and fraud, and there is every chance of the petitioner making unauthorised gain by getting the fixed deposit amounts released in her name. Smt.Rajamma, who was the original nominee in one of the fixed deposits, also submitted a letter stating that the petitioner had induced Shekhara Pillai to change the nomination in her name, at a time when he was suffering from loss of memory.

Circumstances being such, the bank issued Ext.P6, asking the petitioner to settle her disputes with Radhakrishnan Nair and Rajamma and produce succession certificate from court or legal heirship certificate from the revenue authorities. The fixed deposits will mature only on 20.02.2023 and the intention of the account holder being to deposit the amount for 20 months, nomination in the petitioner's name will become effective only on expiry of the said period.

4. In reply, learned Counsel reiterated the contention based on Sections 45ZA and 45ZB and submitted that, the objectors are not Class I heirs and even otherwise, the objections cannot stand in the way of the amount being disbursed to the nominee. The contention that the amounts in fixed deposit can be disbursed only after maturity period has no substance as the account holder is no more and it is now for the nominee to decide whether to continue the fixed deposit till maturity or to withdraw on an early date.

5. The fact that petitioner is the nominee for the fixed deposits and savings bank account of the deceased account holder is not in dispute. Section 45ZA of the Banking Regulation Act, providing for payment of the depositors' money to the nominee, reads as under;

“Section 45ZA - Nomination for payment of depositors' money;

(1) Where a deposit is held by a b