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2024 Supreme(Online)(MAD) 20784
HIGH COURT OF MADRAS
Hon`ble Mr.Justice C.SARAVANAN
P.J.Lakshmi – Appellant
Versus
M/s.Indian Overseas Bank – Respondent
Nominees of deceased account holders cannot claim absolute ownership of assets, as legal heirs maintain succession rights.
Headnote:
Nomination - Writ Mandamus - Banking Regulation Act, 1949 (S. 45-ZA) - The court ruled on the nature of nomination rights in banking accounts, emphasizing that a nominee does not acquire absolute ownership of the deposit, thus affirming that legal heirs are entitled to the estate.
Fact of the Case:
The petitioners seek a Writ of Mandamus to compel a bank to release funds from a deceased relative's savings account, where the nominee claims entitlement. The petitioners argue their legal heir status and right to the funds, challenged by the nominee's assertions.
Issues: Whether the petitioner is entitled to the funds in the deceased's bank account despite the existence of a nominee?
Ratio Decidendi: A nominee on a bank account does not gain absolute rights to the funds; they act merely as a trustee for the legal heirs who retain succession rights.
Final Decision: The Writ Petition is allowed, directing the bank to transfer the funds to the petitioners.
O R D E R
This case was heard at length and the orders were reserved on
18.06.2024. After orders were reserved, on the following day i.e., 19.06.2024, the learned counsel for the fourth respondent filed counter affidavit and thus, the case was de-part heard and taken up for hearing again. Therefore, this case is heard today.
2. The petitioners have filed this Writ Petition for a Writ of Mandamus to direct the second and third respondents to pay the proceeds of Savings Account No.009801000039374 which stood in the name of the petitioner's deceased husband V.Krishnan.
3. The specific case of the petitioners is that the first petitioner's husband, V.Krishnan died on 06.04.2019 in Aruppukottai. The first petitioner's husband late V.Krishnan had maintained a Savings Account with the third respondent Bank in Account No.009801000039374. It is the specific case of the petitioners that the first petitioner's husband late V.Krishnan had nominated the fourth respondent as nominee only for Bank Savings Account No.009801000039374 with the third respondent Bank. It is submitted that Savings Account No.009801000039374 was opened with the third respondent Bank, when the petitioner's husband late V.Krishnan took employment and was bachelor.
4. The learned Senior Counsel for the petitioners would submit that after the death of the first petitioner's husband V.Krishnan on 06.04.2019, the first petitioner had sent a letter to the Revenue Authorities stating that the first petitioner's husband died under mysterious circumstances and that the petitioners were not informed that the first petitioner's husband had died on 06.04.2019.
5. The petitioners further submit that the first petitioner had obtained legal heir certificate from the jurisdictional Tahsildar, Chennai, which came to be challenged by the fourth respondent in W.P.(MD) No. 7018 of 2021, wherein, the marital status of the first petitioner with the late.V.Krishnan, the brother of the fourth respondent was challenged.
6. The said Writ Petition was argued at length and was thereafter disposed of on 22.03.2024, wherein, following the decision of the Hon'ble Full Bench of this Court in P.Venkatachalam and others Vs. The Tahsildar , 2022(4) CTC 1, this Court had rejected the prayer of the fourth respondent to quash the legal heir certificate issued to the petitioners on 22.10.2019.
7. The learned Senior Counsel for the petitioners would further submit that the issue is no longer res integra and would draw attention to the decision of the Hon'ble Supreme Court in Ram Chander Talwar Vs. Devender Kumar Talwar , (2010) 10 SCC 671 which was followed by this Court in its order dated 24.07.2020 in W.P.No.31608 of 2015.
8. The learned Senior Counsel for the petitioners would also draw attention to the another decision of this Court dated 08.09.2016 rendered in P.Panchali Vs. The Chief Engineer and others, in W.P.(MD) No.
10748 of 2016.
9. Finally, the learned Senior Counsel would submit that the law has now been further clarified by the Hon'ble Supreme Court in Shakti Yezdani and another Vs. Jayanand Jayant Salgaonkar and others, 2024 (1) CTC 60, wherein, the Hon'ble Supreme Court had stated as under:-
“26.A consistent view appears to have been taken by the courts, while interpreting the related provisions of nomination under different statutes. It is clear from the referred judgments that the nomination so made would not lead to the nominee attaining absolute title over the subject property for which such nomination was made. In other words, the usual mode of succession is not to be impacted by such nomination. The legal heirs therefore have not been excluded by virtue of nomination.
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40.In Sarbati Devi (supra) this Court held that nomination under S. 39 of the Life Insurance Act, 1938 does not contemplate a third line of succession styled as a ‘statutory testament’ and Page 38 of 43 any amount paid to a nominee on the policy holder’s death forms a part of the estate of the deceased policy holder and dev
