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2009(6) Supreme 199
SUPREME COURT OF INDIA
Dalveer Bhandari and Dr. Mukundakam Sharma, JJ.
Shipra Sengupta — Appellant
versus
Mridul Sengupta & Others — Respondents
Civil Appeal No. 809 of 2002
Decided on : 20-08-2009
Facts of the Case :
Issue in consideration in present case was whether nomination of mother by a member of a Provident fund governed by the Imperial Bank of India Employees’ Provident Fund Rules before his marriage confers ownership on the nominee and destroys right of succession of the widow under Succession Act?
Findings of the Court :
It is well settled that mere nomination made in favour of a particular person does not have the effect of conferring on the nominee any beneficial interest in property after the death of the person concerned. The nomination indicates the hand which is authorized to receive the amount or manage the property. The property or the amount, as the case may be, can be claimed by the heirs of the deceased, in accordance with the law of succession, governing them-Deceased died leaving behind his mother and widow as his only heirs and legal representatives entitled to succeed. Therefore, on the day when the right of succession opened, the appellant, his widow became entitled to one half of the amount of the general provident fund, the other half going to the mother and on her death, the other surviving son getting the same. State Bank of India was directed to release half of the amount of general provident fund to the appellant. Appeal was allowed.
Result : Appeal allowed.
Certainly. Based on the provided legal document, the key points are as follows:
A nomination made in favor of a particular person does not automatically confer beneficial ownership or interest in the property or amount upon the nominee after the death of the individual. The nomination primarily indicates the person authorized to receive or manage the property or funds (!) (!) .
The nomination serves as an authorization for the nominee to receive the amount or manage the property, but the actual beneficial interest and right to claim the property or funds are governed by the applicable law of succession. The heirs of the deceased are entitled to claim the property according to the law governing succession (!) (!) (!) .
In cases where a person dies intestate, the property or funds, such as provident fund, insurance, gratuity, or similar benefits, are to be distributed among the legal heirs based on the law of succession applicable to them. Nomination alone does not override the law of succession (!) (!) (!) .
The legal position is well settled that mere nomination does not create beneficial ownership; it only designates the person who is authorized to receive the amount or property on behalf of the estate. The beneficial interest remains with the legal heirs or successors as per law (!) (!) (!) .
The court's role is to determine the rightful heirs and ensure that the distribution of property or funds is in accordance with the law of succession, regardless of the nomination made earlier (!) (!) .
The validity and effect of a will, especially if not properly executed or signed, are separate legal considerations. The acceptance or reliance on a forged or unsigned will is not appropriate without proper evidence and procedural safeguards (!) (!) (!) (!) .
The interpretation of statutory provisions related to provident funds and succession laws should align with established legal principles, emphasizing that nomination is a procedural step and does not alter the substantive rights of heirs (!) (!) (!) .
In the specific case discussed, the legal heirs (widow and mother) are entitled to their respective shares of the provident fund, and the amount should be distributed accordingly, with the bank or relevant authority directed to release the funds to the rightful heirs (!) (!) (!) .
If you need further clarification or specific legal advice based on these points, please let me know.
JUDGMENT
Dalveer Bhandari, J.—
1. This appeal is directed against the judgment dated 12.9.2000 passed by the High Court of Madhya Pradesh at Jabalpur in Miscellaneous Civil Case No. 1209 of 1998.
2. The appellant is the wife of Late Shri Shyamal Sengupta who was a Head Clerk in the State Bank of India, Bhopal, Madhya Pradesh. He was initially an employee of the Imperial Bank of India and after constitution of the State Bank of India under the State Bank of India Act, 1955, the business of the Imperial Bank of India was taken over by the State Bank of India as per the provisions of the State Bank of India Act, 1955. Shyamal Sengupta died issueless 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. It may be pertinent to mention that Shyamal Sengupta was unmarried at the time when he joined the service of the bank and he nominated his mother as his nominee.
4. The appellant herein Smt. Shipra Sengupta filed an application under section 372 of the Indian Succession Act, 1956, in which she claimed that she was entitled to her share of insurance, gratuity, public provident fund etc. etc. According to the appellant, her claim was based on the principle that any nomination made by Shyamal Sengupta prior to his marriage would automatically stand cancelled after his marriage.
5. The appellant submitted that after the death of her husband both, she and mother of the deceased Niharbala Sengupta, were Class-I heirs under the schedule of the Hindu Succession Act, 1956 and consequently she was, therefore, equally entitled to succeed to the property along with her mother-in-law Niharbala Sengupta.
6. The Trial Court granted succession certificate to the appellant and the mother of the deceased in respect of total amount of life insurance, gratuity, public provident fund and general provident fund due to Shyamal Sengupta. The Trial Court held that both of them shall be entitled to half share in the aforesaid amounts due to Shyamal Sengupta from different heads. As to rest of the items mentioned in paragraph 6 of the application, the Trial Court held that the appellant alone was entitled to a succession certificate.
7. In an appeal jointly filed by the mother of the deceased Niharbala Sengupta and brother of the deceased Pushpal Sengupta, the Appellate Court rejected the contention of the applicants that on account of nomination made in favour of Niharbala Sengupta, in respect of the aforesaid items, the appellant Smt. Shipra Sengupta would not get any share in the amount credited or payable to Shyamal Sengupta. The learned District Judge held that the nomination did not confer any beneficial interest in the amount due towards life insurance, gratuity, public provident fund and general provident fund.
8. The learned District Judge relied on the decision of this Court in Smt. Sarbati Devi & Another v. Smt. Usha Devi1 (1984) 1 SCC 424 and on Om Wati v. Delhi Transport Corporation, New Delhi & Others2 1988 Lab. I.C. 500 and modified the order of the Civil Judge in respect of other items holding that the mother of the deceased Niharbala Sengupta being the Class-I heir under the Hindu Succession Act, 1956 was equally entitled to the half share along with the appellant Smt. Shipra Sengupta. Accordingly, the learned District Judge modified the order passed by the Civil Judge and directed him to issue succession certificate in accordance with the modifications made by him in the order of the Civil Judge.
9. Niharbala Sengupta and Pushpal Sengupta, aggrieved by the order of the District Judge, filed a Civil Revision before the High Court. During the pendency of the said civil revision, Niharbala Sengupta died and her other son Mirdul Sengupta was substituted in her place on the basis of an alleged Will executed by her prior to her death in favour of Mirdul Sengupta. The Will expressly dealt with the amount to which she was entitled to receive
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