Supreme Court of India
Shipra Sengupta vs Mridul Sengupta & Ors on 20 August,
2009
Author: D Bhandari
Bench: Dalveer Bhandari, Mukundakam Sharma
REPORTABLE
IN THE SUPREME COURT
OF INDIA
CIVIL APPELLATE
JURISDICTION
CIVIL APPEAL NO.809
OF 2002
Shipra
Sengupta ..
Appellant
Versus
Mridul
Sengupta & Others
.. Respondents
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 Devi (1984) 1 SCC 424 and on Om Wati v. Delhi Transport
Corporation, New Delhi & Others 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 as a consequence of grant of a succession
certificate.
10. Pushpal Sengupta did not
challenge the Will by which he was affected. Therefore, the position that
emerged was that the court must presume for the purpose of this revision that
the Will is validly executed in favour of Mirdul Sengupta.
11. In the impugned judgment, the
High Court relied on the judgment of Sarbati Devi (supra) and observed that the
nomination did not confer any beneficial interest on the nominee. The High
Court passed the following order:
"(i) The amount of General
Provident Fund deposited in the name of Shyamal Sengupta declaring that Mirdul
Sengupta shall be entitled to entire sum due to Shyamal Sengupta together with
interest to which he is entitled as per rules of deposit by the Bank till he is
paid in full.
(ii) So far as rest of the items
mentioned in paragraph 6(a) of the application under section 372 are concerned
it is declared that after the death of Niharbala Sengupta, Mirdul Sengupta is entitled to succession certificate along
with Shipra Sengupta. Both of them shall be entitled to 1/2 share each as
directed by the District Judge.
(iii) The Civil Judge shall also
direct non-applicant No. 2 or any other authority to pay the interest on the
amount mentioned in paragraph 2 till that is paid to them at the usual rate of
9% from the date of death of Shyamal Sengupta or the usual rate available to
the depositor/subscriber whichever is less."
12. The appellant, aggrieved by
the impugned judgment of the High Court, preferred this appeal. The following
questions have been raised by the appellant in this appeal:
"I. 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?
II. Whether nomination only
indicates the hand which is authorized to receive the amount on the payment of
which trustees of the provident fund get a valid discharge?
III. Whether the provident fund
can be claimed by the heirs of the member of the provident fund in accordance
with the law of succession governing them?
IV. Whether it was proper for the
High Court to rely upon a forged and fabricated Will which was not even signed
by Niharbala?
V. Whether it was proper for the High Court to
accept the alleged Will on record in its revisional Jurisdiction, in absence of
any application to that effect?
VI. Whether the High Court was
entitled to take Will on record without giving fresh opportunity to lead
evidence on it?
VII. Whether the High Court was
right in interpreting and relying upon section 3(2) of Provident Fund Act,
1925?"
13. The appellant submitted that
according to the settled legal position crystallized by the judgment of Sarbati
Devi (supra), the principle of law is that the nomination is only the hand
which accepts the amount and a nomination does not confer any beneficial
interest in the nominee.
14. In Sarbati Devi (supra), this
Court has laid down that a mere nomination does not have the effect of
conferring to the nominee any beneficial interest in the amount payable under
the life insurance policy, on death of the insurer. The nomination only
indicates the hand which is authorized to receive the amount on payment of
which the insurer gets a valid discharge of its liability under the policy. The
amount, however, can be claimed by the heirs of the assured in accordance with
the law of succession.
15. The appellant also placed
reliance on the judgment of this Court in Vishin N. Khanchandani &
Another v. Vidya Lachmandas Khanchandani & Another (2000) 6 SCC 724,
wherein this Court held that the law laid down in Sarbati Devi (supra) holds
the field and is equally applicable to the nominee becoming entitled to the
payment of the amount on account of National Savings Certificates received by
him under Section 6 read with Section 7 of the Act who in turn is liable to
return the amount to those in whose favour the law creates a beneficial
interest, subject to the provisions of sub- section (2) of Section 8 of the Act.
16. Learned counsel for the
appellant also placed reliance on a Division Bench judgment of the Delhi High
Court in Ashok Chand Aggarwala
v. Delhi Administration & Others (1998) VII AD (Delhi) 639. This case
related to the Delhi Co- operative Societies Act. The High Court while
following Sarbati Devi case (supra) held that 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.
17. The controversy involved in
the instant case is no longer res integra. The nominee is entitled to receive the same, but the
amount so received is to be distributed according to the law of succession.
18. In terms of the factual
foundation laid in this case, the deceased died on 8.11.1990 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.
19. In view of the clear legal
position, it is made abundantly clear that the amount in any head can be received by the nominee,
but the amount can be claimed by the heirs of the deceased in accordance with
law of succession governing them. In other words, nomination does not confer
any beneficial interest on the nominee. In the instant case amounts so
received are to be distributed according to the Hindu Succession Act, 1956. The
State Bank of India is directed to release half of the amount of general
provident fund to the appellant now within two months from today along with
interest.
20. The appeal filed by the
appellant is accordingly allowed and disposed of, leaving the parties to bear
their own costs.
............................................J.
(Dalveer Bhandari) ...........................................J(Dr.
Mukundakam Sharma)
New Delhi; August 20, 2009.
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