Calcutta High Court (Appellete Side)
Hanuman Prasad Khemka & Anr vs State Bank Of India & Anr on 3 August, 2021
03.08.2021
Ct. No.13
Sl. No.6
akd
W.P.A. 11857 of 2021 [via video conference]
[Hanuman Prasad Khemka & Anr. -Vs- State Bank of India & Anr.]
Mr. Pratyush Patwari
... ... for the petitioners
Mr. Om Narayan Rai
... ... for the SBI
The writ petitioners are aggrieved by refusal of the State
Bank of India, Jatindra Mohan Avenue Branch, to allow
operation of a locker standing in the name of one late Ashwini
Khemka. The writ petitioner Nos.1 and 2 are the father and
widow, respectively of the deceased.
Admittedly, the document by which the locker was opened
did not contain any nomination. The petitioners rely upon a
nomination in favour of the petitioner no.2 in a savings bank
account of the deceased with the Branch of the bank. It is also
submitted that the locker is linked with the savings bank account.
Learned counsel for the bank does not admit the same.
The petitioners rely upon a decision of the Telengana
High Court in the case of Smt. Vasumathi P vs. The HDFC
Bank Ltd. dated 19th September, 2018 in W.P. No. 12668 of
2012. In the said decision, a widow and children of the deceased
locker holder was refused operation of the locker. The bank had
insisted on appropriate succession certificates.
The Telengana High Court after considering Section 45ZF
of the Banking Regulation Act, 1949 and Sections 214, 370 and
372 of the Indian Succession Act, 1925 held that a locker cannot
be termed either as a debt or a security of a deceased since its
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contents are not known. The Bank's contention was thus
rejected. The High Court went on to direct the bank in that case
to allow legal heirs to operate the said locker.
With due respect this Court is unable to accept the
decision of the Telengana High Court, inter alia, for the reason
that Section 45ZF of the Banking Regulation Act, 1949 in the last
sentence has mandated that "the banking company shall take
due note of such decree, order, certificate or other authority
while considering the request for operation of a locker by legal
heirs".
Section 45ZF of the 1949 Act is set out hereinbelow:
"45ZF. Notice of claims of other persons regarding safety
lockers not receivable No notice of the claim of any person,
other than hirer or hirers of a locker, shall be receivable by a
banking company nor shall the banking company be bound by
any such notice even though expressly given to it: PROVIDED
that where any decree, order, certificate or other authority from
a court of competent jurisdiction relating to the locker or its
contents is produced before the banking company, the banking
company shall take due note of such decree, order, certificate
or other authority."
The expression 'order' in the aforesaid Section has to be
understood to include Letters of Administration granted under
Section 278 of the Indian Succession Act. Hence while the
HDFC Bank in that case may have used the wrong expression
(succession certificate) in the impugned order therein, it was only
complying with the stipulations under Section 45ZF.
This court notes that the Reserve Bank of India has in a
circular dated July 01,2015 being the Master circular for
Customer Services at Regulation 4.1.7 to Regulation 4.1.8, has
directed as follows :-
"4.1.7. Access to safe deposit lockers / return of safe
custody articles (without survivor/nominee clause)
There is an imperative need to avoid inconvenience and
undue hardship to legal heir(s) of the locker hirer(s). In
case where the deceased locker hirer had not made any
nomination or where the joint hirers had not given any
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mandate that the access may be given to one or more of
the survivors by a clear survivorship clause, banks are
advised to adopt a customer-friendly procedure drawn
up in consultation with their legal advisers for giving
access to legal heir(s) / legal representative of the
deceased locker hirer. Similar procedure should be
followed for the articles under safe custody of the bank.
4.1.8. Banks are advised to be guided also by the
provisions of Sections 45ZC to 45ZF of the Banking
Regulation Act, 1949 (As Applicable to Cooperative
Societies (AACS) and the Co-operative Banks
(Nomination) Rules, 1985 and the relevant provisions of
the Indian Contract Act and Indian Succession Act."
Based on the above, the State Bank of India has framed
guidelines in terms of such Master circular of the Reserve Bank
of India. The said circular dated 31st January, 2019 is called
Master Circular Safe Deposit Lockers/Safe Custody Articles.
Clause 3.2(i) stipulates as follows :-
"3.2(i). In case of death of a sole locker hirer (where
there is no nomination) and there is a valid will, probate
may be obtained and access may be given to the
executor/administrator. In other cases, access may be
given to the legal representative of the deceased. In
such cases death certificate and proof of the legal
representation should be obtained. The legal
representation would be in the form of Probate or Letters
of Administration."
A conjoint reading of Section 45ZF of the 1949 Act, the
guidelines of the Reserve Bank of India and the circular of the
State Bank of India would lead to the following conclusions.
a) Section 45ZF of the 1949 Act does not mandate
automatic operation of a locker by the family of a
deceased locker holder in the absence of any
nomination.
b) Such right of family members to operate locker can
flow from either a decree in the nature of a probate
or letters of administration and/or any certificate from
any authority.
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c) If the contents of the locker are unknown, Letters of
Administration from a Competent Court is required to
be produced by the family member.
d) If the contents of the locker are in fact known then a
succession certificate would be required to be
produced by the claimant.
e) If the deceased has left a Will, Probate thereof would
be required to entitle legal heir to open the locker.
While the bank was required by the Reserve Bank of India
to adopt 'a customer friendly approach', Clause 3.2(i), in no
answer to terms mandates that the persons claiming to be legal
heirs and asserting a right to operate locker of an intestate
deceased are required to produce a probate or letters of
administration.
Even a nominee of a bank account/locker/deposit
account/insurance policy/shares etc. is only trustee of the
declared inheritors of the estate of a deceased.
Reference in this regard is made to the decision of Rama
Chakravarty v. Manager, Punjab National Bank reported in
1990 SCC OnLine Cal 257. Relevant paragraphs are set out
hereinbelow:
"2. It is true that the law in India is, by and large, against any
interference with the ordinary course of intestate succession, save and
except by a valid testamentary disposition strictly in accordance with
the law governing testamentary disposition. We have got to, as pointed
by the Supreme Court in Sarbati Davi v. Usha Devi (AIR 1984 SC 346
at 349) : 1984 All LJ 194, bear in mind the anxious care that our law
takes in the matter of execution and proof of testamentary instruments
which have the effect of diverting the estate of the deceased or any part
thereof from the ordinary course of intestate succession. If any post-
mortem course of disposition of property does not satisfy the strict and
rigorous requirements of the rules governing testamantary succession, it
would stand out weighed and overthrown by the general law of
intestate succession, unless a statute rules otherwise. A nominee,
therefore, notwithstanding a valid nomination in his favour by the last
holder in respect of any property, would not acquire any right, title or
interest in the property itself, to the exclusion of the heirs on intestacy,
5
unless the law governing such nomination clearly vests the same in the
nominee.
7. The relevant provision is section 452E of the Act, contained in Part
IIIB thereof, inserted by an Amendment in 1984. Sub-Section (1)
provides that a hirer of a Locker may nominate another "to whom, in
the event of the death of such individual (i.e. the hirer), the Banking
company may give access to the locker and liberty to remove the
contents of the locker". Section 452A deals with rights of a nominee in
respect of deposit of money and Section 452C deals with the rights of a
nominee in respect of deposit of articles. Sub-Section (2) of Section
45ZA clearly provides that on the death of the depositor of money "the
nominee shall become entitled to all the rights of the depositor in
relation to such deposit to the exclusion of all other person .... "In the
case of deposit of money, therefore, the nominee, on the death of the
depositor, not only acquires the right to receive the amount,
but acquires in the amount, all the rights of the depositor to the
exclusion of all other persons. The absence of any such
provision vesting all the rights of the depositor in the nominee, in
Section 45ZE is conspicuous, whereunder the nominee does
not acquire any title in the Locker or its contents. Sub-section (3) of
Section 45ZC dealing with deposit of articles also provides that on the
death of a depositor, "the nominee shall become entitled to the return of
the article to the exclusion of all other persons". The position,
therefore, appears to be that while section 45ZA purports to confer on a
nominee in respect of the deposit of money, not only the right
to receive the amount but also the right to the amount itself, Section
45ZC purports to confer on a nominee in respect of a deposit of articles
only the right to the return of the article, but no right in the article itself.
10. But in the case of a Safety Locker, all that the Bank does is to rent
out a space or a receptacle which, if not terminated earlier, comes to an
end with the death of the hirer. Bank has no knowledge of or concern
with what is stored in the Locker and the hirer, like a lessee, is under an
obligation to remove all the contents therefrom and deliver the vacant
possession of the Locker to the Bank on the termination of the hiring.
As the hiring comes to an and with the death of the hirer, Section 45ZE
provides that access may be given to the nominee to the Locker along
with the liberty to remove the contents to enable the nominee to deliver
vacant possession of the Locker.
11. Be that as it may, coming to the case at hand, I must confess my
utter inability to understand as to why and how the respondent Bank
could insist on a succession certificate being produced by the nominee
before granting her access to the Locker. The Bank, and also its legal
adviser who, in his reply to the petitioner's lawyer, so loudly insisted on
a succession certificate, ought to have noted that under S. 370 of the
Succession Act, 1925, there can be succession certificate only for debts
and securities. The expression "security" has been defined in S. 370(2)
and cannot include the right of access to a Safety Locker and the right
to receive or remove its contents. As to the expression "debt", there are
authorities for the view that the expression in S. 370 does not include
moveable property other than a specific or ascertained sum of money.
But even going by its wider connotation, the expression debt would
mean a liability of one person to another person, in cash, or in kind,
whether secured or unsecured, which is or can be ascertained. The
liability of, say, a lessor, to allow the lessee access to the demised
property on the termination of a lease in order to enable the lessee to
remove his belongings therefrom is obviously not a debt or security, by
any test within the meaning of S. 370, Succession Act.
13. A succession certificate does not decide or confer any title but
merely clothes the holder of the certificate with the authority to realise
the debts and securities belonging to the deceased and to give
valid discharge. A nomination under S. 452E also can only vest the
nominee with the authority to open the Locker hired by the nominator
and to receive and remove the contents. Sub-section (4) enjoins the
Bank to prepare an inventory of the contents of the Locker and sub-s.
(3) categorically provides that "on the removal of the contents of any
Locker by any nominee, the liability of the banking company in
relation to the contents of the Locker shall stand discharged." With
these provisions staring at the face, and the Bank not disputing the
validity or otherwise of the nomination, it had no business to ask the
nominee to produce a succession certificate and thus to indulge in
fruitless logomachy. More so, when the materials on record go to show
that the petitioner has clearly declared that her husband left no other
heir and produced certified copy of the judgment to show that the civil
suit filed against the petitioner has been dismissed. If any other person
has or can have any claim in respect of the contents of the Locker, he
would have to sort it out with the petitioner. But the Bank is not
required to behave like a busybody and develop any headache over the
matter. The Bank and its legal advisers ought to have realised that the
Bank is expected to adopt an attitude of co-operation, and not of a
combatant, to its customers or their representatives."
Further reference may be made to the decision of Indrani
Wahi v. Registrar of Coop. Societies reported in (2016) 6 SCC
440. The relevant paragraphs are set out hereinbelow:
"17. Having perused the aforesaid provisions, there can be no
doubt, that where a member of a cooperative society nominates
a person in consonance with the provisions of the Rules, on the
death of such member, the cooperative society is mandated to
transfer all the share or interest of such member in the name of
the nominee. The above interpretation of Section 79, at our
hands, also emerges from Section 80(1)(a) which postulates,
that the share or interest of a member of the society, "on his
death" shall be transferred to a person "nominated under Section
79". It is also essential to notice, that the rights of others on
account of an inheritance or succession is a subservient right.
Only if a member had not exercised the right of nomination under
Section 79, then and then alone, the existing share or interest of
the member would devolve by way of succession or inheritance.
The heading of Section 80 -- "Disposal of deceased member's
share of interest" lends further credence to the above
interpretation.
This extract is taken from Indrani Wahi v. Registrar of Coop.
Societies, (2016) 6 SCC 440 : (2016) 3 SCC (Civ) 196 : 2016
SCC OnLine SC 321 at page 453
18. In addition to the aforesaid statutory provisions, we would
like to make a reference to Rules 127 and 128 of the West
Bengal Cooperative Societies Rules, 1987. Rules 127 and 128 of
the 1987 Rules are extracted below:
"127. Nomination of transferee.--(1) A member of a
cooperative society may in accordance with the provision of
Section 79, nominate in writing any person belonging to his
family to whom the share or interest or the value of such share or
interest shall, on his death, be paid or transferred under the
provision of the Act:
Provided that if a member has no family he may nominate any
person to whom such share or interest or the value of such share
or interest shall be paid or transferred:
Provided further that such member may, from time to time,
revoke such nomination and make a fresh nomination.
(2) Every cooperative society shall keep a register of all person
(sic persons) so nominated.
(3) In case the nominee of a member dies, the member shall
report the death to the society, and make a fresh nomination if
he so desires.
Explanation.--For the purpose of this rule a family shall have the
same meaning as given in the Explanation to sub-section (2) of
Section 13 and shall include major sons and daughters.
128. Disposal of deceased member's share or interest and
procedure for calculation of value of shares.--(1) When upon
the death of a member of a cooperative society, the question of
transferring the share, or paying interest of such deceased
member arises, and the Board of such society finds that the
deceased member did not make any nomination in accordance
with the provisions of Section 79, or that the existence or
residential address of the person nominated cannot be
ascertained, or that for any other sufficient cause such transfer of
payment cannot be made without unreasonable delay, the Board
may transfer the share or pay interest of such deceased member
in favour of or to any person who presents in writing his or her
claim for the said share or interest and produces, in support of
such claims, probate, letter of administration or succession
certificate issued by a competent court having jurisdiction, and
makes a written declaration in an affidavit before a Magistrate
that he or she is the rightful claimant, being the legal heir or
representative of the deceased.
(2)(a) Where a cooperative society has to make a refund of the
value of a share, the value of the share shall be deemed to be
equal to the amount paid upon the share:
Provided that where a portion of the assets is estimated to be
bad or doubtful in the latest audited balance sheet, and is not
covered by funds created out of profits, the Board may, for the
purposes of such payment, reduce the value of the share in the
same proportions as the aggregate amount of assets which are
not bad or doubtful, less the amount of outside liabilities, bears to
the paid-up share capital.
(b) Where a transfer of share or interest is made, the value of the
share or interest shall be deemed to be the sum actually paid by
the member for the acquisition of such share or interest."
(emphasis supplied)
19. In the same manner as is postulated under Section 79 of the
1983 Act, Rule 127 of the 1987 Rules provides, that if a
nomination has been made by a member under Section 79, the
share or interest or the value of such share or interest standing
in the name of the deceased member, would be transferred to
the nominee. It is however, necessary to notice that Rule 127
postulates nomination only in favour of a person "belonging to
his family". It is not necessary for us to deal with the issue
whether the appellant Indrani Wahi, being a married daughter of
the original member Biswa Ranjan Sengupta, could be treated
as a member of the family, of the deceased member (Biswa
Ranjan Sengupta), because the learned Single Judge, as also,
the Division Bench of the High Court concluded, that the
appellant Indrani Wahi was a member of the family, of the
original member Biswa Ranjan Sengupta. This conclusion has
not been assailed by the respondents, before this Court.
20. Rule 128 of the 1987 Rules also leads to the same inference.
Inasmuch as Rule 128 aforementioned provides, that only in the
absence of a nominee, the transfer of the share or interest of the
erstwhile member, would be made on the basis of a claim
supported by an order of probate, a letter of administration or a
succession certificate (issued by a court of competent
jurisdiction).
21. Insofar as the instant aspect of the matter is concerned,
there is no doubt in our mind, that even Rules 127 and 128 of the
1987 Rules, lead to the inference, that in case of a valid
nomination, under Section 79 of the 1983 Act, the cooperative
society is liable to transfer the share or interest of a member in
the name of the nominee. We hold accordingly.
22. Having recorded the above conclusion, it is imperative for us
to deal with the conclusion recorded in para 6 (already extracted
above at p. 448f-h and p. 449a-b) of the judgment of this Court
in Usha Ranjan Bhattacharjee case [Usha Ranjan
Bhattacharjee v. Abinash Chandra Chakraborty, (1997) 10 SCC
344] . In this behalf, it is necessary to clarify that transfer of
share or interest, based on a nomination under Section 79 in
favour of the nominee, is with reference to the cooperative
society concerned, and is binding on the said society. The
cooperative society has no option whatsoever, except to transfer
the membership in the name of the nominee, in consonance with
Sections 79 and 80 of the 1983 Act (read with Rules 127 and
128 of the 1987 Rules). That, would have no relevance to the
issue of title between the inheritors or successors to the property
of the deceased.
23. Insofar as the present controversy is concerned, we
therefore hereby direct the Cooperative Society to transfer the
share or interest of the Society in favour of the appellant Indrani
Wahi. It shall however, be open to the other members of the
family (presently only the son of Biswa Ranjan Sengupta,
Dhruba Jyoti Sengupta; we are informed that his mother Parul
Sengupta has died), to pursue his case of succession or
inheritance, if he is so advised, in consonance with law."
A Division Bench of the Bombay High Court in Shakti
Yezdani and Another Vs. Jayanand Jayant Salgaonkar and
Others reported in 2016 SCC OnLine Bom 9834 following the
Indrani Wahi (supra) decision has at paragraphs 32, 33, 34, 36,
39, 40, 41, 42 and 44 has dealt with the Status of Nominees
under different laws and contracts. Reference has been made
various decisions of the Supreme Court on each subject. It is
therefore necessary to fully set out the aforesaid paragraphs.
"32. Now we come to the decision of the Apex Court in the case
of Ram Chander Talwar v. Devender Kumar Talwar . The issue
before the Apex Court was whether a nominee in the bank
account held by the deceased can claim full rights over the
money lying in the account to the exclusion of the legal heirs.
Paragraphs 4 to 6 of the said decision read thus:
"4. Sub-section (2) of Section 45-ZA, reads as follows:
"45-ZA. * * *
(2) Notwithstanding anything contained in any other law for
the time being in force or in any disposition, whether
testamentary or otherwise, in respect of such deposit,
where a nomination made in the prescribed manner
purports to confer on any person the right to receive the
amount of deposit from the banking company, the nominee
shall, on the death of the sole depositor or, as the case may
be, on the death of all the depositors, become entitled to all
the rights of the sole depositor or, as the case may be, of
the depositors, in relation to such deposit to the exclusion
of all other persons, unless the nomination is varied or
cancelled in the prescribed manner."
(emphasis added)
5. Section 45-ZA(2) merely puts the nominee in the shoes of
the depositor after his death and clothes him with the
exclusive right to receive the money lying in the account. It
gives him all the rights of the depositor so far as the
depositor's account is concerned. But it by no stretch of
imagination makes the nominee the owner of the money
lying in the account. It needs to be remembered that the
Banking Regulation Act is enacted to consolidate and amend the
law relating to banking. It is in no way concerned with the
question of succession. All the monies receivable by the
nominee by virtue of Section 45-ZA(2) would, therefore, form
part of the estate of the deceased depositor and devolve
according to the rule of succession to which the depositor
may be governed.
6. We find that the High Court has rightly rejected the appellant's
claim relying upon the decision of this Court in Vishin N.
Khanchandani v. Vidya Lachmandas Khanchandani [(2000) 6
SCC 724]. The provision under Section 6(1) of the Government
Savings Certificates Act, 1959 is materially and substantially the
same as the provision of Section 45-ZA(2) of the Banking
Regulation Act, 1949, and the decision in Vishin N.
Khanchandani [(2000) 6 SCC 724] applies with full force to the
facts of this case."
(emphasis added)
33. Sub-section (2) of Section 45-ZA of the Banking Regulation
Act, 1949 starts with a non-obstante clause which seeks to
override any other law for the time being in force or any
disposition whether testamentary or otherwise in respect of such
deposit, where a nomination has been made in the prescribed
manner. Though the word "vest" is not used in Sub-section (2) of
Section 45-ZA, it provides that a nominee on the death of the
sole depositor or as the case may be, on the death of all the
depositors becomes entitled to all rights as the sole depositor in
relation to such deposit to the exclusion of all other persons. The
Apex Court held that the Banking Regulation Act, 1949 is no way
concerned with the question of succession and, therefore, all the
monies receivable by the nominee by virtue of Sub-section (2) of
Section 45-ZA would form part of the estate of the deceased
depositor and would be governed by the law of succession by
which the depositor was governed. Though Sub-section (2) of
Section 45-ZA seeks to override any other law for the time being
in force or any disposition, whether testamentary or otherwise,
the Apex Court held that the nominee does not become the
owner of the money lying in the account.
34. Coming back to the decision in the case of Vishin N.
Khanchandani, as stated earlier, the Apex Court interpreted
Section 6 of the Government Savings Certificates Act, 1959. We
have already quoted Section 6 of the said Act. As pointed out
earlier, even Sub-section (1) of Section 6 starts with a similar
nonobstante clause. The submission of the Appellant before the
Apex Court which is noted in Paragraph 6 based on the non-
obstante clause, was that Section 6 of the Government Savings
Certificates Act, 1959 was intended to make the nominee the
absolute owner of the value of the saving certificates. In
Paragraphs 10 and 11 of the said decision, the Apex Court noted
the difference between Section 39 of the Life Insurance Act,
1938 and Section 6 of the Government Savings Certificates Act,
1959 and noted that Section 6 starts with a nonobstante clause
as distinguished from Section 39 of the Life Insurance Act.
Ultimately, in Paragraph 13, the Apex Court observed that
though the phraseology used in Section 39 of the Life Insurance
Act, 1938 is different from the phraseology used in Section 6 of
the Government Savings Certificates Act, 1959, the effect of both
the provisions is the same and that is how in Paragraph 13 in the
case of Vishin N. Khanchandani, the Apex Court held thus:-
"13. In the light of what has been noticed hereinabove, it is
apparent that though the language and phraseology of
Section 6 of the Act is different from the one used in Section
39 of the Insurance Act, yet, the effect of both the provisions
is the same. The Act only makes the provisions regarding
avoiding delay and expense in making the payment of the
amount of the National Savings Certificates, to the nominee
of the holder, which has been considered to be beneficial
both for the holder as also for the post office. Any amount
paid to the nominee after valid deductions becomes the
estate of the deceased. Such an estate devolves upon all
persons who are entitled to succession under law, custom
or testament of the deceased holder. In other words, the law
laid down by this Court in Sarbati Devi case [(1984) 1 SCC 424:
1984 SCC (Tax) 59] 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."
36. Section 109B of the Companies Act does not advance the
case of the Appellants any further. Section 109B does not
suggest that on nomination being made by a deceased
shareholder of a Company, his nominee becomes the owner of
the shares to the exclusion of all other legal heirs.
39. In the present case, we find that the provisions of Section
109A and in particular Sub-section (3) thereof are not materially
different from the provisions of Sub-section (1) of Section 6 of
the Government Savings Certificates Act, 1959. Sub-section (2)
of Section 45-ZA of the Banking Regulation Act, 1949 is also
similar to Sub-section (2) of Section 109B. The same is the case
with Bye-law 9.11 of the Depositories Act, 1996. Even assuming
that the format of the nomination requires attestation as required
by a will under the Indian Succession Act, 1925, the nomination
does not become a testamentary disposition. Therefore, the
decision of the Apex Court in the case of State of Himachal
Pradesh v. Ashwani Kumar is of no help to the Appellants.
40. Reliance is placed on Sub-Section (2) of Section 58 of the
Indian Succession Act, 1925 which reads thus:
"58. General application of Part.--(1) The provisions of this
Part shall not apply to testamentary succession to the property of
any Muhammadan nor, save as provided by Section 57, to
testamentary succession to the property of any Hindu, Buddhist,
Sikh or Jaina; nor shall they apply to any will made before the
first day of January, 1866.
(2) Save as provided in sub-section (1) or by any other law for
the time being in force, the provisions of this Part shall constitute
the law of [India] applicable to all cases of testamentary
succession."
41. Sections 109A was not on the Statute Book when the Indian
Succession Act, 1925 came into force. We do not see how the
said provision will help the Appellants.
42. The provisions relating to nominations under the various
Enactments have been consistently interpreted by the Apex
Court by holding that the nominee does not get absolute title to
the property subject matter of the nomination. The reason is by
its very nature, when a share holder or a deposit holder or an
insurance policy holder or a member of a Co-operative Society
makes a nomination during his life time, he does not transfer his
interest in favour of the nominee. It is always held that the
nomination does not override the law in relation to testamentary
or intestate succession. The provisions regarding nomination are
made with a view to ensure that the estate or the rights of the
deceased subject matter of the nomination are protected till the
legal representatives of the deceased take appropriate steps.
None of the provisions of the aforesaid Statutes providing for
nominations deal with the succession, testamentary or non-
testamentary. As observed by the Apex Court, the legislative
intention is not to provide a third kind of succession. In Sarbati
Devi, the Apex Court held in paragraph 5 which reads thus:
"......But the summary of the relevant provisions of Section 39
given above establishes clearly that the policy-holder continues
to hold interest in the policy during his lifetime and the nominee
acquires no sort of interest in the policy during the lifetime of the
policy-holder. If that is so, on the death of the policy-holder the
amount payable under the policy becomes part of his estate
which is governed by the law of succession applicable to him.
Such succession may be testamentary or intestate. There is no
warrant for the position that Section 39 of the Act operates
as a third kind of succession which is styled as a 'statutory
testament' in para 16 of the decision of the Delhi High Court
in Uma Sehgal case [AIR 1982 Del 36: ILR (1981) 2 Del 315]. If
Section 39 of the Act is contrasted with Section 38 of the Act
which provides for transfer or assignment of the rights under a
policy, the tenuous character of the right of a nominee would
become more pronounced. It is difficult to hold that Section
39 of the Act was intended to act as a third mode of
succession provided by the statute. The provision in sub-
section (6) of Section 39 which says that the amount shall
be payable to the nominee or nominees does not mean that
the amount shall belong to the nominee or nominees. We
have to bear in mind here the special care which law and
judicial precedents take in the matter of execution and proof
of wills which have the effect of diverting the estate from the
ordinary course of intestate succession and that the rigour
of the rules governing the testamentary succession is not
relaxed even where wills are registered."
(emphasis added)
44. Considering the consistent view taken by the Apex Court
while interpreting the provisions relating to nominations under
various Statutes (including the view in the recent decision in the
case of Indrani Wahi), there is no reason to make a departure
from the consistent view. The provisions of the Companies Act
including Sections 109A and 109B, in the light of the object of
the said Enactment, do not warrant any such departure. The so
called vesting under Section 109A does not create a third mode
of succession. It is not intended to create a third mode of
succession. The Companies Act has nothing to do with the law
of succession. We have gone through every decision and
material relied upon by the Appellants to which we have not
made a specific reference in this Judgment. We hold that there
was no reason to take a view which is contrary to the view taken
in the long line of the decisions of the Apex Court on
interpretation of provisions regarding nominations. Hence, the
view taken in Kokate's case is not correct. We answer the first
question in the negative and the third question in the affirmative.
The second question is answered accordingly."
In the above circumstances, this Court is of the view that
the bank cannot be blamed for taking the stand it has against the
petitioners. The petitioners shall be entitled to operate the locker
only upon production of appropriate letters of administration.
With the aforesaid observations, the writ petition is
disposed of.
There shall be no order as to costs.
All parties are to act on a server copy of this order duly
downloaded from the official website of this court.
(Rajasekhar Mantha, J.)
