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2024 DIGILAW 233 (CHH)

Kumari Ishwari Sahu, D/o. Santram Sahu v. Amrika Sahu, W/o. Vijay Kumar Sahu, D/o. Shri Govardhan Prasad Sahu

2024-03-13

DEEPAK KUMAR TIWARI

body2024
ORDER : 1. Heard. 2. This Civil Revision has been preferred against the order dated 13.12.2023 passed in Miscellaneous Civil Appeal No.14/2023 by the Additional District Judge (FTC), Korba, District Korba (C.G) whereby, the succession certificate issued in favour of legal heirs of respondent No.2 passed in Succession Case No.03/2018 order dated 06.07.2023 by the First Civil Judge Class-I, Korba, District Korba was affirmed. 3. Brief facts of the case are that non-applicants/respondent No.1 and 2 had preferred an application for grant of succession certificate alleging that their father namely Late Govardhan Sahu was posted as Laboratory Attendant in a school run by the respondent No.4 and he died on 13.09.1989 at Korba. Respondent No.1 is the daughter from the first wife of Late Govardhan Sahu and respondents No.2 and 3 are the children from his second wife. Late Smt. Kunti Bai is the third wife of Late Govardhan Sahu and she had no children. After the death of Late Govardhan Sahu, Kunti Bai has got compassionate appointment on the post of Peon in the department of respondent No.4. Thereafter, she left respondents No.2 and 3 and respondent No.1 took care of them. Applicant has alleged that in the service book of Late Kunti Bai, the names of the applicant and her sister were mentioned as nominees, as their father Santaram is the brother of Late Kunti Bai and she had adopted Laxmeen Sahu and Ishwari Sahu, therefore, the applicant and her sister Laxmeen Sahu are entitled for the amount deposited before the employer in the accounts of Employees’ Provident Fund to the tune of Rs.4,00,000/- and of the amount of gratuity of Rs.2,50,546/- in aggregate Rs.6,50,546/-. Learned trial Court after appreciating the evidence found that as per Section 15 of the Hindu Succession Act, 1956, the claim of respondent No.2 is maintainable and the applicant has no right. So in such summary enquiry, succession certificate in favour of the legal heirs of respondent No.2 was issued and the said finding was affirmed by the Appellate Court. Hence, this Revision. 4. Learned counsel for the applicant would submit that Late Smt. Kunti Bai had made nomination in favour of the applicant in the service record and therefore, she is the only person entitled for the succession certificate and the trial Court as well as Appellate Court has not appreciated the evidence in proper perspective. Hence, this Revision. 4. Learned counsel for the applicant would submit that Late Smt. Kunti Bai had made nomination in favour of the applicant in the service record and therefore, she is the only person entitled for the succession certificate and the trial Court as well as Appellate Court has not appreciated the evidence in proper perspective. Non-applicant No.2/Respondent No.2 has not proved that he is the son of Late Govardhan Sahu and further, the appointment of Kunti Bai is on regular basis and not on compassionate basis and the property earned by her is a self-acquired property. Even though, a succession certificate has been issued in favour of the applicant vide order dated 26.10.2017 passed in Succession Case No.09/2017 by the First Civil Judge Class-I, Korba, therefore, issuance of another succession certificate in favour of another person is bad in the eye of law. Hence, prays to allow the revision and set aside the impugned order of the Appellate Court and the trial Court. 5. Heard learned counsel for the applicant and perused the documents annexed with the revision carefully. 6. It is well settled that the procedure under the Indian Succession Act is a summary in nature and any adjudication under Part X does not bar the same question being raised between the same parties in a subsequent suit or proceeding. Even Section 387 permits the filing of a suit or other proceeding even though a succession certificate might have been granted. In the matter of Joginder Pal Vs. Indian Red Cross Society and Others (2000) 8 SCC 143 the nature of the summary enquiry of the succession case and its effect in the subsequent suit has been analysed and the relevant para 15 and 16 read thus:- “15. Part X of the India Succession Act deals with Succession Certificates. Sections 373, 383(e) and 387 are relevant. They read as follows: "373. Part X of the India Succession Act deals with Succession Certificates. Sections 373, 383(e) and 387 are relevant. They read as follows: "373. Procedure on application.- (1) If the District Judge is satisfied that there is ground for entertaining the application, he shall fix a day for the hearing thereof and cause notice of the application and of the day fixed for the hearing- (a) to be served on any person to whom, in the opinion of the Judge, special notice of the application should be given, and (b) to be posted on some conspicuous part of the court-house and published in such other manner, if any, as the Judge, subject to any rules made by the High Court in this behalf, thinks fit, and upon the day fixed, or as soon thereafter as may be practicable, shall proceed to decide in a summary manner the right to the certificate. (2) When the Judge decides the right thereto to belong to the applicant, the Judge shall make an order for the grant of the certificate to him. (3) If the Judge cannot decide the right to the certificate without determining questions of law or fact which seem to be too intricate and difficult for determination in a summary proceeding, he may nevertheless grant a certificate to the applicant if he appears to be the person having prima facie the best title thereto. (4) When there are more applicants than one for a certificate, and it appears to the Judge that more than one of such applicants are interested in the estate of the deceased, the Judge may, in deciding to whom the certificate is to be granted, have regard to the extent of interest and the fitness in other respects of the applicants. 383. Revocation of certificate.- A certificate granted under this Part may be revoked for any of the following causes, namely:- (a)-(d) (e) that a decree or order made by a competent Court in a suit or other proceeding with respect to effects comprising debts or securities specified in the certificate renders it proper that the certificate should be revoked. 387. 383. Revocation of certificate.- A certificate granted under this Part may be revoked for any of the following causes, namely:- (a)-(d) (e) that a decree or order made by a competent Court in a suit or other proceeding with respect to effects comprising debts or securities specified in the certificate renders it proper that the certificate should be revoked. 387. Effect of decisions under this Act, and liability of holder of certificate thereunder.- No decision under this Part upon any question of right between any parties shall be held to bar the trial of the same question in any suit or in any other proceeding between the same parties, and nothing in this Part shall be construed to affect the liability of any person who may receive the whole or any part of any debt or security, or any interest or dividend on any security, to account therefor to the person lawfully entitled thereto." (emphasis supplied) These Sections make it clear that the proceedings for grant of succession certificate are summary in nature and that no rights are finally decided in such proceedings. Section 387 puts the matter beyond any doubt. It categorically provides that no decision under Part X upon any question of right between the parties shall be held to bar the trial of the same question in any suit or any other proceeding between the same parties. Thus Section 387 permits the filing of a suit or other proceeding even though a succession certificate might have been granted. 16. This question was also considered by this Court in the case of Madhvi Amma Bhawani Amma v. Kunjikutty Pillai Meenakshi Pillai (2000) 6 SCC 301 . In this case after having considered the provisions of Section 370 to 390 of the Indian Succession Act as well as Section 11 of the Code of Civil Procedure, it has been held that any adjudication under Part X does not bar the same question being raised between the same parties in a subsequent suit or proceeding. It has been held that Section 387 of the Indian Succession Act takes a decision given under Para X of the Indian Succession Act outside the purview of Explanation VIII to Section 11 of the Code of Civil Procedure. It has been held that Section 387 of the Indian Succession Act takes a decision given under Para X of the Indian Succession Act outside the purview of Explanation VIII to Section 11 of the Code of Civil Procedure. It has been held that Section 387 gives a protective umbrella to ward off from the rays of res judicata to the same issue being raised in a subsequent suit or proceeding. We are in full agreement with the view expressed in this case.” 7. The right of the nominee is also well settled. He is only a trustee subject to the claims of the heirs of the deceased under the law of succession and the said aspect has been clarified in the matter of Smt. Sarbati Devi and Another Vs. Smt. Usha Devi (1984) 1 SCC 424 and the relevant para 5 read thus:- “We shall now proceed to analyse the provisions of Section 39 of the Act. The said section provides that a holder of a policy of life insurance on his own life may when effecting the policy or at any time before the policy matures for payment nominate the person or persons to whom the money secured by the policy shall be paid in the event of his death. If the nominee is a minor, the policy holder may appoint any person to receive the money in the event of his death during the minority of the nominee. That means that if the policy holder is alive when the policy matures for payment he alone will receive payment of the money due under the policy and not the nominee. Any such nomination may at any time before the policy matures for payment be cancelled or changed, but before such cancellation or change is notified to the insurer if he makes the payment bona fide to the nominee already registered with him, the insurer gets a valid discharge. Such power of cancellation of or effecting a change in the nomination implies that the nominee has no right to the amount during the lifetime of the assured. If the policy is transferred or assigned under Section 38 of the Act, the nomination automatically lapses. Such power of cancellation of or effecting a change in the nomination implies that the nominee has no right to the amount during the lifetime of the assured. If the policy is transferred or assigned under Section 38 of the Act, the nomination automatically lapses. If the nominee or where there are nominees more than one all the nominees die before the policy matures for payment the money due under the policy is payable to the heirs or legal representatives or the holder of a succession certificate. It is not necessary to refer to sub-section (7) of Section 39 of the Act here. 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 paragraph 16 of the decision of the Delhi High Court in Uma Sehgal case. 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 tenous 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.” 8. Recently in the matter of Shakti Yezdani and Another Vs. Recently in the matter of Shakti Yezdani and Another Vs. Jayanand Jayant Salgaonkar and Others (2024) 242 Comp Cas 497 the Hon’ble Supreme Court has analysed the nomination under various legislation and categorically reiterated the law that the nomination so made would not lead to the nominee attaining absolute title over the subject property for which such nomination was made and the usual mode of succession is not to be impacted by such nomination and the relevant para 21, 23 to 26 and 43 read thus:- “21. The object behind the introduction of a nomination facility as can be appreciated was to provide an impetus to the corporate sector in light of the slow investment during those times. In order to overcome such conditions, boosting investors’ confidence was deemed necessary along with ensuring that company law remained in consonance with contemporary economic policies of liberalisation. In fact, the provision of nomination facility was made in order to ease the erstwhile cumbersome process of obtaining multiple letters of succession from various authorities and also to promote a better climate for corporate investments within the country. In contrast, one must note that ownership of the securities is not granted to the nominee nor there is any distinct legislative move to revamp the extant position of law, with respect to the same. 23. Reading the provision of nomination within the Companies Act, 1956 with the broadest possible contours, it is not possible to say that the same deals with the matter of succession in any manner. There is no material to show that the intent of the legislature behind introducing a method of nomination through the Companies (Amendment) Act, 1999 was to confer absolute title of ownership of property/shares, on the said nominee. 24. In fact, while interpreting other enactments that are similar in nature by virtue of the fact that the provision of nomination within the statute begins with a non-obstante clause and/or is armed with the term ‘‘vest’’ such as the (Banking Regulation Act, 1949, the Government Savings Certificate Act, 1959 and/or the Employees Provident Fund Act, 1952), multiple courts have rejected the argument that the nominee would become the absolute owner to the exclusion of the legal heirs. To hold otherwise would, in our opinion, exceed the scope and extent of Section 109A of the Companies Act, 1956. 25. To hold otherwise would, in our opinion, exceed the scope and extent of Section 109A of the Companies Act, 1956. 25. In an illuminating list of precedents, this Court as well as several High Courts have dealt with the concept of ‘‘nomination’’ under legislations like the Government Savings Certificate Act 1959, the Banking Regulation Act, 1949, the Life Insurance Act, 1939 and the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. It would be apposite to refer to what the Court said on nomination, in reference to these legislations: Case Law/Precedent Held Sarbati Devi v. Usha Devi [ (1984) 1 SCC 424 ] Nomination under Section 39 of the Insurance Act, 1938 is subject to the claim of heirs of the assured under the law of succession. Nozer Gustad Commissariat v. Central Bank of India [(1993) 1 Mah LJ 228] Nomination under Section 10(2) of the EPF & Misc. Provisions Act, 1952 cannot be made in favour of a non-family person. Relied upon Sarbati Devi (supra) to state that the principles therein were applicable to the Employees’ Provident Funds Act as well and not merely restricted to the Insurance Act. Vishin N. Khanchandani v. Vidya Lachmandas Khanchandani [ (2000) 6 SCC 724 ] Nominee entitled to receive the sum due on the savings certificate under Sl. No. 6(1) of the Government Savings Certificate Act, 1959, but cannot utilise it. In fact, the nominee may retain the same for those entitled to it under the relevant law of succession. Ram Chander Talwar v. Devender Kumar Talwar [ (2010) 10 SCC 671 ] Nomination made under provisions of Section 45ZA of the Banking Regulation Act, 1949 entitled the nominee to receive the deposit amount on the death of the depositor. 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. 43. 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. 43. Consistent interpretation is given by courts on the question of nomination, i.e., upon the holder’s death, the nominee would not get an absolute title to the subject matter of nomination, and those would apply to the Companies Act, 1956 (pari materia provisions in Companies Act, 2013) and the Depositories Act, 1996 as well.” 9. In view of the aforesaid, it is explicit that the amount lying under the payment of Gratuity Act and the Employees Provident Fund shall be governed by the law of succession applicable to the deceased. In the instant case, the Succession Court had rightly found that being heirs of the husband and as per Section 15 of the Hindu Succession Act, in a summary enquiry, they are entitled for the succession certificate. As the claim of the nominee i.e. applicant and her sister that they were adopted by the deceased is a disputed fact for which in the summary enquiry the said Court has not found any clinching evidence and merely because they are nominee, they are not entitled for any preferential right which have been clearly established in the said enquiry. 10. Further, the object of the summary enquiry is very limited and the holder of the succession certificate is bound to follow the rights between the parties which were held in a subsequent suit between the same parties and no res judicata applies. 11. In view of the aforesaid discussions this Court does not find any merit and the Civil Revision is liable to be dismissed at the motion stage itself.