Supreme Court of India
SHIPRA SENGUPTAversusMRIDUL SENGUPTA & OTHERS
- Citation
- 2009 INSC 1058
- Decided
- 20 August 2009
- Bench
- DALVEER BHANDARI
Holding
A nomination under the Provident Fund Act does not confer any beneficial interest on the nominee; the amount payable may be received by the nominee but must be distributed among the deceased's heirs according to the applicable law of succession.
Summary
Shyamal Sengupta, a bank employee, died intestate leaving his widow Shipra Sengupta, his mother Niharbala Sengupta and his brothers as survivors. He had earlier nominated his mother as the nominee for his provident fund accounts. The widow claimed a share of the provident fund, arguing that the nomination was void after his marriage, while the mother and brothers asserted that the nomination gave the mother a beneficial interest. The trial court and the district court held that a nomination does not create a beneficial interest and that the widow and mother, as Class‑I heirs under the Hindu Succession Act, were each entitled to half of the fund, with the mother’s share passing to her surviving son upon her death. The High Court, relying on a purported will of the mother, awarded the entire general provident fund to the son and half‑share to the widow for the remaining items. The Supreme Court reversed this, reaffirming that nomination is merely a mechanism for payment and does not affect succession rights, directing the bank to release half of the general provident fund to the widow with interest, and allowing the appeal.
Issues considered
- Whether a nomination of a mother by a provident fund member before marriage confers ownership and defeats the widow's right of succession under the Succession Act.
- Whether a nomination merely indicates the authorized hand to receive the amount and does not create a beneficial interest.
- Whether the heirs of a provident fund member can claim the amount in accordance with the law of succession governing them.
- Whether the High Court was justified in relying on a forged or unauthenticated will in its revisional jurisdiction.
- Whether the High Court should have allowed fresh evidence on the alleged will.
- Whether the High Court correctly interpreted and applied Section 3(2) of the Provident Fund Act, 1925.
Legislation cited
Subjects
nominationprovident fundsuccessionHindu Succession Actbeneficial interestwillsuccession certificate
Judgment
[2009] 13 (ADDL.) S.C.R. 407
SHIPRA SENGUPTA A
v.
MRIDUL SENGUPTA & OTHERS
(Civil Appeal No. 809 of 2002)
AUGUST 20, 2009
B
[DALVEER BHANDARI AND DR. MUKUNDAKAM
SHARMA, JJ.]
......
Provident Fund Act, 1925 - s.3(2) - Interpretation of -
Provident fund - Nominee's interest in the amount after the c
death of the person concerned - Held: Nomination does not
confer any beneficial interest on the nominee - Amount in
any head can be received by nominee, but amount can be
claimed by heirs of deceased under the law of succession
• governing them - On facts, deceased died leaving behind his D
... _.,. ·mother and widow as his only heirs and legal representatives
- Widow of deceased and his mother entitled to half share
each of the amount of general provident fund and mother the
other half - On death of mother, the surviving son to get the
share - Hindu Suc~ession Act, 1956. E
SS joined bank service and made his mother a
nominee. He was unmarried at that time. He died
A
issueless leaving behind appellant-widow, mother and
-' insurance,PSgratuity,
brothers and MS. Appellant claimed the share of
public provident fund, etc. Trial court F
granted succession certificate to the appellant and the
mother in respect of the amount of insurance, gratuity,
public provident fund and general provident fund.
Regarding the remaining items, the trial court granted
succession certificate to the appellant. In appeal, the G
District judge held that in respect of the remaining items
... -..y- the mother was equally entitled to the half share along
with the appellant. Aggrieved, mother and her son PS
filed a revision. During pendency, the mother died and
407 H
,,,
408 SUPREME COURT REPORTS [2009] 13 (ADDL.) S.C.R.
A MS was substituted on basis of the Will executed by her
in favour of MS as regard the amount which she was to )._
receive on grant of succession certificate. High Court
held that MS would be entitled to the entire amount of ~
General Provident fund deposited in the name of SS; and
B as regard the remaining items, after the death of the
mother, both MS and appellant would get half share each.
Hence the present appeal.
Allowing the appeal, the Court ~
c HELD: 1.1. Nomination does not confer any
beneficial interest on the nominee. 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. [Para 19] [414-
0 H; 415-A]
1.2. In the instant case, the d~~ceased died leaving ~ ~
behind his mother and widow as his only heirs and legal
representatives entitled to succeed. Therefore, on the day ~
l·
when the right of succession opened, the appellant-
E
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. The amounts so received are to be distributed ~
according to the Hindu Succession Act, 1956. The State ~
F Bank of India is directed to release half of the amount of
,,'
general provident fund to the appellant along with
interest. [Paras 18 and 19] [414-F-G; 415-B] •
i
Smt. Sarbati Devi & Anr. vs. Smt. Usha Devi (1984) 1
G SCC 424; Om Wati vs. Delhi Transport Corporation, New
Delhi & Ors. 1988 Lab l.C. 500; Vishin n. Khanchandani &
Anr v. Vidya Lachmandas Khanchandani & Another (2000) -y-
6 SCC 724; Ashok Chand Aggarwala v. Delhi Administration .;
and Ors. (1998) VII AD (Delhi) 639, referred to.
H
SHIPRA SENGUPTA v. MRIDUL SENGUPTA & ORS. 40~
Case Law Reference: A
(1984) 1 sec 424 Referred to Para 8
1988 Lab l.C. 500 Referred to Para 8
c2000) 6 sec 124 Referred to Para 15 B
(1998) VII AD (Delhi) 639 Referred to. Para 16
~ CIVIL APPELLATE JURISDICTION : Civil Appeal No. 809
of 2002.
From the Judgment & Order dated 12.09.2000 of the High C
Court of Judicature at Jabalpur (M.P.) in Misc. Civil Case
No.1209 of 1998.
~ Ashwani Kumar, Tara Chandra Sharma, Arti Singh (for
-i. Sanjay Kapur) for the appearing parties. D
The Judgment of the Court was delivered by
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 E
Case No. 1·209 of 1998.
,. 2. The appellant is the wife of Late Shri Shyamal Sengupta
4 who was a Head Clerk in the State Bank of India, Bhopal,
Madhya Pradesh. He was initially an employee of the Imperial F
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 G
l~ft behind him his widow Smt. Shipra Sengupta, his mother
-~v- Niharbala Sengupta, his brothers Pushpal Sengupta and Mirdul
Sengupta.
H
410 SUPREME COURT REPORTS [2009) 13 (ADDL.) S.C.R.
A 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,
B
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.
*
c
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,
D equally entitled to succeed to the property along with her +-
mother-in-law Niharbala Sengupta. •
j
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
E
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 Co_urt held that the appellant alone was
F 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
G applicants that on account of nomination made in favour of
Niharbala Sengupta, in respect of the aforesaid items, the -Y--
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
,_
H beneficial interest in the amount due towards life insurance,
""'"
SHIPRA SENGUPTA v. MRIDUL SENGUPTA & ORS. 411
[DALVEER BHANDARI, J.]
gratuity, public provident fund and general provident fund. A
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. l.C. 500 and B
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
c
to issue succession certificate in accordance with the
modifications made by him in the order of the Civil Judge.
j
9. Niharbala Sengupta and Pushpal Sengupta, aggrieved
...+.. by the order of the District J,udge, filed a Civil Revision before D
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 E
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
F
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 G
-v~
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 H
412 SUPREME COURT REPORTS [2009) 13 (ADDL.) S.C.R.
)..
A to Shyamal Sengupta togetherwith interest to which
he is entitled ,as per rules of deposit by the Bank
till he is paid in full. ..
(iit So far as rest of the items mentior:ied in paragraph
6(a) of the application under section 372 are
B
concerned it is declared that after the death of
Niharbala Sengupta, Mirdul Sengupta is entitled to
succession certificate along with Shipra Sengupta. ~-v
Both of them shall be entitled to 1/2 share each as
directed by the District Judge.
c
(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
D 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
E
have been raised by. the appellant in this appeal:
"I. Whether nomination of mother by a member of a ).
Provident fu,nd governed by the Imperial Bank of ~
India Employees'.-Provident Fund Rules before his
F 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
G is authorized to.receive the amount on the payment
of which trustees of the.provident fund get a valid ~v-
discharge?
Ill. Whether the provident fund can be claimed by the
heirs of the member of the provident fund in
H accordance with the law of succession governing
SHIPRA SENGUPTA v. MRIDUL SENGUPTA & ORS. 413
[DAL'IEER BHANDARI, J.]
Jhem? A
;\:...
IV. Whether it was proper for the High Court to rely
upon a forged and fabricated Will which was not
even signed by Niharbala?
B
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 c
record without giving fresh opportunity to lead
evidence on it?
VII. Whether the High Court was right in interpreting
I- and relying upon section 3(2) of Provident Fund
D
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 E
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
F
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
G
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 H
414 SUPREME COURT REPORTS [2009) 13 (ADDL.) $.C.R.
A (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 Sectiof;l 7 of the Act who in turn is liable to return
the amount to those in whose favour the law creates a beneficial
B interest, SL!bject 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 & OtherS1·1998) VI I
c AD (Delhi) 639. This case related to the Delhi Co-operative
Societies A~t. 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
D 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.
E
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. .
F t-
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
G 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. -'f-
1,9. In view of the clear legal position, it is made abundantly
H clear. that the amount in any head can be received by the
SHIPRA SENGUPTA v. MRIDUL SENGUPTA & ORS. 415
[DALVEER BHANDARI, J.]
nominee, but the amount can be claimed by the heirs of the A
__. 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 B
release half of the amount of general provident fund to the
appellant now within two months from today along with interest.
-oj_: 20. The appeal filed by the appellant is accordingly
allowed and disposed of, leaving the parties to bear their own C
costs.
N.J. Appeal allowed.
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