TMI Blog2000 (8) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 8. Thus this appeal is allowed with a direction that the succession certificates shall be issued in favour of the respondents in respect of debts detailed in Annexures A and B to the application filed in the Court of the Civil Judge, Senior Division, Thane, subject to their payment of necessary court fees and estate duty certificates. - CIVIL APPEAL NO. 4538 OF 2000 - - - Dated:- 16-8-2000 - K.T. THOMAS AND R.P. SETHI, JJ. Sanjay K. Kaul and Rakesh Batra for the Appellant. S. Ravindra Bhat, Naveen R. Nath, Ms. Hitu Arora and V.N. Raghu- pathy for the Respondent. JUDGMENT Sethi, J. - Leave granted. Whether the nominee specified in the National Savings Certificate, on the death of its holder, becomes entitled to the sum due under the certificate to the exclusion of all other persons, or whether the amount of the certificate can be retained by him for the benefit of the legal heirs of the deceased - is the sole question required to be adjudicated by us in this appeal by special leave. 2. The present dispute is with respect to the savings certificates, the holder of which was Lachmandas Naraindas Khanchandani. Appellant No. 1 is the brother, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Annexure A and serial Nos. 1 and 4 in Annexure B. It was further directed that the respondents shall be entitled to equal share in the amounts which were due on securities listed in Annexures A and B to the application/plaint on payment of necessary court fee stamps and furnishing estate duty certificate. As there was no other claimant, the court held that there was no necessity to furnish any security. 3. Feeling aggrieved, the appellants-the nominees of the National Savings Certificates have filed this appeal contending that under section 6 of the Government Savings Certificates Act, 1959, ( the Act ) after the death of the holder they had become entitled to the payment of such savings certificates in which they were nominees, to the exclusion of all other persons including the respondents and entitled to utilise the aforesaid amounts in the manner they like. It is contended that by their nomination, the holder of the National Savings Certificates, namely, Shri Lachmandas Naraindas Khanchandani has diverted the normal course of succession. According to them section 6 provides another mode of succession, to the exclusion of testamentary and non-testamentary successions. Al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o holding it. 7. Payment on death of holder - (1) If the holder of a savings certificate dies and there is in force at the time of his death a nomination in favour of any person, payment of the sum due thereon shall be made to the nominee. (2) Where the nominee is a minor, payment of the sum due thereon shall be made ( a )in any case where a person has been appointed to receive it under sub-section (3) of section 6, to that person, and ( b )where there is no such person, to any guardian of the property of the minor appointed by a competent court or where no such guardian has been so appointed, to either parent of the minor, or where neither parent is alive, to any other guardian of the minor. (3) Where the sum due on a savings certificate is payable to two or more nominees, and either or any of them dies, the sum shall be paid to the surviving nominee or nominees. (4) If a person dies and is at the time of his death the holder of a savings certificate and there is no nomination in force at the time of his death and probate of his Will or letters of administration of his estate or a succession certificate granted under the Indian Succession Act, 1925, is not within th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of the nominee. It is contended that if the intention was not to entitle the nominee to be paid and to retain the sum due on such national savings certificates, there was no necessity of making a provision as has been incorporated in sub-section (3) of section 6. Section 7 was also relied upon to urge that after the death of the holder, the nominee becomes entitled to the payment of the sum due without there being any further obligation upon him. In support of such an argument further reliance was placed upon sub-sections (3) and (4) of section 7. He also tried to distinguish the verdict of this Court in Smt. Sarbati Devi v. Smt. Usha Devi [1984] 55 Comp. Cas. 214, by pointing out the difference of the language and phraseology in section 6 and section 39 of the Insurance Act. According to him, the words, on the death of the holder of the savings certificate, become entitled to the savings certificate and to be paid the sum due thereon to the exclusion of all other persons , appearing in section 6 have not been incorporated in section 39 of the Insurance Act, suggesting that the Legislature had intended to make the nominee absolute owner of the value of the certificates. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the Allahabad High Court in Raja Ram v. Mata Prasad AIR 1972 All. 167; which has interpreted section 39 of the Act correctly, the judgment of that High Court in Kesari Devi s case [1963] 33 Comp. Cas. 93, related to a different set of facts. In Kesari Devi s case AIR 1962 All. 355; [1963] 33 Comp. Cas. 93, the dispute arose regarding the person who was entitled to the succession certificate in respect of the amount payable under a life insurance policy which had been taken out by the assured between the widow of the assured and the widow of the nominee under section 39 of the Act. On going through the judgment in Kesari Devi s case [1963] 33 Comp. Cas. 93, we feel that the court in that case paid little heed to the earlier judicial precedents of its own court. The decision of the Full Bench in Raja Ram s case [1973] 43 Comp. Cas. 53, set at rest all doubts which might have been created by Kesari Devi s case about the true import of section 39 of the Act in so far as the High Court of Allahabad was concerned. In S. Fauja Singh s case AIR 1978 Delhi 276, there is reference only to three cases Life Insurance Corporation of India v. United Bank of India Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Civil Procedure Code exempted it from attachment in furtherance of the policy of Parliament in making the amendment. The Delhi High Court has committed another error in appreciating the two decisions of the Madras High Court in Karuppa Gounder v. Palaniammal AIR 1963 Mad. 245 (at para. 13), and in B.M. Mundkur v. Life Insurance Corporation of India [1977] 47 Comp. Cas. 19; AIR 1977 Mad. 72. The relevant part of the decisions of the Delhi High Court in Smt. Uma Sehgal v. Dwarka Dass Sehgal AIR 1982 Delhi 36; [1983] 54 Comp. Cas. 842, 850 read thus (paras 10 and 11) : 10. In Karuppa Gounder v. Palaniammal AIR 1963 Mad. 245, (para. 13) K had nominated his wife in the insurance policy. K died. It was held that by virtue of the nomination, the mother of K was not entitled to any portion of the insurance amount. I am in respectful agreement with these views, because they accord with the law and reason. They are supported by section 44(2) of the Act. It provides that the commission payable to an insurance agent shall, after his death, continue to be payable to his heirs, but if the agent has nominated any person, the commission shall be paid to the person so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all be no impediment to the measure intended. To attract the applicability of the phrase, the whole of the section, the scheme of the Act and the objects and reasons for which such an enactment is made has to be kept in mind. 11. The submission made on behalf of the appellants has no substance in view of sub-section (2) of section 8 and the statement of objects and reasons necessitating the passing of the Act. Sub-section (1) of section 8 provides that if any payment is made in accordance with the provisions of the Act to a nominee, the same shall be a full discharge from all further liabilities in respect of the sum so paid. Section 7 of the Act provides that after the death of the holder of the savings certificates payment of the sum shall be made to the nominee, if any, and sub-section (1) of section 8 declares that such payment shall be a full discharge from all further liabilities in respect of the sum so paid. However, sub-section (2) of section 8 specifies that the payment made to the nominee under sub-section (1) shall not preclude any executor or administrator or the legal representa-tive of the deceased holder of a savings certificate from recovering from the person r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ti Devi s case ( 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 who in turn is liable to return the amount to those, in whose favour law creates beneficial interest, subject to the provisions of sub-section (2) of section 8. 13. Under the circumstances this appeal is allowed with a direction that the succession certificates shall be issued in favour of the respondents in respect of debts detailed in Annexures A and B to the application filed in the Court of the Civil Judge, Senior Division, Thane, subject to their payment of necessary court fees and estate duty certificates. The respondents would, however, not be entitled to directly receive the amounts payable on account of debts payable under the National Savings Certificates at Serial Nos. 17 to 26 in Annexure A and Serial Nos. 1 to 4 in Annexure B. The appellants are held entitled to receive the sum due on the aforesaid National Savings Certificates in which they are the nominees upon furnishing the undertaking in terms of sub-section (2) of section 8 in the Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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