TMI Blog2000 (8) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... l persons who are entitled to succession under law, custom or testament of the deceased holder. 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 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 of the Act in the Court of the Civil judge, Senior Division, Thane. The amount received by the appellants on account of the national savings certificates in which they are nominees shall be payable to the respondents after deduction of the amounts of debts or other demands lawfully paid or discharged, if any. - C.A. 4538 OF 2000 - - - Dated:- 16-8-2000 - Judge(s) : K. T. THOMAS., R. P. SETHI JUDGMENT The judgment of the court was delivered by R. P. SETHI J.---Leave granted. Whether the nominee specified in the National ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g aside that portion of the order of the civil judge by which their claim with regard to the National Savings Certificates, in respect of which the appellants were the nominees, had been disallowed. The High Court allowed the appeal and directed the issuance of succession certificate in favour of the respondents in respect of debts not only mentioned in serial Nos. 1 to 16 in Annexure A and serial Nos. 2, 3, 5 and 6 in Annexure B but also in respect of the debts mentioned at serial Nos. 17 to 26 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. 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, after the death of the holder they had become entitled to the payment of such savings certificate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a minor, it shall be lawful for the holder of the savings certificate making the nomination to appoint in the prescribed manner any person to receive the sum due thereon in the event of his death during the minority of the nominee. (4) A transfer of a savings certificate is held by or on behalf of any person as a pledgee or by way of security for any purpose, such holding shall not have the effect of cancelling a nomination but the right of the nominee shall be subject to the right of the person so 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is made, the nominee shall, 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. Referring to sub-section (3) of section 6, learned counsel submitted that in a case where the nominee is a minor, the holder of the savings certificate has a right to make the nomination, to appoint in the prescribed manner any person to receive the sum due thereon in the event of his death during the minority 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 ; [1984] 1 SCC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s life time and on his death forms part of his estate subject to the law of succession applicable to him. The Allahabad High Court in Kesari Devi v. Dharma Devi, AIR 1962 All 355 ; [1963] 33 Comp Cas 93 and the Delhi High Court in S. Fauja Singh v. Kuldip Singh, AIR 1978 Delhi 276 and Smt. Uma Sehgal v. Dwarka Dass Sehgal, AIR 1982 Delhi 36 ; [1983] 54 Comp Cas 842 had, however, taken a different view. While dealing with the view taken by the Allahabad and Delhi High Courts, this court in Sarbati Devi's case [1984] 55 Comp Cas 214 has held : "As observed in the Full Bench decision of the Allahabad High Court in Raja Ram v. Mata Prasad, AIR 1972 All 167 ; [1973] 43 Comp Cas 53 which has interpreted section 39 of the Act correctly, the judgment of that High Court in Kesari Devi's case, AIR 1962 All 355 ; [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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ors. The High Court equated a nominee to the heirs and legatees of the assured and proceeded to hold that the nominee succeeded to the estate with all 'plus and minus points'. We find it difficult to treat a nominee as being equivalent to an heir or legatee having regard to the clear provisions of section 39 of the Act. The exemption of the moneys payable under a life insurance policy under the amended section 60 of the Code of Civil Procedure, 1908, instead of 'devaluing' the earlier decisions which upheld the right of a creditor of the estate of the assured to attach the amount payable under the life insurance policy recognises such a right in such creditor which he could have exercised but for the amendment. It is because it was attachable 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erning them. It is contended on behalf of the appellants that the non obstante clause in section 6 excludes all other persons, including the legal heirs of the deceased holder, to claim any right over the sum paid on account of the national savings certificates, to the nominee. There is no doubt that by non obstante clauses the Legislature devises means which are usually applied to give overriding effect to certain provisions over some contrary provisions that may be found either in the same enactment or some other statute. In other words such a clause is used to avoid the operation and effect of all contrary provisions. The phrase is equivalent to showing that the Act shall 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. 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt than 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 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's case [1984] 55 Comp Cas 214 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 law creates beneficial interest, subject to the provisions of sub-section (2) of section 8 of the Act. Under the circumstances this appeal is allowed with a direction that the succession certificates shall be issued in favour of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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