REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.809 OF 2002

Shipra Sengupta       .. Appellant

Versus

Mridul Sengupta & Others        .. Respondents

J U D G M E N T

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 Case No. 1209 of 1998.

2. The appellant is the wife of Late Shri Shyamal Sengupta  

who was a Head Clerk in the State Bank of India, Bhopal,  

Madhya Pradesh. He was initially an employee of the Imperial  

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 left behind him his widow Smt. Shipra Sengupta,  

his  mother  Niharbala  Sengupta,  his  brothers  Pushpal  

Sengupta and Mirdul Sengupta.

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,  

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.    

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,  

equally  entitled  to  succeed  to  the  property  along  with  her  

mother-in-law Niharbala Sengupta.

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  

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 Court held that the  

appellant alone was 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  

applicants that on account of nomination made in favour of  

Niharbala  Sengupta,  in  respect  of  the  aforesaid  items,  the  

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 beneficial interest in the amount due towards life  

insurance,  gratuity,  public  provident  fund  and  general  

provident fund.

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. I.C. 500 and  

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  to  issue  succession  certificate  in  accordance  

with the modifications made by him in the order of the Civil  

Judge.

9. Niharbala  Sengupta  and  Pushpal  Sengupta,  aggrieved  

by the order of the District Judge, filed a Civil Revision before  

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 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 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  

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  to  Shyamal  Sengupta together with interest to which he is  entitled as per rules of deposit by the Bank till  he is paid in full.

(ii) So  far  as  rest  of  the  items  mentioned  in  paragraph 6(a) of the application under section  372 are concerned it is declared that after the  death of Niharbala Sengupta, Mirdul Sengupta

is entitled to succession certificate along with  Shipra  Sengupta.   Both  of  them  shall  be  entitled to 1/2 share each as directed by the  District Judge.

(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 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 have been raised by the appellant in this appeal:

“I. Whether nomination of mother by a member of  a  Provident  fund  governed  by  the  Imperial  Bank of India Employees’ Provident Fund Rules  before his 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 is authorized to receive the amount on  the payment of which trustees of the provident  fund get a valid discharge?

III. Whether the provident fund can be claimed by  the heirs of the member of the provident fund  in  accordance  with  the  law  of  succession  governing them?

IV. Whether  it  was proper  for  the  High Court  to  rely  upon a forged and fabricated  Will  which  was not even signed by Niharbala?

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 record without giving fresh opportunity  to lead evidence on it?

VII. Whether  the  High  Court  was  right  in  interpreting  and  relying  upon  section  3(2)  of  Provident Fund 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  

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  

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 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 (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 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.

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  &  Others  

(1998) VII AD (Delhi) 639.  This case related to the Delhi Co-

operative  Societies  Act.   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 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.

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.

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  

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.

19. In view of the clear legal position, it is made abundantly  

clear that 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.   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  release half  of  the  amount of  general  provident  

fund  to  the  appellant  now  within  two  months  from  today  

along with interest.

20. The appeal filed by the appellant is accordingly allowed  

and disposed of, leaving the parties to bear their own costs.

……….…………………………….J.         (Dalveer Bhandari)

..……..….………...……….…….J.      (Dr. Mukundakam Sharma)

New Delhi; August 20, 2009.