Case Note & Summary
The appeal was filed by Smt. Lakshmi Priyadarshini against the order dated 06.12.2012 in P & SC No.241/2007 on the file of the IX Additional City Civil and Sessions Judge, Bangalore, granting a Succession Certificate in favour of the respondent No.1 (Smt. Kamalamma) to receive the amount lying in the S.B. Account No.10313112060 in State Bank of India, Jayanagar 4th 'D' Block, Bangalore in the name of Late H.N. Jayasheelan. The appellant was the wife of the deceased and was appointed as nominee in the said account. The respondent No.1 is the mother of the deceased. The trial court granted the succession certificate to the mother, holding that the nominee is only a trustee for the legal heirs. The appellant challenged this order. The High Court of Karnataka, after hearing the parties, held that under Section 45ZA of the Banking Regulation Act, 1949, a nomination in a bank account confers beneficial interest on the nominee, and the nominee is entitled to receive the amount without a succession certificate. The court set aside the trial court's order and allowed the appeal, dismissing the suit for succession certificate. The court directed the bank to pay the amount to the appellant, the nominee.
Headnote
A) Succession Law - Nomination in Bank Account - Beneficial Interest - Section 45ZA of the Banking Regulation Act, 1949 - The court considered whether a nominee under a bank account is entitled to the amount as a beneficiary or merely as a trustee for the legal heirs. Held that nomination under Section 45ZA of the Banking Regulation Act, 1949 confers beneficial interest on the nominee, and the nominee is entitled to receive the amount without a succession certificate. The court set aside the trial court's order granting succession certificate to the mother of the deceased, as the wife was the nominee. (Paras 1-10) B) Succession Law - Succession Certificate - Necessity for Nominee - Section 370 of the Indian Succession Act, 1925 - The court examined whether a succession certificate is required for a nominee to receive the amount from a bank account. Held that a succession certificate is not necessary for a nominee to receive the amount, as the nomination under the Banking Regulation Act, 1949 gives the nominee the right to receive the amount. The court allowed the appeal and dismissed the suit for succession certificate. (Paras 1-10)
Issue of Consideration
Whether a nominee under a bank account is entitled to the amount as a beneficiary or merely as a trustee for the legal heirs, and whether a succession certificate is necessary for the nominee to receive the amount.
Final Decision
Appeal allowed. The judgment and decree dated 06.12.2012 in P & SC No.241/2007 passed by the IX Addl. City Civil and Sessions Judge, Bangalore, is set aside. The suit for succession certificate filed by respondent No.1 is dismissed. The bank is directed to pay the amount in the account to the appellant, the nominee.
Law Points
- Nomination under Banking Regulation Act confers beneficial interest
- Succession certificate not required for nominee to receive amount
- Section 45ZA Banking Regulation Act
- 1949
- Section 370 Indian Succession Act
- 1925
