KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

VAZHUTHACAUD, THIRUVANANTHAPURAM

APPEAL No. 678/2017

JUDGMENT DATED: 23.10.2024

(Against the Order in C.C. 127/2014 of DCDRC, Kannur)

PRESENT:

HON’BLE JUSTICE SRI. B. SUDHEENDRA KUMAR            : PRESIDENT

SRI. AJITH KUMAR D.                                                                 : JUDICIAL MEMBER

SRI. RADHAKRISHNAN K.R.                                                     : MEMBER

APPELLANT:

The Senior Manager, Syndicate Bank, Kannur Main Branch, Kannur.

(By Adv. R.S. Kalkura, Adv. G.S. Kalkura, Adv. Hareesh

Gopinath & Adv. Najumal Hussain)

                                                Vs.

RESPONDENT:

Soudambika Ravindran, W/o late Ravindran V.K., Damayanthi Bhavan, P.O. Talap, Kannur.

                               (By Adv. Narayan R.)

JUDGMENT

HON’BLE JUSTICE SRI. B. SUDHEENDRA KUMAR  : PRESIDENT

The appellant is the opposite party and the respondent is the complainant in C.C. No. 127/2014 on the files of the District Consumer Disputes Redressal Commission, Kannur (for short “the District Commission”).

2.  The respondent filed a complaint before the District Commission alleging deficiency in service against the appellant.  The respondent is the widow of deceased Ravindran.  On 23.02.2014, the said Ravindran died.  The respondent and her daughter are the only legal heirs of the deceased Ravindran.  During the life time, the said Ravindran invested Rs. 4,00,000/- (Rupees Four Lakh only) as fixed deposit in the bank of the appellant for twelve months from 13.12.2011.  The respondent is the nominee for the said fixed deposit.  After the death of Ravindran, the respondent approached the appellant for getting the amount released from the bank.  At that time, the appellant informed the respondent that the amount could be released if the respondent would produce the court order in this regard.  The appellant had no right to direct the respondent to bring the court order for releasing the amount to the nominee.  Therefore, there was deficiency in service on the part of the appellant.  In the said circumstances, the respondent prayed for a direction to the appellant to release the fixed deposit amount mentioned above with penal interest and compensation of Rs. 35,000/- (Rupees Thirty Five Thousand only). 

3.  The appellant filed version contending that the respondent issued a letter dated 08.03.2014 to the appellant requesting to release the fixed deposit amount to her.  The appellant sent a reply intimating the respondent about the claim of Shalini and others, who are sisters of the deceased Ravindran, over the fixed deposit amount.  Therefore, the respondent was requested to produce an order from a competent court to enable the bank to release the amount to the respondent.  A suit filed by the said Shalini and others are pending before the Munsiff Court as OS 185/14. The aforesaid suit is based on a registered Will executed by the deceased Ravindran bequeathing all his estate, including all bank deposits, to Shalini and others.  The appellant did not intentionally delay the release of the amount.  Therefore, there was no deficiency in service or unfair trade practice on the part of the appellant.  Seven other complaints, filed for different fixed deposit amounts, are also pending. 

4.  PW1 was examined and Exhibits A1 to A6 were marked for the respondent.  DW1 was examined and Exhibits B1 to B9 were marked for the appellant.  After evaluating the evidence, the District Commission directed the appellant to release the fixed deposit amount of Rs. 4,00,000/- (Rupees Four Lakh only) with interest to the respondent. It was also directed by the District Commission to pay Rs. 20,000/- (Rupees Twenty Thousand only) as compensation and Rs. 2,000/- (Rupees Two Thousand only) as costs to the respondent.  Aggrieved by the said order, this appeal has been filed. 

5.  Heard both sides and perused the records.

6.  The learned advocates on both sides have advanced argument supporting their respective contentions.

7.  It is not disputed that the deceased Ravindran had a fixed deposit for an amount of Rs. 4,00,000/- (Rupees Four Lakh only) in the bank of the appellant at the time of his death.  It is also not disputed that the respondent was the nominee for the said amount.  Mr. Raveendran died on 23.02.2014.  When the respondent approached the appellant for the release of the above said fixed deposit amount to her, the appellant told the respondent to produce a court order for releasing the amount, as the appellant had already received a claim on the said deposit from the sisters of the deceased Ravindran. The sisters of the said Ravindran filed OS 185/14 before the Munsiff Court, Kannur.  In that suit, an order in I.A. 1314/2014 was stated to have been passed by the Court restraining the appellant from releasing the fixed deposit amount to any person.  However, the said order was not produced or marked before the Commission.  Another order is Exhibit B4 order dated 07.04.2016 in I.A. No. 115/2016 in OS 8/16 issued by the Sub Court whereby the appellant was restrained from disbursing the amount to anybody.

8.  The claim in the present case is based on S.45 - ZA of the Banking Regulation Act, 1949, which according to the respondent, makes the nominee of the depositor the sole beneficiary, vested with all the rights of the sole depositor. We will now go through the authorities on the subject before appreciating the evidence.

9.  In Ram Chander Talwar and Another v. Devender Kumar Talwar and Others, 2010 (10) SCC 671: 2010 KHC 6283, the Apex Court held in paragraph 5 as hereinbelow:

       “5. S.45 - ZA (2) merely puts the nominee in the shoes of the depositor after his death and clothes him with the exclusive right to receive the money lying in the account. It gives him all the rights of the depositor so far as the depositor's account is concerned. But it by no stretch of imagination makes the nominee the owner of the money lying in the account. It needs to be remembered that the Banking Regulation Act is enacted to consolidate and amend the law relating to banking. It is in no way concerned with the question of succession. All the monies receivable by the nominee by virtue of S.45 - ZA(2) would, therefore, form part of the estate of the deceased depositor and devolve according to the rule of succession to which the depositor may be governed”.

10.  In Smt. Sarbati Devi and another v. Smt. Usha Devi, reported in 1984 (1) SCC 424: 1984 KHC 23, the Hon’ble Apex Court considered the question of the rights of a nominee in the amount covered under a life insurance policy when the assured died intestate and held that nomination was subject to a claim of the heirs of the assured under the law of succession.

11.  The Hon’ble Apex Court in Vishin N. Khanchandani v. Vidya Lachmandas Khanchandani (AIR 2000 SC 2747 : 2000 (6) SCC 724),  held that a nominee specified in a National Savings certificate would not on the death of the holder become entitled to the sum due to the exclusion of other heirs. In that case, the Supreme Court held that a nominee cannot be treated as a heir or a legatee and any amount payable on the death of the holder becomes the estate of the deceased and devolves upon all the heirs who are entitled to succeed under law.

12.  The Hon’ble Apex Court in Shipra Sengupta v. Mridul Sengapta and Others, reported in 2009 KHC 5207 : 2009 (10) SCC 680), held in paragraph 19 as hereinunder:-

        “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”.

13.  The Hon’ble Apex Court in Shakti Yezdani v. Jayanand Jayant Salgaonkar, reported in 2023 KHC 1042 : 2023 INSC 1076, held in Paragraph 26 as hereinbelow:-

“26.  A consistent view appears to have been taken by the courts, while interpreting the related provisions of nomination under different statutes. It is clear from the referred judgments that the nomination so made would not lead to the nominee attaining absolute title over the subject property for which such nomination was made. In other words, the usual mode of succession is not to be impacted by such nomination. The legal heirs therefore have not been excluded by virtue of nomination”.

14.  It is clear from the above referred judgment that the nomination cannot be said to be a 'statutory testament'.  In case of a will, it is upon the administrator or executor under the Indian Succession Act, 1925, or in case of intestate succession, the laws of succession to determine the line of succession. The nomination process does not override the succession laws.  In other words, there is no third mode of succession by way of nomination.

15.  The above referred judgments would further make it clear that the status of a nominee to a bank deposit is only an agent to receive the amount from the bank. Such amount so received should form a part of the estate of the deceased and should be subject to lawful succession applicable to the deceased. As far as the legal heirs of the deceased are concerned, the nominee is only a trustee and all legal heirs have the right of succession in accordance with law. The nominee is having a priority to receive the amount from the Bank; but all legal heirs have the right to claim their share as per the right of succession to the estate of the account holder.

16.  In the light of the above legal position, we have to test whether there was any deficiency in service on the part of the appellant in not releasing the fixed deposit amount to the respondent, who is the nominee of the deceased.

17.  Since the sisters of the deceased Ravindran raised a claim on the above said fixed deposit, the appellant, with abundant caution, declined to release the said amount without the order of the Court to any person, including the nominee, who is the respondent.  Admittedly, the above mentioned suits filed by the sisters of the deceased Ravindran, were pending consideration by the Courts concerned at the time when the District Commission had passed the order impugned.  It is true that the District Commission has every right to decide the matter even though the civil suit is pending.  However, the District Commission, even before seeing the Will, entered into a finding that the respondent was entitled to get the amount released from the bank.  The District Commission further proceeded on the assumption that the nominee, on the death of the sole depositor, would become the sole beneficiary vested with all rights of the depositor.  However, as we have already mentioned, the nominee is only an agent to receive the money and disburse the same among the legal heirs. 

18.  In the present case, the civil suit filed by the sisters of deceased Ravindran, claiming rights over the estate, including all bank deposits of the deceased, on the strength of a registered Will, is pending consideration by the court concerned. In the said suit, they inter alia challenge the correctness of the nomination and the correctness of the intestate succession on the strength of the aforesaid Will. Therefore, complicated factual aspects are required to be established through oral evidence and by way of documents. The proceedings before the Commission are essentially summary in nature and hence the adjudication of issues which involve disputed factual questions should not be done by the Commission.  When the factual position is required to be established by way of documents, the Commission is required to examine whether in view of the disputed facts it would be feasible to exercise the jurisdiction.  The complex factual position, as in the present case, would require that the matter should be examined by an appropriate Court of law and not by the Commission. The above view gains support from the decision of the Hon’ble Apex Court in Oriental Insurance Company Limited v. Munimahesh Patel (2006 KHC 1304 : 2006 (7) SCC 655).

19.  In the case on hand, since the sisters of the deceased raised a claim of right over the deposit on the strength of a Will, the appellant was not prepared to release the fixed deposit amount to the respondent when demanded by the respondent.  The sisters of the deceased also filed civil suits and obtained interim order restraining the appellant from releasing the amount to any person. This being the situation, it appears that the appellant had taken a wise decision to retain the amount when he noticed that there was dispute with regard to the rights to claim the amount on the strength of a Will.  In the said circumstances, we are of the considered view that there was no deficiency in service on the part of the appellant in not releasing the amount to the respondent, when demanded by her.  Consequently, the finding in this regard by the District Commission cannot be justified. 

20.  The District Commission ordered to release the amount to the respondent when an interim order restraining the appellant from disbursing the amount was in force. The adjudication of the rights of the parties and the validity of the Will alleged to have been executed by the deceased are complicated issues and hence the said issues cannot be tried before the commission as the proceedings before the commission are essentially summary in nature.  In the said circumstances, it was not proper on the part of the District Commission to issue direction, before adjudicating the rights of the parties, to release the fixed deposit amount to the respondent.  For the said reason, the order passed by the District Commission cannot be sustained and consequently we set aside the same. 

In the result, this appeal stands allowed, the order dated 30.08.2017 passed by the District Commission in C.C. No. 127/2014 stands set aside and the complaint stands dismissed.  In the circumstances of the case, the parties are directed to suffer their respective costs. 

The statutory deposit made by the appellant shall be refunded to the appellant, on proper acknowledgment. 

JUSTICE B. SUDHEENDRA KUMAR: PRESIDENT

                                                                  AJITH KUMAR D. : JUDICIAL MEMBER

jb                                                                     RADHAKRISHNAN K.R.  : MEMBER