# Shri Ram Krishna Puri v. Smt. Gurpyari Devi & Ors

- **Citation:** (2019) 2 ILRA 790
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-08-30
- **Case number:** Second Appeal No. 121 of 2002
- **Bench:** Harsh Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/shri-ram-krishna-puri-v-smt-gurpyari-devi-ors-44749
- **Pages:** 14

## Headnote

A. Banking Law Regulation Act, 1949 -
Section 45ZA of - Indian Contract Act,
1872 - Section 45 - Rights of 'Survivor' in
view of mandate of 'Former or Survivor'
mentioned
over
the
Fixed
Deposit
Receipts (FDRs), as mode of payment -
held - survivor gets limited rights to
2 All. Shri Ram Krishna Puri Vs Smt. Gurpyari Devi & Ors.
791
receive money as trustee of heirs - like a
nominee nominated by "Former".
Mandate "Either or Survivor" or "Former or
Survivor" with regard to mode of payment
deals only with valid discharge of Banks and
has nothing to do with the law of succession
or right of successors/legal heirs/legatee of
deceased-depositor - If Bank makes full
payment to nominee or survivor, it gets a valid
discharge of dues and has no obligation to
seek discharge from other legal heirs of
deceased - Survivor or nominee, has only a
limited right to receive the amount as a
trustee of the legal heirs of deceaseddepositor
and
such
payment
to
survivor/nominee, does not affect the rights or
claims, which any person may have against
survivor or nominee to whom the payment has
been
made
-
On
Such
payment
survivor/nominee would not become absolute
owner of the amount so received by her -
rather would be only a trustee of the legal
heirs of deceased - depositor including her
legatee. (Para 33, 34)
B. Indian Succession Act - Section 372 -
Application for Succession certificate -
Mere
availability
of
remedy
of
an
application (miscellaneous proceedings)
under Section 372 of Indian Succession
Act, does not bar jurisdiction of Civil
Courts to entertain regular civil suit for
declaration.
Lower Appellate Court illegally dismissed the
suit of plaintiff on the ground that suit for
declaration is not maintainable in view of
provisions of Section 42 of Specific Relief Act
or in view of provisions of Sections 372 or 213
of Indian Succession Act. (Para 19)
Held:-Sahodara Bibi brought up plaintiff, as
his mother, died during his infancy - Sahodara
Bibi held four fixed deposit receipts and also
got name of defendant no.1 Gurpyari Devi
added in the fixed deposit receipts with the
remark "Payable to the former or Survivor" -
Sahodara executed her last will in favour of
plaintiff in respect of impugned fixed deposit
receipts
-
After death of Sahodara
--
defendant no.1 disputed the rights of plaintiff
- Plaintiff instituted suit for a decree of
declaration to the effect that he is entitled to
the amount due under the four fixed deposit
receipts - Trial decreed the suit - Lower
Appellate Court dismissed suit of plaintiff
Second Appeal Allowed (E-5)
List of cases cited: -
1.Smt. Bimla Gaindhar Vs Smt. Usha Gaindhar
& anr. AIR 2004 Ald. 329 (Para 18)

## Text

_Characters 0–39,939 of 45,096. This is a partial read: ask again with offset=39939 for what follows._

790 INDIAN LAW REPORTS ALLAHABAD SERIES
of
disposal
of
report
Amin
and
Commissioner which is not an order
which may be termed as decree and no
appeal against such order is legally
maintainable under Section 96 or 104 or
order XLIII of Code of Civil Procedure.
In a partition suit, unless a partition
scheme is finalized and final decree is
prepared, no appeal lies as appeal lies
only against final decree and not against
partition scheme. This legal position
could not be disputed either by learned
counsel for appellant.

5. My above view is supported by the
judgment passed by this Court in the case of
"Phanindra Nath Banerji Versus Labanya
Mayee Banerji 1950 Allahabad Weekly
Reporter 280" wherein it was held that-

"mere order giving directions for
preparation of final decree is not appealable.
A decree for partition, to be operative, must
be engrossed on stamped paper required by
Stamp Act, and until the judge signs the
decree so engrossed it cannot be said that the
suit has terminated".

6. In view of above facts and legal
position, the final appeal no.695 of 1987,
though decided on merits, was legally not
maintainable and against the impugned order
dated 23.1.1998 passed in above mentioned
final appeal (which is not a decree), no second
appeal is legally maintainable. Accordingly,
the second appeal is also not maintainable
irrespective of the fact that it has been
admitted on 20.2.1998 without framing any
substantial questions of law in contravention
of provision of Section 100 (5) of Code of
Civil Procedure.

7. In the circumstances, the appeal
itself is not maintainable and is liable to
be dismissed.

8.

The
appeal
is
dismissed
accordingly with no order as to costs.

9. Substitution applications are
disposed
off
accordingly
without
prejudice to the rights of parties who may
seek remedy as available to them.

10. Interim order, if any, stands
vacated.

11. Let the lower Court record, if
any, has been received be sent back
forthwith to court below alongwith a copy
of this order.
----------

(2019)10ILR A 790

APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 30.08.2019

BEFORE

THE HON'BLE HARSH KUMAR, J.

Second Appeal No. 121 of 2002

Shri Ram Krishna Puri ...Appellant
Versus
Smt. Gurpyari Devi & Ors. ...Respondents

Counsel for the Appellant:
Sri Some Narayan Mishra, Sri S.N. Mishra

Counsel for the Respondents:
Smt. Usha Kiran, Sri Abhijeet Mukherji, Mamta
Singh, Sri N.K. Srivastava, Pratima Srivastava,
Sri B.K. Shukla, Sri S.K. Mehrotra

A. Banking Law Regulation Act, 1949 -
Section 45ZA of - Indian Contract Act,
1872 - Section 45 - Rights of 'Survivor' in
view of mandate of 'Former or Survivor'
mentioned
over
the
Fixed
Deposit
Receipts (FDRs), as mode of payment -
held - survivor gets limited rights to
2 All. Shri Ram Krishna Puri Vs Smt. Gurpyari Devi & Ors.
791
receive money as trustee of heirs - like a
nominee nominated by "Former".
Mandate "Either or Survivor" or "Former or
Survivor" with regard to mode of payment
deals only with valid discharge of Banks and
has nothing to do with the law of succession
or right of successors/legal heirs/legatee of
deceased-depositor - If Bank makes full
payment to nominee or survivor, it gets a valid
discharge of dues and has no obligation to
seek discharge from other legal heirs of
deceased - Survivor or nominee, has only a
limited right to receive the amount as a
trustee of the legal heirs of deceaseddepositor
and
such
payment
to
survivor/nominee, does not affect the rights or
claims, which any person may have against
survivor or nominee to whom the payment has
been
made
-
On
Such
payment
survivor/nominee would not become absolute
owner of the amount so received by her -
rather would be only a trustee of the legal
heirs of deceased - depositor including her
legatee. (Para 33, 34)
B. Indian Succession Act - Section 372 -
Application for Succession certificate -
Mere
availability
of
remedy
of
an
application (miscellaneous proceedings)
under Section 372 of Indian Succession
Act, does not bar jurisdiction of Civil
Courts to entertain regular civil suit for
declaration.
Lower Appellate Court illegally dismissed the
suit of plaintiff on the ground that suit for
declaration is not maintainable in view of
provisions of Section 42 of Specific Relief Act
or in view of provisions of Sections 372 or 213
of Indian Succession Act. (Para 19)
Held:-Sahodara Bibi brought up plaintiff, as
his mother, died during his infancy - Sahodara
Bibi held four fixed deposit receipts and also
got name of defendant no.1 Gurpyari Devi
added in the fixed deposit receipts with the
remark "Payable to the former or Survivor" -
Sahodara executed her last will in favour of
plaintiff in respect of impugned fixed deposit
receipts
-
After death of Sahodara
--
defendant no.1 disputed the rights of plaintiff
- Plaintiff instituted suit for a decree of
declaration to the effect that he is entitled to
the amount due under the four fixed deposit
receipts - Trial decreed the suit - Lower
Appellate Court dismissed suit of plaintiff
Second Appeal Allowed (E-5)
List of cases cited: -
1.Smt. Bimla Gaindhar Vs Smt. Usha Gaindhar
& anr. AIR 2004 Ald. 329 (Para 18)
2. Ram Chander Talwar Vs Devendra Kumar
Talwar & ors. (2010) 10 SCC 671
3. Smt. Sarabati Devi 7 anr. Vs Smt. Usha Devi
1984 SCC (1) 424
4.Dalavayi Nagarajamma Vs S.B.I. AIR 1961
A.P. 320

5. Padmanabhan Bhavani Vs Govindan AIR
1975 Ker 83

(Delivered by Hon'ble Harsh Kumar, J.)

1. The instant appeal has been filed
against
judgment
and decree
dated
18.1.2002 passed by Additional District
Judge, Kanpur Nagar in Civil Appeal
No.264 of 2001 arising out of judgment
and decree dated 4.9.2001 passed by
Additional Civil Judge (Senior Division),
Kanpur Nagar in Civil Suit No.193 of
1986.

2. The brief facts relating to the case
are that Shri Ram Krishna Puri filed Civil
Suit No.193 of 1986 in the Court of Civil
Judge,
Kanpur
Nagar
against
Smt.
Gurpyari Devi, Sri Kashi Nath Khatri and
Allahabad
Bank
for
a
decree
of
declaration to the effect that plaintiff is
entitled to the amount due under the four
fixed deposit receipts each for Rs.10,000/-
dated 16.1.1981 for a period of 63 months
and plaintiff be awarded cost of suit
against defendant-respondent nos.1 and 2,
with the averments that Smt. Sahodara @
792 INDIAN LAW REPORTS ALLAHABAD SERIES
Sahodara Bibi had brought up plaintiff as his
mother had died during his infancy and that
she held four fixed deposit receipts each for
Rs.10,000/- dated 16.1.1981 for a period of
63 months and was sole owner of the amount
and had got name of defendant no.1
Gurpyari Devi added along with her in the
fixed deposit receipts with the remark
"Payable to the former or Survivor"; and
since Smt. Sahodara died on 30.1.1985 after
executing her last will dated 18.1.1983 in
favour of plaintiff in respect of impugned
fixed deposit receipts and defendant no.1 is
disputing the rights of plaintiff, hence suit.

3. The defendant no.1 filed a written
statement denying the allegations of plaint
and claiming herself to be entitled to full
and final payment of maturity amount
under the impugned fixed deposit receipts
and that the suit is barred by provisions of
Section 213 of Indian Succession Act.

4. Defendant no.2 also filed separate
written statement denying the allegations
of plaint.

5. On parties pleadings the trial
court framed as many as six issues viz.,

(i) Whether Smt. Sahodara executed
a will deed dated 18.1.1983?

(ii) What if any is the effect of
entries of the name of Smt. Gurpyari Devi
and Smt. Sahodara over the fixed deposit
receipts?

(iii) Whether Smt. Sahodara had a
right to execute will deed in respect of
fixed deposit receipts?

(iv) Whether the suit is barred by
provisions of Section 213 of Indian
Succession Act?

(v) Whether suit is under valued and
court fee paid is insufficient?

(vi) To what relief if any, is the
plaintiff entitled?

6. After recording parties evidence and
hearing arguments, the learned trial court held
that plaintiff has succeeded in proving
execution of will deed dated 18.1.1983 by
Smt. Sahodara and decided issue no.1 in
favour of plaintiff. On issue nos.2 and 3 trial
court gave a finding in favour of plaintiff
against the defendant and also decided issue
no.4 in favour of plaintiff and against
defendant while issue no.5 had been
previously decided on 10.9.1991 against
defendant. In view of above findings on issue
no.6 trial court held that plaintiff has
succeeded in proving his case and decreed the
suit vide judgment and decree dated 4.9.2001.

7. Feeling aggrieved defendant no.1
Smt. Gurpyari Devi preferred Civil Appeal
No.264 of 2001 before District Judge,
Kanpur Nagar which was transferred for
disposal to the court of Additional District
Judge, Court No.8, Kanpur Nagar. The lower
appellate court vide impugned judgment and
decree dated 18.1.2002 allowed appeal and
set aside the judgment and decree passed by
trial court in Civil Suit No.193 of 1986
dismissing the suit of plaintiff.

8. Feeling aggrieved the plaintiff has
preferred instant second appeal.

9. The instant second appeal has been
admitted vide order dated 8.2.2002 on
following two substantial questions of law :-

(1) Whether the first appellate court
has erred in dismissing the suit on the
ground that the suit for declaration is not
maintainable?
2 All. Shri Ram Krishna Puri Vs Smt. Gurpyari Devi & Ors.
793

(2) Whether the first appellate court
has erred in carving out a new case itself
regarding the maintainability of the suit?

10. Heard Shri Some Narayan
Mishra, learned counsel for plaintiffappellant hereinafter referred as plaintiff
and Shri Abhijeet Mukherji, learned
counsel for defendant-respondent no.1
hereinafter referred as defendant and
perused the record as well as lower court
record summoned in this second appeal.

11. Learned counsel for plaintiff
contends that judgment and decree passed
by lower appellate court is bad on facts
and law; that lower appellate court acted
wrongly in allowing the appeal without
displacing the findings recorded by trial
court in favour of plaintiff- appellant; that
trial court acted wrongly in holding that
suit was barred by provisions of Section
213 of Indian Succession Act; that
impugned fixed deposit receipts were
obtained by Smt. Sahodara which were
issued in the name of Smt. Sahodara and
Smt. Gurpyari Devi with the endorsement
by bank on top of it mentioning "Payable
to Former or Survivor"; that undisputedly
Smt. Sahodara died on 30.1.1985; that
since Smt. Sahodara had executed a
registered will dated 18.1.1983 in favour
of plaintiff-appellant, in respect of the
fixed deposit receipts in question, the
plaintiff-appellant has a right to get the
maturity amount mentioned in the fixed
deposit receipts; that survivor Smt.
Gurpyari Devi has no right or title over
the amount mentioned in fixed deposit
receipts and her position will be that of
nominee only; that nominee can only
receive payment from bank but may not
change the rights of successors rather will
be bound to make payment of amount so
received to the successors of deceased;
that since the plaintiff-appellant was
legatee of the will deed executed by Smt.
Sahodara she was rightful owner of
maturity amount under the impugned
fixed deposit receipts; that the findings of
trial court on issue no.1 with regard to
execution
of
registered
will
dated
18.1.1983 by Smt. Sahodara in favour of
plaintiff-appellant has not been set aside
by lower appellate court and without
setting aside the findings of trial court, the
impugned judgment and decree allowing
the appeal and setting aside the judgment
and decree of trial court is absolutely
wrong, illegal and against law; that lower
appellate court has erred in dismissing the
suit on the ground that suit for declaration
is not maintainable; that lower appellate
court had no jurisdiction in carving out a
new case itself regarding maintainability
of suit while there was no such plea taken
by
defendant-respondent;
that
the
impugned judgment and decree are liable
to be set aside and the judgment and
decree passed by trial court are liable to
be restored.

12. Per contra learned counsel for
defendant-respondent no.1 supported the
impugned judgment and decree passed by
lower appellate court and contended that
learned trial court acted wrongly and
illegally in decreeing the suit of plaintiffappellant and lower appellate court very
rightly held the suit to be barred by
provisions of Section 213 of Indian
Succession Act and in the alternative by
provisions of Section 372 of Indian
Succession Act; that the suit for seeking a
declaratory decree for declaration of his
rights to receive the payment under the
disputed fixed deposit receipts is virtually
a relief for seeking mandatory injunction,
directing the bank to make payment of
maturity amount under the impugned
794 INDIAN LAW REPORTS ALLAHABAD SERIES
fixed deposit receipts; that upon death of
Smt. Sahodara, her niece defendantrespondent no.1 Smt. Gurpyare Devi
becme exclusive and rightful owner and
to get payment under the impugned fixed
deposit receipts being mentioned as
survivor in the fixed deposit receipts; that
no substantial question of law is involved
in this appeal and appeal is liable to be
dismissed with costs.

13. Upon hearing parties counsel and
perusal of record as well as record of lower
court summoned in appeal, I find that
undisputedly Smt. Sahodara Bibi obtained
four fixed deposit receipts (hereinafter
referred to as 'FDRs') for Rs.10,000/- each
on 16.1.1981 from Allahabad Bank for a
period of 63 months, which were issued by
Allahabad Bank in the name of Smt.
Sahodara
and
Smt.
Gurpyari
Devi
(hereinafter referred to as ''S' & ''G',
respectively) with mandate of mode of
payment as "Payable to Former or
Survivor". ''S' died on 30.1.1985 and Ram
Krishna Puri (hereinafter referred to as ''R')
filed Civil Suit No.193 of 1986 claiming to
be a legatee under the last Will executed
and registered by ''S' in his favour on
18.1.1983 and sought a declaratory decree,
seeking declaration that he is entitled to get
the amount due under four FDRs detailed in
prayer clause, impleading Allahabad Bank
as Defendant No.3, who did not file any
written statement and did not contest the
suit. The Trial Court holding that plaintiff
has succeeded in proving the Will as well as
his case, decreed the suit, against which
Civil Appeal No.264 of 2001 filed by
defendant ''G' was allowed by lower
Appellate Court and plaintiff 'R' has
preferred instant second appeal.

14. The lower Appellate Court has
framed two points for determination of
appeal (i) who is legally entitled to get
amount under the impugned FDRs and
whether
in
view
of
the
mandate
mentioned over the FDRs ''S' had a right
to execute Will in respect of the amount
mentioned in FDRs and (ii) whether suit
was barred by provisions of Section 213
of Indian Succession Act.

15. On point no.1, the lower Appellate
Court held that in view of the mandate of
"Payable to Former or Survivor", upon
death of ''S' only ''G' was entitled to operate
the account or receive the amount payable
under the impugned FDRs and the Trial
Court has committed mistake of facts and
law in not considering the wordings of
mandate mentioned over all the impugned
FDRs.
It
further
held
that
in
the
circumstances, question of execution and
proof of Will deed dated 18.1.1983 lost its
relevance, because the survivor ''G' was
exclusively entitled to get the amount under
impugned FDRs and legal heirs or the
legatee of ''S', under impugned Will deed
dated 18.1.1983 may not be getting any
legal right to receive the amount of
impugned FDRs. On point no.2 it held that
though ''R' claims execution of Will by ''S'
in his favour, but since he did not obtain
Probate or Succession Certificate, the suit
was barred by provisions of Section 213 of
Indian Succession Act and in view of
mandate mentioned over FDRs as well as
provisions of Section 42 of Specific Relief
Act, the Civil Court had no jurisdiction to
try suit and pass declaratory decree in
respect of money under impugned FDRs.

16. Substantial question of law No.1
is as under :-

"(1) Whether the first appellate court has
erred in dismissing the suit on the ground that
the suit for declaration is not maintainable?"
2 All. Shri Ram Krishna Puri Vs Smt. Gurpyari Devi & Ors.
795

17. The substantial question of law
No.1 relating to maintainability of suit for
declaration has been dealt with by lower
Appellate Court under point No.2 framed
by it. It is pertinent to mention that
Section 42 of Specific Relief Act, 1963
has no application to the case and suits for
declaration. Specific Relief Act, 1877 was
replaced by new Specific Relief Act,
1963, which came into force w.e.f. 13th
January, 1964, Section 42 of which deals
with provisions relating to "Injunction to
perform negative agreement". Section 34
of Specific Relief Act, 1963 which is
equivalent to Section 42 of old Specific
Relief Act, 1877 with certain changes,
contains
provisions
with
regard
to
Declaratory decrees and discretion of
Court, as to declaration of status or right.
In the instant case, undisputedly the
amount under the impugned FDRs has not
been paid by Bank to ''G', the survivor,
and suit seeking decree for declaration
about his entitlement only, was competent
without seeking any further relief. Hence
the Court finds that lower Appellate Court
acted wrongly and illegally in holding the
suit to be barred by provisions of Section
42 of Specific Relief Act, without even
considering the repeal of old Act of 1877
and provisions of Sections 34 and 42 of
new Act.

18. As far as provisions of Sections
213 and 372 of Indian Successions Act
with regard to Probate and Succession
certificate are concerned, in view of the
law laid down by Division Bench of this
Court in the case of Smt. Bimla Gaindhar
Vs. Smt. Usha Gaindhar and another,
AIR 2004 Ald 329, and provisions of
Section 57 of the Act, plaintiff 'R' was not
at all required to obtain a Probate on the
basis of Will deed dated 18.1.1983
executed by ''S'.

19. In above case, it was also held
that though probate will not be required in
such cases, but an application under
Section 372 of the Act would be
maintainable. It is noteworthy that mere
availability of remedy of an application
(miscellaneous
proceedings)
under
Section 372 of Indian Succession Act,
does not bar jurisdiction of Civil Courts to
entertain regular civil suit for declaration.

20. In view of discussions made
above, this Court is of considered view
that lower Appellate Court committed
manifest error of law and acted wrongly
and illegally in allowing appeal and
dismissing the suit of plaintiff on the
ground of non maintainability of suit in
view of provisions of Section 42 of
Specific Relief Act or in view of
provisions of Sections 372 or 213 of
Indian
Succession
Act.
Substantial
question of law No.1 is accordingly
decided in affirmative in favour of
plaintiff against the appellant.

21. The substantial question of law
no.2 is as under:-

"(2) Whether the first appellate court
has erred in carving out a new case itself
regarding the maintainability of the suit?"

22. The matter relating to this
substantial question of law has been
discussed by lower Appellate Court under
point no.1 framed by it and in paras 7 to
11 of the impugned judgment observing
that on all impugned FDRs, mandate
"Payable to Former or Survivor" is
mentioned. Considering the meaning and
effect of above mandate regarding mode
of payment, by giving an example, it held
that where an account is in the names of
''A' and ''B' with mandate of Former or
796 INDIAN LAW REPORTS ALLAHABAD SERIES
Survivor, ''A' holds right to operate the
account throughout his life time and after
his death, right to operate account goes to
''B' but ''B' has no right to operate the
account during life time of ''A', and in
case 'B' dies in life time of ''A', the legal
heirs of ''B' will not be entitled to operate
the account or receive the amount and so
only upon death of ''A', ''B' may be
entitled to operate the account and receive
the amount in which case legal heirs or
legatee of ''A', will not have any legal
right to operate the account or receive the
amount.

23. It was contended by plaintiff that
lower Appellate Court acted wrongly and
illegally in ignoring the duly proved Will
deed and in dismissing suit of plaintiff
without displacing the findings of Trial
Court on issue no.1 in favour of plaintiff
'R' regarding execution of Will deed dated
18.1.1983 by ''S' and committed manifest
error in holding that in view of mandate
"Payable to Former or Survivor", the
survivor ''G' acquired absolute rights of
receiving the maturity amount to the
exclusion of legal heirs or legatee of ''S'. It
was contended that being survivor,
position of ''G' was only that of a
nominee, who had a limited right, only to
receive the amount under the impugned
FDRs, as trustee of legal heirs of former
''S' deceased.

24. Now the main point to be
considered is that, as to what will be the
rights of 'Survivor' defendant 'G', in view
of mandate of 'Former or Survivor'
mentioned over the impugned FDRs, as
mode of payment and whether the
survivor will get absolute rights to get
maturity value as claimed by defendant
'G' and held by lower Appellate Court,
OR will get only limited rights to receive
money as trustee of heirs of Former, like a
nominee nominated by Former as claimed
by plaintiff 'R', the legatee and legal heir
of Former 'S'.

25. Before proceeding on this
question, I find it expedient to reproduce
the provisions of Section 45 of Indian
Contract Act, 1872 and Section 45ZA of
The Banking Law Regulation Act, 1949,
which are as under:-

"Section 45 of Indian Contract Act,
1872.
45. Devolution of joint right. -When a
person has made a promise to two or
more persons jointly, then, unless a
contrary intention appears from the
contract, the right to claim performance
rests, as between him and them, with them
during their joint lives, and, after the
death
of
any
of
them,
with
the
representative of such deceased person
jointly with the survivor or survivors, and,
after the death of the last survivor, with
representatives of all jointly.
 Illustration
A, in consideration of 5,000 rupees lent to
him by B and C, promises B and C jointly
to repay them that sum with interest on a
day specified. B dies. The right to claim
performance
rests
with
B's
representatives jointly with C during C's
life, and after the death of C, with the
representatives of B and C jointly.

Section 45ZA of The Banking Law
Regulation Act, 1949.

45ZA. Nomination for payment of
depositors' money.-

(1) Where a deposit is held by a
banking company to the credit of one or
more persons, the depositor or, as the
case may be, all the depositors together,
2 All. Shri Ram Krishna Puri Vs Smt. Gurpyari Devi & Ors.
797
may nominate, in the prescribed manner,
one person to whom in the event of the
death of the sole depositor or the death of
all the depositors, the amount of deposit
may be returned by the banking company.

(2) Notwithstanding anything contained
in any other law for the time being in force or
in any disposition, whether testamentary or
otherwise, in respect of such deposit, where a
nomination made in the prescribed manner
purports to confer on any person the right to
receive the amount of deposit from the
banking company, the nominee shall, on the
death of the sole depositor or, as the case may
be, on the death of all the depositors, become
entitled to all the rights of the sole depositor
or, as the case may be, of the depositors, in
relation to such deposit to the exclusion of all
other persons, unless the nomination is varied
or cancelled in the prescribed manner.

(3) Where the nominee is a minor, it
shall be lawful for the depositor making
the
nomination
to
appoint
in
the
prescribed manner any person to receive
the amount of deposit in the event of his
death during the minority of the nominee.

(4) Payment by a banking company
in accordance with the provisions of this
section shall constitute a full discharge to
the banking company of its liability in
respect of the deposit:

Provided that nothing contained in
this sub-section shall affect the right or
claim which any person may have against
the person to whom any payment is made
under this section."

26. In the case of Ram Chander
Talwar Vs. Devendra Kumar Talwar and
others, 2010 (10) SCC 671, the Apex
Court held that

Section 45ZA(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
Section 45ZA(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."

27. In the case of Smt. Sarabati
Devi and another Vs. Smt. Usha Devi,
1984 SCC (1) 424, the Apex Court
interpreting the provisions of Section 39
of Insurance Act held that :-

"1.1 A mere nomination made under
Section 39 of the Insurance Act, 1938
does not have the effect of conferring on
the nominee any beneficial interest in the
amount payable under the life insurance
policy on the death of the accused. The
nomination only indicates the hand which
is authorised to receive the amount, on the
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 governing
them.

1.2 An analysis of the provisions of
Section 39 of the Act clearly established
that the policy holder continues to hold
interest in the policy during his life time
and the nominee acquires no sort of
interest in the policy during the life time
798 INDIAN LAW REPORTS ALLAHABAD SERIES
of the holder. If that is so, on the death of
the policy holder the amount payable
under the policy becomes part of his
estate which is governed by the law of
succession
applicable
to
him,
such
succession may be testamentary or
intestate. The tenuous character of the
right of a nominee becomes more
pronounced when one contrasts the
provisions of Section 39 with that of
Section 38.

Section 39 of the Act was not
intended to act as a third mode of
succession provided by the stature and
incorrectly styled as "statutory testament"
by the Delhi High Court.

1.3 The language of Section 39 of the
Act is neither capable of altering the
course of succession under law nor can be
said to have equated a nominee to an heir
or legatee."

"Modern
Law
Publications"
published an exhaustive commentary on
Banking Law with new developing areas
like MICR technology etc. under the
name of "Banking Law and Practice by
R.K. Gupta", Joint Legal Advisor,
Reserve Bank of India, Legal Department,
Central Office, Mumbai, with a foreword
by Hon'ble Mr. Justice G.P. Mathur,
Judge Supreme Court in two volumes. In
above commentary on "Banking Law and
Practice", Volume I published in the year
2012 in Chapter 7 at page 1.513 rights of
survivor regarding joint accounts have
been described as under :-

"Joint Account payable to former or
survivor. - When the fixed deposit is
payable to Former or Survivor, the
deposit is payable to the former so long
he is alive and after his death, the deposit
is payable to the survivor. The survivor
cannot claim the amount on maturity, if
the former is alive. In such cases, the
legal representatives of the account
holder who had died have no claim
against the bank.

The survivor does not become
absolute owner of the maturity proceeds.
He holds the said amount in trust for the
legal heirs of the account holder who has
died. In Guran Ditta V. Ram Ditta (AIR
1928 Privy Council 172), where the
deposit was held by a person with his wife
on the terms that it is payable to either or
survivor, the court held that on the death
of the husband, it does not constitute a
gift by him to his wife and there is a
resulting trust in her favour in the
absence of proof and contrary intention,
there being no presumption in India of an
intended advancement in favour of his
wife."

28. The Vth Edition of 2010 of The
Banking Law - in Theory and Practice, by
S.N. Gupta, Advocate, narrates the
consequences on death of one of the joint
holder, at page 237 as under :-

"'Former or Survivor' or 'Either or
Survivor' accounts are opened which are
operated by the 'Former or Survivor' or
'Either or Survivor'.

What will happen if there is death of
one of the joint account holders whether
the bank can get the proper discharge by
paying in account of survivor. Another
question will arise as to what is the
liability of the survivor and whether he
has to make some payments to the heirs
and legal representatives of the deceased
joint holder.

In such cases so far as the bank is
concerned we can say that the bank will
get a proper discharge by paying to the
survivor. However, the survivor will be
accountable to the heirs of the deceased
2 All. Shri Ram Krishna Puri Vs Smt. Gurpyari Devi & Ors.
799
joint holder. In the absence of a proof of
the intention of the deceased to make the
survivor the owner."

29. Reserve Bank of India issues
guidelines, instructions, directions to its
'Scheduled Commercial Banks' from time
to time in order to improve quality of
customer service. Parties counsel brought
before the Court "Circular Letter of
Reserve Bank of India" dated 9th June,
2005
issued
by
it
to
'Scheduled
Commercial Banks' in ordinary course of
business, which is being reproduced
hereunder
highlighting
the
details
mentioned in its paras 1 and 2, which are
relevant to the facts of the case :-

"RBI/2004-05/490

DBOD.No.Leg.
BC.95/09.07.005/2004-05

June 09, 2005

To

The Chairman/CEOs of All the
Scheduled Commercial Banks

(Excluding RRBs)

Dear Sir,

Settlement of claims in respect of
deceased depositors - Simplification of
Procedure

Pursuant to the announcement in the
Mid-Term Review of the Annual Policy of
the RBI on November 3, 2003, the
Committee
on
Procedure
and
Performance Audit on Public Services
(CPPAPS) was constituted by the RBI
with a view to improving the quality of
public services to the common person.
The Committee in its Report No.3 on
'Banking Operations : Deposit Accounts
and
other
Facilities
Relating
to
Individuals
(Non-Business)',
observed
that the tortuous procedures, particularly
those applicable to the family of a
deceased depositor, caused considerable
distress to such family members. While
the instruction regarding settlement of
claims of the deceased depositors had
been issued to the banks vide our circular
No.DBOD.BC.148/09.07.007/99-2000
dated
March
14,
2000
and
BC.56/09.07.007/2000-01
dated
December
6,
2000,
the
present
dispensation has been reviewed in the
light of the recommendations of the
CPPAPS and the following instructions
are being issued, in supersession of all the
earlier instructions on the subject, to
facilitate expeditious and hassle-free
settlement of claims on the death of a
depositor.

2. ACCESS TO BALANCE IN
DEPOSIT ACCOUNT

(A) Accounts with survivor/nominee
clause

2.1 As you are aware, in the case of
deposit accounts where the depositor had
utilized the nomination facility and made
a valid nomination or where the account
was opened with the survivorship clause
("either or survivor", or "anyone or
survivor", or "former or survivor" or
"latter or survivor"), the payment of the
balance in the deposit account to the
survivor(s)/nominee of a deceased deposit
account
holder
represents
a
valid
discharge of the bank's liability provided :

(a) the bank has exercised due care
and caution in establishing the identity of
the survivor(s)/nominee and the fact of
death of the account holder, through
appropriate documentary evidence;

(b) there is no order from the
competent court restraining the bank from
800 INDIAN LAW REPORTS ALLAHABAD SERIES
making the payment from the account of
the deceased; and

(c) it has been made clear to the
survivor(s)/nominee that he would be
receiving the payment from the bank as a
trustee of the legal heirs of the deceased
depositor, i.e., such payment to him shall
not affect the right or claim which any
person
may
have
against
the
survivor(s)/nominee to whom the payment
is made.

2.2 It may be noted that since
payment
made
to
the
survivor
(s)/nominee, subject to the foregoing
conditions,
would
constitute
a
full
discharge
of
the
bank's
liability,
insistence
on
production
of
legal
representation
is
superfluous
and
unwarranted and only serves to cause
entirely avoidable inconvenience to the
survivor(s)/nominee and would, therefore,
invite serious supervisory disapproval. In
such case, therefore, while making
payment to the survivor(s)/nominee of the
deceased depositor, the banks are advised
to desist from insisting on production of
succession
certificate,
letter
of
administration or probate, etc., or obtain
any bond of indemnity or surety from the
survivor(s)/nominee, irrespective of the
amount standing to the credit of the
deceased account holder.

3. Premature Termination of term
deposit accounts ..............

4. Treatment of flows in the name of
the deceased depositor ......

5. Access to the safe deposit
lockers/safe custody articles ........

6. Time limit for settlement of claims
..................

7.
Provisions
of
the
Banking
Regulation Act, 1949 .............

8.
Simplified
operational
systems/procedures ..............

9. Customer Guidance and Publicity
..............

10. These instructions should be
viewed as very critical element for
bringing about significant improvement in
the quality of customer service provided
to survivor(s)/nominee(s) of deceased
depositors.

11. Please acknowledge receipt.

Yours faithfully,
(Anand Sinha)
Chief General Manager-in-Charge"

30. A photo copy of the Circular
letter dated 9th June, 2005 of Reserve
Bank of India is being placed on record as
part of record.

"In
the
case
of
Dalavayi
Nagarajamma Vs. State Bank of India
AIR 1961 Andhra Pradesh 320, the High
Court of Andhra Pradesh held that

"Where A deposits his own money in
the joint names of himself and B (who
may be his wife, daughter or any other
person) on the terms that it is payable to
either or survivor, the deposit on A's
death does not constitute a gift by him to
B. The burden of proof lies upon B in
whose name the deposit is jointly taken to
prove that a gift was intended or made.
The mere fact that it is taken in the joint
names does not lead to the conclusion
that a gift was made to the other person."

31. In the case of Padmanabhan
Bhavani Vs. Govindan AIR 1975 Ker 83,
considering above mentioned decision of
Andhra Pradesh High Court in case of
Dalavayi Nagarajamma (supra) wherein
"one Ramaswamy deposited Rs.10,000/-
in the joint names of himself and his
2 All. Shri Ram Krishna Puri Vs Smt. Gurpyari Devi & Ors.
801
concubine,
who
was
the
appellant,
payable to either or survivor and after
Ramaswamy's
death,
the
appellant
claimed the balance at the credit of the
account on the ground that he had
intended to make a gift of the amount of
Rs.10,000/- to her, it was held that the
appellant had not discharged the onus
which was on her of proving the gift and
that the mere fact that the deposit was
made in the joint names does not lead to
the conclusion that Ramaswamy gifted
the amount to her", the High Court of
Kerala formulated following propositions
in para 6 of judgment :-

"(i) A deposit made by a Hindu of his
money in the joint names of himself and
his wife or any other person, on the terms
that it is payable to either or survivor,
does not on his death constitute a gift by
him to the other person.

(ii) In such a case without any
declaration of trust, there is a resulting
trust in favour of the depositor in the
absence of any contrary intention or
unless it can be proved that an actual gift
of the amount was intended.

(iii) The principle of English Law
that a gift to a wife is presumed, where
money belonging to the husband is
deposited at a Bank in her name or where
a deposit is made, in the joint names of
both husband and wife has no application
in India. In other words, there is no
presumption in India of an intended
advancement as there is in England.

(iv) The burden of proving a contrary
intention or gift is on the person who
seeks to rebut the resulting trust in favour
of the person, who makes the deposit.

(v) This burden could be discharged
either by proving that there was a specific
gift or that the owner of the money had a
general intention to benefit the claimant
and that it was in pursuance of that
intention that he made the deposit in the
claimant's name or transferred the deposit
to the joint names of himself and the
claimant.

(vi) In the absence of such proof the
amount under the deposit will form part
of the owner's estate on his death and will
be partible among the heirs."

32. Admittedly 'S' died issue-less
and plaintiff 'R' and defendant 'G' both
claims
that
she
was
their
'Bua'.
Undisputedly, there is absolutely no iota
of evidence on record to show that
Former 'S' had any intention to gift the
amount of impugned FDRs in favour of
Survivor 'G'.

33. It can be safely held that
mandate "Either or Survivor" or "Former
or Survivor" with regard to mode of
payment deals only with valid discharge
of Banks and has nothing to do with the
law
of
succession
or
right
of
successors/legal
heirs/legatee
of
deceased-depositor. In such case, if the
Bank makes full payment of amount due
to nominee or survivor, it gets a valid
discharge of dues and has no obligation to
seek discharge from other legal heirs of
deceased, before making such payment.
As per clear instructions mentioned in
circular of R.B.I. Dated June 9th, 2005,
issued to all the Commercial Banks
(reproduced hereinabove), and also in
view of various decisions discussed
earlier, the survivor or nominee, has only
a limited right to receive the amount as a
trustee of the legal heirs of deceaseddepositor
and
such
payment
to
survivor/nominee, does not affect the
rights or claims, which any person may
have against survivor or nominee to
whom the payment has been made. No
802 INDIAN LAW REPORTS ALLAHABAD SERIES
doubt above Circular Letter has been
issued by Reserve Bank of India in the
year 2005, subsequent in time to the
dispute, which arose between the parties
on death of 'S' on 30.1.1985, but it
contains only instructions or guidelines to
Commercial Banks for improvement in
quality of customer service and clarifies
the legal position, hence is equally
relevant in instant case.

34. In view of discussions made
above, the Court is of the considered view
that position of survivor ''G' upon death of
depositor/former ''S' is only that of a
nominee, to whom even if the payment of
amount due had been made by Bank
(though admittedly has not been made as
yet), would have been only in due
discharge of bank obligation and on such
payment defendant would not have
become absolute owner of the amount so
received by her, as survivor/nominee,
rather would have been only a trustee of
the legal heirs of ''S' including her legatee
''R' the plaintiff.