Arnab Kumar Sarkar vs Smt. Reba Mukherjee And Ors.

on 10 November, 2006

Calcutta High Court

Arnab Kumar Sarkar vs Smt. Reba Mukherjee And Ors. on 10 November, 2006
Equivalent citations: AIR 2007 Cal 79, IV (2007) BC 134
Author: K J Sengupta
Bench: K J Sengupta, S Banerjee
JUDGMENT Kalyan Jyoti Sengupta, J.

1. After having read the draft judgment prepared by my learned Brother I could not to the best of my
ability, come to findings and conclusion different from what my learned brother has done. I,
therefore, endorse my full agreement with the conclusion arrived at by His Lordship, in my own
words as follows:

2. One Nirmala Sarkar, since deceased, originally brought this suit against appellant Arnab, and
State Bank of India, Calcutta Main Branch Office, for declaration that she was entitled to all the
moneys lying with the Bank above (Defendant No. 2) in the Fixed Deposit Accounts and Savings
Bank Account kept by his son Ashoke who died intestate. The suit was contested by the first
defendant, Appellant, Arnab, who filed written statement through his father being his Constituted
Attorney, Amit Sarkar. Admitted position in the case is that, Ashoke at the time of his death was
bachelor and he duly and lawfully during his lifetime nominated appellant after his death to receive
all the monies lying with the second defendant under the provisions of Banking Regulation Act,
1949 (hereinafter Bank Act in short). Appellant is the nephew (younger brother's son) of Ashoke,
since deceased. During pendency of the suit Nirmala died intestate and consequently Reba and Rina
came in the records of suit and became substituted plaintiffs to continue with the action. Several
issues were framed however the trial appears to have been conducted basically on two issues in
substance:

(1) Is the suit maintainable under the provision of Specific Relief Act (though not specifically averred
in the plain or in the issues)?

(2) Js the appellant entitled to claim beneficial ownership of the money lying with the Bank
respondent on the strength of nomination ?

3. Two witnesses on behalf of both the contesting parties were examined even though evidence in
true and practical sense was not warranted. The learned trial Judge granted declaratory decree that
the present plaintiffs are entitled to all the money lying with the defendant No. 2, Bank to the credit
of the deceased Ashoke Kumar Sarkar in the F.D. A/c. and Savings A/c as described in the schedule
A of this plaint together with interest therein till date of payment and further the defendant No.
1/Appellant has no right, title and interest in respect of the same. Speaking for myself the findings
and reasoning recorded by the learned trial Judge appear to me to be so confusing and
incomprehensible that it deserved to be set aside, but for ultimate conclusion arrived at by him.

4. So we took all pains to give completely fresh look to the matter. We read both sides' versions in
the pleading and evidence, and noted argument advanced before the learned Court below. At the
same time we heard Mr. Bidyut Banerjee, Senior Advocate for the appellant contending that the suit

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 Arnab Kumar Sarkar vs Smt. Reba Mukherjee And Ors. on 10 November, 2006

ought to fail by virtue of the provisions of Section 34 of Specific Relief Act, 1963 (hereinafter in short
SP Act), with mere declaratory relief, but without consequential one. His next contention is that the
money lying with the Bank could not belong to any one other than appellant by virtue of nomination
lawfully made by the deceased uncle in favour of only male descendant of Sarkar family, the
appellant. The legal effect of nomination of this nature unlike corresponding measure in case of life
insurance policy on death, is absolute disposition of the money in favour of the nominee. According
to him the learned trial Judge upon true interpretation of Section 45ZA of the Bank Act aught to
have held that the appellant being the nominee after death of Ashoke, and the appellant alone to the
exclusion of others is absolute owner of the said money lying with the Bank.

5. The learned Counsel for the contesting respondents supports the decree contending that Section
34 of SP Act is no bar to maintain this suit or to pass decree without prayer for consequential relief
specifically. He contends further that on careful reading of the above Section of Bank Act that a
nominee of depositor after his death become trustee of funds lying with Bank and is entitled to
receive the same for making over to the rightful owner and/or beneficiary of the same.

6. It seems to us Mr. Banerjee's first objection on maintainability of suit really rests on true import
of proviso of Section 34 of SP Act which is set out hereunder:

Provided that no Court shall make any such declaration where the plaintiff, being able to seek
further relief than a mere declaration of title, omits to do so.

7. No doubt in this section proviso predominantly governs the operation of entire Section which in
its turn provides for discretionary power of the Court. This legislative prohibition is not applicable in
all cases, it operates as bar where Court finds that a suitor cannot get complete relief without prayer
for appropriate consequential relief, and with mere declaratory relief. According to me Court's
pronouncement in favour of the plaintiff under this Section is not for futility but to achieve fruitful
object. In a given case if the Court finds that mere declaration affords effectual and complete
remedy, the above bar is not to be applied. The words "being able to seek..." used in the proviso, to
my mind is enabling provision for the suitor. In a situation where plaintiff's grievance cannot be
remedied without further relief and which is possible for the Court to grant it lawfully the plaintiff
must ask for the same either initially or by way of amendment so the issue of ability mentioned in
the said section has to be determined with reference to the circumstances of a particular case. In this
context a single Bench decision of Orissa High Court reported in AIR 1977 Orissa 88 is apposite. In
this case the plaintiffs sued for mere declaration that they were heirs and legal representatives of
one Naran Singh, but did not ask for consequential relief for cancellation of Succession Certificate
already granted in favour of first defendant viz. one Hema Dibya. The High Court in second appeal
relying on decisions of other High Courts, held such suit is maintainable and decree for declaration
simpliciter could be granted, and indeed granted by reversing the judgment of the first Appellate
Court, learned Additional District Judge and restoring the pronouncement of the first Court.

8. In the case on hand the money is lying with the Bank which is entrusted to hold the same and is
obliged to make over the same to the lawful claimant on the death of original depositor. It does not
appear from the pleadings and evidence that any attempt was made by the Bank to hand over the

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said fund to appellant. Had it been so it would have been absolute necessity for the plaintiff to ask
for prohibitory injunction, otherwise mere declaration decree would have been ineffectual and a
piece of paper. Thus it is difficult for us to accept the argument of Mr. Banerjee that the suit must
fail because of omission of the plaintiff(s) to ask for further relief, under Section 34 of the SP Act.

9. To deal with the Second issue I feel upon reading of Sub-sections (1), (2), (3) and (4) together its
proviso of Section 45ZA of the Bank Act, nomination in writing in this Section by the sole or more
than one depositor has the effect of testamentary disposition for limited purpose after death of the
depositor or depositors and in order to help the Bank discharge its obligation as trustee of the same
to the nominee the moment demanded. For this purpose Bank is not required to wait for production
of Succession Certificate, Letters of Administration or Probate and it is free to hand over the money
to the nominee on demand.

10. The non-obstante clause mentioned in Sub-section (2) and the word 'right' mentioned therein
intend to mean that in absence of any determination of right in favour of third party by any
competent Court of law the nominee is entitled to get and assert its all rights. Actually this Section
really protects the Bank from risk arising out of liability in case of payment being made to the
nominee, but such nomination and payment made under this Section do not affect the right or claim
of any other person in connection with the money deposited with the Bank meaning thereby lawful
claimant's right is saved from the purview of the said sub-section. In order to understand the true
effect and meaning of the word "right" mentioned in Sub-section (2) of Section 45ZA it has to be
read along with proviso of Section 45ZB and that of Sub-section (4) of Section 45ZA which have
protected the right of any lawful person who can establish by obtaining a decree, order or certificate
from a Court of competent jurisdiction or other authority. In the event any such decree, order or
certificate is produced the Bank obviously will not handover the money to the nominee meaning
thereby efficacy of nomination of the deceased depositor stand extinguished the moment decree,
order or certificate of the Civil Court is produced by any person, naturally the Bank is bound to obey
the Court's order. I therefore grant same relief as has been done by my learned Brother, affirming
the decree but not the reasoning recorded by the learned Trial Judge.

Sanjib Banerjee, J.

11. The nominee of a Bank Fixed Deposit has claimed in this appeal that by reason of such
nomination, he was also entitled to be the beneficiary thereof upon the death of the depositor.

12. The appellant had failed to resist in the Court below the decree of declaration that was originally
sought by the widowed mother of the deceased depositor. The effect of the decree sought and
granted is that notwithstanding the appellant being the nominee in respect of the Fixed Deposits
and a Saving Bank Account, it would be the heirs of the depositor and original account holder who
would have the right to enjoy the monies.

13. The mother did not live long enough to receive the money in her hands. She died during the
pendency of the suit and her daughters, as her intestate heirs, now support the judgment and
decree. Under orders of Court, the monies have remained beyond the reach of both sets of

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claimants.

14. The third respondent before us is the concerned Bank which holds the moneys. It was impleaded
to make the judgment and decree binding on it but, understandably, the Bank found no interest to
participate in the proceedings either in the learned Court below or before us.

15. The contention of the appellant, both in Court below and before us, has been that the act of
nomination is, in itself, the choice of the beneficiary in case of death of the depositor or
account-holder, that the nomination, or the papers filled up by the depositor or account-holder in
that regard, effectively concluded the destination of the monies covered thereby in the event of the
depositor's death prior to the maturity and as regards the residue in the account.

16. The principle settled by the Supreme Court in the decision reported at Smt. Sarbati Devi. v. Smt.
Usha Devi, the foundation of the mother's suit, was urged to be read only in the context of the
provisions of Insurance Act that were interpreted in that case. It was contended that since bank
deposits and accounts were not governed by the Insurance Act, the decision rendered in the Sarbali
Devi case could not be applied.

17. The contesting respondents, sisters of the deposit-holder and account-holder, have claimed that
the Sarbati Devi case applied in all force in the present one and notwithstanding different Acts and
Sections, the nominee in respect of an insurance policy stood on no inferior footing than the
nominee of a Fixed Deposit or a Savings Account.

18. The judgment assailed in this first appeal proceeded on the ground that as the depositor had
died intestate and as the nominee could not demonstrate any testamentary disposition in his favour,
he was merely a trustee, that he had authority to receive the money but not to use it.

19. We notice from the judgment of the learned Court below that objections as to inadequacy of
court-fees had also been taken, but such grounds have not been urged before us. The other ground
of similar nature, which has, however, been stressed before us is that in view of the proviso to
Section 34 of the Specific Relief Act, 1963, the sole relief for declaration was bound to fail.

20. The oral evidence received in course of the proceedings below is fairly irrelevant. The plaintiffs
sought to establish that the appellant had been chosen as the nominee as he was closest male
relative of the depositor. Though the learned Court below has discussed the evidence and has
discarded the testimony of the lone witness on the contesting defendant's side, such matters were
immaterial in the context of the decision that was required to be made. However, to complete this
inconsequential part of the proceedings below, we notice that the appellant had put up his
constituted attorney who deposed on his behalf which the learned Court below rightly disregarded.

21. It is the second of the two contentions that the appellant has raised that merits consideration
first. Section 34 of the Specific Relief Act mandates the consequential relief to be sought in aid of the
declaratory relief. In the absence of the consequential relief, it has been urged, declaration will be
refused.

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22. Section 34 of the Specific Relief Act reads as follows:

34. Discretion of Court as to declaration of status or right.- Any person entitled to any legal
character, or to any right as to any property, may institute a suit against any person denying, or
interested to deny, his title to such character or right, and the Court may in its discretion make
therein a declaration that he is so entitled, and the plaintiff need not in such suit ask for any further
relief:

Provided that no Court shall make any such declaration where the plaintiff, being able to seek
further relief than a mere declaration of title, omits to do so.

Explanation. - A trustee of property is a "person interested to deny" a title adverse to the title of
some one who is not in existonce and for whom, it in existence, he would be a trustee.

23. It appears that the objection of the appellant as to the reliefs sought hinges on the expression
"being able to seek further relief appearing in the proviso. If, indeed, the original plaintiff could have
sought further reliefs but failed or omitted so to do, the declaration could not be had.

24. In the written statement, the usual first paragraph challenging the maintainability of the suit is
present. There is more specific, yet as cryptic, ground taken in the fifth paragraph of the written
statement : that the suit was hit by the provisions of the Specific Relief Act. It does not appear from
the written statement or the oral testimony of the appellant's constituted attorney as to whether the
depo its had matured. The constituted attorney the appellant's father, declared that the depositor
"desired his money to be inherited by the defendant No. 1 of this suit".

25. It is evident that the further relief "referred to in the proviso relates to the legal character or right
as to any property". At the time of institution of the suit, it does not appear that the deposits had
matured. The plaintiff could not have sought payment from the appellant, as the appellant had not
received the money as nominee.

26. The proviso is not an absolute bar to the grant of declaration nor does the proviso render the suit
bad. Courts have permitted plaintiffs to amend plaints to incorporate consequential reliefs. Courts
have also not permitted such a ground to be advanced by the defendant at a belated stage.

27. The learned Court below does not record any objection as to the maintainability of the suit on
this ground urged before us. The ground of maintainability, which appears to have been the bone of
contention in the learned Court below, was as to the adequacy of the court-fees paid.

28. We also notice that the plaintiff had sought omnibus further reliefs.

29. We do not consider such ground to be good enough to upset the judgment and decree. There is
no material to conclude that the original plaintiff could have sought a money decree against the
appellant at the time of institution of the suit; it does not appear from the materials nor was it
shown by the appellant that the moneys had already reached his hands. We do not notice such plea

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to have been taken at the earliest opportunity or even in the Memorandum of Appeal. In any event
the original plaintiff had sought other reliefs that she may have been entitled in law or in equity.

30. It has also to be kept in mind that Section 34 is not exhaustive of declaratory reliefs that a Court
may grant.

31. This limb of the appellant's case fails. It is now the merits of the declaration sought and granted
that need to be inquired into.

32. The Supreme Court had held in Sarbati Devi case AIR 1984 SC 346 that a mere nomination in an
insurance policy did not have the effect of conferring on the nominee any beneficial interest in the
amount payable under the policy on the death of the assured. This view has been subsequently
followed by the Supreme Court and applied in cases other than insurance policies by this Court,
though, such subsequent decisions have not been cited at the Bar.

33. In the Sarbati Devi case AIR 1984 SC 346, the conflicting views of various High Courts were
before the Supreme Court. The Supreme Court construed Section 39 of the Insurance Act and
concluded as follows:

12. ...We approve the views expressed by the other High Courts on the meaning of Section 39 of the
(Insurance) Act and hold that a mere nomination made under Section 39 of the Act 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 assured. 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.

34. Section 39 of the Insurance Act as was construed by the Supreme Court in this Sarbati Devi case
AIR 1984 SC 346 provided as follows:

39. Nomination by policy-holder.- (1) The holder of a policy of life insurance on his own life may,
when effecting the policy or at any time before the policy matures for payment, nominate the person
or persons to whom the money secured by the policy shall be paid in the event of his death:

Provided that where any nominee is a minor, it shall be lawful for the policy-holder to appoint in the
prescribed manner any person to receive the money secured by the policy in the event of his death
during the minority of the nominee.

(2) Any such nomination in order to be effectual shall unless it is incorporated in the text of the
policy itself, be made by an endorsement on the policy communicated to the insurer and registered
by him in the record relating to the policy and any such nomination may at any time before the
policy matures for payment be cancelled or changed by an endorsement, or a further endorsement
or a will, as the case may be, but unless notice in writing of any such cancellation or change has been
delivered to the insurer, the insurer shall not be liable for any payment under the policy made bona

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fide by him to a nominee mentioned in the text of the policy or registered in records of the insurer.

(3) The insurer shall furnish to the policy-holder a written acknowledgment of having registered a
nomination or a cancellation or change thereof, and may charge a fee not exceeding one rupee for
registering such cancellation or change.

(4) A transfer or assignment of a policy made in accordance with Section 38 shall automatically
cancel a nomination:

Provided that the assignment of a policy to the insurer who bears the risk on the policy at the time of
the assignment, in consideration of a loan granted by that insurer on the security of the policy within
its surrender value, or its reassignment on repayment of the loan shall not cancel a nomination, but
shall affect the rights of the nominee only to the extent of the insurer's interest in the policy.

(5) Where the policy matures for payment during the lifetime of the person whose life is insured or
where the nominee or, if there are more nominees than one, all the nominees die before the policy
matures for payment, the amount secured by the policy shall be payable to the policy-holder or his
heirs or legal representatives or the holder of a succession certificate, as the case may be.

(6) Where the nominee or if there are more nominees than one, a nominee or nominees survive the
person whose life is insured, the amount secured by the policy shall be payable to such survivor or
survivors.

(7) The provisions of this section shall not apply to any policy of life insurance to which Section 6 of
the Married Women's Property Act, 1874 applies or has at any time applied:

Provided that where a nomination made whether before or after the commencement of the
Insurance (Amendment) Act, 1946 in favour of the wife of the person who has insured his life or of
his wife and children or any of them is expressed, whether or not on the face of the policy, as being
made under this section the said Section 6 shall be deemed not to apply or not to have applied to the
policy.

35. According to the appellant, the Supreme Court's construction was based primarily on Section
39(6) of the Insurance Act. In matters pertaining to bank deposits. Section 45ZA of the Banking
Regulation Act, 1949 would apply. According to the appellant, the non-obstante clause in
Sub-section (2) of Section 45ZA of the Banking Regulation Act, 1949 (the said Act of 1949) would
indicate that it was the nominee, and the nominee alone, who would be entitled to receive and enjoy
the benefits of bank deposits.

36. It is necessary to see the context in which such non-obstante clause appears in the relevant
section of the said Act of 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

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together, 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 varies 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.

37. The argument before us is that despite the law of succession, the bank was mandated to only pay
the matured value to the nominee and the language of Sub-section (2) was clear that "the nominee
shall, on the death of the sole depositor...become entitled to all the rights of the sole depositor in
relation to such deposit to the execution of all other persons unless the nomination is varied or
cancelled in the prescribed manner...."

38. The logical extension of such argument is that since there would be no letter on the depositor to
use the monies received on account of the deposits upon maturity, the nominee as the veritable
depositor could deal with such proceeds. The nomination, in this case was neither varies nor
cancelled and the appellant-nominee's rights, could not, it was urged, be usurped by the successors
of the depositor.

39. In isolation, such argument is attractive but it is the purpose of such provision that has to be
ascertained. Just as Section 39 of the Insurance Act, Section 45ZA of the said Act of 1949 is
essentially to provide for the discharge of the bank's obligation. The entirety of Section 45ZA and the
provision that follows it in the said Act of 1949, Section 45ZB, have to be taken into consideration.
Section 45ZB reads thus:

45B. Notice of claims of other persons regarding deposits not receivable.- No notice of the claim of
any person, other than the person or persons in whose name a deposit is held by a banking
company, shall be receivable by the banking company, nor shall the banking company be bound by
any such notice though even expressly given to it:

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Provided that where any decree, order, certificate or other authority from a Court of competent
jurisdiction relating to such deposit is produced before a banking company, the banking company
shall take due note of such decree, order, certificate or other authority.

40. But before taking the aid of Section 45ZB which, incidentally, was not referred to, the
appellantargument could be resisted on the strength of Section 45ZA alone.

41. In the learned Court below. Section 45-ZE of the said Act of 1949 was also pressed into service.
Section 45ZE relates to lockers and sale deposit vaults and also permits handing over of the contents
of a locker or vault to the nominee in the event of the death of the hirer.

42. Apart from the avowed purpose of the said Act of 1949. Section 45ZA appearing in Part-III-B,
which was incorporated by an amending Act of 1984, is restricted in its operation. Such provision
does not, as the Act in which it appears cannot, direct the fate of the assets of a deceased constituent
or depositor. It only limits the obligation and liability of the bank.

43. Sub-section (1) of Section 45ZA defines a nominee. The nominee is such person to whom the
amount of deposit may be returned by the banking company. Sub-section (2) confers the exclusive
right on the nominee to receive the amount of deposit. The provisions are concerned with the return
and the receipt of the deposit. As to what happens to the monies upon the return and receipt being
completed, is not governed by these provisions as they are beyond the pale of the Act.

44. The bank may be liable if the deposit is not returned to the nominee. It is the bank's obligation to
ensure that, the person claiming to be the nominee is. in fact, the nominee. Upon this return and
receipt, the bank is discharged. Sub-section (4) confirms such discharge.

45. But Sub-section (4) of Section 45ZA carries a proviso which, in the context, resolves all
confusion, if there was any to start with.

46. The "right of claim" referred to in the proviso, necessarily has to be in relation to the money
received by a nominee in respect of a bank deposit. The plaintiff in this case could not have sued the
bank or sought payment from the bank directly. Section 45ZA would not permit the bank to hand
over the payment to persons other than the nominee, unless the nominee so required or unless the
claimant produced the requisite document recognized in the proviso to Section 45ZB.

47. The entire purpose of Section 45ZA is to insulate the bank against any claim arising in relation to
the deposit. It does not clothe either the recipient with the exclusive right to the deposit or make the
recipient immune to any claim by any other.

48. The proviso to Section 45ZB completely dislodges the appellant's contention. The absolute right
of the nominee to receive the proceeds of a deposit is diluted upon the production of a decree, order,
certificate or other authority from a Court of competent jurisdiction. This specific use of the word
"certificate" points to the succession certificate that is generally obtained in such matters.

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49. Even without relying on the principles laid down in the Sarbati Devi case AIR 1984 SC 346, the
aforesaid provisions of the said Act of 1949 conclude the issue against the appellant. A nomination
in respect of a bank deposit cannot be elevated to the status of a testamentary disposition merely by
reason of the death of the depositor prior to the receipt of the proceeds from the deposits.

50. There is another aspect which needs to be noticed in this context. There are three situations
which can arise on the death of a depositor prior to the receipt of the deposit. The depositor may die
intestate as in the instant case. The depositor may leave a Will bequeathing the deposit. He may,
again, leave a Will without mentioning the deposit but on construction whereof it can be ascertained
where the residuary legacy would be parked. In all three cases, the principle will apply without any
dilution. As in the case of intestacy, in the absence of specific bequest in favour of the nominee, the
mere right to receive the deposit as provided in Section 45ZA of the said Act of 1949 would not
permit the nominee to retain the money.

51. The entire arguments have been made on the basis that this subject-matter of the suit was
restricted to fixed deposit accounts. It, however, appears that the appellant was also a nominee or
the like in respect of a saving bank account. No specific provisions have been shown governing
savings bank account nominees, which would detract from the law of succession applying to the
amount left over in such account upon the death of the holder.

52. The appeal falls. The judgment and decree of the learned Court below are affirmed.

53. There will, however, be no order as to costs.

54. Urgent xerox certified copy of this judgment, if applied for, be given to the parties on the usual
undertakings.

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