\nt£]X«n¸n\v \nba\nÀ½mWtam?

(By ]n BÀ. hnPbIpamÀ, AUzt¡äv, XriqÀ)

CubnsS kwØm\ kÀ¡mÀ Hcp \nbaw ]mÊm¡n hnÚm]\w sNbvXp. 2013þse tIcf [\Imcy Øm]\§fnse \nt£]IcpsS Xmev]cykwc£W BIväv F¶mWv t]cv. hnÚm]\w 16.2.2015þÂ. \nt£]Isc h©n¡p¶ [\ImcyØm]\§Äs¡Xnsc ISp¯ \S]Sn A\nhmcyw Xs¶. \nt£]I\v apXepw ]enibpw \jvS]cnlmchpsams¡ e`yamt¡IXpw AXymhiyw. AXn\v iàamb \nbahpw AXy´mt]£nXamWv. F¶m kwØm\¯v BÀs¡ms¡bmWv \nba]cambn s]mXpP\¯nÂ\n¶v \nt£]w kzoIcn¡m³ A\phmZapÅXv? \nb{´W§Ä¡phnt[bambn t\m¬_m¦n§v ^n\m³kv I¼\nIÄ, klIcWØm]\§Ä, tImÀ¸tdj\pIÄ F¶nhbv¡p am{Xsa s]mXpP\\nt£]w kzoIcn¡m³ ]mSpÅp. aäp hyànItfm ]mÀ«WÀjn¸v Øm]\§tfm tImÀ]tdäv AÃm¯ hyànIfpsS Atkmkntbj\pItfm s]mXpP\§fnÂ\n¶v \nt£]w kzoIcn¡p¶Xv 1.4.1997 apX dnkÀÆv _m¦v Hm^v C´y BIväv 45 Fkv hIp¸v {]Imcw \ntcm[n¨n«pÅXmWv.

C§s\ tI{µ\nbaw Xs¶ taev¸dª hn`mK§Ä s]mXpP\§fn \n¶pw \nt£]w kzoIcn¡p¶Xv hne¡nbncnt¡ Hcp hyànt¡m hyànIfpsS kwL¯nt\m (klIcW kwLaÃ) ]¦mfn¯ Øm]\¯nt\m “\nt£]w kzoIcn¡mhp¶ [\Imcy Øm]\w”F¶ ]Zhn \ÂIpIbpw s]mXpP\§fn \n¶pw \nt£]w kzoIcn¡p¶ BÄ AYhm Øm]\§Ä F¶v 2013þse tIcf [\Imcy Øm]\§fnse \nt£]IcpsS Xmev]cy kwc£W BIväneqsS hyàam¡pIbpw sNbvXncn¡p¶Xv AÛpXapfhm¡p¶XmWv.

1.4.1997 apX Hcp hyàntbm, ]¦mfnIfpsS Iq«mbvatbm (]mÀ«WÀ jn¸v) tImÀ¸tdäv AÃm¯ Atkmkntbj\pItfm s]mXpP\§fn \n¶v \nt£]w kzoIcn¨pIqSm F¶ \nbaw (BÀ._n.sF. BIväv) \nehnepÅt¸mÄ C¯cw hyàntbm Iq«mbvatbm Øm]\tam s]mXpP\§fn \n¶pw \nt£]w kzoIcn¡mw F¶v 2013þse [\Imcy Øm]\§fnse \nt£]IcpsS Xmev]cykwc£W BIväneqsS hyhØm]nXam¡n kwØm\¯v sImIphcp¶Xv F´À°¯nemWv F¶p a\Ênemhp¶nÃ. sN¿m³ ]mSnÃm¯ Asæn kzoIcn¡m³ ]mSnÃm¯ \nt£]§Ä taev]dªhn[w hyànIÄ¡pw C¯cw Øm]\§Ä¡pw kzoIcn¡msa¶pw aS¡n \ÂIp¶Xn hogvNhcp¯nbm am{Xw Cu 2013þse kwØm\ BIväv {]Imcw in£m \S]SnIÄ F¶papÅ coXnbn hyhØ sImIph¶ncn¡p¶Xv \nba]cambn Xs¶ \ne\n¡p¶Xà Ft¶mÀ¡Ww. hncp²amb tI{µ\nbaw \ne\nÂs¡ CsX§s\ kw`hn¨p F¶Xn\pw hniZoIcWw thIXmWv.

1958þse tIcf aWnsetâgvkv BIvänse “]WanS]mSpImc³”F¶ \nÀÆN\¯n \nt£]w kzoIcn¡pI IqSn sN¿p¶h\pw DÄs¸Spw F¶Xv CXphsc t`ZKXn sN¿mXncn ¡p¶Xv F´psImIv F¶ Imcyhpw ZpcqlXbpWÀ¯p¶pIv. tI{µ\nbaw C¯cw hyàn Itfm, ]mÀ«vWÀjn¸pItfm, hyànIfpsS Atkmkntbj\pItfm s]mXpP\\nt£]w kzoIcn¡cpXv F¶v hyhØ sNbvXv 16 hÀjambn«pw kwØm\\nba§fn C¯cw \nt£]w C¡q«À¡v Bhmw F¶ hyhØ \ne\n¡p¶Xpw hoIpw 2013þse BIväneqsS AXn\v ]¨s¡mSnIm«p¶Xpw \nt£]X«n¸n\v XSbnSmt\m AtXm t{]mÕml\w \ÂImt\m F¶ tNmZyamWv Ahtijn¡p¶Xv. 2013þse BIvänse 5þmw hIp¸v hmKvZm\§Ä \ÂIn ta¸dª hyànIÄ/Øm]\§Ä \nt£]w kzoIcn¡p¶Xv \ymboIcn¡pIbpw AkzoImcyX Cà F¶v tZymXn¸n¡pIbpw sN¿p¶p.

C§s\ A\phZn¡m³ ]mSnÃm¯ AYhm tI{µ\nba¯m \ntcm[n¡s¸« s]mXpP\ \nt£] kzoIcWw Hcp kwØm\w \nbaw \nÀ½n¨v BImw F¶p hcp¯n XoÀ¯ncn¡p¶Xv F´n\v? CXv IÅ\nt£]§Ä kzoIcn¡p¶ hyànIÄ¡pw ]mÀ«vWÀjn¸v Øm]\§Ä¡pw aäpw AhcpsS sXäv (\nbahncp²ambn kzoIcn¡p¶ s]mXpP\\nt£]w) icnsh¡p¶Xpw t{]mÕml\w \ÂIpwhn[apÅXpamWv. 2013þse tIcf [\Imcy Øm]\§fnse \nt£]IcpsS Xmev]cykwc£W BIväv 16.2.2015 apX \S¸nem¡nbXneqsS kwPmXambncn¡p¶Xv sXämb ktµiw P\§fnse¯n¡pI F¶XmWv.

hyànIÄ¡pw ]¦mfn¯Øm]\§Ä¡pw aäpw s]mXpP\¯nsâ ]Ww tXm¶pw]Sn \nt£]ambn kzoIcn¡mw F¶p hcp¶ hyhØIÄ 2013þse Cu BIvän \n¶pw DS³ Xs¶ ]n³hent¡IXmWv.

AÃm¯ ]£w s]mXpP\\nt£kwc£W¯ns\¶ t]cn sImIph¶ \nbaw ^e¯n \nt£]X«n¸n\pÅ \nba\nÀ½mWambn amdpw F¶Xv \nkvXÀ¡w.

Section 17(F) of the Registration Act -- An Analytical Study
Viz-a-vizConstitution and Existing Provision

(By Biju Menon K, Chief Judicial Magistrate, Kozhikode)

The object and impact of insertion of Clause (f) to Section 17 of the Registration Act making registration mandatory for agreement for sale of immovable property need to be addressed with more legislative sense.

As part of the above exercise, the following questions arise for serious consideration:

Whether courts are justified in refusing to entertain suits based on unregistered agreements?

Whether the State Legislature has power to add, amend or modify Section 17 in the present manner?

Clause (f), which was added by Act 31/13, reads thus:-

“All agreements for sale of immovable property for a consideration of 100 rupees and upwards shall be compulsorily registered."

The power of State Government to make rules under the Registration Act is dealt with under Section 89A of the Act.

Section 89A

Power to make rules for filing of true copies of documents:-

(1) The State Government may make rules for all purposes connected with the filing of true copies of documents in the appropriate Books under this Act.

(2)In particular, and without prejudice to the generality of the foregoing power, such rules may provide for -

(a) the manner in which true copies of documents shall be prepared; and

(b) the manner of filing of such copies.

(3) All rules made under this section shall be published in the Official Gazette and, unless they are expressed to come into force on a particular day, shall come into force on the day on which they are so published.

(4) Every rule made under this section shall be laid, as soon as may be after it is made, before the Legislative Assemblywhile it is in session for a total period of fourteen days which may be comprised in one session or in two successive sessions, and if, before the expiry of the session in which it is so laid or the session immediately following, the Legislative Assembly makes any modification in the rule or decides that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so however that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

Section 69 empowers the Inspector General of Registration to frame Rules subject to the approval of the State Government in certain matters

Section 69:

Power of Inspector General to superintend registration offices and make rules -(1) The Inspector General shall exercise a general superintendence over all the registration offices in the territories under the [State Government], and shall have the power from time to time to make rules consistent with this Act-

(a) Providing for the safe custody of books, papers and documents;

[(aam) providing the manner in which and the safeguards subject to which the books may be kept in computer floppies or diskettes or in any other electronic form under sub-section (1) of Section 6A;]

(b) declaring what languages shall be deemed to be commonly used in each district;

[(bb) Providing for the grant of licences to document writers, the revocation of such licences, the terms and conditions subject to which and the authority by whom such licences shall be granted and generally for all purposes connected with the writing of documents to be presented for registration.]

(c) declaring what territorial divisions shall be recognised under Section 21;

(d) regulating the amount of fines imposed under Sections 25 and 34, respectively;

(e) regulating the exercise of the discretion reposed in the registering officer by
Section 63;

(f) regulating the form in which registering officers are to make memoranda of documents;

(g) regulating the authentication by Registrars and Sub-Registrars of the books kept in their respective offices under Section 51;

[(gg) regulating the manner in which the instruments referred to in sub-section (2) of Section 88 may be presented for registration;]

(h) declaring the particulars to be contained in Index Nos.I, II, III and IV respectively;

(i) declaring the holidays that shall be observed in the registration offices; and

(j) generally, regulating the proceedings of the Registrars and Sub-Registrars.

(2) The rules so made shall be submitted to the [State Government] for approval, and, after they have been approved; they shall be published in the [Official Gazette] and on publication shall have effect as if enacted in this Act.

It is therefore clear that the rule making power of the State Government under the Act is confined to matters related to administration and procedure in the offices of Registrars. It is neither possible nor permissible to hold that execution of a contract for sale of immovable property and rights thereunder as per other laws (T.P. Act, for e.g.) relate to administration and procedure in the offices of Registrars.

Registration of deeds and documents comes under Entry No.6 of the Concurrent List in the Seventh Schedule of our Constitution. Registration Act passed by the Parliament has overriding effect over any state law dealing with the subject by virtue of Article 254 of the Constitution.

Article 254(1):

If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of Clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void.           (emphasis again by me)

The prerogative of the State Government is confined to the extent of powers to frame rules under Sections 69 and 89A. Surely, this does not include any amendment or addition to any substantive provisions of the Act like Section 17. Arguably, accepting the power of the State Legislature to enact/amend the law, when we find that there is an existing law which exempts agreements for sale of immovable property from registration, the amendment appears to be ultra vires.

Even if enactment of sub-section 17(f) is within the legislative freedom of the State, proviso to Section 49 of the Registration Act provides an avenue as it saves many unregistered agreements. It nullifies a subsequent amendment to Section 17 by virtue of Article 254.

Section 49, along with the proviso added by Act 21 of 1929, reads as under:-

Effect of non-registration of documents required to be registered.—No document required by Section 17 [or by any provision of the Transfer of Property Act, 1882,4 of 1822] to be registered shall-

(a) affect any immovable property comprised therein, or

(b) confer any power to adopt, or

(c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered:

[Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 1882) to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 (3 of 1877) [xxxx] or as evidence of any collateral transaction not required to be effected by registered instrument].

Therefore, the addition to Section 17 of the Registration Act by our State Legislature is invalid as it is repugnant and therefore void under Article 254 of the Constitution.

Another disturbing aspect is, despite the compelling reasons which led to the enactment under debate, it is arguable that it erodes freedom of contract. Subsequent experience shows that though number of suits for decree for specific performance has been high, property deals have decreased, which does not augur well for ordinary people who may be in dire need of money for various reasons.

It is, hence, open to courts to entertain suits for specific performance and return of advance money based on unregistered agreements for sale of immovable property. 

Hm¸-td-j³ Ipt_cbpw tIcf ]W-an-S-]mSv \nb-ahpw

(By -]n.-BÀ.hnP-b-Ip-amÀ, AUz-t¡-äv, XriqÀ)

Hcp A²ym-]nI CubnsS Cu teJ-Is\ ImWm³ h¶p. ssIhiw Hcp tImSXn t\m«o-kv. hmbv]bv¡v Pmayw \n¶v ]Ww ssI]-än-b-bmÄ Xncn-¨-S-bv¡m-sX-bm-b-t¸mÄ tIkm-b-Xm-Wv. F¶m A²ym-]n-Ibv¡v t\m«o-kn ]d-bp¶ 1þmw {]Xnsb (hm-bv]-sb-Sp-¯-bmÄ) Adn-bn-Ã. tNmZn¨p h¶-t¸mÄ Ipd¨p hÀjw ap¼v kl-A-²ym-]nI Hcp hmbv]mPmayw Xc-W-sa-¶m-h-iy-s¸-«-t¸mÄ Øm]-\-¯n H¸w-t]mbn NqIn-Im-Wn-¨n-S-s¯ms¡ H¸n«v Xncn-¨p-t]m-¶p. Iq«n-s¡m-Ip-t]mb klA²ym-]n-I-bm-hs« \m«p-Im-c\v Pmayw H¸n-«-Xp-anÃ! A`y-kvX-hn-Zy-cm-bn-«p-t]mepw I®-S¨v H¸n-«p-sIm-Sp-¡p¶ {]Ir-X-ap-Å-hÀ \ap-¡n-S-bn [mcmfw. t»Uv am^nb sdbvUnepw H¸n« »m¦v sN¡p-Ifpw ap{Z-]-{X-§fpw shÅ IS-em-kp-Ifpw \nc-h[n ]nSn-IqSn sb¦nepw AsXm¶pw in£mÀl-amb Ipä-]-{X-§-fmbn amdp-¶n-Ã. "Hm¸-td-j³ Ipt_c"cImw-L«w kÀ¡mÀ {]Jym-]n-¨n-cn-¡p-¶p. H¶mw-L-«-¯nse ]cm-Xn-¡mÀ¡v \oXn In«ntbm? H¶mw-L-«-¯nse 3000þHmfw tIkp-I-fn 699 tIkp-I-fn am{X-amWv NmÀÖvjoäv \ÂIn-bXv F¶v a{´n Xs¶ hyà-am-¡n. t»UvIm-cpsS tXÀhm-gvNbpw km[m-c-W-¡m-cpsS Bß-l-Xy-bv¡pw Adp-Xn-bnÃ.

2012þ tIcfw Aan-X-]-eni CuSm-¡Â \ntcm-[-\-\n-baw sImIp-h-s¶-¦nepw Cu \nb-a-¯nepw "Aan-X-]-eni"F¶m 1958þse aWn-se-tâgvkv BIvSnse 7þmw hIp-¸n ]d-bp¶ ]eni F¶mWv \nÀÆ-Nn-¨n-«p-Å-Xv. 1958þse \nb-a-¯n ]en-i-kw-_-Ôn¨v hnNn-{X-amb hyh-Ø-bmWv DÅ-Xv. kwØm-\¯v ]W-an-S-]m-Sp-Im-c³ hmbv]bv¡v hmWn-Py-_m¦v CuSm-¡p¶ ]en-i-tb-¡mÄ 2% IqSp-X ]en-isb hm§m³ ]mSpÅq (7-þmw hIp¸v). C§s\ kzÀ®-]-W-b-hm-bv]bv¡v 12% ]eni hmWn-Py-_m¦v CuSm-¡p¶p F¦n 14% am{X-amWv kzImcy ]W-an-S-]m-Sp-ImÀ hmt§-I-Xv. F¶m Ch-cpsS \ne-]mSv CX-Ã. hmWn-Py-_m-¦p-I-fnse hnh-[-Xcw hmbv]-I-fn sh¨v Gähpw  DbÀ¶ ]en-i-\n-c-¡pÅ hmbv] GXmtWm AXn-t\-¡mÄ 2% IqSp-X ]eni kzÀ®-hm-bv]bv¡p Xs¶ hm§mw F¶mWvv. AXmbXv hmWn-Py-_m-¦n t]gvk-W temWn\v (kzÀW-hm-bv]-bÃ) 17% amWv ]eni F¦n kzImcy ]W-an-S-]m-Sp-Im-c\v 19% ]eni kzÀ®-hm-bv]-bv¡p-Xs¶ hm§mw F¶mWv Ch-cpsS \ne-]mSv. CXn-\-hÀ ASn-Øm-\-am-¡p-¶Xv 7þmw hIp-¸n "tem¬kv"F¶p a{Xta ]d-bp-¶q-Åq F¶-XmWv. Cu \ne-]mSv adn-I-S¡m³ \mw CXp-hsc \nb-a-t`-Z-K-Xn¡v apXnÀ¶n-«n-Ã. C¯cw Ah-Ø-I-fn-emWv Ipt_c apt¶-dp-¶-Xv.

]eni kw_-Ôn¨ asämcp hkvXpX, C§s\ kzImcy ]W-an-S-]m-SpImcn \sÃmcp hn`mKw t\m¬_m-¦n§v ^n\m³kv I¼\n (NBFC)Bbn amdp-Ibpw aWn-se-tâgvkv BIvSnsâ ]cn[n adn-IS-¡p-Ibpw tXm¶nb ]eni hm§pIbpw sN¿p¶p F¶-Xm-Wv. t\m¬_m-¦n§v ^n\m³kv I¼-\n-Ifpw hmbv] \ÂIp-s¶-¦n aWn-se-tâgvkv BIvSv -{]-Imcw ssek³kv FSp-¡-W-sa¶ kÀ¡mÀ \ne-]mSv tIcf sslt¡m-SXn Unhn-j³ _©pw 2009se hn[n-bn-eqsS icn-sh-¨-t¸mÄ I¼-\n-IÄ kp{]ow-tIm-S-Xn-bn F¯p-Ibpw XÂØnXn XpS-cm³ D¯-chv hm§p-Ibpw sNbvXp. XpSÀ¶v kwØm\ \na-b-{]-Imcw F³.-_n.-F-^v.-kn.ImcpsS hmbv]m-]-eni \nb-{´n-¡m³ kwØm\¯n\v BhmsX h¶p. AanX ]eni \nb-{´n¨v Hm¸-td-j³ Ipt_c hnP-bn-¡-W-sa-¦n sslt¡m-SXn hn[n icn-sh-¨p-sImIv kp{]ow-tIm-S-Xn-bn \n¶v D¯-c-hp-Im-hm³ kwØm\ kÀ¡mÀ ASn-b-´nc \S-]Sn ssIs¡m-Å-Ww. ]e I¼-\n-Ifpw kzoI-cn-¡p¶ ]W-b-kzÀ®w hmWn-Py-_m-¦n Ipdª ]en-ibv¡v ]Wbw shbv¡p¶p. _m¦p-I-fm-Is« 4% ]en-i-bv¡v Irjn-hm-bv]-bpsS t]cn kzÀ®-]-Wbw kzoI-cn-¡m³ k¶-²-cp-am-Wv. C§s\ asäm-cp-h-gn¡pw km[m-c-W-¡m-c\p e`n-t¡Ihmbv] hgn-am-dp-¶p.

AanX ]enibv¡v t]meokv tIsk-Sp-¡p-¶Xv tIcf aWn-se-tâgvkv BIvSnse 3, 7 hIp-¸p-IÄ ewLn¨p F¶p ]d-ªv 17þmw hIp-¸p-{]-Im-c-am-Wv. Cu tIkp-Ifn an¡-hmdpw hnNm-cW Ign-bp-t¼mÄ in£ CÃm-sXtbm aXn-bmb in£ e`-n-¡m-sXtbm t]mIp¶p. ]e tIkp-Ifnepw hnNm-c-W-bv¡p-ap-¼p-Xs¶ NmÀPp-t]mepw sslt¡m-SXn d±m-¡n-. 6.1.2015Âsslt¡m-SXn ]pd-s¸-Sp-hn¨ hn[n (hn-aepw tIc-f-kw-Øm-\hpw X½n-epÅ tIkv) HcmÄ asäm-cmÄ¡v tcJ-I-fpsS _e-¯n ]Ww ISw sImSp-¡p-¶-Xv aWn-se-tâgvkv BIvSnsâ ewL-\-aà F¶v hyà-am-¡p-¶-Xm-Wv. CXv hyàn-]-c-amb Imcy-am-sW¶pw tImSXn NqInIm«n.  sdbvUn sN¡p-Ifpw aäpw IsI-¯n-b-Xns\ XpSÀ¶p-Im-b-Xm-Wv tIkv. aWn se³tUgvkv ssek³kpw DIm-bn-cp-¶n-Ã. F¶m t{]mkn-Iyq-j\v tIkv _e-s¸-Sp-¯m³ aäp sXfn-hp-I-fn-à F¶mWv tImSXn ]d-ª-Xv. asämcp tIkn  (2011 (1)  KLT 803)aWn-se-tâgvkv BIvSnse 18 C hIp-¸p-{]-Imcw C³kvs]-IvSn§v Akn.-I-½o-j-WÀ¡v tIm¼u-In§v At]£ \ÂIn-bm {Inan-\ tIkv DIm-bmepw ]ng HSp-¡m³ Ah-kcw \ÂI-W-sa¶pw ]ng HSp-¡n-bXv tImS-Xn-bn ImWn-¨m in£ eLq-I-cn-¡m³ Bhpw F¶pw sslt¡m-SXn hyà-am-¡p-I-bp-Im-bn. AXm-bXv ]W-ap-sI-¦n AS¨v {Inan-\ in£ Xs¶ A\-[n-Ir-X-]-W-an-S-]m-Sp-Im-c\v Ipdbv¡mw F¶p kmcw.

1958 se tIcf aWn-se-tâgvkv BIvSv Imtem-Nn-X-ambn ]cn-jvI-cn-¨n-«n-Ãm-¯-Xm-Wv. 2þmw hIp-¸n "_m¦v"F¶ t]cn ]W-an-S-]m-Sp-Øm-]\w ]mSnà F¶p hne-¡n-bn-«p-Iv. CXv adn-I-S-¡m³ ]W-an-S-]m-Sp-ImÀ t]cn-s\m¸w "_mt¦gvkv"F¶m-¡n. CXn-s\-Xnsc \S-]-Sn-sb-Sp-¯-t¸mÄ "_m¦v"F¶v tNÀ¡p-¶-Xnt\ Cu \nb-a-¯n hne-¡pÅp F¶v ]dªv sslt¡m-SXn ChÀ¡v A\p-Iq-e-amb hn[n Fgp-Xn. Npcp-¡-¯n kzIm-cy-]-W-an-S-]mSpw _m¦v BWv F¶ [mcW km[m-c-W-¡m-cn ]c-¡m³ CS-bm-bn. CXv adn-I-S-¡m³ Hcp t`Z-K-Xnbpw DIm-bn-Ã. dnkÀÆv _m¦v \nb-a-¯nse 45 Fkv hIp¸p {]Imcw hyàn-Itfm ]mÀ«vWÀjn-¸mtbm \S¯p¶ Øm]-\-§Ä sUt¸m-knäv kzoI-cn-¡m³ ]mSn-Ã. F¶m kwØm\ \nb-a-¯nse 2(7) hIp¸v sUt¸m-knäv kzoI-c-Whpw ]W-an-S-]m-Smbn C¶pw \ne-\nÀ¯n-bn-cn-¡p-¶p! CXv km[m-c-W-¡m-c³ h©n-X-\m-Im³ km[y-X-Iq-«p-¶p. A\-[n-IrX ]W-an-S-]m-Sn \nc-h[n hymPhpw Fgp-Xn-tNÀ¯-Xp-amb tcJ-IÄ ]nSn-Iq-SmdpsI-¦nepw {Inan-\ tIkn ]e-t¸mgpw NXn, hymP-tcJ Na-bv¡Â XpS-§nb Ipä-§Ä¡pÅ C´y³ in£m-\n-b-a-¯nse hIp-¸p-IÄ tNÀ¡m-dn-Ã. CXpw t»Uv am^n-bbv¡v Ffp¸w tIkn \n¶pw c£-s¸-Sm³ km[yX hÀ²n-¸n-¡p-¶p.

t\m¬_m-¦n§v ^n\m³kv I¼-\n-IÄ kwØm-\¯v Xg-¨p-h-f-cp-¶p. ImcWw cIm-Wv. (1) aWn se³tUgvkv \nb-aw, Aan-X-]-eni CuSm-¡Â \ntcm-[-\-\n-baw F¶nh {]Imcw AanX ]eni hm§p¶p F¶m-tcm-]n¨v ChÀs¡-Xnsc \ne-hn tIsk-Sp-¡m-\m-hn-Ã. CXn-\p-Im-cWw taÂ]-dª kp{]ow-tIm-S-Xn-bn InS-¡p¶ tIkp-X-s¶. ^ew Cu I¼-\n-IÄ¡v IqSp-X ]eni hmbv]bv¡v CuSm-¡m-\m-Ip¶p F¶-Xm-Wv. (2) dnkÀÆv _m¦v \nbaw hmbv]m-]-en-i-\n-c-¡nsâ Imcy-¯n hmWn-Py-_m-¦p-Isf \nb-{´n-¡p-s¶-¦nepw F³_nF-^vkn Isf \nb-{´n-¡p-¶nà F¶-Xm-Wv. Cu I¼-\n-IÄ¡v Ah-cpsS {]hÀ¯-\-Nn-ehv apX-em-bh ASn-Ø-m-\-am¡n kzbw ]eni\nc¡v \nÝ-bn-¡m³ kzmX{´yw \ÂIn-bn-cn-¡p¶p. kwØm-\w CXn-s\-Xnsc ià-amb bmsXm-cp-\o-¡hpw \S-¯p-¶n-Ã. kwØm-\s¯ Hcp {]apJ F³_nF-^vkn bv¡v F{X {_m©p-I-fp-sI¶v IW-¡ptIm F¶ hnh-cm-h-Imi At]-£bv¡v tI{µ-I-¼\n cPn-kv{Sm-dpsS adp-]-Sn, I¼-\n-\n-b-a-{]-Imcw cPn-ÌÀ sN¿-s¸« Hcp F³_nF-^vkn bv¡v F{X-sbms¡ {_m©pIv F¶v I¼\n cPn-ÌÀ sNbvX Hm^o-kn t]mepw Adn-bn-¡m³ \nb-a-]-c-amb _m[yX Cà F¶mWv! CXmWv \½psS \nb-ahpw \nb-{´-Whpw Ft¶mÀ¡p-I. Cu Ah-Øbn kwØm-\¯v C¯cw I¼-\n-IÄ F{X ]eni hm§n-bmepw Ipt_c-bv¡v \ne-hn H¶pw sN¿m-\m-hnà F¶XmWv hkvXp-X. kÀ¡mÀ ASn-b´n-c-ambn sNt¿IImcy-§Ä Ch-bm-Wv.

1. ta NqIn-Im-«nb tIcf aWn-se-tâgvkv BIvSnse Ipd-hp-IÄ DS³  ]cn-l-cn-¡-Ww.

2. kp{]ow-tIm-S-Xn-bn 5 hÀj-am-bn«pw XoÀ¸m-ImsX InS-¡p¶ kwØm\ \nb-a-¯n-s\-Xn-sc-bpÅ F³_nF-^vkn¡mÀ \ÂInb A¸o-ep-I-fn sslt¡m-SXn hn[n icn-sh¨v D¯-chv e`n-¡m-\pÅ kXzc \nb-a-\-S-]-Sn- DIm-IWw.

3. dnkÀÆv _m¦v \nb-a-¯n _mt¦-Xc [\-Imcy Øm]-\-§Ä¡v hm§m-hp¶ ]eni ¢n]vX-s¸-Sp¯n t`Z-KXn hcp-¯m³ tI{µs¯ kao]n-¡-Ww.

4. sImÅ-]-en-i-¡msc ]nSn-Iq-Sp-t¼mÄ ]W-¯nsâ Dd-hnSw IsI¯n F³t^m-gvkvsaâv Ub-d-IvS-td-än\v IqSn tIsk-Sp-¡m³ hgn-sbm-cp-¡-Ww.5. ]W-an-S-]m-Sp-ImÀ kzoI-cn-¡p¶ hkvXphmbv]-I-fn AXv ]cn-tim-[n-¡m³ ]©m-b¯p tXmdpw \nb-a-hn-Z-Kv²À IqSn AS-§p¶ Hcp I½n-änsb \ntbm-Kn-¡p-Ibpw Cu I½n-än-bpsS AwKo-Im-c-t¯msS AÃm¯ hkvXp]Wb hmbv]-IÄ¡v \nb-a-km-[p-X-bnà F¶v hyhØ sImIp-h-cn-Ibpw thWw.
6. \mSp-\o-sf-bpÅ A\-[n-IrX Nn«n-\S-¯n¸v \nb-{´n-¡m³ cPn-kvt{S-j³ hIp-¸n Hcp Hm^o-kÀ BWv DÅ-Xv. CXp amän ià-amb kwhn-[m\w A\n-hm-cy-am-Wv.

7. Hcp ]äw cmjv{So-b-¡mcpw t]meo-kp-tZym-K-Øcpw sImÅ-]-en-i-¡mÀs¡m-¸-ap-Iv. CXv _n\m-an-bmbn ]Ww Cd-¡nbpw tIskm-Xp-¡m³ A[n-Imcw D]-tbm-Kn-¨p-am-Wv. anI¨, kXy-k-Ô-cmb DtZym-K-Øsc "Ipt_-c-]Wn"G¸n-¡p-¶-Xn kÀ¡mÀ ]e-t¸mgpw ]cm-P-b-s¸-Sp-¶p. tUm: tXmakv  sFkIv 2007 Agn-a-Xn-c-lnX hmf-bmÀ ]²Xn hnP-bn-¸n¨Xv -{i²n-¡pI. \nIp-Xn-h-Ip-¸nse Gähpw anI¨ DtZym-K-Øsc Xnc-sª-Sp¯v ]me-¡m-S³ sN¡vt]m-Ìp-I-fn \nb-an¨mWv tUm: sFkIv kwØm-\s¯ Xs¶ \nIpXn hcp-am\w Db-À¯nb-Xv.

8. C¶v Hcp t»Uv ]en-i-¡m-c³ ]nSn-¡-s¸-«m Ah\v BsI en-¡p¶ in£ Pmay-¯n\p ap¼pÅ aqt¶m \mtem Znh-ks¯ dnam³Uv am{Xw.  sXfn-hp-ti-J-c-W-¯nsâ A`mhw IqSn-bmWv tIkp-IÄ ZpÀ_-e-am-Ip-¶-Xn\v Imc-W-sa¶v sslt¡m-SXn Xs¶ NqIn-Im-«n-b-Xm-Wv. sF.]n.kn. hIp-¸p-IÄ IqSn tNÀ¯pÅ NmÀÖv X¿m-dm-¡epw A\n-hm-cyw.

9. hmWn-Py-\n-IpXn hIp-¸n hcp¶ ]W-an-S-]mSv ssek³kv At]-£-IÄ [mcm-f-am-Wv. `qanI-¨-h-S-¯nse \nÝ-em-h-Øbpw KÄ^n \n¶pÅ Xncn-¨p-h-chpw Hs¡ CXn\p Imc-W-am-Wv. F¶m ssek³kn§v A[n-Im-cn-bmb hmWn-Py-\n-IpXn Akn:I-½o-j-WÀamÀ  \nIpXn ]ncn-hp-ambn _Ô-s¸« Xnc-¡n-\nS-bn-emWv aWn-se-tâgvkv BIvSv AUvan-\n-ÌÀ sN¿p-¶Xv. AXn-\m CS-hn-«pÅ ]W-an-S-]m-Sp-Øm-]\ ]cn-tim-[\, tIsk-Sp-¡Â F¶nh k{In-b-am-Im³ PnÃ-tXmdpw Cu hIp-¸n Hcp Akn:I½o-j-W-sd-sb-¦nepw Cu BIvSnsâ am{Xw ]qÀ®-Np-a-Xe \ÂIn \nb-an-¡-Ww. C§s\ krjvSn-]-camb \S-]-Sn-IÄ CÃm-¯-]£w ‘Ipt_c’C\nbpw ]cm-P-b-s¸-Spw. Aan-X-]-en-i-¡mÀ tXÀhmgvN \S-¯p-Ibpw sN¿pw !

Kerala Advocates Welfare Fund Act, 1980
Further Amendment is Needed

(By Adv. Parippally R. Raveendran, Former Member Bar Council of India, & 

Former Vice Chairman, Bar Council of Kerala)

1) In the justice delivery system the harmonious blending of the bench and Bar is a necessary requirement and role of a lawyer in the administration of justice is very vital. United States of America is having the largest member advocate in the Bar in the world and next after that our country is having more than 18 lakhs advocates enrolled in various State Bar Councils as advocates. During the pre-Independence era this noble profession was attracted by only few members from the upper class community but after Independence the legal profession in India became too popular and middle class and lower middle class people were also attracted to this profession and the profession became more popular. A study of Dr. N.R. Madava Menon reveals that the average lawyer of Madras is earning only meagre income of Rs.1,500/- per mensum. The Economic situation of lawyers of the country is deteriorating day by day. Only very few people in the profession are getting attractive fees and income who are in the upper strata. Majority of the members of the legal fraternity are getting worried about their professional prospects and daily income and the social security measures are alien to the profession. In this context the Kerala Advocate Welfare Fund Act can be treated as a unique piece of Social Welfare of legislation.

2) By virtue of Sections 6(2), 7(2), 15(2) g(a) of the Advocates Act , 1961, Bar Council of India and State Bar Councils constitute one or more fund for the purpose of giving financial assistance to organize welfare schemes for the indigent disabled and other advocates. Based on this provision, the State of Kerala has passed the Kerala Advocates Welfare Fund Act, 1980 (Act 2 of 1980) w.e.f.05.04.1981.

3) The principal Act was promulgated on 10.12.1980 and brought into force by notification dated 05.04.1981. The object of the Act is to provide terminal benefits on different stages apart from other attended benefits.

4) As per the original legislation Rs.30,000/- was provided and in 1989, 1993, 2001 and 2011 the Act was periodically amended and on 24.01.2011 as per amendment Act 2 of 2011 the terminal benefits was raised to Rs.14,285/- prospectively. However while legislating the ordinance in terms of Act 2001 prospective effect has been given for the first time and so much of erosion from the fund put an end. By the last amendment in 2011 Rs.5,00,000/- was given to the member who attained actual practice of 35 years in profession. The main source of income generated to fund is from the sale of stamps and annual subscription of the members. We have to share the anxious consideration of the Trustee Committee that the source of fund to the corpus is too limited. Apart from the sale of stamps annual subscription and admission fee, 20% of the enrollment fee and income from the Legal Benefit Fund are the other sources.

5) On account of the 2011 amendment the retiral benefit is enhanced to Rs.14,285/- for every completed year of practice and maximum amount is Rs.5,00,000/- at the saturation point of 35 years. At the time of existing members who attained 32 years of practice category, commuting their then entitlement of Rs.3,00,000/- as on 10.06.2008, they can continue in the fund and to entitle Rs.14,285/- early up to the maximum Rs.5,00,000 thus ensured continuity and there by avoided a sudden drain (Rs.3000/-) becomes Rs.14,285/- ie. Five times increase.

6) Those members who have stopped practice and received benefits under the Act and if they wish to resume practice can do so by repaying the amount received with interest of 12%.

7) In terms of section 3(2) (c) and (3) of the K.A.W.F Act the amount set apart from Legal Benefit Fund Constituted under sub-section (2) of Section 76 of the Kerala Court Fees and Suit Valuation Act, 1959 provided social security measures for the legal profession and shall be credited to the fund.

8) Rule 11(2) of the Kerala Legal Benefit Fund Rules, 1991 empowers KAWFTC to receive 50% of the total amount available as on 31st March every year from Legal Benefit Fund. A total amount of Rs.9,24,22,000/- is available during the year 2013-14 for apportionment and Rs.3,23,47,700/- was allotted to the KAWF by KLBF and its meeting dated 22.2.2014 and a total amount of Rs.10,64,50,768/- was received by the trustee committee till that date.

9) It is pertinent to note that out of 17372 lawyers were admitted to the membership of the fund 1402 persons were availed benefit from the fund and total disbursed amount is so far Rs.54,69,0978/-.

10) During the time of the LDF Government the AILU agitated for grant of some amount from the Government and the then Government ordered to pay an amount of Rs.2 crores by way of grant to the fund. But some delay was occurred in handing over the amount and finally the lawyers union constrained to approach the Hon’ble High Court of Kerala and filed writ petition against the Government and finally the Government released the amount in terms of GO(RT) 1537/2013 Law dated 27.11.2013.

11)  In order to strengthen the financial stability of the Fund the corpus is to be enhanced further. The main source of income is sale of stamps. In order to further enhance the welfare fund to Rs.10 lakhs the corresponding increase in the value of welfare stamps is highly necessary. Now, the State is the main litigant in almost all the cases. But for appearance the State memos are being filed without any stamps and there should be a statutory mandate had to be given to such authorities to affix stamps. Now to High Court Rs.25/- and Subordinate Courts Rs. 15 being levied as welfare stamps. It is to be enhanced at the rate of Rs.100/- and 75 respectively, at the event of enhancing the welfare fund to 10 lakhs and corresponding increase must be made in the annual subscription and thereby the member will get Rs.25,000/- per annum instead of Rs.14,285/- as on today.

12)  Now a nominal income of Rs.150/- is levied as enrollment fees. The statutorily fixed 20% is to be increased and the Bar Council has to take a decision to enhance its revenue from the total enrollment expense by at least 10-15%. Out of the court fees levied by the Govts. it is the long standing demand of the legal fraternity to set apart at least 5% of the total court fees for the welfare fund functioning of the Advocates Welfare Fund.

13)   As per the last amendment, for the premature death of the member the legal heirs will get Rs. 3 lakhs. But that should be limited to the age of 55 as stood earlier, otherwise it will be another cause for the drain from the fund.

The present financial position of the Trustee committee.

TABLE I

1. Total number of advocates as per State Roll:          46,916

2. Active members in KAWF:                                          17,372

3. Number of W/F members who completed 35 years of practice:            2,592

4.Amount required for meeting these 2592 claims as per present rate:-Rs.129,60 crores

5. Total amount disbursed from the Fund from 1981 onwards:     Rs.54,69,00,978/-

6. Number of members availed W/F benefits on account cessation of practice 1402

7. Number of death claims:                                             1796

8.Retirement benefit:                                                        153

9. No. of members availed Medical aid :                       338 members

10. -do- Educational aid :                                                 19

11. Meeting Expenses/Year:                                           Rs.40,865/-

12. Establishment expenses/year:                                 Rs.16,59,108/-

13. Printing & Stationary :                                                Rs.52,965/-

14. Telephone bill :                                                           Rs.18,302/-

15. Amount received from KLBF to W/F from the year 2007 onwards :

                                                            Date of receipt

                                                            1.8.2007   : Rs. 68,952

                                                            20.6.2009  : Rs. 21,377

                                                            10.9.2009 : Rs. 31,377

                                                            9.6.2010   : Rs. 31,377

TABLE II

MAXIMUM AMOUNT PAYABLE

*       1981 - 30,000/-

*       1989 - 60,000/-

*       1993 - 1,00,000/-

*        1995 - Stamp Value Rs.2 to Rs.5 [2000-10/-]

*        2001 - 3,00,000/-

*        2008 - 5,00,000/- [prospective]

*        All others retrospective-mounting liability

Some Vital Statistics - As on31.10.2008

*     Total No. of Adv. On Roll-32,770

*      Members in the fund - 19,147

*     No. of members who have completed 35 years of standing and eligible for Rs. 5 lakhs-937

*    Rs.3,00,000/- x 937 = Rs.28,11,00,000/-

*    Fund available -Rs.4,27,00,000/- may cater to maximum 143 members.

*    Esta. Expenses:- No. of staff- 3+1, Salary-Rs.6 lakhs/yr

*    Printing- Rs.10,000, Telephone- Rs.25,000, Meeting - Rs.21,000 [Total below 7 lakhs only]-

*   No rent being collected, by the Bar Council, KSEB, KWA.

TABLE III

Grant from Government received so far

*            1984-85  Rs.10,00,000/-

*            1985-86  Rs. 5,00,000/-

*            1986-87- Rs.5,00,000/-

*            1987-88- Rs.5,00,000/-

*            1988-89  Rs..2,00,000/-

*            1989-90  Rs.5,00,000/-

*            1990-91  Rs.5,00,000/-

*            1991-92 Rs.5,00,000/-

*            1992-93 Rs.1,00,000/-

*            1993-94 Rs.1,00,000/-

*            1994-95 Rs.1,000/- from 1996 onwards-Nil

As per the Writ Petition against the Government in pursuance to the High Court order Government released Rs.2 crores for after a long gap of 1994-1995.

TABLE IV

Contribution from Legal Benefit Fund till 2007

16.07.2005           Rs.15,53,800/-

17.06.2006          Rs.1,74,17,5000/-

16.07.2007          Rs. 68,95,235/-

The mainobjectives of the last amendment

* Prevented drainage of Fund from unreasonable and unjustifiable claims

* Mobilized additional income for stabilizing the Fund

* Brought more benefit to the Members.

* Amendments came into effect prospectively

* Eliminated advocates ‘not in active practice’ from the membership

* Issuing passbooks with photo identification, with name of nominees

The Bar Association can take a vital role in eliminating the non-practicing lawyers who are enjoying the benefits actually intended for practicing lawyers. A sizable number of members are engaged in other avocation and business and even working aboard. In order to ensure transparency and financial viability of the fund expulsion of the non-practicing members and the periodical renewal of members in the fund with some documentary evidence duly certified by the Bar and Bench is necessary to eliminate the ineligible persons.

TABLE V

THE EXISTING ANNUAL SUBSCRIPTION RATES

                                                       Rates            

                                                            Existing              Proposed

Below 5 years                                      200                      300

Below 10 years and above 5 years     500                      750

Below 15 years and above 10 years    1000                 1500

Below 20 years and above 15 years    1500                  2000

On or above 25 years                         1500                   2500

Above 25 years                                   3000 (new slab)

For Designated Seniors                    3000                   5000 

* To strengthen the financial stability the applicability of Sec.75(1) may be extended to all appeals, revisions and original proceedings instituted and commenced in Kerala State before all Tribunals and appellate authorities, including High Court.

* A reasonable percentage of the penalty, fine or cost levied by all courts, Tribunal and other authorities may be set apart for the Kerala Advocates Welfare Fund. With the ouster of jurisdiction of courts and conferment of the same on Central Tribunal like Debt Recovery Tribunal, Central Administrative Tribunal etc, there in a big fall in the Court fees and additional fee levable. The Union Government may be persuaded to make appropriate legislation to enable the State to secure 0.5% of the subject matter involved in any proceedings before these Tribunals to be collected and credited to the Advocates’ Welfare Fund for the purpose of providing social security measures for the members of the legal profession.

Afresh notification may be issued to the effect that additional court fee now being collected @ 0.5% be raised to 1%

TABLE VI

Welfare Scheme UnderKerala Advocates Welfare Fund are as follows:

1.   Medical aid to members [Section 18 (b)].

a) Application for Medical aid Form IX.

2.   Educational aid to members [Section 18(b)].

a) Application for Educational Aid.

3.   Retirement benefits of lawyers on account of cessation of practice [Section 16].

a) Application for retirement benefits- Cessation Form VII.

4.   Terminal benefit to the family of deceased lawyers [Section 16].

a) Application for Terminal benefits-Form VII.

STATEMENT OF CASH INFLOW AND OUTLAW FOR THE PERIOD
1.7.2009 TO 30.06.2010 AFTER ISSUANCE OF THE ORDINANCE AND
BEFORE NOTIFICATION OF THE AMENDMENT

Total members                                                                                19,682

Fund Available with Trustee Committee                                7, 40, 41,000.00

Number of members eligible for maximum amount                            1180

Total inflow during the year                                                     5,91,88,466.00

Total outflow-do-                                                                      3,32,23,143.00

                                                                  Surplus                      2,59,65,323.00

Inflow: Particulars

Subscription                                                                               3,26,14,000.00

Application fee                                                                           2,97,500.00

Sale of stamp                                                                              1,82,92,500.00

Legal Benefit fund                                                                     52,75,576.00

Income from investments                                                                     25,40,800.00

20% of Enrolment fee-from Bar Council                                           1,68,090.00

Outflow: Particulars

Death & Cessation (86+54)                                                     3,21,86,353.00

Medical Aid (14)                                                                         70,000.00

Establishment Expenses                                                         9,66,790.00

Fund balance as on date (23.7.15)                                        17 crores.

Not even half of the enrolled members are not joined in the fund. A statutory provision is to be enacted for enlisting them in the fund irrespective of their standing if they pay the arrears of subscription by calculating some mechanism without affecting the financial viability of the fund.

Though more than 18 lakh lawyers were enrolled in India only in few states like Kerala, Tamilnadu, Andrapradesh, Karnantaka, U.P. are having the Welfare Fund Schemes. There is no uniform central legislation introduced by the Government of India or Law Ministry for the Welfare of the legal fraternity so far applicable to all States and Union Territories. Among the States Kerala Model legislation is worth and unique in all aspects and we have to strengthen the fund.

The Law Does Injures, the Nominee Too

(By R.P.Remesan, Advocate, Kannur)

A business man who had significant amount of savings in the rural Co-operative bank died intestate. One of his sons was the nominee in the bank account. On his death the nominee succeeded in obtaining the money from the bank. Of late the other children and the wife of the deceased came to notice the withdrawal of money by the nominee. As he was not ready to part with the amount they have instituted suit against him for equal distribution of money which is being opposed by the nominee.

The above is only an illustration. We can see such cases everywhere. In all cases suits were filed against the nominee and in almost cases suits are decreed in favour of the
plaintiff/s. If the defendant (nominee) is a shrewd personality, realization of the decreed amount become unsuccessful.

In the latest judgment in the row of umpteen in Suma Devi v. Sub Treasury Officer (W.P.(C).No. 13009 of 2014) it was held that “the law is well settled that the nominee is entitled to receive the amount on behalf of the legal heirs as a trustee and it is the obligation of the nominee who receives the amount to disburse the same to the legal heirs. As far as the 1st respondent is concerned, he cannot insist that all the legal heirs as shown in the succession certificate should come forward to receive the amount. If at all there is any dispute with reference to disbursement of the amount covered by the fixed deposit, it is for the legal heirs to approach the competent court of law and seek appropriate remedies.” As it is rightly held that the position of law became settled by the repeated judgments of Supreme Court and High Courts.1 In all the decisions the courts observed that the nominee is only an agent or a person to hold the money in trust and his duty is to disburse the amount to the legal heirs of the account holder. Nomination would not amount to a Will or a gift or trust in favour of the nominee.2 
This observation further asserts that the amount should go to the hands of the legal heirs of the deceased. If this is the situation why should there be a nominee in the bank
deposits/accounts.

A nominee is only an agent. The dictionary meaning of the word nominee is “ a person or entity who is requested or named to act for another, such as an agent or trustee.” The verdicts referred above are in tune with the dictionary meaning of the word ‘nominee’. There are different types of nominees in law. Nominee in an election proceedings and in a company meeting are for different situations and they are dealing with a varied scenario than the nominee in a bank deposit/account. A nominee in a company meeting can exercise the functions of the principal. In election process nomination is a statutory mandate and once his nomination is accepted he became the candidate leaving no connection with the person by whom he was nominated.

Unlike the above situations a nominee in the bank account has more responsibility and the duty incumbent upon him may continue for years giving him bane of busy. It is also possible for a nominee to get benefit out of the transaction putting all the legal heirs in trouble as we have seen in the illustration referred above. This is the situation which compels to explore the statutory mandate for making nomination in the bank accounts/deposits.

Section 4 of The Government Savings Banks Act, 1873 (Act No. 5 of 1873), one of the oldest Act reads:

“4.Nomination by depositor.(1) Notwithstanding anything contained in any law for the time being in force, or in any disposition, whether testamentary or otherwise, by a depositor in respect of his deposit, where any nomination made in the prescribed manner purports to confer on any person the right to receive the deposit on the death of the depositor, the nominee shall, on the death of the depositor become entitled, to the exclusion of all other persons, to be paid the deposit, unless the nomination is varied or cancelled in the prescribed manner.”

Section 39 of The Insurance Act, 1938 (Act No. 4 of 1938) also provides nomination clause.

“Section 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.”

Similar provisions have been made in the Banking Regulation Act (Act No. 10 of 1949) also.

“Section 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, 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.

The word ‘may’ used in S.45ZA(1) of B.R. Act gives the depositor an advantage of receiving the amount by a person on his death, if he nominated someone. The word ‘one person’ in the above provision further asserts that the depositor cannot nominate all of his legal heirs as nominees. So the probability is that there will be a person to receive the amount from the bank and if he is not the sole legal heir there will be one or more persons legally entitled to receive the said amount. The proviso to sub-clause (4) asserts this view.

“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.”

Section 45ZB of B.R. Act further ensures that no banking companies are bound to notice of claim by other person in specific terms.

 45ZB. 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 even though expressly given to it: 

The question is why the provision of nomination has been incorporated in the Act? Was it for the benefit of depositors? No. It is for the convenience of the bank. It is essentially to provide for the discharge of the bank’s obligation.3 Answer to this question is merged in sub-section (4) which reads:

(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:

The above provision emerges that a depositor cannot decide to whom the deposited amount should be given on his death unless he executed a Will. So the depositor is not benefited by appointing anyone as a nominee. At the same time the bank can disburse the amount to the nominee and avoid further litigations against it. By doing so the bank or the holder of the deposit is freed from keeping the amount with them. So the purpose of nomination is only for the benefit of the bank and not for the depositor or his legal heirs. I couldn’t find any decision where the court considered the question of necessity of nominations in the bank account/deposits.

The principle Actus legis nemini facit injuriam (The act of the law does injury to no one) is fundamental to any system of justice and applies to our jurisprudence, the Supreme Court said in Busching Schmitz (P) Limited v. P.T. Menghani (AIR 1977 SC 1569.) But the law explained above goes against the fundamental principles and opens battle between the nominee shown in the accounts/deposits and the legal heirs of the deceased account holder. If there is no provision to make nominee in the accounts the legal heirs can collect money as prescribed in law. Or the person who was appointed as nominee to receive the amount is permitted to use the amount as his own creates no harm to anyone and the intention of the depositor become more effective. Since there is a nominee the legal heirs have to rush to the bank/institution soon after the death of the depositor with a request not to disburse the amount to the nominee or to approach the court of law restraining the bank/institution from releasing the amount to the nominee. The courts are not supporting to the proposition that the nominee can use the amount as his own. It was held that no person or body can, at their will introduce any peculiar rule of inheritance or distribution and that a nomination is not a will.4 In short the law compels/permits the depositor to name a person to receive the amount from the bank in the event of his death but prevent the nominee to use the amount as of him. If it is the aim of law that the amount should reach to the hands of the legal heirs and none others what is the necessity of making a nomination except for the advantages of the bank as aforesaid.

Though it is possible to reach a conclusion that the nomination is for the convenience of the bank as held in Arnab Kumar Sarkar v. Reba Mukharjee, on a meticulous examination one could find that there is no benefit to the bank even if the amount is paid to the nominee. In fact they are the loser. On the death of the depositor the bank can treat the account as continuing account till the legal heirs makes a valid claim so that the bank will be benefited. The chance of the bank to keep the money with them for some more periods is lost by the nomination of a person in the account. So the final conclusion is that no one is benefited for the nomination in the account and it only opens litigation between the nominee and legal heirs of the depositor/s. The only way to solve the impasse is to treat the nomination as a Will of the depositor or restrict the right of the nominee to receive the amount from the bank if the depositor left any legal heirs behind him. The most comprehending way is to struck down the provisions relating to the appointment of nominee in bank deposits/accounts.

Foot Note:

1.Aimai v. Awabai Dhanjishaw Jamsetii & Ors.(AIR 1924 Sind 57), Hardial Devi Ditta v.  Janki Das & Anr. (AIR 1928 Lah. 773),D. Mohanavelu Mudaliar & Anr. v. Indian Insurance Banking Corporation Ltd. Salem & Anr .( AIR 1957 Mad. 115), Narayanan S/o Late Ganesh Pai v. Aesha (AIR 1964 Ker.197), Sarojini Amma v. Neelakanta Pillai (1960 KLT 1319 (F.B.) = AIR 1961 Ker. 126), Raja Ram v. Mata Prasad (AIR 1972 All.157, Mamta Sen v. Life Insurance Corporation of India (AIR 1981 Cal. 283), Shaik Dawooj & Ors. v. Mahmooda Begum & Ors. (AIR 1985 AP 321), Sarbati Devi & Anr. v. Smt. Usha Devi (1984 KLT SN 12 (C.No. 23) = (1984) 1 SCC 424).

2. Hardial Devi Ditta v. Janki Das & Anr.(AIR 1928 Lah. 773).

3.   Arnab Kumar Sarkar v. Reba Mukharjee(AIR 2007 Cal. 79).

4.   Aimai v. Awabai Dhanjishaw Jamsetii & Ors.  (AIR 1924 Sind 57), Consumer Care Society v. Union of India  (AIR 2011 Kant 46).