TaxTMI 
TaxTMI 
1992 (12) TMI 228
X X X X Extracts X X X X
X X X X Extracts X X X X
....ner has filed this petition for issue of Succession Certificate in respect of certain debts and assets belonging to the deceased by his next friend, mother and natural guardian the said Freny Irani. There is no dispute that the petitioner is the minor son of the deceased and the petitioner is his only heir. 3. The assets of the deceased include a sum of Rs. 1,95,167/- lying to the credit of the deceased in the Provident Fund Account bearing No. 2590. The deceased died on October 4, 1992. 4. The respondent No. 4 has filed an affidavit in reply to this notice of motion contending that the deceased had nominated respondent No. 4 in respect of the provident fund dues. The respondent No. 4 resists this notice of motion on the ground that the respondent is absolutely entitled to provident fund amount by virtue of the said nomination. The respondent No. 4 contends that the said amount does not form part of estate of deceased and no injunction and/or other relief can be granted in respect thereof. The respondent No. 4 has not raised any other contention in respect of any other assets of the deceased or otherwise. In substance, the respondent No. 4 resists grant of application for iss....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dent Fund Scheme framed by the Central Bank of India. There is considerable force in this submission of learned counsel. I accept the sub-missions correct. 8. The Employees' Provident Funds Scheme, 1952 has a legislative history of considerable significance. Prior to amendment by Act XI of 1946, Section 5 of the Provident Funds Act, 1925 provided as under : "Any nomination which purports to confer upon any person the right to receive the whole or any part of such sum on the death of the subscriber shall be deemed to confer such right absolutely." By the Amending Act XI of 1946, Section of the Provident Funds Act, 1925 was amended and the expression "absolutely" occurring hitherto in Section 5 was omitted and for a good reason. Section 10(2) of Employees' Provident Funds and Misc. Provisions Act, 1952 i.e. the Succession Act reads as under :- "(2) Any amount standing to the credit of a member in the Fund or of an exempted employee in a provident fund at the time of his death and payable to his nominee under the Scheme or the rules of the provident fund shall, subject to any deduction authorised by the said Scheme or rules, vest in the nominee and shal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing the amount from employer and handing over the same to the heirs entitled thereto. 10. It appears to me to be of considerable significance to refer to the judgment of Tayyebji, C.J. in the case of Noormohammed v. Must. Sardar Khatoon, AIR 1949 Sind 38. In this case the learned Chief Justice observed as under :- "The word 'vest' has very well defined meaning. Vesting in relation to property means the acquisition of the legal right of immediate possession and dominion over property. It means nothing more. The ..... words" the sum shall vest in the nominee" do not connate anything more than that in law the legal right to immediate possession of and dominion over the property shall pass from trustees of the fund to the nominee and do not mean that the full rights of ownership including the right to the beneficial enjoyment of the property shall pass to the nominee". The heir of heirs of the deceased or the legatee or legatees under the will of the deceased alone have title to the provident fund nominee. If the law of provident fund restricts the category of such heirs or legatees to the relatives like wife, children, dependent parents, special provisions contained i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... language of Section 10(2) of Provident Funds Act or in the context of other provisions of the Act so as to support the construction put forward by learned counsel for respondent No. 4. 13. I shall now refer to the conflict of judicial opinion between the two leading judgments cited before me i.e. the judgment of High Court of Andhra Pradesh in the case of Shalikh Dawood v. Mahmooda Begum, and judgment of High Court of Calcutta in the case of Smt. Usha Mujumdar v. Smt. Smriti Basu, . 14. In the abovereferred Andhra Pradesh judgment in the case of Shalikh Dawood v. Mahmooda Begum (supra) it was held by the Division Bench of High Court of Andhra Pradesh that the Provident Fund amount remains the property if the deceased subscriber and is available for distribution amongst his heirs in accordance with their personal laws. It was held by the Division Bench of the High Court of Andhra Pradesh in this case that the nominee of a provident fund has the exclusive right to receive the fund but his rights are similar to that of a nominee under Section 39 of the Insurance Act. i.e. without any beneficial interest therein and without any title thereto. In a given case if he sets up a titl....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... judgment is cited before me on the subject. 15. To my mind, the principles laid down by the Hon'ble Supreme Court in the case of Sarbati Devi (supra) are applicable to the cases under the Provident Funds Act also. It is not correct view to hold that the principles laid down in this case are liable to be restricted to cases under Section 39 of Insurance Act only. 16. There are two main points of distinction, which have to be kept in mind while considering the submission concerning literal interpretation of Section 10(2) of the 1952 Act as appears to have been done by the High Court of Calcutta. The question to be asked is why the word "absolutely" hitherto before existing in Section 5 of the Employees' Provident Funds Act, 1952 was deliberately omitted by the Amending Act XI of 1946. Was it the intention of the Legislature that even after omission of the said word from the said provision, the nominee must be held to have an absolute right to the provident fund amount lying to the credit of the deceased employee. Even prior to 1946, some of the High Courts had interpreted the provision to mean that the nominee of provident fund had no title to the amount belonging to t....