TaxTMI 
TaxTMI 
2010 (4) TMI 1169
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.... under the Employees' Provident Fund Act, 1952 and the Scheme framed thereunder. In the first nomination dated 29/05/1998, the plaintiff nominated his sister, the defendant No. 3. In the second nomination, dated 23/02/2001, he nominated the plaintiff and defendant No. 3 as persons entitled to receive the amount due, upon his death. By virtue of the said nomination, the plaintiff and defendant No. 3 were required to receive the amounts due in the said provident fund on 50:50 basis. 4. The said Joazinho Dias expired on 9/12/2001. After his death, the plaintiff and defendant No. 3 submitted a joint letter on or about 15/01/2002, claiming that the payment be made to them on 50:50 basis. However, the fact remains that a sum of ₹ 2,80,909/- from the provident fund of Joazinho Dias was exclusively paid on 19/06/2002 to defendant No. 3, being the sister of the deceased Joazinho Dias. 5. A sum of ₹ 72,179.50 was paid to the plaintiff by the employer, the said Goa Shipyard Ltd., on account of revised salary due to the deceased Joazinho Dias. 6. The Plaintiff therefore filed the said suit claiming that he was entitled to receive 50% of the said dues in the provident fund ac....
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....on of all other persons, to receive such sum or part thereof, as the case may be shall be deemed to confer such right absolutely. 10. It appears that before the learned trial Court certain decided cases were cited including the judgment of this Court in the case of Komal Singh v. Krishnabai AIR (33) 1946 Bom. 304 and the District Judge held, and, in my view rightly, that there was no provision similar to Section 5 in the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and, as such, the said cases were not applicable. Section 5 was substituted w.e.f. 18/04/1946 and it reads as follows; 5. Rights of nominees - (1) Notwithstanding anything contained in any law for the time being in force or in any disposition, whether testamentary or otherwise, by a subscriber to or depositor in, a Government or Railway Provident Fund of the sum standing to his credit in the Fund, or of any part thereof, where any nomination, duly made in accordance with the rules of the Fund, purports to confer upon any person the right to receive the whole or any part of such sum on the death of the subscriber or depositor occurring before the sum has become payable are before the sum having....
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....d under Section 5. Section 10 of the Act of 1952 deals with protection against attachment and Sub-section 2 of Section 10 provides that; (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, vests in the nominee and shall be free from any debt or other liability incurred by the deceased or the nominee before the death of the member of the exempted employee and shall also not be liable to attachment under any decree or order of any court. 11.1 Section 5 deals with Employees' Provident Fund Scheme. In terms of Section 5, the Government has framed the Employees' Provident Funds Scheme, 1952 (Scheme, for short). Section 5(IA) provides that the Fund shall vest in, and be administered by, the Central Board constituted under Section 5A. Sub-section (IB) provides that subject to the provisions of this Act, a scheme framed under Sub-section (1) may provide for all or any of the matters specified in Schedule II. 11.2 Para 2(g) of the Scheme inter alia d....
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....ra 70 of the Scheme deals with persons to whom accumulations of a deceased member are to be paid and it provides that on the death of a member before the amount standing to his credit has become payable or where the amount has become payable before payment has been made- (i) if a nomination made by the member in accordance with Paragraph 61 subsists, the amount standing to his credit in the Fund or that part thereof which the nomination relates, shall become payable to his nominee or nominees in accordance with such nomination; or (ii) if no nomination subsists or if the nomination relates only to a part of the amount standing to his credit in the Fund, the whole amount or the part thereof to which the nomination does not relate, as the case may be, shall become payable to the members of his family in equal shares: 11.5 And lastly Para 72 deals with payment of Provident Fund, and sub-para (1) of para 72 provides that when the amount standing to the credit of a member, or the balance thereof after any deduction under paragraph 69 becomes payable, it shall be the duty of the Commissioner to make prompt payment as provided in this scheme. In case there is no nominee in accordance....
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....bute" in sub-para 2 of para 61 of the Scheme means divide, apportion, allot, dispense and therefore when the member has been empowered "to distribute the amount amongst his nominees at his discretion" it certainly means that thereby he would be giving the amount to them and a concept of distribution as envisaged in para 61(2) of the Scheme cannot by any stretch of imagination mean that the member was distributing the right to receive the money amongst his nominees. The learned Division Bench also held that by such distribution the nominee acquires ownership to the money and this has again been made explicitly clear by the word "interest" appearing in sub-para (5). The word "interest" obviously means the right to the money that accrued in favour of the nominee consequent upon its distribution by the member. It is of course true that the member may modify his nomination even during his lifetime and thereby extinguish a nominee's interest but then ultimately the nominee, whoever he may be, acquires an interest in the money. 15. With respect, it is not possible for me to agree with the view expressed by the learned Division Bench of Calcutta High....
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....t in a limited sense, as indicated in the context in which it may have been use in a particular piece of legislation. It was held in terms in that case that in the context the word "vest" may mean mere possession of property for a particular purpose. This Court further held that the word "vests" is a word of variable import as shown by provisions of various Indian statues and further held that the use of the word "vest" in Section 10(2) of the Act of 1952 does not clothe a nominee with absolute title or beneficial title in respect of provident fund amount lying to the credit of the deceased. This Court further held that the nominee is merely authorized to receive the amount for the benefit of heirs of the deceased. In other words, vesting of the amounts in the nominee is for limited purpose of receiving the amount from employer and handing over the same to the heirs entitled thereto. This Court also refereed to the case of Smt. Sarbati Devi v. Smt. Usha Devi (supra) which was in relation to the interpretation of Section 39 of Insurance Act, 1938 and reiterated that the Apex Court held that the nomination only indicated the hand which was authorised to....