Ram Chander Talwar and Ors. vs. Devender Kumar Talwar and Ors. (06.10.

2010
- SC): MANU/SC/0833/2010: (2010)10 SCC 671
The issue before the Apex Court was whether a nominee in the bank account held by the deceased
can claim full rights over the money lying in the account to the exclusion of the legal heirs. Paragraphs
4 to 6 of the said decision read thus:

"4. Sub-section (2) of Section 45-ZA Banking Regulating Act, 1949, reads as follows:

(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."

(emphasis added)

5. Section 45-ZA(2) merely puts the nominee in the shoes of the depositor after his death and clothes
him with the exclusive right to receive the money lying in the account. It gives him all the rights of the
depositor so far as the depositor's account is concerned. But it by no stretch of imagination makes the
nominee the owner of the money lying in the account. It needs to be remembered that the Banking
Regulation Act is enacted to consolidate and amend the law relating to banking. It is in no way
concerned with the question of succession. All the monies receivable by the nominee by virtue of
Section 45-ZA(2) would, therefore, form part of the estate of the deceased depositor and devolve
according to the rule of succession to which the depositor may be governed.

The Apex Court held that the Banking Regulation Act, 1949 is no way concerned with the question of
succession and, therefore, all the monies receivable by the nominee by virtue of Sub-section (2) of
Section 45-ZA would form part of the estate of the deceased depositor and would be governed by the
law of succession by which the depositor was governed.

6. In view of the aforesaid exposition of law, it is absolutely clear that a mere nomination in itself does
not confer any 'beneficial interest' in the nominee and the retiral benefits of the deceased would become
part of his estate and would be governed by the law of succession.

Ratio Decidendi:

"Section 45ZA (2) of the Banking Regulation Act gives nominee all the rights of the depositor, so for as
the depositor's account is concerned, however does not make him owner of the money lying in said
account."

ALSO

Kamla Devi vs. Union of India and Ors. (28.11.2016 - HPHC): MANU/HP/1462/2016

Shakti Yezdani and Ors. vs. Jayanand Jayant Salgaonkar and Ors. (01.12.2016 - BOMHC):
MANU/MH/2599/2016