LAW RELATING TO ISSUANCE OF SUCCESSION CERTIFICATE

 

LAW RELATING TO ISSUANCE OF SUCCESSION CERTIFICATE

By- 

Rajneesh Mohan Verma

Deputy Director

Judicial Training & Research Institute,

UP, Lucknow

Introduction

Property in inheritance generally passes on to the legal heir after doing some legal formalities. These formalities are incomplete without proper legal documents indemnifying the recipients to be the actual heir/s or the legal recipients of the rights or property. These documents are prepared on the basis of a legal will or self-declaring documents prepared by the deceased for transfer of his property to any person or group after his death. In absence of a legal will, documents like a Succession certificate or a legal heir certificate have to be obtained by the person to legally inherit the property or the right to manage the assets of the deceased . In the event a person dies leaving a Will, a succession certificate may not be required for inheriting the assets of the deceased since the entire estate of the deceased shall vest on the executor of the Will for distribution as per the instructions set forth in the Will. Although Section 370 of the Indian Succession Act, 1925, specifically provides that a succession certificate shall not be granted with respect to any debt or security in cases where a right to such property is required to be established by obtaining letters of administration or a probate. In certain states, a probate and a succession certificate are compulsory to transfer the title of an immovable property. It is to be further noted that in the absence of a Will, banks and financial institutions typically rely on the succession certificate and/or a legal heirship certificate.

A succession certificate, under the Indian Succession Act, is a document that gives authority to the person who obtains it, to represent the deceased for the purpose of collecting debts and securities due to him or payable in his name. Usually, a succession certificate is a key in the absence of a will, a succession certificate will be the primary document through which the heirs can stake a claim to the assets of a deceased relative. Issuance of succession certificate does not give right of succession to the claimed property of a deceased person, because it does not determine the right, title and interest of the deceased person to a particular property or entire property. However, successor(s) of an intestate deceased person is/are entitled to inherit the deceased person’s properties.

Law and Procedures for grant of Succession certificate:

The grant of succession certificates is dealt with in Part X (sections 370 to 390) of the Indian Succession Act, 1925. Under Section 372 an application for a succession certificate is to be made to the “District Judge”. The term “District judge’ is defined in Clause (bb) of Section 2, as “the Judge of a principal Civil Court of original jurisdiction”. The particulars mentioned in Section 372 should be set forth in the application for succession certificate. According to section 370 read with Section 373 There are three restrictions (or conditions) on the grant of succession certificates by a Court which are as under :

(1) that the property in respect of which the certificate is asked for must be a “debt or a security,”

(2) it must not be a debt or security to which a right is required by Section 212 to be established by letters of administration, and

(3) it must not be a debt or security to which a right is required by Section 213 to be established by probate.

In case the deceased died intestate, there is no question of Section 213 applying. Section. 212 provides as follows:

212 Right to intestate's property. (1) No right to any part of the property of a person who has died intestate can be established in any Court of Justice, unless letters of administration have first been granted by a Court of competent jurisdiction.

(2) This section shall not apply in the case of the intestacy of a Hindu, Muhammadan, Buddhist, Sikh, Jaina, Indian Christian or Parsi.

Therefore In case the deceased is of a Hindu, Muhammadan, Buddhist, Sikh, Jaina, Indian Christian or Parsi community Succession certificate may be granted by the competent court.

What is “Debt, or Security”?

For the purpose of the Succession certificate section 370 (2) defines the term ‘Security’ in the following words:-

(2) For the purposes of this Part, “security” means —

(a) any promissory note, debenture, stock or other security of the Central Government or of a State Government;

(b) any bond, debenture, or annuity charged by Act of Parliament of the United Kingdom on the revenues of India;

(c) any stock or debenture of, or share in, a company or other incorporated institution;

(d) any debenture or other security for money issued by, or on behalf of, a local authority;

(e) any other security which the State Government may, by notification in the Official Gazette, declare to be a security for the purposes of this Part.

Section 370 of the Indian Succession Act, gives the definition of 'security, but the word 'debt' is not defined in Part X of the said Act. However, Section 214 defines the term ‘debt’ to mean any debt except rent, revenue or profits payable in respect of land used for agricultural purposes.

Hon’ble Allahabad High Court in the case of “Dina Nath vs Balkrishna And Anr. AIR 1963 All 46” has observed in para 6 that “What is ordinarily understood by the word 'debt' is a liability owing from one person to another whether in cash or Kind, secured or unsecured, whether ascertained or ascertainable, arising out of any obligation, express or implied.”

But this definition was not accepted by the Bombay High Court. In the case of Ranchhoddas Govinddas Banatwala vs Unknown (1976), 78 BOMLR 219 Hon’ble Bombay high court after discussing in detail the Dina Nath's case, denied to accept the definition of debt given by the Hon’ble Allahabad high court and held that- Debts and securities are merely two species of property out of the wide varieties of property which a man may own. That the word 'debts' is used in the Indian Succession Act to mean pecuniary liability only and is also shown by Sections 322 to 325 of the Indian Succession Act which deals with payment of debts from the estate of a deceased. the word 'debt' does not include any movable Property other than a specific or ascertained or liquidated sum of money.”

In the case of Lalsa vs Ivth Additional District Judge, 1999 (3) AWC 1828, Hon’ble Allahabad High Court after a detailed discussion of various rulings of different high courts and the Judgement delivered in Dina Nath’s case, has defined the term ‘debt’ in the context of succession certificate. In para 7 of the said judgment Hon’ble court has observed that-

“Debt' has not been defined in Chapter X of the Act relating to the succession certificate although the same has been defined in Section 214(2) to mean any debt except rent, revenue, or profits payable in respect of the land used for agricultural purposes. This limited definition of the expression 'debt' is to be confined to the statutory provisions of Section 214(2) of the Act only. The meaning of the word 'debt' is wide enough. The dictionary meaning is quite general. In Strouds Judicial Dictionary, the meaning of the word 'debt' is given as a sum of money payable in respect of the liquidated money demand recoverable by action. A debt is a sum of money now payable or a sum of money which will become payable, in future by reason of a present obligation. In the Law Lexicon by P. Ramanatha Aiyar, (1997 Ed.), the expression 'debt' has been defined to mean a sum of money due under an express or implied agreement (as) a bond or bill or note ; amount due or payable from one person to another in return for money, service, goods, or other obligation. A debt is a sum payable in respect of a money demand recoverable by action. In common parlance it is a sum of money due from one person to another. The word 'debt' is of large import, including not only debts of record or judgment, and debts by speciality but also obligations arising under simple contract, to a very wide extent, and in its popular sense includes all that is due to a man under any form of obligation or promise. For example, a dividend declared by a company is after its due date a debt from the company to the share-holder, A dividend is not a debt until it is declared. The word 'debt' as used in section 60 C.P.C. must be confined to a debt in ordinary sense of the word, that is to say, an existing debt. It involves (a) an obligation incurred by the debtor, (b) a liability on the part of the debtor to pay for that obligation at a certain date. Until that obligation has been fully incurred, there is no debt.”

The meaning of the word 'debt' came to be considered by the Apex Court, though in a different context. In the case of Kesoram Industries and Cotton Mills Ltd. v. Commissioner of Wealth Tax (Central). Calcutta, AIR 1966 SC 1370, in para 22, at page 1377, the position has been summarized as below :

"We have briefly noticed the judgments cited at the Bar. There is no conflict in the definition of the word 'debt'. All the decisions agree that the meaning of the expression 'debt' may take colour from the provisions of the concerned Act, it may have different shades of meaning. But the following definition is unanimously accepted: "a debt is a sum of money which is now payable or will become payable in future by reason of a present obligation “debitum in praesenti, solvendum in futuro". The said decisions also accept the legal position that a liability depending upon a contingency is not a debt in praesenti or in futuro till the contingency happened. But if there is a debt the fact that the amount is to be ascertained does not make it any the less a debt if the liability is certain and what remains is only the quantification of the amount....."

 Indian Succession Act 1925 clearly contemplates the formalities to be complied with before issuance of succession certificate. Courts may come across a situation, where a party file an application for issuing a succession certificate for those things, for which courts have no jurisdiction to entertain it. If any authority requires the party to furnish a succession certificate to inherit any claim and if the party presents an application for issuing succession certificate in compliance thereto, this itself does not confer any jurisdiction on the court to issue a succession certificate. It is very necessary for courts to strictly adhere to the provisions of Indian Succession Act "It is not in the power of courts to issue a Succession certificate to any person for compassionate appointment. By reason of grant of such certificate, a person in whose favour succession certificate is granted becomes a trustee to distribute the amount payable to the deceased to his heirs and legal representative. He does not derive any right thereunder. The succession certificate does not confer any title and neither prove any relationship between the deceased and the applicant." State of Chhattigarh and ors. v. Dhirjo kumar Sengan, AR 2009 SC 2568.

Can a succession certificate be granted in respect of the dues on account of Provident Fund, Compulsory Deposit Scheme, Life Insurance, arrears of pay, Death-cum-retirement Gratuity etc., ?

The answer is yes? In the case of Lalsa vs Ivth Additional District Judge, 1999 (3) AWC 1828, Hon’ble Allahabad High Court has observed that- “On the death of an employee, the various dues become payable. The employer under the law as well as under the contract of employment, is duty-bound to make payment of the amounts under the various heads to the legal heir of the deceased employee. On the death of the employee, the employer becomes Indebted to the legal heirs to the extent of the amounts, which become payable under the various heads consequent upon death of the employee. Therefore, the amounts of the Provident Fund, Compulsory Deposit Scheme, Life Insurance, arrears of pay, Death-cum-retirement Gratuity etc.. which are held by the employer and become payable as a result of the death of the employee, will undoubtedly fall within the meaning of the expression 'debt'. These amounts are payable on account of the services rendered by the deceased employee, contributions and deductions made from his salary and the wages which were actually earned by him. The amounts under the aforesaid categories are obviously in the form of debts in the hands of the employer and, therefore, they are covered by the provisions for issue of succession certificate contained in Chapter X of the Act. It would not be out of context to point out that the succession certificate merely authorizes the party in whose favour grant has been made to give full discharge of liability to the employer debtor. It, however, does not confer any title to the person in whose favour the grant has been made. Such a right can always be, established in proper proceeding in a Court of law.”

Competent Court to grant Succession Certificate:

Section 371 of the Act talks about the courts having Jurisdiction to grant certificates. According to this section “The District Judge within whose jurisdiction the deceased ordinarily resided at the time of his death, or if at that time he had no fixed place of residence, the District Judge, within whose jurisdiction any part of the property of the deceased may be found, may grant a certificate under this part.”

As mentioned above according to section 371 of the Act, it is the court of District Judge who is competent to issue a certificate under part x of indian succession Act. Now the question may arise that why the petitions for this certificate are being filed and are pending in the courts of Civil Judge Junior and Senior division of various districts in the state of Uttar Pradesh?

In this regard, it is pertinent to mention here that Section 388 of this chapter confers power upon the State Government to invest any court inferior to the grade of District Judge with power to exercise the functions of the District Judge under this part namely part 10. By exercising the power given under section 388, The State Government has issued a notification dated 11.3.1955 to the following effect:-

"1. In supersession of all previous notifications on the subject, and in the exercise of the powers conferred by sub-section (1) of section 388 of the Indian Succession Act, 1925 (Act No. XXXIX of 1925) the Governor of Uttar Pradesh is pleased to invest all Civil Judges in the State with power to exercise the functions of a District Judge under Part X of the said Act within the local limits of their respective jurisdiction as Civil Judges.

2. In supersession of all previous notification on the subject and in the exercise of powers conferred by sub-section (1) of Section 388 of the Indian Succession Act, 1925 (Act No. XXXIX of 1925) the Governor of Uttar Pradesh is pleased to invest all Munsifs in the State with power to exercise the functions of a District Judge under Part X of the said Act within the local and pecuniary limits of their respective jurisdiction as Munsifs. {Government Notification No. 4516(i)/VII--900(8)-53. dated March II 1955 and No.4516 (iv)/V1I-900(8)-53, dated March 11,1955.} (See; WRIT - C No. - 63679 of 2011, Ashok Mahaur V. Darshan Singh And Another decided by Hon’ble Allahabad High Court)

Now it is clear that Civil Judge Junior Division and Civil Judge Senior Division in the state of Uttar Pradesh is competent enough to entertain and decide the application for succession certificate according to their pecuniary and territorial jurisdiction. Following points should be kept in mind by the presiding officer of a Civil Court while deciding the admissibility and Jurisdiction of the court :-

(1) Pecuniary Jurisdiction: 
Application for succession certificate will be presented before a Court of Civil Judge Junior or Senior Division as the case may be, having pecuniary Jurisdiction.

“(Note:- The pecuniary Jurisdiction of Civil Judge Junior was inhanced by UP Act No. 14 of 2015 by which the Bengal, Agra and Assam Civil Courts Act, 1887 and The Provinicial Small Cause Courts Act, 1887 were amended in their appilication to the State of Uttar Pradesh. According to this amendment Civil Judge Junior Division has pecuniary Jurisdiction upto Rupees Five Lakhs and Civil Judge Senior Division has Jurisdiction above Rupees Five Lakhs. Newly inducted Civil Judge Junior Division has pecuniary Jurisdiction only upto Rupees One Lakh until and unless the complete Jurisdiction of rupees Five lakhs has been given by the Hon’ble High Court to the officer concerned.)”

(2) Territorial Jurisdiction: the territorial jurisdiction of the court for succession certificate proceedings will be decided on the following grounds:

(i) Residence of Deceased: The application will be presented before such Civil court within whose jurisdiction the deceased was ordinarily residing at the time of his death.

(ii) No fixed place of Residence: If the deceased had no fixed place of residence at the time of his death, then the application will be presented before such-Civil Judge within whose jurisdiction any part of the property of the deceased may be found.

What does the term “ordinary resident” means ?

In the case of Rameshwari Devi v. Raj Ball Shah and another, AIR 1988 All 68, it was held that in ordinary circumstances the jurisdiction falls within which the deceased ordinarily resided at the time of his death. If at that time, he had no fixed place of an abode then the jurisdiction would fall within which the property is situated. The second branch would not be attracted until and unless the first branch is exhausted. The second branch is an alternative provision that is attracted only in those cases in which the deceased at the time of his death had no fixed place of residence. The permanent residence is necessarily a fixed place of abode. The permanent residence mentioned by a person, on a transferable job, is the fixed place of abode. However, by reason of employment one is transferred from one place to another or he is staying at a different place at the time of his death in that event, it cannot be said that he ordinarily resided at the place where he was staying for his treatment nor it could be said that he was ordinarily residing at the places where he was serving by reason of his transferable service.

The word “ordinary resident” was defined by Hon’ble Allahabad High Court in the case of Km. Rakhi And Another vs Ist Additional District Judge 2000 (1) AWC 323, AIR 2000 ALL 166 in this case the death took place at Kanpur where he was on account of his treatment. Admittedly, the deceased was posted at Allahabad. He was a railway employee and used to be transferred from one place to other. Thus, Kanpur where the deceased had been staying for the purpose of his treatment cannot be said to be his place of ordinary residence. He had been in Kanpur for his treatment which is for a particular purpose which is not an ordinary purpose. An ordinary resident means that he had resided voluntarily and ordinarily and not for any particular purpose. Admittedly, the address of the deceased was at Firozabad. This was shown in the records of his service. The document contained in Annexure-9 to this petition also mentions the address of the deceased as at Firozabad. Thus from the document, on which the petitioner had intended to rely, disclosed that the deceased was an ordinary resident of Firozabad which was his permanent or fixed place of abode. Therefore, his stay at Kanpur at the lime of his death for the purpose of his treatment cannot be treated to be his ordinary residence or that the deceased used to ordinarily reside at Kanpur at the time of his death within the meaning of Section 371of the Succession Act.

Content of Application for certificate:- 

According to section 372(1) Application for such a certificate shall be made to the District Judge (Now in UP Civil judge Junior or senior division as the case may be) by a petition signed and verified by or on behalf of the applicant in the manner prescribed by the Code of Civil Procedure, 1908 (5 of 1908) for the signing and verification of a plaint by or on behalf of a plaintiff, and setting forth the following particulars, namely:—

(a) the time of the death of the deceased;

(b) the ordinary residence of the deceased at the time of his death and, if such residence was not within the local limits of the jurisdiction of the Judge to whom the application is made, then the property of the deceased within those limits;

(c) the family or other near relatives of the deceased and their respective residences;

(d) the right in which the petitioner claims;

(e) the absence of any impediment under section 370 or under any other provision of this Act or any other enactment, to the grant of the certificate or to the validity thereof if it were granted; and

(f) the debts and securities in respect of which the certificate is applied for.

(2) If the petition contains any averment which the person verifying it knows or believes to be false, or does not believe to be true, that a person shall be deemed to have committed an offence under section 198 of the Indian Penal Code, 1860 (45 of 1860).

(3) Application for such a certificate may be made in respect of any debt or debts due to the deceased creditor or in respect of portions thereof.

Object of this provision:-

The procedure prescribed under the Act is for the purpose that only an heir, who is entitled to receive benefit, can come forward and make a claim to the amount to which the deceased was entitled. No imposter or unauthorised person could claim a benefit that accrues upon the death of a person (Mansha Ram Mishra v. the State of U.P., 2008 (4) ALJ 426). A holder of succession certificate is bound to show that he had discharged his duty to handing over the amount received by him to the heirs entitled to the amounts if the holder is but one of the co-heirs (Uma R. Sett v. Dipali Rani Sett, 2006 (1) CHN 373).

Procedure on application:-

Section 373 talks about the procedure for the presentation of the application.

According to section 373(1) If the District Judge (Now in UP Civil judge Junior or senior division as the case may be) is satisfied that there is ground for entertaining the application, he shall fix a day for the hearing thereof and cause notice of the application and of the day fixed for the hearing—

(a) to be served on any person to whom, in the opinion of the Judge, special notice of the application should be given, and

(b) to be posted on some conspicuous part of the court-house and published in such other manner, if any, as the Judge, subject to any rules made by the High Court in this behalf, thinks fit, and upon the day fixed, or as soon thereafter as may be practicable, shall proceed to decide in a summary manner the right to the certificate.

{Note: Rule 509 of G.R.Civil provide that, Under section 373, clause 1(b), Act No. XXXIX of 1925, a notice of application for grant of a certificate shall be given —

(1) by posting a proclamation on the notice-board of the Court;

(2) by posting a duplicate thereof on the house of the deceased;

(3) by the beat of the drum in the mohalla of the town or village in which the deceased last resided.

The sum of 25 paise in cash shall be tendered with every such application to cover the expense of proclaiming the notice by the beat of the drum.}

(2) When the Judge decides the right thereto to belong to the applicant, the Judge shall make an order for the grant of the certificate to him.

(3) If the Judge cannot decide the right to the certificate without determining questions of law or fact which seem to be too intricate and difficult for determination in a summary proceeding, he may nevertheless grant a certificate to the applicant if he appears to be the person having prima facie the best title thereto.

(4) When there are more applicants than one for a certificate, and it appears to the Judge that more than one of such applicants are interested in the estate of the deceased, the Judge may, in deciding to whom the certificate is to be granted, have regard to the extent of interest and fitness in other respects of the applicants.

Requisition of security from grantee of certificate:-

According to section 375 (1), The Judge shall in any case in which he proposes to proceed under sub-section (3) or sub-section (4) of section 373, and may, in any other case, require, as a condition precedent to the granting of a certificate, that the person to whom he proposes to make the grant shall give to the Judge a bond with one or more surety or sureties, or other sufficient security, for rendering an account of debts and securities received by him and for indemnity of persons who may be entitled to the whole or any part of those debts and securities.

(2) The Judge may, on an application made by the petitioner and on cause shown to his satisfaction, and upon such terms as to the security, or providing that the money received be paid into Court, or otherwise, as he thinks fit, assign the bond or other security to some proper person, and that person shall thereupon be entitled to sue thereon in his own name as if it had been originally given to him instead of to the Judge of the Court, and to recover, as trustee for all persons interested, such amount as may be recoverable thereunder.

Contents of Certificate:-

Section 374 provides for the content of a succession certificate. According to it, When the Judge grants a certificate, he shall therein specify the debts and securities set forth in the application for the certificate, and may thereby empower the person to whom the certificate is granted—

(a) to receive interest or dividends on, or

(b) to negotiate or transfer, or

(c) both to receive interest or dividends on, and to negotiate or transfer, the securities or any of them.

376. Extension of certificate:-

(1) A District Judge may, on the application of the holder of a certificate under this Part, extend the certificate to any debt or security not originally specified therein, and every such extension shall have the same effect as if the debt or security to which the certificate is extended had been originally specified therein.

(2) Upon the extension of a certificate, powers with respect to the receiving of interest or dividends on, or the negotiation or transfer of, any security to which the certificate has been extended maybe conferred, and a bond or further bond or other security for the purposes mentioned in section 375 may be required, in the same manner as upon the original grant of a certificate.

377. Forms of certificate and extended certificate.—

Certificates shall be granted and extensions of certificates shall be made, as nearly as circumstances admit, in the forms set forth in Schedule VIII.

SCHEDULE VIII

(See section 377)

FORMS OF CERTIFICATE AND EXTENDED CERTIFICATE

In the Court of

To A. B.

Whereas you applied on the day of for a certificate under Part X of the Indian Succession Act, 1925, in respect of the following debts and securities, namely:-

Debts

Serial Number

[Name] of debtor

Amount of debt, including interest, on date of application for certificate

Description and date of instrument, if any, by which the debt is secured



Securities

DESCRIPTION

Serial Number

Distinguishing number or letter of security

Name, title or class of security

Amount or par value of security

Market-value of security on date of application for certificate

This certificate is accordingly granted to you and empowers you to collect those debts [and][to receive][interest][dividends][on][to negotiate][to transfer][those securities].

Dated this day of Civil Judge

In the Court of

On the application of A. B. made to me on the day of ,I hereby extend this certificate to the following debts and securities, namely:—

Debts

Serial Number

[Name] of debtor

Amount of debt, including interest, on date of application for extension

Description and date of instrument, if any, by which the debt is secured

Securities

DESCRIPTION

Serial Number

Distinguishing number or letter of security

Name, title or class of security

Amount or par value of security

Market-value of security on date of application for certificate

This extension empowers A. B. to collect those debts [and] [to receive] [interest] [dividends] [on] [tonegotiate] [to transfer] [those securities] .

Dated this day of District Judge

Surrender of superseded and invalid certificates.(Sec.389):-

(1) When a certificate under this Part has been superseded or is invalid from any of the causes mentioned in section 386 (either revoked u/s 383 or by order in appeal u/s384), the holder thereof shall, on the requisition of the Court which granted it, deliver it up to that court.

 

(2) If he willfully and without reasonable cause omits so to deliver it up, he shall be punishable with a fine which may extend to one thousand rupees, or with imprisonment for a term which may extend to three months or with both.

Nature of proceeding:

The proceeding for the grant of succession certificate is a summary inquiry in nature. Grant of succession certificate does not depend on the right of any claimant to the debt. The certificate does not recognize or invest in the grantee title to the debt or property in the debt. It only enables him to collect the debt and give valid discharge to the creditor. Grant of a certificate does not strike out or destroy the claims of others. If there be conflicting claims, they have to be settled in appropriate proceedings in accordance with the law. In the summary enquiry trusted by the provisions, the Judge is not expected nor required to decide whether actually, the debt belonged to the deceased or not. That is a matter extraneous to the enquiry. That may have to be decided in the proceedings in which the grantee of a certificate commences against the creditor for recovery if such a dispute is raised. To determine a substantial dispute between the parties, It may have been decided in any other proceedings for such dispute existing among the rival claimants.

On the other hand, if the application is entertained the Court has to confine itself to the issue of the right to the certificate in which the Court has to decide the question of title to the certificate asked for and to grant the same to the applicant if he appears to be the person "having prima facie the title thereto". The Court can not determine too intricate questions of law or fact, nor The court can direct the parties to seek a declaration in respect of their rights. On the other hand, sub-section (3) of Section 373 was to be read, construed and enforced in the light that succession as the rule which is to be promoted and not to be defeated. So, it cannot be construed that mere grant of such certificate or a decision in such proceedings would constitute to be a decision on an issue finally decided between the parties.

A direction for a DNA test cannot be given in a proceeding for the issuance of a succession certificate under the Indian Succession Act, 1925. The grant of the certificate does not establish the title of the grantee as the heir of the deceased, but only furnishes him with authority to collect his debts and allows the debtors to make payments to him without incurring any risk. In order to succeed in the succession application, the applicant has to adduce cogent and credible evidence in support of the application. The respondents, if they so choose, can also adduce evidence to oppose the grant of succession certificate. The trial court erroneously held that the documents produced by the respondents were not sufficient or relevant for the purpose of adjudication and the DNA test was conclusive. A DNA test is not to be directed as a matter of routine Banarsi Das VS Teeku Dutta, 2005(4) SCC 449.

Res - Judicata:

In summary inquiry the Court has only to ascertain as to who is entitled to the certificate. The court does not substantially decide the rights of the parties while issuing succession certificates. Therefore, proceedings for granting succession certificate would not operate as res-judicata in any other suit or proceeding. This contention was held in the case of Madhavi Amma Bhawani Amma v. Kunjikutty Pillai Meenakshi Pillai, AIR 2000 SC 2301, as " Any decision made in proceeding under Section 372, for the grant of Succession Certificate under the Indian Succession Act, would not bar any party to the said proceeding to raise the same issue in a subsequent suit. Thus, even if no appeal is preferred by the appellant against the decision of the trial Court arising out of proceedings for the grant of Succession Certificate, the principle of res judicata would not apply". In one case only one succession certificate can be granted Ganga Dei V/S Munia, AIR 1966 107 ALL. A nomination does not amount to a transfer, but it merely enables the nominee, in the event of the death of the assured, to get the amount of the insurance policy. Nomination creates no interest in the nominee in respect of the title to the insurance policy (Mahadeo Nath v. Meena Devi, 1976 AIR(All) 64.)

Certificate in favour of opposite party:

In a case applicant alone has made the application for the issue of succession certificate. However, the opposite parties filed objections and requested that succession certificate be issued in their names. It was not necessary for the opposite parties to move a fresh application for issue of succession certificate. The opposite parties in their objection made a request for the issue of the certificate and therefore, for the purpose of Sections 372, 373 of the Indian Succession Act, 1925 the opposite parties shall be deemed to be applicants to issue succession certificate. There is no bar that succession certificate cannot be issued in favour of the objectors. The multiplicity of the suits should never be encouraged. The matter for issue of succession certificate question could be decided in the application moved by the applicant itself and therefore, there was no necessity for moving of fresh application by the opposite parties Dulia Devi v. Dulia Devi, 2001 AIR (All) 195.

Imposing Conditions:

The court is only required to make a summary enquiry in order to find out as to whether the petitioners are the rightful claimants or not. The court does not have any jurisdiction to impose a condition such as the amount would be kept in a fixed deposit for a certain period of time. The imposition of such a condition is clearly outside the domain of the jurisdiction of the Court while issuing a succession certificate under Section 373 of the Indian Succession Act. While issuing succession certificates, courts are not empowered to hold or give direction for the use of claimed dues. The holder of the succession certificate is fully empowered to use the claimed amount as per his requirement. No such condition can be imposed by the court while granting succession certificate Rizwana and Others V/S Civil Judge (Senior Division) And Others, 2008 (1) AWC 551.

Effect of Nomination:

It is clear that the amount in any head can be received by the nominee, but the amount can be claimed by the heirs of the deceased in accordance with the law of succession governing them. In other words, nomination does not confer any beneficial interest on the nominee. Amounts received by the nominee are to be distributed according to the Hindu Succession Act, 1956 Shipra Sengupta V/S Mridul Sengupta, 2009 (10) SCC 680. A mere nomination does not have the effect of conferring to the nominee any beneficial interest in the amount payable under the life insurance policy, on the death of the insurer. The nomination only indicates the hand which is authorized to receive the amount on 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. Sarbati Devi and another Vs. Smt. Usha Devi, 1974 I SCC 424.

A succession certificate can be granted in favour of any person. It may be granted to an heir or a nominee. By reason of grant of such certificate, a person in whose favour succession certificate is granted becomes trustee to distribute the amount payable by the deceased to his heirs and legal representative. He does not derive any right thereunder. The succession certificate merely enabled him to collect the dues of the deceased. No status was conferred on him thereby nor it did prove any relationship between the deceased and the appicant. State of Chhattisgarh and others v. Dhirjo kumar Sengar, (2009) 13 SCC 600. Succession certificate does not amount to declaration of the relationship of parties to get the service on compassionate appointment. U.P. Jal nigam, Banda, Jhansi and another v. Rajendra, (2014) 105 ALR 656.

COURT FEES:-

Sec. 379 Mode of collecting Court-fees on certificates -(1) Every application for a certificate or for the extension of a certificate shall be accompanied by a deposit of a sum equal to the fee payable under the Court-fees Act, 1870, (7 of 1870) in respect of the certificate or extension applied for.

(t) If the application is allowed, the sum deposited by the applicant shall be expended, under the direction of the Judge, in the purchase of the stamp to be used for denoting the fee payable as aforesaid.

(u) Any sum received under subsection (1) und not expended under sub-section (2) shall be refunded to the person who deposited it.

A plain reading of S. 379 shows that the purpose and object of the provision was a procedure for collecting Court-fees on the certificate. It was a mode provided to collect the Court-fees payable on the certificate if granted. Sub-section (2) provides that out of deposit made, the Court-fees would be paid. In case the certificate is not granted and the amount is not spent for the purpose of payment of Court-fees in that event, the same would be refundable to be deposited. Sub-section (1) requires a deposit of a sum equal to the fee payable under the Court-fees Act in respect of the certificate applied for. Such a deposit is to accompany the application for a certificate. The expression 'shall' used here has to be interpreted on the basis of the purpose and object of the provision as has been incorporated. There is nothing to indicate that an application is required to be stamped with the Court-fees which is payable on the certificate. The application filed with the Court-fees payable on a miscellaneous application is paid, the application is maintainable. It is not dependent on its maintainability on the question of deposit of the amount equal to the fee payable on the certificate. The Court-fees on the certificate is payable only when the certificate is issued after the certificate is granted. Till the certificate is granted, no Court-fee becomes payable. It was only a mode of collecting Court-fees for the certificate or in other words, it was a procedure for securing the realisation of the Court-fees payable on the certificate. In case a less amount is deposited when the certificate is granted additional Court-fees is to be paid. Similarly, if an excess amount is deposited, the balance is refunded or in case the amount so deposited is not at all spent, then the same also becomes refundable to the depositor. Sub-sections (2) and (3) makes the position clear to the extent that it was not meant that the deposit should be mandatory or non-deposit thereof would make the application not maintainable. "As such non-deposit will not take away the jurisdiction of the Court to entertain the application. The grant of certificates is subject to payment of Court-fee. Such Court-fees can be paid even at the time when the certificate is issued after the application is allowed and the certificate is granted. Thus, the provision contained in S. 379 of the Succession Act is not mandatory to the extent that non-compliance thereof would hit at the root of the application itself and throw it out in limine. Non-compliance with Sec. 379 of the Succession Act may be an irregularity but not illegality before the grant of the certificate. Such irregularity is curable and can be cured on the eve of the grant by directing the applicant to deposit the amount before the grant is made and certificate." Km. Rakhi and another v. Ist Additional District Judge, Firozabad and other, AIR 2000 All 166.

It has been observed that the provisions of the Code of Civil Procedure are applicable to proceedings for grant of succession certificate by the virtue of the provisions contained in Section 141 of the Code. If provisions of Order XXXIII, regarding declaring an applicant as pauper or an indigent person is applicable to proceedings for grant of probate or letters of administration which are also governed under the Indian Succession Act, there was no rhyme or reason as why the provisions of Order XXXII would not be applicable to proceedings for grant of succession certificate under the Indian Succession Act. Ramji Sao v. Jogeshwari, AIR 1964 Pat 272.

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Rajneesh Mohan Verma

Dy Director JTRI Lucknow

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Rajneesh Mohan Verma