Deceased claim and sureties
Shunny Nigam
(Querist) 15 March 2015
This query is : Resolved
Hello All
I wish to know that why bank ask two sureties when giving claim amount of deceased person to legal heirs after receiving affidavit and indemnity letter from claimants. After all its not loan that bank needed any surety.These days friends and relatives dont come forward for sureties, if person could not arrange sureties, is there any other option or person will not get the money at all unless he brings the sureties. Claim amount is less then 1.5lakh.
Devajyoti Barman
(Expert) 16 March 2015
Then produce succession certificate granted by competent court of law.
Shunny Nigam
(Querist) 16 March 2015
Thanks Mr Barman. Out of 4 legal heirs one of my brother is staying outside India. Can we get succession certificate without him being physically present here in India?
Also is it mandatory as per IBA MOP 2006/RBI guideline to have sureties for no nomination deceased claims?
Thanks all experts in advance
Rajendra K Goyal
(Expert) 16 March 2015
Your brother can entrust POA in favor of some one for the purpose.
Where nomination is not available surety is necessary to pay the balance in the account of deceased constituent without legal representation..
Jayaraj Poojari
(Expert) 16 March 2015
A legal heirship certificate issued by the Tahsildar of your area would solve the problem. Your outstation brother need not be present in your town. This process of investigating the legal heirs of deceased person will be taken care of by Revenue Inspectors under the guidance of Tahsildar.
Shunny Nigam
(Querist) 16 March 2015
We are in Delhi city Mr Poojari.
Pls. Is there any time limit after death for succession certificate application in the court. Approximately how much normally it will cost and in how many days/months i can get once applied.
After succession certificate, no need for indemnity and sureties?
Thanks once again everybody
Jayaraj Poojari
(Expert) 16 March 2015
Legal Heirship certificate has to be applied immediately after death (within a months time)so that the revenue officials will act in time to issue the same. If not, you have to apply through the Court. The procedure is similar to a Civil suit. The Court orders issuance of LH certificate through the Tahsildar. There is no time limit for applying through the Court.
Jayaraj Poojari
(Expert) 16 March 2015
LH Certificate should be the alternative for indemnity and sureties.
Rajinder KumarAhuja9990725300
(Expert) 16 March 2015
No.
sir LH certificate is not alternative to indemnity and sureties.Banks usually do not part with deceased's money unless indemnity and sureties acceptable to them are executed. It is the bank who decides one or two sureties are required.Generally one surety good for the amount is sufficient but they have other ways to compel you to produce legal representation. In which bank you are dealing?I can be contacted at rajinder.ahuja@gmail.com for free consultations.
Guest
(Expert) 16 March 2015
All depends upon the amount of claim. Except with succession certificate, individual ceilings are fixed in banking rules without sureties, with sureties, LH certificate, respectively.
Jayaraj Poojari
(Expert) 17 March 2015
Thanks for the experts views. I think it
is a simple procedure to handover the money to the appropriate legal heirs. The banks create their own rules, unless it is tenable under law it can be challenged. I do not understand the logic behind banks demanding sureties, indemnity bond..etc . Once an Account holder is dead, the Banks ought to disburse the deposit to the nominee of the account holder or the beneficiaries in case of a will. In case there is no nomination, no will, the Bank should disburse it to the legal heirs upon producing death certificate and LH certificate. In addition the bank can take an undertaking from all legal heirs acknowledging the disbursal. The money belongs to legal heirs and not to the bank. They (bank) cannot simply hold other's money unreasonably.
Rajinder KumarAhuja9990725300
(Expert) 17 March 2015
From your angle the opinion given seems to be very fair. But there are people in this country who would like not to disclose the entire list of LRs and disappear after taking money of others shares also.That puts Banks in an embarrassing position.Even the neighbors do not know how many sons and daughters the deceased had at the time of his death.Banks in order to protect their interest simply can say that the list of LRs is doubtful.The final result is to approach court of distt judge whose authority can not be challenged by Banks.
Shunny Nigam
(Querist) 17 March 2015
Respected All,
Thats what i was thinking whats the point of giving undertaking in form of affidavit and indemnity when they doubt about the true information about legal heirs and thus ask sureties.
In case of any fraud, bank can take action against those names who gave Affidavit and Indemnity.
Anyhow my case is with three bank UCO,PNB, Bank of baroda where my mother did FD and saving account without joint holding and nominee. Each bank has money less then 1.5lakh.
In loan i can understand that in case i default, bank can ask or pressurise surety or guarantor. But our own money, and that too giving affidavit and indemmnity.
Even in IBA 2006 anex 5, there is no surety anywhere so why banks in their forms put surety coloumn.
Jayaraj Poojari
(Expert) 17 March 2015
Your view is seen from the other side and it is what exactly happening in some cases. However, LH Certificate issued either from the Tahsildar or resulting from a Court order is an effective document issued after enquiry and verification and is legally binding. Banks can safely act based on LH certificate. Banks ultimately have no financial liability.
Guest
(Expert) 17 March 2015
Dear Jayaraj Poojari,
In money matters pertaining to deceased depositors cheating by any heir cannot be overruled. So. thinking of any individual as, "a simple procedure to handover the money to the appropriate legal heirs" has no relevance for the bank, being the custodian of money and and the trustee of the depositor. They have to ensure that the funds of the deceased goes to the right claimant.
The question arises, after payment of money to some non-eligible person, if someone appears to claim money of the deceased with a succession certificate, from whom they would claim the amount when he flees away with the money after withdrawal of money from his account? So, banks have to device their rules to safeguard the money of the deceased depositor to handover the same to the eligible person only. The succession certificate is safest way for the bank to absolve from their liability. If no succession certificate is produced, the bank can get hold of the sureties in case the payee becomes missing on presentation of claim or objection by any other legal heir of the deceased.
Guest
(Expert) 17 March 2015
Dear Shunny,
Hope you would have got the point from my earlier post in response to the views of Shri Poojari.
Shunny Nigam
(Querist) 17 March 2015
Yes Mr.Dhingra i got it the importance of surety in case of no succession certificate.
Guest
(Expert) 17 March 2015
Thanks for understanding.
T. Kalaiselvan, Advocate 
(Expert) 18 March 2015
Expert Mr. Dhingra has explained the position very well, there appears to be a solution to the author's query.
Some banks dont insist on sureties at all, they, if satisfied with the genuineness of the claimants and the claim amount, have discretion to waive the requirement of surety on the basis of letter of indemnity too.
Think practical situation, do not agitate over good for nothing issues, instead cooperate with the bankers to get your problem solved amicably.
Shunny Nigam
(Querist) 18 March 2015
You are correct Mr.Kailaiselvan, unfortunatly all claims are in banks where we dont have our regular business and saving accounts, therefore absolutly new person for those bank staff and managers.
I now fully understand that bank being custodian for our money wants full security measure by asking surety etc.
T. Kalaiselvan, Advocate
(Expert) 18 March 2015
Hope you understood the risk involved while clearing the formalities to retrieve your own money (?), act wisely as per the situation.
