Nomination

kumaraswamy sekar (Querist) 04 May 2013 This query is : Resolved
WHETHER NOMINEE OF A BANK DEPOSIT / BANK ACCOUNT IS THE SOLE BENEFICIARY ENTITLED TO THE FUNDS OF THE DEPOSITS / ACCOUNT? HAS OTHER LEGAL HEIRS ANY CLAIM, IF ONE OF THEM IS THE NOMINEE? IF SO, WHAT IS THE REMEDY?

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Adv. Chandrasekhar (Expert) 04 May 2013
Nominee is not the sole beneficiary, if legal heirs are there. If legal heirs are deprived of their benefit, any one of the legal heirs can move the court under Indian succession Act making the concerned bank and other legal heirs and invariably the nominee as respondents for distribution of the benefit in accordance with the succession Act.

R.K Nanda (Expert) 04 May 2013
repeated query.

ajay sethi (Expert) 04 May 2013
nominee is only a trustee for all legal heirs . other legal heirs can request bank not to transfer funds to nominee . obtain succession certificate

Guest (Expert) 04 May 2013
You can claim your share from the nominee, but not from the bank, as bank is liable to pay to the nominee only.

prabhakar singh (Expert) 04 May 2013
The sharers should demand their share from the nominee and on refusal must sue the nominee within three years from the date of payment by the bank to the nominee.

Section 45ZA(2)(Banking Regulation Act) merely put 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 depositors so far as the depositors’s account is concerned.

But it by no stretch of imagination make the nominee the owner of the money lying in the account.

However there is an exception to the general rule of nomination which is restricted to nominee of share of companies.

A reading of Section 109(A) of the Companies Act and 9.11 of the Depositories Act makes it abundantly clear that the intent of the nomination is to vest the property in the shares which includes the ownership rights thereunder in the nominee upon nomination validly made as per the procedure prescribed.