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Priya (C.S.)     06 March 2011

Query on Banking Regulation Act

There is one man having a fixed deposit account in the Bank. He is married and his wife is the legal heir. He has nominated his sister as the nominee for the said fixed deposit. He died after few years and after his death his sister appoached the Bank and claimed the fixed deposit money being the nominee. When her claim was in process the wife approached the Bank and claimed the fixed deposit amount and submitted the letter to that effect to the Branch Manager. The branch manager informed her about the nomination and said he cannot help her. After completing the formalities Bank paid the Fixed deposit amount to his sister. After some days the bank informed the wife that they have paid the money to his sister. The wife filed the suit against the Bank for payment of fixed deposit amount. Bank contended in the court that they have paid as per nomination and as such discharged from liability.

Please let me know what is the position of the wife in the above case. Is she correct in arguing that the Bank should not have gone ahead in making the payment to the nominee (sister)

Kindly suggest some case laws to back up my answer.



Learning

 2 Replies

abhaykumar (officer)     07 March 2011

she should have file civil suit against sister of deceased for recovery of amount .Nomination does not affect right of wife to succed .Action of bank was also proper.

c.p.s. ramachary (1500)     14 April 2012

I fully agree with the views of Mr.Abhaykumar. Nomination is different from a  'Will'.  Nomination facility is in fact  statutory contemplation governed by Sec 45za of Banking Regulation Act 1949 and is meant for the benefit of banks to get valid discharge against adverse claims from third parties whether they are legal heirs or not. So the suit filed against bank cannot sustain and will fail. Instead of suing bank, sue the nominee received the proceeds of the deposit as after all  nominee is extended hand of legal heirs and is answerable to the legal heirs. If the the nominee does not cooperate with the legal heirs, there is no alternative except to sue the nominee (if the cause of action is not barred by time) to recover the same .


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