Sunday, 4 April 2021

Whether nomination made by an employee can be treated as his will and curtail the right of legal heirs to claim a share in his service benefits?

 The purpose of taking a nomination by an employer is to relieve itself of the obligation to pay the benefits, irrespective of the right of a person who is entitled in law to the Fund. Nomination, in law, cannot be construed as a “Will” of the employee and cannot be treated as a testamentary disposition of the deceased employee with an intent to bestow the benefits on the heirs. Every employee has a right in law to decide how his movable assets should be treated and disbursed in the event of his death

and nomination cannot circumscribe the legal rights of disposition of the assets. The purpose of nomination is only to benefit a custodian so as to enable him to know how and to whom he has to hand over the assets, protecting him from litigations and multiplicity of cases from different people, claiming to be successors to the interest of the employee. Thus,

the liability of the employer / custodian is discharged by disbursing the funds to the ‘nominee’ and thereafter if there is an inter-se disputes between the lawful heirs, they could resort to appropriate remedies for identification of their shares. The concept of appointing a nominee therefore is only to ensure that the amounts are disbursed at the earliest to the nominee and this becomes significant as there may be occasions where it may take time for the legal heirs to resolve their disputes and in the meantime the trustee / Custodian Company or any other Institution may go into liquidation or any other contingency may arise making it difficult to realize the retiral and other dues.


 Whenever provident fund amount is

disbursed the custodian of the fund is anxious to have a good

discharge against all claims from whomsoever claiming

through the member. The Rules nowhere provide that the

nomination is to be construed as a will by the member. If a

nomination is to be taken as a final disposition made by the

member as to how it should be taken by his heir on his death, it

would lead to anomalies, because till the member dies, the

nominee acquires no right to claim the amount. The legal right

of a member to decide from time to time as to how his assets

should be taken consequent to his death, cannot be frozen by a

nomination given, as part of his service conditions. His legal

rights about disposition of his assets cannot be circumscribed

by such nomination, 11 he is to execute a “Will” later on,

contrary to the nomination that has been made earlier, the

terms and conditions of the ‘will’ alone can prevail, and so far

as the trustees of the fund are concerned, their obligation will

be fully discharged by paying it to the nominee, who will in turn

be liable to hand over the funds to the persons entitled to as per

the ‘Will’. In case of intestate succession, the nominee is bound

to hand over the amounts to the heirs of the deceased. The main

purpose of nomination is intended to benefit

 the custodianstrustees

of the fund to know as to how or to whom they should

hand over the amounts and need not make themselves

answerable to multiplicity of claims from different persons

claiming to succeed to the interests of the deceased member. If

there is no nomination, the custodian of the fund cannot decide

as to who are the lawful heirs to succeed and they will have to

wait for a Court order to be produced, and unless finality is

reached, therein, the disbursement of the fund will be delayed

Funds, like the provident fund, in the case of State or other

public institutions, may be sufficiently safe-guarded even if

there is to be a delay in disbursement. But in cases of other

institutions, if the amounts are not immediately disbursed on

the basis of nomination, and before proceedings in Court are

over, if for any reasons, the Companies or institutions are

liquidated, the contributions made by a member of such bodies,

will not enure to the benefit of the legal heirs till finality is

reached in Court proceedings unless the amount is deposited in

Court at the earliest stage. The concept of nomination has been

thought of to achieve the disbursement of the amounts at the

earliest point of time to the nominee, who will be answerable to

claims made by those who are entitled to the amount lawfully.

 IN THE HIGH COURT OF DELHI AT NEW DELHI


W.P.(C) 6701/2018 and C.M. Nos.25451/2018, 41307/2019 and

11129/2020

SUMAN KUMARI @ SUMAN SINGH  Vs  NAND KISHOR & ORS 

CORAM: HON'BLE MS. JUSTICE JYOTI SINGH

Pronounced on: 06.11.2020

1. By way of the present petition the Petitioner seeks directions to

Respondent Nos. 4 & 5 to grant compassionate appointment to the

Petitioner as well as to release part share of the Gratuity, pension and

other terminal dues as well as Insurance fund in her favour which

according to her accrues to the Petitioner on the demise of her husband.

2. Petitioner was married to Late Shri Manoj Kumar Singh

(hereinafter referred to as Manoj) on 11.06.2015 as per Hindu Rites. The

marriage took place after the death of the 1st wife of Manoj, namely, Late

Neelam Singh (hereinafter referred to as Neelam), who died on


16.07.2009. Neelam is survived by a daughter namely Ms. Aditi Singh

who was born on 16.01.2003 and is a minor. Respondent Nos. 1 & 2 are

the father and mother of Manoj and the minor daughter has been

impleaded as Respondent No. 3. Respondent Nos. 4 & 5 are the official

Respondents i.e. ONGC, the ex-employer of Manoj.

3. It is an undisputed fact that Manoj was working with ONGC and at

the time of his untimely demise he was working as Superintendent

Engineer (Mechanical) and that he died of Brain Tumor for which he was

undergoing treatment at a hospital in Gurgaon.

4. Petitioner made a representation on 11.04.2017 for release of

Gratuity, pension and other terminal dues. Getting no response, she sent

another application in September, 2017, followed by a reminder on

07.03.2018. Vide the impugned order dated 02.04.2018 ONGC

communicated to the Petitioner the rejection of her representations on the

ground that the terminal dues of Manoj had been released as per the

nomination Forms filled by him in the year 2009 & 2017 and that being

an employer, ONGC could not enter into inter-se family disputes of the

deceased employee.

5. Contention of learned counsel for the Petitioner is that the

Petitioner is one of the Class-I legal heir of Manoj. She was legally

wedded to him and the marriage certificate and the requisite information

was admittedly available in the records of the ONGC. Petitioner is thus

entitled and eligible for compassionate appointment. Respondent Nos. 1

& 2 are senior citizens and Respondent No. 3 is a minor and hence the

Petitioner is the only legal heir entitled to be given a job after the death of


her husband. Petitioner is in great financial difficulty without any source

of livelihood.

6. It is further contended that being the widow of Manoj and the legal

heir, ONGC is bound to release Gratuity and other retiral benefits to the

Petitioner including the insurance fund of CSSS as Manoj was the

employee of ONGC and died while in service, on account of a medical

ailment. Counsel fairly contends that the Petitioner is not demanding that

the entire benefits should be disbursed to her, but seeks a direction that

share due to her by virtue of being a Class-I heir be released to her. It is

contended that the Respondent Nos. 4 & 5 are illegally denying the

benefits on the ground that the benefits have to be disbursed in

accordance with nomination made by Manoj. The argument is that

nominee is only entitled to receive an amount and is not the absolute

owner of the fund. The nominee is thus duty bound to distribute and share

the amount with all the legal heirs under the personal law of succession.

In this regard reliance is placed by the learned counsel on the judgement

of a Co-ordinate Bench of this Court in Smt. Manjula Verma & Anr. v.

Kumari Sarla Verma in CM (M) No. 306/2007 decided on 03.12.2007

more particularly para 44 which is as follows:-

“para 44… from the aforenoted two decisions, the legal

principle which emerges is that the nominee does not acquire

any beneficial interest or ownership to the sum in the Provident

Fund Account. The nominee merely gets a right to receive the

fund. The Division Bench of the Andhra Pradesh High Court in

Shaik Dawood’s case (supra) has taken a similar view.”


7. Counter affidavit has been filed on behalf of Respondent Nos. 1 to

3. Counsel for the said Respondents has opposed the petition on the

ground that Respondent No. 1 is 75 years of age and Respondent No. 2 is

71 years old and both were living peacefully in the last stage of their life,

in a small place in Uttar Pradesh, when they got the information that their

son was suffering from Brain Tumor and when they went to Delhi to

support the family and meet their son, the Petitioner was extremely rude

to them and to the minor daughter. The Petitioner, out of 22 months of

marriage hardly lived with her husband and in less than 9 months had left

the matrimonial home on 27.09.2016, making complaints against the

Respondent Nos. 1 & 2 and the bedridden husband, under the Domestic

Violence Act. She never showed any concern or love and affection for the

family including her husband and has now filed the petition seeking

benefits, which under the law accrue to Respondent Nos. 1 to 3 and are

the lifetime savings of Manoj which have been now invested for the

future of the minor daughter. Petitioner is not entitled to the benefits as

Manoj had consciously nominated his daughter for receiving his benefits

in 2009. Even after the marriage with the Petitioner, when Manoj made

the nomination in 2017, he had the opportunity to change the nomination

in favour of the Petitioner, but he consciously chose not to do so, as the

Petitioner had been ill treating him and the minor daughter, even though

he was bedridden.

8. A detailed counter affidavit has been filed by Respondent Nos. 4 &

5. Learned counsel for the said Respondents has argued that the present

petition is misconceived and ought to be dismissed against the answering

Respondents who have no concern with the inter-se family disputes of the

Petitioner with Respondent Nos. 1 to 3. The factum of the marriage of the

Petitioner with Manoj on 11.06.2015 is however not disputed. It is argued

that ONGC cannot be made a party to the dispute of succession between

the family and in case there is any grievance of the Petitioner with regard

to the share qua the nominees, the remedy is to file a Civil Suit and the

Petitioner cannot take recourse to a writ petition and raise issues of

testamentary dispositions or disputed questions of fact.

9. Without prejudice to the said submission, it is submitted that a

nomination Form dated 29.09.2009 was executed by Manoj, in presence

of two witnesses and he had nominated his daughter in respect of the

terminal dues, in the event of his death. On 06.02.2017 Manoj submitted

fresh nomination Form, bearing his thumb impressions, executed in

presence of two witnesses. Along with the Form he had submitted a

medical certificate dated 02.02.2017, issued by the hospital, certifying

that on account of progressive disease and weakness of hand he was

unable to sign any document. In the second nomination Form, Manoj had

nominated his daughter for receiving 100% benefits in respect of CPF,

Gratuity, PRBS etc. and 75% benefits in respect of CSSST, in the event

of his death. For receiving 25% benefits with respect to CSSST, Manoj

had nominated his father i.e. Respondent No. 1.

10. The contention is that as per the prevalent Rules and Regulations of

the ONGC, the terminal dues have to be paid to the nominees of the

employees in the event of the happening of the contingencies mentioned

in the respective Rules. Attention of the Court is drawn to Rules 5(1) &

8(2) of the ONGC Death Retirement and Terminal Gratuity Rules, 1995,

with respect to payment of Gratuity on the death of an employee. Rules

18.7 & 20.1 of ONGC Self Contributory Post Retirement and Death in

Service Rules, 1991 are referred to with respect to disbursement of

benefits under the said Scheme. Likewise Rule 13 of the ONGC

Composite Social Security Scheme, 1998 is alluded to for disbursement

of benefits under the said Scheme, wherein it is the right of a nominee to

receive the cash benefits in the event of death of the Member of the

Scheme.

11. Counsel further argues that with respect to the Employees

Contributory Fund Benefits every employee on joining the Fund, as a

member has to make a nomination and in the event of his death, the

benefits can only be released to the nominee in terms of the provisions of

Regulation 19 of ONGC Employees Contributory Provident Fund

Regulations. The answering Respondents cannot release money/benefits

under the Schemes/Regulations to any person other than the nominee and

are bound by the provisions.

12. It is further submitted by the counsel for the ONGC that it has

released certain amounts as per the nomination Form dated 06.02.2017.

The details as set out in the counter affidavit are as follows:-

“12. That following Late Mr. Manoj Kumar Singh's demise, the

Respondent No. 4 has released the following amounts as per the

nomination form dated 06.02.2017-

a. Gratuity (As per entitlement subject to a

maximum of Rs. 20 Lakhs). In the instant case

of Late Mr. Manoj Kumar, total Gratuity

payable was Rs. 12,40,154. Amount of Rs. 10

Lakh was paid to the nominee in the salary of

June 2017 and remaining amount of Rs.

2,40,154 was paid in the month of March 2018.


b. CPF : (Employee + Employer Contribution +

accrued Interest). In the instant case as per

system details available with the Respondent,

amount has not been disbursed by the

concerned Trust so far.

c. CSSS: Late Mr. Manoj Kumar being an E-4

Level Executive was eligible for Rs. 60 Lakh. In

the instant case, initial payment has been

released on 28.03.2018 to father i.e.

Respondent No. 1 Rs. 7,50,000/- and FD has

been made in the name of Respondent No. 3

Aditi Singh, (Minor Daughter) to the tune of Rs.

22,50,000/-.

d. PRBS: Entire corpus has been converted into

Pension and Rs. 16,765 is remitted as monthly

annuity/pension in the Bank Account of

daughter of Late Mr. Manoj Kumar i.e.

Respondent No. 3.

e. Employee Group Leave Encashment Scheme

through LIC of India: Rs. 10 Lakh was paid to

the nominee on 22.02.2018.

13. In so far as the grievance of the Petitioner regarding compassionate

appointment is concerned, counsel for ONGC argued that a dependent of

a deceased employee is eligible for financial assistance under the ONGC

Composite Social Security Scheme, in lieu of gainful employment. Manoj

was employed as an E-4 Level Executive and was eligible for financial

assistance amounting to Rs. 60 Lakh. ONGC has already released an

initial payment on 28.03.2018 to Respondent No. 1 to the tune of Rs.

7,50,000/- and a Fixed Deposit has been made in the name of Respondent

No. 3 to the tune of Rs. 22,50,000/- and therefore the Petitioner is not

eligible for compassionate appointment.

W.P. (C) 6701/2018 Page 8 of 24

14. I have heard the learned counsels for the respective parties and

examined their rival contentions.

15. The legal nodus that arises in the present petition is whether the

line of succession governed by the personal law is applicable to the

parties or the nomination made by the deceased employee would be the

decisive factor for disbursing benefits such as Gratuity, Insurance,

Provident Fund, etc. While the contention of the Petitioner is that she is

the legally wedded wife of deceased Manoj and entitled to part of the

benefits, the contention of the Respondent Nos.1 to 3 is that the

nomination made by Manoj would be the governing factor and hence the

benefits should be disbursed to the nominee(s).

16. Before adverting to the issue raised it would be relevant to consider

the provisions applicable which are as follows :-

“Rule 5 (1) of ONGC Death Retirement & Terminal Gratuity

Rules, 1995:-

"5.PAYMENT OF GRATUITY:

(1) Gratuity shall be payable to an employee on the termination

of his employment after he has rendered continuous service for

not less than five years :-

(a). On his superannuation, or

(b). On his retirement or resignation, or

(c). On his death or disablement due to accident or disease.

Provided that the completion of continuous service of five years

shall not be necessary where the termination of the employment

of any employee is due to death or disablement.

Provided further that in the case of death of the employee,

gratuity payable to him shall be paid to his nominee or, if no

nomination has been made, to his heirs, and where any such

nominee or heir is a minor, the share of such minor, shall he

W.P. (C) 6701/2018 Page 9 of 24

deposited with the controlling authority who shall invest the

same for the benefit of such minor in such bank or other

financial institution, as may be prescribed, until such minor

attains majority.

EXPLANATION : For the purposes of this Rule disablement

means such disablement as incapacitates an employee for the

work which he was capable of performing before the accident

or disease resulting in such disablement."

“Rule 8 (2) of ONGC Death Retirement & Terminal Gratuity

Rules, 1995:

8. Nomination :

(2). If an employee has a family at the time of making a

nomination, the nomination shall be made in favour of one or

more members of his family, and any nomination made by such

employee in favour of a person who is not a member of his

family shall be void.”

“Rule 18.7 of ONGC Self Contributory Post Retirement and

Death in Service Rules 1991 :

18 BENEFITS

18.7 In case a member who joins this scheme during the

service, his/her spouse or legal heir or nominee would be

entitled to 40% of the last applicable salary as pension or

pension as per Rule 17.1 above whichever is higher. This will

also apply to any member of the Scheme who suffers a

permanent total disability while in service. Permanent total

disablement would be as defined in the Workmen’s

Compensation Act, 1948.”

“Rule 20.1 of ONGC Self Contributory Post Retirement and

Death in Service Rules 1991 :

20. NOMINATION :

20.1 An employee may make a nomination conferring on one or

more persons the right to receive the amount of superannuation

benefit in the event of his death before that amount becomes

payable, or having become payable and the amount has not

been paid. Such a nomination shall be made in such form as

may be prescribed by the Trustees from time to time.”

“Rule 13 of ONGC Composite Social Security Scheme, 1998

13 NOMINATION :

(a). Every member shall on joining the Scheme make a

nomination in prescribed form conferring on one or more

persons the right to receive the Cash Benefits under the Scheme

in the event of his death before the amount has become payable

or having payable has not been paid, provided that :-

i) If at the time of making nomination, the member has a family,

the nomination shall not be made in favour any person/persons

other than the members of family (as defined in the Scheme).

Any nomination made by such member in favour of

person/persons not belonging to his/her family shall be invalid,

and any nomination made by such employee in favour of a

person who is not a member of his family shall be void.

ii) If at the time of making nomination, the member has no

family, he shall provide in the nomination that it shall become

invalid in the event of his/her subsequently acquiring a family."

“Regulation 19 of ONGC Employees Contributory Provident

Fund Regulations :-

19. NOMINATION :

(a). Every employee shall on joining the Fund make a

nomination in Requisite form conferring one or more persons

the right to receive the amount that may stand to his credit in

the event of his death before the amount has become payable or

having payable has not been paid.

Provided that :-

(i). If at the time of making nomination, the employee has a

family, the nomination shall not be in favour any person or

persons other than the members of his family. Any nomination

made by such employee in favour of person not belonging to his

family shall be invalid.”

17. Perusal of the Rules and Regulations hardly leaves any doubt that

the employee is entitled to appoint a nominee in his lifetime, who would

be the recipient of the benefits in the event of the death of the employee.

It is uncontroverted that under the Rules, ONGC is required to disburse

the benefits of the deceased employee only to the nominee(s).

Nomination means “to mention by name” or “to appoint” or “propose”.

The purpose of taking a nomination by an employer is to relieve itself of

the obligation to pay the benefits, irrespective of the right of a person who

is entitled in law to the Fund. Nomination, in law, cannot be construed as

a “Will” of the employee and cannot be treated as a testamentary

disposition of the deceased employee with an intent to bestow the

benefits on the heirs. Every employee has a right in law to decide how his

movable assets should be treated and disbursed in the event of his death

and nomination cannot circumscribe the legal rights of disposition of the

assets. The purpose of nomination is only to benefit a custodian so as to

enable him to know how and to whom he has to hand over the assets,

protecting him from litigations and multiplicity of cases from different

people, claiming to be successors to the interest of the employee. Thus,

the liability of the employer / custodian is discharged by disbursing the

funds to the ‘nominee’ and thereafter if there is an inter-se disputes

between the lawful heirs, they could resort to appropriate remedies for identification of their shares. The concept of appointing a nominee therefore is only to ensure that the amounts are disbursed at the earliest to the nominee and this becomes significant as there may be occasions where it may take time for the legal heirs to resolve their disputes and in the meantime the trustee / Custodian Company or any other Institution may go into liquidation or any other contingency may arise making it difficult to realize the retiral and other dues.

18. The nominations are thus to be construed on a different pedestal

than a testamentary disposition of the deceased employee and this issue is

no longer res integra. I may at this stage allude to a few, with a caveat

that most of them deal with the Provident Fund Act, but the law with

regard to the rights of a nominee has been settled therein.

19. In Union of Bharat vs. Asha Bi, AIR 1957 MP 79, a Division

Bench of the Madhya Pradesh High Court held that a provision of

appointing a nominee merely wipes off all personal and other laws, thus

creating right in the nominee to receive money according to the

nomination, but does not make the nominee owner of the fund. Court also

held that before the death of the subscriber, nominee is not entitled to a

beneficiary interest and nomination is in its nature not testamentary and

on the death of the subscriber, his legal representatives would be entitled

to the property.

20. A full Bench of the Kerala High Court in Sarojini Amma vs.

Neelakanta, AIR 1961 Ker. 126 held that nominee only had a right to

collect the money under the Policy on the death of the assured but did not

become the owner. The purpose was only to discharge the insurance

W.P. (C) 6701/2018 Page 13 of 24

company, but he remained liable to make over the money to the heirs of

the assured.

21. In Controller of Estate Duty, Madras vs. Estate of Pitchai

Thambi, (1976) T.L.N.J. 393, while dealing with the effect of nomination

under Section 39 of the Insurance Act, 1938, a Division Bench of the

Madras High Court held as follows :-

“The effect of nomination is not to clothe the nominee with

beneficial interest in the policy or the money payable

thereunder, but to clothe him or her only with the power to

receive the money under the policy from the insurer without

prejudice to the question of title to the money. Consequently it

confers on the nominee a bare right to collect the policy money

when the money becomes payable and by such nomination and

the collection of the money, the nominee does not become the

owner of the money payable under the policy and he or she is

liable to make it over to whomsoever is entitled to the same

under the law. Therefore, the mere use of the word “nominee”

or “assignee” in section 14 of the Act does not decide the tide

to the money.”

22. In Ramayee vs. Krishnaveni and ors., 1997 (1) LLN 406, a police

constable had died in harness. The dispute was between the mother who

claimed that she was an heir to the deceased and therefore had a right to

his retiral benefits, etc. and the wife of the deceased in whose favour the

employee had made a nomination during his lifetime. The Trial Court

held that the mother of the deceased was entitled to half share in the

retiral benefits as well as the insurance amount payable under the

Insurance Policy and a Decree of Declaration was passed. The wife of the

deceased filed an appeal and the Appellate Court held that the wife being

the nominee was entitled to the insurance amount, to the exclusion of the

W.P. (C) 6701/2018 Page 14 of 24

mother and also held that the nominee alone will be entitled to receive the

benefits such as family pension, gratuity, etc. The mother filed an appeal

against the said order before the Madras High Court. The Court framed

the following question of law :

“Whether the nomination made by the deceased in relation to

the pecuniary benefits gratuity and the family benefit fund

which become payable on the death of the deceased will

override the right of inheritance available to the legal heirs of

the deceased under the personal law?”

23. The Court after examining the issue and following the law laid

down by the Supreme Court in Sarbati Devi vs. Usha Devi, 1984(1) SCC

424, observed as follows :-

“All these judicial decisions clearly show that the nominee gets

only a right to receive the amount of distribute the same to the

heirs of the deceased in accordance with the law of succession

governing them. The above said legal position has not been

disputed by any of the respondent's counsel. Hence the

judgment of the lower appellate court is set aside and the

judgment of the trial court is restored, accordingly the second

appeal is allowed.”

24. In Jodh Singh vs. Union of India, 1980 (4) SCC 306, the Supreme

Court observed as under :-

“Where a certain benefit is admissible on account of status and

a status that is acquired on the happening of certain event,

namely, on becoming a widow on the death of the husband,

such pension by no stretch of imagination could ever form part

of the estate of the deceased. It did not form part of the estate of

the deceased it could never be the subject matter of

testamentary disposition.”

W.P. (C) 6701/2018 Page 15 of 24

25. In Shipra Sengupta vs. Mridul Sengupta and Ors., 2009 (10) SCC

680, the appellant before the Supreme Court was the wife of a deceased

employee in a bank in Madhya Pradesh. Prior to his marriage the

employee on joining the bank had nominated his mother. He died leaving

behind his widow, mother and two brothers. The appellant / widow filed

an application for succession under the Succession Act, 1925 claiming

her share in the benefits and the ground urged was that after the marriage

the prior nomination ceased to exist. It was also her contention that both

she and the mother of the deceased were Class-I heirs under the Hindu

Succession Act, 1956 and thus entitled to succeed to equal shares in the

property. The Trial Court held both entitled to half shares in the amounts

under the head of ‘retiral benefits’ but for certain other benefits the

widow was held entitled to the exclusion of the mother. The litigation

travelled upto the Supreme Court where the widow questioned the

judgment of the High Court. Three questions framed by the Supreme

Court are relevant to the present case and are as follows :-

“I. Whether nomination of mother by a member of a Provident

fund governed by the Imperial Bank of India Employees'

Provident Fund Rules before his marriage confers ownership

on the nominee and destroys right of succession of the widow

under Succession Act?

II. Whether nomination only indicates the hand which is

authorized to receive the amount on the payment of which

trustees of the provident fund get a valid discharge?

III. Whether the provident fund can be claimed by the heirs of

the member of the provident fund in accordance with the law of

succession governing them?”

W.P. (C) 6701/2018 Page 16 of 24

26. The Court after examining the issues and placing reliance on the

earlier judgments of the Supreme Court held as follows :-

“17. The controversy involved in the instant case is no longer

res integra. The nominee is entitled to receive the same, but the

amount so received is to be distributed according to the law of

succession. In terms of the factual foundation laid in this case,

the deceased died on 8.11.1990 leaving behind his mother and

widow as his only heirs and legal representatives entitled to

succeed. Therefore, on the day when the right of succession

opened, the appellant, his widow became entitled to one half of

the amount of the general provident fund, the other half going

to the mother and on her death, the other surviving son getting

the same.

18. In view of the clear legal position, it is made abundantly

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 law of succession governing them.

In other words, nomination does not confer any beneficial

interest on the nominee. In the instant case amounts so received

are to be distributed according to the Hindu Succession Act,

1956.”

27. In M.V. Krishnamoorthy vs. Tmt. Anandallakshmi, 1980 (2) MLJ

321, the High Court of Madras dealing with a similar issue held as

follows :-

“8. R. 22 before 1972 amendment, provided that all

nominations must be in writing and must be registered with the

trustees. R. 23 deals with payment to nominee and is to the

effect that on the death of a member, the full amount shall be

paid to the nominee, and such payment shall be a good

discharge to the Trustees and to the Corporation…against all

claims whatsoever in respect of the Fund by whomsoever

claiming through the said member. These two rules go to show

that the main purpose of taking nomination is for the trustees of

the fund to relieve themselves of their obligation in paying the

provident fund amount, irrespective of the persons who may be

entitled to the fund. Whenever provident fund amount is

disbursed the custodian of the fund is anxious to have a good

discharge against all claims from whomsoever claiming

through the member. The Rules nowhere provide that the

nomination is to be construed as a will by the member. If a

nomination is to be taken as a final disposition made by the

member as to how it should be taken by his heir on his death, it

would lead to anomalies, because till the member dies, the

nominee acquires no right to claim the amount. The legal right

of a member to decide from time to time as to how his assets

should be taken consequent to his death, cannot be frozen by a

nomination given, as part of his service conditions. His legal

rights about disposition of his assets cannot be circumscribed

by such nomination, 11 he is to execute a “Will” later on,

contrary to the nomination that has been made earlier, the

terms and conditions of the ‘will’ alone can prevail, and so far

as the trustees of the fund are concerned, their obligation will

be fully discharged by paying it to the nominee, who will in turn

be liable to hand over the funds to the persons entitled to as per

the ‘Will’. In case of intestate succession, the nominee is bound

to hand over the amounts to the heirs of the deceased. The main

purpose of nomination is intended to benefit

 the custodianstrustees

of the fund to know as to how or to whom they should

hand over the amounts and need not make themselves

answerable to multiplicity of claims from different persons

claiming to succeed to the interests of the deceased member. If

there is no nomination, the custodian of the fund cannot decide

as to who are the lawful heirs to succeed and they will have to

wait for a Court order to be produced, and unless finality is

reached, therein, the disbursement of the fund will be delayed

Funds, like the provident fund, in the case of State or other

public institutions, may be sufficiently safe-guarded even if

there is to be a delay in disbursement. But in cases of other

institutions, if the amounts are not immediately disbursed on

the basis of nomination, and before proceedings in Court are

over, if for any reasons, the Companies or institutions are

liquidated, the contributions made by a member of such bodies,

will not enure to the benefit of the legal heirs till finality is

reached in Court proceedings unless the amount is deposited in

Court at the earliest stage. The concept of nomination has been

thought of to achieve the disbursement of the amounts at the

earliest point of time to the nominee, who will be answerable to

claims made by those who are entitled to the amount lawfully.

Nomination means ‘to mention by name'; to appoint, to propose

formally.’

xxxx xxxx xxxx

18. Most of the decisions above referred to arose under the

Provident Funds Act and even then subsequent to amendments

it has been held that the nominee does not acquire absolute

interest in the funds. The provision for nomination is made for

the benefit of discharging the liability of the custodians of the

fund, which aspect I have dealt with at length in the earlier part

of this Judgment, and unless a specific provision is made in the

relevant Act or even in the nomination a direction of

bequeathing the amount is given to the effect that except the

nominee, none of the legal heirs would acquire rights and such

directions is not varied later on, the right of a nominee cannot

be anything more than being the sole person entitled to draw

out the amount and he would be doing so in the capacity of a

trustee of the funds answerable to the claims of the lawful heirs

of the deceased member. The use of the word ‘nomination

which means only appointment to receive the amount, cannot

be construed as to confer any absolute right in the funds to the

exclusion of the rights of the lawful heirs, because even a

stranger may be nominated in whom the nominator may have

trust. If the intendment is to make the nominee as the absolute

owner, there can be no difficulty in incorporating the necessary

recitals to the effect that he has got, on the date of nomination,

his legal heirs and in spite of it, he bequeathes the amount only

to the nominee to take the funds to the exclusion of the other

heirs. When such an unequivocal expression is not present in a

nomination, it would not be proper to hold that such a

nomination would result in absolute conferment of rights in the

nominee to take the amount for himself.”

28. Having gone through the various judgments as referred to above, I

am of the view that the law on the right of a nominee is well settled. The

effect of nomination is not to clothe the nominee with a beneficial interest

but is only a pointer to the person who is authorized to receive the amount

and subsequently the amounts so received would have to be distributed

according to the law of succession. It is crystal clear that Nomination

cannot override the law of succession as applicable to the parties in

question. Therefore, once there is a claim by the heirs of the deceased to

his benefits or assets, the same shall devolve on the heirs in accordance

with the governing law of succession. There is no right in a nominee to

claim ownership to the property in question.

29. Learned counsel for the Petitioner is thus right in his contention

that a widow of a deceased employee is a Class-I heir under the

Succession Act and would be entitled to a proportionate share in the

benefits that accrue out of employment. Learned counsel has rightly

relied on the judgment of a Co-ordinate Bench of this Court in Smt.

Manjula Verma (supra) where the Court after analysing the historical

rhetoric of the Provident Fund Act and its Amendments, concluded that

the nominee does not acquire any beneficial interest or ownership to the

sum in the Provident Fund Account and merely gets a right to receive the

fund.

W.P. (C) 6701/2018 Page 20 of 24

30. The question that next arises in the present petition is the relief that

can be granted to the Petitioner. The prayers made in the present petition

need to be looked into in this regard and are as under :-

“(a). Issue of a writ of mandamus or any other appropriate writ

or order or direction to the respondent no.4 & 5 to grant

compassionate appointment to the petitioner.

(b). Direct the Respondent no.4 and 5 to provide the release

Gratuity, pension, terminal dues, insurance fund which accrued

due to death of Late Sh. Manoj Kumar Singh and other

monetary benefits of late Manoj Kumar Singh to the petitioner

and other legal heirs as per law.

(c). Direct the Respondent No.1 to 3 to pay the amount, if

received from the Respondent No.4 and 5 qua gratuity, pension,

terminal dues and other monetary benefits of late Manoj Kumar

Singh, to the Petitioner regarding her share.”

31. It is evident from the prayers that the Petitioner has claimed reliefs

against Respondent Nos. 4 and 5 to release the retiral and other monetary

benefits accruing due to the death of Manoj claiming to be a Class-I legal

heir, as per law. Petitioner has also sought a direction against Respondent

Nos.1 to 3 to disburse to her the share to which she is entitled as a Class-I

heir of her deceased husband. Petitioner has also sought compassionate

appointment with Respondent Nos.4 and 5.

32. In so far as compassionate appointment is concerned, ONGC has

brought out that under the Rules applicable to ONGC, a dependent of the

deceased employee is eligible for financial assistance in lieu of gainful

employment under the ONGC Composite Social Security Scheme. Being

an E-4 level Executive, Manoj was entitled to Rs.60 Lakh under the

Scheme. Out of the said amount, Rs.7,50,000/- have been released to

W.P. (C) 6701/2018 Page 21 of 24

Respondent No.1 on 28.03.2018 and Rs.22,50,000/- have been placed in a

fixed deposit in the name of the minor daughter Aditi. The stand of

ONGC, in my opinion, cannot be faulted as the action has been taken in

terms of the provisions of the Scheme, whereby compassionate

appointment or financial assistance are alternatives to one another. In any

case, during the course of arguments, the relief was not pressed by the

counsel for the Petitioner.

33. In so far as direction to the ONGC to release the retiral and other

monetary benefits to the Petitioner is concerned, it is a settled law that the

employer / trustee / custodian is discharged in its obligation and liability

once the benefits of the deceased are disbursed in favour of a nominee.

As noticed above, the Courts have repeatedly affirmed that the purpose of

nomination is to discharge the trustee of his liability to release the money

as soon as the person nominating expires and it is thereafter for the

nominee to take steps to disburse the amount in case there is a claim by

the other legal heirs of the deceased.

34. In the present case it is undisputed that Manoj had nominated his

minor daughter as a nominee to receive the benefits under various Heads

and for a certain percentage of share under one of the Schemes

nomination was made in favour of Respondent No.1. ONGC followed the

Rules applicable to the deceased employee and released some of the

amounts in favour of the nominees. Once the nomination was made as per

the Rules, which have been referred to above, no infirmity or illegality

can be found with the action of the ONGC or their stand that they are

obliged to release the benefits as per the nomination made by the

deceased employee.

W.P. (C) 6701/2018 Page 22 of 24

35. At this stage it is pertinent to mention that after some of the

benefits had been released by ONGC as per the Nomination Form and as

mentioned by them in para 12 of the Counter Affidavit, this Court had

passed an interim order on 27.06.2018, relevant part of which is as

follows :-

“Having considered the submissions of the learned counsel for

the petitioner, I am of the view that the petitioner has been able

to make out a prima facie case and balance of convenience is

also in her favour. Grave and irreparable loss would be caused

to the petitioner, in case, during the pendency of the present

petition, all the retiral dues of late Shri Manoj Kumar Singh are

released to the respondent nos.1 to 3.

Accordingly, till the next date of hearing, the respondent no.4 is

restrained from releasing more than 50 per cent of the retiral

dues of late Shri Manoj Kumar Singh to any of the respondent

nos.1 to 3.”

36. The position therefore that emerges is that some portions of the

amounts towards retiral / terminal benefits have been disbursed in favour

of Respondent Nos.1 and 3 while some are lying with the ONGC, due to

the interim order passed by the Court.

37. Ordinarily, this Court would have relegated the Petitioner to civil

remedies, but in view of the fact that the marriage of Petitioner with

deceased Manoj is not disputed and the marriage certificate has been

placed on record, directions are being issued in the present petition. In

somewhat similar circumstances, the High Court of Kerala in Kaveri S.

vs. Deputy Inspector General of Police CRPF and Ors. 2015 SCC

OnLine Ker 33849 entertained the writ petition and passed the following

directions:-

W.P. (C) 6701/2018 Page 23 of 24

“3. It is trite that a nominee does not get a right to the estate of

the deceased and in the event of the same being confined to a

money claim, the right is only to get disbursement of the same;

which the nominee would hold in trust for the other legal heirs.

Hence, even if the amounts are disbursed to the 4th respondent,

the 4th respondent cannot claim any right, as such, over the

entire amounts.

4. Admittedly, the son of the 4th respondent had entered into a

marriage with the petitioner just two months prior to his death.

The same is evidenced by Ext.P1 certificate. A child is said to

have been born to the petitioner in the wedlock. Hence, the

petitioner and the child along with the mother of the deceased

are Class-I heirs, as per the Hindu Succession Act, 1955.

Hence, it may not be necessary for this Court to relegate the

petitioner to the Civil Court especially since the disbursement

of the retirement benefits has not been made till now.

xxxx xxxx xxxx

7. In such circumstance, the following directions are issued:

(i) The petitioner shall appear before the 1st respondent with the

original of Ext.P1 certificate as also the birth certificate of the

child born to the petitioner. The 1st respondent shall, on

production of such original certificates, verify the same and

sanction 1/3 of the retirement benefits to the petitioner herein;

1/3 of the benefits shall be issued by way of cheque in the name

of the child, a minor, and the cheque handed over to the 2nd

respondent. The balance 1/3 shall be disbursed to the 4th

respondent.

(ii) The pension, going by the C.C.S. Pension Rules, shall be the

entitlement of the petitioner and the same shall be computed

and Pension Payment Order, for family pension, if eligible,

issued in the name of the petitioner and all arrears paid as

expeditiously as possible. The petitioner's claim for

compassionate appointment, in accordance with the rules, as

applicable to the C.R.P.F., shall be kept open.”

38. In view of the law enunciated by various courts, it is held that the

Petitioner being a Class-I heir of Manoj, is entitled to stake a claim over

W.P. (C) 6701/2018 Page 24 of 24

the proportionate share in the retiral / terminal benefits of Manoj, in

accordance with the Hindu Succession Act and her right cannot be

defeated by the nominations. As Respondent No.2 being the mother and

Respondent No.3 being the minor daughter are also Class-I heirs,

Petitioner is entitled only to 1/3rd share in the retiral / terminal benefits. It

has come on record that prior to the passing of the interim order, amounts

under certain Heads, as noted in the earlier part of the judgement, were

already disbursed in favour of the nominees. However, on account of the

interim order certain amounts are lying deposited with the ONGC,

although the exact figures have not been disclosed in the Counter

Affidavit.

39. ONGC is thus directed to disburse to the Petitioner her

proportionate share under the various Heads, as claimed, from the

amounts presently lying in the various Funds / Trust with the ONGC.

Needless to state that if the amounts disbursed by the ONGC to the

Petitioner fall short of the 1/3rd share in the total entitlement, on account

of the fact that amounts towards certain benefits have already been

disbursed to Respondent Nos. 1 to 3, it shall be open to the Petitioner to

resort to appropriate Civil remedies, in accordance with law, to recover

the said amounts from Respondent Nos. 1 to 3.

40. Petition is partly allowed. All pending applications stand disposed

of.

JYOTI SINGH, J

NOVEMBER 6th, 2020/ yo/yg

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