Korlam Sitaramaswamy vs Korlam Venkatarama Rao

Horwill, J.—The appellant and the respondent are step-brothers, being the sons of one K. Adinarayana Patnaik, who had been subscribing

to a provident fund according to the rules of the Bengal Nagpur Railway Co., and who, at the time of his death, had a sum of Rs. 7200 odd

standing to his credit. He had nominated his first wife under the rules as the person to whom the sum standing to his credit in the provident fund

should be paid on his death. She died as early as August 1929; but he made no change in the nomination. Upon his death in 1941, he left a second

wife, whom he married after the death of his first wife, and two sons, one by the first wife and the other by the second wife. The latter is the

appellant and the former the respondent. The learned advocate for the appellant contends that as the nominee had predeceased her husband, the

sum due to Adinarayana Patnaik was a sum belonging to him and undisposed of by will, and therefore belonged equally to his two sons. The

respondent, on the other hand, contends that the sum vested in his mother, the nominee, and that therefore he was entitled to the same exclusively.

That view was upheld by the Subordinate Judge of Chicacole, and it is against that decision that the appellant has appealed. The learned

Subordinate Judge came to the conclusion he did on the wording of Section 5 of Act 19 of 1925 which states, "" Subject to the provisions of this

Act ... any nomination, duly made in accordance with the rules of the fund, which purports to confer upon any person the right to receive the whole

or any part of such sum on the death of the subscriber or depositor, shall be deemed to confer such right absolutely, until such nomination is varied

by another nomination made in like manner or is expressly cancelled by the subscriber or depositor by notice given in such manner and to such

authority as is prescribed by those rules.

If a nomination is to be deemed to confer a right absolutely to receive money standing in the provident fund until another nomination is made, it

means that the right vests in the nominee. This was pointed out by Beasley C.J. and Stodart J. in Mon Singh v. Mothibai AIR 1936 Mad. 477. The

learned advocate for the appellant seeks, however, to distinguish that case, because it relates to a nominee who was not a dependant; and he

contends that Section 5(1) applies only to nominees who are not dependants. Section 5 does not purport to have that limited application; but it is

argued that unless Section 5 is given this restricted application, it is not in consonance with Sections 3 and 4. We do not however find that Section

5 cannot be reconciled with Section 3 or Section 4 without restricting the application of Section 5. Section 3 purports to protect compulsory

deposits against claims by creditors or assignees, and Section 4 contains provisions regarding the payments out by the officer whose duty it is to

make such payments. Neither Section 3 nor Section 4 purports to lay down the legal effect of a nomination that is the purpose of Section 5. The

most that can be said for the appellant is that if there had been no Section 5, a view different from that come to by the lower Court would be

possible upon a reading of Sections 3 and 4. That does not mean that Sections 3 and 4 cannot be reconciled with Section 5 unless this section is

restricted in its application. The learned Counsel for the appellant relies on the decision of Beasley J. in Cuffley v. M. S. M. Ry. Co. Ltd. 1928

M.W.N. 402, who adopted a line of reasoning not unlike that put forward here on behalf of the appellant. Beasley J.''s decision was however

largely influenced by the Provident Fund Rules framed by the Railway Company, which have since been considerably altered, as was pointed out

by a Bench of this Court in Lakshmamma v. Subramanyam AIR 1939 Mad. 489. This last-mentioned decision distinctly laid down the rule that if a

person has been nominated, the sum lying to the credit of the depositor at his death is payable to the nominee, whether he is a dependant or not.

The learned advocate for the appellant says that there are decisions of other High Courts to the contrary; but as we find ourselves in respectful

agreement with Mon Singh v. Mothibai 23 AIR 1936 Mad. 477 and Lakshmamma v. Subramanyam AIR 1939 Mad. 489, we do not think it

necessary to consider those other views. If the provident fund of K. Adinarayana Patnaik vested in his first wife, it follows that after her death, her

son inherited her right to the deposit. The appeal is dismissed with costs.