Lakshmamma (dead) and Another vs P.S. Subramanyam

Burn, J.—This is an appeal from an order of the learned District Judge of Chittoor on a petition by a Brahmin lady named Lakshmamma u/s

372 of the Indian Succession Act. The lady alleged that she was the widow of one P. Sambiah Sarma who had died while in employment as a

station master on the Madras and Southern Mahratta Railway. She claimed a succession certificate to enable her to draw the amount standing to

the credit of P. Sambiah Sarma in the Railway Provident Fund. It was not disputed that Sambiah Sarma, the depositor, had made a declaration

under the Provident Fund Rules in favour of Lakshmamma, nominating her as the person to whom he desired the amount at his credit to be paid in

the event of his death. One P.S. Subramanyam the son of P. Sambiah Sarma by his first wife opposed the application and alleged that

Lakshmamma had never been legally married to his father. The learned District Judge found that Lakshmamma had lived with P. Sambiah Sarma

as his wife for many years, but by reason of certain documents proved before him the learned Judge held, that the lady had been married before to

one Madyala Subramaniah. He held therefore that she could not have been the legally wedded wife of P. Sambiah Sarma. The learned Judge

found accordingly that the provident fund money must go to the son of P. Sambiah Sarma because the son comes within the definition of

dependant"" in Section 2 of the Provident Funds Act of 1925 and because the nomination which had admittedly been made by Sambiah Sarma in

favour of the appellant must be treated as an unlawful nomination. The learned Judge states in paragraph 3 of his judgment that

Under the Provident Funds Act only a dependant may be lawfully nominated and a dependant is defined as a wife, husband, parent, child, minor

brother, unmarried sister, deceased son''s widow and child or paternal grandparent.

We are unable to find any provision in the Provident Funds Act, which says that only a dependant may be lawfully nominated. On the contrary

we think that Section 4 of the Provident Funds Act clearly implies that a nomination may be made in favour of a person other than a dependant.

The learned District Judge has apparently been misled by applying to this case the rules of the Government General Provident Fund. The learned

Judge quotes Rule 7(2) of the General Provident Fund Rules which is to the effect that a subscriber shall nominate one or more members of his

family and Rule 7(3) says that in the absence of a family any person may be nominated but such nomination shall not be valid so long as the

subscriber has a family. Rule 7(4) provides that on acquiring a family a nomination of an outsider previously made must be formally cancelled.

These rules are not applicable to the Provident Fund of the Madras and Southern Mahratta Railway. We have examined the rules of the Madras

and Southern Mahratta Railway Company''s Provident Fund and they do not contain anything corresponding to Rule 7(2), (3) and (4) of the

General Provident Fund. Rule 21 of the Madras and Southern Mahratta Railway Provident Fund Rules says that when a deposit account is first

opened, the member concerned shall be required to give a declaration in Form G. 45, particularising the person or persons by whom he is desirous

that the whole or any portion of his deposit shall be received in the event of his death. It is provided that this declaration shall remain in force unless

it is revised or cancelled by means of a notice in writing given to the Chief Auditor and Accountant in Form G. 45-A. The rule permits a depositor

to make a fresh declaration at any time and it also provides that if the depositor is not a Hindu, Mohammadan, Buddhist or other person exempted

from the operation of the Indian Succession Act any declaration already submitted by him shall forthwith become null and void on the occasion of

his marriage or re-marriage and a fresh declaration shall be required. Form G. 45 bears upon its face an indication that the nominee need not be a

dependant. After the declaration, a column is provided for the name and address of the nominee or nominees and then in column 2 the depositor is

required to state whether the nominee is a dependant as defined in Section 2(c) of the Provident Funds Act, 1925, or if not a dependant, the

nature of relationship. This clearly implies that the nominee need not be a dependant.

Learned Counsel for the respondent relies upon the decision of Mr. Justice Beasley (as he then was) in the case of Cuffley v. Madras and

Southern Mahratta Railway Co. (1928) M.W.N. 402. In that judgment the learned Judge laid it down that where there are a widow and children

left by the deceased subscriber to a provident fund, they are entitled to the benefit of the fund whatever be the amount subscribed for, regardless of

the nominations or assignments made by the subscriber. Relying upon this learned Counsel for the respondent contends that since the petitioner

was found by the learned District Judge not to be the legally wedded wife of the subscriber, she does not come within the definition of ""dependant

in Section 2 of the Provident Funds Act. The son for whom learned Counsel appears is a ""dependant"" since he is a child of the subscriber. It is

therefore contended that the son has a right to this provident fund amount in preference to the lady nominated by the subscriber. This result would

follow undoubtedly from the decision of Mr. Justice Beasley in the case referred to. We find however, in the first place, that the learned Judge

really decided the case on a different point altogether. He found that the subscriber Mr. W.J. Cuffley had made a declaration in favour of his step-

mother at a time when he had no legally wedded wife in existence. Subsequently he had married and had had children. The learned Judge found

that the declaration made before marriage became null and void on the occasion of the subscriber''s marriage. This was sufficient to decide the

case and the learned Judge did decide it on this ground. But he went on to say that even if he were wrong in holding that the declaration was

invalid, this would not necessarily mean that the nominee was entitled to the money in preference to the plaintiff and he proceeded to lay down the

proposition already mentioned. We find however that the rules referred to by the learned Judge, namely, 21 and 22 have been very materially

altered since the date of the judgment and we therefore do not feel ourselves bound to follow the learned Judge or to discuss in detail our reasons

for dissenting from his conclusion. In a later case to which Sir Owen Beasley was a party Mon Singh v. Mothi Bai (1935) 71 M.L.J. 790 : ILR 59

Mad. 855 the Provident Fund Rules of the Madras and Southern Mahratta Railway were again under consideration and the judgment was

pronounced by one of us. It was there held:

It appears therefore that the money is not payable to a dependant as such unless the dependant is also nominated in the declaration. And Rule 21

indicates precisely the nature and effect of the declaration. (Vide page 859.)

The judgment then goes on to quote Rule 21 which has already been referred to. This is sufficient, we think, to show that Sir Owen Beasley

would have recognised the difference created by the alteration in the rules between the date of his judgment in Cuffley. v. Madras and Southern

Mahratta Railway Co. (1928) M.W.N. 402 and the present date. There is nothing in the rules of the Provident Fund requiring declarations to be

made in favour of dependants only. There is no restriction with regard to the persons in whose favour declarations may be made by depositors.

Rule 22 as it now stands carries out the provisions of Sections 3 and 4 of the Provident Funds Act. u/s 3(2) of the Provident Funds Act it is

provided that any sum standing to the credit of any subscriber to, or depositor in, any such fund at the time of his decease and payable under the

rules of the Fund to any dependant of the subscriber or depositor...shall, subject to any deduction authorized by this Act, and, save where the

dependant is the widow or child of the subscriber or depositor, subject also to the right of an assignee...vest in the dependant, and shall, subject as

aforesaid, be free from any debt or other liability incurred by the deceased or incurred by the dependant before the death of the subscriber or

depositor. The reference to the rules of the fund shows that these provisions can only apply to sums which under the rules are payable to a

dependant. It is quite clear that this section also recognises the possibility of sums being payable to persons other than dependants. Under Rule 22

of the Madras and Southern Mahratta Railway Provident Fund Rules it is provided that if a declaration made by the depositor in accordance with

the provisions of Rule 21 subsists, the amount standing to his credit in the Fund, or the part thereof to which the declaration relates, shall, subject to

the other provisions of these rules, be payable in accordance with such declaration. In the present case there is no dispute about the fact that the

declaration was made in favour of the appellant and the declaration is in accordance with the provisions of Rule 21. It was a subsisting declaration

at the time of the depositor''s decease and therefore the amount is payable to the appellant under the rules.

For these reasons we are of opinion that this appeal succeeds and we allow it with costs both here and in the Court below.