Muhammed vs Parukutty Amma and Others

K. Sreedharan, J.—These appeals arise out of O.S. 441/82 and O.S. 613/82 on the file of the Subordinate Judge''s Court, Ernakulam. These suits were jointly tried and were disposed of by a common judgment. Therefore I consider it advantageous to dispose of these appeals by a common judgment. A.S. 145/86 and A.S. 148/86 arise out of the suit O.S. 441/82. They are filed by the 5th Defendant and 4th Defendant respectively. The 5th Defendant in O.S. 441/82 was the Plaintiff in O.S. 613/82. He challenges the dismissal ofhis suit in A.S. 525/90.

The short facts necessary for the disposal of these appeals are as follows: Plaintiffs in O.S. 441/82 are the widow and children of late Sri P.N. Parameswaran Pillai. He committed suicide on 23rd January 1981. Hie had not disposed of the properties held by him and so he died intestate. Plaintiffs are the legal heirs to succeed to the estate left behind. Deceased was having accounts with the Banks, which are impleaded as Defendants 1 to 3. The accounts and the deposits in the Banks were started by Parameswaran Pillai with his funds but had got Defendants 4 and 5 included and accounts made operative by "former or survivor" of "either or survivor". It is the Plaintiffs'' case that Defendants 4 and 5 had no manner of right over the amounts covered by those accounts even though they were second named parties to those accounts and fixed deposits. On these averments Plaintiffs have prayed for a decree declaring their title to the amounts in deposit with the Banks and for a prohibitory injunction restraining Defendants 4 and 5 from withdrawing any amount lying in deposit in the joint names of Parameswaran Pillai and Defendants 4 and 5.

First Defendant, Bank, filed a written statement contending that Plaintiffs must prove that they are the exclusive legal heirs of deceased Pafameswaran Pillai. According to Bank, Fixed Deposit No. 2808/109, dated 18th January 1978 for an amount of Rs. 17,000 stands in the name of deceased and 4th Defendant to be operated by the former and balance payable to survivor. So also is Savings Bank Deposit No. 149/3350 in which a sum of Rs. 13.17 is the balance. Fixed Deposit No. 2808/107 dated 16th January 1978 for a sum of Rs. 14,000 stands in the name of the deceased and 5th Defendant to be operated by either or survivor and balance payable to survivor. Another Savings Bank Account No. 2862 which was started on 18th July 1977 in the names of the deceased and 5th Defendant to be operated by either or survivor has a balance of Rs. 542-64. It is further averred therein that the first two accounts i.e. fixed deposit for Rs. 17,000 and S.B. Actount No. 149/3350 were in the names of late P.N. Parameswaran Pillai and Sri V.G. Narayanan Nair initially with the clause ''former or survivor''. On 22ad January 1989, the deceased instructed the Bank in writing to change the name of V.G. Narayanan Nair to V.N. Padmanabhan Nair. Accordingly, the 4th Defendant''s name was included as the second person in the account.

Second Defendant, the Ganara Bank, Kothamangalam Branch, in its written statement averred that deceased Parameswaran Pillai had the following accounts with the Bank. S.B. account No. 4891 having a balance of Rs. 494.91 is in the names of Parameswaran Pillai and P.G. Gopalan Nair to be operated by former or survivor. In the joint names of these two, Anr. S.B. Account No. 4355 was operated and it has a balance of Rs. 309.66. Rupees 6,000 has been deposited in Fixed Deposit No. 104/78 in the joint names of P.N. Parameswaran Pillai and Poor Home Society, West Hill, Kozhikode. The amount due on that fixed Deposit is to be paid to the Poor Home Society. Another sum of Rs. 8,000 is covered by Fixed Deposit No. 1/78 in the joint natnes of Parameswaran Pillai and P.G. Gopalan Nair to be operated by former or survivor. Yet Anr. deposit of Rs. 9,000 covered by Fixed Deposit No. 50/80 is in the joint names of Sri Parameswaran Pillai and Sri V.N. Padmanabhan Nair, the 4th Defendant in the suit. That account is to be operated by former or survivor. As per the accounts with the Bank, the Bank has to pay the amount to the survivor unless the court otherwise directs.

The 4th Defendant in his detailed written statement raised the following contentions. On 17th December 1979 Parameswaran Pillai approached this Defendant and sought for a loan of Rs. 15,000. He made this Defendant to believe that he had fixed deposit which is not matured and in case he availed a loan, the same would entail unnecessary loss of interest. Knowing fully well that Parameswaran Pillai was a reliable person, he advanced Rs. 13,000 as loan. Thereupon Parameswaran Pillai executed a promissory note in favour of this Defendant. Some of the properties belonging to this Defendant''s wife and children were sold on 14th May 1980 and 11th August 1980. The entire sale consideration together with Rs. 250 totalling to Rs. 5,000 was paid to Parameswaran Pillai. A sum of Rs. 9,000 was deposited in the joint names of Parameswaran Pillai and this Defendant in the Canara Bank in Fixed Deposit No. 50/80. While making this deposit, Parameswaran Pillai told the Defendant that his name need be removed from the joint account only on payment of Rs. 5,000 and interest due thereon. Parameswaran Pillai owed Rs. 13,000 and Rs. 5,000 together with interest. Two days prior to his suicide he converted his Fixed Deposit in the Union Bank of India for Rs. 17,000 into the joint names of this Defendant and himself. The idea was to pay the entire money to this Defendant. As regards the fixed deposit of Rs. 9,000 with 2nd Defendant it is claimed that this Defendant is entitled to Rs. 5,000 together with interest.

5th Defendant in his turn has raised the following contentions. Himself and Parameswaran Pillai were very close friends. They had joint business. They operated Savings Bank account with the Union Bank of India. The understanding was that during the life-time of Paremeswaran Pillai and this Defendant the amount would be jointly owned by them and after the death of either the amount will belong exclusively to the survivor. The Savings Bank account was started on 18th July 1977 and the Fixed Deposit was made on 16th January 1978. In August, 1980 Parameswaran Pillai had required Rs. 10,000 as a loan from this Defendant after handing over the Fixed Deposit Receipt No. 1/78 which was in the joint names of Parameswaran Pillai and P.G. Gopalan Nair. Parameswaran Pillai had directed Sri Gopalan Nair to pay the amount to this Defendant in case Parameswaran Pillai was not alive on the date of maturity of the Fixed Deposit. On this basis, it was contended that Plaintiffs are not entitled to the amounts covered by the Savings Bank account and the Fixed Deposit Receipts.

5th Defendant in O.S. 441/82 instituted O.S. 613/82 for realisation of a sum of Rs. 8,000 from the amount due under Fixed Deposit Receipt No. 1/78 dated 2nd January 1978 together with interest at the rate of 12 per cent per annum. In that suit, brother of decceased Parameswaran Pillai, Sri P.G. Gopalan Nair was impleaded as the first Defendant and Canara Bank as the second Defendant. Subsequently the Plaintiffs in O.S. 441/82 were impleded as additional defendents 3 to 7. Defendants in that suit disputed the claims put forward by the Plaintiffs.

As stated earlier, both suits were tried jointly. O.S. 441/82 was treated as the main suit. On the side of the Plaintiffs, P.Ws. 1 to 3 were examined and Exts. A-1 to A-10 marked. The Defendants in their turn got D.Ws. 1 to 3 examined and Exts. B-1 to B-10 proved. After appreciating the evidence, learned Sub Judge dismissed O.S. 613/82 and passed a decree in O.S. 441/82 in the following terms:

In O.S. 441/82 it is declared that the Plaintiffs in this suit are the legal representatives of late P.N. Parameswaran Pillai, Puthiyamadathil House, Vendiivazhi, Kothamangalam, who have inherited the title of the plaint deposits with Defendants 1 to 3 banks except the deposit covered under F.D. 2806/107 with the 1st Defendant, for which the 5th Defendant has got half right. Plaintiffs and 5th Defendant are also entitled for the interest accrued on deposits accordingly. The Plaintiffs and 5th Defendants are entitled to draw the amounts from Defendants 1 to 3 banks as above. The 4th Defendant is restrainad by prohibitory injunction from withdrawing the amounts from the banks held in the joint name of late Parameswaran Pillai. In the circumstances of these suits there will be no order as to costs.

This decree is under challenge by Defendant 4 and 5 who have preferred A.S. 148/86 and A.S. 145/86 respectively. Plaintiffs have filed a memorandum of Cross Objection in A.S. No. 145/86 questioning that part of the decree which granted the 5th Defendant half right in the amount covered by Fixed Deposit No. 2806/107 issued by the first Defendant Union Bank of India.

No argument was advanced by learned Counsel appearing in these three appeals questioning the legal status of the Plaintiffs in O.S. 441/82 as the widow and children of deceased P.N. Parameswaran Pillai. It is also conceded before me that, they are the only legal heirs of deceased Parameswaran Pillai. It is also not in dispute that Parameswaran Pillai died without executing a Will.

It is common case that the Fixed Deposits and Savings Bank accounts except two Fixed Deposits stood in the joint names of deceased Parameswaran Pillai and either the 4th Defendant or 5th Defendant. Fixed Deposit evidenced by receipt No. 104/78 with the second Defendant which was for a sum of Rs. 6,000 is in the joint names of Parameswaran Pillai and Poor Home Society, Kozhikode. The amount was specifically directed to be paid to the Society and the Plaintiffs have not put forward any claim for the anount covered by that F.D. Fixed deposit No. 1/78 for a sum of Rs. 8,000 made with the second Defendant stands in the joint names of deceased Parameswaran Pillai and one Sri P.G. Gopalan Nair. This P.G. Gopalan Nair has not put forward any claim for the money covered by that F.D.

The case of put forward by the 4th defendant is that he gave a loan of Rs. 13,000 on 17th December 1979 to deceased Parameswaran Pillai. On getting that loan, it is contended that Parameswaran Pillai executed a promissory note. But prior to the date of suicide of Parameswaran Pillai he got the Fixed Deposit which was for a sum of Rs. 17,000 changed to the joint names of himself and deceased Parameswaran Pillai. On getting his name included in the F.D. it is averred that the promissory note was torn off. The inclusion of his name in the F.D. receipt, according to him, would go to show that the money covered by the receipt should enure to his benefit and not to any other person. It is his further contention that a sum of Rs. 5,000 was advanced by him on 11th August 1980. That amount was meant for purchasing a plot for him. But since the price of lands shot up, the land was not purchased; instead Parameswaran Pillai deposited Rs. 9,000 in Fixed Deposit in the joint names of himself and the 4th Defendant with the Ganara Bank. So it is contended that the 4th Defendant is entitled to Rs. 5,000 from out of the amount covered by F.D. 50/80. That deposit as per the second Defendant Bank was made on 28th August 1980. If this Rs. 9,000 was inclusive of Rs. 5,000 advanced by the 4th Defendant, Parameswaran Pillai could have returned that Rs. 5,000 when he deposited Rs. 9,000 in the Bank on 28th August 1980. There was no need for depositing that Rs. 5,000 along with Anr. Rs. 4,000 in the joint names of Parameswaran Pillai and the 4th Defendant. Viewed'' in this light, I am not in a position to accept the 4th Defendant''s contention that he is entitled to Rs. 5,000 out of Rs. 9,000 deposited in Fixed Deposit with the second Defendant. Further the said deposit, of Rs. 9,000 was made on 28th August 1980. For making that deposit, under ordinary circumstances, it cannot bp taken that Parameswaran Pillai has utilised Rs. 5,000 given by the 4th Defendant on 11th August 1980. So the contention of the 4th Defendant that Rs. 9,000 covered by F.D. Receipt No. 50/80 issued by the second Defendant takes in Rs. 5,000 belonging to him cannot be accepted.

Fixed Deposit Receipt for Rs. 17,000 issued by the Union Bank of India on 18th January 1978 is marked in this case as Ext. B-1. That receipt shows that initially it was in the names of deceased Parameswaran Pillai and Another V.G. Narayanan Nair. Subsequently V.G. Narayanan Nair''s name has been scored off and the name of the 4th Defendant inserted. This shows that at the time when the deposit was made, 4th Respondent had no right whatsoever on the amount covered by that receipt. According to 4th Defendant, he had advanced a loan of Rs. 13,000 to Parameswaran Pillai on 17th December 1979. It was to facilitate the repayment of that loan, it is alleged, his name was included in the F.D. It is true that 4th Defendant is seen to have withdrawn a sum of Rs. 13,000 from his account with the Union Bank of India, Kothamangalam. This fact is seen from Ext. B-16 pass book. In December, 1979 if Parameswaran Pillai required Rs. 13,000, he could have pledged Ext. B-1 F.D. receipt and raised a loan. Instead of doing that, if he had taken a loan as is contended by the 4th Defendant from him, it should have been evidenced by some other document. It is the 4th Defendant''s case that a promissory note was in fact executed. That promissory note is stated to have been torn off when his name was inserted in the Fixed Deposit Receipt. This contention is too preposterous to be countenanced. If in fact Parameswaran Pillai wanted to transfer the amount covered by the Fixed Deposit of Rs. 17,000 in favour of the 4th Defendant, he could have endorsed the certificate to him. By making him the second depositor in the account to be operated by''either or survivor'' he will not get title to that amount.

Coming to the case put forward by the 5th Defendant, it is his case that he was having a joint business with the deceased Parameswaran Pillai. For the benefit of that joint business, they had joint Savings Bank account and joint Fixed Deposits. It is to be examined whether this claim put forward by the 5th Defendant can be accepted. Savings Bank account No. 2862 was started in the Union Bank of India on 18th July 1977 by depositing a stun of Rs. 30. When examined before court as D.W. 2, he admitted that the joint business was during the period from , 1966 to 1978. Thereafter there could not have been any joint venture. The total amount seen to have been deposited in that account upto January, 1979 is Rs. 426. Between 18th July 1977 and 3rd January 1979 Parameswaran Pillai is seen to have withdrawn only a sum of Rs. 1,000. No other withdrawal is recorded in the passbook. Further majority of the deposits in that Savings Bank account during that period are by way of interest from Fixed Deposits. It shows that the business did not yield any income for being deposited in the Bank and the majority of the deposits were interest from Fixed Deposits.

From the written statement filed by the first Defendant, Union Bank of India, it is seen that Parameswaran Pillai deposited a sum of Rs. 14,000 in F.D. on 16th January 1978 and Anr. sum of Rs. 17,000 on 18th Jianuary 1978. The first deposit alone was in the joint names of the deceased and the 5th Defendant. The second deposit was in the joint names of the deceased and 4th Defendant. 4th Defendant has admitted before court that Parameswaran Pillai disposed of his properties for more than Rs. 40,000. 5th Defendant had no case that the F.D. of Rs. 14,000 was made from the income from the joint business. In cross-examination he admitted that he does not know his share which made up the said Rs. 14,000. The.contention raised by him in the written statement that he had advanced a loan of Rs. 10,000 to deceased Parameswaran Pillai has not been substantiated by any independent evidence. Under these circumstances, I find it difficult to accept the 5th Defendant''s contention that he is entitled to the amount covered by the fixed deposit receipts issued by the first Defendant. This is more so because his contention is that the Fixed Deposit was to be operated either by Parameswaran Pillai or himself i.e. in case of death of Parameswaran Pillai the entire money must go to him (5th Defendant) and on his predeceasing Parameswaran Pillai, Parameswaran Pillai is to take the whole amount. In other words, according to 5th Defendant, the agreement was that if he predeceased Parameswaran Pillai, the entire amount will be taken by Parameswaran Pillai to the exclusion of his legal heirs. In the ordinary circumstances, such an intention cannot be attributed to the 5th Defendant. He could not have intended to disinherit his legal heirs. So the plea now put forward is only an attempt to get at the whole amount covered by the Fixed Deposits.

The problems concerning the relationship of parties to accounts inter se is somewhat complicated. Bank will obtain a good discharge by paying the balance of a joint account to the survivor or survivors. But that will not solve the dispute between the survivor and the legal heirs of the deceased. In the case of joint deposits it cannot be presumed that the depositor first named alone is the owner. As held by the Supreme Court in State of Maharashtra Vs. Pollonji Darabshaw Daruwalla, the matter is principally guided by the terms of the agreement, inter se, between joint depositors. What their Lordships stated is:

The assumption that in all joint deposits, the depositor first named alone is the beneficial owner ana the depositor named second has no such beneficial interest is erroneous. The matter is principally guided by the terms of the agreement, inter se, between the joint depositors. If, however, the terms of the acceptance of the deposit by the depositee stipulate that the name of the beneficial owner shall alone lie entered first, then the presumptive beneficial interest in favour of the first depositor might be assumed.

In the case of accounts to be operated by ''either or survivor'' question has arisen before court as to who is to take the money on the demise of one among them. A learned Single Judge of this Court in Padmanabhan Bhavani v. Govindan Bhargavi 1974 KLT 822 went into the issue in detail. After an exhaustive survey of all decisions on the point, the learned Single Judge formulated the following propositions:

(i) A deposit made by a Hindu of his money in the joint names of himself or his wife or any other person, on the terms that it is payable to either or survivor, does not on his death constitute a gift by him to the other person.

(ii) In such a case without any declaration of trust, there is a resulting trust in favour of the depositor in the absence of any contrary intention or unless it can be proved that an actual gift of the amount was intended.

(iii) The principle of English Law that a gift to a wife is presumed, where money belonging to the husband is deposited at a Bank in her name or where a deposit is made, in the joint names of both husband and wife has no application in India. In other words, there is no presumption in India of an intended advancement as there is in England.

(iv) The burden of proving a contrary intention or gift is on the person who seeks to rebut the resulting trust in favour of the person who makes the deposit....

(v) This burden could be discharged either by proving that there was a specific gift or that the owner of the money had a general intention to benefit the claimant and that it was in pursuance of that intention that he made the deposit in the claimant''s name or transferred the deposit to the joint names of himself and the claimant....

(vi) In the absence of such proof the amount under the deposit will form part of the owner''s estate on his death and will be partible among the heirs.

I am in respectful agreement with the above statement of the law. If from the facts and circumstances of the case it can be held that the deceased had the intention to make the survivor the owner of the amount lying in the account, then the survivor will be entitled to recover the same and not th� legal heirs. In the instant case, the circumstances do not established any such an intention of Parameswaran Pillai. The holder of the joint account on withdrawing the amount must restore it to the heirs and legal representatives of the deceased joint holder. The Bank will get a proper discharge by paying to the survivor. But, the survivor will be accountable to the heirs of the deceased joint holder in the absence of proof of the intention of the deceased to make the survivor the owner. In the case on hand, I have no hesitation in holding that deceased Parameswaran Pillai had no intention to make neither the 4th Defendant nor the 5th Defendant the owner of the amount covered by the Fixed Deposits. The position of joint account holders is not different from the nominees in life insurance policies. In Smt. Sarbati Devi and Another Vs. Smt. Usha Devi, Their Lordships took the view that a nominee under the life insurance policy will not be entitled to the money covered by the policy on the death of the assured. The amount in the hands of the nominee can be claimed by the heirs of the assured in accordance with law of succession governing the deceased. Relying on that principle, a learned Single Judge of this Court in Narayani Amma v. Saraswathy Amma 1991 (1) KLT 450 took the view that a nominee to a Fixed Deposit in a Bank will not be entitled to deprive the legal representatives of the depositor of their right to claim the amount. That principle, according to mc, will apply on all fours to the facts before me.

In view of what has been stated above, I hold that the amounts covered by the accounts with the Banks, Defendants 1 to 3, are the amounts left behind by deceased P.N. Parameswaran Pillai. Plaintiffs in O.S. 441/82 are alone entitled to those amounts. The court below was wrong in directing the 5th Defendant to have half right on the amount covered by Fixed Deposit No. 2806/107. On the basis of this finding, I dismiss all the three appeals but allow the Cross Objection filed by the Plaintiffs in O.S. 441/1982. The decree passed by the court below is modified accordingly. Defendants 1 to 3, the Union Bank of India, Kothamangalam Branch, Canara Bank, Kothamangalam Branch and South Indian Bank, Kothamangalam Branch are directed to pay the amounts covered by the accounts standing in the name of deceased P.N. Parameswaran Pillai and Ors. , which are made mention of in the schedule to the plaint, together with interest till the date of payment, to the Plaintiffs in O.S. 441/82. Plaintiffs in O.S. 441/82 are granted a decree to recover the said amounts from Defendants 1 to 3. I make no order as to costs.