If nomination is a substitute to testamentary succession

 If nomination is a substitute to testamentary succession

Recently,  amendments were made in the banking laws about nomination facility for bank accounts & lockers facility, making provisions of multiple nominations, share of various nominees either successively or simultaneously.

Banking Laws (Amendment) Act, 2025.

# 10. In the Banking Regulation Act of 1949, in section 45ZA, - 

(a) in sub-section (1), for the words “one person”, the words “one or more persons not exceeding four, either successively or simultaneously” shall be substituted;

(b) after sub-section (1), the following sub-sections shall be inserted, namely: - 

• “(1A) Where the nomination is made successively in favour of more than one person under sub-section (1), the nomination shall be effective only in favour of one person in the order of priority specified in section 45ZG.

• (1B) Where the nomination is made simultaneously in favour of more than one person under sub-section (1), the nomination shall be effective in favour of all such persons in proportion to which it is declared, and the following terms and conditions shall apply, namely: - 

• (a) the nomination shall not be made in favour of more than four persons;

• (b) the nomination shall explicitly state the proportion of amount of deposit in percentage in favour of each nominee;

• (c) the nomination shall be made in respect of the whole amount of deposit;

• (d) if any nominee dies before receiving deposit from the banking company, the nomination in respect of such nominee alone shall become ineffective and the amount of deposit purported to be nominated in favour of deceased nominee shall be treated as if nomination had not been made in respect of that portion of deposit,

and any nomination which does not comply with any of the terms and conditions specified in clauses (a) to (c), shall be invalid, as if nomination had not been made by the depositor or all the depositors together, as the case may be.”.

# 11. In the Banking Regulation Act of 1949, in section 45ZC, in sub-section (1), for the words “one person”, the words “one or more persons not exceeding four, successively,” shall be substituted.

# 12. In the Banking Regulation Act of 1949, in section 45ZE, for sub-section (1), the following sub-section shall be substituted, namely: - 

• “(1) Where one or more individuals hire a locker from a banking company, whether such locker is located in the safe deposit vault of such banking company or elsewhere, the individual or, as the case may be, all the individuals together, may nominate one or more persons not exceeding four, successively, to whom, in the event of the death of the sole hirer or the death of all the hirers, the banking company may give access to the locker and liberty to remove the contents of the locker.”.

# 13. In the Banking Regulation Act of 1949, after section 45ZF, the following section shall be inserted, namely: - 

• “45ZG. (1) Where the nomination is made in favour of more than one person successively under sub-section (1) of section 45ZA or sub-section (1) of section 45ZC or sub-section (1) of section 45ZE, the nomination shall be effective only in favour of one person in the following order of priority, namely: - 

• (a) nomination of the first nominee shall be effective if that nominee survives the person or persons who made the nomination; 

• (b) nomination of the second nominee shall become effective only after the death of the first nominee;

• (c) nomination of any nominee lower in the order of nomination shall become effective only after the death of all the nominees whose names are higher in the order of nomination.

• (2) Where the order of nomination is not mentioned, persons shall be deemed to have been nominated in the order in which their names appear in the nomination.

• (3) The provisions of this section shall not apply to the nominations made simultaneously in favour of more than one person under sub-section (1) of section 45ZA.”.

For a common citizen, the nomination facility in the banking accounts & lockers facility in the banks, with the above amendments gives an impression that nomination is sufficient to define & settle the succession of one’s financial assets (bank deposits & valuables kept in lockers). However, the Hon'ble Supreme Court in Shakti Yezdani vs Jayanand Jayant Salgaonkar had ruled that nomination does not confer succession ownership rights on the nominee.

Thus to provide for clarity & to avoid unnecessary litigation amongst legal heirs of the depositor, the Indian Succession Act, 1925, may kindly be considered to be amended to treat the nominations, registered under the provisions of various statutes, as deemed will unless contrary is mentioned in the subsequent will of the depositor/testator.

Case Law;

Hon'ble Supreme Court (2023.12.14) in Shakti Yezdani vs Jayanand Jayant Salgaonkar  [2023 INSC 1076, Civil Appeal  No. 7107 Of 2017] held that.

“# 25. In an illuminating list of precedents, this Court as well as several High Courts have dealt with the concept of ‘nomination’ under legislations like the Government Savings Certificate Act 1959, the Banking Regulation Act, 1949, the Life Insurance Act, 1939 and the Employees Provident Fund and Miscellaneous Provisions Act,  1952. It would be apposite to refer to what the Court said on nomination, in reference to these legislations:

Case Law/Precedent	Held
Sarbati Devi & Anr. v. Usha Devi [(1984) 1 SCC 424]	Nomination under S. 39 of the Insurance Act 1938 is subject to the claim of heirs of the assured under the law of succession.
Nozer Gustad Commissariat v. Central Bank of India [(1993) 1 Mah LJ 228]	Nomination under S. 10(2) of the EPF & Misc.  provisions Act 1952 cannot be made in favour of a non-family person. Relied upon Sarbati Devi (supra) to state that the principles therein were applicable to the Employees Provident Funds Act as well and not merely restricted to the Insurance Act.
Vishin N. Khanchandani & Anr. v. Vidya L. Khanchandani [(2000) 6 SCC 724]	Nominee entitled to receive the sum due on the savings certificate under S. 6(1) of the Govt. Savings Certificate Act 1959, but cannot utilise it. In fact, the nominee may retain the same for those entitled to it under the relevant law of succession.
Ram Chander Talwar & Anr. v. Devender Kumar Talwar & Ors. [(2010) 10 SCC 671]	Nomination made under provisions of S. 45ZA of the Banking Regulation Act 1949 entitled the nominee to receive the deposit amount on the death of the depositor.

# 26. A consistent view appears to have been taken by the courts, while interpreting the related provisions of nomination under different statutes. It is clear from the referred judgments that the nomination so made would not lead to the nominee attaining absolute title over the subject property for which such nomination was made. In other words, the usual mode of succession is not to be impacted by such nomination. The legal heirs therefore have not been excluded by virtue of nomination.

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# 39. The appellants also contend that a nomination validly made under S. 109A of the Companies Act, 1956 and Bye-law 9.11 of the Depositories Act, 1996 constitutes a ‘statutory testament’ that overrides testamentary/intestate succession. It is worth noting that the argument of nomination as a ‘statutory testament’ in respect of instruments such as life insurance policies, government savings certificates, provident fund etc. were considered and emphatically rejected by this Court in multiple rulings.

# 40. In Sarbati Devi (supra) this Court held that nomination under S. 39 of the Life Insurance Act, 1938 does not contemplate a third line of succession styled as a ‘statutory testament’ and any amount paid to a nominee on the policy holder’s death forms a part of the estate of the deceased policy holder and devolves upon his/her heirs, as per testamentary or intestate succession. Further, in Ram Chander Talwar (supra), while discussing the rights of a nominee of a deceased depositor (S. 45-ZA(2) Banking Regulation Act, 1949), this court concluded that the right to receive the money lying in the depositor’s account was to be conferred on the nominee but the nominee would not become the owner of such deposits. The said deposit is a part of the deceased depositor’s estate and is subject to the laws of succession, that governs the depositor.”

Disclaimer: The sole purpose of this blog is to create awareness on the subject and must not be used as a guide for taking or recommending any action or decision, commercial or otherwise. One must do his own research and seek professional advice if he intends to take any action or decision in the matters covered in this blog.

The Global Economy - 2050

 

The seven qualities of a Pencil🖍️, guiding philosophy of one's life.

 

The seven qualities of a Pencil🖍️, guiding philosophy of one's life.

A young boy was watching his grandmother writing in a book. 

He asked her what she was writing.

His grandmother stopped writing and said to her grandson:

I am writing a story, but more important than the words is the pencil I am using. I hope you will be like this pencil when you grow up.

Intrigued, the boy looked at the pencil. It didn’t seem very special.

“But it’s just like any other pencil I’ve seen!”

“That depends on how you look at things. It has seven qualities which, if you manage to adopt, will make you a happy person who is always at peace with the world.”

❤️ First quality: You must never forget that there is a hand guiding you. 

We call that hand God, and He always Guides us according to His Will.

❤️Second quality: Now and then, I have to stop writing and use a sharpener. That makes the pencil suffer a little, but afterwards, it is much sharper. 

So you, too, must learn to bear certain pains and sorrows, because they will make you a better person.

❤️Third quality: The pencil always allows us to use an eraser to rub out any mistakes. 

This means that correcting something we did is not necessarily a bad thing; it helps to keep us on the right path.

❤️ Fourth quality: what really matters in a pencil is not its wooden exterior, but the graphite inside. 

So always pay attention to what is happening inside you.

❤️Fifth quality: It always leaves a mark. 

In just the same way, you should know that everything you do in life will leave a mark, so try to be conscious of that in every action of yours. 

❤️Sixth quality : It gets shorter and shorter with use.... as is life. 

Make the most while it lasts.

❤️Seventh quality: It writes till the very end. 

Be useful and productive till your dying day.

( Courtesy -  Unknown, WhatsApp forwarded message)

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*The Sky Gets Dark, Slowly*

A very nice article, I could not resist to share.

Mao Dun literary prize winner Zhou Daxin’s latest novel to be published, “The Sky Gets Dark, Slowly”, is a sensitive exploration of old age and the complex, hidden emotional worlds of the elderly in a rapidly ageing population.

In it he writes, “…Many elderly speak as though they know everything, but of old age they are in fact as ignorant as children. Many elderly are in fact, completely unprepared for what they are to face when it comes to getting old and the road that lays ahead of them.

In the time between a person turning 60 years old, as they begin to age, right until all the lights go out and the sky gets dark, there are some situations to keep in mind, so that you will be prepared for what is to come, and you will not panic.

1. The people by your side will only continue to grow smaller in number. People in your parents’ and grandparents’ generation have largely all left, many of your peers will increasingly find it harder to look after themselves, and the younger generations will all be busy with their own lives. Even your wife or husband may depart earlier than you, or and what might then come are days of emptiness. You will have to learn how to live alone, and to enjoy and embrace solitude.

2. Society will care less and less for you. No matter how glorious your previous career was or how famous you were, ageing will always transform you into a regular old man and old lady. The spotlight no longer shines on you, and you will have to learn to be content with standing quietly in one corner, to admire and appreciate the hubbub and views that come after you, and you must overcome the urge to be envious or grumble.

3. The road ahead will be rocky and full of precarity. Fractures, cardio-vascular blockages, brain atrophy, cancer… these are all possible guests that could pay you a visit any time, and you would not be able to turn them away. You will have to live with illness and ailments, to view them as friends, even; do not fantasize about stable, quiet days without any trouble in your body. Maintaining a positive mentality and get appropriate, adequate exercise is your duty, and you have to encourage yourself to keep at it consistently.

4. Prepare for bed-bound life, a return to the infant state. Our mothers brought us into this world on a bed, and after a journey of twists and turns and a life of struggle, we return to our starting point – the bed – and to the state of having to be looked after by others. The only difference being, where we once had our mothers to care for us, when we prepare to leave, we may not have our kin to look after us. Even if we have kin, their care may never come close to that of your mother’s; you will, more likely than not, be cared for by nursing staff who bear zero relation to you, wearing smiles on their faces all whilst carrying weariness and boredom in their hearts. Lay still and don’t be difficult; remember to be grateful.

5. There will be many swindlers and scammers along the way. Many of them know that the elderly have lots of savings, and will endlessly be thinking of ways to cheat them of their money: through scam phone calls, text messages, mail, food and product samples, get-rich-quick schemes, products for longevity or enlightenment… basically, all they want is to get all the money. Beware, and be careful, hold your money close to you. A fool and his money are soon parted, so spend your pennies wisely.

Before the sky gets dark, the last stretches of life’s journey will gradually get dimmer and dimmer; naturally, it will be harder to see the path ahead that you are treading towards, and it will be harder to keep going forward. As such, upon turning 60, it would do us all well to see life for what it is, to cherish what we have, to enjoy life whilst we can, and to not take on society’s troubles or your children’s and grandchildren’s affairs on  yourself. Stay humble, don’t act superior on account of your own age and talk down to others – this will hurt yourself as much as it will hurt others. As we get older, all the better should we be able to understand what respect is and what it counts for. In these later days of your lives, you have to understand what it means, to let go of your attachments, to mentally prepare yourself.

 

The way of nature is the way of life; go with its flow, and live with equanimity.

 

*******

Hardly the day started and … it is already six o’clock in the evening.

Barely arrived on Monday and it’s already Friday.

… and the month is almost over.

… and the year is almost up.

… and already 50 or 60 or 70 years of our lives have passed.

… and we realize that we lost our parents, friends.

and we realize that it is too late to go back …

 

So … Let’s try to take full advantage of the time we have left …

Let’s not stop looking for activities that we like …

Let’s put color in our greyness …

Let’s smile at the little things in life that put balm in our hearts.

And yet, we must continue to enjoy the time that remains.

 

Let’s try to eliminate the “after” …

I do it after …

I will say after …

I will think about it after …

We leave everything for ‘later’ as if “after” was ours.

 

Because what we do not understand is that:

after, the coffee cools …

after, priorities change …

after, the charm is broken …

after, health passes …

after, the children grow up …

after, the parents get older …

after, the promises are forgotten …

after, the day becomes night …

after, life ends …

And all that afters, we find it’s often too late ….

 

So … leave nothing for ‘later’ …

Because in always waiting for later, we can lose the best moments, the best experiences,

the best friends,

the best family …

 

The day is today … The moment is now …

We are no longer at the age where we can afford to postpone until tomorrow what needs to be done right away.

 

(Courtesy - GETJOY - https://t.me/getjoyin)

12 Life Lessons

Rooted in the hearts of many Hindus is the belief that if you breathe your last in Kashi (Varanasi) you attain what is popularly known as ‘Kashi Labh’ or ‘the fruit of Kashi’- moksh or “release from the cycle of rebirth impelled by the law of karma”.

Kashi Labh Mukti Bhawan in Varanasi is one of the three guesthouses in the city where people check in to die. The other two are Mumukshu Bhawan and Ganga Labh Bhawan. Established in 1908, Mukti Bhawan is well-known within the city and outside.

Bhairav Nath Shukla has been the Manager of Mukti Bhawan for 44 years. He has seen the rich and the poor take refuge in the guesthouse in their final days as they await death and hope to find peace. Shukla hopes with and for them. He sits on the wooden bench in the courtyard, against the red brick wall and shares with me 12 recurring life lessons from the 12000 deaths he has witnessed in his experience as the manager of Mukti Bhawan:

1. Resolve all conflicts before you go

Shukla recounts the story of Shri Ram Sagar Mishr, a Sanskrit scholar of his times. Mishr was the eldest of six brothers and was closest to the youngest one. Years ago an ugly argument between the two brothers led to a wall to partition the house.

In his final days, Mishr walked to the guesthouse carrying his little paan case and asked to keep room no. 3 reserved for him. He was sure he will pass away on the 16th day from his arrival. On the 14th day he said, “Ask my estranged brother of 40 years to come see me. This bitterness makes my heart heavy. I am anxious to resolve every conflict.”

A letter was sent out. On the 16th day when the youngest brother arrived, Mishr held his hand and asked to bring down the wall dividing the house. He asked his brother for forgiveness. Both brothers wept and mid sentence, Mishr stopped speaking. His face became calm. He was gone in a moment.

Shukla has seen this story replay in many forms over the years. “People carry so much baggage, unnecessarily, all through their life only wanting to drop it at the very end of their journey. The trick lies not in not having conflicts but in resolving them as soon as one can,” says Shukla.

2. Simplicity is the truth of life

“People stop eating indulgent food when they know they are going to go. The understanding that dawns on many people in their final days is that they should’ve lived a simple life. They regret that the most,” says Shukla.

A simple life, as he explains, can be attained by spending less. We spend more to accumulate more and thus create more need. To find contentment in less is the secret to having more.

3. Filter out people’s bad traits

Shukla maintains that every person has shades of good and bad. But instead of dismissing “bad” people out-rightly, we must seek out their good qualities. Harbouring bitterness for certain people comes from concentrating on their negatives. If you focus on the good qualities though, you spend that time getting to know them better or, maybe even, loving them.

4. Be willing to seek help from others

To know and do everything by yourself might feel empowering but it limits one from absorbing what others have learnt. Shukla believes we must help others, but more importantly, have the courage to seek help when we’re in need.

Every person in the world knows more than us in some respect. And their knowledge can help us, only if we’re open to it.

He recounts the incident of an old woman being admitted on a rainy day back in the 80s. The people who got her there left her without filling the inquiry form. A few hours later, the police came to trace the relatives of the old lady who, they said, were runaway Naxalites. Shukla pretended to not know nothing. The police left. When the lady’s relatives returned next morning, Shukla asked the leader uninhibitedly, “When you can kill 5-8 people yourself why didn’t you simply shoot your Nani and cremate her yourself? Why did you make me lie and feel ashamed?” The grandson fell to his knees and pleaded for forgiveness saying no one amongst them is capable of helping his religious grandmother attain salvation. He respects that, and is the reason why he brought her to Mukti Bhawan.

5. Find beauty in simple things

Mukti Bhavan plays soulful bhajans and devotional songs three times a day. “Some people”, he says, “stop and admire a note or the sound of the instruments as if they have never heard it before, even if they have. They pause to appreciate it and find beauty in it.”

But that’s not true of everyone, he adds. People who are too critical or too proud, are the ones who find it hard to find joy in small things because their minds are preoccupied with “seemingly” more important things.

6. Acceptance is liberation

Most people shirk away from accepting what they are going through. This constant denial breeds in them emotions that are highly dangerous. Only once you accept your situation is when you become free to decide what to do about it. Without acceptance you are always in the grey space.

When you are not in denial of a problem you have the strength to find a solution.

Indifference, avoidance, and denial of a certain truth, Shukla believes, cause anxiety; they develop a fear of that thing in the person. Instead, accept the situation so you are free to think what you want to do about it and how. Acceptance will liberate you and empower you.

7. Accepting everyone as the same makes service easier

The secret to Shukla’s unfazed dedication and determination towards his demanding job can be understood via this life lesson. He admits that life would’ve been difficult if he treated people who admit themselves to Mukti Bhavan differently, based on their caste, creed, colour, and social or economic status. Categorization leads to complication and one ends up serving no one well. “The day you treat everyone the same is the day you breathe light and worry less about who might feel offended or not. Make your job easier,” he says.

8. If/When you find your purpose, do something about it

To have awareness about one’s calling is great, but only if you do something about it.

A lot of people, Shukla says, know their purpose but don’t do anything about realizing it, making it come to life. Simply sitting on it is worse than not having a calling in the first place. Having a perspective towards your purpose will help you measure the time and effort you need to dedicate to it, while you’re caught up in what you think you can’t let go or escape. Take action on what truly matters.

9. Habits become values

Shukla recommends cultivating good habits to be able to house good values. And building good habits happens over time, with practice. “It’s like building a muscle; you have to keep at it everyday.”

Till one doesn’t consistently work towards being just or kind or truthful or honest or compassionate, every single time he is challenged, one cannot expect to have attained that quality.

10. Choose what you want to learn

In the vastness of the infinite amount of knowledge available to us it is easy to get lost and confused. “The key lesson here is to be mindful of choosing what you deeply feel will be of value to you,” he says. People might impose subjects and philosophies on you because it interests them and while you must acknowledge their suggestions, the wise thing to do is delve deeper into what rejoices your own heart and mind.

With a smile on his face Shukla says, “In the last days of their life a lot of people can’t speak, walk or communicate with others with as much ease as they could, earlier. So, they turn inwards. And start to remember the things that made their heart sing once, things that they cared to learn more about over the course of their life, which enriches their days now.”

11. You don’t break ties with people; you break ties with the thought they produce

You can seldom distance yourself from people you have truly loved or connected with in some way. However, in any relationship, along the way, certain mismatch of ideologies causes people to stop communicating. This never means you are no longer associated with that person. It simply means that you don’t associate with a dominant thought that person brings with him/her, and to avoid more conflict you move away. The divorce, Shukla affirms, is with the thought and never with the person. To understand that is to unburden yourself from being bitter and revengeful.

12. 10 percent of what you earn should be kept aside for dharma

Dharma, Shukla doesn’t define as something religious or spiritual. Instead, he says it is associated more with doing good for others and feeling responsible about that. A simple calculation according to him is to keep 10 percent of your income for goodwill.

Many people donate or do charitable acts towards the end of their life because death is hard on them. In their suffering, they begin to empathize with others’ suffering. He says those who have the companionship of loved ones, the blessings of unknown strangers, and an all-encompassing goodwill of people exit peacefully and gracefully. That is possible when you don’t cling on to everything you have, and leave some part of it for others.

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(Courtesy - Deepak Ramola, Project Fuel)