Bank nominee not absolute owner of account: SC

Last Updated : 18 October 2010, 15:18 IST

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A Bench of Justices Aftab Alam and R M Lodha in an order said that the money lying deposited in the account of the original depositor should be distributed among the claimants in accordance with the Succession Act of the respective community and the nominee cannot claim any absolute right over it.

"Section 45ZA(2)(Banking Regulation Act) merely put the nominee in the shoes of the depositor after his death and clothes him with the exclusive right to receive the money lying in the account.

"It gives him all the rights of the depositors so far as the depositors's account is concerned. But it by no stretch of imagination make the nominee the owner of the money lying in the account," the Bench observed.

The apex court passed the ruling while dismissing the appeal of Ram Chander Talwar who claimed that since he was a nominee of the account held by his late mother, his brothers and other family members were not entitled to either the money in the account or others valuables in the locker.

Rejecting the argument, the apex court said the Banking Regulation Act was enacted to consolidate and amend the law relating to banking operations in the country.

"It is in no way concerned with the question of succession. All the monies receivable by the nominee by virtue of Section 45 ZA (2) would, therefore, form part of the estate of the deceased depositor and devolve according to the rule of succession to which the depositor may be governed," the bench said.

Published 18 October 2010, 15:18 IST

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