Whether nomination made by an employee can be treated as his will and curtail the right of legal heirs to claim a share in his service benefits?

IN THE HIGH COURT OF DELHI AT NEW DELHI

W.P.(C) 6701/2018 and C.M. Nos.25451/2018, 41307/2019 and 11129/2020

SUMAN KUMARI @ SUMAN SINGH

Vs

NAND KISHOR ORS

CORAM: HON’BLE MS. JUSTICE JYOTI SINGH
Pronounced on: 06.11.2020

1. By way of the present petition the Petitioner seeks directions to Respondent Nos. 4 5 to grant compassionate appointment to the Petitioner as well as to release part share of the Gratuity, pension and other terminal dues as well as Insurance fund in her favour which according to her accrues to the Petitioner on the demise of her husband.

2. Petitioner was married to Late Shri Manoj Kumar Singh (hereinafter referred to as Manoj) on 11.06.2015 as per Hindu Rites. The marriage took place after the death of the 1st wife of Manoj, namely, Late Neelam Singh (hereinafter referred to as Neelam), who died on 16.07.2009. Neelam is survived by a daughter namely Ms. Aditi Singh who was born on 16.01.2003 and is a minor. Respondent Nos. 1 2 are the father and mother of Manoj and the minor daughter has been impleaded as Respondent No. 3. Respondent Nos. 4 5 are the official Respondents i.e. ONGC, the ex-employer of Manoj.

3. It is an undisputed fact that Manoj was working with ONGC and at the time of his untimely demise he was working as Superintendent Engineer (Mechanical) and that he died of Brain Tumor for which he was undergoing treatment at a hospital in Gurgaon.

4. Petitioner made a representation on 11.04.2017 for release of Gratuity, pension and other terminal dues. Getting no response, she sent another application in September, 2017, followed by a reminder on 07.03.2018. Vide the impugned order dated 02.04.2018 ONGC communicated to the Petitioner the rejection of her representations on the ground that the terminal dues of Manoj had been released as per the nomination Forms filled by him in the year 2009 2017 and that being an employer, ONGC could not enter into inter-se family disputes of the deceased employee.

5. Contention of learned counsel for the Petitioner is that the Petitioner is one of the Class-I legal heir of Manoj. She was legally wedded to him and the marriage certificate and the requisite information was admittedly available in the records of the ONGC. Petitioner is thus entitled and eligible for compassionate appointment. Respondent Nos. 1 2 are senior citizens and Respondent No. 3 is a minor and hence the Petitioner is the only legal heir entitled to be given a job after the death of her husband. Petitioner is in great financial difficulty without any source of livelihood.

6. It is further contended that being the widow of Manoj and the legal heir, ONGC is bound to release Gratuity and other retiral benefits to the Petitioner including the insurance fund of CSSS as Manoj was the employee of ONGC and died while in service, on account of a medical ailment. Counsel fairly contends that the Petitioner is not demanding that the entire benefits should be disbursed to her, but seeks a direction that share due to her by virtue of being a Class-I heir be released to her. It is contended that the Respondent Nos. 4 5 are illegally denying the benefits on the ground that the benefits have to be disbursed in accordance with nomination made by Manoj. The argument is that nominee is only entitled to receive an amount and is not the absolute owner of the fund. The nominee is thus duty bound to distribute and share the amount with all the legal heirs under the personal law of succession. In this regard reliance is placed by the learned counsel on the judgement of a Co-ordinate Bench of this Court in Smt. Manjula Verma Anr. v. Kumari Sarla Verma in CM (M) No. 306/2007 decided on 03.12.2007 more particularly para 44 which is as follows:-

“para 44… from the aforenoted two decisions, the legal principle which emerges is that the nominee does not acquire any beneficial interest or ownership to the sum in the Provident Fund Account. The nominee merely gets a right to receive the fund. The Division Bench of the Andhra Pradesh High Court in Shaik Dawood’s case (supra) has taken a similar view.”

7. Counter affidavit has been filed on behalf of Respondent Nos. 1 to 3. Counsel for the said Respondents has opposed the petition on the ground that Respondent No. 1 is 75 years of age and Respondent No. 2 is 71 years old and both were living peacefully in the last stage of their life, in a small place in Uttar Pradesh, when they got the information that their son was suffering from Brain Tumor and when they went to Delhi to support the family and meet their son, the Petitioner was extremely rude to them and to the minor daughter. The Petitioner, out of 22 months of marriage hardly lived with her husband and in less than 9 months had left the matrimonial home on 27.09.2016, making complaints against the Respondent Nos. 1 2 and the bedridden husband, under the Domestic Violence Act. She never showed any concern or love and affection for the family including her husband and has now filed the petition seeking benefits, which under the law accrue to Respondent Nos. 1 to 3 and are the lifetime savings of Manoj which have been now invested for the future of the minor daughter. Petitioner is not entitled to the benefits as Manoj had consciously nominated his daughter for receiving his benefits in 2009. Even after the marriage with the Petitioner, when Manoj made the nomination in 2017, he had the opportunity to change the nomination in favour of the Petitioner, but he consciously chose not to do so, as the Petitioner had been ill treating him and the minor daughter, even though he was bedridden.

8. A detailed counter affidavit has been filed by Respondent Nos. 4 5. Learned counsel for the said Respondents has argued that the present petition is misconceived and ought to be dismissed against the answering Respondents who have no concern with the inter-se family disputes of the Petitioner with Respondent Nos. 1 to 3. The factum of the marriage of the Petitioner with Manoj on 11.06.2015 is however not disputed. It is argued that ONGC cannot be made a party to the dispute of succession between the family and in case there is any grievance of the Petitioner with regard to the share qua the nominees, the remedy is to file a Civil Suit and the Petitioner cannot take recourse to a writ petition and raise issues of testamentary dispositions or disputed questions of fact.

9. Without prejudice to the said submission, it is submitted that a nomination Form dated 29.09.2009 was executed by Manoj, in presence of two witnesses and he had nominated his daughter in respect of the terminal dues, in the event of his death. On 06.02.2017 Manoj submitted fresh nomination Form, bearing his thumb impressions, executed in presence of two witnesses. Along with the Form he had submitted a medical certificate dated 02.02.2017, issued by the hospital, certifying that on account of progressive disease and weakness of hand he was unable to sign any document. In the second nomination Form, Manoj had nominated his daughter for receiving 100% benefits in respect of CPF, Gratuity, PRBS etc. and 75% benefits in respect of CSSST, in the event of his death. For receiving 25% benefits with respect to CSSST, Manoj had nominated his father i.e. Respondent No. 1.

10. The contention is that as per the prevalent Rules and Regulations of the ONGC, the terminal dues have to be paid to the nominees of the employees in the event of the happening of the contingencies mentioned in the respective Rules. Attention of the Court is drawn to Rules 5(1) 8(2) of the ONGC Death Retirement and Terminal Gratuity Rules, 1995, with respect to payment of Gratuity on the death of an employee. Rules 18.7 20.1 of ONGC Self Contributory Post Retirement and Death in Service Rules, 1991 are referred to with respect to disbursement of benefits under the said Scheme. Likewise Rule 13 of the ONGC Composite Social Security Scheme, 1998 is alluded to for disbursement of benefits under the said Scheme, wherein it is the right of a nominee to receive the cash benefits in the event of death of the Member of the Scheme.

11. Counsel further argues that with respect to the Employees Contributory Fund Benefits every employee on joining the Fund, as a member has to make a nomination and in the event of his death, the benefits can only be released to the nominee in terms of the provisions of Regulation 19 of ONGC Employees Contributory Provident Fund Regulations. The answering Respondents cannot release money/benefits under the Schemes/Regulations to any person other than the nominee and are bound by the provisions.

12. It is further submitted by the counsel for the ONGC that it has released certain amounts as per the nomination Form dated 06.02.2017. The details as set out in the counter affidavit are as follows:- “12. That following Late Mr. Manoj Kumar Singh’s demise, the Respondent No. 4 has released the following amounts as per the nomination form dated 06.02.2017- a. Gratuity (As per entitlement subject to a maximum of Rs. 20 Lakhs). In the instant case of Late Mr. Manoj Kumar, total Gratuity payable was Rs. 12,40,154. Amount of Rs. 10 Lakh was paid to the nominee in the salary of June 2017 and remaining amount of Rs. 2,40,154 was paid in the month of March 2018.

b. CPF : (Employee + Employer Contribution + accrued Interest). In the instant case as per system details available with the Respondent, amount has not been disbursed by the concerned Trust so far.

c. CSSS: Late Mr. Manoj Kumar being an E-4 Level Executive was eligible for Rs. 60 Lakh. In the instant case, initial payment has been released on 28.03.2018 to father i.e. Respondent No. 1 Rs. 7,50,000/- and FD has been made in the name of Respondent No. 3 Aditi Singh, (Minor Daughter) to the tune of Rs. 22,50,000/-.

d. PRBS: Entire corpus has been converted into Pension and Rs. 16,765 is remitted as monthly annuity/pension in the Bank Account of daughter of Late Mr. Manoj Kumar i.e. Respondent No. 3.

e. Employee Group Leave Encashment Scheme through LIC of India: Rs. 10 Lakh was paid to the nominee on 22.02.2018.

13. In so far as the grievance of the Petitioner regarding compassionate appointment is concerned, counsel for ONGC argued that a dependent of a deceased employee is eligible for financial assistance under the ONGC Composite Social Security Scheme, in lieu of gainful employment. Manoj was employed as an E-4 Level Executive and was eligible for financial assistance amounting to Rs. 60 Lakh. ONGC has already released an initial payment on 28.03.2018 to Respondent No. 1 to the tune of Rs. 7,50,000/- and a Fixed Deposit has been made in the name of Respondent No. 3 to the tune of Rs. 22,50,000/- and therefore the Petitioner is not eligible for compassionate appointment.

14. I have heard the learned counsels for the respective parties and examined their rival contentions.

15. The legal nodus that arises in the present petition is whether the line of succession governed by the personal law is applicable to the parties or the nomination made by the deceased employee would be the decisive factor for disbursing benefits such as Gratuity, Insurance, Provident Fund, etc. While the contention of the Petitioner is that she is the legally wedded wife of deceased Manoj and entitled to part of the benefits, the contention of the Respondent Nos.1 to 3 is that the nomination made by Manoj would be the governing factor and hence the benefits should be disbursed to the nominee(s).

16. Before adverting to the issue raised it would be relevant to consider the provisions applicable which are as follows :-

“Rule 5 (1) of ONGC Death Retirement Terminal Gratuity Rules, 1995:-

“5.PAYMENT OF GRATUITY:ÿ(1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years :-ÿ(a). On his superannuation, orÿ(b). On his retirement or resignation, orÿ(c). On his death or disablement due to accident or disease.ÿProvided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement. Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominee or heir is a minor, the share of such minor, shall heÿdeposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.ÿEXPLANATION : For the purposes of this Rule disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.”

“Rule 8 (2) of ONGC Death Retirement Terminal Gratuity Rules, 1995:

8. Nomination :

(2). If an employee has a family at the time of making a nomination, the nomination shall be made in favour of one or more members of his family, and any nomination made by such employee in favour of a person who is not a member of his family shall be void.”

“Rule 18.7 of ONGC Self Contributory Post Retirement and Death in Service Rules 1991 :

18 BENEFITS

18.7 In case a member who joins this scheme during the service, his/her spouse or legal heir or nominee would be entitled to 40% of the last applicable salary as pension or pension as per Rule 17.1 above whichever is higher. This will also apply to any member of the Scheme who suffers a permanent total disability while in service. Permanent total disablement would be as defined in the Workmen’s Compensation Act, 1948.”

“Rule 20.1 of ONGC Self Contributory Post Retirement and Death in Service Rules 1991 :

20. NOMINATION :

20.1 An employee may make a nomination conferring on one or more persons the right to receive the amount of superannuation benefit in the event of his death before that amount becomes payable, or having become payable and the amount has not been paid. Such a nomination shall be made in such form as may be prescribed by the Trustees from time to time.” “Rule 13 of ONGC Composite Social Security Scheme, 1998

13 NOMINATION :

(a). Every member shall on joining the Scheme make a nomination in prescribed form conferring on one or more persons the right to receive the Cash Benefits under the Scheme in the event of his death before the amount has become payable or having payable has not been paid, provided that :-

i) If at the time of making nomination, the member has a family, the nomination shall not be made in favour any person/persons other than the members of family (as defined in the Scheme). Any nomination made by such member in favour of person/persons not belonging to his/her family shall be invalid, and any nomination made by such employee in favour of a person who is not a member of his family shall be void.

ii) If at the time of making nomination, the member has no
family, he shall provide in the nomination that it shall become
invalid in the event of his/her subsequently acquiring a family.”
“Regulation 19 of ONGC Employees Contributory Provident
Fund Regulations :-

19. NOMINATION :

(a). Every employee shall on joining the Fund make a
nomination in Requisite form conferring one or more persons
the right to receive the amount that may stand to his credit in
the event of his death before the amount has become payable or
having payable has not been paid.

Provided that :-

(i). If at the time of making nomination, the employee has a
family, the nomination shall not be in favour any person or
persons other than the members of his family. Any nomination
made by such employee in favour of person not belonging to his
family shall be invalid.”

17. Perusal of the Rules and Regulations hardly leaves any doubt that
the employee is entitled to appoint a nominee in his lifetime, who would
be the recipient of the benefits in the event of the death of the employee.
It is uncontroverted that under the Rules, ONGC is required to disburse
the benefits of the deceased employee only to the nominee(s).

Nomination means “to mention by name” or “to appoint” or “propose”.

The purpose of taking a nomination by an employer is to relieve itself of
the obligation to pay the benefits, irrespective of the right of a person who
is entitled in law to the Fund. Nomination, in law, cannot be construed as
a “Will” of the employee and cannot be treated as a testamentary
disposition of the deceased employee with an intent to bestow the
benefits on the heirs. Every employee has a right in law to decide how his
movable assets should be treated and disbursed in the event of his death
and nomination cannot circumscribe the legal rights of disposition of the
assets. The purpose of nomination is only to benefit a custodian so as to
enable him to know how and to whom he has to hand over the assets,
protecting him from litigations and multiplicity of cases from different
people, claiming to be successors to the interest of the employee. Thus,
the liability of the employer / custodian is discharged by disbursing the
funds to the ‘nominee’ and thereafter if there is an inter-se disputes
between the lawful heirs, they could resort to appropriate remedies for identification of their shares. The concept of appointing a nominee therefore is only to ensure that the amounts are disbursed at the earliest to the nominee and this becomes significant as there may be occasions where it may take time for the legal heirs to resolve their disputes and in the meantime the trustee / Custodian Company or any other Institution may go into liquidation or any other contingency may arise making it difficult to realize the retiral and other dues.

18. The nominations are thus to be construed on a different pedestal
than a testamentary disposition of the deceased employee and this issue is
no longer res integra. I may at this stage allude to a few, with a caveat
that most of them deal with the Provident Fund Act, but the law with
regard to the rights of a nominee has been settled therein.

19. In Union of Bharat vs. Asha Bi, AIR 1957 MP 79, a Division
Bench of the Madhya Pradesh High Court held that a provision of
appointing a nominee merely wipes off all personal and other laws, thus
creating right in the nominee to receive money according to the
nomination, but does not make the nominee owner of the fund. Court also
held that before the death of the subscriber, nominee is not entitled to a
beneficiary interest and nomination is in its nature not testamentary and
on the death of the subscriber, his legal representatives would be entitled
to the property.

20. A full Bench of the Kerala High Court in Sarojini Amma vs.
Neelakanta, AIR 1961 Ker. 126 held that nominee only had a right to
collect the money under the Policy on the death of the assured but did not
become the owner. The purpose was only to discharge the insurance
company, but he remained liable to make over the money to the heirs of
the assured.

21. In Controller of Estate Duty, Madras vs. Estate of Pitchai
Thambi, (1976) T.L.N.J. 393, while dealing with the effect of nomination
under Section 39 of the Insurance Act, 1938, a Division Bench of the
Madras High Court held as follows :-

“The effect of nomination is not to clothe the nominee with
beneficial interest in the policy or the money payable
thereunder, but to clothe him or her only with the power to
receive the money under the policy from the insurer without
prejudice to the question of title to the money. Consequently it
confers on the nominee a bare right to collect the policy money
when the money becomes payable and by such nomination and
the collection of the money, the nominee does not become the
owner of the money payable under the policy and he or she is
liable to make it over to whomsoever is entitled to the same
under the law. Therefore, the mere use of the word “nominee”
or “assignee” in section 14 of the Act does not decide the tide
to the money.”

22. In Ramayee vs. Krishnaveni and ors., 1997 (1) LLN 406, a police
constable had died in harness. The dispute was between the mother who
claimed that she was an heir to the deceased and therefore had a right to
his retiral benefits, etc. and the wife of the deceased in whose favour the
employee had made a nomination during his lifetime. The Trial Court
held that the mother of the deceased was entitled to half share in the
retiral benefits as well as the insurance amount payable under the
Insurance Policy and a Decree of Declaration was passed. The wife of the
deceased filed an appeal and the Appellate Court held that the wife being
the nominee was entitled to the insurance amount, to the exclusion of the
mother and also held that the nominee alone will be entitled to receive the
benefits such as family pension, gratuity, etc. The mother filed an appeal
against the said order before the Madras High Court. The Court framed
the following question of law :

“Whether the nomination made by the deceased in relation to
the pecuniary benefits gratuity and the family benefit fund
which become payable on the death of the deceased will
override the right of inheritance available to the legal heirs of
the deceased under the personal law?”

23. The Court after examining the issue and following the law laid
down by the Supreme Court in Sarbati Devi vs. Usha Devi, 1984(1) SCC
424, observed as follows :-

“All these judicial decisions clearly show that the nominee gets
only a right to receive the amount of distribute the same to the
heirs of the deceased in accordance with the law of succession
governing them. The above said legal position has not been
disputed by any of the respondent’s counsel. Hence the
judgment of the lower appellate court is set aside and the
judgment of the trial court is restored, accordingly the second
appeal is allowed.”

24. In Jodh Singh vs. Union of India, 1980 (4) SCC 306, the Supreme
Court observed as under :-

“Where a certain benefit is admissible on account of status and
a status that is acquired on the happening of certain event,
namely, on becoming a widow on the death of the husband,
such pension by no stretch of imagination could ever form part
of the estate of the deceased. It did not form part of the estate of
the deceased it could never be the subject matter of
testamentary disposition.”

25. In Shipra Sengupta vs. Mridul Sengupta and Ors., 2009 (10) SCC
680, the appellant before the Supreme Court was the wife of a deceased
employee in a bank in Madhya Pradesh. Prior to his marriage the
employee on joining the bank had nominated his mother. He died leaving
behind his widow, mother and two brothers. The appellant / widow filed
an application for succession under the Succession Act, 1925 claiming
her share in the benefits and the ground urged was that after the marriage
the prior nomination ceased to exist. It was also her contention that both
she and the mother of the deceased were Class-I heirs under the Hindu
Succession Act, 1956 and thus entitled to succeed to equal shares in the
property. The Trial Court held both entitled to half shares in the amounts
under the head of ‘retiral benefits’ but for certain other benefits the
widow was held entitled to the exclusion of the mother. The litigation
travelled upto the Supreme Court where the widow questioned the
judgment of the High Court. Three questions framed by the Supreme
Court are relevant to the present case and are as follows :-

“I. Whether nomination of mother by a member of a Provident
fund governed by the Imperial Bank of India Employees’
Provident Fund Rules before his marriage confers ownership
on the nominee and destroys right of succession of the widow
under Succession Act?

II. Whether nomination only indicates the hand which is
authorized to receive the amount on the payment of which
trustees of the provident fund get a valid discharge?
III. Whether the provident fund can be claimed by the heirs of
the member of the provident fund in accordance with the law of
succession governing them?”

26. The Court after examining the issues and placing reliance on the
earlier judgments of the Supreme Court held as follows :-
“17. The controversy involved in the instant case is no longer
res integra. The nominee is entitled to receive the same, but the
amount so received is to be distributed according to the law of
succession. In terms of the factual foundation laid in this case,
the deceased died on 8.11.1990 leaving behind his mother and
widow as his only heirs and legal representatives entitled to
succeed. Therefore, on the day when the right of succession
opened, the appellant, his widow became entitled to one half of
the amount of the general provident fund, the other half going
to the mother and on her death, the other surviving son getting
the same.

18. In view of the clear legal position, it is made abundantly
clear that the amount in any head can be received by the
nominee, but the amount can be claimed by the heirs of the
deceased in accordance with law of succession governing them.
In other words, nomination does not confer any beneficial
interest on the nominee. In the instant case amounts so received
are to be distributed according to the Hindu Succession Act,
1956.”

27. In M.V. Krishnamoorthy vs. Tmt. Anandallakshmi, 1980 (2) MLJ
321, the High Court of Madras dealing with a similar issue held as
follows :-

“8. R. 22 before 1972 amendment, provided that all
nominations must be in writing and must be registered with the
trustees. R. 23 deals with payment to nominee and is to the
effect that on the death of a member, the full amount shall be
paid to the nominee, and such payment shall be a good
discharge to the Trustees and to the Corporation…against all
claims whatsoever in respect of the Fund by whomsoever
claiming through the said member. These two rules go to show
that the main purpose of taking nomination is for the trustees of
the fund to relieve themselves of their obligation in paying the
provident fund amount, irrespective of the persons who may be
entitled to the fund. Whenever provident fund amount is
disbursed the custodian of the fund is anxious to have a good
discharge against all claims from whomsoever claiming
through the member. The Rules nowhere provide that the
nomination is to be construed as a will by the member. If a
nomination is to be taken as a final disposition made by the
member as to how it should be taken by his heir on his death, it
would lead to anomalies, because till the member dies, the
nominee acquires no right to claim the amount. The legal right
of a member to decide from time to time as to how his assets
should be taken consequent to his death, cannot be frozen by a
nomination given, as part of his service conditions. His legal
rights about disposition of his assets cannot be circumscribed
by such nomination, 11 he is to execute a “Will” later on,
contrary to the nomination that has been made earlier, the
terms and conditions of the ‘will’ alone can prevail, and so far
as the trustees of the fund are concerned, their obligation will
be fully discharged by paying it to the nominee, who will in turn
be liable to hand over the funds to the persons entitled to as per
the ‘Will’. In case of intestate succession, the nominee is bound
to hand over the amounts to the heirs of the deceased. The main
purpose of nomination is intended to benefit
the custodianstrustees
of the fund to know as to how or to whom they should
hand over the amounts and need not make themselves
answerable to multiplicity of claims from different persons
claiming to succeed to the interests of the deceased member. If
there is no nomination, the custodian of the fund cannot decide
as to who are the lawful heirs to succeed and they will have to
wait for a Court order to be produced, and unless finality is
reached, therein, the disbursement of the fund will be delayed
Funds, like the provident fund, in the case of State or other
public institutions, may be sufficiently safe-guarded even if
there is to be a delay in disbursement. But in cases of other
institutions, if the amounts are not immediately disbursed on
the basis of nomination, and before proceedings in Court are
over, if for any reasons, the Companies or institutions are
liquidated, the contributions made by a member of such bodies,
will not enure to the benefit of the legal heirs till finality is
reached in Court proceedings unless the amount is deposited in
Court at the earliest stage. The concept of nomination has been
thought of to achieve the disbursement of the amounts at the
earliest point of time to the nominee, who will be answerable to
claims made by those who are entitled to the amount lawfully.
Nomination means ‘to mention by name’; to appoint, to propose
formally.’

xxxx xxxx xxxx

18. Most of the decisions above referred to arose under the
Provident Funds Act and even then subsequent to amendments
it has been held that the nominee does not acquire absolute
interest in the funds. The provision for nomination is made for
the benefit of discharging the liability of the custodians of the
fund, which aspect I have dealt with at length in the earlier part
of this Judgment, and unless a specific provision is made in the
relevant Act or even in the nomination a direction of
bequeathing the amount is given to the effect that except the
nominee, none of the legal heirs would acquire rights and such
directions is not varied later on, the right of a nominee cannot
be anything more than being the sole person entitled to draw
out the amount and he would be doing so in the capacity of a
trustee of the funds answerable to the claims of the lawful heirs
of the deceased member. The use of the word ‘nomination
which means only appointment to receive the amount, cannot
be construed as to confer any absolute right in the funds to the
exclusion of the rights of the lawful heirs, because even a
stranger may be nominated in whom the nominator may have
trust. If the intendment is to make the nominee as the absolute
owner, there can be no difficulty in incorporating the necessary
recitals to the effect that he has got, on the date of nomination,
his legal heirs and in spite of it, he bequeathes the amount only
to the nominee to take the funds to the exclusion of the other
heirs. When such an unequivocal expression is not present in a
nomination, it would not be proper to hold that such a
nomination would result in absolute conferment of rights in the
nominee to take the amount for himself.”

28. Having gone through the various judgments as referred to above, I
am of the view that the law on the right of a nominee is well settled. The
effect of nomination is not to clothe the nominee with a beneficial interest
but is only a pointer to the person who is authorized to receive the amount
and subsequently the amounts so received would have to be distributed
according to the law of succession. It is crystal clear that Nomination
cannot override the law of succession as applicable to the parties in
question. Therefore, once there is a claim by the heirs of the deceased to
his benefits or assets, the same shall devolve on the heirs in accordance
with the governing law of succession. There is no right in a nominee to
claim ownership to the property in question.

29. Learned counsel for the Petitioner is thus right in his contention
that a widow of a deceased employee is a Class-I heir under the
Succession Act and would be entitled to a proportionate share in the
benefits that accrue out of employment. Learned counsel has rightly
relied on the judgment of a Co-ordinate Bench of this Court in Smt.
Manjula Verma (supra) where the Court after analysing the historical
rhetoric of the Provident Fund Act and its Amendments, concluded that
the nominee does not acquire any beneficial interest or ownership to the
sum in the Provident Fund Account and merely gets a right to receive the
fund.

30. The question that next arises in the present petition is the relief that
can be granted to the Petitioner. The prayers made in the present petition
need to be looked into in this regard and are as under :-

“(a). Issue of a writ of mandamus or any other appropriate writ
or order or direction to the respondent no.4 5 to grant
compassionate appointment to the petitioner.
(b). Direct the Respondent no.4 and 5 to provide the release
Gratuity, pension, terminal dues, insurance fund which accrued
due to death of Late Sh. Manoj Kumar Singh and other
monetary benefits of late Manoj Kumar Singh to the petitioner
and other legal heirs as per law.

(c). Direct the Respondent No.1 to 3 to pay the amount, if
received from the Respondent No.4 and 5 qua gratuity, pension,
terminal dues and other monetary benefits of late Manoj Kumar
Singh, to the Petitioner regarding her share.”

31. It is evident from the prayers that the Petitioner has claimed reliefs
against Respondent Nos. 4 and 5 to release the retiral and other monetary
benefits accruing due to the death of Manoj claiming to be a Class-I legal
heir, as per law. Petitioner has also sought a direction against Respondent
Nos.1 to 3 to disburse to her the share to which she is entitled as a Class-I
heir of her deceased husband. Petitioner has also sought compassionate
appointment with Respondent Nos.4 and 5.

32. In so far as compassionate appointment is concerned, ONGC has
brought out that under the Rules applicable to ONGC, a dependent of the
deceased employee is eligible for financial assistance in lieu of gainful
employment under the ONGC Composite Social Security Scheme. Being
an E-4 level Executive, Manoj was entitled to Rs.60 Lakh under the
Scheme. Out of the said amount, Rs.7,50,000/- have been released to
Respondent No.1 on 28.03.2018 and Rs.22,50,000/- have been placed in a
fixed deposit in the name of the minor daughter Aditi. The stand of
ONGC, in my opinion, cannot be faulted as the action has been taken in
terms of the provisions of the Scheme, whereby compassionate
appointment or financial assistance are alternatives to one another. In any
case, during the course of arguments, the relief was not pressed by the
counsel for the Petitioner.

33. In so far as direction to the ONGC to release the retiral and other
monetary benefits to the Petitioner is concerned, it is a settled law that the
employer / trustee / custodian is discharged in its obligation and liability
once the benefits of the deceased are disbursed in favour of a nominee.
As noticed above, the Courts have repeatedly affirmed that the purpose of
nomination is to discharge the trustee of his liability to release the money
as soon as the person nominating expires and it is thereafter for the
nominee to take steps to disburse the amount in case there is a claim by
the other legal heirs of the deceased.

34. In the present case it is undisputed that Manoj had nominated his
minor daughter as a nominee to receive the benefits under various Heads
and for a certain percentage of share under one of the Schemes
nomination was made in favour of Respondent No.1. ONGC followed the
Rules applicable to the deceased employee and released some of the
amounts in favour of the nominees. Once the nomination was made as per
the Rules, which have been referred to above, no infirmity or illegality
can be found with the action of the ONGC or their stand that they are
obliged to release the benefits as per the nomination made by the
deceased employee.

35. At this stage it is pertinent to mention that after some of the
benefits had been released by ONGC as per the Nomination Form and as
mentioned by them in para 12 of the Counter Affidavit, this Court had
passed an interim order on 27.06.2018, relevant part of which is as
follows :-

“Having considered the submissions of the learned counsel for
the petitioner, I am of the view that the petitioner has been able
to make out a prima facie case and balance of convenience is
also in her favour. Grave and irreparable loss would be caused
to the petitioner, in case, during the pendency of the present
petition, all the retiral dues of late Shri Manoj Kumar Singh are
released to the respondent nos.1 to 3.

Accordingly, till the next date of hearing, the respondent no.4 is
restrained from releasing more than 50 per cent of the retiral
dues of late Shri Manoj Kumar Singh to any of the respondent
nos.1 to 3.”

36. The position therefore that emerges is that some portions of the
amounts towards retiral / terminal benefits have been disbursed in favour
of Respondent Nos.1 and 3 while some are lying with the ONGC, due to
the interim order passed by the Court.

37. Ordinarily, this Court would have relegated the Petitioner to civil
remedies, but in view of the fact that the marriage of Petitioner with
deceased Manoj is not disputed and the marriage certificate has been
placed on record, directions are being issued in the present petition. In
somewhat similar circumstances, the High Court of Kerala in Kaveri S.
vs. Deputy Inspector General of Police CRPF and Ors. 2015 SCC
OnLine Ker 33849 entertained the writ petition and passed the following
directions:-

“3. It is trite that a nominee does not get a right to the estate of
the deceased and in the event of the same being confined to a
money claim, the right is only to get disbursement of the same;
which the nominee would hold in trust for the other legal heirs.
Hence, even if the amounts are disbursed to the 4th respondent,
the 4th respondent cannot claim any right, as such, over the
entire amounts.

4. Admittedly, the son of the 4th respondent had entered into a
marriage with the petitioner just two months prior to his death.
The same is evidenced by Ext.P1 certificate. A child is said to
have been born to the petitioner in the wedlock. Hence, the
petitioner and the child along with the mother of the deceased
are Class-I heirs, as per the Hindu Succession Act, 1955.

Hence, it may not be necessary for this Court to relegate the
petitioner to the Civil Court especially since the disbursement
of the retirement benefits has not been made till now.

xxxx xxxx xxxx

7. In such circumstance, the following directions are issued:
(i) The petitioner shall appear before the 1st respondent with the
original of Ext.P1 certificate as also the birth certificate of the
child born to the petitioner. The 1st respondent shall, on
production of such original certificates, verify the same and
sanction 1/3 of the retirement benefits to the petitioner herein;
1/3 of the benefits shall be issued by way of cheque in the name
of the child, a minor, and the cheque handed over to the 2nd
respondent. The balance 1/3 shall be disbursed to the 4th
respondent.

(ii) The pension, going by the C.C.S. Pension Rules, shall be the
entitlement of the petitioner and the same shall be computed
and Pension Payment Order, for family pension, if eligible,
issued in the name of the petitioner and all arrears paid as
expeditiously as possible. The petitioner’s claim for
compassionate appointment, in accordance with the rules, as
applicable to the C.R.P.F., shall be kept open.”

38. In view of the law enunciated by various courts, it is held that the
Petitioner being a Class-I heir of Manoj, is entitled to stake a claim over
the proportionate share in the retiral / terminal benefits of Manoj, in
accordance with the Hindu Succession Act and her right cannot be
defeated by the nominations. As Respondent No.2 being the mother and
Respondent No.3 being the minor daughter are also Class-I heirs,
Petitioner is entitled only to 1/3rd share in the retiral / terminal benefits. It
has come on record that prior to the passing of the interim order, amounts
under certain Heads, as noted in the earlier part of the judgement, were
already disbursed in favour of the nominees. However, on account of the
interim order certain amounts are lying deposited with the ONGC,
although the exact figures have not been disclosed in the Counter
Affidavit.

39. ONGC is thus directed to disburse to the Petitioner her
proportionate share under the various Heads, as claimed, from the
amounts presently lying in the various Funds / Trust with the ONGC.
Needless to state that if the amounts disbursed by the ONGC to the
Petitioner fall short of the 1/3rd share in the total entitlement, on account
of the fact that amounts towards certain benefits have already been
disbursed to Respondent Nos. 1 to 3, it shall be open to the Petitioner to
resort to appropriate Civil remedies, in accordance with law, to recover
the said amounts from Respondent Nos. 1 to 3.

40. Petition is partly allowed. All pending applications stand disposed
of.

JYOTI SINGH, J
NOVEMBER 6th, 2020

JYOTI SINGH, J
NOVEMBER 6th, 2020

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