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TMI Blog1991 (2) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... ghters of Kankuben. Plaintiffs Nos. 2 and 3 are the minor sons born out of wedlock of plaintiff No. 1 with deceased Bhanabhai. The deceased Bhanabhai was serving in Calico Mills at Ahmedabad. He has expired on 2.2.1974, The deceased had not executed any Will. The succession certificate Ex.25 is obtained by defendant No. 1 Lalitaben by filing Civil Miscellaneous Application No. 280 of 1974 before the City Civil Court, Ahmedabad. That application was filed for recovering following amounts: Amount of provident fund with the Calico Mills, Ahmedabad. ... ₹ 15,000/- Amount of gratuity with the Calico Mills, Ahmedabad. ... ₹ 8,000/- Amount of deposit with the Calico Mills Co-operative Credit society ... ₹ 1,750/- Amount of contribution with the Calico Co-operative Society. ... ₹ 2,000/- No. 1 was lawfully married wife of the deceased Bhanabhai Malabhai and the respondents Nos. 2 3 are sons born to her during her lawful marriage with the deceased Bhanabhai. Each plaintiff had l/6th share in the joint properties described in paragraph 4 of the plaint along with each defendant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceased. For this purpose he has relied upon Ex.84 which is a xerox copy of Form No. 8 filled in by deceased Bhanabhai wherein it is stated that the nomination made by him in the name of Kankuben (deceased wife) was cancelled and the amount standing to his credit in the employees' provident fund be received by the persons named therein in the event of his death before that amount has become payable. No dispute is raised with regard to the amount of gratuity or the deposit amount which was lying in the name of the deceased in the Calico Mills Credit Co-operative Society as there is no nomination for the said amount in her name. Therefore, for the said properties the plaintiffs are entitled to have their share as specified in the decree. He submitted that in view of the nomination in favour of defendants Nos. 1 to 3 by the deceased for the provident fund amount, they are entitled to recover it exclusively and the plaintiffs are not entitled to have any share in the said amount. For this purpose he relied upon Section 10 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and Clause 61 of the Employees' Provident Fund Scheme, 1952. 7. For appreciati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Any nomination made by such member in favour of a person not belonging to his family shall be invalid. (4) If at the time of making a nomination the member has no family, the nomination may be in favour of any person or persons but if the member subsequently acquires a family, such nomination shall forthwith be deemed to be invalid and the member shall make a fresh nomination in favour of one or more persons belonging to his family. (4-A) Where the nomination is wholly or partly in favour of a minor, the member may, for the purposes of this Scheme, appoint a major person of his family as defined in Clause (g) of Paragraph 2, to be the guardian of the minor nominee in the event of the member predeceasing the nominee and the guardian so appointed: Provided that where there is no major person in the family, the member may, at his discretion, appoint any other person to be a guardian of the minor nominee. (5) A nomination made under sub-paragraph (1) may at any time be modified by a member after giving a written notice of his intention of doing so in Form 8 annexed hereto. If a nominee predeceases the member, the interests of the nominee shall revert to the member who may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicable to the Provident Fund amount received by the nominee. 10-A. Secondly, the word vest is ambiguous and may have different shades depending on the context in which it is used. What meaning should be given to the word vest is considered by the Supreme Court in the case of F. V. Merchants Union v. Improvement Trust, Delhi AIR 1957 SC 344. The Supreme Court has held that the term vesting has a variety of meanings which has to be gathered from the context in which it has been used. It may mean full ownership or only possession for a particular purpose of clothing the authority with power to deal with the property as the agent of another person or authority. After discussion the various authorities the Court has held as under: (19) That the word vest is a word of variable import is shown by provision of Indian Statutes also. For example. Section 56 of the Provincial Insolvency Act (5 of 1920) empowers the Court at the time of the making of the order of adjudication or thereafter to appoint a receiver for the property of the insolvent and further provides that such property shall thereupon vest in such receiver . The property vests in the receiver for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of any debt or liability incurred by the member. The protection which is afforded is even given to the extent that the Official Assignee appointed under the Presidency Towns Insolvency Act or any receiver appointed under the Provincial Insolvency Act shall not be entitled to have any claim on the provident fund amount. Similar protection is given to a nominee under Sub-section (2) of the Act. Therefore, the sole purpose of Section 10 seems to afford protection to the member of the Provident Fund Scheme against creation of any debt by the member so that after retirement he gets something to survive or in case of his death his heirs get something to live on. Therefore, the word vest is required to be given a limited meaning to the effect that as against attachment ofthe said amount for the debt or other liability incurred by the deceased member or the nominee, it shall vest in the nominee. The heading prefixed to sections is useful in interpretation of the words in the section or sections if the words are ambiguous. This aspect is considered by the Supreme Court in the case of Binka v. Charan Singh' AIR 1959 SC 960, by observing as under: The heading reads thus: ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 10 would be that the provident fund amount vests in the nominee so that he can receive the said amount from the concerned authority and give a valid discharge and that the said amount would not be liable to be attached for the debt incurred by the member or the nominee. The amount, however, can be claimed by the heirs of the member in accordance with the Law of Succession governing them. 12. While interpreting Section 39 of the Insurance Act, 1938 which provides for nomination of the person or persons to whom the money secured by the policy shall be paid in the event of his death the Supreme Court in Sarbati Devi v. Usha Devi AIR 1984 SC 346, has held that the nominee would get the said amount for a limited purpose of giving due discharge to the insurer of his liability under the policy. The relevant discussion is as under: But the summary of the relevant pro-visions of Section 39 given above establishes clearly that the policy holder continues to hold interest in the policy during his lifetime and the nominee acquires no sort of interest in the policy during the lifetime of the policy holder. If that is so, on the death of the policy holder the amount payable under the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t under Section 10(2) of the Provident Fund Act the amount standing to the credit of the member of the Fund at the time of his death shall vest in the nominee and, therefore, it becomes part of the asset of the nominee whereas under the Insurance Act after the death of the assured the money continues to be his asset. The relevant discussion is as under: Having given our anxious consideration to the various provisions of the Provident Fund Act and the Scheme we are of the opinion that the status of a nominee under the Provident Fund Act is completely different from his counterpart under the Insurance Act. The most and striking difference about the status of the nominee under the two Acts is clearly discernible from Section 10(2) of the provident Fund Act quoted earlier which expressly provides that the amount standing to the credit of a member of the Fund at the time of his death shall vest in the nominee and it shall be free from any debt or liability incurred by the deceased or the nominee before the death of the member. From Section 10(2) it is abundantly clear that immediately upon the death of the member the provident fund money becomes part of the asset of the nominee wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payable before payment has been made- (i) if a nomination made by the member in accordance with the paragraph 61 subsists, the amount standing to his credit in the Fund or that part thereof to which the nomination relates, shall become payable to his nominee or nominees in accordance with such nomination, or (ii) if no nomination subsists or if the nomination relates only to a part of the amount standing to his credit in the Fund, the whole amount or the part thereof to which the nomination does not relate, as the case may be, shall become payable to the members of his family in equal shares: Provided that no share shall be payable to: (a) sons who have attained majority; (b) sons of a deceased son who have attained majority; (c) married daughters whose husbands are alive; (d) married daughters of a deceased son whose husbands are alive; if there is any member of the family other than specified in Clauses (a), (b), (c), (d): Provided further that the widow or widows, and the child or children of a deceased son shall receive between them in equal parts only the share which that son would have received if he had survived the member and h ..... 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