Calcutta High Court
Citi Bank N.A vs Jyotirmoy Pal Chaudhuri And Another on 3 July, 2026
Author: Debangsu Basak
Bench: Debangsu Basak
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
ORIGINAL SIDE
Present:
The Hon'ble Justice Debangsu Basak
And
The Hon'ble Justice Md. Shabbar Rashidi
APD 2 of 2025
With
CS 191 of 2012
Citi Bank N.A.
Vs.
Jyotirmoy Pal Chaudhuri and Another
With
APD 8 of 2024
Smt. Sonali Majumder
Vs
Jyotirmoy Pal Chaudhuri and Another
With
OCO 1 of 2025
Citi Bank N.A.
Vs
Jyotirmoy Pal Chaudhuri and Another
For the appellant : Mr. Aniruddha Mitra, Sr. Adv.
in APD 8 of 2024 Mr. S. Sengupta, Adv.
For the appellant : Mr. Aniruddha Chatterjee, Sr. Adv.
Citi Bank N.A. Mr. Arif Ali, Adv.
Mr. Prabhat Kr. Srivastava, Adv.
Ms. Ankita Singh, Adv.
SK SOHEL Digitally signed by
SK SOHEL UDDIN
UDDIN 11:15:12 +05'30'
Date: 2026.07.03
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For the respondent/ : Mr. Utpal Bose, Sr. Adv.
plaintiff Ms. Hashnuhana Chakraborty, Adv.
Mr. Subhransu Ganguly, Adv.
Hearing concluded on : 18.05.2026
Reserved on : 18.05.2026
Judgment on : 03.07.2026
Md. Shabbar Rashidi, J.:-
1. The two appeals and the Cross Objection are taken up for
analogous consideration as they have emanated out of a common
judgment and decree dated April 25, 2024 passed in CS No. 191 of
2012. Since there are appeals on both sides and a cross objection, we
would refer the parties as they stand designated in CS 191 of 2012 for
the sake of convenience.
2. By the impugned judgment and decree, CS 191 of 2012 was
disposed of by the learned Single Judge directing defendant No. 2,
Sonali Majumdar, to pay to the plaintiff, a sum of ₹25,29,156.85/-
with interest. The impugned judgment and decree also directed
defendant No.1 the City Bank N.A. to pay a cost of ₹1,00,000/- to the
plaintiff in the suit. The learned Single Judge passed the impugned
judgment and decree to the following terms:
“23. In the present case, this Court finds that the defendant
no. 1 without taking due care and caution has released the
amount of Rs. 25, 29, 156.85/- in favour of the defendant no.
2 and the defendant no. 2 having knowledge that the plaintiff
3had filed an application for grant of Succession Certificate in
which the present savings account was also one of the
subject-matter of the said case but the defendant no. 2 had
suppressed the same and received the amount from the bank.
The Learned Court of District Delegate at Alipore granted
Succession Certificate in favour of the plaintiff, thus the
defendant no.2 is liable to pay the amount of Rs. 25,
29,156.85/- to the plaintiff along with interest @ 10% per
annum from the month of November, 2009 till the realisation
of the total amount.
24. The defendant no. 1 has not taken due care and caution
and released the amount in favour of the defendant no. 2
knowing that the application form submitted by the defendant
no. 2 was incomplete and had not submitted required
documents due to which the plaintiff is compelled to file this
suit for recovery of money and thus this Court imposed cost of
Rs. 1, 00,000/- upon the defendant no. 1.
25. The defendant no.2 is directed to pay the amount of Rs.
25, 29,156.85/- along with interest @ 10% per annum from
the month of November, 2009 till the payment of the total
amount to the plaintiff. The defendant no. 1 directed to pay
cost of Rs. 1, 00,000/- to the plaintiff within four weeks from
the date of receipt of this judgment failing which the amount
shall carry interest at the rate of 10% per annum till the
payment is made.”
3. The learned senior advocate for defendant No. 2 contended
that learned Trial Judge misinterpreted the provisions of the Hindu
Succession Act, 1956 in so far as the learned Single Judge made
distinction between the properties inherited by a Hindu female from
her father and that left behind by such Hindu female at the time of
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her death which was sale proceeds of the properties inherited by a
female Hindu from her father. It was also contended that learned
Single Judge failed to appreciate that source of inheritance was of
essential importance to determine the future flow of succession rather
than the nature of the property. Learned advocate for defendant No. 2
further submitted that such distinction was made by the learned
Single Judge on his own without being pleaded or argued.
4. The learned senior advocate for defendant No. 2 further
contended that the learned Single judge failed to appreciate that the
nature and character of the properties inherited by the deceased
account holder Shyamali Pal Chowdhury did not change on sale, as
the sale proceeds were not mixed up with any other type of properties
to create a different asset. It was also argued that the learned Single
Judge was not justified in holding that once the identity of the
property inherited by a female Hindu from her father is changed,
altered or substituted, the special rule enunciated under Section 15
(2) of the Act of 1956 has no manner of application.
5. The learned advocate for defendant No. 2 further submitted
that the learned Single Judge failed to appreciate that the money lying
with Citi Bank belonged to Late Mrinmoy Pal Chowdhury which, on
his death, was inherited by Shyamali Pal Chowdhury. It was also
submitted that the learned Trial Judge failed to consider that the
bank account was opened by Shyamali Pal Chowhury in her own
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name. She was never accompanied by the plaintiff and Mrinmoy Pal
Chowdhury at the time of opening the account. At the same time,
learned Single Judge did not consider that there was no evidence on
record that the money lying in Citi Bank was inherited by Shyamali
Pal Choudhury from Late Mrinmoy Pal Chowdhury and that grant of
Succession Certificate in favour of the plaintiff did not confer title over
the properties mentioned in the Affidavit of Assets in the testamentary
proceeding. It was also contended that in terms of the provisions of
Section 45ZA of the Banking Regulation Act, 1949, defendant No. 1,
Citi Bank was under obligation to release the money lying in the
account of Shyamali Pal Choudhury, to its nominee irrespective of the
rights of any person interested therein or any claim they have against
the nominee.
6. The learned senior advocate for defendant No. 2 further
contended that the learned Single Judge did not appreciate that the
oral testimony of defendant No. 2, to the effect that the money lying to
the credit of Shyamali Pal Choudhury was sale proceeds of the
properties she inherited from her father, went uncontroverted
whereas, it was admitted by the plaintiff that defendant No. 2 was the
nominee of Shyamali Pal Choudhury in respect of the subject bank
account. It was also submitted that learned Single Judge came to an
erroneous finding that defendant No. 2 failed to prove that the money
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lying in the subject bank account of Shyamali Pal Choudhury was
sale proceeds of the properties inherited by her from her father.
7. The learned senior advocate for defendant No. 1 Citi Bank
contended that the learned Single Judge failed to appreciate the true
purport of Section 45ZA of the Banking Regulation Act, 1949 and
erroneously directed defendant No. 1 to pay ₹1,00,000/- to the
plaintiff. By releasing funds in favour of defendant No. 2, the bank
was divested of all its liabilities in respect of the subject account. It
was also argued that the learned Single Judge failed to appreciate that
the bank was under legal obligation to release the amount in favour of
the defendant No. 2, the nominee, in absence of any order of stay etc.
The pendency of Succession Certificate proceeding was absolutely
irrelevant as the bank was under statutory obligation to release the
money in favour of a nominee. It was submitted by learned senior
advocate for defendant No. 1 that the learned Single Judge erred in
holding that defendant No. 1 ought not have released the money
pending Succession Certificate proceeding. In terms of the Master
Circular, defendant No.1 was not under any obligation to wait for the
outcome of the Succession Certificate proceeding.
8. The learned senior advocate for defendant No. 1 Citi Bank
further contended that the learned Single Judge failed to appreciate
that there was no privity of contract between the plaintiff and the Citi
Bank. It rightfully released the money in favour of defendant No. 2 in
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terms of the extant provisions of law and regulations. According to
learned senior advocate for defendant No. 1, the learned Single Judge
erred in not considering that the plaintiff could only have a cause of
action against defendant No. 2, who received the amount lying to the
credit of Shyamali Pal Choudhury in trust for its rightful claimants.
There was no cause of action as against defendant No. 1, who was
merely acting and discharging its legal obligations.
9. The learned senior advocate for defendant No. 1, Citi Bank,
further submitted that defendant No. 1, the Citi Bank was neither
necessary nor proper party to the suit and the suit was liable to be
dismissed with costs as against defendant No. 1. It was also
contended that the learned Trial Judge erred in holding that
defendant No. 1 did not take due care and caution in releasing the
money to defendant no. 2 in consideration of the claim application
form submitted by her. The learned Single Judge erred in holding that
the claim application form was not properly filled up and was not
supported by essential documents. Filling up of the form by defendant
no. 2, purportedly, at the instructions of defendant no. 1 was not
sufficient to hold that defendant no. 1 was acting in connivance with
defendant no. 2. It was contended that the learned Single Judge
misconstrued the provisions of Section 45ZA of the Banking
Regulation Act, 1949.
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10. On the contrary, learned senior advocate for the plaintiff
submitted that the plaintiff is a legal heir and successor of deceased
Shyamali Pal Chowdhury, in terms of the provisions of the Hindu
Succession Act, 1956. It was also contended that notwithstanding
defendant no. 2 had been contesting the Succession Certificate
proceeding filed an incomplete claim application with incomplete
information. Defendant no. 1, being a banker, did not take due care
and caution in respect of the money lying to the credit of the deceased
enjoined upon them in terms of the provisions of Banking Regulation
Act, 1949 as well as Master Circular. In fact, defendant no. 1 connived
together with defendant no. 2 and illegally released the money in
favour of defendant no. 2 inspite of the knowledge of pendency of
Succession Certificate proceeding.
11. According to learned advocate for the plaintiff, defendant no.
2 is liable to make over the amount to the legal heir and successors of
the deceased. It was also contended that defendant no. 1, Citi Bank is
jointly and severally liable for the release of money to defendant no. 2
in violation of the provisions of Banking Regulation Act, 1949 and
Master Circular issued by the Reserve Bank of India. The learned
senior advocate for the plaintiff stood by the impugned judgment and
decree in so far as it directs defendant no. 2 to pay the due amount to
the plaintiff as legal heir and successor of the deceased.
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12. The plaintiff filed CS 191 of 2012 seeking recovery of a sum of
₹25,29,156.85/- against the defendants together with interest.
According to the case made out in the plaint, the plaintiff is one of six
children of Sri Khagendra Pal Chaudhuri and Smt. Usha Pal
Chaudhuri, both since deceased, the other siblings of the plaintiff
were, Smt. Ranu Talukdar, daughter (since deceased), Smt. Bani Roy
(daughter), Sri Chinmoy Pal Chaudhuri (Son), Sri Mrinmoy Pal
Chaudhuri, since deceased (son), and Smt. Sima Paul (daughter).
Smt. Ranu Talukdar, one of the sisters of the plaintiff died on
September 4, 1996 and one of the brothers of the plaintiff, namely, Sri
Mrinmoy Pal Chaudhuri died on November 16, 2006. The wife of Sri
Mrinmoy Pal Chaudhuri, since deceased, namely Smt. Shyamali Pal
Chaudhuri also expired on July 26, 2008. Sri Mrinmoy Pal Chaudhuri
and Shyamali Pal Chaudhuri (both deceased) died issueless.
13. Smt. Shyamali Pal Chaudhuri, since deceased died leaving
behind several debts and securities. The plaintiff on behalf of his
surviving brother and two surviving sisters as well as on his own
behalf, had filed an application under Section 377 of the Indian
Succession Act, 1925 before the Learned Court of District Delegate at
Alipore, for grant of Succession Certificate with respect to the debts
and securities i.e. several savings bank accounts, fixed deposits
accounts and other accounts lying in the post office to the credit of
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Smt. Shyamali Pal Chaudhuri (since deceased), wife of late Mrinmoy
Pal Chaudhuri.
14. It was the further case of the plaintiff that on January 10,
2009, the plaintiff came across a letter issued by the defendant no. 1
to Smt. Shyamali Pal Chaudhuri, since deceased in respect of
operation of the bank account of Smt. Shyamali Pal Chaudhuri
maintained with defendant no. 1. Upon receipt of the such letter, the
plaintiff informed the defendant no. 1 on March 13, 2009 that an
application for grant of a Succession Certificate was filed by the
plaintiff in respect of the debts and securities of Smt. Shyamali Pal
Chaudhuri and appropriate directions for operation of bank account
would be given to the defendant no. 1 by the plaintiff only after grant
of Succession Certificate. On March 18, 2009, defendant no. 1 called
upon the plaintiff to submit death certificate, relinquishment deed and
other documents to defendant no. 1 so that the account of the
Shyamali Pal Chaudhuri being Account No. 5308184333 could be
closed and the amounts lying therein may be transferred to the
plaintiff.
15. Consequently, a Succession Certificate was issued from the
learned court of District Delegate at Alipore in favour of the plaintiff.
The subject bank account of Smt. Shyamali Pal Chaudhuri with the
defendant no. 1 was one of the subject-matters in the Succession
Certificate proceeding. On receipt of the Succession Certificate, the
11
plaintiff approached the office of the defendant no. 1 whereupon the
plaintiff was informed by the defendant no. 1 that the account of Smt.
Shyamali Pal Chaudhuri, since deceased was closed and the proceeds
thereof had already been handed over to defendant no. 2 sometime in
the month of October, 2009, as the nominee of the said account.
When the plaintiff came to know that the defendant no. 1 had already
released the amount in favour of defendant no. 2, the plaintiff
registered its objection to the acts of defendant no. 1 Citi Bank by
submitting a letter on January 16, 2010 stating inter alia that
defendant no. 1 had illegally and wrongfully released the said amount
in favour of defendant no. 2 inspite of having knowledge of pendency
of an application before the appropriate court of law for grant of
Succession Certificate initiated at the behest of plaintiff in respect of
the assets of late Shyamali Pal Chaudhuri. Having not received any
consideration, the plaintiff filed the suit being CS 191 of 2012.
16. The suit was contested by defendant no. 1 by filing written
statement denying the allegations made in the plaint. It was the
positive case of defendant no. 1, Citi Bank that the amount lying at
the credit of the deceased Shyamali Pal Chaudhuri was released by it
in favour of defendant no. 2 who was the declared nominee in respect
of the subject account. The money was validly released by defendant
no. 1 in discharge of its obligation in terms of the provisions of Section
45ZA of the Banking Regulation Act, 1949 as well as Master Circular
12
on Customer Service in banks issued by the Reserve Bank of India. It
was contended that there was no question of fraud or connivance on
the part of defendant no. 1. It was submitted that since defendant no.
1, the Citi Bank was acting in discharge of its legal obligations, it
cannot be held liable.
17. Defendant no. 2 also contested the CS 191 of 2012 by filing a
separate written statement. Defendant no. 2 made out a case that the
deceased Shyamali Pal Chaudhuri was her sister. She received the
amounts lying deposited to the credit of her deceased sister in
defendant no. 1 bank as nominee to the account. She further came up
with a case, that late Shyamali Pal Chaudhuri sold out her properties
from time to time, which she had inherited from her father and
invested the sale proceeds in the subject account maintained with
defendant no. 1. She further submitted that the plaintiff or any other
person had no right and title over the said money. In fact, defendant
no. 2, being own sister of late Shyamali Pal Chaudhuri inherited the
said amount, in terms of the provisions of Section 15 (2)(a) of Hindu
Succession Act, 1956, being sale proceeds of the properties inherited
by the deceased from her father. She however admitted that an
amount of ₹25,29,156.85/- was released by defendant no. 1 in her
favour on October 24, 2009.
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18. On the basis of the rival pleadings put in on behalf of the
parties, the learned Trial Judge framed as many as 10 issues for
proper adjudication of the disputes, that’s to say: –
“1. Whether the plaintiff is entitled to the proceeds lying in the
Savings Bank Account No. 5308184333 in the name of Smt.
Shyamali Pal Chaudhuri, since deceased with Chowringee
Branch of the Defendant No. 1 bank by virtue of and on the
basis of the Succession Certificate granted by the learned 2
District Delegate at Alipore by the judgment and order dated
December 21, 2009?
2. Whether the Defendant No. 1 ought to have disbursed the
amounts lying in the Savings Bank Account No. 5308184333
in the name of Smt. Shyamali Pal Chaudhuri, since deceased
with Chowringee Branch of the Defendant No. 1 bank to the
plaintiff and not to the Defendant No. 2 ?
3. Whether the Defendant No. 2, as the nominee of Smt.
Shyamali Pal Chaudhuri, since deceased and the account
holder of Savings Bank Account No. 5308184333 with
Chowringee Branch of the Defendant No. 1 bank is holding
the money received by her from the Defendant No. 1 in trust
for and on behalf of the plaintiff ?
4. Whether the Defendants No. 1 and 2 are jointly and/or
severally liable to make payment of a sum of Rs.2529156.85
to the plaintiff ?
5. Whether the plaintiff is entitled to the reliefs as claimed in
the plaint and/or any other reliefs?
6. Whether the Defendant No. 1 acted illegally and wrongfully
and in violation of the mandate and Guidelines of the Reserve
Bank of India in releasing the proceeds of Savings Bank
Account No. 5308184333 in the name of Smt. Shyamali Pal
Chaudhuri, since deceased with Chowringee Branch of the
Defendant No. 1 bank in favour of the Defendant No. 2, the 3
14nominee despite having notice of the pendency of proceedings
of Successively Certificate?
7. Is the present suit bad for non-joinder of necessary parties
being all the heirs of the deceased account holder, namely,
Shyamali Pal Chaudhuri ?
8. Is there is any valid cause of action of the Plaintiff against
the Defendant No. 1?
9. Whether the properties or sale proceeds thereof lying to the
credit of S.B. A/c. No. 5308184333 with Citi Bank,
Chowringhee Branch, were inherited by Late Shyamali Paul
Chowdhury from her father during her life time?
10. Is the plaintiff entitled to a decree for Rs. 25,29,156.85 on
the basis of the Succession Certificate issued by the Learned
District Delegate at Alipore in Act 39 Case No.388 of 2008
(Succession) in the Goods of Late Shyamali Paul Chowdhury?”
19. All the issues appear to have been taken up by learned Single
Judge together for adjudication. It is not in dispute that the amount
involved in the present lis was lying in an account maintained with
defendant no. 1, to the credit of deceased Shyamali Pal Chaudhuri.
The said Shyamali Pal Chaudhuri was wife of deceased brother
plaintiff namely Mrinimoy Pal Chowdhury. Defendant no. 2 is the
sister of said deceased Shyamali Pal Chaudhuri and was a nominee in
the subject account. In such capacity, defendant no. 2 received the
amount lying to the credit of deceased in the subject account to the
tune of ₹25,29,156.85/-. Admittedly, Mrinimoy Pal Chowdhury and
Shyamali Pal Chaudhuri died issueless.
15
20. By filing CS 191 of 2012, the plaintiff claimed the said
amount as legal heir and successor of late Shyamali Pal Chaudhuri in
accordance with Section 15(1)(b) of Hindu Succession Act, 1956.
However, defendant no. 2 claimed right over the said amount in terms
of Section 15(2)(a) of the said Act, being heir of the father of the
deceased. In order to appreciate the disputes between the parties, it
would be apposite to set out Section 15 of Hindu Succession Act, 1956
which deals with the rule of succession in case of the properties
belonging to a Hindu female. The provision reads as follows:
“15. General rules of succession in the case of female
Hindus.–
(1) The property of a female Hindu dying intestate shall
devolve according to the rules set out in section 16,–
(a) firstly, upon the sons and daughters (including
the children of any pre-deceased son or daughter)
and the husband;
(b) secondly, upon the heirs of the husband;
(c) thirdly, upon the mother and father;
(d) fourthly, upon the heirs of the father; and
(e) lastly, upon the heirs of the mother.
(2) Notwithstanding anything contained in sub-section
(1),–
(a) any property inherited by a female Hindu from
her father or mother shall devolve, in the absence
of any son or daughter of the deceased (including
the children of any pre-deceased son or daughter)
not upon the other heirs referred to in sub-section
(1) in the order specified therein, but upon the
heirs of the father; and
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(b) any property inherited by a female Hindu from
her husband or from her father-in-law shall
devolve, in the absence of any son or daughter of
the deceased (including the children of any pre-
deceased son or daughter) not upon the other
heirs referred to in sub-section (1) in the order
specified therein, but upon the heirs of the
husband.”
[Emphasis supplied]
21. The provisions of Section 14 of the Act of 1956 would also be
relevant in the present lis and in fact, the learned Single Judge has
dealt with such proposition. Section 14 of the Act lays down that,
“14. Property of a female Hindu to be her absolute
property.―(1) Any property possessed by a female Hindu,
whether acquired before or after the commencement of
this Act, shall be held by her as full owner thereof and
not as a limited owner.
Explanation.― In this sub-section, “property” includes
both movable and immovable property acquired by a
female Hindu by inheritance or devise, or at a partition,
or in lieu of maintenance or arrears of maintenance, or by
gift from any person, whether a relative or not, before, at
or after her marriage, or by her own skill or exertion, or
by purchase or by prescription, or in any other manner
whatsoever, and also any such property held by her as
stridhana immediately before the commencement of this
Act.
(2) Nothing contained in sub-section (1) shall apply to any
property acquired by way of gift or under a will or any
17
other instrument or under a decree or order of a civil court
or under an award where the terms of the gift, will or
other instrument or the decree, order or award prescribe
a restricted estate in such property.”
22. Since defendant no. 2 claimed the amount lying to the credit
of her deceased sister on the ground that the same came out of the
sale proceeds of the properties she inherited from her father. The
learned Single Judge observed that once the nature of the property
was changed to sale proceeds, it became absolute property of the
deceased Shyamali Pal Chaudhuri and it cannot devolve upon the
heirs of her father in terms of Section 15(2)(a) of the Act of 1956. The
learned Single Judge held that,
“In the present case also it is the specific case of the
defendant no. 2 that Shyamali Pal Chaudhuri, since deceased
sold the properties inherited from her father and then the sale
proceeds were deposited in the said account, though the
defendant no. 2 has not proved her case but assuming the
defendant no. 2 proved her case then also the property
inherited by Shyamali Pal Chaudhuri, since deceased from
her father becomes her absolute property and the Special Rule
have no application.”
23. So far as the claim of defendant no. 2 over the amount lying
in Account No. 5308184333 with defendant no. 1 bank to the credit of
the deceased Shyamali Pal Chaudhuri is concerned, it was specific
case of defendant no. 2 that the said amount came out of sale
proceeds of the properties inherited by deceased from her father.
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Therefore, in terms of Section 15(2)(a) of the Act of 1956, on the death
of Shyamali Pal Chaudhuri, the said amount devolved upon defendant
no. 2 being the heir of father of the deceased. On the contrary, the
plaintiff claimed the amount having inherited the same from late
Shyamali Pal Chaudhuri being the heirs of the husband of deceased in
accordance with Section 15(1)(b) of Hindu Succession Act. Admittedly,
Mrinmoy Pal Chowdhury and Shyamali Pal Chaudhuri died issueless.
24. The evidence led at the trial discloses that there was a
Succession Certificate proceeding at the behest of plaintiff which was
contested by defendant no. 2. It was noted by learned Single Judge, in
the impugned judgment and decree that although, several
amendments were taken out in the said proceeding in respect of
several credits lying in different banks, but defendant no. 2 never
claimed the amount lying in the subject account in such proceeding.
Moreover, the learned court emphatically held in the impugned
judgment and decree that defendant no. 2 failed to prove that the
amount lying in the subject account came out of the sale proceeds of
the properties inherited by Shyamali Pal Chaudhuri from her father.
The description and identification of such properties have not been
disclosed. The details of the purported sale of the properties have also
not been divulged by defendant no. 2, in order to establish that the
amount lying in the subject account is actually the sale proceeds of
the properties inherited by the deceased.
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25. As to the rights of the defendant no. 2 over the amount lying
in the subject account, the learned Single Judge, in the impugned
judgment and decree held that,
“13. In the present case, the defendant no. 2 tried to impress
upon this Court that the defendant no. 2 is entitled to get the
sum which was lying on the account of Shyamali Pal
Chaudhuri, since deceased with the defendant no. 1 as per
Section 15 (2)(a) of the Hindu Succession Act, 1956. The
defendant no. 2 has not produced any document or brought
any evidence on record to prove that the father of Shyamali
Pal Chaudhuri, since deceased owned any properties or
Shyamali Pal Chaudhuri, since deceased had sold the said
properties and deposited the sale proceeds in the account
maintained with the defendant no. 1. During the cross-
examination, the defendant no. 2 admits that she has not
submitted any document in support of her claim that the
properties of her father had been sold and the proceeds
deposited in the bank account. The defendant no. 2, during
her examination, deposed that the flat no. 6, Jatin Bagchi
Road had not been sold and was in her daughter’s name.
From the said evidence of the defendant no. 2 regarding the
sale of properties of her father by Shyamali Pal Chaudhuri,
since deceased and deposited the sale proceeds in the bank
account has not been proved. The defendant no. 2 failed to
prove that the amount lying in bank account of Shyamali Pal
Chaudhuri, since deceased, was inherited by her from her
father.”
26. It has been noted by learned Trial Judge that once the
properties inherited from father is sold out and sale proceeds is
converted into money, the changed character of the properties makes
20
the same absolute properties of the female in terms of Section 14 of
the Act of 1956. If that be so, the property of such female Hindu will
devolve in accordance with Section 15(1)(b) of the Act of 1956. Such
legal position was upheld by the court of learned District Delegate at
Alipore in Act XXXIX Case No. 388 of 08 under Section 377 of Indian
Succession Act, 1925, which issued Succession Certificate in favour of
the plaintiff despite contest by defendant no. 2. The order passed by
learned District Delegate at Alipore in such proceeding and
consequent Succession Certificate (Exhibits 9 and 10) are still
subsisting and has not been challenged. In such view of the facts,
defendant no. 2 cannot claim any right over the amount lying in the
subject account standing in the name of Shyamali Pal Chaudhuri.
27. So far as the role of defendant no. 1, Citi Bank is concerned,
the plaintiff had come up with a definite case, that although,
defendant no. 1 was duly informed of the pendency of Succession
Certificate proceeding before the appropriate court, the bank illegally
connived together with defendant no. 2 and proceeded to release the
money in favour of defendant no. 2. The defendant no. 1 did not apply
proper care and caution in dealing with the bank account as required
of it in terms of the Banking Regulation Act 1949 as well as Master
Circular on Customer Service in banks issued by the Reserve Bank of
India. In response to such contention, the Citi Bank, defendant no.1
came up with a case that the bank was under legal obligation to settle
21
the account in favour of the designated nominee, in terms of Section
45ZA of Banking Regulation Act 1949 as well as Master Circular on
Customer Service dated July 1, 2009. Defendant no. 1 discharged its
obligation by releasing the money in favour of defendant no. 2 and
therefore, there can be no claim against defendant no. 1. It simply
discharged its legal obligations after observing all legal formalities in
this regard and never acted in connivance with defendant no. 2.
According to the case made out by defendant no. 1, pendency of
proceeding for issuance of Succession Certificate is not at all relevant
for the purpose of settlement of the account in terms of the provisions
of Section 45 ZA of the Act of 1949 and the Master Cirular.
28. The learned Trial Judge, noted in the impugned judgment and
decree that,
“15. After came across a letter dated 10th January, 2009 of
the defendant no.1, the plaintiff had informed the defendant
no. 1 by a letter dated 13th March, 2009, that the plaintiff has
initiated a case for grant of Succession Certificate with respect
to the debts and securities of Shyamali Pal Chaudhuri, since
deceased and appropriate directions for operation of the bank
account would be provided to the defendant no.1 after
issuance of Succession Certificate by the competent Court of
law. On receipt of the said letter, the defendant no.1 by a
letter dated 18th March, 2009, requested the plaintiff to
provide death certificate, relinquishment deed etc. to the
defendant no.1 so that the account of the deceased Shyamali
Pal Chaudhuri could be closed and amounts can be
transferred to the plaintiff. The plaintiff was granted
22
Succession Certificate by the Learned District Delegate, at
Alipore and on receipt of the same, the plaintiff had
approached the defendant no.1 for release of the amount
available in the account of the deceased Shyamali Pal
Chaudhuri but the defendant no.1 informed the plaintiff that
the defendant no.1 has released the amount in favour of the
defendant no.2 as she is the nominee of the deceased
Shyamali Pal Chaudhuri in her account.”
29. The learned Single Judge noted the provisions of Clause
20.1.1 of Master Circular dated July 1, 2009 which is reproduced
hereunder for proper appreciation. It reads as follows:
“20.1.1. In the case of deposit accounts where the depositor
had utilized the nomination facility and made a valid
nomination or where the account was opened with the
survivorship clause (“either or survivor”, or “anyone or
survivor”, or “former or survivor” or “latter or survivor”), the
payment of the balance in the deposit account to the
survivor(s)/nominee of a deceased deposit account holder
represents a valid discharge of the bank’s liability provided:
(a) The bank has exercised due care and caution in
establishing the identity of the survivor(s)/nominee and
the fact of death of the account holder, through
appropriate documentary evidence;
(b) There is no order from the competent court
restraining the bank from making the payment from the
account of the decease; and
(c) It has been made clear to the survivor(s)/nominee
that he would be receiving the payment from the bank
as a trustee of the legal heirs of the deceased depositor,
i.e., such payment to him shall not affect the right or
23claim which any person may have against the
survivor(s)/nominee to whom the payment is made.”
30. Defendant no. 1 i.e. the Citi Bank made out a case that in
releasing the amount in favour of defendant no. 2, it had acted in
accordance with Section 45ZA of the Banking Regulation Act, 1949,
which reads as follows, that’s to say:
“45ZA. Nomination for payment of depositors’ money.–(1) Where
a deposit is held by a banking company to the credit of one or
more persons, the depositor or, as the case may be, all the
depositors together, may nominate, in the prescribed manner, one
or more persons not exceeding four, either successively or
simultaneously] to whom in the event of the death of the sole
depositor or the death of all the depositors, the amount of deposit
may be returned by the banking company.
(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;
24
(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.
(2) Notwithstanding anything contained in any other law for the
time being in force or in any disposition, whether testamentary or
otherwise, in respect of such deposit, where a nomination made
in the prescribed manner purports to confer on any person the
right to receive the amount of deposit from
the banking company, the nominee shall, on the death of the sole
depositor or, as the case may be, on the death of all the
depositors, become entitled to all the rights of the sole depositor
or, as the case may be, of the depositors, in relation to such
deposit to the exclusion of all other persons, unless the
nomination is varied or cancelled in the prescribed manner.
(3) Where the nominee is a minor, it shall be lawful for the
depositor making the nomination to appoint in the prescribed
manner any person to receive the amount of deposit in the event
of his death during the minority of the nominee.
(4) Payment by a banking company in accordance with the
provisions of this section shall constitute a full discharge to the
banking company of its liability in respect of the deposit:
Provided that nothing contained in this sub-section shall affect
the right or claim which any person may have against the person
to whom any payment is made under this section.”
25
31. Conceptually there are differences between succession within
the meaning of the Indian Succession Act, 1925 or the law of
succession in India on one point and a nomination contemplated
under the Banking Regulation Act, 1949 and the Master Circular
dated July 1, 2009 on the other part. A nominee holds the sum in
trust and for and on behalf of the actual successor to the estate of the
deceased. A successor to the estate of the deceased however takes the
sum of the deceased in accordance with the law of succession
governing the deceased. In a factual matrix, the nominee and the
successor of the deceased may be the same. However, when, the
nominee and the successor of the deceased are not the same person,
then, the nominee holds the sum of the deceased as a trustee, for and
on behalf of the successor. The nominee is under obligation to make
over the sum of the deceased to the successor of the deceased.
32. Section 45ZA of the Act of 1949 provides a mechanism for a
bank to make over the sum of the deceased to a nominee validly
nominated by the account holder during his lifetime. It absolves the
liability of the bank when the bank acts in accordance with the
provisions of Section 45ZA of the Act of 1949 read with Clause 20.1.1
of the Master Circular dated July 1, 2009.
33. Neither Section 45ZA of the Banking Regulation Act, 1949 nor
Clause 20.1.1 of the Master Circular dated July 1, 2009 lays down or
regulates the succession of the estate of the deceased. They merely
26
facilitate making over portion of the estate of the deceased lying with
the bank to a person who is validly nominated by the deceased during
his lifetime. Once a bank discharges its responsibility in terms of
Section 45ZA read with the Clause 20.1.1 of the Master Circular dated
July 1, 2009 then the bank stands absolved of its responsibility and
liability. However, in a given case where the bank in the know of
succession disputes with regard to the estate of the deceased proceeds
to make over the credit balance in the bank account of the deceased to
the nominee, whose nomination is also doubtful, then, in that given
factual matrix, the banker may be held responsible for not discharging
due care.
34. Section 45ZA of the Act of 1949 and Clause 20.1.1 of the
Master Circular dated July 1, 2009 have not substituted the Law of
Succession in India. It has however modulated the relationship
between a banker and its constituent vis-Ã -vis the nominee of the
constituent.
35. The learned Single Judge took note of the claim application
filed on behalf of defendant no. 2 and noted that defendant no. 1, the
bank, did ignore the various column in such application being left
blank. It was held by learned Single Judge that defendant no. 1 bank
did not consider that several information required for releasing the
money were not provided by defendant no. 2 in her claim application.
Nevertheless, the bank proceeded to release the amount lying in the
27
subject bank in favour of defendant no. 2 on the basis of incomplete
information. Accordingly, the learned Trial Judge came to a conclusion
that defendant no. 1 bank was not diligent and acted without proper
care and caution in releasing the amount, as required of it in terms of
the provisions of Section 45ZA of the Act of 1949 coupled with the
Master Circular issued by Reserve Bank of India.
36. In consideration of the claim application submitted by defendant
no. 2 with defendant no. 1, vis-Ã -vis the provisions of the Master
Circular dated July 1, 2009, the learned Single Judge observed that,
“As per Clause 20.1.1(a) of the above Circular, the bank has
to exercise due care and caution in establishing the identity of
the survivor(s)/nominee and the fact of the death of the
account holder, through appropriate documentary evidence.
But in the present case, on careful examination of the claim
form submitted by the defendant no. 2 for release of the debts
of the deceased as nominee, the said claim form i.e. Exhibit-14
has not been verified by the bank with due care and caution
as in the form Clauses 2, 3, 6, 8 and 9 have not been filled up
properly and no details of the other legal heirs/successors of
the deceased was provided no indemnity bond of the legal
heirs have been submitted and inspite of the said
discrepancies in the form, the bank has accepted and release
the amount even both the defendants had the knowledge that
a case is pending before the appropriate court of law for grant
of Succession Certificate in which the particular account was
also the subject-matter of the said case.
20. The defendant no. 1 as well as the defendant no. 2
were well aware about the pendency of the case for grant of
Succession Certificate before the Learned District Delegate at
28
Alipore as by a letter dated 13th March, 2009, the plaintiff
had informed about the pendency of the case for grant of
Succession Certificate to the defendant no. 1 and the
defendant no. 2 was the party to the said case as the
defendant no. 2 had participated in the said proceedings, but
inspite of the same, the defendant no. 1 in connivance of the
defendant no. 2 had released the amount without waiting the
outcome of the application filed by the plaintiff for grant of
Succession Certificate.
21. The defendant no. 1 had not adduced any evidence in
support of his case. Considering the above facts, the Court
finds that there was connivance in between the defendant no.
1 and defendant no. 2 for releasing of the amount in favour of
the defendant no. 1 in violation of the Master Circular as well
as after knowing fully well that a case for grant of Succession
Certificate is pending.”
33. Learned Trial Judge also noted the demeanour of defendant
no. 2 in the impugned judgment and decree to the following effect,
“17. The defendant no. 1 without taking due care and caution
knowing that the form submitted by the defendant no. 2 for
release of the amount is not filled up properly and not enclosed
the required documents but has released the said amount.
During the cross-examination, answer to the question No. 90, the
defendant no. 2 stated that the application form was filled up by
her as per the instructions of the bank. In answer to the question
No. 92, the defendant no. 2 stated that the application form was
filled up by her husband and she does not know anything about
the same. In answer to the question No. 93, the defendant no. 2
stated that she went to the bank with her husband and as per
the instruction of the bank her husband filled up the form and
she put the signature on the form.”
29
32. Therefore, from the perusal of the evidence let at the trial, it
transpires that defendant No. 1 went on to release the amount lying in
the subject account to the credit of deceased Shyamali Pal Chaudhuri
without taking due care and caution as required of it in terms of the
provisions contained under Section 45ZA of the Act of 1949 as well as
the master circular dated July 1, 2009. Not only that defendant No. 1
released the amount with full knowledge of the fact that a proceeding
under Section 377 of Indian Succession Act, 1925 being Act XIII case
No. 388 of 2008 was pending. In the said proceeding, defendant No. 2
was a contesting defendant. In the impugned order, it was noted by
learned Trial Judge that by a letter dated March 13, 2009, the plaintiff
had informed defendant No. 1 about the pendency of the case for
grant of succession certificate. However, inspite of such
communication by the plaintiff, defendant No. 1 bank released the
amount in favour of defendant No. 2 who was a contesting defendant
in the succession certificate proceeding without waiting for the
outcome of the said proceeding. In consideration of the aforesaid
evidence, learned Trial Judge concluded that there was a connivance
in between defendant No. 1 bank and defendant No. 2 to release the
amount in favour of defendant No. 2 in violation of the master
circular.
30
33. Since we have already noted hereinbefore that the claim of
defendant No. 2 that she is the legal heir and successor of deceased
Shyamali Pal Chaudhuri and was entitled to receive the amount lying
to the credit of the deceased in the subject account revised by learned
District Delegate at Alipore in the succession certificate proceeding.
We also note that such order of the learned District Delegate is still
subsisting and has not been challenged. The learned Trial Judge, on
the basis of evidence brought on record, held the plaintiff to be
entitled to succeed to the assets and liabilities of the deceased
Shyamali Paul Choudhury in terms of the provisions contained in
Section 15(1)(b) of Hindu Succession Act, 1956 and directed defendant
No. 2 to pay and deliver the amount of 25,29,156.58/- to the plaintiff
with interest at the rate of 10 percent per annum calculated from the
month of November 2009 till realisation in full. We find no reason to
interfere with such finding of the learned Trial Judge.
34. So far as the liability of defendant No. 1, Citi Bank is
concerned, learned Trial Judge held that defendant No. 1 bank acted
in violation of the provisions of Section 45ZA of the Act of 1949 as well
as the Master Circular on Customer Services dated July 1, 2009,
issued by the Reserve Bank of India. The learned Single Judge held
that inspite of having knowledge of the pendency of succession
certificate proceeding, defendant No. 1 acted in connivance with
defendant No. 2 in realising the amount without observing the proper
31
care and caution as required of it. The learned Trial Judge, taking into
consideration the aforesaid circumstances as discussed above,
awarded a cost of 1,00,000/- upon defendant No. 1 to be paid to the
plaintiff. Taking stock of the facts and circumstances obtaining in the
case coupled with the conduct of defendant No. 1 in not observing due
care and caution in respect of realising the amount in favour of
defendant No. 2, as statutorily required of it, we are of the opinion that
there are sufficient materials on record to concur with the learned
Single Judge that defendant No. 1 acted in connivance with defendant
No. 2. For such reason, the liability of defendant No. 1 i.e. Citi Bank is
jointly and severely liable to pay the plaintiff the full decretal amount
of 25,29,156.58/- together with the interest of such amount at the
rate of 10 percent per annum calculated from the month of November
2010 till realisation in full. Needless to say, defendant No. 1, on
making payment of such amount to the plaintiff, would be entitled to
release the amount paid by it from defendant No. 2 in accordance with
law. Since, we have held that defendant No. 1, bank, to be jointly and
severely liable, the cost awarded by the learned Trial Judge need not
be paid.
32. With the modifications made in the impugned judgment and
decree, as indicated above, the appeals being APD 2 of 2025, APD 8 of
2024 and cross objection being OCO 1 of 2025 are disposed of.
Connected applications, if any, shall also stand disposed of.
32
33. Urgent photostat certified copy of this judgment, if applied
for, be supplied to the parties on priority basis upon compliance of all
formalities.
[MD. SHABBAR RASHIDI, J.]
34. I agree.
[DEBANGSU BASAK, J.]
