Fixed deposit must be paid only to nominees, says HC

In the event of the death of a Fixed Deposit holder, the deposited money should be paid only to nominees even if there were rival claims by other individuals on the ground of being the legal heirs of the deceased, the Madras High Court Bench here has said.

Justice K.K. Sasidharan made the observation while allowing a writ petition filed by M. Rajeswari of Virudhunagar who had been nominated by her husband Muthuchamy to receive Rs. 8.5 lakh deposited by him with the Virudhunagar District Central Cooperative Bank.

The judge said that the bank should necessarily pay the amount to the nominee and it could not be heard to say that the amount was not disbursed to her just because there was a rival claim made by another legal heir of the depositor.

Sounding a note of caution, the judge said that the payment of the entire deposited amount to the nominee would not in any way stand in the way of other legal heirs claiming their proportionate share from the nominee by instituting appropriate civil proceedings.

They could even obtain an interim order from the civil court restraining the bank from disbursing the amount to the nominee until the dispute over their share was sorted out.

But in no circumstances, a bank could stop disbursement on its own by citing rival claims.

The purpose of nominating a person with respect to fixed deposits was to simplify the procedures involved in disbursing the amount.

There was no legal requirement that a person nominated must be the legal heir or representative of the depositor, the judge added.

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Printable version | Jan 17, 2022 10:48:02 PM |

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