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PAYMENT OF ASSETS OF DECEASED CONSTITUENTS ACCOUNT
04-Sep-2023 (In Banking / Finance Law)
Raju, a Hindu gentleman, had been maintaining two joint Savings Bank accounts, one with his mother, Maya, and another with his Aunt ( Mother’s sister), Durga. The operation mandate of both the accounts was on the “Either or Survivor” basis.
Durga expired on 31-12-2016. Raju did not intimate the Bank but continued operation in the account.
Maya expired on 19-05-2018. Before giving intimation to Bank Raju also died intestate on 30-05-2018.
Now, Anamika, widow of wife, is inclined to claim the amount outstanding in both the accounts for self and on & behalf of her minor son without legal representation, i.e. with Affidavit and Indemnity as per Bank's extant norms.
Is She entitled to receive the assets of both the accounts in the above case?
RBI has in its Master Circular on Maintenance of Deposit Accounts laid down guidelines on operations in Joint Accounts. In the case of a Joint Savings Account with the mandate of ‘Either or Survivor’, wherein one of the account holder dies, if the benefit of survivorship is provided, the survivor can give a valid discharge to the bank.
Even though payment to the survivor will confer a valid discharge to the bank, the survivor will, however, hold the money only as trustee for the legal heirs (who may include the survivor as well) unless he is the sole beneficial owner of the balance in the account or the sole legal heir of the deceased. Thus, the survivor’s right unless he is the sole owner of the balance in the account/sole legal heir of the deceased, is only in the nature of a mere right to collect the money from the bank
In your case, Raju had a Joint Savings Account with his Aunt Durga (his mother’s sister). Upon her expiry on 31-12-2016, Raju can hold the money only as a trustee for the legal heirs unless he is the sole beneficial owner of the balance in the account or the sole legal heir of his aunt, Durga. In other words, the balance in the joint savings account with his aunt Durga, can be solely Raju’s only if the terms of their account state that he is the sole beneficial owner of the balance or the sole legal heir. If Durga has any other legal heirs, they have the right to claim the balance in the account. So, for Anamika to have access to the balance in Durga and Raju’s account, it needs to be clear whether Raju had the right to be owner of the balance, either by being the sole beneficial owner or as a legal heir. Similarly, upon the death of his mother, Maya, Raju has the rightful access to the balance of their joint account in the capacity of being the beneficial owner or the legal heir. Raju dying intestate, gives right to his wife, Anamika to claim the amount outstanding in both accounts provided it can be proved that Raju had the rightful possession of the same.
Even though payment to the survivor will confer a valid discharge to the bank, the survivor will, however, hold the money only as trustee for the legal heirs (who may include the survivor as well) unless he is the sole beneficial owner of the balance in the account or the sole legal heir of the deceased. Thus, the survivor’s right unless he is the sole owner of the balance in the account/sole legal heir of the deceased, is only in the nature of a mere right to collect the money from the bank
In your case, Raju had a Joint Savings Account with his Aunt Durga (his mother’s sister). Upon her expiry on 31-12-2016, Raju can hold the money only as a trustee for the legal heirs unless he is the sole beneficial owner of the balance in the account or the sole legal heir of his aunt, Durga. In other words, the balance in the joint savings account with his aunt Durga, can be solely Raju’s only if the terms of their account state that he is the sole beneficial owner of the balance or the sole legal heir. If Durga has any other legal heirs, they have the right to claim the balance in the account. So, for Anamika to have access to the balance in Durga and Raju’s account, it needs to be clear whether Raju had the right to be owner of the balance, either by being the sole beneficial owner or as a legal heir. Similarly, upon the death of his mother, Maya, Raju has the rightful access to the balance of their joint account in the capacity of being the beneficial owner or the legal heir. Raju dying intestate, gives right to his wife, Anamika to claim the amount outstanding in both accounts provided it can be proved that Raju had the rightful possession of the same.
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Adv. Ankit Juneja
Delhi | 25+ Answers
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