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Property Rights Of Successors Versus Nominees

Courtesy/By: Shubham Mathur | 07 Dec 2018

A division bench (two-judge bench) of the Bombay High Court, comprising of Justice Oak and Justice Sayed, recently upheld the rights of successors over nominees. The court stated that the nominees are appointed, to ensure that the subject matter of the nomination is protected, until the legal heirs or legal representatives of the deceased take appropriate steps, such as obtaining probate of the will of the deceased or letters of administration of the estate of the deceased, to claim their rights over it.

There have been some contradictory observations in the past. In one such case (Harsha Nitin Kokate v The Saraswat Cooperative Bank Limited, also known as the ‘Kokate Case’), a single judge of the Bombay High Court had ruled that the rights of the nominee prevail over that of the successors, in case of shares held in a company. Finding this decision per incuriam, another single judge of the Bombay High Court subsequently upheld the contrary, i.e., in favour of the successors. However, the competency of a single judge to review the findings of another single judge created a controversy, which was questioned in this matter before the two-judge bench of the Bombay High Court.

Courtesy/By: Shubham Mathur | 07 Dec 2018