P L D 1958 (W (PLP)

Muhammad Amin Khan for Petitioner. M. Iqbal Hussain for Respondents No. 1 and

3. Date of hearing: 23rd October 1957. B. Z. KAIKAUS, J.‑--This is a revision against the order of Khan Muhammad Sadiq Ahmad Khan, Civil judge 2nd Class, Multan, refusing to grant a succession certificate to the petitioner. The question involved is as to who was entitled to receive provident fund of one Muhammad Din who was an Accountant in the Audit Office at Hyderabad and died on the 5th of May 1952. Muhammad Din left behind him a widow, Mst. Hayat Bibi, a son, Umar Hayat by name, who is the petitioner before me, Mst. Rashida Begum, a married daughter and Mst. Hamida Begum, a virgin daughter who is yet a minor. The applicant for the succession certificate was Umar Hayat petitioner who relied on a will executed be the deceased oil the 24th of May 1940, wherein it was provided that the provident fund was to go to Urnar Hayat petitioner 4/9, Khizar Hayat, the other son of Muhammad Din, 4/9, and Mst. Rashida Begum daughter, 1/9. Hamida Begum was not born at that time and the widow, Mst. Hayat Bibi, was not included among those who were to inherit the provident fund. Khizar Hayat, it may be stated had pre‑deceased his father. The petitioner also relied on the fact that he was the only son of Muhammad Din. He had applied to the Accounts Officer for payment to him of the provident fund of Muhammad Din but that officer refused to pay him on the ground that it was Hayat Bibi, the widow, and Hamida Begum the daughter, who were entitled to the provident fund according to the rules appli cable to the fund. The learned judge who heard the application of the petitioner has dismissed his petition on the same ground: The question as to who is entitled to a provident fund is to be decided in accordance with the provisions of the Provident Funds Act (XIX of 1925) and the rules framed by the Government. I reproduce below sections 3 and 5 of the Provident Funds Act which deal with this matter:‑ "3. (1) A compulsory deposit in any Government or Railway Provident Fund shall not in any way be capable of being assigned or charged and shall not be liable to attachment under any decree or order of any Civil, Revenue or Criminal Court in respect of any debt or liability incurred by the subscriber or depositor, anti neither the official assignee nor any receiver appointed under the Provincial Insolvency Act, 1920, shall be entitled to, or have any claim on, any such compulsory deposit. (2) Any sum standing to the credit of any subscriber to, or depositor in, any such Fund at the time of his decease and payable under the rules of the Fund to any dependant of the subscriber or depositor, or to such person as may be authorised by law to receive payment oil his behalf shall subject to any deduction authorised by this Act and, save where the dependant is the widow or child of the subscriber or depositor, subject also to the rights of an assignee under an assignment made before the commencement of this Act vest in the dependant, and shall, subject as aforesaid, be free from any debt or other liability incurred by the deceased or incurred by the dependant before death of the subscriber or depositor. 5. (1) Notwithstanding anything contained in any law for the time being in force or in any disposition whether testamentary or otherwise, by a subscriber to, or depositor, in, a Government or Railway Provident Fund of the sum standing to his credit in the Fund, or of any part thereon where any nomination, duly made in accordance with the rules of the Fund, purports to confer upon any person the right to receive the whole or any part of such sum oil the death of the subscriber or depositor occurring before the sum has become payable or before the sum, having become payable, has been paid, the said person shall, on the death as aforesaid of the subscriber or depositor, become entitled, to the exclusion of all other persons, to receive such sum or part thereof, as the case may be, unless‑ (a) such nomination is at any time varied by another nomination made in like manner or expressly cancelled by notice given in the manner and to the authority prescribed by those rules, or (b) such nomination at any time becomes invalid by reason of the happening of some contingency specified therein,‑ and if the said person predeceases the subscriber or depositor the nomination shall, so far as it relates to the right conferred upon the said person, become void and of no effect Provided that where provision has been duly made in the nomination in accordance with the rules of the Fund, conferring upon some other person such right in the stead of the person deceased, such right shall, upon the deceased as aforesaid of the said person, pass to such other person. (2) Notwithstanding anything contained in the Succession Certificate Act, 1889, or the Bombay Regulation VIII of 1927, any person who becomes entitled as aforesaid, may be granted a certificate under that Act, or that Regulation, as the case may be, entitling him to receive payment of such sum or part, and such certificate shall not be deemed to be invalidated or superseded by any grant to any other person of probate or letters of administration to the estate of the deceased." There is no section in the Provident Funds Act which says in so many words that the Government shall have power to frame rules so as to regulate the rights of heirs or dependants in tile provident fund of a deceased employee but these sections give legal force to any rules which may be framed by the Government with respect to nomination of the person who is to receive the fund and its distribution among the dependants, in case there is no nomination. According to section 3 (2), any sum standing to the credit of the subscriber at the time of his death vests in the dependant to whom it is payable under the rules applicable to the fund. Section 9, which I have not thought it necessary to reproduce, provides the procedure that is to be adopted for payment of tile fund when a subscriber dies. According to this section whatever the amount involved it is to be paid to the dependant in whom it vests by virtue of section 3 (2). No succession certificate, probate or letters of administration are necessary for payment to such dependant. If it is not payable however, to the dependant, as stated above, then it would be payable, to tile person nominated to receive it, without a succession certificate, if it is less than five thousand rupees, and on the presentation of a succession certificate etc., if it exceeds five thousand rupees. If there is neither a dependant, as stated above, in whom the fund vests, nor is there nominee, then if its amount is less than five thousand rupees, it can be paid to the person who appears to the officer making payment to be entitled to receive it without a succession certificate and if its amount exceeds five thousand it is to be paid to the person who produces a succession certificate, probate or letters of adminis tration. Section 5 provides that when a person is nominated by the subscriber to receive the fund, the nominee shall become entitled to the fund to the exclusion of all other persons. The effect of the above‑mentioned provision is that in case (1) there is a nomination by the subscriber of some person in accordance with the rules or (2) the rules provide for payment of the provident fund to some dependant, the fund is to be paid to such nominee or such dependant. The authority which maintains a fund has power to make provision in the rules for a nomination or for the distribution of the fund among the dependants. So far as the nominees or the dependants are concerned, they get an absolute title to the amount payable to them. If there be no nominee, nor a dependant who is entitled accordance with the rules, then the provident, fund has obviously to go to the heirs of the subscriber in accordance with law applicable to his estate. It is contended on behalf of the petitioner that the Provident Funds Act and the rules relating to a particular fund do not make the person who is entitled, in accordance with the rules, to receive tile fund, the owner of the fund and that they have the effect only of making him a trustee (or persons who would inherit the estate of the deceased, under the law applicable to him. Reliance is placed on Hayatuddin v. Mst. Rahiman (A I R 1935 Sind 73), where it was held that the Provident Funds Act does not make the person in whom the fund vests the owner of it. I am, with all respect, not inclined to agree. I have little doubt that the Provident Funds Act, in so fart as it entitles the nominee or the dependant to receive the Provident Fund overrides the personal jaw and creates rights of ownership in the dependant or the nominee. As the point had been fully discussed in Hayatuddin v. Mst. Rahiman and as it is of general importance. I have examined it with care and I will set out my reasons in detail. In the first place it appears to me altogether unreasonable to hold that when the Act makes elaborate provisions (and the rules do the same) for vesting the fund in the dependant: for the nominee being entitled to the exclusion of all other persons to recover the sum", and for the payment to the dependant even without any succession certificate, the only intention was to burden the dependant or the nominee with the responsibility of paying the fund to the heir under personal law What object can be served by payment to the dependant or nominee of the fund ? It will do no good to the dependant or nominee for he gets no beneficial interest in the sum recovered by him on account of this payment and it will do no good to the heir for he may have to recover it from a dependant to whom it has, in accordance with section 4, to be paid without his furnishing any security. Suppose the fund is paid to a sod's daughter in accordance with the rules without a nomination and a son is alive. The son's daughter is not an heir at all. What good can it do to either? It can only lead to litigation. The intention of the Provident Funds Act and the rules appears to me to confer some real benefit on the dependants Section 5 clearly points to the conclusion that the nominee is also to be the owner of the fund. It says the nominee "shall become entitled to the exclusion of all other persons to receive the sum". Do the words "entitled to only mean that the money is to be placed in his hands as trustee for the heir? A reference to the use off these words in section 4 will show that they are used in this Act to denote the person who owns. In accordance with section 4 (1) (b) the Accounts Officer is to pay the fund to the person who appears to the Accounts Officer to be "entitled to receive" it if it be not payable to a dependant in accordance with the rules and if there be at the same time no nomination. It is obvious that in these circumstances the Accounts Officer will only be determining who is the person entitled to the sum as heir. The use of these words in the proviso to section 4 (1) is even clearer. It speaks of the "decision of a Civil Court as to the person entitled to receive it". This "decision" relates to the case of an assignment and evidently means a 'decision of the rights of claimants. If in spite of the strong words used in section 5, the intention was only to make the recovered of the money a trustee, the matter should have been made clear. It will be observed that according to section 3 (2), the fund which vests in a dependant is free not only from any liability incurred by the deceased subscriber but also from any liability of the dependant himself incurred before the death of the subscriber. If it was not the intention that the dependant should become the owner of the fund which he receives, this immunity would be meaningless. The object of this subsection obviously is that those who own the provident fund should be entitled to appropriate it and should not be liable to pay it either to the creditors of the subscriber or to their own creditors (as they existed at death of subscriber). The protection would be of little use if the person to whom it is paid holds it only on behalf of others to whose liabilities the fund is subject. Also the subsection by implication makes the fund liable for the debts of the dependant incurred after the death of the subscriber. At least the section makes that assumption be justified if there is a possibility of the dependant having no beneficial interest in the fund at all? The fund may belong entirely to another person. Why should it be liable to attachment for the debt of the person to whom it only vests and to whom it does not belong? In the present case admittedly there was no nomination in accordance with the rules. The will of the deceased does not amount to a nomination, because nomination under rule 13.7 of the C. S. R. (Vol. II) has to be submitted to the Accounts Officer. In the absence of a nomination, according to rule 13.30 the provident fund is to go to the members of the family of the deceased in equal shares. Family is defined in rule 13.2 and means the widow, the children and the children of a son. By a proviso to rule 13.30, major sons and married daughters whose husbands are alive are not entitled to share in the provident fund if any other member of the family who is not excluded by the proviso be alive. The petitioner being a major son is obviously not entitled to inherit any part of it. The decision of the learned Civil judge that the fund is to go only to Mst. Hayat Bibi and Mst. Hamida Begum is, therefore, correct. A preliminary objection had been raised in this case by learned counsel for the petitioner that the learned Civil Judge had no jurisdiction to hear the application for a succession certificate at all. The objection by an applicant that the Court in which he was prosecuting his application had no jurisdiction is rather unusual and seems to have been taken as a last resort, on account of the hopelessness of the petitioner's case on the merits. The contention is that jurisdiction to grant a succession certificate belongs only to the District judge by virtue of section 371 of the Succession Act and that an ordinary Civil judge can be invested with jurisdiction only by a special order of the Provincial Government. Such special order, it is alleged, is absent in the present case. There is d notification of the Provincial Government of the year 1914 investing First and Second Class Sub‑Judges with jurisdiction to act as District judges under the repealed 6nccession Certificate Act. Learned counsel urges that the‑Succession Certificate Act having been repealed a fresh notification was needed and the notification under the repealed Act is of no force whatsoever. The contention fails to take notice, however, of the effect of section 24 of the General Clauses Act. In accordance with that section whenever an Act is repealed and re‑enacted a notification under the repealed Act is regarded as a notification under the Act in which the provisions of the repealed Act are re‑enacted. The notification of the Pro vincial Government is to be regarded as one under the provisions of the Succession Act which re‑enacts what was contained in the Succession Certificates Act. This petition is dismissed with costs. K. M. A. Petition dismissed.