• Payment received by nominee (legal heir also) of cheque that was signed by account holder before his death

My mother having a pension account .in which I was nominee . A cheque was signed by him before death after death that cheque was encash by me with consent of other two legal heirs..for BRAHAM BHOJ ,and other rituals rites . But after that one legal heir become hostile to other legal heir nominee also who withdraw money .he is threatened to frame a false case on the basis of with money after death'.withdrawl Despite he consent ed for withdrawal of money . Now question is there is any high court or supreme court judgement relevant to above cited facts with protection to nominee who withdraw money .with full citations details of the case however pension account closed by nominee after getting final payment of closing account as per bank norms
Asked 2 months ago in Civil Law

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7 Answers

No cheque can be encashed legally after the death of the account holder. Consent of the legal heirs is irrelevant here. The nominee is a mere trustee and not the sole legatee. The nominee is accountable to all the legal heirs for settlement of their respective shares in accordance with the law of succession.

 

Swaminathan Neelakantan
Advocate, Coimbatore
2887 Answers
20 Consultations

On death of a customer, the order of the customer comes to an end and only if the banker pays the cheque before notice of death, is it valid. It would thus appear that the death of customer terminates his authority to order payment and operates as a countermand of the outstanding cheque.

 

2) On the moment of demise of customer, the bank, in terms of its contract, is holding the money not to the order of the deceased customer, but to the order of his nominees or legal representatives. The bank cannot thus act on the order of the deceased customer. The cheque, which has been held to be merely an order, thus, on demise of drawer, ceases to be a cheque". Therefore, no money can be withdrawn form the account of deceased except under the order of legal representative or nominees.

 

 

Ajay Sethi
Advocate, Mumbai
96426 Answers
7773 Consultations

Your question is that one legal heir withdraw the money from the drawer's account with the consent of other legal heir, however it is not known that on whose name was the cheque favored by the drawer and what is the dispute going on between the legal heirs.
If the cheque is dated back to the lifetime of the drawer then it is very much valid even after his/her death within three months from the date of cheque.

Therefore there can be no dispute maintainable for withdrawing money prescribed in the cheque post death of the drawer by the drawee.
If there's any case filed against you for this, you may challenge the same as per law.

T Kalaiselvan
Advocate, Vellore
86630 Answers
2315 Consultations

Ideally after death without informing the bank he is dead and without submitting death certi its illegal to withdraw 

Prashant Nayak
Advocate, Mumbai
32330 Answers
194 Consultations

A nominee is a custodian of funds, not an owner. They must act in the interest of the legal heirs.

Since you withdrew the money with the consent of the other two legal heirs, this strengthens your legal standing. Documenting this consent is crucial.

 

Mohammed Mujeeb
Advocate, Hyderabad
19306 Answers
32 Consultations

- Since , that cheque was signed by her , it means that her consent was with you at the time of handover the said cheuqe for the fund withdrawal. 

- However, as per succession laws, a nominee has the right to receive the account balance as a caretakers of the funds until the amount are rightfully distributed among all the legal heirs.

Mohammed Shahzad
Advocate, Delhi
14242 Answers
216 Consultations

Dear Client,

A nominee is someone who has been appointed to receive funds from an account when the account holder dies. However, a nominee is often regarded as a trustee of the funds for the legal heirs and does not have complete control of the funds.
Funds withdrawn from an account following the account holder's death must be utilized in line with the account holder's desires and for legitimate purposes, such as completing last rites and ceremonies.
If all legal heirs agreed to the withdrawal and use of the assets, a claim against the nominee is less likely to be successful. However, disagreements may emerge if an heir later withdraws their consent.
In the case of Vishin N. Khanchandani v. Vidya Lachmandas Khanchandani & Anr. (2000)[AIR 2000, SC 2747] the Supreme Court clarified the duty of the nominee under Section 45ZA of the Banking Regulation Act of 1949.
The nominee serves solely as a trustee for the legal heirs and does not acquire complete ownership of the monies.

A nominee has the ability to withdraw funds from the deceased's account, but they must also act as trustee for the legal heirs. The Supreme Court's decision in Vishin N. Khanchandani vs. Vidya Lachmandas Khanchandani & Anr. establishes that a nominee does not have complete control over the funds and must distribute them in accordance with the law. Proper documentation of the heirs' approval, as well as legal assistance, can help to safeguard the nominee from bogus claims.

Anik Miu
Advocate, Bangalore
9981 Answers
117 Consultations

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