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Wife’s succession rights trumps bank nominee: Orissa High Court
The judgement said property of a male Hindu dying intestate devolves first upon Class-I heirs—which includes the wife—before any other claimants, regardless of nomination arrangements with banks
Reinforcing the primacy of succession laws over banking nomination facilities, the Orissa High Court has ruled that under Section 8 of the Hindu Succession Act, a wife as a Class-I heir has the first right to her deceased husband’s estate, superseding any nomination made in favour of other family members.
Justice Biraja Prasanna Satapathy, in a judgment delivered on January 20 held that property of a male Hindu dying intestate devolves first upon Class-I heirs—which includes the wife—before any other claimants, regardless of nomination arrangements with banks or insurance companies.
The case involved Snigdha Patnaik, whose husband Subhransu Mohanty, a Canara Bank employee, died on September 18, 2023, while divorce proceedings initiated by him were still pending. The couple had married in 2014 and had a daughter together.
After Mohanty’s death, the bank calculated his terminal benefits at ₹62.90 lakh. After adjusting loan liabilities of ₹22.16 lakh, the bank credited ₹40.74 lakh to the account of Mohanty’s mother, Susama Mohanty, who he had nominated in his official records. Before his death on January 13, 2024, she withdrew ₹6.70 lakh from this amount.
Patnaik’s lawyers argued that as the legally married wife and a Class-I heir under the Hindu Succession Act, she was entitled to the benefits. The bank had already released ₹9.33 lakh to Patnaik following an earlier court order.
The Court emphasized that under Section 8 of the Hindu Succession Act, property of a male Hindu dying intestate devolves first upon Class-I heirs, which includes the wife.
Relying on the Supreme Court’s recent ruling in Shakti Yezdani versus Jayanand Jayant Salgaonkar (2023), which clarified that nomination does not create a third mode of succession, the HC said just because of facility of nomination is made that does not defeat the rights of the legal heirs to claim their right in respect of estate of deceased, as the right of the other legal heirs is as per law of succession.
“After death of deceased, whatever the estate/amount is there, it is devolved to the legal heirs of deceased as per governing law of inheritance. Therefore, there is no merit in the contention that just because the mother of the deceased is nominee than, she alone is entitled to receive the entire amount depriving the right of other legal heirs. Being the wife of the deceased employee and she being a Class-I heir, her interest over the property of the deceased in terms of the provision contained under Section 14 of the Hindu Succession Act, will come first and she is eligible and entitled to get the benefit, as due to her husband,” justice Satpathy observed.
“Even after amendment of the Insurance Act in 2015, nomination is subject to the claims of heirs as per the Law of Succession,” the court observed, rejecting arguments that the 2015 amendments created beneficial ownership for nominees.
The court directed Canara Bank to release ₹34.04 lakh, representing the balance after the ₹6.70 lakh withdrawal, along with accrued interest, to the widow within four weeks. The court allowed the already-withdrawn amount to remain with the mother of the deceased heirs, as it was taken before any interim order was passed.
“This judgment reaffirms a fundamental principle—succession rights under personal laws cannot be defeated by mere nomination,” said Bhakti Prasad Patnaik, a senior advocate specializing in succession matters in Bhubaneswar. “Section 8 creates a clear order of devolution. Class-I heirs have the first and paramount claim. Banks and insurance companies need to understand that nominees are merely facilitators for receiving payments, not beneficial owners.”
Advocate Suman Mohanty, who handles Hindu succession cases across Odisha, added: “The 2015 amendment to the Insurance Act created confusion about beneficial nominees versus collector nominees. This judgment clarifies that even after those amendments, the Hindu Succession Act’s hierarchy remains intact. A wife’s status as a Class-I heir gives her priority over all other claimants, including the mother who may have been named as nominee.”
