GPF nominee can claim funds sans succession cert

New Delhi: Noting that Centre itself had framed General Provident Fund (Central Service) Rules in 1960, which entitled a valid nominee of GPF account to receive the amount lying in it, Supreme Court has said that the nominee does not need to produce a succession certificate to withdraw the amount.

A bench of Justices Manoj Misra and Manmohan rejected an appeal filed by Centre which said that in case the account has more than Rs 5,000, a nominee has to produce a succession certificate. The Centre’s plea was earlier rejected by Central Administrative Tribunal and Calcutta high court on the same ground that Rule 33(ii) allows a nominee to withdraw the amount.

“This Court declines to entertain the present Special Leave Petition as Rule 33(ii) of the Rules, 1960 has been framed by the Central Govt and the same cannot be and has not been challenged by the petitioners...This Court is of the view that if the submission of Govt of India is accepted, then the purpose of having a nomination would be lost. After all, the process of nomination has a sanctity attached to it,” the court said.

It said that if a succession certificate is required in all eventualities, then it would render otiose all nominations made under the Provident Fund Act, 1925, read with the Rules, 1960.

“This Court further finds that the basis of cases (where amount is more than Rs 5,000 in a/c) falling in Section 4(1)(b) and 4(1)(c)(i) is stated to be the amount standing to the credit of the depositor. While the basis of classification, namely, the amount of Rs 5,000 may have been substantial and reasonable in the year 1925, i.e., when the Act was passed, however, the same has ceased to be of any relevance a century later due to inflationary market forces. Recognising this ground level reality, the govt itself in the Rules framed thirty-five (35) years later stipulated that in cases of nomination, irrespective of the amount of money lying in the account, the same shall be released to the nominee,” it said.


Select The Times of India as your preferred source on Google Search