SHRI VISHIN N. KHANCHANDANI AND ANR. versus VIDYA LACHMANDAS KHANCHANDANI AND ANR.

Citation: [2000] SUPP. 2 S.C.R. 415 · Decided: 16-08-2000 · Supreme Court of India · Bench: K.T. THOMAS · Disposal: Appeal(s) allowed

Judgment (excerpt)

SHRI VISHIN N. KHANCHANDANI AND ANR. 
v. 
VIDYA LACHMANDAS KHANCHANDANI AND ANR. 
AUGUST 16, 2000 
[K.T. THOMAS AND R.P. SETHI, JJ.] 
Government Savings Certificate Act, 1959 : 
Ss.8(2), 6 and 7-National Savings Certificates-Nominee of-Held, has 
a right to be paid the .rnm due on such savings certificates after death of 
holder-But he retains the said amount for benefit o.f persons entitled to it under 
law o.f succession, subject to provisions o.f sub-section (2) of s.8. 
Interpretation of Statute : 
Non-obstante clause in a statut<'ry provision-Interpretation of-Ex-
plained. 
Respondent no. 1, on the death of her husband filed a petition under 
s.370 of the Indian Succession Act, 1925 for grant of succession certificate 
in respect of debts and securities left by the deceased. The appellants, the 
brother and the step brother of the deceased, contested the claim with 
respect to such national savings certificates in which they had been men-
tioned as nominees of the deceased. The Civil Judge held that the respond-
ents were entitled to succession certif~ate in respect of the debts men-
_tioned in Schedules A and B to the application excluding the National 
Savings Certificates and Compulsory Deposit Scheme, in which the appel-
lants had been nominated. That part of the order by which the respond-
ents' claim with regard to the National Savings Certificates was disallowed 
was challenged by the respondents in an appeal before the IDgh Court 
which allowed the claim. Aggrieved, the nominees filed the present appeal. 
It was contended for the appellants that in view of the non-obstante 
clause in s.6 of the Act, after death of the deceased-holder, they became 
entitled to the sum paid on account of the National Savings Certificates in 
which they were nominees, to the exclusion of all other persons including 
the legal heirs. 
Allowing the appeal, the Court 
415 
A 
B 
c 
D 
E 
F 
G 
H 
A 
B 
c 
D 
416 
SUPREME COURT REPORTS 
[2000] SUPP. 2 S.C.R. 
HELD : 1. Though under s.6 of the Government Savings Certificate 
Act, 1959, the nominee of the National Savings Certificates has a right to 
be paid the sum due on such savings certificates after the death of the 
holder, yet, in view of sub-section (2) of s.8 and the Statement of Objects 
and Reasons of the Act, he retains the said amount for the benefit of the 
persons who are entitled to it under the law of succession applicable in the 
case, however, subject to the exception of deductions mentioned in the sub-
section. [426-B; CJ 
2:1. There is no doubt that by non-obstante clause the Legislature 
devices means which are usually applied to give overriding effect to certain 
provisions over some contrary provisions that may be found either in the 
same enactment or some other statute. Such a clause is used to avoid the 
operation and effect of all contrary provisions. The phrase is equivalent to 
showing that the Act shall be no impediment to the measure intended. To 
attract the applicability of the phrase, the whole of the section, the scheme 
of the Act and the objects and reasons for which such an enactment is 
made has to be kept in mind. [425-E-F] 
2.2. Though language and phraseology of Section 6 of the Govern-
ment Savings Certificate Act, 1959 is different than the one used in Section 
39 of the Insurance Act, yet, the effect of both the provisions is the same. 
E 
The 1959 Act only makes the provisions regarding avoiding delay and 
expense in making the payment of the amount of the National Savings 
Certificates, to the nominee of holder, which has been considered to be 
beneficial both for the holder as also for the post office. Any amount paid 
to the nominee after valid deductions becomes the estate of the deceased. 
F 
Such an estate devolves upon all persons who are entitled to succession 
under law, custom or testament of the deceased holder. The law laid down 
by this Court in Sarbati Devi's case* holds the field and is equally applica-
ble to the nominee becoming entitled to the payment of the amount on 
account of National Savings Certificates received by him under section 6 
read with Section 7 of the Act who in turn is liable to return the amount to 
G 
those, in whose favour law creates beneficial interest, subject to the provi· 
sions of sub-section (2) of Section 8 of the Act. [426-F-H; 427-A] 
Smt. Sarbati Devi & Am: v. Smt. Usha Devi, [1984] 1 SCC 424, relied 
on. 
H 
Ramballav Dhandhania v. Gangadhar Nathmall, AIR (1956) Cal. 275; 
~'.) 
• 
V

Excerpt shown. Read the full judgment & AI analysis in Lexace.