Shakti Yezdani and Another v. Jayanand Jayant Salgaonkar and Others

The Hon’ble Supreme Court of India in Shakti Yezdani and Another v. Jayanand Jayant Salgaonkar and Others (2023) has clarified the legal position on nominations under corporate and depository laws vis-à-vis testamentary succession. This case has far reaching implications for estate planning in India.

The dispute arose when the deceased had both a registered Will and separate nominations for securities and fixed deposits under Section 109A of the Companies Act and Section 9 of the Depositories Act. After his death, the nominees claimed full ownership of these assets, while the beneficiaries cited the Will for rightful succession.

The Hon’ble Supreme Court ruled that a nominee is merely a trustee or custodian of the asset and does not acquire beneficial ownership. Succession must occur according to the Will or, in its absence, the applicable succession laws. The Court emphasized that nomination provisions are administrative and cannot override testamentary or statutory succession.

This judgment is crucial for estate planners and individuals managing wealth transfers. It reiterates that a nomination is not a substitute for a Will. Therefore, individuals must ensure their Wills are comprehensive and cover all significant assets, even those with nominations. Proper alignment between nominations and testamentary documents is essential for avoiding legal ambiguity and ensuring a smooth transfer of wealth.

Source

https://indiankanoon.org/doc/166607072/