In a landmark ruling the Bombay High Court has granted ownership of shares belonging to the deceased to the nominee instead of the legal heir. This was done basis the interpretation of the Companies Act and Depositories Act which were deemed to be different from the laws governing insurance companies and housing societies.
It was made clear that in the case of insurance companies and housing societies, the nominee was just the guardian of the property and rightful owner was the legal heir.
I wonder what would be the case when it comes to Banking. My understanding and experience in this sector says that a nomination is essential so that in the event of death, the bank can discharge its duties by transferring the money to the nominee and then the nominee and legal heir can battle it out for ownership. Though I think the legal heir should get the ownership.
There is a bigger question - how can we have different laws defining the role a nominee across multiple financial sectors. It is a sure fire way to increase the case backlog of the already overburdened courts..
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