Currently, the banks may follow the rule of Bangladesh Bank and the principle of the judgment of the High Court Division that the nominee is entitled to the money of the deceased person and pay to the nominee at the first instance to complete their responsibility. Subsequently, the nominee will be treated as a custodian in case of a succession certificate given by the court and distribute the amount accordingly.

1. Rights of the nominee vis-à-vislegal heirs
M S Siddiqui
https://businesspostbd.com/editorial/2022-07-27/rights-of-the-nominee-vis-a-vis-legal-heirs
27 Jul 2022 00:07:07 | Update: 28 Jul 2022 17:12:24
Bankers are always foundin a difficult positionin managing deceasedaccounts
because they are in a great dilemma as to whether they should follow section
103 ofthe Bank Company Act to pay the money to the nominee or abide by the
succession order issued by the court to pay the successor(s). According to
Section103 (3)ofthe Bank Companies Act, 1991, the nominee shallget priority
over any person and all other persons shall be deprived of such property upon
the death of the depositor or account-holder. Therefore, this legal provision
takes precedence over any other law (e.g. law of inheritance).
A nominee is a person whose name is endorsed by the account holder in the
application of account, wherein the nominee's right to his/her deposits is
unequivocally stipulated. By including the nominee in the account application, the
accountholder expresses an absolute intent ofthe payment of the money after his/her
death to the person nominated. The successors are defined in the family of each
person according to their religious faith. The Muslim Personal Law (Shariat)
Application Act of 1937 is the regulating law of successor for the Muslims.
There are some laws and rules defining the nominee and their rights over the money
of the deceased. The Wage Earner Development Bond Rules, 1981 Section 2(5) has
defined the word nominee. ‘Nominee’ means the person named by the purchaser of
the Bond to receive the amount(s) due against the Bond in the event of the death of
the holder of the Bond and to receive the death risk-benefit in the event of the death
of the wage-earner who purchases the Bond(s). When the nominee dies before the
death of the Bond holder, the heirs of the deceased Bond holder shall be entitled to
the interest and the maturity value of the Bond (Section 10).
Under the notification of Sanchayapatra Rules, 1977 (Amended on June 30, 2015),
a nominee included an individual and/or legal or juristic person and maybe one or

2. more. Thus, by the above provisions, the law has given the absolute right of the
nominee over the deposited money against the successorsor heirs. Section 8 of the
Pensioner Policy, 2004 and Section 10 of the Family Savings Policy also elaborated
about the nomination, nominee and their rights.
Section 57 of the Insurance Act 2010, provides that the nomination may be
incorporated in the text of the policy by the insurer to receive the money in the event
of the death of the insured before the maturity of the policy. The nomination can be
made to one ormore persons. Even a minor may bemade a nominee and in this case,
a person shall be appointed to receive the money in case of the death of the insured
during the minority of the nominee. If a nominee is not made in the above process,
it can be made by an endorsement of the Policy.
The Insurance Act is silent over the rights of the heirs. The position of the legal heirs
has not been made clear; whether the legal heir will be excluded by the nominee or
not. If a nominee gets an exclusive right over the property, it will be completely in
contradiction with the Muslim personal law. Therefore, the above circumstantial
situation becomes a complex and ambiguous concept regarding the law of
nomination.
The Co-operative Societies Act, 2001 does notdefine the word “nominee” and “legal
heir”. The act only deals with the nomination of a receiver. The law has denied the
rights of the legal heirs (Section 40) on the shares of the societies. It provides all the
rights and liabilities in the shares to the personnominated. The Act has conferred an
exclusive right on the nominee to receive the shares as well as the liabilities in case
of the death of the members. This has created a conflicting situation with other laws
relating to a nominee in Bangladesh.
The government Savings Bank Act, 1873 applicable for nomination for savings
instruments has given the right to the nominee (Section 4 A) to receive money
against the savings instrument of the deceased person. The heirs will get the money
in case there is no nominee authorised by the savings certificate holder (section 5-
C).
There is a decision of the High Court Division of the Supreme Court of Bangladesh
related to the issue. On April 3, 2016, the High Court delivered a landmark decision
in establishing the right of the legal heirs over the deposited or invested money
against the nominees. According to the decision of the High Court, the nominee
would merely hold the money as a trustee and thus must distribute the money among

3. the legal heirs of the deceased. The judgment of the High Court was subsequently
been stayed by the Appellate Division.
Subsequently, in 2019, the High Court Division delivered the full judgment, which
stated that only nominees are authorized to withdraw money from bank accounts of
deceased persons and distribute it amongst the legal heirs as per the basis of the
respective religious laws of inheritance. The case is reportedly pending with the
Appellate Division of the Supreme Court for the final decision.
Bangladesh may considera reference casein Pakistan. The Pakistani Supreme Court
in Amtul Habi vs Musarrat Parveen, PLD (1974) SC 185 laid down the same
principle while holding that a nomination does not constitute a gift orbequest, “and,
therefore, a nomination shall not deprive the legal heir of the nominator.”
The supervisory bodyofthe banks, Bangladesh Bank (BB) has issued an instruction
BRDB circular no 6 dated 19 April 2017 to all commercial banks advising them to
follow the Bank Company Act 1991 and amendment thereof up to 2013 while
making payments of depositors' money after his/her death. In fact, with this
instruction Bangladesh Bank has unequivocally advised commercial banks to pay
depositor's money to the nominee when the depositor dies.
The decision of the High Court is a law of the land after the final decision from the
Supreme Court in due course. Moreover, there is no clear or superseding clause in
any law which clearly states which one will prevail when a conflicting situation
arises.
In this situation, different banks are following different processes of releasing the
money of a deceased person. The nominees and legal heirs are thereby facing
numerous problems due to the prevailing confusing practices by different banks.
The laws dealing with a nomination should be very clear, sufficient and exhaustive
but the existing laws relating to nomination in Bangladesh, such as the Insurance
Act, 2010; The Government Savings Bank Act, 1873; the Co-Operative Societies
Act, 2001, are not exhaustive becausethey do not cover all the aspects of the law of
nomination.
The existing laws in Bangladesh as mentioned above have not given any definition
of the term “nominee” which is highly necessary to understand the concept of a
nominee. Some of the Acts have mentioned that if a depositor dies without making
any nomination the payment will bedelivered accordingto the rule ofthe Succession
Certificate under the Succession Act, 1925.

4. To avoid such confusion and contradiction of law and rule related to the money of
the deceased person, Bangladesh needs a law with provisions of (1) An acceptable
and clear definition of a nominee, (2) Mention the persons who become nominees,
(3) Qualification and disqualification of a nominee, (4) Power and function of a
nominee will have to bementioned, (5) Grounds forthecancellation ofa nomination.
(6) Who will be entitled to the deposited money if the depositor dies without
designating a nominee, should be mentioned.
Currently, the banks may follow the rule of Bangladesh Bank and the principle of
the judgment of the High Court Division that the nominee is entitled to the money
of the deceased person and pay to the nominee at the first instance to complete their
responsibility. Subsequently, the nominee will be treated as a custodian in case of a
succession certificate given by the court and distribute the amount accordingly.
The writerisNon-GovernmentAdviser, BangladeshCompetition Commission. He
can be contacted at mssiddiqui2035@gmail.com