Kandasamy v. Karur Vysya Bank Ltd.,

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 11.12.2017 CORAM :

THE HONOURABLE MR.JUSTICE G.R.SWAMINATHAN C.M.A.(MD)Nos.703 and 704 of 2017 1.Kandasamy 2.Punithavalli 3.Lalithambigai ... Appellants 1 to 3 in CMA 703/2017 4.Gnanagurupuran ... Appellant No.4 in C.M.A.703/2017 and Appellant in CMA 704/2017 Vs.

Karur Vysya Bank Ltd., Shares Department Central Office, Erode Road, Karur.

... Respondents in both appeals Prayer: Civil Miscellaneous Appeals are filed under Section 384 of Indian Succession Act, 1925, to set aside the order dated 31.01.2017 and 21.03.2017 made in S.O.P.Nos.1 of 2015 and 2 of 2015 respectively on the file of the Principal District Judge, Karur in respect of the stamp duty directed to pay by the appellants. For Appellants in both appeals : Mr.T.K.Gopalan For Respondent : Mr.R.Pandivel Mr.S.Srinivasa Raghavan, Amicus Curiae Mr.B.Pugalendhi, AAG Assisted the Court COMMON JUDGMENT The appellants herein filed S.O.P.Nos.1 and 2 of 2015 on the file of the Principal District Judge, Karur. One Bhuvaneswari, wife of Kandasamy was having shares in Karur Vysya Bank. She passed away on 30.10.2009. She died leaving behind her husband Kandasamy and two daughters and one son. Since the bank insisted on production of Succession Certificate, the legal heirs filed S.O.P.No.1 of 2015 before the Principal District Judge, Karur. One Subramaniyapillai

passed away on 19.07.2011. He had executed a Will on 09.10.1991 in favour of Gnanagurubaran, son of Kandasamy. The said Subramaniapillai was also holding shares in Karur Vysya Bank. In this case also, the Bank insisted on production of Succession certificate. Therefore, the said Gnanagurubaran filed S.O.P.No.2 of 2015 on the file of the Principal District Judge, Karur. The learned District Judge, by order dated 31.01.2017 allowed S.O.P.No.1 of 2015 and by order dated 21.03.2017 allowed S.O.P.No.2 of 2015. However, the learned Principal District Judge directed that the Succession certificate shall be issued only on deposit of the balance amount of Court fee which must be computed based on the market value of the share certificates prevailing on the date of filing of the petition.

Aggrieved by this portion of the decretal order, these civil miscellaneous appeals have been filed. 2.This Court appointed Mr.S.Srinivasa Raghavan as Amicus Curiae to assist the Court. The learned Amicus Curiae made detailed submissions and also filed his written submissions and called upon this Court to sustain the order passed by the learned Principal District Judge. Since the issue has revenue implications in terms of Section 20 of the Succession Act, this Court issued notice to the learned Additional Advocate General to make his submissions on behalf of the State Government.

3.Heard the learned counsel appearing for the appellant, the learned counsel for the respondent, the learned Additional Advocate General appearing for the State Government and Mr.S.Srinivasa Raghavan, Amicus Curiae.

4.The principal contention urged by the learned counsel appearing for the appellant is that grant of succession certificate only empowers the grantee to sue for recovery of amount covered by the certificate. It does not by itself amounts to a decree or order within the meaning of C.P.C. In other words, if any one refused to pay the debt to the holder of the certificate, the certificate holder is only entitled to institute a suit to recover the debt. In other words, it cannot be executed straightaway. In support of this proposition, he relied on the decision reported in AIR 1980 Kant 67 - Employment Officer, Mandya Vs. Sevarinathan. He also compared the language employed in Schedule I in respect of the various articles. For instance, the expression "market value" is found in column 3 in respect of articles 3 and 4.

But, as regards the article 7 in schedule I of Tamil Nadu Court fees and Suits Valuation Act, 1955, the expressions "Two per centum on such amount or value" and "Three per centum on such amount or value" are mentioned. The expression "market value" is absent in column 3 as far as article 7 is concerned. He would therefore point out that there is internal evidence that one has to pay court fees based only on the face value of the security and not on market value.

5.The learned Additional Advocate General as well as the Amicus Curiae on the other hand drew the Court's attention to Note 3 appended to article 7. Note 3 reads as under:

"(1)..........

(2)..........

(3)Whether or not any power with respect to a security specified in a certificate has been conferred under the Act, and where such a power has been so conferred, whether the power is for the receiving of interest or dividends on, or for the negotiation or transfer of the security, or for both purposes, the value of the security is its market value on the day on which the inclusion of the security in the certificate is applied for, as far as such value can be ascertained."

They also drew the attention of this Court to Section 377 of Indian Succession Act, 1925 which says that the certificates shall be granted and extension of certificates shall be made as nearly as circumstances admit in the forms set forth in Schedule 8. Schedule 8 contains the following forms as far as the securities are concerned.

Securities Serial Number Description Marketvalue of security on date of application for certificate Distinguishing number or letter of security Name, title or class of security Amount or par value of security Column 4 talks about amount or par value of security. The next column specifically refers to market value of security on the date of application for certificate.

6.The grievance of the appellant is that when the certificate will only empower and enable the holder to collect the debts and cannot be executed by itself, he will have to pay a further court fee at the rate of 7.5% on the market value to file a suit. Thus, he would be placed at a greater hardship. A person who wants to institute a money suit will pay only 7.5% Court Fee on the suit claim. But, if one were to obtain a succession certificate and thereafter institute a suit, he will end up paying more court fee. While this hardship is certainly apparent, this Court will have to necessarily go by the express language set out in the Statute.

In view of the mandate set out in Note 3 of article 7 of the Schedule 1 in Tamil Nadu Court Fees and Suit Valuation Act 1955, this Court is of the view that the learned Principal District Judge was right in decreeing that the succession certificate will be issued only on deposit of the balance amount. This conclusion is further reinforced by the language found in the "Form" pertaining to securities in Schedule 8 of the Indian Succession Act.

therefore finds no merit in this appeals. It stands dismissed. Considering the circumstances of this case and the fact that there is no rival claim, the following directions are issued. (i)the Trial Court shall compute the market value payable on the securities in question and intimate the same to the respondent bank.

(ii)Since the learned counsel for the appellants submits that the share certificates in question have accrued sufficient dividend amount, which can meet the Court fee liability, the respondent bank shall remit the same directly to the credit of S.O.P.Nos.1 and 2 on the file of the Principal District Judge, Karur. Upon such remittance by the Bank within the period as directed by the Trial Court, the liability of the Bank to the certificate holders shall be correspondingly reduced.

(iii)the Trial court shall after completion of due formalities issue the succession certificates as prayed for. 7.With the above directions, these appeals are disposed of. No costs. This Court places on record its appreciation of the assistance rendered by Mr.S.Srinivasa Raghavan, Amicus Curiae. Sd/ Assistant Registrar(AD-II) /True copy/ Sub Assistant Registrar To 1.The Principal District Judge, Karur.

2.The Record Keeper, Vernacular Section, Madurai Bench of Madras High Court, Madurai.(2 COPIES) +2cc to Mr.PT.S.NARENDRAVASAN, Advocate, SR.No. 92157,92158 +1cc to Mr.R.PANDIVEL, Advocate, SR.No.92046 +1cc to M/s.Special Government Pleader,SR.No. 92388 C.M.A.(MD)Nos.703 and 704 of 2017 11.12.2017 skm KK/SV MMS/20.04.2018/SAR-4/4P-8C