Kiran Raj

The Supreme Court of India Division Bench of Justice Sanjay Karol and Justice Nongmeikapam Kotiswar Singh held that a deceased central government employee’s General Provident Fund must be shared equally between his widow and mother, despite an earlier nomination in favour of the mother. Clarifying that, once an employee marries and thereby forms a family, any prior nomination exclusively in favour of a parent ceases to operate and the fund thereafter falls to be divided in equal shares between the spouse and surviving parents, the Court allowed the widow’s challenge. Setting aside the Bombay High Court’s contrary view and restoring the Central Administrative Tribunal’s decision, the Bench directed that one half of the GPF remain with the wife and the remaining half be released to the mother.

The case concerns a dispute between the widow and mother of a deceased central government employee over entitlement to the amount accumulated in his General Provident Fund (GPF). The employee, serving in the Defence Accounts Department, initially nominated his mother as recipient of GPF, Central Government Employees Group Insurance Scheme (CGEIS) and Death-cum-Retirement Gratuity (DCRG) at the time of joining service. After his marriage, he executed a fresh nomination in favour of his wife only for CGEIS and DCRG. On his death in service in July 2021, the widow received various service benefits, but payment of the GPF was declined on the ground that the mother continued as nominee on record.

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The widow approached the Central Administrative Tribunal, which examined the General Provident Fund (Central Services) Rules, 1960, particularly the provisions on nomination and distribution on death, and treated the earlier nomination as having become ineffective upon the employee acquiring a family. In writ proceedings, the High Court analysed Rules 5 and 33 of the GPF(CS) Rules and held that the nomination in favour of the mother did not stand automatically cancelled, relying on the concept that nomination indicates the person authorised to receive the amount. Before the Supreme Court, the widow relied on the nomination form condition and Note 2 to Rule 476(V) of the Official Manual, while the mother emphasised the deceased’s decision to retain her as nominee for GPF.

The Court first addressed the effect of invalidation of nomination under the governing framework, noting that “The Rules do indeed provide that when a nomination becomes invalid, the amount is to be distributed/divided amongst all eligible members, but equally it has to be seen that between his marriage in 2003 and death in 2021, each year, as per Rules, presented an opportunity to the deceased to alter the nomination for the GPF which he did not.” “Be that as it may, the nomination form was clear.”

The Court then turned to the specific contingency of acquiring a family, recording that “The nomination in favour of the respondent no.1 would become invalid upon him acquiring a family (marriage or otherwise), as such, by function thereof, it became invalid in 2003.” “He did not alter the nomination to comply therewith.” “It is also true that respondent nos. 2 to 4 are not obligated to ask such a subscriber to alter or cancel the nominations and it is the duty of the subscriber to do so.” “It is to provide for these very situations where a subscriber neglects to or fails to make such changes, that Rules have been prescribed, laying down how the money is to be distributed amongst survivors.”

In examining the High Court’s approach, the Bench stated that “It may be so that the Rules do not provide for auto cancellation but it is also that they provide for the eventuality where the nomination duly filled by the subscriber do not subsist.” “That apart, the Rule quoted above stipulates a mandate that, upon acquiring family the nomination will become invalid.” “That being the case, even in view of the fact that the deceased had not made changes to the nomination for GPF, the earlier nomination cannot be held to be valid.”

Clarifying the legal effect of such invalidation, the Court concluded that “The position stated by us above is no longer under any manner of doubt.” “Granted that the nomination was in favour of respondent no.1, however, the condition stipulated in the nomination form rendered such nomination, at the time of death, void.” “In other words, the nomination itself would not give respondent no.1 a better claim over the total GPF amount than the appellant.”

Relying on earlier precedent on nominations, the Court cited Sarbati Devi v. Usha Devi and recorded: “We approve the views expressed by the other High Courts on the meaning of Section 39 of the Act and hold that a mere nomination made under Section 39 of the Act does not have the effect of conferring on the nominee any beneficial interest in the amount payable under the life insurance policy on the death of the assured.” “The nomination only indicates the hand which is authorised to receive the amount, on the payment of which the insurer gets a valid discharge of its liability under the policy.” “The amount, however, can be claimed by the heirs of the assured in accordance with the law of succession governing them.”

The Bench further referred to Shakti Yezdani v. Jayanand Jayant Salgaonkar, noting: “A consistent view appears to have been taken by the courts, while interpreting the related provisions of nomination under different statutes.” “It is clear from the referred judgments that the nomination so made would not lead to the nominee attaining absolute title over the subject property for which such nomination was made.” “In other words, the usual mode of succession is not to be impacted by such nomination.” “The legal heirs therefore have not been excluded by virtue of nomination.”

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The Court directed: “In that view of the matter, the appeal deserves to be allowed. The impugned judgment with particulars mentioned in Para two are set aside and the order of the CAT is upheld as being in accordance with law.”

“The GPF of the deceased shall be distributed between the appellant and respondent no.1. It is a matter of record that the appellant has already received her share of GPF amount, as ordered by CAT. The remainder half of the money in question which currently stands deposited before the Registrar, High Court (Appellate side) shall be released in favour of Respondent No.1 herein.”

“Learned Counsel for the said respondent shall make an application within two weeks of this judgment before the concerned Registrar to facilitate the release of the funds. Pending application(s), if any, shall stand disposed of.”

Advocates Representing the Parties

For the Petitioners: Mr. Venkita Subramoniam T.R, AOR

For the Respondents: Mr. Uday B. Dube, Sr. Adv. Mr. Kaustubh Dube, Adv. Mr. A. Selvin Raja, AOR Mr. Brijender Chahar Ld, A.S.G. Mr. Mukesh Kumar Maroria, AOR Mr. Jagdish Chandra, Adv. Mr. Bhakti Vardhan Singh, Adv. Ms. Gayatri Mishra, Adv.

Case Title: Smt. Bolla Malathi v. B. Suguna and Ors.
Neutral Citation: 2025 INSC 1391
Case Number: Civil Appeal No. 14604 of 2025, Arising out of Special Leave Petition (Civil) No.8303 of 2025
Bench: Justice Sanjay Karol, Justice Nongmeikapam Kotiswar Singh