A nominee’s rights cannot be directly challenged by the legal heirs, but they can take legal action against them in case of misuse of assets.
Generally, a nominee is a trusted person designated to receive assets during the death of a legal owner. Legal heirs, on the other hand, are entitled by law to inherit the deceased’s properties. Being a nominee, they are facilitated only to transfer the ownership of a property once the legal heirs are determined.
Nominees and legal heirs intersect at some point. Though the designation of both people is different, disputes arise over the rightful ownership of the property.
This article explains whether a nominee can be challenged by the legal heirs, key court rulings, or the circumstances under the regulations.
What Is The Supreme Court Decision On Nominee And Legal Heir?
The regulations associated with nominees and legal heir are crucial and complex. Herewith some significant decisions of supreme court have been explained, which have been taken while handling the following cases.
Sarbati Devi v. Usha Devi – 1983
Case Details:
People Associated with this issue: Sarbati Devi and another (appellants) took action against Usha Devi (respondent).
Year: 1983
Issue: Whether a nominee can become the absolute owner and claim the insurance amount while the death of the policyholder.
Scenario of this case:
- Someone who is likely to be deceased took out a life insurance policy and mentioned Usha Devi as a nominee.
- Sarbati Devi and another person were the legal heirs of the deceased person.
- After the death of a policyholder, Usha Devi – a nominee has claimed the entire sum insured.
- The legal heirs argued with Usha Devi to share the insurance money.
Court’s Judgment
- The supreme court took favor of Sarbati Devi and another legal heir.
- Through this case, the court once again clarified that a nominee is just designated to transfer the money to legal heirs. They act as a trustee to manage the assets until the legal heirs are determined.
Vishin N. Khanchandani v. Vidya Lachmandas Khanchandani – 2000
Case Details
People Associated with this Case: Vishin N. Khanchandani Vs. Vidya Lachmandas Khanchandani.
Year: 2000
Issue: The primary issue here is whether a property named ‘X’ belongs to a joint family or the separate property of the respondent.
Scenario of this Case:
- The appellant said that the property belonged to a joint family, and argued to claim a partition.
- The respondent contended his point, that the property was his self-acquired and he has no rights to claim it.
Court’s Judgment
- With the evidence submitted, the Supreme court has concluded that the property is self-acquired. Only the respondent, Vidya Lachmandas has rights to use it.
- The appellant doesn’t have any legal rights to claim partition in that property.
- The appeal of Vishin N. Khanchandani was dismissed as he didn’t have sufficient evidence to prove that he has rights to hold the property.
Could Nominees be Challenged by Legal Heirs?
Yes, the legal heirs can challenge the nominee. The Supreme Court of India has passed an announcement that the nominee is more likely a custodian or trustee to receive the fund. The ultimate ownership of a property is determined by succession laws.
What is the Right of Legal Heirs Against Nominees?
Nominees are just a trustee to handle the assets of a legal owner until the legal heirs are identified according to the succession act. Once they are determined, the nominee needs to transfer the property to them.
What if Legal Heirs are Not Cooperating?
When the cooperation of legal heirs is poor, negotiation is a way to go. If it fails, consider filing a legal suit against them to grab your rights. Prepare evidence to showcase your relationship to hold the deceased assets.
Is There a Time Limit for Heirs?
Yes, there is a time limit for heirs to claim their inheritance. However, the time limit varies depending on the type of asset and jurisdiction. The heirs need to act according to the legal regulations to avoid losing their rights.
Can There be 2 Nominees for a Property?
Yes, there is space for 2 nominees for a specific property. The rights and implications for dual nomination vary depending upon the property type, intention of the owner, and laws associated with it. Anyhow, consulting legal experts is essential to avoid legal complications while designating dual nominees for a property.
FAQs
1. Who is a nominee and a legal heir?
A nominee is appointed to manage specific assets during the death of a legal owner. Legal heirs, on the other hand, are entitled by law to inherit the deceased’s properties.
2. Can nominees be challenged by legal heirs?
Yes, the legal heirs can challenge the nominee. The Supreme Court of India has announced that the nominee is more likely a custodian or trustee to receive the fund. The ultimate ownership of a property is determined by succession laws.
3. Can a nominee and legal heir be the same person?
Yes, the nominee can also be a legal heir. In that case, the process is pretty simple as they can own the rights to access the assets or properties according to the succession law.
4. Who are Legal heirs?
Legal heirs are individuals who are entitled to access the properties of a deceased person according to the succession laws. The person might be a spouse, children, and some other relatives who is trustable to hold the assets.