In a significant judgment reinforcing the primacy of personal succession laws over banking nomination arrangements, the Orissa High Court has ruled that a legally wedded wife, as a Class-I heir under Section 8 of the Hindu Succession Act, has the foremost right to her deceased husband’s estate, regardless of any bank or insurance nominations in favour of other family members.
Justice Biraja Prasanna Satapathy, delivering the verdict on January 20, held that the property of a male Hindu dying intestate (without a will) devolves first upon Class-I heirs—including the wife—before any nominee can lay claim. The ruling came in a dispute between a widow, Snigdha Patnaik, and her late husband’s mother, Susama Mohanty, over posthumous terminal benefits amounting to ₹62.90 lakh.
Snigdha Patnaik married Subhransu Mohanty, a Canara Bank employee, in 2014. The couple had a daughter. While divorce proceedings initiated by Mohanty were pending, he died intestate on September 18, 2023. In the bank’s records, Mohanty had named his mother, Susama Mohanty, as the nominee for his service benefits.
Following his death, Canara Bank credited ₹40.74 lakh to Susama Mohanty’s account after adjusting for a loan liability of ₹22.16 lakh. Susama withdrew ₹6.70 lakh before her death on January 13, 2024.
Patnaik approached the court, asserting her rights as a Class-I heir to her deceased husband’s estate. The bank had earlier released ₹9.33 lakh to her pursuant to a prior interim order.
Patnaik’s counsel argued that under the Hindu Succession Act, the wife has an overriding legal claim over the estate of her deceased husband. The bank and the opposing party relied on the nomination made in favour of the mother, asserting her entitlement to the entire benefit.
Rejecting that argument, Justice Satapathy cited the Supreme Court’s ruling in Shakti Yezdani v. Jayanand Jayant Salgaonkar (2023), affirming that nomination is not a mode of succession and cannot override the statutory rights of heirs under personal law.
“After death of deceased, whatever the estate/amount is there, it is devolved to the legal heirs of deceased as per governing law of inheritance,” the court said. “There is no merit in the contention that just because the mother of the deceased is nominee, she alone is entitled to receive the entire amount, depriving the right of other legal heirs.”
The court emphasized that Patnaik, being the widow and a Class-I heir, was entitled to inherit the estate under Section 14 of the Hindu Succession Act. It also clarified that even after the 2015 amendment to the Insurance Act, a nominee does not become the beneficial owner if a legal heir under succession law exists.
The court directed Canara Bank to release the remaining ₹34.04 lakh—after deducting ₹6.70 lakh already withdrawn by the mother—to Patnaik along with accrued interest, within four weeks. It allowed the previously withdrawn amount to remain with the deceased nominee’s account as it was withdrawn before any interim order was passed.
“This judgment reaffirms a fundamental principle—succession rights under personal laws cannot be defeated by mere nomination,” said Bhakti Prasad Patnaik, a senior advocate in Bhubaneswar. “Section 8 creates a clear order of devolution. Class-I heirs have the first and paramount claim.”
Odisha-based advocate Suman Mohanty noted that the decision also clears prevailing confusion post the 2015 Insurance Act amendment. “The judgment clarifies that a wife’s status as a Class-I heir gives her legal priority over nominees, including the mother.”
The ruling holds importance for thousands of similar cases where bank and insurance nominations are contested by legal heirs. It reiterates that nominations may streamline disbursement but do not override the statutory scheme of inheritance.
