All have to die and none can escape from death but yet most of us dislike the very talk of death, which cannot be ignored.1 From the beginning of the civilization man reared the temptation to reserve or gather property, but they were incapable because of lacking the proper way of reserving the property. After invention of the unit of exchange (like as Taka, Dollar, Rupee etc.), from then man tried to reserve or invest property in many ways through many institutions. Only for this purpose there have been emerged many institutions. There are several types of Bank where one can reserve or invest one’s money. Beside Banking System there have emerged Insurance Industry, Co-operative Society, Provident fund and many other institutions whose main activities are to help the people to reserve / invest money for future.
Before this modern system of saving property, the Zamindars reserved their money in the lockup and also it is noticed that they gave the money to the poor for interest. It is now rare even in rural Area. Now the role of Zamindars is played by different Investment Banks or institutions that get money from individual investor and they (Banks or institutions) provide it to the businessmen or to the needy people. People reserve or invest money in the Bank or any other institutions where they feel more secure of their property. They make investments not only for themselves but also for their children to reap the fruits of the same. A question that quite often disturbs their (investors) mind is how to ensure that their near and dear ones will not face any problem in possessing and enjoying the assets that they have earned during their lifetime.2
It is a very difficult question that when an investor or depositor will die and then who will get the reserved assets. To whom the Bank or investment company will provide the invested money. The solution of this question is nomination of a person as a legal representative of the investor to whom that very Bank or investment company will provide the invested money or if the nominated person wants to continue the business or installment he/she can do so. “If a person dies without nominating anyone, the legal heirs may have to run from pillar to post and produce all kinds of certificates like succession certificate etc. to claim the assets left behind by the deceased.”3
Another thing is that any public servant and others (who are not public servant but get the salary from the government treasury) get lump sum money as pension on his/her termination from job by retirement. There is also a problem if no nomination is made, to whom the authority will hand over the pension money after the death of the very person. If there exists any nominee, the Bank, Investment Company or the public authority can easily pay the nominee without incurring any liability. When there is an application made by the nominee to the very institutions, where the person employed or invested money, getting out the picture as soon as possible the payment is made to the nominee and thereafter the matter has to be settled between the nominee and the legal heirs of the deceased.4In Bangladesh there are several Acts which provide that how a nominee can get property. If there is no nominee, how the legal heir can get the property is also described in those Acts.
There is no doubt that nomination of a person as representative of an investor or depositor or public servant, who receives the money and distributes it among the legal heirs of the deceased, is good for savings the legal heirs from the harassments. But problem is here, whether nominee will take all the property as absolute owner or distribute it among the legal heirs of the deceased. It is a well known view in India and Malaysia that nominee is like a trustee who only executes the property for which she/he will not take any advantage.5 But in Bangladesh it is a general idea that who is made nominee, he/she is gifted with the property and he/she will take all the nominated property. Our statutory laws provide that who is nominated by a depositor of the deposit or any part thereof, be entitled, to the exclusion of all other persons, to receive the deposit or part which the nomination relates.6 It may be interpreted thus the person nominated will take the whole of the property as gift or the person will only receive the property from that very institution as trustee and distribute it to the legal heirs of the deceased. In Sarbati Devi v. Usha Devi7, the Apex court of India held that a nominee cannot receive the policy amount to the exclusion of other legal heirs primarily because: 1) Nothing in Section 39 (of the Insurance Act, 1938) indicates that it will operate as a third kind of succession and 2) The section provides that “the money shall be payable to the nominee” and not that it shall belong to the nominee. As the insurance law of India and Bangladesh is same, if India can take that decision, easily we can interpret it as mentioned above. It is a matter of sorrow that though the law is same but practice is totally different from each other.
It can be said that constitutionally Bangladesh is a Muslim country because its state religion is Islam8 and majority people are Muslim. The Muslims follow the Shariah law in their family matters like inheritance. The Shariah Act 1937 provides that a provision that no laws will be contradictory with any personal laws. But it is not followed. Nomination system opens a new system in distributing the deceased person’s property which is contradictory to the Muslim law of inheritance and violates the Shariah Act 1937. From 1873 the Muslim law of inheritance is violated through nomination system, to prevent Muslim shariah law, the Shariah Act 1937 is passed but this Act has been capable to do so. In 1938 a new law was enacted regarding nomination containing the provision contradictory to Muslim law of succession. There are several laws containing the nomination system which is contradictory to Islam. When Pakistan gained independence they adopted those very laws without any change. In 1971 Bangladesh also adopted those laws without making any change. If nominee enjoys the whole nominated property as absolute beneficiary, what is the status of the legal heirs? Regularly the legal heirs of the deceased are excluded by the nominee in Bangladesh. Many times it is noticed that the nominated person is not the member of the family and also noticed that he/she/(they) is not the legal heirs of the deceased, even after that he/she gets the property which is not supported by the Shariah law. According to the laws of the state the institutions run their activities. Who is nominated, the institutions pay him/her/them the assets. If no nomination exists, according to the succession certificate given by the court of law, the institutions pay the property to the successors.
The neighboring country of Bangladesh has developed the nomination system through several case laws and rules of the high court and judgment of the Supreme Court by which they solve the problem if any case arises between the nominee and legal heirs. In Malaysia the government has passed separate Acts regarding the nomination for the Muslim and other than the Muslims. But Bangladesh has no progress in the problem and every day Bangladeshis disobey the Muslim Shariah law. It has no solution.
Bangladesh and other countries who follow the Muslim law, if it is asked the scholar or policyholder why they do not change this law. Some say that when someone is nominated then it is supposed that he/she is gifted by the depositor or investor. Now question is how much it is correct. Is gift valid under condition except Hiba-bil-Awaz? Gift is transfer of property in life time but nomination transfers the property after death of the depositor. In gift there will be no condition. But in nomination system condition is clear. Such if the depositor or investor or policyholder dies only then the nominee will receive the property. In gift the transfer of the property is occurred immediately. But in the nomination, it is not possible. So it is not a gift. Again it can be compared with bequest but there is a question that in Sunni law without permission of the heirs no bequest can be made in the favor of the heir. There is also a question that without permission of the heir, no amount more than one-third can be made a bequest. If the deposited amount is more than one-third then there may be arisen the problem. So nomination can not be compared with bequest. Therefore it is a problem and contradiction between the existing statutory law and Muslim Shariah law on the point of inheritance.
1.2 Objectives of the Study
The study has the following objectives-
- To clarify the concept of nomination system in Bangladesh and other countries both in the statutory laws and Muslim law of succession with reference to the contemporary world.
- To clarify the concept of legal heirs under Muslim law and statutory law. And compare the legal heirs of Muslim law with other personal laws.
- To compare the legal heir with nominee and identify the superiority of the legal heir and the nominee under both the statutory law and Muslim law of succession.
- To show the impact of the nomination system on the society and what are the good sides and bad sides of nomination system.
- To suggest the policy maker how the nomination can be the useful to the society and what activities can be taken by the Government to make the people conscious about this system.
From this study it will be tried to bring out the full sketch of nomination and the inheritance right of the legal heirs over the deceased’s nominated property.
1.3 Review of Literature
The concept of nominee is the juristic thought process while the right and obligation of heirs ranks a distinct position in their discourse. Many studies have already been done upon this issue abroad. In India and Malaysia regarding this issue the scholars, academically and non-academically, have completed many works and been trying from a long since to reach in point of view where the Shariah law will prevail. In Bangladesh some statutory provisions exist which violate the personal law and those do not also provide any clear idea about the nominee and legal heirs. In those provisions even the definition of the nominee is not provided. There is no single step taken by the Bangladeshi scholars. No survey was also made for this purpose.
In Bangladesh there are several Acts which contain the provision of nominee. These are hard materials for this study and other materials presented here are soft Viz. internet based.
A recent study made by Nehal Pandey (2010) in India is “Nominee versus legal heir”.9 In 2010 on this issue Bombay High Court of India provided a verdict in “Harsha Nitin Kokate V. The Saraswat Co-operative Bank”.10 There are also many case laws in India regarding this issue. Like as Sarabati Devi v. Usha Devi ; Kesari Devi v. Dharma Devi; Karuppa Gounder v. Palaniammal; Fauja Singh v. Kuldip Shingh; Uma Sehgal v. Dwarkadas Sehgal; Sarojini Amma v. Neelakanta Pillai; D. Mohanvelu Mudaliar v. Indian Insurance and Banking Corporation Ltd. Salem; Atmaram Mohanlal Panchal v. Gunavantiben; Ramballav Dhan- dania v. Gangadhar Nathm All; Ramdas Shivram Sattur v. Rameshchandra @ Ram Chandra Popatla Shah and Or; Arnab Kumar Sarkar v. Smt. Reba Mukherjee and Ors.; Divya Vasant Desai v. State Bank of India etc.11 There are also several articles which deal with nominee and legal heirs but not specifically on this issue. These are “Effect of ‘Nomination in life Policy’ Insurance Vs. Takaful” by Prof. Dr. Mohd. Ma’sum Billah;12 “Nomination of shares – A key to save kins from problems”;13 “Common shortcemings Committed in inheritance meeras” by Mufti Nazar Kaleem Qudsee All-Qasmi.14 Prachi V. Manekar “Nomination and Inheritance”. 15
1.4 Justification of the Study
In Bangladesh it is the first study on this topic. From the British period to present Bangladesh the Muslim law of succession is neglected by introducing the nomination system because a deceased person’s property is supposed to be distributed among the legal heirs but by the nomination system it is violated. So it is a very important legal issue for discussion. And it is very interesting that how the legal heirs are deprived which till now has not been discussed. It is very much related with the daily life of the people. This study is very timely and interesting and it is totally a new study in the field of the legal research of Bangladesh. For this reason this research is well justified.
1.5 Scope and Limitation of the Study
The study has included the status of the nominee and legal heirs under both statutory laws of Bangladesh and Muslim law of succession. The study will consider the position of nominee and legal heir with regard to bank, insurance, cooperative society, University, Provident fund only. It will not cover other areas such as provident fund, pension scheme or portal certificate.
1.6 Methodology of the Study
This study deals specially with legal issue. In this study a combination of various legal research methodologies is adopted. Analytical, Inter-disciplinary, Socio-legal and Comparative Approaches are applied. This study has been written with the help of both primary and secondary sources. Primary sources are interview, survey, case laws and statutes. Secondary sources are books, journals, articles, newspapers, internet and so on.
1.7 Usefulness of the Study
This study will help the policy makers to remove the conflicts between Muslim personal law and statutory laws of Bangladesh. The researchers, planners and the general readers will come to know about the status of the nominee and legal heirs in both the statutory laws and personal law of Muslim. The policy makers can take the recommendations for solving the problem regarding this issue.
In Muslim Shariah law a nominee should be a mere executor and is under an obligation to receive the benefits over the nominated assets on behalf of the legal heirs of the deceased and distribute the benefits among the legal heirs of the deceased in accordance with the principles of Muslim law of succession. But in our country reality is that nominee absolutely enjoys all the nominated assets as owner. In this study it has been tried to compare between these two vital issues and also tried to give a solution with suggestions. This study will introduce a new area of research for the next researcher and others who are interested on this issue. This study will include a new dimension for the appointment of the nominee considering the position of legal heirs.
To accept the challenges, this study will make a sensible attempt to streamline the Muslim Shariah law and Statutory Laws of Bangladesh regarding the nominee and legal heir. It has been expected that through this study it will be possible to determine a proper way of nomination by which the protection of legal heirs of the deceased will as well be protected.