A proceeding for grant of Succession Certificate which in any case is summary in nature, the persons holding debts and securities are not required to be impleaded. DRAFT ARGUMENTS

 BEFORE THE HON'BLE PRL. SENIOR CIVIL JUDGE, ______________

SOP No.     2025

Between

________________________________________________________...PETITIONER/CLAIMANT

VERSUS

STATE BANK OF INDIA

...RESPONDENT

WRITTEN ARGUMENTS ON BEHALF OF THE PETITIONER/CLAIMANT

MAY IT PLEASE YOUR LORDSHIP,

The present written arguments are submitted on behalf of the Petitioner/Claimant in response to the preliminary objection raised by the Respondent, State Bank of India (hereinafter referred to as "SBI"), contending that the Succession Petition is not maintainable unless SBI Mutual Funds is impleaded as a party.

It is humbly submitted that the objection raised by the Respondent is misconceived, legally untenable, and contrary to the settled principles governing the grant of Succession Certificates under the Indian Succession Act, 1925.

I. THE OBJECT AND SCOPE OF A SUCCESSION CERTIFICATE

1. Statutory Framework: The grant of a Succession Certificate is governed by Part X (Sections 370 to 390) of the Indian Succession Act, 1925 (hereinafter referred to as "the Act").
2. Purpose: A Succession Certificate is a legal document issued by a competent court to establish the authenticity of the rightful successor(s) to the movable assets (debts and securities) of a deceased person who died intestate (without leaving a Will). Its primary purpose is to afford protection to persons paying debts or delivering securities to the holder of the certificate, ensuring a valid discharge of their liability. It facilitates the collection of debts and securities and enables the certificate holder to negotiate or transfer them.
• Reference: Section 381 of the Indian Succession Act, 1925, which states: "Payments bona fide made in respect of debts or securities to the holder of a certificate granted under this Part shall, in the absence of fraud or collusion, be a full discharge to the person making the payment, and all payments so made shall be deemed to have been made to the person rightfully entitled thereto, notwithstanding any defect whatsoever in the title of the person to whom the certificate was granted."
3. No Determination of Title: It is crucial to understand that a Succession Certificate does not determine the legal title to the property. It merely provides an indemnity to the debtor or financial institution against claims from other potential heirs. It does not confer a general power of administration over the estate of the deceased. The certificate holder is merely authorized to collect the debts and securities.
• Case Law: In Smt. Madhvi Amma Bhawani Amma and Ors. vs. Kunjikutty Pillai Meenakshi Pillai and Ors., the Hon'ble Supreme Court of India held that "the grant of the certificate gives to the grantee a title to recover the debt due to the deceased, and payment to the grantee is a good discharge of the debt." This emphasizes the protective nature of the certificate for the debtor, not a declaration of absolute ownership.
• Case Law: In Banarsi Dass v. Teeku Dutta (Smt.) and Anr., AIR 2005 SC 2198, the Hon'ble Supreme Court reiterated that a Succession Certificate "does not establish a title of the grantee as the heir of the deceased, but only furnishes them with authority to collect their debts and allows the debtors to make payments to them without incurring any risk."

II. NECESSARY PARTIES IN A SUCCESSION PETITION

1. Statutory Requirement: Section 372 of the Indian Succession Act, 1925, outlines the particulars required in an application for a Succession Certificate. It specifies details such as the time of death, ordinary residence of the deceased, family or near relatives, the right in which the petitioner claims, and the debts and securities for which the certificate is applied.
2. Absence of Mandate to Implead Debtors/Institutions: Significantly, Section 372 of the Act does not mandate the impleadment of the debtors or the institutions holding the securities (such as banks or mutual funds) as necessary parties to the petition. The focus of the petition is on establishing the right of the applicant to collect the debts and securities of the deceased, not on adjudicating a dispute with the debtor.
3. Role of the Financial Institution: The role of SBI, or for that matter, SBI Mutual Funds, is merely that of a custodian of the funds/securities. They are the disbursing agency, not a claimant to the estate. Their interest is limited to ensuring that they pay the legitimate heir and are protected from future claims, which is precisely what a Succession Certificate provides.
4. No Adversarial Claim: There is no adversarial claim being made against SBI Mutual Funds in the present petition. The petition is not seeking a decree for payment against them, but rather an authorization for the Petitioner to collect the assets. The grant of a Succession Certificate does not prejudice the rights of the mutual fund or the bank; rather, it protects them.
5. Distinction from Civil Suits: A Succession Petition is a summary proceeding, distinct from a regular civil suit where all parties whose presence is necessary for a complete and effective adjudication of the dispute must be impleaded. The scope of a Succession Petition is limited to determining who is entitled to collect the debts and securities.

The Petitioner herein is relying on the Judgment in the case of Sushila Devi Vs. State & Ors. in CM(M) No.985/2017, decided on 12.09.2017 by the Delhi High Court which explicitly held that "Before granting such Succession Certificate, in a proceeding for grant of Succession Certificate which in any case is summary in nature, the persons holding debts and securities are not required to be impleaded."

Further the Petitioner also relying on the Judgment of the Rajasthan High Court, in Aruna Derashri vs. Learned District Judge, S.B. Civil Writ Petition No. 4796/2019, decided on 16.04.2019, which also explicitly held that proceedings under Section 372 of the Indian Succession Act, 1925, can proceed without impleading the State Bank of India and other entities holding securities as party

III. MUTUAL FUNDS AS "SECURITIES" UNDER THE ACT

1. Definition of "Security": Section 370(2) of the Indian Succession Act, 1925, defines "security" for the purposes of Part X, including "any stock or debenture of, or share in, a company or other incorporated institution." Mutual fund units clearly fall within the ambit of "securities" as they represent an interest in an incorporated institution (the Asset Management Company or the Trust managing the mutual fund).
2. No Separate Entity for Mutual Fund: SBI Mutual Funds is essentially a part of the broader financial services offered by SBI or an entity closely associated with it. Even if it were a separate legal entity (an Asset Management Company), its function remains that of a holder of securities, not a claimant to the estate. The principles regarding the non-necessity of impleading the debtor/custodian remain the same.

In light of the foregoing submissions, it is humbly prayed that this Hon'ble Court may be pleased to:

1. Dismiss the preliminary objection raised by the Respondent, SBI, regarding the non-impleadment of SBI Mutual Funds.
2. Hold that SBI Mutual Funds is not a necessary party to the present Succession Petition.
3. Proceed with the hearing and grant the Succession Certificate as prayed for by the Petitioner/Claimant.

And for this act of kindness, the Petitioner/Claimant shall ever pray.

DATE:     -07-2025

PLACE:                     Counsel for the Petitioner.