Review: Supreme Court Rules that Marriage Nullifies earlier GPF Nomination; Wife and Mother entitled to equal share
In this edition of Court Judgements, we look at the Supreme Court’s judgements on General Provident Fund Nomination, and disqualification of candidate without title, Jammu and Kashmir and Ladakh High Court’s order on insurance policies, Bombay High Court’s judgement on Sexual Assault in POCSO Act, and Kerala High Court’s judgement on exempted income from Public Religious/Charitable Trusts under Income Tax Act.
Supreme Court: Marriage nullifies earlier GPF nomination; Wife and Mother entitled to equal share
The Supreme Court, in Mrs. Bolla Malathi vs. B. Suguna & Ors., held that the usual mode of succession is not to be impacted by nomination, and the nomination prior to marriage cannot be held to be valid.
The case concerns a dispute between the wife and the mother of a deceased Central Government employee, Bolla Mohan, who served in the Defence Accounts Department. At the time of joining service on 29 February 2000, he validly nominated his mother (Respondent No.1) as the beneficiary of General Provident Fund (GPF), Central Government Employees Group Insurance Scheme (CGEIS), and Death-cum-Retirement Gratuity (DCRG).
After marrying the appellant wife on 20 June 2003, he changed his nominations only for CGEIS and DCRG, favouring his wife. He did not update the GPF nomination, where his mother continued to remain the nominee on record. Upon his death on 4 July 2021, the wife received death benefits amounting to ₹60 lakhs. However, when she sought release of the GPF corpus, the authorities denied the request, citing the mother as the nominee.
The appellant argued that marriage automatically invalidated the previous nomination made in favour of the mother under the GPF (Central Service) Rules, 1960, and since she became a family member after marriage, she was entitled to an equal share. The respondent argued that the earlier nomination continued to be valid as the employee did not expressly cancel or modify it after his marriage.
Upon hearing both parties, the Bench held that the original nomination made in favour of the mother lost its validity once the employee acquired a family by marriage, thereby triggering the application of Rule 33 of the GPF (Central Service) Rules, 1960. The Court clarified that the scheme prioritises family members over beneficiaries named before marriage.
The Bench further reiterated the established legal principle that a nomination does not confer an overriding entitlement to the fund, relying on the precedent laid down in Sarbati Devi vs. Usha Devi (1984). The Court emphasised that the existence of a nomination cannot give a nominee a superior claim when statutory rules direct otherwise.
Consequently, the Supreme Court set aside the Bombay High Court’s judgment and restored the CAT’s decision, holding that the GPF amount must be shared equally between the deceased employee’s wife and mother.
Supreme Court: Degree title cannot override curriculum when read in a reasonable and purposive manner.
The Supreme Court in Laxmikant Sharma vs. State of Madhya Pradesh held that insisting only on the title of a degree, without considering the actual curriculum, wrongly elevates form over substance.
The case concerned the termination of a Monitoring and Evaluation Consultant appointed in 2013 under P.H.E.D., Bhopal. Although the job advertisement required a “postgraduate degree in Statistics”, the appellant, who held an M.Com., with principal subjects in Business Statistics and Indian Economic Statistics, was initially verified as eligible and served for a year. Later, an inquiry committee declared him unqualified, leading to repeated terminations, despite university and departmental certifications confirming that his coursework met the requirements.
The appellant argued that no government university in Madhya Pradesh offers a postgraduate degree titled exclusively in “Statistics”, making the State’s interpretation unreasonable. He also alleged a violation of natural justice as the inquiry report was issued without giving him a hearing, and asserted arbitrariness since similarly qualified employees remained in service. The State maintained that only a degree explicitly titled “Statistics” would suffice and that contractual employees have no right to continuation.
The Court held that when a contractual employee is removed solely for alleged lack of qualification, courts may examine whether such ineligibility is factually correct. It further found that the termination was arbitrary, noting the inquiry report was factually incorrect, violated natural justice, and ignored expert opinion certifying eligibility. It therefore set aside the High Court’s decision and ordered reinstatement with consequential benefits, restricting the ruling to the case’s specific facts.
Jammu and Kashmir and Ladakh High Court: Insurer cannot rely upon a concealed exclusion clause to defeat the consumer’s legitimate expectations
In National Insurance Company Limited vs. Mala Bashir & Others, the Jammu and Kashmir and Ladakh High Court held that while the insured must disclose material facts relating to the risk, the insurer bears an equally onerous duty to clearly notify and explain any exclusion clause. The insurer cannot rely upon a concealed exclusion clause to defeat the consumer’s legitimate expectations.
The appellants (insurer) challenged the order of the Jammu & Kashmir Consumer Redressal Commission directing payment of Rs. 4,76,347 towards flood damage to the respondent’s insured house. The deceased insured had continuously renewed the Standard Fire and Special Perils Policy from 2009 to 2014. During the September 2014 floods, the property suffered substantial damage. The insurer’s own surveyor assessed the loss at Rs. 6,08,462. However, the insurer repudiated the claim, asserting that the policy excluded STFI (Storm, Tempest, Flood and Inundation) risks.
It was contended that since the policy was only a renewal of earlier policies, prior exclusions automatically continued. The insured never objected to the STFI exclusion, and no extra premium was paid as required under Section 64VB of the Insurance Act. The insurer argued that enforcing liability would amount to rewriting the contract, relying on Shree Ambica Medical Stores and Others vs. Surat Peoples Cooperative Bank Limited and Others, which asserted that express exclusions are binding.
The respondents argued that the policy described itself as a “Standard Fire and Special Perils Policy,” which ordinarily covers natural calamities. Exclusions could not be presumed without explicit disclosure. Citing Manmohan Nanda vs. United India Insurance Co. Ltdand Texco Marketing Pvt. Ltd. vs. TATA AIG General Insurance Company Ltd, it was submitted that insurers must inform consumers of exclusions under the principle of uberrima fides and IRDA Regulations. The insurer failed to produce the proposal form or prove that the exclusion was explained.
The Court held that insurance contracts are standard-form agreements requiring clear disclosure of exclusions. Mere renewal cannot create presumed knowledge of exclusion, especially when the policy suggests comprehensive coverage. Since the insurer failed to prove that the STFI exclusion was communicated, the repudiation was invalid. Upholding the Commission’s 25% deduction for contributory negligence, the appeal was dismissed and the award confirmed.
Bombay High Court: Minor’s hand held with monetary lure amounts to sexual assault under POCSO
In Sheikh Rafique Sk. Gulab vs. State of Maharashtra, the Bombay High Court held that monetary inducement with physical contact of a minor constitutes Sexual Assault
The Bombay High Court has held that when a minor girl’s hand is forcibly held, and she is simultaneously offered money to perform a sexual act, the conduct amounts to sexual assault under Section 7 of the POCSO Act 2012, attracting punishment under Section 8.
The appeal challenged a 2019 decision of the Special POCSO Court at Yavatmal, which sentenced the appellant to three years’ imprisonment. The prosecution alleged that on two consecutive days in October 2015, the appellant, who lived in the same locality, approached a 13-year-old girl when she was alone at home.
On the first visit, he asked for water and offered ₹50, implying a sexual request. The next day, he repeated the offer and held the child’s hand, attempting to persuade her again. The girl resisted and subsequently narrated the incident to her family, resulting in an FIR under Sections 354, 354-A IPC and the POCSO Act.
The Counsel for the accused argued that merely holding someone’s hand does not meet the requirements of Section 7 and disputed the delay in filing the FIR and alleged omissions in the victim’s initial account.
Upon hearing both parties, the Court held that the intent is evident from the accused’s proposition, combined with the physical act. It held that the argument that mere holding of hands without further physical assault cannot constitute an offence is without merit, as the POCSO Act protects children from sexual assault in all its forms, including attempted or inducement-based acts
Further, the victim’s testimony was found to be straightforward and reliable, and the Court reiterated that, under POCSO, inducement or attempted sexual exploitation is also punishable. The Court affirmed that Section 8 carries a mandatory minimum sentence, rendering probation inappropriate in offences involving children.
Kerala High Court: Income from Public Religious/Charitable Trusts/endowments not eligible for exemption U/S 10(23BBA) Income Tax Act
In Madhur Sree Madanantheswara Vinayaka Temple vs. Income Tax Officer, the Kerala High Court held that the exemption contemplated under section 10 (23BBA) is only for the body or authority created by the statute, for governing the public religious institutions, but the said provision is not intended to provide exemptions to the public religious institutions governed by such body or authority.
Six writ petitions were filed by various temples under the Malabar Devaswom Board challenging income tax proceedings and seeking exemption under Section 10(23BBA) of the Income Tax Act, 1961. The lead petition by Madhur Sree Madanantheswara Vinayaka Temple challenged an assessment order dated 27 March 2023, for the assessment year 2018-19, imposing tax liability on temple income. All petitioning temples operated through administrative bodies constituted under schemes framed by the Deputy Commissioner pursuant to Section 58 of the Madras Hindu Religious and Charitable Endowments Act, 1951. The temples contended they were entitled to a complete tax exemption as statutory bodies.
The temples argued that their administrative bodies, constituted under the HR&CE Act (a state enactment), qualify as “bodies or authorities” entitled to complete tax exemption under Section 10(23BBA). They relied on precedents and statutory provisions establishing their bodies as creatures of statute.
The Income Tax Department contended that Section 10(23BBA) exempts only the income of administrative bodies themselves, not the temples they govern. They emphasised the proviso explicitly stating that trust and endowment income remains taxable, and that temples should seek exemption under Sections 11-12A instead.
Upon hearing the parties, the bench analysed Section 10(23BBA), identifying four essential conditions for exemption. The court distinguished between the income of administrative bodies (exempted) and the income of religious institutions they administer (not exempted). The judgment also noted that temple properties belong to the deity, with administrative bodies merely managing them.
The High Court disposed of all petitions by declaring that the Section 10(23BBA) exemption applies exclusively to bodies and authorities constituted under statute, such as the Malabar Devaswom Board itself, and not to individual temples, trusts, or endowments under their administration. However, recognising factual disputes regarding income sources, the court permitted petitioners to pursue statutory remedies before the appropriate authorities.