Report No. 110
V. Form and Contents
48.28. Section 374-Contents of certificate.-
Section 374 provides that when the District Judge grants a certificate, he shall therein specify the debts and securities set forth in the application for the certificate, and may thereby empower the person to whom the certificate is granted-
(a) to receive interest or dividends on, or
(b) to negotiate or transfer, or
(c) both to receive interest or dividends on, and to negotiate or transfer, the securities or any of them.
This section also needs no change.
48.29. Section 375-Requisition of security from grantee of certificate.- Section 375 reads:
"375. (1) The District Judge shall in any case in which he proposes to proceed under sub-section (3) or sub-section (4) of section 373, and may, in any other case, require, as a condition precedent to the granting of a certificate, that the person to whom he proposes to make the grant shall give to the Judge a bond with one or more surety or sureties, or other sufficient security, for rendering an account of debts and securities received by him and for indemnity of persons who may be entitled to the whole or any part of those debts and securities.
(2) The Judge may, on application made by petition and on cause shown to his satisfaction, and upon such terms as to security, or providing that tire money received be paid into Court, or otherwise, as he thinks fit, assign the bond or other security to some proper person, and that person shall thereupon be entitled to sue thereon in his own name as if it had been originally given to him instead of to the Judge of the court, and to recover, as trustee for all persons interested, such amount as may be recoverable thereunder."
The section needs no change, having raised no problems.
48.30. Section 376-Extension of certificate.- Section 376 reads-
"376. (1) A District Judge may, on the application of the holder of a certificate under this Part, extend the certificate to any debt or security not originally specified therein, and every such extension shall have the same effect as if the debt or security to which the certificate is extended had been originally specified therein.
(2) Upon the extension of a certificate, powers with respect to the receiving of interest or dividends on, or the negotiation or transfer of, any security to which the certificate has been extended may be conferred, and a bond or further bond or other security for the purpose mentioned in section 375 may be required, in the same manner as upon the original of a certificate."
This section also needs no change.
48.31. Section 377.-
Section 377 provides that certificates shall be granted and extensions of certificates shall be made, as nearly as circumstances admit, in the forms set forth in Schedule VIII.
The section needs no change.
48.32. Section 378-Amendment of certificate in respect of powers as to securities.-
This takes us to section 378, which provides that where a District Judge has not conferred, on the holder of a certificate, any power with respect to a security specified in the certificate, or has only empowered on him to receive interest or dividends on, or to negotiate or transfer, the security, the Judge may, on application made by petition and on cause shown to his satisfaction, amend the certificate by conferring any of the powers mentioned in section 374 or by substituting any one for any other of those powers.
The section needs no change, having created no serious problems.
48.33. Section 379-Mode of Collecting court-fees on certificates.-
Section 379 consists of three sub-sections. Sub-section (1) provides that every application for a certificate or for the extension of a certificate shall be accompanied by a deposit of a sum equal to the fee payable under the Court-fees Act, 1870, in respect of the certificate of extension applied for.
Sub-section (2) lays down that if the application is allowed, the sum deposited by the applicant shall be expended, under the direction of the Judge, in the purchase of the stamp to be used for denoting the fee payable as aforesaid.
Finally, sub section (3) provides that any sum received under sub section (1) and not expended under sub-section (2) shall be refunded to the person who deposited it.
48.34. Controversy as to stage of refund.-
The question has arisen as to the stage at which refund is permissible under section 379(3). It is the stage before passing of the order for grant of a certificate, could it be any later stage? The nature of the controversy will be apparent on a consideration of selected cases on the section.
48.35. The case law.-
In a Madras case1, the District Judge. Tinnevelly, referred the following question to the High Court:-
"Up to what stage in the proceeding for succession certificate is an applicant entitled to obtain a refund?"
The High Court held that, if the application is allowed, i.e., if the order for the grant of a certificate has been made, the sum in deposit becomes at once legally appropriated, as duty, to the extent of the debt covered by the order, and cannot be refunded. In other cases, we think that refund can be made." This case was decided under section 14 of the Succession Certificate Act, 1889, to which section 379 of the present Act corresponds.
1. Sankara Ayyar v. Nainar Mooppanar, 1898 ILR 21 Mad 241.
48.36. A Nagpur case1, however, seems to have taken a different view. The applicant applied for a succession certificate and deposited the required fee. The Court allowed the application for succession certificate subject to the applicant's furnishing security, but the applicant failed to furnish it. Thereafter, the applicant applied for a refund of the sum deposited by him. The lower appellate court, relying on the Madras case mentioned above2, rejected the application.
The High Court, in revision, held that section 379(3) lays down two conditions-(i) the sum should be received under sub-section (1), and (ii) it should not be expended under sub-section (2). If these two conditions are satisfied, the sum should be refunded. Since in this case both the conditions were satisfied, the High Court ordered a refund.
The same view has been subsequently taken in a Lahore case3.
1. Fatambi (in re:), AIR 1940 Nag 65.
2. Sankara Ayyar v. Nainar Mooppanar, 1898 ILR 21 Mad 241.
3. Prakash Wati v. Province of Punjab, AIR 1941 Lah 399.
48.37. Comment on case law.-
It is, with respect, suggested that on the language of sub-section (2), refund is not permissible once the application is allowed. Under that sub-section the money can be spent only for purchase of the stamp. It thus impliedly bars refund, once the application is allowed.
The opening words of section 379(2) are "if the application is allowed", and not "when the certificate is granted". Therefore, once a court has allowed an application for succession certificate and has passed an order to that effect, whether with or without a condition, the sum can be appropriated only towards the payment of the stamp. If the applicant has failed to fulfil a condition, the State cannot be deprived of its legitimate dues, more particularly when the court has heard the parties, spent its time and exercised its mind on the problems.
48.38. Recommendation to insert-section (4) in section 379 and to amend sub-section 379(3).-
We recommend that in order to make the position clear, a new sub section should be inserted in section 379, as follows:-
"(4) If the application is allowed with or without condition, the sum shall not be refunded, even if, by reason of breach of the condition, the certificate cannot he granted."
We also recommend that the provisions of sub-section (3) should be made subject to new sub-section (4) which is proposed to be inserted as above.
Section 379(3) should, therefore, begin as follows:-
"(3 ) Subject to the provisions of sub-section (4) any sum received."