Authority: High Court at Calcutta, Civil Appellate Jurisdiction (Original Side)

Order Date: 03 July 2026

Case Overview

  • Parties: Plaintiff (Jyotirmoy Pal Chaudhuri) vs. Defendant 1 Citi Bank N.A. and Defendant 2 Sonali Majumder; cross‑objection filed by Sonali Majumder.
  • Origin: Suit CS 191 of 2012 filed by plaintiff seeking recovery of ₹25,29,156.85 (plus interest) from the savings account No. 5308184333 of the deceased Smt. Shyamali Pal Chaudhuri.
  • Background: Plaintiff obtained a Succession Certificate from the District Delegate, Alipore (order dated 21 December 2009). Despite informing Citi Bank on 13 March 2009 of the pending succession proceeding, the bank released the amount to the nominee (Sonali Majumder) in October 2009.
  • Appeals: APD 2 of 2025 (Citi Bank vs. plaintiff), APD 8 of 2024 (Sonali Majumder vs. plaintiff), and cross‑objection OCO 1 of 2025 were consolidated.
  • Issues framed by the Trial Judge (10 issues) covered entitlement to the account proceeds, applicability of the Hindu Succession Act 1956, liability of the bank under Section 45ZA of the Banking Regulation Act 1949, and compliance with RBI Master Circular dated 1 July 2009.
  • Arguments:
  • Plaintiff argued that the amount formed part of the estate of the deceased and, under Section 15(1)(b) of the Hindu Succession Act, belonged to the legal heirs; the bank should have awaited the Succession Certificate outcome.
  • Defendant 2 claimed the sum was sale proceeds of property inherited from her father, invoking Section 15(2)(a) of the Hindu Succession Act.
  • Citi Bank contended it was statutorily obliged to honour the nominee’s claim under Section 45ZA and the Master Circular, irrespective of the succession dispute.
  • Court’s Observations:
  • The sale‑proceeds argument of Defendant 2 was unsupported; no documents proved inheritance from the father or sale of such property.
  • Once inherited property is sold and proceeds become cash, it becomes the absolute property of the female Hindu (Section 14), thus devolving under Section 15(1)(b), not the special rule of Section 15(2)(a).
  • The Succession Certificate issued in favour of the plaintiff remained subsisting and unchallenged.
  • Citi Bank released the amount without exercising the “due care and caution” mandated by Section 45ZA and Clause 20.1.1(a) of the RBI Master Circular; the claim form submitted by Defendant 2 was incomplete and not verified.
  • The bank acted in connivance with Defendant 2, knowing the succession proceeding was pending, thereby violating statutory and regulatory provisions.
  • Section 45ZA and the Master Circular regulate the bank‑nominee relationship but do not supplant the law of succession; the bank’s discharge of liability is conditional on proper verification, which was lacking.

Final Outcome

  • Defendant 2 (Sonali Majumder) is directed to pay the plaintiff ₹25,29,156.85 with interest at 10% per annum from November 2009 until full realisation.
  • Citi Bank N.A. is held jointly and severally liable with Defendant 2 to pay the same principal amount plus interest at 10% per annum calculated from November 2010 until full realisation.
  • An initial cost of ₹1,00,000 was awarded against Citi Bank, but the Single Judge held that, given the bank’s joint liability, the cost need not be paid.
  • All appeals (APD 2/2025, APD 8/2024) and the cross‑objection (OCO 1/2025) are dismissed; the modified decree stands.
  • The parties may obtain a certified copy of the judgment on priority upon compliance with formalities.

Topics: Banking Regulation, Succession Law