Succession Certificate | Family Law - CLAT PG PDF Download

Succession Certificate: An Overview

A succession certificate is a legal document issued by a court to the heirs of a deceased person, authorizing them to inherit the deceased's debts, securities, and other assets. It serves to establish the authenticity of the heirs and provides them with the authority to collect debts and manage securities owed to the deceased.

Definition of Succession

• Succession refers to the legal process and procedures through which beneficiaries become entitled to property as per a testator's will or in cases of intestacy (when someone dies without a will).

What is a Succession Certificate?

• A succession certificate is a legal document issued by a competent court under the Indian Succession Act, 1925.
• It is granted to the legal heirs of a deceased person to establish their authenticity and give them the authority to inherit debts, securities, and other assets of the deceased.

Purpose of a Succession Certificate

• The main purpose of a succession certificate is to facilitate the collection of debts and to provide protection to parties paying debts to the representatives of the deceased.
• It is used in situations where banks, financial institutions, or private entities release funds to a nominee, and the nominee refuses to cooperate in distributing the assets to the legal beneficiaries.

Key Features of a Succession Certificate

• A succession certificate does not determine the title of the deceased or the holder regarding the debts and securities covered by it.
• It provides protection to parties making payments based on the certificate.
• The grant of a succession certificate is conclusive against the debtor.
• A succession certificate is valid throughout India as per Section 380 of the Indian Succession Act, 1925.

Legal Standing of a Succession Certificate

• According to Sections 381 and 386 of the Indian Succession Act, a succession certificate is conclusive against the person or persons liable to whom full indemnity is afforded for payments made.
• While the succession certificate is conclusive of the representative title of the holder against the debtors, a suit for declaration cannot be filed to challenge the legal representative status of the holder.
• A succession certificate can also prove the genuineness of a claimant in cases of substantial inheritance amounts.
• In some states, a probate (authenticated copy of the will) and a succession certificate are mandatory for transferring the title of immovable property.

Who Can Apply for a Succession Certificate?

A succession certificate is a legal document that grants the holder the authority to manage and distribute the assets of a deceased person. Here are the individuals who are eligible to apply for a succession certificate:

1. Sound Mind Person

• The applicant must be of sound mind, meaning they are mentally capable of making decisions and understanding the implications of their actions.

2. Major Person

• The applicant must be a major, which typically means they are at least 18 years old and legally considered an adult.

3. Person Having an Interest in the Estate of Deceased

• The applicant must have a legitimate interest in the estate of the deceased. This could include beneficiaries, heirs, or individuals with a legal claim to the deceased's assets.

4. Secretary of State

• In certain cases, the Secretary of State may have the authority to apply for a succession certificate, particularly in matters involving state interests or public welfare.

5. Person Having Beneficial Interest in the Debt or Security of Deceased Person

• Individuals who have a beneficial interest in the debts or securities of the deceased, such as creditors or beneficiaries of specific financial instruments, may also be eligible to apply for a succession certificate.

Application for Succession Certificate

When applying for a succession certificate, it is important to provide specific details and follow the correct procedures. Here are the key points to consider:

Who Can Apply?

A petition for a succession certificate can be filed by an individual who has a legitimate claim to the debts or securities of the deceased. This could be a family member or someone with a legal interest in the deceased's assets.

Where to Apply?

The application must be made to the District Judge in the relevant jurisdiction.

How to Apply?

• The application should be in the form of a petition signed and verified by the applicant, following the guidelines set out in the Civil Procedure Code (C.P.C) for the signing and verification of a plaint.
• It is crucial to provide all necessary details accurately to avoid any delays in the process.

Essential Particulars for the Application

When applying for a succession certificate, certain particulars must be included in the application:

• Date of Death: The exact date when the deceased passed away.
• Place of Residence: The address where the deceased lived at the time of death.
• Family Details: Information about the deceased's family members and their respective places of residence.
• Petitioner's Right: The applicant must demonstrate some title or interest in the debt or security for which the certificate is being sought.
• Absence of Impediments: Assurance that there are no legal obstacles preventing the issuance of the certificate.
• Details of Debts or Securities: Specific information about the debts or securities in question.

Additional Considerations

• If multiple individuals apply for the succession certificate, the court will determine who has the preferential claim based on the evidence presented.
• It is essential to ensure that all information provided is accurate and complete to facilitate a smooth application process.

How to Apply for a Succession Certificate

Applying for a Succession Certificate involves several important steps and requirements. Here's a simplified guide on how to go about it:

Steps to Apply

• Make an Application: Submit an application to the District Judge as per Section 372 of the Indian Succession Act, 1925.
• Petition Verification: The petitioner must sign and verify the petition.
• Details of Relatives: Include the residences of the deceased's relatives and family in the application.
• For Hindu Succession Act: If applicable, mention the names of the heirs as per the Hindu Succession Act (Act XXX of 1956).
• Petitioner's Rights: Clearly state the rights of the petitioner in the application.
• Jurisdiction: Ensure that either the ordinary residence of the deceased at the time of death or the deceased's property falls within the jurisdiction of the concerned court.
• Debts and Securities: Specify the debts and securities for which the succession certificate is being requested.
• Impediments: Mention the absence of any impediments as per Section 370(1) of the Act or any other relevant provisions that could affect the grant or validity of the succession certificate.

District Judge's Role

• When the District Judge grants a succession certificate, they will specify the debts and securities mentioned in the application.
• The Judge may empower the certificate holder to:
• Receive interest or dividends on the securities.
• Negotiate or transfer the securities.
• Or both receive interest/dividends and negotiate/transfer the securities.

Costs Involved

• The court typically charges a fixed percentage of the estate's value as fees, as prescribed under the Court-fees Act, 1870.
• This fee is to be paid in the form of judicial stamp papers.
• In addition to court fees, the applicant is also responsible for paying the lawyer's fees.

Competent Court to Grant Succession Certificate

• Section 371 of the Act states that the District Judge can grant a succession certificate based on the deceased's residence at the time of death or the location of their property.

Key Points of Section 371

• Application: Applications for succession certificates must be presented to a District Judge.
• Residence of Deceased: The application should be filed in the jurisdiction where the deceased was ordinarily residing at the time of death.
• No Fixed Place of Residence: If the deceased had no fixed residence, the application can be made to any District Judge within whose jurisdiction any part of the deceased's property is located.

Grant of Succession Certificate - Certain Restrictions

No succession certificate can be granted under the following circumstances:

I) Under Section 370 (1) of the Act:

• No succession certificate can be issued for any debt or security where the right needs to be established through probate or letters of administration.

II) If Section 212 of the Act Applies:

• Succession certificates cannot be granted if the provisions of Section 212 are applicable.

III) If Section 213 of the Act Applies:

• Similar to Section 212, if Section 213 is relevant, a succession certificate cannot be issued.

IV) Cases Requiring Probates or Letters of Administration:

• In situations where the law mandates probates or letters of administration to establish the right to property, such as in the cases of Parsis, Jews, East Indians, Europeans, and Americans, a succession certificate cannot be granted.

V) Exception for Indian Christians:

• Despite the above restrictions, a succession certificate can be granted to a person entitled to the effects of a deceased Indian Christian or any part thereof related to any debt or security, provided that the right can be established by letters of administration.

Effect of Succession Certificate

The effect of a succession certificate can be understood by referring to Section 381 of the relevant Act. Essentially, a succession certificate provides protection to parties involved in paying debts, without making any determination about the title of the deceased's assets.

Protection for Debt Payments

• Section 381 of the Act clarifies that a succession certificate protects parties paying debts without adjudicating the title of the deceased's assets.

Extension of Succession Certificate

• Section 376 allows for the extension of a succession certificate to include debts or securities not originally specified.
• If an extension is ordered, it is treated as if the debt or security was included from the beginning.
• The District Judge can only extend a succession certificate upon the application of the certificate holder, not any other party.

Case Laws Regarding Succession Certificates

Muthia v. Ramnatham (1918 MWN 242)

• The issuance of a succession certificate grants the holder the legal right to recover debts owed to the deceased.
• Payment made to the certificate holder is considered a valid discharge of the debt.

Srinivasa v. Gopalan

• Determining whether a debt belonged to the deceased is not within the scope of a succession certificate application.

Paramananda Chary v. Veerappan (AIR 1928 Madras 213:82 IC 604)

• The issuance of a succession certificate is binding on the debtor.
• Even if another individual later proves to be the deceased's heir, the certificate remains valid.

Ganga Prasad v. Saudan

• Section 381 of the Act safeguards debtors and provides full indemnity to those liable for debts covered by the certificate.
• It protects individuals who make payments "in good faith" regarding the debts and securities specified in the certificate.

Distinction between Succession Certificate and Wills

When a person passes away, the way their assets are transferred can vary depending on whether they left a Will or not.

When There is a Will

• If a person dies and leaves behind a Will, a succession certificate is usually not needed to inherit their assets.
• This is because the entire estate automatically goes to the executor of the Will.
• The executor is responsible for distributing the assets according to the instructions in the Will.

Legal Provisions

• According to Section 370 of the Indian Succession Act, 1925, a succession certificate is not necessary for debts or securities when the right to such property is established through letters of administration or probate.
• However, in some states, both a probate and a succession certificate are required to transfer the title of immovable property.

When There is No Will

• If a person dies without a Will, banks and financial institutions typically require a succession certificate and/or a legal heirship certificate to identify the rightful heirs.

Introduction to Legal Heirship Certificate

A legal heirship certificate is an important document that establishes the relationship of legal heirs to a deceased person. It is often used to claim benefits such as pension, provident fund, gratuity, or other service benefits from government departments when the deceased did not designate a nominee. This certificate is particularly useful in situations where a succession certificate is not readily available or accepted.

Legal Heirship Certificate vs. Succession Certificate

• Legal Heirship Certificate:
  • Establishes the relationship of heirs to the deceased.
  • Used for claims related to government service benefits.
  • Generally easier and quicker to obtain.
  • Accepted by banks and private companies for transferring assets.
• Succession Certificate:
  • Establishes the right of heirs to inherit the deceased's assets.
  • Typically required for transferring assets when a legal heirship certificate is insufficient.

Importance of Legal Heirship Certificate

• Facilitates the transfer of assets and benefits from the deceased to the legal heirs.
• Provides a legal basis for claims related to government service benefits.
• Streamlines the process of asset transfer in cases where a nominee is not specified.
• Avoids the need for a more time-consuming succession certificate in many cases.

Procedure for Obtaining a Legal Heirship Certificate

• Research and gather necessary documents.
• Visit the local revenue office or designated authority.
• Submit the application along with required documents.
• Follow up with the authority for any additional requirements.
• Receive the legal heirship certificate once approved.

Documents Required for Legal Heirship Certificate

• Application form.
• Death certificate of the deceased.
• Proof of relationship with the deceased (e.g., birth certificates, marriage certificates).
• Identity proof of the applicants.
• Any other documents as required by the local authority.

Obtaining a Legal Heirship Certificate

• A legal heirship certificate, while not prescribed by the Indian Succession Act, 1925, can be issued by revenue officers such as tahsildars,revenue mandal officers, or talukdars in each taluk.
• This certificate is meant for identifying the living heirs of a deceased person but has limited purposes and is not conclusive in determining the legitimate class of heirs or the title of heirs to disputed property.
• In cases of disputes among heirs, the revenue officer cannot issue a legal heirship certificate and must direct the heirs to approach a civil court for resolution.

Legal Heirship Certificate vs. Succession Certificate

• Legal Heirship Certificate: Issued to identify the living heirs of a deceased person.
• Succession Certificate: Establishes the authenticity of the heirs and grants them the authority to inherit debts, securities, and other assets left by the deceased.

Conclusion

• The succession certificate provides a speedy remedy and quick decision in succession matters, ensuring that the legal heirs of the deceased can have their share in movable assets ascertained,allocated, and disbursed promptly.
• This is particularly important for families in need of immediate disbursement to meet their day-to-day needs.