MATILDAS BISHOP Vs. SUZAN ANTHONY MILLARD

JUDGEMENT

(1.) THIS is an appeal from the judgment of Mr. Justice Bhagwati, Eustace Edwin Millard, an employee of the G. I. P. Railway, was a subscriber to the provident fund of the railway company. On July 23, 1936, he made a nomination under the rules of the fund in the prescribed form, which is headed "the Form of declaration", in favour of his mother, He married the respondent on July 18, 1941, and died on October 1, 1943. He left him surviving his widow the respondent, and two sisters who are the appellants. His mother died on September 23, 1943, i. e. before his own death. After his death the appellants obtained letters of administration to the estate of their mother and claimed to receive payment of the provident fund due to the deceased from the railway company. The respondent claimed the same fund on the ground that on her marriage the nomination ceased to subsist under the rules. The G. I. P. Railway being owned at all material times by Government, the Governor General in Council filed an interpleader suit as the plaintiff. He was discharged from the suit on payment of his costs, after he desposited the amount in Court. The only issue which was ordered to be tried first was as follows: Whether the marriage of defendant No.1 (respondent) to the deceased subsequent to the nomination by the deceased in favour of his mother revokes the nomination ? I must say that the word "revokes" is not happily chosen. If the word "subsists," which is used in the rules, was retained with proper alterations in the issue, it might have been better. The parties, however, have clearly understood the rival contentions arising on the construction of the rules and the Provident Funds Act, 1925.

(2.) ON behalf of the appellants it is contended that the Provident Funds Act should be first looked at and Section 5 of the Act determines the rights of the nominee. The relevant portion of that section is as follows: Subject to the provisions of this Act, but otherwise notwithstanding anything contained in any law for the time being in force, or any disposition, whether testamentary or otherwise by a subscriber to. . . the Railway Provident Fund of the sum standing to his credit in the Fund. . . any nomination duly made in accordance with the rules of the fund, which purports to confer upon any person the right to receive the whole or any part of such sum on the death of such subscriber. . . shall be deemed to confer such right absolutely until such nomination is varied by another nomination made in like manner or is expressly cancelled by the subscriber. . . by notice given in such manner and to such authority as is prescribed by those rules. It was pointed out that although under the Act there was no provision for making rules by Government or the railway administration, the existence of the rules is assumed. It was argued that while rules might be framed for the internal management of the fund, no rule can be framed so as to override Section 5 and prescribe a method by which a nomination duly made under the rules can be varied or cancelled, otherwise than as prescribed by the section. In this connection it was pointed out that in England under the Friendly Societies Act, 1875, there was no provision for revocation of the nomination on the marriage of the subscriber. The provision of revocation on the happening of that event was made by express legislation under the Friendly Societies Act, 1896. It was therefore contended that the same result cannot be achieved by making a rule to that effect.

(3.) ON behalf of the respondent it is contended on the other hand that the rules of the provident fund govern the rights of the parties. The Act is applicable, but unless any rule is in conflict with the express statute, the rights of the contracting parties, i. e. Government on the one hand and the employees on the other, must be according to the rules. It was argued that the whole argument of the appellants was based on a misreading of Section 5, It was not disputed that a nomination cannot be varied or cancelled except as provided in Section 5 .The section however recognises the nomination made in accordance with the rules of the fund. The Act did not prohibit the making of rules in respect of nominations, so as to make them conditional or subsisting on certain contingencies only. It was pointed out that Sections 3, 4 and 5 contained the scheme of the Act. While Section 5 defined the rights of the nominee, Section 4 was the material section as it contained provisions relating to repayment of the fund. Section 4 (1) (c) (i) was relevant to be considered in this connection. In that clause the sum or the balance of the provident fund which was not payable under Clause (a) or {b) to the dependent or when it was less than Rs. 5,000, was to be paid to "any person nominated to receive it under the rules of the fund. " Relying on the general words used in that clause it was argued that the nomination made under the rules controlled the right to receive payment. If the nomination itself was not bad according to the rules, it was wrong to contend that because the nomination was conditional, viz. subsisting on the non-occurrence of a certain event, it should be considered as varied or cancelled otherwise than in the manner prescribed in Section 5