The Allahabad High Court ruled that requiring a security bond for issuing a succession certificate is not mandatory, with Justice Manish Kumar Nigam stating courts may waive it when the applicant is the sole beneficiary or heirs raise no objections.
PRAYAGRAJ: The Allahabad High Court has determined that requiring a security bond for the issuance of a succession certificate is not a routine requirement. Justice Manish Kumar Nigam stated that this condition is at the court’s discretion and can be waived in instances where the applicant is the sole beneficiary or when other natural heirs have not raised any objections.
Background of the Case:
This matter originated from an order dated January 18, 2025, by the Civil Judge (Senior Division) in Kanpur Nagar concerning a succession case. Smt. Shakuntala Devi passed away intestate on October 30, 2008, leaving two daughters, Smt. Alka Singhania (the petitioner) and Smt. Shilpi Agarwal (the respondent), as her only legal heirs. The deceased held shares in Reliance Industries Limited.
The petitioner, Smt. Alka Singhania, submitted an application under Section 372 of the Indian Succession Act (ISA) for a succession certificate. Despite a public notice being issued, no objections were raised. The other heir, Smt. Shilpi Agarwal, submitted a consent affidavit indicating her lack of objection to the issuance of the certificate to the petitioner. Although the trial court approved the application, it required the petitioner to provide both a personal bond and a security bond equivalent to the value of the succession certificate.
Arguments of Parties:
The petitioner’s counsel, Sri R.K. Mishra, argued that the requirement to submit a security bond of equal value was arbitrary, especially given that there were no other claimants or heirs, and the sole respondent had already provided her consent. He referenced the Delhi High Court ruling in Arvind Nanda Vs. State (2020) to support his case for exemption.
Conversely, the respondent’s counsel, Sri Rama Shanker Yadav, filed a brief counter-affidavit affirming that the respondent had no objection to granting the succession certificate to her sister.
Analysis of the Court:
The High Court considered Section 375 of the Indian Succession Act, highlighting that the purpose of a security/surety/indemnity bond is to “indemnify person(s) or safeguard the interests of such persons who may be entitled to the whole or any part of the debt and security.”
The court emphasized that the necessity of imposing such a condition is contingent upon the specific circumstances of each case and “cannot be mechanically insisted upon, especially in situations where the beneficiary is the sole beneficiary or in other appropriate cases, if the beneficiary is a natural heir of the deceased and no objections exist from other claimants.”
Referring to the principles established in Arvind Nanda Vs. State, the court noted:
“In every case involving the grant of a succession certificate, a mechanical approach of imposing a condition for furnishing the surety/security and insisting on the indemnity bond is not required.”
The court affirmed that the imposition of such a requirement is discretionary and not obligatory, as previously stated by the Division Bench in Rajesh Kumar Sharma.
Decision:
The court concluded that, since the petitioner is a natural heir and the only other heir had no objections, the demand for a security bond of equal amount was unwarranted.
Justice Manish Kumar Nigam stated:
“The petitioner, being the sole legal heir and beneficiary of his parent’s estate, and there being no objections from any quarter, is exempted from furnishing a surety.”
The High Court modified the trial court’s order concerning the security bond and instructed the lower court to issue the succession certificate within eight weeks.
Case Title: Smt. Alka Singhania v. Smt. Shilpi Agarwal
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