Srinagar, Dec 3 (LatestNewsX) – The J&K and Ladakh High Court clarified that once a bank pays the remaining balance of a joint account governed by an “either or survivor” clause to the surviving account holder, the bank’s obligations end entirely.
Justice Sanjay Dhar said in the order, “A bank is fully discharged of liability when it pays the balance of a joint account with an ‘either or survivor’ mandate to the surviving account holder. Any subsequent dispute between the survivor and the deceased’s legal heirs is a matter for them to resolve civilly, and the bank cannot be held criminally liable for honouring the ‘either or survivor’ clause.”
The court also noted that similar judgments, like those from the Madras High Court, affirm that the right to manage the account shifts to the survivor once one holder dies. In short, the bank is mandated to forward the funds to the living account holder under the “either or survivor” instruction, and that act constitutes a complete discharge of its duty.
“This payment fully satisfies the bank’s obligation. If a dispute arises over who should rightfully receive the money after the survivor has taken it, it is purely a civil issue between the survivor and the deceased’s heirs, and has no basis for criminal action against the bank.” The order further explained that the “either or survivor” arrangement is a contractual agreement between the account holders and the bank, and by signing it, they concede to pay the balance to whichever of the two remains alive.
The principle that account control passes to the survivor is upheld in other Indian High Court decisions, including a 2005 Madras ruling that recognized the survivor as the sole beneficiary of such balances.
Justice Sanjay Dhar granted relief to two petitions filed by Shabeena Ibrahim and HSBC, both of whom had been named as accused in a criminal complaint by Mir Usman Disooki. –LatestNewsX
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