Succession Certificate: Section 372 [The Indian Succession Act, 1925]
372 Application for certificate —
(1) Application for such a certificate shall be made to the District Judge by a petition signed and verified by or on behalf of the applicant in the manner prescribed by the Code of Civil Procedure, 1908 (5 of 1908) for the signing and verification of a plaint by or on behalf of a plaintiff, and setting forth the following particulars, namely:—
(a) the time of the death of the deceased;
(b) the ordinary residence of the deceased at the time of his death and, if such residence was not within the local limits of the jurisdiction of the Judge to whom the application is made, then the property of the deceased within those limits;
(c) the family or other near relatives of the deceased and their respective residences;
(d) the right in which the petitioner claims;
(e) the absence of any impediment under section 370 or under any other provision of this Act or any other enactment, to the grant of the certificate or to the validity thereof if it were granted; and
(f) the debts and securities in respect of which the certificate is applied for.
(2) If the petition contains any averment which the person verifying it knows or believes to be false, or does not believe to be true, that person shall be deemed to have committed an offence under section 198 of the Indian Penal Code, 1860 (45 of 1860).
(3) Application for such a certificate may be made in respect of any debt or debts due to the deceased creditor or in respect of portions thereof.
Upon the death of a person, his property and liability devolve on his legal heirs. Legal heirs are entitled to access his property and discharge his liability. If that person dies intestate i.e. without making a valid Will, the question arises that who will receive his property and discharge his debt?
In the absence of a nominee the bank balance, fixed deposits and other bank deposits of deceased do not automatically devolve upon his legal heirs. The same issue emerges in respect to his shares, mutual funds, government bonds etc. Therefore, it becomes necessary to ascertain who is the legal heir or successor of the deceased? A succession certificate solves this issue and authorises its holder to receive the property of the deceased.
When is succession certificate required?
A succession certificate is required in these conditions. Firstly, a person has died intestate i.e. without making a valid will. Secondly, his legal heir wants to claim his property and discharge his liability. The applicant of succession certificate should also be ready to discharge the liability of the deceased.
In intestate death, it is uncertain that who is the legal heir of the deceased. Therefore, ascertainment of the legal heir is mandatory for authorising him to collect the deceased’s property and/or pay his debts.
Section 372 of the Indian Succession Act provides a remedy to tackle this situation. It empowers the district judge to issue a certificate thereby authorise the successor of the deceased to collect the assets and to pay his debts.
Legal effect of succession certificate
The holder of succession certificate is entitled to make payment of the debt and receive securities of the deceased. He takes assets such as mutual funds, bank balance, fixed deposits etc. The succession certificate does not grant title to its holder. Hence, he cannot claim ownership on that property. C.K. Prahalada v. State of Karnataka, (2008) 15 SCC 577: the Supreme Court held that:
“the court grants the succession certificate for the very limited purpose and does not decide the question of title.”
More importantly, a person other than the legal heir may also obtain the succession certificate. This certificate confers him a legal status like a trustee thereby he distributes the assets of the deceased to his legal heirs. According to section 380 of the Indian Succession Act, the succession certificate is applicable everywhere in India.
In Banarsi Dass v. Teeku Dutta, (2005) 4 SCC 449; the Supreme Court held that the main object of a succession certificate is to facilitate collection of debts on succession and to protect persons who deal with the alleged representatives of the deceased persons. Such a certificate does not give any general power of administration on the estate of the deceased.
The applicant will file a petition before the district judge, with proper verification and the court fee. The court after receiving the petition shall issue a notice to the person to whom he thinks fit to hear and fix a day for the hearing. On the day the court after hearing all the parties to the petition shall issue a certificate. If the court thinks fit, it can take a bond with one or more sureties from the certificate holder. The court takes the bond to protect the interest of legal heirs of the deceased and to prevent the misuse of a certificate.