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On January 7, 2026, the Supreme Court of India ruled that even if the General Provident Fund (GPF) balance is over Rs 5,000, the nominee can access the fund without a succession certificate, probate, or letters of administration. The court pointed out that if the government insists on such documents from a nominee, it would undermine the whole concept of nomination as the nominee is not a legal heir.
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This situation came about after both the tribunal and Calcutta High Court ruled in favour of Mr Mondal, who is the brother and nominee of the deceased government employee. Both the High Court as well as the Tribunal agreed on the petitions in favour of Mr Mondal on the ground that Rule 33(ii) of General Provident Fund (Central Service) Rules, 1960 designates him as the sole valid nominee for his brother’s GPF account to receive the funds.
However, the central government’s representative, Additional Solicitor General (ASG) mentioned that some nephews of the deceased employee raised objections on October 12, 2022, regarding Mr Mondal’s claim to the funds in his brother’s GPF account.
According to the ASG, even with a valid nomination under the Rules of 1960, the amounts cannot be released to the nominee due to Section 4(1)(c)(i) of the Provident Fund Act, 1925, which stipulates that if the amount in the name of the depositor is over Rs. 5,000, then the nominee can receive the money only on production of a succession certificate or probate or letters of administration.
The ASG also stated that even though Mr Mondal has produced a succession certificate under the Indian Succession Act, 1925, the authority did not accept it since the GPF amount is not listed in the schedule of that certificate.
The Supreme Court dismissed the ASG’s arguments and ruled in favour of the nominee, Mr Mondal.
Apurva Agarwal, Founder, Universal Legal, Mumbai, said to ET Wealth online that in this case, Mr. Mondal, the nominee for his late brother’s General Provident Fund (GPF), was denied access to the fund by the government. Their argument was that, since the GPF amount was more than Rs 5,000, he needed to produce a succession certificate or legal documentation like probate or letters of administration.
But the Supreme Court disagreed with this. Agarwal says: “They pointed out that under the GPF Rules – specifically Rule 33(ii) – if there’s a valid nomination and no surviving family (as defined under the rules), the nominee is clearly entitled to receive the full GPF amount. The Court said that insisting on a succession certificate in such cases makes the entire concept of nomination pointless.”
According to Agarwal, the Rs 5,000 threshold that the government was relying on comes from a 1925 law. The Court rightly noted that this figure is outdated and not relevant today. What was a substantial amount in 1925 clearly is not logical anymore.
The Supreme Court also emphasised that paying the nominee does not take away the legal heirs’ rights they can still claim their share through civil court if they want.
Agarwal says: “This ruling is important because it brings much-needed clarity. It means that if you are a valid nominee for someone’s GPF, the government must release the money to you – no unnecessary paperwork, no legal hoops.”
Summary of the judgement
The Supreme Court dismissed the appeal filed by the central government challenging the Calcutta High Court judgement which directed release of GPF money to Mr Monday, the brother and nominee of the deceased employee.
The Supreme Court ruled that Rule 33(ii), framed by the Central Government itself, could not be ignored. It held that insisting on succession certificates even in cases of valid nomination would render the concept of nomination meaningless. The Supreme Court said that though the law mentions that the nominee needs a probate, succession certificate, etc if the GPF amount is more that Rs 5,000 but that was framed in 1925. In the present times, this money is not in line with inflation and thus instead of a literal interpretation, a harmonious interpretation of the Rs 5,000 rule needs to be made.
The Court harmoniously interpreted the law and rules and noted that Section 5 gives primacy to a valid nominee through a non-obstante clause and thus ruled in Mr Mondal’s favour.
However, the Court clarified that a nominee acts as a trustee and that legal heirs may still pursue their claims separately, but the government must release provident fund dues to the valid nominee which is Mr Mondal in this case.
The Supreme Court said that the mere fact that the amount is released to a valid nominee will not bar the objector(s) or holder(s) of probate or letters of administration or succession certificate from claiming their share from the amount released to the nominee from a competent court.
The Supreme Court also said that the central government should not get involved in protracted litigation with respect to the estate of a deceased employee or dispositor.
The Supreme Court said: “The requirement to have a probate or letters of administration or succession certificate even in cases of valid nomination will invariably make the Government a party to litigation which should ideally only be between private parties.”
Supreme Court analysis and discussion
The relevant portion of Section 4 and Rule 33 (ii) are reproduced hereinbelow:-
“The Provident Funds Act, 1925:
4.Provisions regarding re-payments.—……
(b) if the whole sum or balance, as the case may be, does not exceed five thousand rupees, pay the same, or any part thereof, which is not payable under clause (1), to any person nominated to receive it under the rules of the Fund, or, if no person is so nominated, to any person appearing to him to be otherwise entitled to receive it; or
(c) in the case of any sum or balance, or any part thereof, which is not payable to any person under clause (a) or clause (b) pay the same,–
(i) to any person nominated to receive it under the rules of the Fund, on production by such person of probate or letters of administration evidencing the grant to him of administration to the estate of the deceased or a certificate granted under the Succession Certificate Act, 1889 (7 of 1889), or under the Bombay Regulation VIII of 1827, entitling the holder thereof to receive payment of such sum, balance or part, or
(ii) where no person is so nominated, to any person who produces such probate, letters or certificate:
The General Provident Fund (Central Services) Rules, 1960 Rule 33
– Procedure on Death of a Subscriber ….
(ii) When the subscriber leaves no family, if a nomination made by him in accordance with the provisions of Rule 5 in favour of any person or persons subsists, the amount standing to his credit in the Fund or the part thereof to which the nomination relates, shall become payable to his nominee or nominees in the proportion specified in the nomination.”
Justice Manoj Misra and Justice Manmohan of the Supreme Court of India in their judgement (Diary No. 71438 /2025) said that they decline to entertain the present Special Leave Petition as Rule 33(ii) of the Rules, 1960 has been framed by the Central Government and the same cannot be and has not been challenged by the petitioners (central government).
If nominee needs to get succession certificate or probate then nomination process would lose meaning
The Supreme Court said that if if a succession certificate is required in both eventualities i.e. cases covered under (i) and (ii) of Section 4(1)(c), then it would render otiose all nominations made under the Act, 1925 read with the Rules, 1960.
The Supreme Court said: “This Court is of the view that if the submission of Government of India is accepted, then the purpose of having a nomination would be lost. After all, the process of nomination has a sanctity attached to it.”
Rs 5000 limit was sufficient in 1925 but not in present times
The Supreme Court said that they find that the basis of cases falling in Section 4(1)(b) and 4(1)(c)(i) is stated to be the amount standing to the credit of the depositor.
The Supreme Court said: “While the basis of classification, namely, the amount of Rs 5,000 may have been substantial and reasonable in the year 1925, i.e., when the Act was passed, however, the same has ceased to be of any relevance a century later due to inflationary market forces.”
The Supreme Court said that recognising this ground level reality, the government itself in the Rules framed 35 years later stipulated that in cases of nomination, irrespective of the amount of money lying in the account, the same shall be released to the nominee.
Section 5 gives primacy to a valid nominee through a non-obstante clause
The Supreme Court said that consequently, keeping in view Rule 33 (ii) of the Rule 1960 and the fact that Section 5(1) begins with a non-obstante clause by virtue of which, any valid nominee in accordance with the rules of the Fund would be entitled to receive the sums in the provident fund account, means that the nominee has primacy to receive the amounts standing in the name of a depositor upon his death.
Instead of literal interpretation of the Rs 5,000 rule, harmonious interpretation is needed
The Supreme Court said that the literal interpretation of Section 4(1) (b) and 4(1)(c)(i), leads to an inconsistent conclusion that if the amount in the provident fund account exceeds more than Rs 5,000, the nominee is entitled to receive the amount only upon production of a probate or letters of administration or a certificate granted under the Succession Certificate Act, 1889 (7 of 1889), or under the Bombay Regulation VIII of 1827.
The Supreme Court said: “This Court is of the view that it would be appropriate to construe Sections 4, 5 and Rule 33 (ii) harmoniously. (See : CIT vs. Hindustan Bulk Carriers, (2003) 3 SCC 57)”
If nomination is valid, then provident fund money needs to be released as nominee is not legal heir
The Supreme Court said: “Consequently, this Court is of the view that in cases of a valid nomination, the amount in the provident fund account of the deceased depositor or subscriber is required to be released to the nominee.”
The Supreme Court said that their opinion is strengthened by the settled position of law that a nominee is a mere trustee to collect the funds and not the beneficial owner [Sarbati Devi vs. Usha Devi, (1984) 1 SCC 424].
The Supreme Court said: “Therefore, the mere fact that the amount is released to a valid nominee will not bar the objector(s) or holder(s) of probate or letters of administration or succession certificate from claiming their share from the amount released to the nominee from a competent court.”
Judgement: “In light of the aforesaid reasons, the present Special Leave Petition is dismissed. In case a challenge is laid to the order of the High Court by any competing interest, we may consider the matter on merits. Pending application(s), if any, shall stand disposed of.”
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