Supreme Court holds man’s general provident fund post death must be shared by wife, mother despite latter being nominee

The court further said that the provident nomination form and its clause itself do not provide a better claim to the mother over the employee’s wife.

The husband, a government official, married the petitioner in 2003 and subsequently nominated her as a recipient for other service benefits, but did not change the nominations for General Provident Fund (GPF).

The court highlighted that the relevant rules indeed provide that when a nomination becomes invalid, the amount should be distributed amongst all eligible members and said that the husband had the opportunity to alter the nomination for GPF between his marriage in 2003 and his death in 2021, but he did not do so.

The GPF rules, the bench said, are clear and state that the nomination in favour of the mother would become invalid upon the employee acquiring a family (marriage). Therefore, it became invalid in 2003, it added.

The court also observed that the authorities concerned were not obligated to ask such a subscriber to alter or cancel the nominations, and it was the duty of the subscriber to do so.

“It is to provide for these very situations where a subscriber neglects to or fails to make such changes, that Rules have been prescribed, laying down how the money is to be distributed amongst survivors,” the order read.

The court noted that the wife had already received her share of GPF as per the previous order of the Central Administrative Tribunal (CAT) and directed the release of the other half of the remaining funds to the employee’s mother.

Background, arguments

The wife of the government employee, who died in July 2021, received all benefits arising from his husband’s employment totalling Rs 60 lakh. However, the authority concerned refused to release the funds accumulated in his husband’s General Provident Fund (GPF), stating her mother was the nominee on record for the said funds.

The wife approached the Central Administrative Tribunal (CAT), which held the equal distribution of the provident fund between the mother and wife, but the Bombay High Court subsequently set aside the tribunal’s order.

The wife then moved the Supreme Court, challenging the high court’s order and argued that the original nomination document states the invalidity of any prior nomination before the subscriber (the husband) acquired a family and referred to the relevant rules, which states that, in a situation like this, the funds are to be payable to all eligible family members in equal shares.

The employee’s mother, on the other hand, pointed to his “son’s intention” and said that while he made his wife the nominee for other benefits of services, she was “clearly left out of the GPF amount entitlement”.