Succession Certificate

If a person dies intestate, i.e., without making a Will  or any testamentary document,a Succession Certificate comes into play to deal with the movable estate like bank accounts, FDRs, etc. of the deceased.

When the person (legal heir) visits financial institutions like  banks and companies etc. to gain possession of inherited debts and securities occupied by the deceased, they need to prove themselves as the legal heir of the deceased. In the event of not being nominated as a nominee of the deceased and there being no Will,  the above institutions do not release the account proceeds without insisting upon a Succession Certificate.

A Succession Certificate can be issued only in the name of the legal heir/s or legal representative/s of the deceased. In the case of Hindus/Sikhs/Jains, the Hindu Succession Act 1956 is the applicable law governing succession and the procedure is applied, as given in the Indian Succession Act 1925.

In short, a Succession  Certificate is a document issued by a competent  court (civil) certifying a rightful person to be the successor of a deceased person and is issued only for the movable properties of the deceased. A succession certificate, under the Indian Succession Act, is a document that gives authority to the person who obtains it, to represent the deceased to collect debts and securities due to him or payable in his name.

DEBTS AND SECURITIES:

Under section 370 of the Indian Succession Act, a succession certificate can be granted only in respect of debts and securities and not for any other kind of property. For example, A  Succession  Certificate cannot be granted in respect of ornaments pledged by a deceased with a bank by way of security for the debt which the bank had advanced. It is not a debt due from the bank. Also, it cannot be granted in respect of ornaments kept in a deposit locker in a bank.

Security  means: -

• any promissory note, debenture, stock or other security of the Central Government or a State Government;
• any bond, debenture, or annuity charged by Act of Parliament of the United Kingdom on the revenues of India;
• any stock or debenture of, or share in, a company or other incorporated institution;
• any debenture or other security for money issued by, or on behalf of, a local authority;
• any other security which the State Government may, by notification in the Official Gazette, declare to be a security for this Part.

Where to File:

The District Judge, within whose jurisdiction the properties are situated or the deceased resided, immediately, before his death, shall be having the jurisdiction to try and entertain the Petition. Some high courts in the country have concurrent jurisdiction to try and entertain the dispute, meaning thereby that a petition could be filed either at the High court or at District Court.

Procedure to Obtain a Succession Certificate from Court: The beneficiary has to approach the District Court or the High Court as the case may be and file a petition for a succession certificate.

• The petition has to be rightly drafted mentioning all the requirements as per the law like the relation of the petitioner with the deceased, details of other surviving legal heirs and beneficiaries, the time, date and place of death, etc.
• Along with the  petition, all the relevant documents have to be annexed like the death certificate, relationship proof, and other documents that the court may require.
• Thereafter, notices are sent to those who may have an interest in the property of the deceased and the concerned court also ask for publication of general notice for the public in a daily newspaper calling objections. The court also issues notice to the State Government to ascertain if any debts are due to the state against the deceased.
• Thereafter, the  court gives sufficient time for any objection to be filed.
• If other legal heirs provide no–objection certificate and the court is satisfied, it passes an order to issue a succession certificate to the petitioner. If there is more than one petitioner, then the court may jointly grant them a certificate but it will not grant more than one certificate for a single asset.
• Apart from lawyer’s fees, courts levy  estate duty at the time of grant of  Succession  Certificate, which varies from state to state. Usually, it is between 2-3% of the value of the assets.
• Once you have the certificate, you are authenticated to distribute the assets to the legal heirs as per the succession laws.

It is always considered that if the  Succession  Certificate is obtained then the person is the rightful owner of the deceased person’s properties, which is not true. A  Succession  Certificate allows the person to act exactly similar to how a nominee would act. It gives the authority to the holder for distributing the deceased person’s assets and also submits a report of distribution before the  court, if the court so directs.