Succession certificate

When a person dies without a Will, the bank, the depository and the fund house all face the same problem: they have money that belongs to someone, and no document saying who.

A succession certificate solves that one problem. Under the Indian Succession Act, 1925 it is a document issued by a court to the legal heirs, establishing their authenticity and authorising them to represent the deceased for the purpose of collecting debts, securities and other assets due or payable to them.

Notice what it does not do. It does not determine the right, title and interest of the deceased to any property. Holding one does not, by itself, confer ownership of the asset claimed.

Where it comes from. Section 371 of the Indian Succession Act provides that the certificate is granted by the District Courts, on an application filed by the beneficiaries in a court of relevant jurisdiction.

When it is not available. Section 370 provides that where the deceased left a valid Will, the entire property as stated in the Will vests with the executor — and a succession certificate cannot be granted. A Will and a succession certificate are alternatives, never companions.

What it covers. Its purpose is limited to debts and securities — provident fund, insurance, bank deposits, shares, and central or state government securities to which the deceased was entitled. Every payment made to the holder of the certificate on behalf of the deceased is treated as valid, which is what gives banks and registrars the comfort to release funds.

Where it earns its keep. The workbook identifies the situation precisely: a bank or institution has released funds to a nominee who is not the legal beneficiary, and that nominee will not cooperate in distributing the asset. The heirs then need the court's authority behind their claim.

Against the legal heir certificate. The two are constantly confused, and the workbook tabulates the difference: the succession certificate is issued by a civil court, the legal heir certificate by the Tehsildar of the district. The first authorises a person to succeed to the debts and securities; the second merely identifies the living heirs, is largely used for pension, provident fund, gratuity and insurance claims, and does not serve as conclusive evidence under succession laws.

Mr Iyer dies intestate in Pune leaving a widow and two adult children — the Class I heirs — and:

The brother, as registered nominee, collects the Rs 32,00,000 of shares. He is a nominee, not an heir — in law a trustee for those entitled — and he refuses to hand anything over.

This is the textbook case. The widow and children apply to the District Court for a succession certificate covering the securities. Granted, it authorises them to collect and receive those debts and securities, and every payment made to them on the deceased's behalf is a valid discharge for the payer.

What it does not reach: the Rs 1,40,00,000 flat. The certificate's purpose is limited to debts and securities; title to the immovable property passes under the law of natural succession, with the Class I heirs as primary inheritors, and is established separately.

One Will, professionally drafted, would have removed the court application entirely — the property would have vested in the executor under Section 370, and no succession certificate could even have been granted.

Chapter 15 (Tools for Estate Planning), section 15.2.7, immediately before the role of the executor — and Table 15.1 sets the succession certificate against the legal heir certificate line by line, which is exactly the form the Module 10 questions take. Expect: who issues it (District Court / civil court, versus the Tehsildar), when it can not be issued (where a valid Will exists), and what it covers (debts and securities, not title to property). Chapter 14 supplies the nominee-versus-heir distinction that the whole example turns on.

• It does not confer title. It authorises collection of debts and securities; it does not decide who owns the asset.
• No certificate where there is a valid Will. Section 370 vests the property in the executor instead; the Will route is probate, not a succession certificate.
• Succession certificate is not a legal heir certificate. Civil court versus Tehsildar; authority to succeed versus identification of heirs. This is the most frequently examined pair in the chapter.
• A nominee is not an heir. The certificate exists precisely because nomination decides who receives the asset, not who keeps it.
• Immovable property is largely outside its scope. Title to land and buildings is established through the Will or the law of succession.
• It is a remedy, not a plan. Every question that offers "obtain a succession certificate" as an estate-planning tool is testing whether you know it is what happens when planning did not.