Chandramma v State Bank of Hyderabad (1987) | Bank Nomination Case & Section 45ZA Explained

Banking Law Case 14 of 29 by Law Easy, for LL.B., CLAT PG, UGC NET Law and Judiciary exams. Case: Chandramma v State Bank of Hyderabad (1987), Andhra Pradesh High Court, decided September 1987 (Justice P. A. Choudary). FACTS: A depositor had jointly nominated his two widows for his savings account. After his death the bank refused to pay them, because Section 45ZA of the Banking Regulation Act, as it then stood, allowed only one person to be nominated. LEGAL ISSUE: Can a bank that accepted a nomination of two persons, and used the deposit, refuse payment on the ground that only one nominee was permitted? JUDGMENT: Justice P. A. Choudary held that the bank, having accepted the nomination of two persons and used the deposit, could not take advantage of its own mistake. The provision told the bank not to accept more than one nominee, but it did not make such a nomination void. The bank had to pay the nominees with interest. PRINCIPLE TO REMEMBER: A bank cannot benefit from its own error in accepting a nomination. Also remember that a nominee receives payment on behalf of the legal heirs, who take according to the law of succession. Payment to the nominee gives the bank a valid discharge, but the nominee is not automatically the owner of the money. PROVISIONS: Sections 45ZA to 45ZG of the Banking Regulation Act, 1949 (nomination, payment to nominee and discharge). EXAM NOTE (current law): This case was decided when Section 45ZA allowed only one nominee. After the Banking Laws (Amendment) Act, 2025, a depositor may nominate up to four persons, subject to the prescribed rules. For deposits, nominations can be simultaneous (fixed shares) or successive (the next nominee is paid only if the earlier one is not alive). For articles in safe custody and for lockers, only successive nomination is allowed. Do not state the old single-nominee limit as today's rule. PLAYLIST (all 29 cases in order): https://www.youtube.com/playlist?list=PLbhYsrMKgACA COMPLETE LECTURE (all 29 cases with timestamps): https://youtu.be/ayAN7RLlfPM PREVIOUS CASE (13, Tournier v National Provincial Bank): https://youtu.be/nAKdXWQRuWo More law notes: https://www.thelaweasy.com If this helps your exam preparation, please subscribe to Law Easy. This video is for education and is not legal advice. #BankingLaw #BankingRegulationAct #BankNomination #CLATPG #Judiciary #LLB #LawEasy