Nominee Is Merely a Trustee, Not a Successor in Law: Delhi High Court Affirms Equal Succession Rights in Family Property Dispute

“Even Where Section 10 CPC Doesn’t Apply, Courts Can Stay Proceedings Under Inherent Powers of Section 151 to Avoid Conflicting Outcomes” - In a significant ruling Delhi High Court, speaking through a Division Bench comprising Justice Anil Kshetrapal and Justice Harish Vaidyanathan Shankar, clarified critical issues relating to succession law and civil procedure. The Court dismissed RFA(OS) thereby affirming a preliminary decree granting equal share in moveable assets among four siblings, and simultaneously allowed FAO(OS), staying partition proceedings with respect to immoveable assets until the final outcome of pending probate litigation.

The ruling centers around the legal implications of nominations, the effect of admissions in pleadings, and the power of civil courts to stay proceedings even when Section 10 CPC is technically inapplicable. The case forms part of a long-standing family dispute concerning the estate of Late Mohinder Singh Gujral (MSG) and his wife Late Upkar Gujral, whose properties included a residential property in New Friends Colony and a commercial property in Nehru Place, New Delhi.

“The Law Is Clear—A Nominee Does Not Displace a Legal Heir Unless a Valid Will Exists”

The High Court began by affirming the well-settled legal principle that nominations do not amount to succession, holding that a nominee merely receives the property on behalf of all legal heirs and does not acquire absolute ownership. The Court observed:

“A nominee is merely a trustee of the assets who holds the assets but is not a person entitled to them exclusively, and the assets are to be distributed to all the legal heirs.”

The Court relied extensively on precedents including Sarbati Devi v. Usha Devi (1984) 1 SCC 424 and the recent Shakti Yezdani v. Jayanand Jayant Salgaonkar (2024) 4 SCC 642, where the Supreme Court reiterated that a nominee cannot exclude legal heirs under the guise of administrative convenience.

Rejecting the appellants’ contention that MSG had already distributed his moveable assets by naming certain persons as nominees or joint account holders, the Court concluded that such arrangements do not amount to testamentary disposition. Notably, the two wills executed by MSG in 2008 made bequests only of the immoveable properties, and no will was proved or even pleaded for moveable assets.

“Admissions in Pleadings Can Justify Decree Without Trial—Order XII Rule 6 Is a Speedy Tool When the Facts Are Undeniable”

The appellants further contended that no clear or unequivocal admission had been made in the pleadings to justify the passing of a preliminary decree under Order XII Rule 6 of the CPC. However, the Court found otherwise, citing paragraphs from the written statement where the appellants admitted that MSG had made arrangements for distribution through nominations and joint holdings. The Court held:

“Such admissions, when viewed in light of the legal character of a nominee, amount to a clear acceptance that no will covered the moveable properties.”

Relying on the Supreme Court’s observations in Rajiv Ghosh v. Satya Narayan Jaiswal 2025 SCC OnLine SC 751 and Uttam Singh Dugal v. United Bank of India (2000) 7 SCC 120, the Court reiterated that a decree may be passed where the admission is plain and leaves no scope for further dispute. The exercise of discretion under Order XII Rule 6 is not mandatory, but once the court is satisfied that there is a clear, unambiguous admission, it may render judgment even without full trial.

Accordingly, the High Court upheld the Trial Court's decision granting a 1/4th share in all moveable assets to each of the four children of MSG, and dismissed the appeal.

“Probate Court Determines Validity of the Will, Not Ownership—But Partition Suit Can Still Be Stayed Where Outcomes Are Interlinked”

In relation to FAO(OS) 89/2023, the Court addressed whether the partition suit should be stayed owing to the pendency of Probate Case Nos. 5969/2016 and 5921/2016—which deal with the validity of MSG’s two wills dated 09.05.2008, each relating to one immoveable property.

The appellants had originally sought a stay under Section 10 CPC, arguing that the issues in the partition suit were “directly and substantially” at issue in the earlier-filed probate petitions and a related civil suit concerning the same properties. The Court held that:

“Probate proceedings are not suits in the civil sense under Section 10. The subject matter and reliefs sought are distinct. While the probate court examines the due execution of a will, it does not decide title or partition.”

However, the Court also found merit in the argument that, despite the technical inapplicability of Section 10, the inherent powers under Section 151 CPC may be invoked where the interests of justice demand it. The Court held:

“Even if stay under Section 10 CPC is impermissible, the Court is not powerless. The inherent jurisdiction under Section 151 CPC exists to prevent duplication and avoid contradictory outcomes.”

Pointing to the fact that the validity of the wills would directly affect the scope of partition, the Court concluded that the trial court erred in refusing to stay proceedings. It held that:

“If the Wills dated 09.05.2008 are ultimately probated in favour of the concerned beneficiaries, the scope of the partition suit will vary.”

Accordingly, the Court set aside the impugned order of the Single Judge and stayed proceedings in the partition suit CS(OS) No. 3262/2012 with respect to the immoveable properties, pending adjudication of the probate petitions.

“When Wills Are Under Challenge, Proceeding with Partition Suit May Lead to Redundant or Conflicting Decrees”

The Court was mindful of judicial efficiency, observing that unnecessary expenditure of time, energy, and resources by all parties would be avoided by staying the matter. It further noted that the revocation of the earlier probate of Upkar Gujral’s 1995 Will—granted to MSG and subsequently challenged—is also pending appeal.

In such a situation, the Court found it prudent to await the conclusion of probate litigation before venturing into final determination of ownership rights in immoveable assets.

The Court dismissed RFA(OS) 43/2024, affirming that MSG died intestate with respect to moveable assets, and all four children are equally entitled.

It allowed FAO(OS) 89/2023, staying further proceedings in CS(OS) 3262/2012 until the final adjudication of the two pending probate petitions—Probate Case Nos. 5969/2016 and 5921/2016.

The judgment stands as a comprehensive exposition on the interaction between succession law, civil procedure, and judicial discretion, and reinforces the principle that technicalities must yield to the demands of substantive justice.

Date of Decision: 17 October 2025