SUPREME COURT HOLDS THAT GPF NOMINATION IN FAVOUR OF PARENT CEASES TO BE VALID AFTER EMPLOYEE’S MARRIAGE:

The Supreme Court has held that once an employee gets married, a prior nomination made in favour of a parent under the General Provident Fund (GPF) scheme automatically becomes invalid. In such a situation, the Court ruled that the GPF amount must be distributed equally between the surviving spouse and the parent. This ruling overturns a judgment of the Bombay High Court and restores the decision of the Central Administrative Tribunal (CAT), which had directed that the GPF amount of the deceased employee be shared equally between his wife and mother.

The matter was decided by a bench comprising Justices Sanjay Karol and N. Kotiswar Singh. The Court clarified that the act of acquiring a family, whether through marriage or otherwise—results in the termination of a nomination previously made in favour of a parent. The bench explained that under the relevant service rules, only members of the employee’s family can claim GPF amounts after death. Therefore, an old nomination naming a parent ceases to have legal force once the employee is married.

Reiterating established legal principles, the Court held that a nomination does not create an absolute or superior right over the fund. It emphasised that the existence of a nomination cannot defeat the statutory provisions that determine entitlement. Accordingly, the deceased employee’s mother could not claim exclusive rights over the deceased employee’s GPF on the ground that her name had been nominated earlier. Instead, both the mother and the wife were eligible beneficiaries.

The Court referred to Rule 33 of the General Provident Fund (Central Service) Rules, 1960, which governs situations where a government employee has died leaving behind family members. The rule provides for distribution of the fund among eligible claimants when the nomination is no longer valid. The bench highlighted that this rule applies automatically when an employee acquires a family and has not substituted the earlier nomination. Therefore, the Court held that the deceased employee’s GPF would have to be divided equally between his wife and mother.

This ruling was also supported by the principle laid down in the 1984 decision in Sarbati Devi v. Usha Devi, where the Court held that a nomination merely authorises payment but does not determine beneficial entitlement. Applying this reasoning, the Court reiterated that the nomination in favour of the deceased employee’s mother did not grant her a better claim than the wife.

The case concerned an employee of the Defence Accounts Department. In 2000, he had made nominations naming his mother for GPF, Central Government Employees Group Insurance Scheme (CGEGIS), and Death-cum-Retirement Gratuity (DCRG). After marrying in 2003, he updated nominations for CGEGIS and DCRG in favour of his wife but did not change the nomination for GPF. When he passed away in 2021, the authorities released all other service benefits to the wife, but denied GPF, relying on the old nomination.

The wife challenged the denial before CAT, which held in her favour, and directed equal distribution between her and the mother. However, the Bombay High Court set aside that order, holding that unless a nomination was formally cancelled, it continued to remain in force. This prompted the wife to appeal before the Supreme Court. Allowing the appeal, the Supreme Court restored CAT’s order and clarified that the statutory rules override the original nomination. The judgment ensures that once an employee acquires a family, the benefit of GPF must be shared as provided by law, preventing earlier nominations from causing unjust exclusion of legal heirs.