Section 374 Succession Act: Contents of certificate

Section 374 of Indian Succession Act: Contents of certificate

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

When the District Judge grants a certificate, he shall therein specify the debts and securities set forth in the application for the certificate, and may thereby empower the person to whom the certificate is granted-

(a) to receive interest or dividends on, or

(b) to negotiate or transfer, or

(c) both to receive interest or dividends on, and to negotiate or transfer, the securities or any of them.

Legal Commentary & Landmark Judgments: Section 374

Section 374 governs the contents of a succession certificate, enacting that the certificate must specify the exact debts and securities, and declare whether the holder is empowered to receive interest, dividends, or negotiate the securities.

Substantive Scope & Reach: Section 374 establishes the statutory operational scope of the succession certificate.
Core Legal Standard: When the District Judge grants a succession certificate, the certificate must explicitly set forth.

(1) The exact debts and securities specified in the application, detailing debtor institutions, account numbers, and monetary amounts; and
(2) The specific powers conferred upon the holder: whether the holder is empowered to:
    (a) Receive interest or dividends on the securities; OR
    (b) Negotiate or transfer the securities; OR
    (c) Both receive interest/dividends and negotiate/transfer the securities.

The powers granted must be explicitly delineated in the certificate. If the court merely empowers the holder to 'receive interest', the holder cannot sell or transfer the underlying shares or mutual funds without applying for an amendment under Section 378.

Key Landmark Precedents:

Ganeshprasad v. Damodardas, AIR 1946 Bom 33: The court held that under Section 374, the certificate must specify the precise debts and powers conferred, and the holder's authority is strictly bounded by the terms of the certificate.
Smt. Madhvi Amma Bhawani Amma v. Kunjikutty Pillai Meenakshi Pillai, (2000) 6 SCC 301: The Supreme Court affirmed that the certificate under Section 374 operates as a statutory power of attorney enabling realization of specified assets.

Legal Commentary:

Section 374 requires careful prayer drafting. When applying for shares, mutual funds, or bonds, litigators must expressly pray for the power to 'negotiate and transfer' the securities, not merely to 'receive dividends'. If the transfer power is omitted from the certificate under Section 374, share registrars and demat depositories will refuse to transfer ownership.

Section 374: Contents of certificate

Section 374 of Indian Succession Act: Contents of certificate

Legal Commentary & Landmark Judgments: Section 374