032-NLR-NLR-V-71-Mrs.-C.-V.-ABEYRATNE-Appellant-and-Mrs.-S.-MARAMBE-KUMARIHAMY-and-4-others-.pdf
Abeyratne v. Marambe Kumarihamy
127
1068Present: Tennekoon, J.
Mrs. C. V. ABEYRATNE, Appellant, andMrs. S. MARAMBE KUMARIH A MY and 4 others, Respondents
S. C. 1 /67—Appeal to the Supreme Court in terms of section 29 (2) of theEmployees' Provident Fund Act in Case No. EPFfTAl2{67
Employees' Provident Fund—Contributions made to it by a member—Entitlement tobenefits thereto on death of the member—Rights of nominee as against legatee—Employees' Provident Fund Act, No. 15 of 1958, ss. 3 (1), 3 (2), 10, 23, 24,25, 27, 29, 46 (1) (g).
W, who was a member who contributed to the Employees’ Provident Fund,nominated the 1st respondent as the person entitled to be paid all amountsstanding to his credit in the Fund in the event of his death. Nevertheless,before he died on 23rd July 1966, he left a Will bequeathing those amounts tothe appellant and tho 1st, 3rd and 4th respondents. The 2nd respondent, inhis capacity as executor of the Will, claimed the whole amount standing tothe credit of W. The 1st respondent also claimed that sum as the personnominated in terms of tho Employees’ Provident Fund Act. The appellantconceded that, in view of section 3 (2) of the Act, it could not be said thatthe nomination of tho 1st respondent was revoked or superseded by the Will.He contended, however, that the 2nd respondent, as executor of the Will,was entitled under sub-paragraph (a) of section 24 of the Act to payment ofthe benefit.
Held, that, having regard to the fact that there was a valid and effectivenomination of a person who remained alive at the time of the death of W,section 24 had no application; and no right for the executor to receive themoney in question could be founded on that section. The 1st respondent, beingnominee, was entitled to receive the benefit.
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TENNEKOON, J.—Abeyratne v. Marambe Kumarihomy
A.PPEAL in terms of section 29 (2) of the Employees’ ProvidentFund Act.
if. T. M. Sivardeen, for Appellant.
Ananda de Silva, Crown Counsel, for Attorney-General.
Gut. ado. trull.
June 20, 1968. Tennekoon. J.—
One F. L. S. S. Weerakoon who was employed ns an Engineer in theCeylon Mineral Sands Corporation was a member and made contributionsto the Employees’ Provident Fund in terms of the provisions of theEmployees’ Provident Fund Act No. 15 of 1958 (hereinafter referred toas the Act). He had nominated the 1st respondent Mrs. S. M. Kumari-hamy as the person entitled to be paid all amounts lying to his credit inthe Fund in the event of his death. Mr. Weerakoon was above 55 yearsof age and still employed under the Mineral Sands Corporation when hedied on 23rd of July 1966. At the date of his death there was a sum ofabout six thousand rupees lying to his credit in the fund. Mr. Weerakoonhad left a Last Will in which he is said to have bequeathed his property(including the amount lying to his credit in the Fund) to the appellantand the 1st, 3rd and 4th respondents. The 2nd respondent in his capacityas Executor of the said Last Will claimed the amount lying to the croditof Weerakoon from the Commissioner of Labour. The 1st respondentalso claimed the said sum of money as the person nominated by Weerakoonto receive the amounts lying to his credit in the event of his death.
The Commissioner acting under section 28 of the Act made adetermination that the 1st respondent was entitled to the entirety of thebenefit, the amount of which appears to have been calculated to beRs. 5,800/60. An appeal was taken to the Tribunal of Appeal undersection 29 of the Act, and the Tribunal by its order of 27/6/67 affirmedthe Commissioner’s decision holding that the 1st respondent was theperson entitled to the benefit. The present proceedings are an appealunder section 29 (2) of the Act to this Court from the decision of theTribunal of Appeal.
The 1st ground of appeal, viz.: that the nomination of the 1st respondentwas revoked or superseded by the Will was quite rightly abandoned atthe hearing before me by Counsel appearing for the appellant in view ofthe provisions of section 3 (2) of the Act which provides that:—
“ Neither a member of the Fund nor any person claiming under himshall have any interest in, or claim to, the moneys of the Fund otherwisethan by virtue of any provision of this Act o^of any regulation
TENNEKOON, J.—Abeyratne v. Marambe Kumarffumy
129
The second ground of appeal and the one that was pressed by Counselfor the appellant was that the 2nd respondent as Executor of the LastWill of the deceased member was entitled to payment of the benefit undersub-paragraph (a) of section 24 of the Act.
Crown Counsel appearing for the Commissioner of Labour was equallyemphatic that section 24 of the Act, the very section on which theappellant relied, clearly negatived appellant’s contention.
Section 24 reads as follows :—
w Where o member of the Fund dies before becoming entitled to theamount standing to his credit in his individual account or where hedies after becoming entitled thereto but before receiving such amountor where no nominee has been appointed under regulations made underthe Act to whom such amount should be paid in the event of the deathof such member or where one nominee has been appointed and he isdead or where more than one nominee is appointed and any one of themis dead, then such amount shall—
if it is not less than two thousand five hundred rupees, be paid
to the executor of the last will or the administrator of the estateof such deceased member to be included in that estate ; and
if it is less than two thousand five hundred rupees, be paid to the
person who is, or be apportioned by the Monetary Board amongthe persons who are certified by the Commissioner to be in hisopinion, entitled by law to such amount.”
Before examining this section it is necessary to be informed of themeaning of certain words and expressions used therein. A ‘ member ofthe Fund * is an employee who has become liable under section 10 topay contributions to the Fund; he continues to be a member so long asthere is any sum to the credit of his individual account in the Fund (seesection 3 (1) of the Act).
The expression “ before becoming entitled to the amount standing tohis credit in his individual account ” has reference to section 23 underwhich provision is made for all the situations in which the amount in thefund standing to the credit of a member will be paid out to him.
The word * nominee ’ is not defined in the Act; but its meaning is madeclear in the section empowering the Minister to make regulations in respectof nominations. Section 46 (1) reads as follows :—
" The Minister may make regulations —
in respect of the nomination by a member of the Fund, of aperson or persons to whom the amount standing to thecredit of that member's individual account in the Fundmay be paid in the event of that member’s death and themanner of revocation of such nomination; ”
15 -PP 006137 (98/08)
180
TENNEKOON, J.—Abeyratne v. Marambe Kvmarihamy
It is clear that the word “ nominee ” in section 24 refers to a personnominated (in accordance with rules made by the Minister) by a memberof th9 Fund and that such nominee would be the person entitled to bepaid the amount standing to the credit of that member in the event ofthat member’s death. To say of a nominee that he is not entitled to bepaid the benefit upon the death of the member who nominated him is todeny to the term “ nominee ” the very meaning which is attributed toit in the Act. Section 25 makes it quite clear that there are threecategories of persons who become entitled to a benefit under theAct, viz. :
those referred to in section 23 ;
those referred to in section 24 ; and
a nominee appointed by a member as the person entitled to be
paid the benefit upon his death.
Section 23 deals with the circumstances in which the benefit is paid tothe member himself, he being alive ; upon death of a member, if there isa nominee or nominees, such nominee or nominees become entitled tothe payment. The only area in which provision is further needed iswhere the member dies without having made a nomination at all or whereat the death of a member a nomination has become defective by reasonof the supervening event of death of a sole nominee or of the death ofany one of several nominees. One would have expected section 24 (theonly provision relating to entitlement to benefits other than section 23and those relating to nominees) to deal with this aspect. But it ex faciedeals w ith situations already covered by other provisions of the Act andin a manner which drains the word ' nominee 5 of the meaning attributedto it in other parts of the Act. For convenience of analysis this sectioncan be split up into five parts :—
where a member of the Fund dies before becoming entitled to the
amount standing to his credit in his individual account; or
where a member dies after becoming entitled thereto but before
receiving such amount; or
where no nominee has been appointed under regulations made
under this Act to show such amount should be paid in the
event of the death of such member; or
where one nominee has been appointed and he is dead ; or
where more than one nominee is appointed and any one of them is
dead, then such amount shall, etc.
Now, looking at the plain meaning of words, the only conditionpostulated to bring limb 1 or 2 into operation is the death of the member—and this, irrespective of the existence of ^ valid and operative nomination.If this is the result intended by the legislature it is inconceivable why
TENNEKOON, J.—Abeyralne. v. Marambe Kxtmarihamy
131
limbs (3), (4) and (5) were at all incorporated. It would have beensufficient, without the waste of so much legislative breath in repetitionand tautology, to enact that " where any member of the bmd dies ” thenpayment shall be made in accordance with sub>paragraphs (a) and (6)of the section. Further, limbs (3), (4) and (6) are pregnant with meaning ;they imply very clearly that the section has no application where there isa valid and operative nomination at the time of the death of the member.Are then limbs (1) and (2) to be confined to vases where there is no valid-and operative nomination ? It is not possible to reach this result becausethat is the very hind of cose dealt with in limbs (3), (4) and (5). It is alsoobvious that although there is no express postulation of‘ the death of amember * for limbs (3), (4) or (5) to operate, the death of a member ascontemplated in limb (1) or as contemplated in limb (2) is conditionprecedent for limbs (3) or (4) or (5) to operate. There is thus a defect inthe section as it- stands. The absurd results to which it can lead arerevealed when one tries to apply the section to the {acta of the presentrwise. As contended by Counsel for the uppellant, the application of the1st limb can only result in the executor being declared entitled to receivepayment.. As contended by Counsel for the 5th respondent, the clearand necessary implication of the 3rd and 4th limbs of the section is thatthe deceased member having made a nomination (of the 1st respondent)and that nominee being alive, the section has no application. Thus theapplication of section 24 as it stands yields the absurd answer that both.the executor, representing the estate of the deceased member, and thenominee are each entitled to be paid the whole sum standing to the creditof the deceased member, and they should both be successful in theseproceedings—a situation very reminiscent of the Caucus-Race in Alicein Wonderland, where everybody wins and there is no loser. Thatbeing the case, rather than say that the section is beyond interpretation,I would make use of the principle that a court, in interpreting a statutoryprovision, is permitted, occasionally, in order to avoid manifest absurdity,and at res magis -juani percat, to read * and * for * or ’. (See Maxwell,Interpretation of Statvites 11th Edn page 229). It seems to me that ifthe word ‘ or' that appears after the 2nd limb is read as ‘ and * one getsa perfectly sensible provision that accords with the scheme of the Act andavoids the internal inconsistencies and absurdities in the section as itstands at present. In my opinion, the section should be read asfollows: —
Where a member of the Fund dies before becoming entitled to theamount standing to his credit in his individual account; or
where a member dies after becoming entitled thereto but beforereceiving such amount; and•_
where no nominee has been appointed under regulations madeunder this Act to whom such amount should be paid in the event ofthe death of such member; or
where one nomine^-has been appointed and he is dead; or
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VaUipuranother v. Sellar
where more than one nominee is appointed and any one of them isdead;
then such amount shall, etc.
The section, it seems to me, was intended to apply only in cases where
a member dies and thero is no valid or effective nomination. ‘ Nomination *is the only method provided by the Act by which a member of the Fundcan control the destination of the amount standing to his credit in theevent of his death. As observed earlier a member cannot make atestamentary disposition of such moneys. The content of sub-paragraphs(a) and (6) of section 24 are clearly directed towards a situation of* intestacy ’ in regard to the amount in the Fund ; and intestacy in thiscontext can only refer to the absence of a valid or fully effectivenomination.
Applying the section in this way I hold that, having regard to the factthat in the present case there was a valid and effective nomination of aperson who remained alive at the time of the death of Weerakoon,section 24 has no application ; and no right for the executer to receivethe money in question can be founded on that section. The 1st respondentbeing nominee is entitled to receive the benefit.
In the result the appeal fails and is dismissed. There will be no orderfor costs.
Appeal dismissed.