SC asks Finance Ministry to respond to PIL seeking mechanism on unclaimed funds

The Supreme Court on Thursday asked the Finance Ministry to file its response in three weeks to a PIL seeking directions to create a centralised database providing information about bank accounts, insurance, deposits, post office funds lying in accounts held by those who are no longer alive.

The PIL, filed by journalist Sucheta Dalal, also sought a direction to set up a mechanism to inform the legal heirs of deceased depositors about the unclaimed deposits lying dormant in bank accounts.

”While the Ministry of Corporate Affairs has filed its counter affidavit, the counsel for the Union of India submits that the Ministry of Finance may be granted some time to file its counter affidavit. The counter affidavit (response) be filed within three weeks,” a bench comprising Chief Justice D Y Chandrachud and Justice J B Pardiwala said.

The top court then listed the PIL for further hearing on April 28. It had earlier issued notices to the two union ministries, market regulator SEBI (Securities and Exchange Board of India) and the RBI (Reserve Bank of India). The plea has also sought a direction to establish a procedure that eliminates unnecessary litigation while dealing with claims of legal heirs qua bank deposits, insurance, post office funds etc.

The plea said that the Depositors’ Education and Awareness Fund (DEAF) had Rs 39,264.25 crore at the end of March 2021, up from Rs 33,114 crore on 31 March, 2020 and a sharp rise from Rs 18,381 crore at the end of March 2019.

Further the amount lying with the Investor Education Protection Fund, started at Rs 400 crore in 1999, was 10 times higher at Rs 4,100 crore at the end of March 2020, the plea said.

The petition stated there is an urgent need to develop a centralised online database under the control of RBI that will provide information about the deceased account holder including such details as the name, address and last date of transaction by the deceased account holder.

Further, it should be mandatory for banks to inform the RBI about the inoperative or dormant bank accounts. This exercise should be repeated after an interval of 9-12 months.

The need for a centralised database providing information of deceased account holders also becomes extremely essential when seen in the context of the already existing time consuming and cumbersome process that legal heirs have to go through while making claims after the death of an individual, the plea said.