Section 5 of The Government Savings Promotion Act, 1873
1[Any payment made in accordance with the foregoing provisions of this Act] shall be a full discharge from all further liability in respect of the money s o paid Saving of right of executor.-- 2[Nothing] herein contained precludes any executor or administrator, or other representative of the deceased, from recovering from the person receiving the same the amount remaining in his hands after deducting the amount of all debts or other demands lawfully paid or discharged by him in due course of administration. Saving of right of creditor.--3[Every creditor] or claimant against the estate of the deceased may recover his debt or claim out of the money paid under this Act, 4*** to any person, and remaining in his hands unadministered, in the same manner and to the same extent as 5[if that person had obtained] letters of administration of the estate of the deceased.
Summary
- When the bank pays money out according to the Act, it is fully discharged from any further legal responsibility for that money.
- This payment does not stop a legal executor or administrator from suing the person who received the money to get it back for the estate.
- Creditors (people the deceased owed money to) can still try to collect their debts from the person who received the payment.
- A creditor can act against the receiver of the money just as if that receiver had been granted official letters of administration for the estate.
Practical examples
FAQ
1. Can the bank be sued if they pay the wrong person while following the Act?
No. Section 5 states that any payment made according to the Act's rules is a "full discharge," meaning the bank's liability ends once the money is paid out.
2. If I receive a deceased person's savings as a nominee, do I get to keep it all even if they owed people money?
Not necessarily. Section 5 allows creditors of the deceased to claim their debts from the money you received, just as they could from an official estate administrator.
3. Does the bank's "discharge" mean the money belongs to the receiver forever?
No, it only means the bank is no longer responsible. An executor or representative of the deceased can still legally recover the money from the receiver if the law says it belongs elsewhere.
Test yourself
Q1.Under Section 5 of The Government Savings Promotion Act, 1873, what is the legal effect on a Government Savings Bank after it makes a payment according to the Act?
Q2.Under Section 5 of The Government Savings Promotion Act, 1873, if an executor wants to recover money that the bank already paid to a nominee, who must they seek the money from?
Q3.Under Section 5 of The Government Savings Promotion Act, 1873, what right is specifically "saved" for a creditor of the deceased?
Q4.Under Section 5 of The Government Savings Promotion Act, 1873, a creditor can recover money from a recipient in the same manner as if that recipient had obtained: