What Ministry's Advisory On Queer Partners' Bank Accounts Fails To Address

The Advisory has gained wide publicity and is being touted as a new development enabling members of the LGBTQIA+ community to now open joint bank accounts with their partners, which they were apparently prevented from doing earlier. However, what most reports have failed to note is that this 2-sentence advisory does not create any new entitlement for the queer community. On the contrary, its issuance, without detail or context and the subsequent media reaction, confuses rather than clarifies matters relating to succession.

Legal effect of joint bank accounts and nominations

The 2014 RBI Master Circular on Maintenance of Deposit Accounts itself notes that two or more persons can open a joint bank account (current, savings, or deposits) and there is no requirement that they be related biologically or otherwise. Account holders can also specify, through survivorship clauses, how the bank is to deal with the balance in the account on the date of maturity or on the death of any of the joint holders. Similarly, depositors can also make nominations in favour of any one individual for their balances, deposits, lockers, mutual funds, and other investments. In view of this, the Advisory only sets out the existing position on joint bank accounts and nominations and does not secure any new right to the queer community.

Where the Advisory causes confusion is in its failure to clarify the legal effect of a survivorship/nomination and its implications for the queer community. On the death of the account holder(s), a survivor/nominee does not become an owner of the funds (as confirmed by the Supreme Court in December 2023 in Shakti Yezdani and Anr.v. Jayanand Jayant Salgaonkar). While a survivor/nominee would have the right to receive the money from the bank, and payment to the survivor/nominee would confer a valid discharge to the bank, the funds are treated as being held in trust by the survivor/nominee for the legal heirs of the deceased holder. The funds would be dealt with as per either the deceased's will or, in the absence of a will, as per the applicable personal law.

Therefore, for the queer community, when there is no legal recognition of the relationship between the partners, it would not be enough to simply designate a partner as a survivor/nominee to ensure that they become entitled to the funds. In addition to a survivorship stipulation/nomination, LGBTQIA+ persons would necessarily have to execute a will clearly bequeathing the designated funds to their partner. In the absence of a will, the surviving partner would remain entirely excluded from the deceased's estate, which will have to be distributed only to legally recognised heirs as per the applicable personal law.

Legal implications of 'family' and directions from the Supreme Court

Recognition of one's status as a member of a family unit brings with it a 'bouquet of entitlements' as well as liabilities. For instance, default succession rules under all personal laws recognise the right of a spouse to inherit assets on the death of a partner. The recognition of an implicit authority to take medical decisions, entitlement to maintenance, insurance, compensation or consideration for compassionate appointments, shared rights to custody and guardianship as parents of a child are rights that are only available to a straight, married couple. The right to seek protection to live, free of violence, within a shared household is only available in terms of a woman in a relationship 'in the nature of marriage'.

On the flipside, even the disabilities in law accruing to 'relatives' in various statutes such as the Companies Act, 2013, and Insolvency and Bankruptcy Code, 2016 would not be attracted for queer couples, resulting in a lacuna which the State ought to be interested in plugging.

In Supriyo @ Supriyo Chakraborty and Anr. v. Union of India, while a Constitution Bench of the Supreme Court did not recognise a fundamental right to marry and rejected the constitutional challenge to the Special Marriage Act, it nevertheless unanimously recognised that the State's failure to make provisions for queer couples to access benefits flowing from a union was discriminatory.

The Supreme Court called upon the Union Government to review the existing legal framework to address this and recorded the assurance of the Solicitor General that the Union Government would constitute a Committee “for the purpose of defining and elucidating the scope of the entitlements of queer couples who are in unions”. This Committee was formed by the Central Government on 16 April 2024 and comprises the Cabinet Secretary (as Chairperson) along with the Secretary of the Department of Home, Ministry of Women and Child Development, Department of Health and Family Welfare, Legislative Department, and Department of Social Justice and Empowerment (DoSJE).

In a recent press release dated 1^st September 2024, the DoSJE has invited comments from the public on measures to be taken for the queer community while also setting out “interim action” taken by the Government of India. It appears that advisories and letters have been addressed to all States and UTs flagging the need to ensure that there is no discrimination against queer persons in issuance of ration cards, opening joint bank accounts, ensuring access to healthcare, etc.

Advisories which simply re-state the existing state of affairs do not secure any additional rights for the queer community. Any real relief can only be provided by considered structural changes through legislative amendments, which we can only hope, will be extensively discussed by the Committee and set out in a report. Till then, in matters relating to inheritance and succession, LGBTQIA+ persons will need to protect their own interests within the existing legal framework.

Pritha Srikumar Iyer is Advocate-on-Record at Supreme Court & Mansi Binjrajka is an Advocate practising at Supreme Court. Views are personal.