Private Client Quarterly Milestones (April-June 2026)

In Bai Avabai Hormusji Tata Trust v Shernaz Faroukh Lawyer & Ors.,¹ the Supreme Court upheld the Bombay High Court’s direction to initiate court-monitored criminal investigation during pending testamentary proceedings. The dispute arose from two competing Wills relating to the estate of a deceased Parsi testator. During the proceedings, a court-appointed Administrator discovered that estate funds had been transferred to private entities and a charitable trust shortly after the testator’s death. The investigation also revealed suspicious circumstances surrounding the revival of a long-dormant trust that claimed rights under one of the Wills and its links to entities that had received estate funds.

The High Court directed the Administrator to lodge a criminal complaint to investigate the alleged siphoning of estate assets. Upholding this direction, the Supreme Court held that although a testamentary court’s primary role is to determine the validity and due execution of a Will, a High Court exercising testamentary jurisdiction retains its inherent powers as a constitutional court to prevent abuse of its process. The Court also observed that a court-appointed Administrator is under a duty to take all reasonable steps to preserve and protect the estate, including reporting suspected criminal misconduct. It also clarified that the Indian Succession Act, 1925 does not shield any person from prosecution for offences such as criminal breach of trust, forgery or conspiracy committed in relation to an estate.

This ruling highlights that testamentary proceedings do not preclude the exercise of the High Court’s wider powers where credible allegations of fraud or misappropriation arise. It also emphasises the responsibilities of court-appointed Administrators to safeguard estate assets and signals that parties engaging in fraudulent or obstructive conduct during succession disputes may face criminal, in addition to civil, consequences.

In S. Anand v State of Tamil Nadu,² the Supreme Court quashed criminal proceedings against a purchaser who had acquired immovable property through a registered sale deed from the seller claiming title under a Will that was subsequently alleged to be forged. The complainant contended that his brother, the seller, had forged their father’s Will and, on the strength of the forged document, sold the property to the appellant.

Allowing the appeal, the Supreme Court held that there was no material on record to suggest that the purchaser had participated in or had any knowledge of the alleged forgery. The Court observed that a bona fide purchaser who acquires property for valuable consideration and makes no fraudulent representation cannot, merely because of the purchase, be prosecuted for cheating under Section 420 of the erstwhile Indian Penal Code. Criminal liability for offences such as forgery or cheating cannot be attributed in the absence of evidence establishing the purchaser’s involvement in the alleged fraud.

The Court, however, clarified that its decision was confined to the purchaser’s criminal liability and did not adjudicate upon the validity of the purchaser’s title. If the Will is ultimately found to be forged, the purchaser’s title may still be challenged in appropriate civil proceedings, and the purchaser may have recourse against the seller.

The ruling provides important protection to bona fide purchasers by drawing a clear distinction between civil disputes concerning title and criminal liability for fraud. At the same time, it underscores the importance of undertaking thorough due diligence where title is derived through a Will, as protection from criminal prosecution does not necessarily safeguard the purchaser’s ownership rights.

On 29 May 2026, the Securities and Exchange Board of India (SEBI) issued a circular simplifying the nomination framework for demat accounts and mutual fund folios, with effect from 1 September 2026.³ The changes are intended to streamline the nomination process, encourage investors to record nominees, and help reduce the number of unclaimed financial assets.

The key modifications include:

• Nomination by default for single-holder accounts: Sole-holders of demat accounts and mutual fund folios must either nominate one or more persons or expressly opt out by submitting a declaration. Nomination remains optional for jointly held demat accounts and folios.
• Multiple nominees permitted: Investors may now nominate up to three persons for each account.
• Simplified execution requirements: For physical or offline nominations, a witness is no longer required where the investor signs the nomination form. A witness is required only where the investor executes the form using a thumb impression.
• Reduced mandatory disclosure requirements: It is now sufficient to provide only the nominee’s name and their relationship with the investor. The nominee’s date of birth must be disclosed only if the nominee is a minor.

The revised framework is likely to encourage greater adoption of nomination across investment accounts, reducing unclaimed assets in the Indian securities market. From an estate planning perspective, investors should ensure that the nominations recorded for their demat accounts and mutual fund folios are consistent with their Wills and other succession planning documents to minimise the potential for disputes between nominees and legal beneficiaries upon their demise.