1981 (4) TMI 268 - HC - Indian Laws

Summary

Issues Involved:
1. Entitlement of the nominee to the insurance policy money.
2. Role and rights of the nominee under Section 39 of the Insurance Act, 1938.
3. Applicability of Section 6 of the Married Women's Property Act, 1874.
4. Interpretation and implications of Section 60(1)(kb) of the Code of Civil Procedure.

Detailed Analysis:

1. Entitlement of the Nominee to the Insurance Policy Money:
The primary issue was whether Dwarka Dass Sehgal, as the nominee, was entitled to receive the policy money absolutely or merely held it in trust for the legal heirs of the deceased, Sudarshan Kumar Sehgal. The learned Sub-Judge initially dismissed the suit, holding that Dwarka Dass, being the nominee, was entitled to receive the amount in his own right absolutely and was neither a trustee nor an agent of the legal heirs. This judgment was challenged, leading to the present appeal.

2. Role and Rights of the Nominee under Section 39 of the Insurance Act, 1938:
The court examined various precedents and statutory provisions to determine the role and rights of a nominee. It was noted that Section 39 of the Act allows the policyholder to nominate a person to receive the policy money upon their death. The court observed that the prevailing view in numerous cases was that a nominee is merely a person who receives the payment on behalf of the heirs of the assured. However, the court found merit in the argument that a departure from this view was justified.

The court highlighted the comprehensive provisions of Section 39, which state that the policy money shall be paid to the nominee if available, and only to the heirs if no nominee is available. The court rejected the notion that the nominee acts merely as a collection agent for the heirs, emphasizing that the nominee has a statutory right to the policy money.

3. Applicability of Section 6 of the Married Women's Property Act, 1874:
Section 6 of the Married Women's Property Act, 1874, was discussed, which provides that a policy of insurance effected by a married man on his own life for the benefit of his wife or children shall be deemed to be a trust for their benefit. The court noted that Section 39 of the Insurance Act does not apply to policies under Section 6 of the Married Women's Property Act, except where the nomination purports to be under Section 39. The court found no indication that the nominee in the first category (insurance on one's own life) would be a mere collection agency.

4. Interpretation and Implications of Section 60(1)(kb) of the Code of Civil Procedure:
Section 60(1)(kb) of the Code of Civil Procedure provides that all moneys payable under a policy of insurance on the life of the judgment-debtor are not liable to attachment or sale in execution of a decree. The court observed that the policy money is not available to the creditors of the assured, reinforcing the statutory protection afforded to the nominee.

Conclusion:
The court concluded that the nominee takes the money by way of statutory testamentary disposition and is not a trustee or agent of the heirs or successors of the assured. The insurance money is not available to any creditor. The appeal was dismissed, affirming that Dwarka Dass Sehgal, as the nominee, was entitled to the policy money absolutely.