9911796707
TMI Blog2021 (5) TMI 1075X X X X Extracts X X X X X X X X Extracts X X X X ..... a died on 11.07.2018 and the policy had matured after the Amendment to Section 39, came into force. It was thus incumbent upon the Trial Court to have considered and examined the issue, once the same was raised and highlighted by the Appellants and taken a decision accordingly, with respect to the benefits accruing under the insurance policies, in question. Since the Trial Court has not considered the legal issue of the 2015 Amendment to the Insurance Act 1938, raised by the Appellants, it would be appropriate to remand the matter back to the Trial Court. Accordingly it is directed that the learned Trial Court shall consider the matter afresh, taking into account the respective contentions of the parties and the law on the subject. In so far as the respective claims to other moveable assets are concerned, excluding the policies, the same shall be decided by the Trial Court, separately and at the appropriate time. The appeal is allowed and the order of the Trial Court is set aside. - MS. JYOTI SINGH, J. For Appellant : Ekta Gambhir, Advocate For Respondents : Rakesh Wadhwa, Advocate JUDGMENT The Appellants have filed the present Regular First Appeal assa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, Appellants filed their written statement. In the interregnum, vide order dated 13.05.2019 the learned Trial Court directed the Appellants and Respondent No. 2 to maintain status quo with respect to possession of flat at Dwarka and also restrained the Appellants from expending the cash amounts received, as aforesaid. 7. The Appellants, amongst various pleas on merits, in the written statement, took a preliminary objection to the maintainability of the suit on the ground that with respect to the moveable assets of the deceased, succession certificate was required from a Court of competent jurisdiction under Section 372 of the Indian Succession Act, 1925. Preliminary objections regarding pecuniary jurisdiction, Court fee and misjoinder of causes of action were also taken in the written statement. 8. On merits, it was pleaded that the suit property was purchased exclusively out of the funds invested by the deceased husband of Appellant No. 1 and the name of Respondent No. 2 was added in the sale deed out of respect. The entire expenditure on the home furnishing etc. including water electricity bills, was incurred by the deceased. In a nutshell, it was the case of the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uding its maintainability. If the maintainability was decided against them, the claims on merits could only be decided in a full-fledged trial. It was categorically stated that Respondent No. 1 had no right to claim the benefits under the policies as Appellant No. 1 was the nominee. 13. Along with the written submissions, Appellants filed an application under Order VII Rule 11 CPC, to which reply was filed by Respondent No. 1. 14. Learned Trial Court decided both the applications by a common order dated 16.09.2020, dismissing the application under Order VII Rule 11 CPC and allowing the application under Order XII Rule 6 CPC. A preliminary decree was passed in favour of Respondent No. 1 directing Appellant No. 1 to transfer/pay a sum of Rs. 54,14,077/- in the account of Respondent No. 1. The impugned order to the extent it has partially decreed the suit under Order XII Rule 6 CPC is assailed by the Appellants before this Court. 15. Learned counsel for the Appellants contended that there was no admission on the part of the Appellants enabling the Trial Court to pass a decree under Order XII Rule 6 CPC. The relief claimed under the said provision is discretionary in nature an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said decision, the Supreme Court held that nomination would not confer any beneficial interest on the nominee and it is a mere authorization to receive the insurance amount, which can be claimed by the legal heirs of the assured in accordance with law of succession, governing the parties. The judgment has been followed successively by various High Courts in a long line of cases, holding that mere nomination effected under Section 39 shall not deprive the legal heirs to the amount under the Insurance Policies. However, as per Ms. Gambhir, the said judgments would be of no avail to Respondent No. 1 as the said decisions are based on the unamended Section 39, while the present case relates to policies which have matured in 2018, post the 2015 Amendment. 19. Learned counsel for the Appellants relied upon the judgment of Rajasthan High Court in Ramgopal Ors. vs. General Public Ors., S.B. Civil Misc. Appeal No. 27/2018 decided on 05.04.2019, wherein according to her, judgment in Sarbati Devi (supra) was distinguished in view of the 2015 Amendment and Court held that wherever the provisions of amended section 39 will be applicable, beneficial nominee shall be entitled to the benef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not embroiled in the litigations inter-se the legal heirs of the insured. Reliance was placed by Mr. Wadhwa on the following judgments to support his contentions. i. Smt. Sarbati Devi Anr. Vs. Smt. Usha Devi (1984) 1 SCC 424. ii. Shipra Sengupta Vs. Mridul Sen Gupta Ors. (2009) 10 SCC 680. iii. Shakti Yezdani Anr. Vs. Jayanand Jayant Salgaonkar Ors. Appeal No. 313 of 2015 decided by Bombay High Court on 01.12.2016. iv. Smt. Rampali Vs. The State Govt. of NCT of Delhi Ors. FOA No. 184/2017 decided by Hon'ble High Court of Delhi on 24.04.2017. v. Khushboo Gupta Vs. The Life Insurance Corporation of India Ors. CWJC No. 12012 of 2018 decided on 25.09.2019. vi. Oswal Greentech Ltd. Vs. Mr. Pankaj Oswal Ors. CA no. 410 of 2018 decided by National Company Law Appellate Tribunal, Delhi on 14.11.2019. vii. S. Shafeek Ors. Vs. State of Kerala. viii. Smt. Ramayee Vs. the Principal Comptroller of Defence Ors. W.P. (MD) No. 18544 of 2016 decided on 17.02.2020. 22. Learned counsel for the Respondent had also relied on a judgment of the Rajasthan High Court in Chaini Devi vs. General Public, S.B. Civil Misc. Appeal No. 2302/2018 decided on 11.03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 1/4th share in the benefits under the policies, Provident Fund and medical reimbursement etc. which were valued at Rs. 3,12,56,311/-, in the plaint. From the 1/4th share, which came to Rs. 78,14,077/-, Trial Court excluding a sum of Rs. 24,00,000/-, received by Respondent No. 1 and directed payment of balance of Rs. 54,14,077/-. 27. The proposition of law laid down by the Supreme Court in Sarbati Devi (supra) and relied upon by counsel for the Respondent cannot be disputed and is a binding dictum. The Supreme Court held that nomination would not confer any beneficial interest on the nominee under an insurance policy and a nominee is only an authorized hand to receive the insurance amount, which is subject to be disbursement amongst the legal heirs under the law of succession, governing the parties. In fact, the said judgment has been followed subsequently in a long line of judgments not only by this Court but different High Courts from time to time. Relevant paras of Sarbati Devi (supra) are as under:- 5. We shall now proceed to analyse the provisions of Section 39 of the Act. The said section provides that a holder of a policy of life insurance on his own life may when ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is difficult to hold that Section 39 of the Act was intended to act as a third mode of succession provided by the statute. The provision in sub-section (6) of Section 39 which says that the amount shall be payable to the nominee or nominees does not mean that the amount shall belong to the nominee or nominees. We have to bear in mind here the special care which law and judicial precedents take in the matter of execution and proof of wills which have the effect of diverting the estate from the ordinary course of intestate succession and that the rigour of the rules Patna High Court CWJC No. 12012 of 2018 dt. 25-09-2019 governing the testamentary succession is not relaxed even where wills are registered. xxx xxx xxx 8. We have carefully gone through the judgment of the Delhi High Court in Uma Sehgal case [ AIR 1982 Del 36 : ILR (1981) 2 Del 315]. In this case the High Court of Delhi clearly came to the conclusion that the nominee had no right in the lifetime of the assured to the amount payable under the policy and that his rights would spring up only on the death of the assured The Delhi High Court having reached that conclusion did not proceed to examine the possibility of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is one other strong circumstance in this case which dissuades us from taking a view contrary to the decisions of all other High Courts and accepting the view expressed by the Delhi High Court in the two recent judgments delivered in the year 1978 and in the year 1982. The Act has been in force from the year 1938 and all along almost all the High Courts in India have taken the view that a mere nomination effected under Section 39 does not deprive the heirs of their rights in the amount payable under a life insurance policy Yet Parliament has not chosen to make any amendment to the Act. In such a situation unless there are strong and compelling reasons to hold that all these decisions are wholly erroneous, the Court should be slow to take a different view. The reasons given by the Delhi High Court are unconvincing We, therefore, hold that the judgments of the Delhi High Court in Fauza Singh case [ AIR 1978 Del 276] and in Uma Sehgal case [ AIR 1982 Del 36 : ILR (1981) 2 Del 315] do not lay down the law correctly. They are, therefore, overruled. We approve the views expressed by the other High Courts on the meaning of Section 39 of the Act and hold that a mere nomination made under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve the person whose life is insured, the amount secured by the policy shall be payable to such survivor or survivors. (7) Subject to the other provisions of this section, where the holder of a policy of insurance on his own life nominates his parents, or his spouse, or his children, or his spouse and children, or any of them, the nominee or nominees shall be beneficially entitled to the amount payable by the insurer to him or them under sub-section (6) unless it is proved that the holder of the policy, having regard to the nature of his title to the policy, could not have conferred any such beneficial title on the nominee. (10) The provisions of sub-sections (7) and (8) shall apply to all policies of life insurance maturing for payment after the commencement of the Insurance Laws (Amendment) Act, 2015. (11) Where a policyholder dies after the maturity of the policy but the proceeds and benefit of his policy has not been made to him because of his death, in such a case, his nominee shall be entitled to the proceeds and benefit of his policy. 30. Section 39 was amended by the amending Act No. 5 of 2015 and was pursuant to the recommendations of 190th Report of the Law Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the insurer's liability under the policy and that unless the contrary is expressed, the nominee would be the beneficial nominee. (c) An option be given to the policyholder to clearly express whether the nominee will collect the money on behalf of the legal representatives (in other words such nominee will be the collector nominee) or whether the nominee will be the absolute owner of the monies in which case such nominee will be the beneficial nominee. (d) A proviso be added to make the nomination effectual for the nominee to receive the policy money in case the policyholder dies after the maturity of the policy but before it can be encashed. Suggested Amendment of Section 39:- 7.1.15 To give effect to the above recommendations, the Law Commission is of the view that s. 39 be recast as follows: xxx xxx xxx (7) Subject to the other provisions of this section, where the holder of a policy of insurance on his own life nominates his parents, or his spouse, or his children, or his spouse and children, or any of them, the nominee or nominees shall be beneficially entitled to the amount payable by the insurer to him or them under sub-section (6) unless it is prove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 2015 Amendment to the notice of the Trial Court, including the judgment of the Rajasthan High Court in Ramgopal (supra). But the Trial Court has not even dealt with the legal issue raised before it and allowed the application under Order XII Rule 6 CPC, based on the unamended provisions of Section 39. It is a settled law that the rights of the parties to a lis have to be decided in accordance with the statutory provisions and law that prevails on the day the cause of action arises. 33. In the present case, Appellants had specifically flagged the issue of applicability of the amendment to Section 39 on the ground that Late Shri Vineet Huria died on 11.07.2018 and the policy had matured after the Amendment to Section 39, came into force. It was thus incumbent upon the Trial Court to have considered and examined the issue, once the same was raised and highlighted by the Appellants and taken a decision accordingly, with respect to the benefits accruing under the insurance policies, in question. 34. Perusal of the impugned order reflects another error committed by the Trial Court even in the quantum of the amount directed to be paid i.e. Rs. 54,14,077/-. The said figure, as afo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
