Rubi Borah vs The Life Insurance Corp Of India ...
2021 Latest Caselaw 974 Gua

                                                               Page No.# 1/8

GAHC010072472020




                      THE GAUHATI HIGH COURT
  (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

                       Case No. : WP(C)/2222/2020

         RUBI BORAH
         W/O- LATE PRAFULLA KUMAR BORAH, R/O- PASCHIM BORAGAON, P.S-
         GARCHUK, P.O- GOTANAGAR, GUWAHATI- 781035, DIST- KAMRUP(M),
         ASSAM



         VERSUS

         THE LIFE INSURANCE CORP OF INDIA AND 3 ORS
         2ND FLOOR, JEEVAN SHIKHA BUILDING, LIC COLONY ROAD, BORIVALI
         WEST, MUMBAI, MAHARASHTRA- 400103, REP. BY ITS CHAIRMAN

         2:THE LIFE INSURANCE CORPORATION OF INDIA
          GUWAHATI DIVISIONAL OFFICE
          FANCY BAZAR GUWAHATI
          REP. BY THE DIVISIONAL MANAGER LICI
          GUWAHATI DIVISIONAL OFFICE
          FANCY BAZAR
          GUWAHATI- 781001

         3:MANAGER (CLAIMS)
          LICI
          GUWAHATI DIVISIONAL OFFICE
          FANCY BAZAR
          GUWAHATI- 781001

         4:BRANCH MANAGER
          LICI
          GUWAHATI DIVISIONAL OFFICE
          FANCY BAZAR
          GUWAHATI- 78100
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Advocate for the Petitioner     : MR. S BANIK

Advocate for the Respondent : MR. S P CHOUDHURY




                                     BEFORE
                    HONOURABLE MR. JUSTICE SANJAY KUMAR MEDHI

                                            JUDGMENT

Date : 15-03-2021

Considering the nature of the dispute involved in this writ petition and also the fact that the contesting respondent has filed the affidavit, the present writ petition is taken up for disposal at the admission stage.

2. The issue is in connection with an insurance policy with the Life Insurance Corporation of India (Corporation), which was entered into by one Prafulla Kumar Borah, the deceased husband of the petitioner. The issue revolves around the fact that since the Death Certificate contains the name of another lady, Pranati Dutta, as the wife, the Corporation has not released the amount in question to the petitioner.

3. Bereft of details, the basic facts of the case is that the petitioner Smt. Rubi Borah claims to be the wife of one Prafulla Kumar Borah. They have a daughter, namely, Gourima Borah, in whose Birth Certificate both the names of the petitioner and her husband, Prafulla Kumar Borah are clearly mentioned. The Aadhaar Card of the petitioner, the Photo Identity Card issued by the Election Commission of India and the Next of Kin Certificate issued by the district authorities clearly show that the petitioner is the wife of Prafulla Kumar Borah. Unfortunately, the said Prafulla Kumar Borah passed away on 11.04.2019.

4. The husband of the petitioner was a policy holder, being Policy No.486808278 with the Corporation and there is no dispute regarding the validity of the policy. On the death of Prafulla Kumar Borah, a claim was accordingly made by the petitioner and as per the requirement, the Death Certificate was annexed to such claim. However, the Corporation Page No.# 3/8

noticed that the name of the wife was different, namely, Pranati Dutta and therefore, the petitioner was asked to explain the same as the objection of the Corporation was that there should not be any misuse of the policy or the amount involved therein. The efforts made by the petitioner in trying to establish that she is the wife, in support of which there are other documents, having not yielded any results, the writ jurisdiction has been invoked by filing this present petition with the prayer that a direction be issued for release of the amount to the petitioner with interest.

5. I have heard Shri S Banik, learned counsel for the petitioner. I have also heard Shri SP Choudhury, learned counsel representing the respondent-Corporation.

6. Shri Banik, learned counsel for the petitioner has submitted that there is no dispute with regard to the identity or status of the petitioner with regard to the marital relationship with the deceased and as observed above, the Birth Certificate of the daughter, Gourima Borah, the Aadhaar Card, the Photo Identity Card and the Next of Kin Certificate are all consistent to show that the petitioner is the wife of the deceased. That being the position, the fact that the Death Certificate mentions another name as the wife would not be a relevant factor for release of the amount. The learned counsel has alternatively contended that the position of a nominee being equivalent to a trustee, the Corporation will have no discretion not to release the same to the trustee and if any other claim is made under the personal law, those would be decided by the competent court of law for the mode of disbursement and apportionment of the amount involved in the policy. Shri Banik accordingly prays that the action/inaction of the respondent authorities in not releasing the amount is wholly unreasonable and violative of her rights guaranteed under Article 14 of the Constitution of India.

7. The learned counsel for the petitioner has submitted that it is no longer res integra that regarding the fact that Corporation has to be regarded as a State within the meaning of law so as to bring it within the ambit of Article 226 of the Constitution of India. In support of his claim made in this writ petition, the learned counsel has relied upon the following decisions of Page No.# 4/8

the Hon'ble Supreme Court:

i) Smt. Sarbati Devi and Anr. Vs. Smt. Usha Devi, reported in (1984) 1 SCC 424;

ii) Vishin N. Khanchandani and Anr. Vs. Vidya Lachmandas Khanchandani and Anr. , reported in (2000) 6 SCC 724;

iii) Shreya Vidyarthi Vs. Ashok Vidyarthi and Ors., reported in (2015) 16 SCC 46.

8. In the case of Smt. Sarbati Devi and Anr. (supra), the Hon'ble Supreme Court was confronted with two sets of decision - one set by the Delhi High Court and the other by rests of the High Courts. After threadbare discussion, the Hon'ble Supreme Court reached the following conclusion, which is extracted hereinbelow:

"12. Moreover there 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 Fauja Singh's case (AIR 1978 Delhi 276) (supra) and in Mrs. Uma Sehgal's case (AIR 1982 Delhi 36) (supra) 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 Section 39 of the Act does not have the effect of conferring on the nominee any beneficial interest in the amount payable Page No.# 5/8

under the life insurance policy on the death of the assured. The nomination only indicates the hand which is authorised to receive the amount, on the payment of which the insurer gets a valid discharge of its liability under the policy. The amount, however, can be claimed by the heirs of the assured in accordance with the law of succession governing them."

9. The aforesaid decision of the Hon'ble Supreme Court has been constantly followed in other decisions, including the case of Vishin N. Khanchandani and Anr. (supra) and Shreya Vidyarthi (supra).

10. In the case of Vishin N. Khanchandani and Anr. (supra), the Hon'ble Supreme Court was considering the relevant provisions of the Insurance Act of 1938 along with the Government Savings Certificates Act, 1959 and had laid down as follows:

"13. In the light of what has been noticed hereinabove, it is apparent that though language and phraseology of Section 6 of the Act is different than the one used in Section 39 of the Insurance Act, yet, the effect of both the provisions is the same. The Act only makes the provisions regarding avoiding delay and expense in making the payment of the amount of the national savings certificates, to the nominee of holder, which has been considered to be beneficial both for the holder as also for the post office. Any amount paid to the nominee after valid deductions becomes the estate of the deceased. Such an estate devolves upon all persons who are entitled to succession under law, custom or testament of the deceased-holder. In other words, the law laid down by this Court in Sarbati Devi's case, AIR 1984 SC 346, holds field and is equally applicable to the nominee becoming entitled to the payment of the amount on account of national savings certificates received by him under Section 6 read with Section 7 of the Act who in turn is liable to return the amount to those, in whose favour law creates beneficial interest, subject to the Page No.# 6/8

provisions of sub-section (2) of Section 8 of the Act."

11. The Hon'ble Supreme Court in the case of Shreya Vidyarthi (supra) while approving the decision in Smt. Sarbati Devi and Anr. (supra) has also laid down as follows:

"19. The affidavit of Rama Vidyarthi in Suit No. 147 of 1968 filed by Savitri Vidyarthi discloses that she was looking after the family as the Manager taking care of the respondent No.1, her step son i.e. the son of the first wife of Hari Shankar Vidyarthi. In the said affidavit, it is also admitted that she had received the insurance money following the death of Hari Shankar Vidyarthi and the same was used for the purchase of the suit property along with other funds which she had generated on her own. The virtual admission by the predecessor-in-interest of the appellant of the use of the insurance money to acquire the suit property is significant. Though the claim of absolute ownership of the suit property had been made by Rama Vidyarthi in the aforesaid affidavit, the said claim is belied by the true legal position with regard to the claims/entitlement of the other legal heirs to the insurance amount. Such amounts constitute the entitlement of all the legal heirs of the deceased though the same may have been received by Rama Vidyarthi as the nominee of her husband. The above would seem to follow from the view expressed by this Court in Smt. Sarbati Devi & Anr. vs. Smt. Usha Devi[1984 (1) SCC 424] which is extracted below. (Paragraph 12)

"12. Moreover there 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 Page No.# 7/8

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 and in Uma Sehgal case 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 Section 39 of the Act does not have the effect of conferring on the nominee any beneficial interest in the amount payable under the life insurance policy on the death of the assured. The nomination only indicates the hand which is authorised to receive the amount, on the payment of which the insurer gets a valid discharge of its liability under the policy. The amount, however, can be claimed by the heirs of the assured in accordance with the law of succession governing them.""

12. Shri Banik, learned counsel accordingly submits that in view of the aforesaid facts and circumstances and by following the law laid down by the Hon'ble Supreme Court, the present petition is liable to be allowed by directing release of the amount in question by the respondent-Corporation to the petitioner.

13. Shri SP Choudhury, learned counsel for the Corporation fairly submits that there is absolutely no dispute to the proposition of law canvassed on behalf of the petitioner and it was only with the purpose of ensuring that there is no misuse of public money that the amount has not been released to the petitioner. Shri Choudhury, however, submits that there is no explanation as to how the name of another lady, namely, Pranati Dutta has been Page No.# 8/8

mentioned in the Death Certificate of Prafulla Kumar Borah, which itself was provided by the petitioner while making the claim.

14. After considering the rival submissions and by following the law laid down by the Hon'ble Supreme Corut, this Court is of the view that prima facie, there is no dispute to the fact that the petitioner is the legally married wife of the deceased Prafulla Kumar Borah. In any view of the matter, there being no dispute that the petitioner is the nominee of the policy in question, the respondent-Corporation shall not have any other option but to release the amount to the petitioner as the claim has already been lodged. It is accordingly directed that the respondent-Corporation shall forthwith release the amount in question to the petitioner. It is, however, made clear that in the event any claim is lodged in the appropriate forum of law, the apportionment of the amount in question shall be done as per the direction which may be issued by the appropriate court of law.

15. The writ petition is accordingly disposed of. No costs.

JUDGE

Comparing Assistant