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2022 Latest Caselaw 3527 Gua

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GAHC010147562022




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

                       Case No. : I.A.(Civil)/2147/2022

         KOHINUR SIKDER AND ANR.
         WIFE OF NURUL ISLAM, DAUGHTER OF ABDUL KUDDUS SIKDER,
         RESIDENT OF VILLAGE KARAIKHAITY, P.O. PATHIMARI, P.S.
         KACHUMARA, DISTRICT BARPETA, ASSAM, PIN 781127.

         2: MASUD BEEN SHAHMA
          SON OF LATE ABU SHAMA AHMED
          RESIDENT OF VILLAGE KARAIKHAITY
          P.O. PATHIMARI
          P.S. KACHUMARA
          DISTRICT BARPETA
         ASSAM
          PIN 781127. REPRESENTED BY THE APPLICANT NO.

         VERSUS

         LIFE INSURANCE CORPORATION OF INDIA AND 3 ORS.
         REP. BY THE BRANCH MANAGER OF LICI, BARPETA BRANCH, BARPETA,
         ASSAM, PIN 781301.

         2:THE BRANCH MANAGER

          LIFE INSURANCE CORPORATION OF INDIA
          JANIA ROAD
          P.O. AND DIST. BARPETA
          ASSAM
          PIN 781301.

         3:KHODEJA KATIN
         WIFE OF KALIM UDDIN
          RESIDENT OF VILLAGE KARAIKHAITY
          P.O. PATHIMARI
          P.S. KACHUMARA
          DISTRICT BARPETA
                                                                   Page No.# 2/7

            ASSAM
            PIN 781127.

            4:KALIM UDDIN
             SON OF LATE ABDUL JALIL
             RESIDENT OF VILLAGE KARAIKHAITY
             P.O. PATHIMARI
             P.S. KACHUMARA
             DISTRICT BARPETA
            ASSAM
             PIN 781127



             Linked Case : WP(C)/6167/2017
            KHODEJA KHATUN AND 2 ORS
            W/O- KALIM UDDIN


            VERSUS

            LIFE INSURANCE CORPORATION OF INDIA
            REP. BY THE BRANCH MANAGER OF LICI
            BARPETA BRANCH
            BARPETA
            ASSAM


                                     BEFORE
                Hon'ble MR. JUSTICE SANJAY KUMAR MEDHI

                                JUDGMENT & ORDER

Advocates for the petitioners   :   Shri M. Rahman, Advocate.


Advocates for respondents       :   Shri K.M. Hassan, Advocate.




Date of hearing             :   14.09.2022
Date of judgment            :   14.09.2022
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1.   Heard Shri M. Rahman, learned counsel for the petitioners. Also heard Shri
K.M. Hassan, learned counsel for the applicants.


2.   At the outset, it is made clear that in the I.A. though the applicant no. 1
has been made party respondent no. 3, the applicant no. 2 is not a party
respondent in the writ proceedings and therefore, the appearance would only be
regarded for the applicant no. 1/ respondent no. 3. Though the name of
Standing Counsel, LIC appears in the cause list, none is present while the
matter is called upon.


3.   Considering the subject matter of the writ petition and the fact that the
same is pending since the year 2017 along with the I.A. the writ petition is also
taken up for final disposal at the admission stage.


4.   The present writ petition has been instituted by the petitioners, who are the
mother, father and son of the deceased Abu Shama Ahmed. The deceased was
a LIC Policy Holder being numbered 998875019 and in the said policy he had
nominated the respondent no. 3 as the nominee. However, on the death of Abu
Shama Ahmed, the respondent no. 3 on the strength of being a nominee has
purported to take the entire benefit of the policy.


5.   It is the case of the petitioners that the representations were also not paid
any heed to and therefore the writ petition has been filed.


6.   This Court while issuing notice vide order dated 22.09.2017 had directed

that beyond 1/8th portion of the amount involved, no other amount shall be
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released in favour of the respondent no. 3. The aforesaid direction was given
considering that the parties were Muslims and as per Muslim Personal Law, the

wife / widow would be entitled to 1/8th of the amount in question.


7.   Shri Rahman, the learned counsel for the petitioners submits that the
respondent no. 3 is only a nominee and as a nominee, she cannot usurp the
entire amount and is entitled only to the amount which is admissible under the
law governing the parties. He accordingly submits that appropriate direction
may be issued to limit her entitlement only to her share as permissible under
the Personal Law.


8.   On the other hand, Shri Hassan, the learned counsel for the respondent no.
3/ applicant no. 1 submits that there is an amendment of the Insurance Act,
1938 (herein after the Act) whereby the entire Section 39 has been amended.


9.   By drawing the attention of this Court to Section 39(7) of the Act, the
learned counsel for the respondent no. 3 submits that as per the said sub
section, since the nominee is the spouse, she would be entitled to the entire
amount. He accordingly submits that the writ petition is liable to be dismissed.


10. This Court has duly considered the rival submissions made by the parties.


11. There is no manner of doubt that a nominee is at par with the position of a
trustee and on the death of the policy holder, the amount is released to the
nominee which however has to be disbursed in accordance with law governing
the respective parties.
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12. Since Section 39 (7) of the Act has been pressed into service, it would be
convenient to have a close look at the said sub section which read as follows:

      "39.   Nomination by policyholder.--
      .....

(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."

13. A careful perusal of the aforesaid sub section, in the opinion of this Court would make it clear that if a nominee is a spouse or children or parents, the nominee would be entitled to such beneficial title as permitted under the law. The meaning sought to be given by the learned counsel for the respondent no. 3 that the entire amount would be entitled to by the nominee in the opinion of this Court is not the correct meaning and the said sub section only makes it clear that when the nominee comes within the classes mentioned in the sub section, apart from being at par with the position of a trustee, the said nominee would also be entitled to the benefit of the policy.

14. The Hon'ble Supreme Court in the case of Sarbati Devi v. Usha Devi, reported in (1984) 1 SCC 424 has settled the position of a nominee vis-a-vis his or her entitlement as there were conflicting decisions. In paragraph 12, the following has been laid down:

"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 Page No.# 6/7

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 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."

15. In the instant case, the parties being Muslim by religion, Shri Ahmed, the learned counsel for the petitioners submits that the respondent no. 3 would be

entitled to 1/8th of the share. The aforesaid proposition is not disputed by Shri Hassan, the learned counsel for the respondent no. 3 / applicant no. 1.

16. Though Shri Hassan, the learned counsel for the respondent no. 3 has not opposed to the said proposition, he contends that the proper disbursement can only be decided by an appropriate Civil Court.

17. In that view of the matter, the present writ petition is disposed of by giving liberty to the parties to approach the appropriate Civil Court for proper Page No.# 7/7

disbursement of the amount in question and till such disbursement is made as per the law governing the parties, the amount shall be kept intact.

18. At this stage, this Court has proposed to the learned counsel for the respective parties that an attempt should be made for settling the matter through Mediation before approaching the Civil Court.

19. The learned counsel for the parties have readily agreed to the said proposal. Accordingly, let an attempt be made for settling the matter through Mediator.

20. Accordingly this Court appoints Ms. Nikita Baruah, learned Counsel to act as the Mediator to make an attempt to settle the dispute between the parties. Let the learned counsel for the parties furnish the relevant documents to the learned Mediator within a week and that the first meeting be held on or before 31.10.2022.

21. If the matter can be settled outside the Court in Mediation, the liberty to approach the Civil Court would become redundant. However, in case the mediation fails, the parties may approach the Civil Court in terms of liberty granted above.

22. Both the writ petition and Interlocutory Application are accordingly disposed of.

JUDGE

Comparing Assistant