First Appeal No.5 of 1998

12th November, 2009

Petitioner Counsel: Mr. V. A. KOTHALE
Respondent Counsel: Mr. N. D. DANGRE

Cases Cited:
Khageswar Naik Vs. Domuni Bewa, AIR 1989 Orissa 10 [Para 3,5]
Smt. Sarbati Devi Vs. Smt. Usha Devi, AIR 1984 SC 346 [Para 4,5]
State of Chhatisgarh Vs. Dhirjo Kumar Sengar, 2009(4) ALL MR 987 (S.C.)=AIR 2009 SC 2568 [Para 6]

JUDGMENT

JUDGMENT :- By this appeal, appellants challenge judgment and order dated 18th September, 1997 passed by the Joint Civil Judge, Senior Division, Chandrapur in Succession Case No.6 of 1994 refusing to grant Succession Certificate to applicants i.e. widow and daughter respectively of deceased Dr. Dilip Gaidhane. The securities in respect of which the certificate was applied for were four insurance policies described in the application.

2. Respondent no.1-father was nominated by deceased Dilip while effecting the policies. Section 39(i) of the Insurance Act provides that in the event of death of a policy-holder amount of policy shall be paid to the person or persons nominated by him, was reason for the Trial Court to reject application for succession certificate made by appellant no.1-wife. Learned Trial Court, however, held that since nomination indicates the hand which is authorised to receive the proceeds of policy, applicants are entitled to take up appropriate remedy available to them in law from the nominee proportional to their right, if need so arises.

3. Learned counsel for appellants contends that appellants being admittedly heirs in class-I, learned trial Court could have declared their 1/3rd share in the money payable under various policies, without asking appellants to undergo rigours of another round of litigation. Learned counsel for appellants has relied upon judgment of Orissa High Court in Khageswar Naik Vs. Domuni Bewa and anr. reported in AIR 1989 Orissa 10 in which it is held that widow and widow mother of a male Hindu being class-I heirs, succeed simultaneously and are entitled to half share each in the immovable property of the deceased.

4. In Smt. Sarbati Devi and anr. Vs. Smt. Usha Devi reported in AIR 1984 SC 346, the Apex Court was dealing with right of nominee qua Section 39 of the Insurance Act. It is held that the amount assured shall be paid to the nominee in order to give discharge to the insurer, but it does not mean that nominee becomes owner of the amount and that Section 39 cannot operate as a third kind of succession and nominee cannot be treated equivalent to an heir or legatee. At the same time, it has been in no unambiguous term held that the nomination only indicates the hand which is authorised to receive the amount on the payment 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.

5. In view of the law laid down by the Apex Court in Sarbati Devi's case (supra), principle laid down in Khageswar Naik's case (supra) cannot be applied to the case of appellants. Contention of learned counsel for respondents no.1 and 2 that on re-marriage, appellant no.1 has no right to claim any share in the assured amount, is out of place. It is settled position of law that even after re-marriage to another person in a different family, a widow having acquired absolute interest in the property of her deceased husband is not divested of the same. Learned counsel for appellants was right when he contended that if right of appellants to money payable under insurance policies is indisputable, they should not be compelled to undergo the hardship of another lis. Multiplicity of litigation can also be avoided as far as possible as it may entail loss of precious time and money.

6. In State of Chhatisgarh & ors. Vs. Dhirjo Kumar Sengar reported in AIR 2009 SC 2568 : [2009(4) ALL MR 987 (S.C.)], the Apex Court in paragraph 23 observes thus-

"A succession certificate can be granted in favour of any person. It may be granted to an heir or a nominee. By reason of grant of such certificate, a person in whose favour succession certificate is granted becomes a trustee to distribute the amount payable to the deceased to his heirs and legal representatives. He does not derive any right thereunder. The succession certificate merely enabled him to collect the dues of the deceased. No status was conferred on him thereby. It did not prove any relationship between the deceased and the applicant. Even otherwise, the respondent and his father were entitled to the said dues being his heirs and legal representatives."

7. It is required to be observed that appellant no.1 was not advised properly in fact and in-law. She could have taken recourse to by first asking respondent no.1 to receive money as a nominee and make disbursement in accordance with law and on his failure to do so, she could have exhausted remedy as is available in law to secure her and appellant no.2's share. Be that as it may, this Court feels that the following order would subserve the ends of justice.

8. The net result is, appeal will have to be partly allowed. It is accordingly partly allowed. In view of the fact that interim stay was granted vide order dated 12.1.1998, money payable under the policies is still with the respondent Insurance Company. Respondent no.3 Insurance Company is directed to release the amounts payable under the policies in question to respondent no.1 forthwith together with interest at the rate of 8% per annum from the date of death of Dr. Dilip Gaidhane till actual payment. Respondent no.1 on receipt of amount, shall distribute the same to appellants and respondent no.2 in equal proportion. No order as to costs.

Appeal partly allowed.