1956 (1) TMI 23 - HC - Indian Laws

Insurance nominee not owner of policy money; not attachable to deceased's estate.

Ramballav Dhandhania Versus Gangadhar Nathmall

The court held that the insurance moneys payable to the nominee do not form part of the estate of the deceased judgment-debtor and are not attachable for ... - Issues Involved:1. Whether the insurance moneys payable to the nominee under the terms of nomination form part of the estate of the deceased judgment-debtor.2. Interpretation and application of Section 39(6) of the Insurance Act, 1938.3. The effect of nomination on the ownership of the insurance moneys.4. Applicability of Section 6 of the Married Women's Property Act, 1874.Issue-wise Detailed Analysis:1. Whether the insurance moneys payable to the nominee under the terms of nomination form part of the estate of the deceased judgment-debtor:The applicant contended that the insurance moneys payable to the nominee do not form part of the estate of the deceased judgment-debtor and thus are not attachable for satisfying the decree against him. The court examined the terms of the nomination and concluded that the nominee does not become the owner of the money payable under the policy. The nomination only indicates the person who should receive the money in case of the assured's death, without conferring ownership rights.2. Interpretation and application of Section 39(6) of the Insurance Act, 1938:Section 39(6) of the Insurance Act, 1938 was central to the argument. The section states, 'Where the nominee, or, if there are more nominees than one, a nominee or nominees survive the person whose life is insured, the amount secured by the policy shall be payable to such survivor or survivors.' The court interpreted that this provision merely facilitates the payment process by the insurance company to the nominee, without affecting the ownership of the moneys. The nominee is essentially a receiver of the moneys, not the owner.3. The effect of nomination on the ownership of the insurance moneys:The court analyzed the general scheme of Section 39 of the Insurance Act. Sub-sections (1), (2), (4), and (5) were examined to determine the policy-holder's rights. The court concluded that the nomination does not affect the title to the money secured by the policy but only provides a mode of payment to a particular person. The policy-holder retains the power of disposition over the insurance moneys, which can be exercised through transfer, assignment, or will. Therefore, the insurance moneys continue to belong to the estate of the assured.4. Applicability of Section 6 of the Married Women's Property Act, 1874:The court considered the protection offered to wives and widows under Section 6 of the Married Women's Property Act, 1874. This section ensures that a policy of insurance expressed to be for the benefit of the wife or children enures as a trust for their benefit and is beyond the control of the husband's creditors. However, in this case, the policy was not expressed to be for the benefit of the wife and/or children but was a simple nomination. The court noted that the proviso to Section 39(7) of the Insurance Act clarifies that if a nomination is made under this section, Section 6 of the Married Women's Property Act does not apply. Thus, the nomination in this case did not create a trust for the wife.Conclusion:The court held that Section 39(6) of the Insurance Act, 1938 does not make the nominee the owner of the money due under the policy. The nomination only facilitates the payment process without affecting the title to the moneys. Consequently, the insurance moneys form part of the estate of the deceased judgment-debtor and are attachable for satisfying the decree against him. The application was dismissed, and the costs of the application were directed to be added to the respondent's costs in execution of the decree.