Nomination for renewal commission can override heirs' entitlement where the statutory proviso validly redirects payment to the nominee.

Section 44(2) of the Insurance Act, as modified by notification, was construed to allow a deceased insurance agent to nominate, in writing, any person to receive renewal commission after death. The proviso was held to do more than authorise collection on behalf of the estate: it displaced the heirs' statutory entitlement where a valid nomination existed and had not been revoked. The distinction from nomination under Section 39 was treated as material because the proviso operated on a statutory right created for the heirs and could redirect payment to the nominee as the intended recipient. Accordingly, the nominee was entitled to receive the renewal commission in her own right.

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Issues: Whether, on the true construction of Section 44(2) of the Insurance Act, 1938 as applied to the Life Insurance Corporation of India and modified by the Government notification, the nominee of a deceased insurance agent was entitled to receive renewal commission in her own right or only as a recipient on behalf of the heirs.

Analysis: Section 44(2) initially continued the deceased agent's renewal commission for the benefit of his heirs, but the later proviso introduced by the notification permitted the agent, during his lifetime, to nominate in writing any person, including a social or charitable institution, to receive the commission after his death. The structure and language of the proviso showed that it was not a mere authority to collect on behalf of the estate; rather, it qualified the heirs' statutory entitlement and displaced it where a valid nomination existed and had not been varied or cancelled. The distinction between the nomination under Section 39 of the Insurance Act and the nomination under the proviso to Section 44(2) was material, because the latter operated upon a statutory right created for the heirs and could therefore redirect the money to the nominee as the intended recipient.

Conclusion: The nominee was entitled to receive the renewal commission in her own right, and the insurer was justified in paying her alone.

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