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of <h1>Delhi HC sets aside partition order, remands insurance policy dispute for fresh consideration under amended Section 39</h1> Delhi HC allowed appeal and set aside trial court order in partition suit involving insurance policy proceeds. Court found trial court failed to consider ... Suit for partition or separation of shares of Respondent No. 1 - Recovery of amount - rendition of accounts and permanent injunction against the Appellants herein and Respondent No. 2 - HELD THAT:- As is evident from a reading of the recommendations of the Law Commission, a distinction was carved out between 'beneficiary nominee' and 'collector nominee' and Section 39 of the Insurance Act, 1938 was amended accordingly, adding sub-Section (7). Beneficiary nominee means a nominee who was entitled to receive the entire proceeds under an insurance policy and a collector nominee means a nominee other than a beneficiary nominee. Keeping this distinction in mind, sub-section (7) of Section 39 was carefully and cautiously drafted and the words used by the legislature are 'beneficial interest'. In the present case, Appellants had specifically flagged the issue of applicability of the amendment to Section 39 on the ground that Late Shri Vineet Huria died on 11.07.2018 and the policy had matured after the Amendment to Section 39, came into force. It was thus incumbent upon the Trial Court to have considered and examined the issue, once the same was raised and highlighted by the Appellants and taken a decision accordingly, with respect to the benefits accruing under the insurance policies, in question. Since the Trial Court has not considered the legal issue of the 2015 Amendment to the Insurance Act 1938, raised by the Appellants, it would be appropriate to remand the matter back to the Trial Court. Accordingly it is directed that the learned Trial Court shall consider the matter afresh, taking into account the respective contentions of the parties and the law on the subject. In so far as the respective claims to other moveable assets are concerned, excluding the policies, the same shall be decided by the Trial Court, separately and at the appropriate time. The appeal is allowed and the order of the Trial Court is set aside. Issues Involved:1. Maintainability of the suit.2. Applicability of the Insurance Laws (Amendment) Act, 2015.3. Entitlement to insurance policy benefits.4. Calculation of the amount payable to the respondent.Issue-wise Detailed Analysis:1. Maintainability of the Suit:The appellants raised preliminary objections regarding the maintainability of the suit, citing the need for a succession certificate under Section 372 of the Indian Succession Act, 1925, for movable assets. They also questioned the pecuniary jurisdiction, court fee, and misjoinder of causes of action.2. Applicability of the Insurance Laws (Amendment) Act, 2015:The appellants contended that the Life Insurance Policies were governed by the Insurance Act, 1938, as amended by the Insurance Laws (Amendment) Act, 2015. They argued that under the amended Section 39(7), the nominee (Appellant No. 1) would have a beneficial interest in the insurance amount, to the exclusion of other legal heirs.3. Entitlement to Insurance Policy Benefits:The respondent (mother of the deceased) claimed a 1/4th share in the insurance benefits as a Class-I legal heir, arguing that mere nomination does not confer absolute rights to the nominee. The Trial Court, based on the unamended Section 39 and the precedent set by the Supreme Court in Sarbati Devi vs. Usha Devi (1984) 1 SCC 424, held that the nominee does not have a beneficial interest and is merely an authorized receiver. The Trial Court directed Appellant No. 1 to pay Rs. 54,14,077/- to the respondent.4. Calculation of the Amount Payable:The Trial Court calculated the amount payable to the respondent by dividing the total benefits (Rs. 3,12,56,311/-) into four shares and deducting Rs. 24,00,000/- already received by the respondent. However, the appellants argued that the Trial Court erroneously included benefits related to Provident Fund and medical reimbursements, which were not claimed in the application under Order XII Rule 6 CPC.Judgment Summary:The High Court allowed the appeal, setting aside the Trial Court's order dated 16.09.2020. The High Court noted that the Trial Court failed to consider the applicability of the 2015 Amendment to Section 39 of the Insurance Act, which was crucial as the policies matured post-amendment. The High Court remanded the matter back to the Trial Court for fresh consideration, directing it to address the legal issue of the 2015 Amendment and the respective claims of the parties.The High Court emphasized that the Trial Court should separately decide the claims related to other movable assets, excluding the insurance policies, and clarified that no opinion on the merits of the case was expressed. The appeal was disposed of along with the pending application, instructing the Trial Court to proceed uninfluenced by the High Court's observations.
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