Zaibunnissa Begum, In Re v. . — 1954 DIGILAW 483 (MAD)

Judgment :- RAMASWAMI J. This is a petition for succession certificate by the step-mother, full brother, step-brothers and step-sisters of the deceased Zaibunnissa Begum in respect of a 3/4th share in regard to two insurance policies, viz., Policy No. 227835 for Rs. 2, 000 with the Oriental Life Assurance Company Ltd., and policy No. 25065 for Rs. 3, 000 with the United India Life Assurance Company Ltd. This petition is opposed by the heirs of that decease Zaibunnissa's husband Mohamed Abdullah, the assured under these policies. The facts are : Mohamed Abdullah, who was employed in the Prohibition Department, took out these two policies maturing after a stated period or payable at death. He assigned on 9th October, 1928, the policy taken with the Oriental Insurance Company in favour of his wife Zaibunnissa Begum. The endorsement of assignment recites that the assignment was made out of natural love and affection and that the benefits under the policy are to revert to the assignor surviving the period of maturity, if any. In the case of the policy taken with the united India Assurance Company, though the petition has wrongly stated that a similar assignment was made in favour of the wife, it is now found from the letter dated 24th June, 1954, of that company that the policy had been assigned on 1st November, 1935, by the assured in favour of the Secretary of State for India in Council now represented by the President of the Indian Union and now actually in the custody of the Accountant-General, Madras. It is obvious that this assignment has been made in favour of the Government as the assured must have been paying the premium thereunder from out of his monthly provident fund contributions. This Mohamed Abdullah died on 22nd August, 1952, long surviving his wife Zaibunnissa Begum who died on 24th March, 1943. The dispute between the petitioners and objectors is that the petitioners claiming to be the heirs of this Zaibunnissa claim 3/4th of the amount and the objectors claiming to be the heirs of Mohamed Abdullah state that the petitioners are not entitled to more than one-half. The dispute between the petitioners and objectors is that the petitioners claiming to be the heirs of this Zaibunnissa claim 3/4th of the amount and the objectors claiming to be the heirs of Mohamed Abdullah state that the petitioners are not entitled to more than one-half. There is no dispute that if the petitioners claim as heirs of Zaibunnissa, their shares will amount to 3/4th and if they claims as heirs of Abdullah, their shares will amount to 1/2.The case for the petitioners is that on account of these assignments which according to them were both in favour of Zaibunnissa, she has got a vested interest in the amounts covered by the two policies and that on her death the amounts due to her are collectable by her heirs. I have already pointed out that in the case of the United India policy the assignment has been made in favour of the Government and not in favour of the wife. Therefore, on the death of Mohamed Abdullah it is only his heirs who will be entitled thereto, naturally subject to the rights of the Government, if any. Therefore the succession certificate can be granted to the petitioners on the foot of their being the heirs of Mohamed Abdullah in regard to the United India policy in the following form, viz., that succession certificate will be issued in their names with a rider added that the insurance amount be directly made payable into this court and that on its being so deposited the petitioners will be entitled to draw one-half of the amount and the other half will be allowed to be drawn by the respondents on payment to the petitioners one-half of the expenses incurred by them for obtaining the succession certificate. In regard to the Oriental policy, which has been assigned to the wife who predeceased her husband, the assure, the law governing the assignment is section 130 of the Transfer of Property Act and not section 38 of the Insurance Act, 1938. In regard to the Oriental policy, which has been assigned to the wife who predeceased her husband, the assure, the law governing the assignment is section 130 of the Transfer of Property Act and not section 38 of the Insurance Act, 1938. Before the enactment of section 38, transfer of a life insurance policy constituting as it does an actionable claim was governed by section 130 of the Transfer of Property Act : Mulraj Khatau v. Viswanath Prabhuram Vaidya 1913 (37) Bom 198), Shamdas v. Savitribai, Dinbai v. Bamansha On such a conditional assignment it is settled law that the assured created an immediate vested interest in the assignee and such an assignment is not revocable. The effect of an assignment is, it operates to completely divest the assignor of any right under it. (Rayner v. Preston 1981 (188) Ch 1, 7 : C.A.), Mulraj Khatau v. Vaidya 1913 (37) Bom 198). In other words the policy became the asset of the assignee and ceases to be that of the assignor. This is the basis of the line of decision in Lakshmi Kutty Kettilamma v. T. Vishnu Nambison 1939 ILR(Mad) 415), followed in Bai Lakshmi v. Jaswantilal Tribhuvandas 1947 AIR(Bom) 369). The only effect of the condition was to make the assignment inoperative upon the subsequent happening of either of the two contingencies. Section 38(7) of the Insurance Act states : "Notwithstanding any law or custom having the force of law to the contrary, an assignment in favour of a person made with the condition that it shall be inoperative or that the interest shall pass to some other person on the happening of a specified event during the lifetime of the person whose life is insured, and an assignment in favour of the survivor or survivors of a number of persons, shall be valid." * But even prior to the enactment of section 38(7), an assignment of a life policy on conditions that the policy should revert to the assured if the assignee predeceased him before maturity was valid in law : Somasekhara Rao v. K. S. Mishra 1944 AIR(Nag) 185). See also Bai Lakshmi v. Jaswantilal Tribhuvandas 1947 AIR(Bom) 369). The only difficulty which arose and which has been sought to be set a right by section 38(7) is as regards a Muhammadan assured. See also Bai Lakshmi v. Jaswantilal Tribhuvandas 1947 AIR(Bom) 369). The only difficulty which arose and which has been sought to be set a right by section 38(7) is as regards a Muhammadan assured. Much difficulty was felt when a Muhammadan policy holder executed such an assignment, as under the rules of the Muhammadan law conditions to gifts are void : Abdul Karim v. Abdul 1906 (28) All 342, Amtul Nissa v. Nurruddin 1903 (27) Bom 489), Yusuf Ali v. Collector of Tipperah 1883 (9) Cal 138), Chekkone Kutti v. Ahmed 1887 (10) Mad 196), Roshan v. Hussen (1866 5 W.R. 4), affirmed in Enayat Hussain v. Roshan (1876 3 I.A. 291). These conditional assignments are construed as contingent gifts under Muhammadan law. See K. P. Saksena, Muslim Laws as administered in India and Pakistan, 3rd Edn. 1949 page 209; Mulla's Muhammadan Law, 13th Edn. page 150; Wilson's Anglo-Muhammadan Law, 5th Edn. page 334; Tyabji Muhammadan Law, 3rd Edn. page 356 (originals referred to Baillie, 1, 508 and Macnaughten 50). This is especially the case where the assignment was made out of natural love and affection. It would be different if the assignment was made by a Muhammadan policyholder to his wife by way of dower. But there can be no presumption of the assignment being in lieu of dower where on the face of it the assignment is for consideration of natural love and affection and does not state to have been made in consideration of dower : Sadiq Ali v. Zahida Begum 1939 ILR(All) 957. It should be remembered, however, that though under the rules of the Muhammadan law a condition to a gift is considered to be void, the gift itself is not affected thereby. The condition goes but the gift remains and takes effect as an absolute one. The Muhammadan law defeats not the grant but the condition though this does not mean that conditions of some kind which do not concern us here may be annexed to gifts (Tyabji, ibid, section 348, page 357). Under present sub-section (7) to section 38 of the Indian Insurance Act the defect of contingency is validated : Sadiq Ali v. Zahida Begum 1939 ILR(All) 957. An assignment effected prior to the coming into force of the Insurance Act would not however be governed by the present sub-section (7), vide, sub-section (6) as in the present case. Under present sub-section (7) to section 38 of the Indian Insurance Act the defect of contingency is validated : Sadiq Ali v. Zahida Begum 1939 ILR(All) 957. An assignment effected prior to the coming into force of the Insurance Act would not however be governed by the present sub-section (7), vide, sub-section (6) as in the present case. Section 38(7) has no retrospective effect. I have already pointed out that the right of an assured not governed by the Muhammadan law to make a conditional assignment of this nature has been recognised as valid from even before passing of the Insurance Act : Shamdas Govindram v. Mt. Savitribai 1947 AIR(Sind) 181), Lakshmi Kutty Kettilamma v. T. Vishnu Nambison 1939 ILR(Mad) 415). Therefore, as the assignment of this Oriental policy has been made prior to the coming into operation of section 38 of the Indian Insurance Act, conditional assignment will have to be construed as contingent gift with the condition going and the gift remaining and taking effect as an absolute one.In this view the petitioner will be entitled to succession certificate in respect of three-fourths of the amount in respect of this policy and the succession certificate issued in regard to this debt will be in the following terms, viz., that it will be issued subject to the amount being put into court directly by the insurance company and the petitioners being at liberty to draw three-fourths of the amount and the respondents the remaining one-fourth after paying the petitioners one-fourth of the expenses incurred by them for obtaining this succession certificate. (No security). This petition is disposed of accordingly.