Ram Vir Singh v. Mithilesh Kumari — 1988 DIGILAW 1173 (ALL)

JUDGMENT S. R. Bhargava, J. - This is an appeal under section 384 of the Indian Succession Act against order dated 24-3-1988 granting succession certificate to respondent No. 1. 2. Facts of the case are that Mahabir Prasad Sharma was a constable in U. P. Police. He died on 14-6-1984 leaving behind him his widow respondent No- 1 Smt. Mithilesh Kumari and his brothers appellant Ramvir Singh and respondent No. 2 Rajvir Singh. He held a G. P. F. Account and Insurance money. Both in the G. P. F. Account and Insurance appellant Ramvir Singh was nominee. Respondent No. 1 applied for succession certificate under section 372 of the Indian Succession Act in respect of the G. P. F. and Insurance money of the deceased. Ramvir and Rajvir filed joint objections and pleaded that as a nominee Ramvir has a right to receive G. P. F- and Insurance money. They further pleaded that deceased left sister Pushpa whose marriage was performed by Ramvir who had to spend money for Pushpas maintenance also. According to them Smt. Mithilesh Kumari lives with her parents. She sold away the share of the property of her husband and deposited the money in joint account with her father. 3. Learned lower court held that under section 39 of the Insurance Act of 1939 nominee did not acquire any beneficial interest. He relied upon the case of Smt. Sarwati Devi v. Usha Devi, AIR 1984 SC 346 . He held that respondent No. 1 being widow of the deceased had right to succession certificate. He consequently granted succession certificate. 4. Being aggrieved, nominee and brother Ramvir have preferred this appeal. 5. Parties have exchanged affidavits and have been heard at this stage. With the agreement of the parties under High Courts Rules the appeal is being disposed of finally at this stage. 6. It is evident the deceased left two debts, namely, balance in G.P.F. Account and the Insurance money. It is unfortunate that the learned Civil Judge granting succession certificate did not record any separate finding in respect of G. P. F. He confined himself to nominee under section 39 of the Insurance Act. But the facts are evident. Deceased was a constable in U. P. Police and consequently his G. P. F. was governed by the General Provident Fund (Uttar Pradesh) Rules. But the facts are evident. Deceased was a constable in U. P. Police and consequently his G. P. F. was governed by the General Provident Fund (Uttar Pradesh) Rules. In Rule 2 (c) (i) of these rules family in the case of a male subscriber is defined as the wife or wives and children of subscriber and the widow or widows and children of a deceased, son of the subscriber. Proviso of this sub-clause permits the subscriber to prove that his wife has been judicially separated from him or has ceased under the customary law of the community to which she belongs to be entitled to maintenance and in that event she should be no mote treated as member of subscribers family in matter to which these rules relate, unless subscriber subsequently indicates by express notification in writing to the Account Officer that she should continue to be recorded as his wife. Rule 8(1) requires the subscriber at the time of joining the fund to send a nomination conferring on one or more persons the right to receive the amount that may stand in Credit in the fund in the event of his death before that amount has become payable, or having become payable, has not been paid. First Proviso to this sub-rule lays down that if at the time of making the nomination the subscriber has a family, the nomination should not be in favour of any person or persons other than members of his family Sub-rule (3) of Rule 8 of these rules lays down that every nomination should be in such one of the forms set forth in the First Schedule as is appropriate in the circumstances. Clause (b) of sub-rule 5 of Rule 8 lays down that the nomination should become invalid in the event of the happening of the contingency specified therein. This clause further lays down that if at the time of making the nomination the subscriber has no family he should provide in the nomination that it shall become invalid in the event of his subsequently acquiring family. This clause further lays down that if at the time of making the nomination the subscriber has no family he should provide in the nomination that it shall become invalid in the event of his subsequently acquiring family. Then sub-rule (6) of Rule 8 says that immediately on the death of a nominee in respect of whom no specific provision has been made in the nomination or on the occurrence of an event by reason of which the nomination becomes invalid in pursuance of clause (b) of sub-rule (5) or proviso thereto, the subscriber shall send to the Account Officer a notice in writing cancelling the nomination together with fresh nomination made in accordance with the provisions of this rule. 7. Rule 31 relates to payment of G. P. F. balance of a subscriber on his death. According to clause (1) (a) of this rule, if a nomination of the subscriber in accordance with the provision of Rule 8 in favour of a member or members of his family subsists the amount standing to his credit in the fund or part thereof to which the nomination relates shall become payable to his nominee or nominees in the proportion in the nomination Clause (1) (b) of Rule 31 says that if no such nomination in favour of member or members of the family of the subscriber subsists or such a nomination relates only to a part of the amount standing to his credit in the fund, the whole amount or part thereof to which the nomination does not relate as the case may be, shall notwithstanding any nomination purporting to be in favour of any person or persons other than a member or members of his family, become payable to the members of his family in equal shares. 8. Undoubtedly respondent No. 1 Smt. Mithilesh Kumari is widow of the deceased. She falls in the definition of family. Brother, namely, Ramvir cannot be member of the family of the subscriber. In the instant case there is no pleading or evidence that the deceased ever proved that respondent No. 1 Smt. Mithilesh Kumari was judicially separated wife. Then irrespective of the fact whether the nomination was made before or after the marriage of the deceased with respondent No. 1, the nomination in favour of the brother became invalid. In the instant case there is no pleading or evidence that the deceased ever proved that respondent No. 1 Smt. Mithilesh Kumari was judicially separated wife. Then irrespective of the fact whether the nomination was made before or after the marriage of the deceased with respondent No. 1, the nomination in favour of the brother became invalid. There is no evidence even now that respondent No. 1 was judicially separated wife of the deceased. Hence as widow of the deceased and as member of the family she is entitled to receive the balance of G. P. F. of the deceased, under Rule 31 (1) (b) of these rules. 9. Then coming to the Insurance money of the deceased it is not clear from the pleadings of the parties whether the Insurance money is due on an Insurance Policy issued under the Insurance Act or under the Scheme of Insurance for U. P. State Employees. For concluding the matter finally, findings may be recorded on both the insurances. No doubt section 39 (6) of the Insurance Act, 1938 confers right upon the nominee to receive payment from Insurer who by payment to the nominee gets a valid discharge of its liability under the policy. As laid down in the case of Smt. Sarwati Devi v. Smt. Usha Devi, (supra) nominee does not get any beneficial interest in the insurance money which he may receive. More or less a similar view was expressed in the Full Bench case of Raja Ram v. Mata Prasad, AIR 1972 All 167 wherein it was said that the nominations in the Policies do not create a trust in favour of the nominees. They do not create any vested interest in them in the life time of the assured. The amounts due under the policies become payable to the nominees only in the event of the death of the insurer and so the nominees will be legal representatives. From that point of view to my mind, nominees are no more than intermedlers. 10. They do not create any vested interest in them in the life time of the assured. The amounts due under the policies become payable to the nominees only in the event of the death of the insurer and so the nominees will be legal representatives. From that point of view to my mind, nominees are no more than intermedlers. 10. Section 373 (2) of the Indian Succession Act runs as under : "When the Judge decides the right thereto belong to the applicant, the Judge shall make an order for the grant of the certificate to him." This sub-section in cases of right of the applicant to the succession certificate or to the debt or security being established casts a duty upon the Judge to make an order for grant of certificate to the person whose right has been established. 11. Section 381 of the Indian Succession Act lays down that succession certificate with respect to the debt and security specified therein should be conclusive as against the persons owning such debts or liable on such securities and afford full indemnity to such persons as regards of payments made, dealings had in good faith in respect of such debts or securities to, with the person to whom the certificate was granted. There appears to be some conflict between section 381 of the Indian Succession Act and section 39 (6) of the Insurance Act. But it cannot be overlooked that a succession certificate issued on the basis of a right stands on better footing than mere nomination which gives rise only to an intermedler. On the other hand there is no provision in the Indian Succession Act or in the Insurance Act prohibiting grant of succession certificate in respect of Insurance money in cases of nomination in the Insurance Policy itself. If the provisions of section 381 of the Indian Succession Act are held to be over-riden by section 39 (6) of the Insurance Act result would be multiplicity of proceedings. If the nominee is preferred and if he is allowed to receive the money from insurer the heir or heirs will be compelled to file a suit against the nominee and for maintaining that suit they will have to again apply for succession certificate because section 214 of the Indian Succession Act prohibits any decree in cases of succession without a succession certificate. Hence I hold that if applicant for succession certificate establishes his right, he cannot be refused succession certificate. In that event section 381 of the Indian Succession Act shall override the provisions of section 39 (6) of the Insurance Act. 12. Scheme for Insurance of U. P. State Employees is known as Group Insurance Scheme. It was applied to the police Department in 1974. By G.O. No. Samanya-3-832/10-14/76 dated 24-5-1976 this scheme was made applicable to all the departments. The premium collected by deductions from the pay of the employees was made payable to Life Insurance Corporation towards Risk Plan Premium and Deposit Administration Plan Premium. The scheme was enforced after arrangement with Life Insurance Corporation. But the insured employee was not insured directly under a policy issued by Life Insurance Corporation. This scheme is not governed by specific rules. But from time to time Government orders have been issued. In the G. O. of 24-5-1976 it is made clear that this scheme has been adopted for providing social security to the families of the State employees By G. O. No. Samanya-3-2l05/10-14-77-Narnankar dated 26-12-1978 nomination by the employee was introduced. In paragraph 2 of this G. O. the family was defined and unmarried brother below 18 years of age was also included in the family. In case of an employee having family, the prescribed form required that the nomination should only be in favour of member of the family. In paragraph 3 of this G. O. it was made clear that in case the employee dies before nomination, payment of the assured sum should be made first to the wife of the deceased, then to his minor and unmarried son and daughter, then to adult son, then to parents, then to minor brother and unmarried sister, then to married daughters, and then to sons and unmarried daughters of the pre-deceased sons of the deceased By G. O No. Bima-2307/10-85-36/81 dated 4-6-1985 the matter of nomination was further clarified- Family was again defined in paragraph 6 (2) of this G. O. It did not include adult brother. In paragraph 6 (2) it was further made clear that nomination is matter of choice of the employees and it is not necessary that his nomination should be according to the order of family. It was further stated that the employee has a right to nominate any member of his family. In paragraph 6 (2) it was further made clear that nomination is matter of choice of the employees and it is not necessary that his nomination should be according to the order of family. It was further stated that the employee has a right to nominate any member of his family. Again in paragraph 3 it was said that in case an employee dies before nomination, his wife should get the top priority for receiving payment. In G. O. No. Bima-56/10-86-36/1981 dated 10-1-1986 matter of nomination and payment was further clarified. In paragraph 1 (IV), family was again stated and again it did not include adult brother. In case of employee having a family he is given a right of nomination from amongst the members of his family in any order Again it was stated that in case of want of nomination wife of the deceased employee should get top priority. However, all these directions were made subordinate to the court orders. It is thus, evidence that payment of assured sum under the Group Insurance Scheme applicable to U. P. State Employees is not governed by section 39 (6) of the Insurance Act. The very purpose of the scheme shows that the payment should be for social security of the family of the deceased employee. The right of nomination by an employee is restricted, in case he has a family, to the members of his family. It is thus obvious that in case an employee acquires family after nomination he should make a fresh nomination as his earlier nomination becomes invalid because the members of the family have to be paid the assured sum. Then it is further clear that the authorities responsible for making payment are to be guided by court orders. Succession certificate is judgment in-rem. As is obvious from section 381 of Indian Succession Act it is binding upon the authority responsible for payment. Even after considering the Group Insurance Scheme in the light of various G.O. the succession certificate is binding even on the nominee. After considering the matter carefully I hold that for payment of assured sum under the Group Insurance Scheme applicable to U. P. State Employees, there is no law which may prohibit issue of succession certificate to the widow of the deceased who is the sole heir of the deceased. 13. After considering the matter carefully I hold that for payment of assured sum under the Group Insurance Scheme applicable to U. P. State Employees, there is no law which may prohibit issue of succession certificate to the widow of the deceased who is the sole heir of the deceased. 13. In this court it was argued on behalf of the appellant that appellant invested money in marriage of Pushpa, sister of the deceased and treatment of the deceased and incurred debt. May it be as it is said. If all this gives rise to a quasi contract appellant may enforce the same against estate of the deceased in the hands of his heir or heirs. But it cannot prevent heir or heirs from obtaining succession certificate. In other words, it does not abridge the right of heir or heirs to the succession certificate. 14. In result this appeal has no force and is hereby dismissed with costs.