Research › Search › Judgment

Kerala High Court · body

2000 DIGILAW 521 (KER)

A. C. Thamvaikutty v. Beevi

2000-10-05

A.LEKSHMIKUTTY, S.SANKARASUBBAN

body2000
Judgment :- SANKARASUBBAN, J. This appeal is preferred by the supplemental third plaintiff In O.S. No. 169 of 1987 on the file of the Subordinate Judge's Court, Tellicherry. Appellant was originally the fifth defendant in the suit. Thereafter, he was transposed as third supplemental plaintiff. One A. C. Mahim died without issues on 22-1-1987. At the time of his death, he was in service as Joint Registrar of Co-operative Societies. First defendant in the suit is his wife. First plaintiff is his father. Second plaintiff and defendants 2 to 6 are his brothers. According to the plaintiffs, since Mahim died issueless, as per the Personal Law, his wife, the first defendant will be entitled to 1/4 share in the assets Mahim. His mother is entitled to 1/6 = The remaining shares will go to the brothers. A schedule property was acquired by Mahim and a house was constructed by availing of a loan. He was residing in the house with his wife. C schedule items are the movables in A schedule building. B schedule item No. 1 is the deposit made by Mahim in Tellicherry Town Co-operative Bank. Item Nos. 2 and 3 are the amounts due from the Department as gratuity and under the Family Benefit Scheme. Item Nos. 4 to 6 are arrears of salary due from the Department and the amount due from the Life Insurance Corporation of India and also the amount due from the Provident Fund Account. According to the plaintiffs, even though notice was issued for partition, the defendants repelled the same. First defendant filed a written statement as follows : Plaint A schedule property and C schedule movables belong to her and Mahim had not invested anything for the construction of the house as well as for acquisition of movables. A schedule property was purchased on 19-3-1969 for a consideration of Rs. 6, 758/- by raising funds by the sale of her property to one T. Mammu and his brother Abdul for Rs. 2, 500/-. She had about 14 country boats yielding an average income of Rs. 5, 000/-. Apart from this, the defendant has a tiled bunk shop fetching a monthly rent of Rs. 12/- and other shop rooms fetching daily rent of Rs. 14/-. The house in A schedule property was constructed by the first defendant raising a loan of Rs. 2, 500/-. She had about 14 country boats yielding an average income of Rs. 5, 000/-. Apart from this, the defendant has a tiled bunk shop fetching a monthly rent of Rs. 12/- and other shop rooms fetching daily rent of Rs. 14/-. The house in A schedule property was constructed by the first defendant raising a loan of Rs. 10, 000/- sanctioned by the District Collector as per proceedings dated 25-9-1969. Permission was obtained by her for the construction of the house. Regarding the deposits in the Bank, it was only Rs. 50, 000/-. She was shown as only a nominee for this amount. But Mahim had given a covering letter authorising that the first defendant would be the sole beneficiary. Hence, defendants 2 to 5 and the plaintiffs have no right over the deposit of the amount. She also contended that the amount due under the Death Cum Retirement Gratuity and under the Family Benefit Scheme, she alone had the right to receive the same. The Department has sanctioned Rs. 39, 138/- to the first defendant and that amount is not an asset belonging to the deceased Mahim. Arrears of salary of Rs. 2, 341.51 had been received by the first defendant and Rs. 5, 313. 80 had been received from the Life Insurance Department. Part of the provident fund was withdrawn by the deceased Mahim and the balance has not been received. The second defendant filed O.S. No. 235 of 1987 for restraining the first respondent from receiving the amount. That suit was dismissed. Out of the partible assets of the deceased, the first defendant was entitled to reimburse the medical expenses of Rs. 1, 502.50 and Rs. 1, 252.40 spent for funeral ceremonies and Rs. 700/-, for Ambulance charges. The deceased had borrowed Rs. 5, 000/- from one Nazar for his medical expenses. Hence, the suit is filed without any merit and is liable to be dismissed. Defendants 2 to 6 filed written statement supporting the plaint claim.Third plaintiff was examined as PW 1 and Ext. A-1 was marked on the side of the plaintiffs. First defendant was examined as DW 1 and Exts. B-1 to B-13 were marked on the side of the defendants. Exts. X-1 and X-2 were marked as third party Exhibits. Defendants 2 to 6 filed written statement supporting the plaint claim.Third plaintiff was examined as PW 1 and Ext. A-1 was marked on the side of the plaintiffs. First defendant was examined as DW 1 and Exts. B-1 to B-13 were marked on the side of the defendants. Exts. X-1 and X-2 were marked as third party Exhibits. The trial Court came to the conclusion that only plaint B schedule items 4 and 5 are liable to be partitioned after deducting Rs. 2, 202.50 covered by Exts. B-1 and B-2 for medical expenses and charges for the Ambulance. It is against the above judgment and decree that the present appeal is filed by the supplemental third plaintiff. Learned counsel for the appellant contended that A schedule property even though was purchased in the name of the first defendant, money belonged to the deceased Mahim. Further, it was contended that the building was constructed with the loan and for getting the loan, Mahim had also made a guarantor in the Bank. Regarding the movables, it was stated that the movables belonged to Mahim personally. Regarding the amount in the B schedule for which no decree was given, it was stated that the first defendant was only a nominee and she is not entitled to the right over the same. Learned counsel for the first defendant contended that the judgment and decree of the Court below is correct and that no interference is called for. Counsel on both sides cited a number of decisions in support of their propositions. Plaint A schedule property was purchased under Ext. B-5. Ext. B-5 is standing in the name of the first defendant. There is no case that it was purchased benami by Mahim. Hence, it has to be held that the property belongs to the first defendant, So far as the construction of the building is concerned, it also stands in the name of the first defendant. The only argument put forward by the appellant is that Mahim also joined in availing of the loan for the purpose of construction of the building. We don't think, this fact will take away the right of the first defendant in the property and the building. Hence, we agree with the Court below that A schedule property and the building belong to the first defendant absolutely. We don't think, this fact will take away the right of the first defendant in the property and the building. Hence, we agree with the Court below that A schedule property and the building belong to the first defendant absolutely. So far as the movables are concerned, nothing has been discussed, to prove that it belongs to Mahim. In the absence of evidence, no decree can be given in favour of the appellant.The next question for consideration is regarding the deposit made in the Tellicherry Town Co-operative Bank. It is now admitted that on the date of filing of the suit only Rs. 50, 000/- was available. According to the appellant, the first defendant was only a mere nominee and was not entitled to the amount. But Ext. X-1 produced in this case will show otherwise. Ext. X-1 is the nomination filed by the deceased Mahirn. In Ext. X-1, it is stated as follows : "I had already nominated my wife T.C.P.M. Beevi as nominee and here also I am nominating her as nominee with the intention that she (Beevi) must be the only beneficiary in regard to this amount of Rupees 50, 000/-. Learned counsel relied on the decision reported in Shamblu Nath Shivpuri v. Pushkar Nath, AIR 1945 Privy Council 10. It is true that there is no presumption of advancement in favour of a wife. In that decision, it is stated that the deposit by a Hindu of his money in a bank in the joint names of himself and his wife and on terms that it is payable to either as survivor does not on his death constitute a gift by him to his wife. But the decision itself shows that there can be a contrary intention. After looking into Ext. X-1 in the present case, we are satisfied that the intention of the deceased was that the above amount should absolutely belong to the first defendant. Hence, we agree with the finding of the Court on this aspect. The next contention is with regard to items 2, 3 and 6 in B schedule. Item No. 2 is the amount claimed as the gratuity, item No. 3 is the amount under the Family Benefit Scheme and item No. 6 is the provident fund amount. Hence, we agree with the finding of the Court on this aspect. The next contention is with regard to items 2, 3 and 6 in B schedule. Item No. 2 is the amount claimed as the gratuity, item No. 3 is the amount under the Family Benefit Scheme and item No. 6 is the provident fund amount. The Court below has held that for all these items, the first defendant is absolutely entitled and hence, the amount due under the above items was held to be not devolving on the heirs of the deceased. So far as the Death Cum Retirement Benefit is concerned, the Court below analysed Rules 67, 71 and 72 of the Kerala Service Rules and has held that the amount belongs absolutely to the first defendant. Similar is the case with regard to the amount under the provident fund and also the amount under the Family Benefit Scheme. So far as the amount under the provident fund is concerned, this is passed under the General Provident Fund (Kerala) Rules. Rules regarding nomination is contained in Rules 8 and 9. Rule 8 says that a subscriber shall at the time of joining the fund, send to the Account Officer along with his application in Form A, file a nomination conferring on one or more persons the right to receive the amount that may stand to his credit in the fund. Rule 8(2)(ii) says that if a subscriber nominates more than one person under sub-rule (1), he shall specify in the nomination the amount or share payable to each of the nominees in such manner as to cover the whole of the amount that may stand to his credit in the fund at any time. Rule 8(2)(iv) says that a subscriber may at any time cancel a nomination by sending a notice in writing to the Account Officer. Rule 32 of the above Rules says that on the death of a sub-scriber before the amount standing to his credit has become payable before payment has been made (1) when the subscriber leaves a family (a) if a nomination made by the subscriber in accordance with the provisions of Rule 8, the amount standing to his credit in the fund or the part thereof to which the nomination relates shall become payable to his nominee or nominees in the proportion specified in the nomination. Note 3 to Rule 32 says that payment of provident fund money due to a person nominated to receive the whole or part of the amount standing to the credit of a subscriber in the fund shall be made as follows. In cases where the nominee dies after the subscriber but before receiving payment : (a) when the amount due to the deceased nominee does not exceed Rs. 500/- the Account Officer may authorise payment of the amount to the claimant or claimants, if the Collector considers that the production of letters of administration may be dispensed with. Further, the Collector is required to direct the parties to execute the documents. According to us, the Rules clearly show that the title with regard to the above amount does not pass to the so-called nominee. There is nothing to show that succession has taken place with regard to the above amount in favour of the nominee. Similar is the case with regard to the Family Benefit Scheme.This Court had occasion to consider the question in the decision reported in Bhaskaran v. Kalliani, 1990 (2) Ker LT 749 (1991 Lab IC 650) with regard to the Family Benefit Scheme. This Court held that whatever may be the intention of the framers of the scheme in question the nominee or nominees who may be a member or all the members of the subscriber's family as defined in the scheme can receive payment of the amount due under the scheme only subject to the rights of all other legal heirs of the subscriber to claim their rights to such amount in accordance with the law governing succession. The provision prescribing the procedure for disbursement of the amount to the nominee, namely, paragraph 14 of the scheme only speaks of payment to the nominee or nominees. No words have been used to constitute such nominees as the exclusive owners of the benefit of the scheme. With regard to gratuity, the relevant Rules are 73, 74, 76, 77, 78 and 79 of the Kerala Service Rules. Rule 72 of the above Rules says that an employee shall make a nomination conferring on one or more persons the right to receive any gratuity that may be sanctioned. Rule 73 enables the nomination to be made in the name of more than one person. Under Rule 76(b), an employee may at any time cancel a nomination. Rule 72 of the above Rules says that an employee shall make a nomination conferring on one or more persons the right to receive any gratuity that may be sanctioned. Rule 73 enables the nomination to be made in the name of more than one person. Under Rule 76(b), an employee may at any time cancel a nomination. Rule 77 states that immediately on the death of a nominee in respect of whom no special provision has been made in the nomination, the employee shall send to the appropriate authority a notice in writing formally cancelling the nomination. These Rules also do not say that the nominee becomes entitled to the amount. Learned counsel for the respondents relied on the decisions of the Calcutta High Court in Usha v. Smriti, AIR 1988 Cal 115 and the Madras High Court in B. M. Mundkur v. Life Insurance Corporation of India, AIR 1977 Mad 72. The decision in Usha v. Smriti, AIR 1988 Cal 115 was a case dealing with the Employees' Provident Funds and Miscellaneous Provisions Act. Section 10(2) of the Employees' Provident Funds and Miscellaneous Provisions Act says that any amount standing to the credit of a member in the Fund or of an exempted employee in a provident fund at the time of his death and payable to his nominee under the Scheme or the rules of the provident fund shall, subject to any deduction authorised by the said Scheme or rules, vest in the nominee and shall be free from any debt or other liability incurred by the deceased or the nominee before the death of the member or of the exempted employee. Interpreting the above provision, the Calcutta High Court held that since the statute itself says that the amount was vested in the nominee, the nominee was entitled to the same. In B. M. Mundkur v. Life Insurance Corporation of India, AIR 1977 Mad 72, the question was regarding interpretation of Section 44(2) of the Insurance Act. This Section says that any commission payable to an insurance agent under the provisions of Clauses (b) and (c) of the proviso to sub-section (1) shall, notwithstanding the death of the agent, continue to be payable to his heirs for so long as such commission would have been payable and such insurance agent been alive. This Section says that any commission payable to an insurance agent under the provisions of Clauses (b) and (c) of the proviso to sub-section (1) shall, notwithstanding the death of the agent, continue to be payable to his heirs for so long as such commission would have been payable and such insurance agent been alive. Interpreting the above Section, the Madras High Court held that the main part of Section 44(2) confers a right on the heirs of the deceased agent, to receive the commission, and the proviso to that sub-section enables the agent to make a nomination to receive the commission after his death, which would have the effect of taking away that right from the heirs themselves. It cannot be contended that under the main part of Section 44(2) the heirs will receive the money as owners of the money, but under the proviso to Section 44(2), the nominee will receive the money not as owner but merely as an agent on behalf of somebody else, for such a contention would be opposed to all recognized rules of construction of statutory provisions along with their provisos. The Supreme Court in Smt. Sarbati Devi v. Smt. Usha Devi, AIR 1984 SC 346, held that a mere nomination made under Section 39 does not have the effect of conferring on the nominee any beneficial interest in the amount payable under the life insurance policy on the death of the assured. The nomination only indicates the hand which is authorised to receive the amount, on the payment of which the insurer gets a valid discharge of Its liability under the policy. The amount, however, can be claimed by the heirs of the assured.Recently the Supreme Court dealt with similar question in Shri Vishin N. Khanchandani v. Vidya Lachmandas Khanchandani, 2000 (9) JT (SC) 321 : (2000 AIR SCW 2932) with regard to a claim arising out of the Government Savings Certificates Act, 1959. The provisions relating to Government certificate regarding nomination are detailed in paragraph 6 of the above decision. In the above decision, the Supreme Court held that though language and phraseology of Section 6 of the Act is different than the one used in Section 39 of the Insurance Act, yet, the effect of both the provisions is the same. The provisions relating to Government certificate regarding nomination are detailed in paragraph 6 of the above decision. In the above decision, the Supreme Court held that though language and phraseology of Section 6 of the Act is different than the one used in Section 39 of the Insurance Act, yet, the effect of both the provisions is the same. The Act only makes the provisions regarding avoiding delay and expense in making the payment of the amount of the National Savings Certificates, to the nominee of holder, which has been considered to be beneficial both for the holder as also for the post office. Any amount paid to the nominee after valid deductions becomes the estate of the deceased. Such an estate devolves upon all persons, who are entitled to succession. In that case, many decisions were considered. In the present case, we find that under the Family Benefit Scheme or the Gratuity Rules or Provident Fund Rules, it is not specifically stated that the nominee is entitled to the amount. No doubt, there is a stipulation that if the members of the family are alive, only their names should be recommended. But as stated by the Supreme Court in the earlier case, this is the only mode adopted for avoiding delay and for convenience. In the light of the above, we are of the view that the lower Court was wrong in holding that items Nos. 2, 3 and 6 belong to the first defendant. According to us, items Nos. 2, 3 and 6 belonged to Mahim at the time of his death and after his death, it devolved on the heirs as per the Muslim Law. The plaintiffs are entitled to 1/6 right over the above amount. Hence, the judgment and decree of the Court below is modified by declaring that B schedule items 2 to 6 except Rs. 2, 202.50 are available for partition and declaring 38/144 share to plaintiffs 1 and 2 and 14/144 share to the supplemental third plaintiff and 14/144 share to defendants 2 to 4.Appeal is disposed of as above. Cross-objection is dismissed. Order accordingly.