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Andhra High Court · body

2008 DIGILAW 1136 (AP)

Saleha Fatima v. Mirza Fazal Hussan Baig

2008-12-31

G.YETHIRAJULU

body2008
JUDGMENT The defendants in as. No.1828 of 2003 preferred the present appeal challenging the Decree and Judgment of the lower Court dated 12-03-2008 in O.S No.1828 of 2003. The plaintiffs filed the above Suit for partition of money of Rs.21,00,255.75 ps. The suit was decreed holding that plaintiffs are entitled to 1/6 share each out of total amount received on the personal insurance policy of late Mirza Hashim Hussain Baig by the first defendant. Being aggrieved by the same, defendants 1 to 3 preferred the present appeal. 2. The averments of the plaint filed by the plaintiffs are briefly as follows: The plaintiffs are the father and mother of late Mirza Hashim Hussain Baig. He is the only son among other children. Defendant No.1 is the wife and defendants 2 and 3 are children of the deceased Baig. During the lifetime of the deceased, he worked at Meero and Co., Sharjah, Abu Dhabi as Project Engineer and while working he purchased insurance policy of his life for $ 45,000/through Alliance Insurance Company at Sharjah of Abu Dhabi. On 28-08-2001 the deceased nominated his wife as nominee to receive amount in case of his pre-mature death. The first defendant as per the nomination entitled to receive all benefits from the insurance company and liable to distribute the amount among all heirs of late Baig. The deceased died in his car on Abu Dhabi Road on 12-03-2002 intestate due to cardio respiratory arrest. After the death of late Mirza Hashim Hussan Baig, all his movable and immovable properties will become Matruka properties and they devolved upon all legal heirs. The plaintiffs are entitled to give 1/6 share each in those properties. The plaintiffs intimated to Alliance Insurance Company about the presence of other heirs of late Mirza Hashim Hussan Baig, but the insurance company did not consider this fact. The defendant NO.1 had received an amount of Rs.21 ,00,255.75 ps. from the insurance company through cheque and also all the movables and cash from the bank accounts of the deceased from Mashreq Bank. Sharjah, and also from the Meero Company amounting to Rs.10,00,000/-, but failed to distribute among the heirs as per law. The first defendant did not disclose the other movable property. D-1 deposited cheque in her personal account No.01190015489. The plaintiffs demanded their share of amount, but the first defendant at first gave evasive replies. Sharjah, and also from the Meero Company amounting to Rs.10,00,000/-, but failed to distribute among the heirs as per law. The first defendant did not disclose the other movable property. D-1 deposited cheque in her personal account No.01190015489. The plaintiffs demanded their share of amount, but the first defendant at first gave evasive replies. On 23-09-2002, she refused to give the share of property to plaintiffs without any reason. Plaintiffs tried for amicable settlement, but D-1 refused for the same. Hence, the suit. 3. Defendants 1 to 3 resisted the suit through written statement and made the following averments in brief: The relationship between the plaintiffs and defendants and the purchase of policy by the deceased Baig are not disputed, but contended that the deceased nominated D-1 to receive the amount, therefore, she is entitled to receive all the benefits from the insurance company. The Indian laws are not applicable to the policy, as the policy obtained in Abu Dhabi and further contended that plaintiffs cannot be permitted to contend that they have got 1/6 share each out of the amount disbursed by Alliance Insurance Company, Sharjah. The plaintiffs have no locus stande in claiming very part of the amount of the policy. The policy amount was disbursed by Alliance Insurance Company in favour of nominee, therefore, the Court at Hyderabad has no jurisdiction and the Indian law has no application to the transaction and no cause of action arose to the plaintiffs and hence the suit is liable to be dismissed in points of cause of action and jurisdiction. 4. After amendment of the plaint, D-1 to D-3 filed additional written statement by denying the averments in plaint para 9 (A) contending that the pay order and covering letter dated 04-06-2003 addressed to the first defendant have nothing to do with the plaintiffs as the suit itself is not maintainable. The defendant No.4, State Bank of Hyderabad, filed a separate written statement contending that there IS no cause of action against D4 and no relief sought against the fourth defendant. D4 is not a necessary party to the suit, therefore, the suit is liable to be dismissed with damages of Rs.2,500/-. Basing on the above pleadings the lower Court framed the following issues: "1. D4 is not a necessary party to the suit, therefore, the suit is liable to be dismissed with damages of Rs.2,500/-. Basing on the above pleadings the lower Court framed the following issues: "1. Whether the suit schedule property comes under 'Matruka' property and if so, Whether the plaintiffs are entitled for partition of schedule property and allotment of 1/6 share each? 2. Whether this court has no jurisdiction to try the suit? 3. Whether the suit is not maintainable in law as Indian law has no applicable in schedule property? 4. To what relief?" 5. During the course of trial, P.Ws.1 and 2 were examined and Exs.A-1 to A-3 were marked on behalf of the plaintiff. D.W.1 was examined and no documents were marked on defendants' side. The lower Court while decreeing the suit observed that there is no dispute about the relationship between the plaintiffs and defendants 1 to 3. Date of death of the deceased Baig is also not in dispute, which is evidence from the death certificate covered by EX.A-1. It is also not in dispute that the deceased took an insurance policy for $ 45,000/-, which is equalent to Rs.21,00,255.75ps. in Indian currency, and that amount was transferred to her account in State Bank of Hyderabad, City Branch, Hyderabad. The receipt of the amount by the first defendant at Hyderabad is not in dispute. The pay order was encashed and the amount was credited to the account of the first defendant on 11-06-2003. The lower Court observed that the claim of the plaintiffs is not against the Alliance Insurance Company. The insurance amount was received by D-1 through D-4 bank at Hyderabad. The cause of action arose when the amount was credited to D-1 account on 11-06-2003, therefore, the Court has jurisdiction to entertain the suit. The amount in dispute is lying within the jurisdiction of the Court at Hyderabad, therefore, the Court at Hyderabad has jurisdiction to entertain the suit. The Court further observed that the insurance policy is a contract between the deceased Baig and Alliance Insurance Company. The amount accrued due to contract between the deceased and the Insurance Company forms part of the estate of the deceased. Immediately after the death of the deceased intestate, the estate of the deceased will be vested on the legal heirs of the deceased. The amount accrued due to contract between the deceased and the Insurance Company forms part of the estate of the deceased. Immediately after the death of the deceased intestate, the estate of the deceased will be vested on the legal heirs of the deceased. The vested right of the legal heirs cannot be taken away, therefore, the amount forms part of the Matruka property and it cannot be treated as the absolute property of D-1. As both parties to the suit are governed by Muslim Personal Law and as per the Muslim Law the plaintiffs are entitled to 1/6 share each and 1/8 share to the first defendant and defendants 2 and 3 for the rest of the amount. 6. Being aggrieved by the judgment of the lower Court, the defendants 1 to 3 preferred the present appeal by contending that the lower Court while rejecting the contentions of the plaintiffs regarding the applicability of Section 46 of the Indian Insurance Act. 1938 and that there is no application of the insurance law at Abu Dhabi, erroneously held that the amount received by the first defendant is the Matruka property and all the legal heirs are entitled to a share as per the Muslim Personal Law. The trial Court failed to observe that except transferring the amount to the account of the first defendant, no transaction took place in India to hold that the Court at Hyderabad has jurisdiction to entertain the suit. The lower Court failed to observe that when once the amount under the insurance policy stood disbursed by the insurance company, the transaction stood concluded at Sharjah and the mere transferring of the amount into the account of the first defendant will not give any cause of action for the plaintiffs to file the suit at Hyderabad and as the Court at Hyderabad has no Jurisdiction, the suit is liable to be dismissed by allowing the appeal. 7. In the light of the contentions raised by the appellants/defendants the following are the points for consideration: (i) Whether the suit schedule property becomes Matruka property of the deceased and Whether the plaintiffs are entitled for a share in the property as claimed by them; and (ii) Whether suit is liable to be dismissed by allowing the appeal. 8. 7. In the light of the contentions raised by the appellants/defendants the following are the points for consideration: (i) Whether the suit schedule property becomes Matruka property of the deceased and Whether the plaintiffs are entitled for a share in the property as claimed by them; and (ii) Whether suit is liable to be dismissed by allowing the appeal. 8. The lower Court rightly listed the undisputed facts that the deceased taking the policy at Abu Dhabi by entering into the contract with Alliance Insurance Company; that the death of the deceased at Abu Dhabi; that the insurance company paying $ 45,000/to the nominee; that the relationship between the plaintiffs and defendants and that the credit of the amount into the account of the first defendant at Hyderabad etc., The contention of the plaintiffs is that as the amount received by the first defendant is a Matruka property, the plaintiffs are entitled for a share as legal heirs under Muslim Personal Law. The defendants are contending that in pursuance of the contract between the deceased and Alliance Insurance Company at Abu Dhabi, the insurance company paid the amount on account of the death of the deceased and as the first defendant was the nominee, the entire amount was paid to her, therefore, the amount became personal property of the first defendant and not Matruka property of the deceased, therefore, the first defendant became the absolute owner of the entire amount and plaintiffs are not entitled for any share in the said amount. 9. It is contended on behalf of the respondents-plaintiffs that under Indian Law the nomination in the policy is only to facilitate the person nominated to receive the policy amount to distribute among the legal heirs of the deceased and it will not become the absolute property of the nominee, therefore, the first defendant is not entitled to claim that it became her absolute property. The learned counsel for the respondents-plaintiffs cited the following judgments in support of his contention. 10. In Sarbati Devi v. Usha Devi the Supreme Court considered the question whether the nominee of a life insurance policy under Section 39 of the Insurance Act, 1938 does not have tile effect of conferring on the nominee any beneficial interest in the amount payable under the Life Insurance Policy on the death of the assured. 10. In Sarbati Devi v. Usha Devi the Supreme Court considered the question whether the nominee of a life insurance policy under Section 39 of the Insurance Act, 1938 does not have tile 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 authorized 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 in accordance with the law of succession governing them. 11. In Shubhangi Shivji Raoghatge v. Lite Insurance Corporation at India the Supreme Court held that class I heirs of the deceased are entitled to a share in the amount received by the nominee from the policies. 12. In Vishin N. Khanchandani v. Vidya Lachmandas Khanchandani Sethi J. the Supreme Court considered whether the amount under the national savings certificate can be retained by the nominee for his benefit to the exclusion of all legal heirs or whether the amount retained by the nominee for the benefit of the legal heirs of the deceased. The Supreme Court while answering the question observed that though language and phraseology of Section 6 of the National Savings 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 under law, custom or testament at the deceased-holder. 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 under law, custom or testament at the deceased-holder. The law laid by the Supreme Court in Sarbati Devi's case (1 supra) hold the field and is equally applicable to the nominee becoming entitled to the payment of the amount on account of the national savings certificate received by him under Section 6 read with Section 7 of the Act who in turn is liable to return the amount to those in whose favour law creates beneficial interest subject to the provisions of sub-section (2) of Section 8 of the National Savings Act. 13. The law in force in England on the position of nominee who has been treated to be a third party in relation to a claim regarding insurance policy, is summarized in Halsbury's Laws of England (Fourth Edition), Vo1.25, para 579 as under: "position of third party.- The policy money payable on the death of the assured may be expressed to be payable to a third party and the third party is then prima facie merely the agent for the time being of the legal owner and has his authority to receive the policy money and to give a good discharge: but he generally has no right to sue the insurers in his own name The question has been raised whether the third party's authority to receive the policy money is terminated by the death of the assured; it seems, however, that unless and until they are otherwise directed by the assured' s personal representatives the insurers may pay the money to the third party and get a good discharge from him" 14. Various High Courts and the Supreme Court repeatedly held that the role of a nominee is like an agent of the legal heirs to receive the policy amount to speed up the process and to avoid all the legal heirs to approach the concerned authorities making a claim for the policy amount and when once the amount is received by the nominee, it becomes the estate of the deceased and the legal heirs are entitled for a share as per the law under which the deceased and the legal heirs are governed. 15. 15. The deceased took the policy at Abu Dhabi under a contract between the deceased and the insurance company. If there is any violation of the conditions of policy by the deceased or if there is any default committed by the insurance company In making the payment of the amount covered by the policy, the cause of action arises at the place where the policy was taken or to the place where the jurisdiction is conferred on a particular court under the terms and conditions of the policy. In the present case there is no dispute about the liability of the insurance company on account of death of the deceased and the insurance company paid the entire amount as per terms and conditions of the policy. There is no dispute either regarding the terms and conditions of the policy or regarding the claim on account of the death of the deceased against the insurance company, therefore, this is not a matter for enforcing any terms and conditions for the contract entered between the deceased and the insurance company. When once the amount is released by the insurance company to the nominee discharging the insurance policy, It becomes the estate of the deceased in the hands of the first defendant. As the amount was disbursed by the insurance company by way of pay order to State Bank of Hyderabad at Hydrabad and when the amount was credited to the account of the first defendant, it became the estate of the deceased, thereby it can be treated as Maturka of the deceased. The law on this subject is very clear. Simply because one person is nominated to receive the amount, it will not become the absolute property of the nominee. In the present case the first defendant being the wife was nominated to receive the amount. If a third party is nominated, who is readily available for receiving the amount, he cannot claim that he becomes the owner of the property to the exclusion of the legal heirs. On applying the same analogy and in view of the established law of the land, it can be safely concluded that all the legal heirs are entitled to a share in the property as per Muslim Personal Law. On applying the same analogy and in view of the established law of the land, it can be safely concluded that all the legal heirs are entitled to a share in the property as per Muslim Personal Law. The first defendant did not place any material to show that under Abu Dhabi Insurance Law the nominee becomes the absolute owner of the property and it is not the burden of the plaintiffs to establish that the nominee is not entitled for the entire amount as claimed by the learned counsel for the appellants. The application of the Foreign Insurance Act does not apply to the present case, as there is no dispute between the insurance company and anyone of the legal heirs. When once the property becomes the Matruka of the deceased, the legal heirs are entitled for the respective shares as per the law of inheritance under the Mohammadian Law. It is not a disputed fact that the deceased died intestate, therefore, the lower Court rightly held that the plaintiffs are entitled to 1/6 share each out of the amount received by the first defendant. After going through the entire oral and documentary evidence, I am convinced that the Court at Hyderabad has territorial jurisdiction to entertain the suit and rightly came to a conclusion that the plaintiffs ere entitled to 1/6 share each in the amount credited to the account of the first defendant. After going through the judgment of the lower Court and other record, I do not find any grounds to interfere with the order of the lower Court. 16. The C.CC.A. is accordingly dismissed. Each party to bear its own costs.