Judgment:
R.A. Sharma, J.
1. Late Usha Saha joined a middle school at Asstt. Teacher in 1987. In the same year, she became member of the General Provident Fund and submitted nomination paper nominating both the petitioners to receive the amount that may stand to her credit in the event of her death. At the time when she joined service and made the nomination, she was unmarried. She married Samar Kumar Sharma (respondent No. 7) in 1988. She, however, died in 1989. The petitioners thereafter made an application before the respondent No. 3, the District Superintendent of Education, Giridih, seeking payment of the amount of General Provident Fund and Group Insurance standing to the credit of the deceased, Usha Sinha. The said respondent required the petitioners to submit succession certificate. The petitioners having failed to produce such a certificate, the payment was denied to them. Hence, this writ petition seeking writ of mandamus directing the respondent No. 3 to pay to the petitioners the amount of G.P.F. and the group insurance belonging to late Usha Sinha.
2. The respondent No. 3 has filed counter-affidavit but no counter-affidavit has been filed by any other respondents although all of them have been served.
3. The husband of the deceased has also laid a claim before the respondent No. 3 for payment of the amount standing to the credit of the deceased in the form of G.P.F. and the group insurance. The respondent No. 3 has also not paid the same amount to him in view of the dispute raised by the petitioners. Although the husband himself has not filed any writ petition but he has been Impleaded as respondent No. 7 to the writ petition filed by the petitioners.
4. The submission of the learned Counsel for the petitioners is that the petitioners by virtue of being the nominees of late Usha Saha are entitled to receive the amount standing to her credit in the form of G.P.F. and the Group Insurance and it is not open to the respondent No. 3 to deny the payment of the same to them.
5. The learned Counsel for both the parties have jointly stated that in the instant case, the Bihar General Provident Fund Rules, 1948 (hereinafter referred to as the Rules) will be applicable and will govern the controversy. The Rule 8 which provides for nomination, so far as it is relevant for the present controversy, is reproduced below:
NOMINATION
8.(1) A subscriber shall, as soon as may be, after joining the Fund send to the Accounts Officer a nomination conferring the right to receive the amount that may stand to his credit in the Fund in the event of his death, before the amount standing to his credit has become payable, or where the amount has become payable, before payment has been made.
(2) A subscriber who, at the time of joining the Fund, has a family shall send to the Accounts Officer a nomination in the form set forth in the First Schedule in favour of one or more members of his family.
(3) A subscriber who has no family shall similarly nominate a person or persons in the form set forth in Second Schedule:
Provided that a nomination made under this sub-rule shall be deemed to have been duly made in accordance with these rules only for so long the subscriber has no family.
(4) If a nomination under any of the proceeding sub-rules is in favour of a minor, the subscriber may at the same time nominate a person or persons to whom payment is to be made, on behalf of the minor.
(5) If a subscriber at any time acquires a family he shall send to the Accounts Officer a nomination as provided in Sub-rule (2) and if he has under Sub-rule (3) nominated any person other than a member of his family he shall formally cancel the previous nomination.
(6) A subscriber may in his nomination distribute the amount that may stand to his credit in the Fund among his nominees at his own discretion.
(7) A nomination may be cancelled by a subscriber and replace by any nomination which is permitted to be made, under this rule.
6. The Sub-rule (1) to Rule 8 requires the subscriber to nominate person or persons who will have 'the right to receive the amount that may stand to his credit In the event of his death'. The Sub-rule (2) provides for nomination by a subscriber who has a family. If the subscriber has no family, he can make nomination under and in accordance with the Sub rule (3) of Rule 8. The proviso to the said Sub-rule (3) has expressly laid down that the nomination made thereunder 'shall be deemed to have been duly made in accordance with this rules only for so long the subscriber has no family.' (Emphasis supplied). The Sub-rule (5) has laid down that the subscriber can make a fresh nomination after cancelling the previous nomination if he acquires the family. The Sub-rule (7) also empowers the subscriber to change the nomination even otherwise.
7. Rule 31, which provides for payment of the amount standing to the credit of the subscriber in the event if his death, being relevant, is reproduced below:
31. On the death of a subscriber before the amount standing to his credit has become payable, or where the amount has become payable before payment has been made:
(i) when the subscriber leaves a family-
(a) if a nomination made by the subscriber in accordance with the provisions of Rule 8, or of the corresponding rule, heretofore, in force in favour of a member or members of his family subsist, 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.
(b) if no such nomination in favour of a member or members of the family of the subscriber, subsists or if such nomination relates only to part of the amount standing to his credit in the Fund the whole amount or the 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:
Provided that no share shall be payable to-
(1) sons who have attained legal majority;
(2) sons of a deceased son who have attained legal majority;
(3) married daughters whose husband are alive;
(4) married daughters of deceased son whose husbands are alive if there is any member of the family other than those specified in Clauses (1), (2), (3) and (4):
Provided, further that the widow or widows and child or children of a deceased son shall receive between them in equal parts only the share which that son would have received if he had survived the subscriber and had been exempted from the provisions of Clause (1) of first proviso.
(ii) when subscriber leaves no family, if a nomination made by him in accordance with the provisions of Rule 8 of the corresponding rule, heretofore, in favour of any persons subsists, the amount standing to his credit in the Fund or the part thereof to which nomination relates, shall become payable to his nominee in the proportion specified in the nomination.
7. Rule 31 deals with both the contingencies, namely, (1) when the subscriber dies leaving his family, it is covered by Rules 31(i) and (2) when he dies without leaving any family, it is dealt with in Rule 31(ii). Rule 31(i)(a) covers a case where nomination has been made by the deceased subscriber in favour of member or members of his family. The Sub-rule (b), on I he other hand, covers a case where the subscriber has left his family but the nomination was made by him not in favour of a member or members of his family or if there was such a nomination it relates to part of the amount only standing to his credit in the fund. In such a case, notwithstanding the nomination in favour of a person or persons other than the members of his family, the amount standing to the credit of the deceased subscriber in the fund is to be paid to the members of his family in equal share. The instant case is covered by Sub-rule (i)(b) of Rule 31. The petitioners, not being the members of the family of the deceased subscriber as defined by and under the Rules, cannot get the amount of the provident fund standing to the credit of the late Usha Saha.
8. That apart, the amount of provident fund and group Insurance left by the deceased subscriber is the part of his estate which is to be governed by the law of succession applicable to him. In this connection, reference may be made to Smt. Sarbati Devi and Anr. v. Smt Usha Devi : [1984]1SCR992 , wherein the effect and object of the nomination under the Insurance Act was considered by the Apex Court. It was held therein that the policy holder continues to hold Interest in the policy during his life time and on his death the amount payable under the policy becomes part of his estate which is governed by the law of succession applicable to him and the nomination merely indicates the hand which is authorised to receive the amount. The relevant extracts of the said decision of the Apex Court are quoted below:
5. ...But the summary of the relevant provisions of Section 39 given above establishes clearly that the policy holder continues to hold interest in the policy during his lifetime and the nominee, acquires no sort of interest in the policy during the lifetime of the policy holder. If that is so, on the death of the policy holder the amount payable under the policy becomes part of his estate which is governed by the law of succession applicable to him. Such succession may be testamentary or intestate. There is no warrant for the position that Section 39 of the Act operates as a third kind of succession which is styled as a 'statutory testament'....
12. ...We approve the views expressed by the other High Courts on the meaning of Section 39 of the Act and hold that a mere nomination made under Section 39 of the Act 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 in accordance with the law of succession governing them....
9. Under the Rules also, the subscribe is entitled to receive the amount of provident fund if he is alive after his retirement. But in the event of his death, the amount of provident fund and the group insurance is liable to be paid in accordance with Rule 31. Rules 8 and 31 read together make the position abundantly clear that the said amount has to be paid to the members of his family, if there is any, and not to the persons in whose favour the nomination was made, In the instant case, both the petitioners who claim to be brother and sister of the deceased subscriber are not the members of her family as defined by and under the Rules. Therefore, they are not entitled to receive the said amount standing to her credit.
10. This petition lacks merit and is accordingly dismissed.