R.N. Gurtu, J.
1. One Sri Ramlal held a decree against Sri Brij Bhushan Saran. Mittal, The decree-holder put his decree into execution after the death of the said Brij Bhushan Saran Mittal and sought to attach the money due under a life insurance policy which Brij Bhushan Saran Mittal had taken out on 28-2-1944 from the Indian Mercantile Insurance Company Ltd.
2. Brij Bhushan Saran Mittal's wife, Smt. Shanti Devi, made an application for the release of the insurance policy money which had been attached, upon the ground that she had been nominated by Brij Bhushan Saran Mittal to receive the policy money in the event of the death of Brij Bhushan Saran Mittal, the insured. The objection of Smt. Shanti Devi was dismissed by the learned executing court which held that Section 6(1) of the Married Women's Property Act (Act III of 1874) did not apply to Hindus.
It also held that Section 39 of the Insurance Act was clear that where the insured had nominated his wife to receive payment of the money after his death, Section 6 of the Married Women's Property Act did not come into play. It also held that mere nomination did not create any interest in favour of the nominee and held that the money still continued to be the property of the assured and the executing court further held that the insurance money was liable to be attached as a part of the estate of the deceased. The objection of Smt. Shanti Devi was, therefore, dismissed.
3. Upon an appeal by Smt. Shanti Devi, the court below held that, in the absence of an assignment in favour of Smt. Shanti Devi, the policy amount remained the assets of the deceased. It held that merely because the appellant was nominated to receive the sum from the Insurance Company that did not make her owner of the money and that the nomination only dispensed with the necessity of obtaining a succession certificate.
4. This is an execution second appeal by Smt. Shanti Devi. It is contended that Section 6(1) of the Married Women's Property Act applies to Hindus and that though the policy in question was effected by Brij Bhushan Saran Mittal on his own life but was expressed on the face of it to be for the benefit of his wife and that therefore the policy enured for the benefit of the wife and must be deemed to be a trust for the benefit of the wife under Section 6(1) of the Married Women's Property Act.
5. Before dealing with the contention it is necessary to state that the policy in question was taken out on 28-2-1944, that the sum assured was Rs. 2,000/-. The conditions of the policy, inter alia, were set out in the Schedule to the Policy which is reproduced below:
SCHEDULE.
The Proposer
Name, Brij Bhusan Saran Mittal, Esq. OccupationCashier.
Address. C/o. Messrs. Mansa Ram & Sons,Bankers, Dehradun, U. P.
The Life Assured. Same as above.
Date of Proposal, 21st February, 1944.
Date ofCommencement of the Assurance. 28th February 1944.
Sum Assured
Amount Rupees. Two Thousand only with Profits TableNo. VII. Plan. Endowment Assurance, 20 years. To whom Payable. The LifeAssured, his nominees, executors, administrators or Assigns.
Nominee under Section 39 of Insurance Act 1938.Nil.
Event on the happening of which the sum as-Sured isto become payable.
On the 28th day of February 1964 or at death or theLife Assured, if earlier.
Instalment of Premium.
Annual Tabular Premium Rs. 109/10
Amount Rs.27/-
(Rupees Twenty sevan. and annas seven only).
Date when due.
28th day of February, May, August and Novemberevery year.
Period during which payable.
During life time of the Life Assured for 20 years,that is until the 28th November 1963 (Inclusive).
Age of the Life Assured admitted or not. Notadmitted.
Special provisions (if any).
This policy is issued with Double Accident Benefitas per Endorsement stated at the back hereof.
6. On 9-5-1944 the Assured endorsed a nomination on the back of the policy in the following words:
'I, Brij Bhushan Saran Mittal hereby nominate my wife Shreemati Shanti Devi aged 25 years to be the person to whom the moneys secured by the within Policy shall be paid in the event of my death. Dated at Dehradun this 9-5-1944.
Witness : Sd. D. Joshi Sd. B. B. S. Mittal.
Full name ; Damodar Joshi.
Designation : Chief Agent. Signature of the LifeAssured.
Address : Dehra Dun Anand-Chowk.
The Indian Mercantile Insurance Co. Ltd. Registered No. 1682 Date 22-5-44.
Note that the Registration of this document must not be taken to imply any admission on the part of the Company as to the validity of the document or otherwise.
Sd. R.M. Desai
General Manager.'
7. It is now necessary to quote Section 6 of the Married Women's Property Act, 1874 (Act III of 1874) as amended by Section 2 of the Act 13 of 1923.
'6(1) A policy of insurance effected by any married man on his own life, and expressed on the face of it to be for the benefit of his wife, or of his wife, children, or any of them, shall enure and be deemed to be a trust for the benefit of his wife, or of his wife and children, or any of them, according to the interest so expressed, and shall not, so long as any object of the trust remains, be subject to the control of the husband, or to his creditors or form part of his estate.
When the sum secured by the policy becomes payable, it shall, unless special trustees are duly appointed to receive and hold the same, be paid to the Official Trustee of the (Part A State or Part C State) in which the office at which the insurance was effected is situate, and shall be received and held by him upon the trusts expressed in the policy, or such of them as are then existing.
And in reference to such sum he shall stand in the same position in all respects as if he had been duly appointed trustee thereof by a High Court, under Act No. XVII of 1864 (to constitute an office of Official Trustee), Section 10.
Nothing herein contained shall operate to destroy or impede the right of any creditor to be paid out of the proceeds of any policy of assurance which may have been effected with intent to defraud creditors.
6(2) Notwithstanding anything contained, in Section 2, the provisions of Sub-section (1) shall apply, in the case of any policy of insurance such as is referred to therein which is effected by any Hindu, Muhammadan, Sikh or Jain, in Madras after the thirty first day of December, 1913, or. in any other (Part A state or Part C State) after the first day of April 1923:
Provided that nothing herein contained shall affect any right or liability which has accrued or been incurred under any decree of a competent court passed before the first day of April 1923.'
8. It is also necessary to quote Section 39 of the Insurance Act, 1938 (Act IV of 1938) as amended by Section 20 of the Insurance Amendment Act, 1946 (VI of 1946).
'39. (1) The holder of a policy of life insurance on his own life may, when effecting the policy or at any time before the policy matures for payment nominate the person or persons to whom the money secured by the policy be paid in the event of his death:
Provided that, where any nominee is a minor it shall be lawful for the policy-holder to appoint in the prescribed manner any person to receive the money secured by the policy in the event of his death during the minority of the nominee.
(2) Any such nomination in order to be effectual shall unless it is incorporated in the text of the policy itself, be made by an endorsement on the policy communicated to the insurer and registered by him in the records relating to the policy and any such nomination may at any time before the policy matures for payment be cancelled or changed by an endorsement or a further endorsement or a will, as the case may be, but unless notice in writing of any such cancellation or change has been delivered to the insurer, the insurer shall not be liable for any payment under the policy made bona fide by him to a nominee mentioned in the text of the policy or registered in records of the insurer.
(3) The insurer shall furnish to the policy, holder a written acknowledgment of having registered a nomination or a cancellation or change thereof, and may charge a fee not exceeding one rupee for registering such cancellation or change.
(4) A transfer or assignment of a policy made in accordance with Section 38 shall automatically cancel a nomination;
Provided that the assignment of a policy to the insurer who bears the risk on the policy at the time of the assignment, in consideration of of a lien granted by that insurer on the security of the policy within its surrender value or its reassignment on repayment of the loan shall not cancel a nomination, but shall affect the rights of the nominee only to the extent of the insurers interest in the policy.
(5) Where the policy matures for payment during the lifetime of the person whose life is insured or where the nominee or, if there are more nominees than one, all the nominees die before the policy matures for payment, the amount secured by the policy shall be payable to the policy holder or his heirs or legal representatives or the holder of a succession certificate, as the case may be.
(6) Where the nominee or, if there are more nominees than one, a nominee or nominees survive the person whose life is insured, the amount secured by the policy shall be payable to such survivor or survivors.
(7) The provisions of this Section shall not apply to any policy of life insurance to which Section 6 of the Married Women's Property Act, 1874 (III of 1874) applies or has at any time applied;
Provided that where a nomination made whether before or after the commencement of the Insurance (Amendment) Act, 1946, in favour of the wife of the person who has insured his life or of his wife and children or any of them is expressed, whether or not on the 'face of the policy, as being made under this section, the said Section 6 shall be deemed not to apply or not to have applied to the policy'.
It will appear from Section 6(2) of the Married Women's Property Act, (as quoted above) that in respect of policies of insurance taken out after the 1st day of April 1923, Section 6(1) of the said Act is applicable. Before Sub-section (2); was added in 1923 the Act was not applicable to those who professed the Hindu religion but after Act XIII of 1923, Section 6, Sub-section (1) became applicable to them also. Act XIII of 1923 has renumbered the old Section 6 as Section 6(1) and has added the Sub-section (2) also. The Execution Court was therefore wrong in considering that Section 6(1), as it now stands, was not applicable to Hindus.
9. The question which has therefore to be determined is whether this policy executed by Brij Bhushan Saran Mittal on his own life was expressed on the face of it for the benefit of his wife or not. From the schedule quoted above it is clear that when the policy was executed on 28-2-1944 the wife was not indicated as the person to whom the sum assured was payable. On that date the sum was agreed to be paid only to the life assured, his nominees, executors, administrators or Assigns. On that date it also appears from the schedule, quoted above, that no nomination under Section 39 of the Insurance Act was made.
The nomination was made, as already indicated, on 9-5-1944. This nomination, it will be observed, is by an endorsement on the back of the policy and it was clearly communicated to the insurer under Section 39(2) of the Insurance Act for it was registered by the treasurer in the records relating to the policy as will appear from the fact that there is a note to the effect below the endorsement that it has been registered at No. 1682 on 22-5-1944. Therefore, it is apparent that this nomination was intended to be and was treated as nomination under Section 39 of the Insurance Act, 1938.
That being so, the proviso to Section 39 would have the effect of excluding the application of Section 6(1) of the Married Women's Property Act, 1874, in this case.
10. It may be here restated that this proviso was introduced by Section 20 of the Insurance Amendment Act, 1949 already referred to.
11. Section 6(1) of the Married Women's Property Act makes no such provision for nomination subsequent to the effecting of the policy, nor does make any provision for the registration of such nomination, as is provided for in Section 39 of the Insurance Act.
12. The contention of Mr. Kunzru for the wife nonetheless is that a policy, which has been effected in the first instance only in favour of the husband, may yet become a policy to which the incidents of Section 6(1) of the Married Women's Property Act would apply if the husband subsequently makes a nomination expressed on the face of the policy to be for the benefit of his wife or his wife and children or any of them. In other words, Mr. Kunzru contends that even though ab initio no equitable or beneficial interest is created by the policy itself in favour of the wife, it may so be created by a mere nomination such as in this case.
13. For the purpose of testing this contention we invited counsel to place before us any reported case in which a subsequent nomination had been made after the policy had been effected and it was held that, by virtue of the said nomination, the policy became a policy to which Section 6(1) of the Married Women's property Act was attracted. No such case was cited; on the other hand, several cases were shown to us where money due under a policy of Insurance and shown as payable ab initio to the assured husband or the wife in case of the husband's prior death, were held to attract Section 6(1) of the Married Women's Property Act.
The view in these cases was that where the amount is payable to the assured or his wife, if the assured predeceases her, a contingent trust comes into existence in favour of the wife, but none of these cases is a case in which there was a subsequent nomination.
14. In Abhiramavalli Ammal v. The Official Trustee of Madras : AIR1932Mad220 the amount was payable to ........the assured or his wife Abhiramavalli Ammal if he 'predeceased her'. In V. Lalithambal Ammal v. Guardian of India Insurance Co., Ltd. AIR 1937 Mad. 645 (B) under the heading 'per whose benefit and to whom payable' were the words 'the assured or his wife Mrs. V. Lalithambal if he predeceases her'. In V. E. R. M. K. Krishnan Chettiar v. Velayee Ammal, reported in AIR 1938 Mad 604 (FB) (C) the wife was indicated the beneficiary in clause 12 of the proposal which is intended to contain the name of the person nominated to receive the sum assured and his or her relation with the proposer.
In this case the words entered therein were, 'self or wife Velayammal'. It was held in this case that the proposal could be read along with the policy and so here also the wife was indicated as the beneficiary from the very inception of the policy. In Parmeshwaribai v. Nihalchand Lalchand AIR 1938 Sind 20 (D) the person or persons to whom the sum assured is payable showed ....... Smt. Parmeshwari, the wife of the Life assured. In re Asha 'Lata Dassi : AIR1940Cal217 the sum of Rs. 5000/- was shown as payable to his wife if the assured was dead before that date.
It will thus appear that in every case where it was held that Section 6(1) of the Married Women's Property Act was attracted, the wife was ab initio, and at the very inception when the policy was effected, made a beneficiary thereunder. Inasmuch as in this case the wife was not made a beneficiary ab initio, it is not really necessary to consider how a policy, which is intended to be effected for the benefit of a wife under the Married Women's property Act should be expressed i.e. what words should be used.
In each of the above cases a statement in the Policy that, in the event of the death of the husband the policy would be payable to the wife, was considered a sufficient expression of the desire of the husband to effect the policy in question for the benefit of his wife. In each of these cases it was considered that continent trust had come into existence in favour of the wife in the event of the husband dying before the policy matured.
15. In our view inasmuch as the wife was not made beneficiary ab initio this policy was not 'effected' by the husband for the benefit of his wife and the mere fact that he made a subsequent nomination such as he was empowered to make and did make under Section 39 of the Insurance Act does not make this policy a policy to which Section 6(1) of the Married Women's Property Act applies because of such nomination. In our view the equitable and beneficial interest whether immediate or contingent must be created at the very inception of the policy. It must be created ab initio in the wife or the children or any of them if it is to attract Section 6(1) of the Married Women's Property Act otherwise if a trust is to be created later in favour of any person after the policy has been effected, then it cannot be created under Section 6(1) of the Married Women's Property Act but must be created as any other trust is created.
Section 6(1) clearly shows that the policy has to be 'effected' for the benefit of his wife. The language is not that a policy effected for the benefit of another person may be considered to have been effected for the benefit of the wife by a subsequent nomination. The making of a subsequent nomination in favour of the wife is merely authorising her to receive the money and is not the 'effecting' of a policy for her benefit. A policy cannot be effected twice.
In other words, a policy is brought into effect when the assured and the insurer enter into the contract, and a nomination, if it is intended to operate as a divestment of the interest of the assured in the subject-matter of the policy, would have to be made by way of such an assignment as is contemplated and permitted by Section 38 of the Insurance Act which provides for the assignment and transfer of insurance Policies.
If the nomination is made only under Section 39 it is not an assignment but merely gives the right to the nominee to receive the assured amount without creating any interest in the nominee. It seems to us clear that Section 39 of the Insurance Act and Section 6(1) of the Married Women's Property Act are not complementary and that the right of nomination which is bestowed on a Policy-holder under Section 39 of the Insurance Act cannot be read into Section 6(1) of the Married Women's Property Act so as to vary the clear intention of the latter Act.
There is the right to cancel nominations and to vary them under Section 39 of the Insurance Act, Where a trust comes into existence though the right of the beneficiary to receive the benefit under the trust may be of a contingent character, once those contingent rights come into existence it is no longer possible for the creator of the trust to destory the contingent trust. Section 39 of the Insurance Act, therefore, cannot be brought in aid as a complementary Section to Section 6(1) of the Married Women's Property Act.
16. We have already indicated that the courts have considered that a contingent trust comes into existence in a case where a policy is made payable ab initio to the assured or to his wife in case of his prior death. Those cases have been mentioned above. A note of dissent has, however, been struck in some cases that a contingent trust does not come into existence even in a case where the policy is made merely payable to the assured or to his wife in case of demise. It is not necessary for us to go into this question as it is not essential for the disposal of this appeal because we can proceed on the basis that a contingent interest can be created by the use of such words provided that policy at its very inception and ab intio is expressed in these words.
17. We accordingly agree that the objection of the wife was liable to be dismissed. We, therefore, dismiss this appeal with costs.