R.K. Patra, J.
1. The short question that arises for consideration in this writ petition is whether a non-nominee can claim any share in the insured amount vis-a-vis a nominee mentioned in the insurance policy.
2. The petitioner has filed this writ petition seeking for a direction the authorities of the Life Insurance Corporation of India (opposite parties 1 and 2) to settle the L.I.C. claim of her deceased son-Soumendra Kumar Behera in her favour and her daughter-in-law (Opposite party No. 3)-widow of the deceased-Soumendra.
3. The petitioner's case is that her son-Soumendra while working as Assistant Teacher opened a L.I.C. policy bearing number 581307998 on 20.12.1994 underthe monthly salary savings scheme. In the policy, the petitioner was declared to a nominee under Section 39 of the Insurance Act, 1938 (Annexure-1). The petitioner's son-Soumendra married to opposite party No. 3 in the year 1996 and both of them were leading a happy conjugal life as husband and wife till his death which occurred on 26.7.1998. Soon after her son's death, the petitioner requested the Branch Manager, Life Insurance Corporation of India, Bhadrak (opposite party No. 2) tosettle the L.I.C. claim in accordance with the policy. On receipt of the claim, the opposite party No. 2 asked her in letter dated 3.8.1998 (Annexure-2) to submit documents mentioned therein. The petitioner accordingly duly submitted the required documents on 12.9.1998. According to the petitioner, under the terms and conditions of the policy, the petitioner being the nominee under the policy and her daughter-in-law (opposite party No. 3), widow of late Soumendra are entitled to the claim but the authorities of the L.I.C., instead of settling the claim promptly are sitting over the matter without any legal justification.
4. When this case was called for hearing on 5.3.2002, Shri S.P. Mishra, learned counsel for the L.I.C., brought to our notice that opposite party No. 3 has filed a petition Under Section 372 of the Indian Succession Act, 1925 in the Court of the CivilJudge (Senior Division), Bhadrak (Succession Misc, Case No. 8 of 1999) in respect of the insurance policy in question praying that the certificate may be granted to her and the opposite party No. 2 therein (writ petitioner). We accordingly called for the records from the Court of the Civil Judge which are made available to us.
5. It may stated that the question whether a person who was not nominated under Section 39 of the Insurance Act, 1938 would be entitled to receive the amount due under the life insurance policy is no more res integra in view of the decision of the Supreme Court in Smt. Sarbati Devi v. Smt. Usha Devi, AIR 1984 SC 346. In that case, the Supreme Court held that the policy holder continues to hold interest in the policy during his life time and the nominee does not acquire any interest in the policy during the life time of the policy holder. 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 of intestate and Section 39 of the Act does not operate as a third kind of succession. The provisions contained in Sub-section 6 of Section 39 which states that the amount shall be payable to the nominee or nominees does not mean that the amount shall belong to the nominee or nominees. Having held so, the Court in paragraph 12 of the judgment succinctly laid down the law as under:
'... 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 theinsurer 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.'
A Bench of this Court in O.J.C.No. 12557 of 1996 (disposed of on 11.9.1997) on the basis of the aforesaid ratio of the Supreme Court has held that under the law of succession applicable to the parties of that case, the widow of the deceased policy holder would be'entitled to half of the total amount payable under the policy although she was not the nominee.
A similar question recently came up for consideration before the Supreme Court in Vishin N. Khanchandani v. Vidya Lachmandas Khanchandani, AIR 2000 SC 2747. It was with regard to the nominee specified in the National Savings Certificate issued under the Government Savings Certificates Act, 1959. It was held therein that the law laid down in Smt. Sarbati Devi's case (supra) holds the field and the nominee described in the national savings certificate on the death of its holder does not become entitled to the sum due under the certificate to the exclusion of all other legal heirs who are entitled to succession under law.
6. On 5.3.2002 a memo has been filed on behalf of the L.I.C. stating as follows :
'In the above mentioned case as per the instruction received from the claims Department of LIC of India, the claim under the policy is admissible for the basic sum assured minus the unpaid premium which comes to an amount of Rs. 1,99,150/- only. Therefore, the L.I.C. of India is ready to pay the aforesaid amount in due discharge of its policy obligation and they shall abide by the direction to be passed by the Hon'ble Court.'
7. The aforesaid being the legal position, we have no hesitation to hold that the petitioner and opposite party No. 3 are entitled to share half each out of the amount of Rs. 1,99,150/- admissible under the policy. We direct accordingly.
The petitioner and opposite party No. 3 will appear before the Branch Manager, L.I.C. of India, Bhadrak (opposite party No. 2) on 30th of April, 2002. On compliance of the formalities and on being properly identified, the Branch Manager will disburse each of them half of the amount mentioned above.
8. With this order, Succession Misc. Case No. 8 of 1999 pending in the Court of the Civil Judge (Senior Division) Bhadrak has become infructuous and the same is accordingly dismissed. The recordsof that case (Succession Misc. Case No. 8 of 1999) may be sent back to the Court concerned forthwith. The Registry is also directed to send a copy of this judgment to the Court of Civil Judge (Senior Division), Bhadrak along with the records.
The writ petition is accordingly allowed.
Pradip Mohanty, J.
9. I agree.