Madhya Pradesh High Court
Narendra Yadav vs Chetan Revindra Yadav on 18 May, 2017
1
W. P. No.19840/2016
W. P. No.19840/2016
18.05.2017
Shri Amalpushp Shroti, learned counsel for the
petitioner.
Shri Mukhtar Ahmad, learned counsel for the
respondent No.2.
With consent of learned counsel for the parties, the matter is finally heard.
Order dated 02.11.2016, passed by Civil Court is taken exception of.
Relevant facts giving rise to passing of impugned order are that respondent No.1 filed succession case under Section 372 of Indian Succession Act, 1925, bearing No.11/2009 for issuance of succession certificate in lieu of death of his father Ravindra Yadav, who expired on 07.01.2008 to get all the monetary benefits of Life Insurance Policies No.352063440 amounting to Rs.1,00,000/-, No.372492821 for Rs.2,00,000/- and No.352055743 for Rs.5,00,000/-.
Petitioners filed their reply contending inter alia that late Ravindra Yadav was their brother and had started living with the petitioners after getting divorce 2 W. P. No.19840/2016 from applicant's mother. That late Ravindra Yadav had nominated the petitioners as his nominees in these policies. That the mother of applicant had started living with some other person Suresh alias Bhandari.
Parties went to trial. The Court found applicant/respondent No.1 entitled for Succession Certificate by order dated 06.09.2012. An appeal preferred by the petitioner was dismissed on 22.08.2013. Whereagainst, as informed by learned counsel for the petitioner, a Revision is pending in this High Court, wherein no stay order is passed.
That during pendency of the Succession Case, trial Court vide order dated 22.07.2010, taking note of the fact that, the amount towards three policies were disbursed in favour of present petitioner by Insurance Company, directed the petitioners to give an undertaking in the Court that in case the succession certificate is granted to deposit the amount in Court. The Court ordered-
^^izdj.k esa ;g vfookfnr gS fd bl mRrjkf/kdkj vkosnu i= ds yafcr jgrs gq;s e`rd jfoUnz dh chek ikfy'kh dk Hkqxrku vukosnd Øekad&3 }kjk vukosnd Ø&1 o 2 dks fd;k x;k gSA ,slh ifjfLFkfr esa tcfd vukosnd Øekad&3 us bl vkosnui= ds yafcr jgrs gq;s Hkqxrku vukosnd Ø-&1 o 2 3 W. P. No.19840/2016 dks dj fn;k gS blfy, vukosnd Ø-&1 o 2 dks funsZf'kr fd;k tkrk gS fd tks Hkqxrku izkIr dj fy;k x;k gS mlds laca/k esa ikap yk[k #i;s dh vUMjVsfdax bl vk'k; dh U;k;ky; esa is'k fd tkos fd U;k;ky; }kjk ewy vkosnu i= ds fujkdj.k ds le; ;fn vkosnd ds i{k esa dksbZ vkns'k jkf'k ds Hkqxrku ds laca/k esa mRrjkf/kdkj izek.k i= iznku fd;s tkus ds laca/k esa ikfjr fd;k tkrk gS] rks mDr jkf'k vukosnd x.k 1 o 2 }kjk U;k;ky; esa 15 fnol ds vanj tek dj nh tkosxhA^^ The matter was posted for 12.08.2010 for giving said undertaking. However, as the record reveals the petitioner did not give the undertaking.
The succession case was finally decided on 06.09.2012; whereby, the Court while directing for grant of succession certificate directed present petitioners to deposit the amount received by them as nominees towards the policies of late Ravindra Yadav in Court within 15 days. The Court ordered-
^^23- bl izdj.k esa ;g rF; lkeus vk;k gS fd chek ikWfylh ds #i;s Hkkjrh; thou chek fuxe vFkkZr vukosnd Ø-3 ds ;gka tek Fks vkSj bl izdj.k ds yafcr jgrs gq;s vukosnd Ø-3 ds }kjk izdj.k esa n'kkZ;h x;h chek ikWfylh dk Hkqxrku ikWfylh esa fd;s x;s ukfeus'ku ds vk/kkj ij vukosnd Ø-1 o 2 dks dj fn;kA bl laca/k esa vkosnd dh vksj ls vkifRr mBkrs gq;s U;k;ky; ds le{k vkosnu i= fnukad 04-02-10 dks izLrqr fd;k Fkk] ftldk fujkdj.k fnukad 22-07-10 dks ikfjr vkns'k }kjk fd;k x;kA rnuqlkj 4 W. P. No.19840/2016 vukosnd Ø- 1 o 2 dks funsZ'k fn;k x;k Fkk fd os chek daiuh ls izkIr fd;s x;s Hkqxrku ds laca/k esa ikap yk[k #i;s dh vaMjVsfdax bl U;k;ky; esa is'k dh tkos fd U;k;ky; }kjk ewy vkosnu i= ds fujkdj.k ds le; ;fn vkosnd ds i{k esa dksbZ jkf'k Hkqxrku ds laca/k esa mRrjkf/kdkj izek.k i= tkjh djus dk vkns'k fn;k tkrk gS] rc vukosnd Ø- 1 os 2] 15 fnu esa U;k;ky; esa #i;s tek djk nsosA blh vkns'k ds rkjrE; esa vukosnd Ø- 1 o 2 dks funsZ'k fn;k tkrk gS fd mUgksaus Lo- jfoUnz ;kno dh ukfeuh ds #i esa vukosnd Ø-3 ls chek ikWfylh ds laca/k esa tks #i;s izkIr fd;s gS os #i;s 15 fnu esa U;k;ky; esa tek djsaA^^ After dismissal of appeal, respondent applicant filed an application for a direction to present petitioners to deposit the amount as directed by order dated 06.09.2012. Petitioner contested the application stating that the amount received by them is as a nominee and since the amount has been disbursed by Insurance Company; therefore, the order passed by the Succession Court is non executable. The Insurance Company defended their action stating that amount is disbursed to the nominee.
The Court after taking into consideration the entire material facts and evidence on record directed petitioners to deposit Rupees Eight Lacs in the Court vide impugned order.
5W. P. No.19840/2016
The impugned order is challenged on the following grounds:
"6.1- That the succession certificate was not executable and therefore, the impugned order, dated 02.11.2016 is wholly without jurisdiction.
6.2- That a succession certificate is granted for a limited purpose and the Court granting a succession certificate has a duty to hand over, the property to the person who has a legal title thereto and therefore, by obtaining a succession certificate alone the respondents did not become the owner of the property and the direction regarding deposit of money received by the petitioners against the policy of the deceased Ravindra Yadav could not be issued and was without jurisdiction and in turn the impugned order is also without jurisdiction.
6.3- That learned Judge of the Court below was not having the jurisdiction of an Executing Court in as much as no Court can exercise the functions of an Executing Court under Indian Succession Act, 1925. 6.4- That the learned Judge of the Court below ought to have seen that the respondent No.2 had already released the policy amount in favour of the petitioners, after taking into consideration the fact that the petitioners were the nominee and threfore the rightful holder of the policies 6 W. P. No.19840/2016 of Late Ravindra Yadav.
6.5- That the learned Judge of the Court below erred in law in ignoring the fact that the policies were taken by late Ravindra Yadav, after he got separated from his wife. 6.6- That the learned Judge of the Court below have committed an error by treating the applicants as trustee instead of nominees."
Section 39 of the Insurance Act, 1938, envisages-
"39- Nomination by policy-holder. --
(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 shall 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 7 W. P. No.19840/2016 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 acknowledgement 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 a loan 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 insurer's 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 8 W. P. No.19840/2016 Women's Property Act, 1874 (3 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." In Smt.Sarbati Devi and another v. Smt. Usha Devi: AIR 1984 SC 346, Supreme Court while dwelling on the issue as to whether a nominee under Section 39 of the Act of 1938, get an absolute right to the amount due under a Life Insurance Policy on the death of assured held-
"5- We shall now proceed to analyse the provisions of section 39 of the Act. The said section provides that a 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 shall be paid in the event of his death. If the nominee is a minor, the policy holder may appoint any person to receive the money in the event of his death during the minority of the nominee. That means that if the policy holder is alive when the policy matures for payment he alone will receive payment of the money due under the policy and not the nominee. Any such nomination may at any time before the policy matures for payment be cancelled or changed, but before such cancellation or change is notified to the insurer if he makes the payment bon fide to the nominee already registered with 9 W. P. No.19840/2016 him, the insurer gets a valid discharge. Such power of cancellation of or effecting a change in the nomination implies that the nominee has no right to the amount during the lifetime of the assured. If the policy is transferred or assigned under section 38 of the Act, the nomination automatically lapses. If the nominee or where there are nominees more than one all the nominees die before the policy matures for payment the money due under the policy is payable to the heirs or legal representatives or the holder of a succession certificate. It is not necessary to refer to sub-section (7) of section 39 of the Act here. 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' in paragraph 16 of the decision of the Delhi High Court in Mrs. Uma Sehgal's case (supra). If section 39 of the Act is contrasted with section 38 of the Act which provides for transfer or assignment of the rights under a policy, the tenous character of the right of a nominee would become more pronounced. It is difficult to hold that section 39 of the Act was intended to act as a third mode of succession provided by the statute. The provision in sub-section (6) of section 39 which says that the amount shall be payable to the nominee or nominees does not mean that the amount shall belong to the nominee or nominees. We have to bear in mind here the special care which law and judicial precedents take in the matter of execution and proof of wills which have the effect of diverting the 10 W. P. No.19840/2016 estate from the ordinary course of intestate succession and that the rigour of the rules governing the testamentary succession is not relaxed even where wills are registered."
12 ............. a mere nomination effected under section 39 does not deprive the heirs of their rights in the amount payable under a life insurance policy. Yet Parliament has not chosen to make any amendment to the Act. In such a situation unless there are strong and compelling reasons to hold that all these decisions are wholly erroneous, the Court should be slow to take a different view. The reasons given by the Delhi High Court are unconvincing. We, therefore, hold that the judgments of the Delhi High Court in Fauja Singh's case (supra) and in Mrs. Uma Sehgal's case (supra) do not lay down the law correctly. They are, therefore, overruled. 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."
The decision relied by the petitioner in Banarsi Dass v. Teeku Dutta (Mrs.) and another: (2005) 4 SCC 449 and C. K. Prahalada and others v. State of Karnataka and others: (2008) 15 SCC 577, does not state the law contrary to that in Sarbati Devi (supra).
11W. P. No.19840/2016
In Banarsi Dass (supra) while dwelling on the core question whether a direction for deoxyribonucleic acid test (i.e., DNA test) can be given in a proceeding for issuance of Succession Certificate under the Indian Succession Act, 1925, their Lordships were please to observe-
"14- The main object of a Succession Certificate is to facilitate collection of debts on succession and afford protection to parties paying debts to representatives of deceased persons. All that the Succession Certificate purports to do is to facilitate the collection of debts, to regulate the administration of succession and to protect persons who deal with the alleged representatives of the deceased persons. Such a certificate does not give any general power of administration on the estate of the deceased. The grant of a certificate does not establish title of the grantee as the heir of the deceased. A Succession Certificate is intended as noted above to protect the debtors, which means that where a debtor of a deceased person either voluntarily pays his debt to a person holding a Certificate under the Act, or is compelled by the decree of a Court to pay it to the person, he is lawfully discharged. The grant of a certificate does not establish a title of the grantee as the heir of the deceased, but only furnishes him with authority to collect his debts and allows the debtors to make payments to him without incurring any risk....."
Careful reading of this verdict would reveal that their was no accrual of right in favour of third persons like petitioners who do not succeed to the estate of the 12 W. P. No.19840/2016 deceased Ravindra Yadav, because respondent No.1 has been declared to be the successor. Even if the amount towards policy has been disbursed in favour of the petitioners as nominees, they have no right to retain the same once the respondent No.1, and not the petitioners, are held to be successor. This is what has been held by Supreme Court in C. K. Prahlada (supra):
"17A- Succession Certificate is granted for a limited purpose. A Court granting a Succession Certificate does not decide the question of title. A nominee or holder of Succession Certificate has a duty to hand over the property to the person who has a legal title thereto. By obtaining a succession certificate alone, a person does not become the owner of the property." (emphasis supplied) Thus, though true it may be that a Court granting a Succession Certificate does not decide the question of title and that by obtaining a succession certificate alone a person does not become the owner of the property. But equally true it is that, a nominee or holder of succession certificate, as the petitioners are in the case at hand, have a duty to hand over the property to the person who has a legal title thereto.
The petitioners thus, have no right to retain the amount of Rs.8,00,000/- received by them as nominee 13 W. P. No.19840/2016 after the succession certificate is granted in favour of the respondent No.1.
The next question is whether the Succession Court would be functus officio after deciding the application under Section 372 of the Act of 1925.
Contention on behalf of the petitioners is that the Court was not having the jurisdiction of an executing Court.
True it may be that there is no provision in the Act of 1925 in respect of execution of succession certificate. For apparent reasons that, once a succession certificate is issued and unless set aside in appeal or revoked under Section 383 of the Act or there is a declaration by a Competent Court of jurisdiction vide provision contained under Section 387 of the Act the certificate remains invogue which binds the debtor.
In the case at hand, the question is whether one of the party to the proceeding who has been subjected to an order can avoid the same without getting it set aside. As noticed earlier it has been categorically held in C. K. Prahalad (supra) that a nominee or holder of 14 W. P. No.19840/2016 succession certificate has a duty to hand over the property in question to a person who has a legal title thereto. Petitioners are thus bound by the order passed by the Succession Court.
In these facts it will be within the jurisdiction of the Succession Court to seek implementation of the order and for that limited purpose the Succession Court cannot be said to be functus officio.
In Shalini Shyam, Shetty and another V. Rajendra Shankar Patil : (2010) 8 SCC 329; reliance whereof has been placed by learned counsel for the petitioner it has been held-
"49- On an analysis of the aforesaid decisions of this Court, the following principles on the exercise of High Court's jurisdiction under Article 227 of the Constitution may be formulated:
(a) ...
(b) ...
(c) ...
(d) ...
(e) ...
(f) ...
(g) ...
(h) In exercise of its power of superintendence High Court cannot interfere to correct mere errors of law or fact or just because another view than the one taken by the tribunals or Courts subordinate to it, is a possible view. In other words the jurisdiction has to be very sparingly exercised.
(i) ...
(j) ...15 W. P. No.19840/2016
(k) The power is discretionary and has to be exercised on equitable principle. In an appropriate case, the power can be exercised suo motu.
(l) ...
(m) ...
(n) This reserve and exceptional power of judicial intervention is not to be exercised just for grant of relief in individual cases but should be directed for promotion of public confidence in the administration of justice in the larger public interest whereas Article 226 is meant for protection of individual grievance. Therefore, the power under Article 227 may be unfettered but its exercise is subject to high degree of judicial discipline pointed out above.
(o) ..."
In view whereof, this Court decline to interfere with the impugned order.
Consequently, petition fails and is dismissed. Petitioner is directed to deposit amount as is directed by impugned order within a period of 30 days from the date of communication of this order.
(SANJAY YADAV) JUDGE Loretta/das