Himachal Pradesh High Court
Smt. Neena And Others vs Smt. Sunehru Devi And Others on 29 October, 2015
Author: Tarlok Singh Chauhan
Bench: Tarlok Singh Chauhan
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
.
R.S.A. No. 489 of 2004
Date of decision: 29.10.2015.
Smt. Neena and others ...Appellants/Defendants.
of
Versus
Smt. Sunehru Devi and others ..Respondent/Plaintiff/Proforma
respondents.
Coram
rt
The Hon'ble Mr. Justice Tarlok Singh Chauhan, Judge.
Whether approved for reporting ?1 Yes
For the Appellants : Mr. N.K. Sood, Senior Advocate, with
Mr. Aman Sood, Advocate.
For the Respondents : Mr. Harsh Khanna, Advocate, for
respondent No.1.
Mr. V.K. Verma, Addl. Advocate General,
with Ms. Parul Negi, Dy. Advocate General,
for proforma respondents.
Tarlok Singh Chauhan, Judge (Oral)
The present appeal has been preferred by the appellants/Defendants against judgment and decree dated 10.08.2004 passed in Civil Appeal No. 99-S/13 of 2002 by learned District Judge, Shimla, whereby he partly allowed the appeal and decreed the suit of the plaintiff for recovery of a sum of ` 63,337/- against the appellants.
2. The facts, in brief, are that the respondent No.1/plaintiff (hereinafter referred to as the 'plaintiff') filed a suit for recovery of share of the plaintiff and for relief of mandatory and prohibitory injunction against the defendants/appellants. It was claimed that the plaintiff being the 1 Whether reporters of Local Papers may be allowed to see the Judgment ? yes ::: Downloaded on - 15/04/2017 19:15:49 :::HCHP 2 mother of deceased Santosh Kumar was having a share in the amount of .
death-cum-retirement gratuity, family pension and G.P.F. amount which was payable to the heirs of Santosh Kumar, after his death. This amount is said to have not been paid to the plaintiff by the defendants-State of Himachal and Secretary (SAD) to the Govt. of H.P.(defendant No.2) of despite representation having been made by the plaintiff to them in this behalf. In the suit, the plaintiff prayed for recovery of her share in the rt amount of benefits paid to defendants No. 3 to 5 by defendants No. 1 and
2. The plaintiff also prayed for relief of mandatory injunction for seeking a direction to defendants No. 1 and 2 to recover the amount of share of the plaintiff from defendants No. 3 to 5 and release the same in favour of the plaintiff. The plaintiff also prayed for relief of prohibitory injunction against the defendants No. 3 to 5 for directing them to not appropriate or usurp the amount of the share of the plaintiff which is said to have been wrongly released to their favour.
3. The suit was contested by the defendants. The defendants-
State of Himachal Pradesh and Secretary (SAD) in their reply claimed that as per CCS (Pension) Rules, 1972, the amount of gratuity and family pension was payable to the nominee of the deceased Government employee. It was also stated that deceased Santosh Kumar had made nominations in favour of his legally widowed wife, daughter and son (defendants No. 3 to 5) and all such dues have rightly been paid to the nominees, defendants No. 3 to 5 and, therefore, the suit was not maintainable against defendants No. 1 and 2. It was also averred that the plaintiff, who was the mother of deceased Santosh Kumar, had remarried on 23.10.1983 to one Kanthu Ram and, therefore, she was not entitled to ::: Downloaded on - 15/04/2017 19:15:49 :::HCHP 3 seek any share from the amount of pension, GPF and gratuity etc. .
payable to the legal heirs of Santosh Kumar, after his death. The suit was also stated to be bad for non-joinder of necessary parties insofar as Senior Deputy Accountant General, who is said to have authorized the payment of retirement benefit, was not impleaded as a party in the suit.
of The defendants admitted that a sum of Rs. 44,658/- was paid to defendants No. 3 to 5 as the legal heirs of Santosh Kumar.
rt
4. In separate written statement, the defendants No.3 to 5 also claimed that the plaintiff had no locus standi or right, title to maintain the suit insofar as the grant of gratuity and pension was payable to the nominee of the deceased Santosh Kumar, who had nominated defendants No. 3 to 5 as the persons entitled to receive this amount after his death. It was also averred that the court has no jurisdiction to entertain the suit because the dispute related to the service benefits and was cognizable only by H.P.State Administrative Tribunal. The suit was also stated to be bad for non-joinder of necessary particulars.
5. On the pleadings of the parties, the learned trial Court framed the following issues:
1. Whether the plaintiff being mother of deceased Santosh Kumar is entitled for the benefit alongwith defendants No. 3 to 5 as alleged? OPP.
2. Whether the plaintiff is entitled for decree of mandatory injunction, as prayed? OPP
3. Whether the plaintiff is entitled for permanent prohibitory injunction as prayed? OPP
4. Whether suit is not maintainable, as alleged in objection No. 3 and 4? OPD
5. Whether suit is bad for non-joinder of necessary parties?
OPD ::: Downloaded on - 15/04/2017 19:15:49 :::HCHP 4
6. Whether this court has no jurisdiction? OPD .
7. Relief.
6. After recording the evidence, the learned trial Court dismissed the suit of the plaintiff vide judgment and decree dated 1.6.2002. Aggrieved against the said judgment and decree, the plaintiff of preferred an appeal before the learned lower Appellate Court, who vide his judgment and decree dated 10.8.2004 has allowed the appeal and rt the suit of the plaintiff has been ordered to be decreed for recovery of a sum of `.63,337/- in her favour and against defendants No. 3 to 5. It is against this judgment and decree, which has been challenged by the appellants/defendants No. 3 to 5 before this Court.
7. On 16.11.2004, this Court admitted the appeal on the following substantial questions of law:
1. Whether the findings of the learned appellate Court are vitiated by mis-interpretation of the pleadings and law?
2. Whether the Civil Court has no jurisdiction to try the suit?
3. Whether in view of the nomination of the widow and other minor children, the plaintiff is not entitled to the service benefits of deceased Santosh Kumar?
Substantial Question of law No.2:
8. At the outset, I proceed to determine question No.2, which relates to the jurisdiction of the Civil Court to try the instant suit. It is not in dispute that a specific issue i.e. issue No.6 was framed by the learned trial Court (supra) to this effect and the same was answered against the defendants/appellants. This finding has attained finality since the ::: Downloaded on - 15/04/2017 19:15:49 :::HCHP 5 appellants did not question the same before the learned lower Appellate .
Court.
Substantial Questions of Law No. 1 and 3:
These substantial questions of law are inter-connected and inter-related and, therefore, are being disposed of by a common of reasoning.
9. It is not in dispute that the plaintiff/respondent No.1 is the rt mother of deceased Santosh Kumar, and was therefore, a class-1 heir in respect of the estate left behind by him on his death. It is also not in dispute that Santosh Kumar was employed as a Peon in Government Secretariat and had died on 14.2.1998 and had left behind the defendants No. 3 to 5 as his other legal heirs being his widow, daughter and son.
10. PW-3 Manohar Lal Sharma, who was a Senior Assistant in Government Secretariat, had deposed that a total sum of `2,53,348/- had been paid by defendants No. 1 and 2 to defendants No. 3 to 5 as terminal benefits in the shape of death-cum-retirement gratuity, family pension and balance amount of GPF and insurance compensation. It has further been established on record that the defendants No. 3 to 5 were the nominees with regard to the pension and gratuity etc. Once it is not in dispute that the plaintiff was the mother and class-1 legal heir in respect of the estate of Santosh Kumar, then her entitlement to 1/4th share in his estate cannot be disputed as the remaining 3/4th share would go to defendants No. 3 to 5, who are the other class-1 legal heirs of the deceased being his widow, daughter and son.
::: Downloaded on - 15/04/2017 19:15:49 :::HCHP 611. Insofar as the legal status of nominee is concerned, the .
same is no longer res integra. The Hon'ble Supreme Court for the first time clarified the issue in case Smt. Sarbati Devi and another vs. Smt. Usha Devi, (1984) 1 SCC 424 and held that in context of Section 39 of the Life Insurance Act, 1938 (in short LIC Act), a mere nomination under of Section 39 of the Act did not confer "beneficial interest" in the nominee qua the amount payable under the policy on the death of the assured.
rt The nomination was indicative only of the authority or the person who was to receive the amount, pursuant to which the insurer would get a valid discharge of its liability under the policy. This however, would not belie the claim of the heirs of the asssured made in accordance with law of succession. It is apt to reproduce para 4 of the judgment which reads thus:
"4. At the out set it should be mentioned that except the decision of the Allahabad High Court in Kesari Devi v. Dharma Devi, AIR 1962 All 355, on which reliance was placed by the High Court in dismissing the appeal before it and the two decisions of the Delhi High Court in S. Fauza Singh v. Kuldip Singh & Ors., AIR 1978 Del 276 and Mrs. Uma Sehgal & Anr. v. Dwarka Dass Sehgal & Ors AIR 1982 Del 36 in all other decisions cited before us the view taken is that the nominee under section 39 of the Act is nothing more than an agent to receive the money due under a life insurance policy in the circumstances similar to those in the present case and that the money remains the property of the assured during his lifetime and on his death forms part of his estate subject to the law of succession applicable to him. The cases which have taken the above view are Ramballav DhanJhania v. Gangadhar Nathmall AIR 1956 Cal 275, Life Insurance Corporation of India v. United Bank of India Ltd. & Anr., AIR 1970 Cal 513, D. Mohanavelu Muldaliar & Anr. v. Indian Insurance and Banking Corporation Ltd. Salem & Anr.,AIR 1957 Mad 115, Sarojini Amma v. Neelakanta Pillai AIR 1961 Ker 126, Atmaram Mohanlal Panchal v. Gunavantiben & Ors.,AIR 1977 Guj 134, Malli Dei vs. Kanchan Prava Dei, AIR 1973 Ori 83 and Lakshmi Amma v. Sagnna Bhagath & Ors.,ILR 1973 Kant 827 ::: Downloaded on - 15/04/2017 19:15:49 :::HCHP 7 Since there is a conflict of judicial opinion on the question involved in .
this case it is necessary to examine the above cases at some length.
The law in force in England on the above question is summarised in Halsbury's Laws of England (Fourth Edition), Vol. 25, Para 579 thus :
"579. 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 of 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 rt 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."
12. In Vishin N. Khanchandani and another vs. Vidya Lachmandas Khanchandani and another (2000) 6 SCC 724, the legal position was reiterated and it was held:
"10.....The nomination only indicated the hand which was authorized to receive the amount on the payment of which the insurer got a valid discharge of its liability under the policy. The policy holder continued to have interest in the policy during his lifetime and the nominee acquired no sort of interest in the policy during the lifetime of the policy holder. On the death of the policy holder, the amount payable under the policy became part of his estate which was governed by the law of succession applicable to him. Such succession may be testamentary or intestate. Section 39 did not operate as a third kind of succession which could be styled as a statutory testament. A nominee could not be treated as being equivalent to an heir or legatee. The amount of interest under the policy could, therefore, be claimed by the heirs of the assured in accordance with law of succession governing them."
13. In Ram Chander Talwar and another vs. Devender Kumar Talwar and others (2010) 10 SCC 671, it was held that nomination merely gives right of depositor to receive money lying in the account, but it does not make nominee owner of money lying in the account and it was held as under:
::: Downloaded on - 15/04/2017 19:15:49 :::HCHP 8"3. Mr. Swetank Shantanu, counsel appearing for the appellants, .
strenuously argued that by virtue of sub-section 2 of section 45 ZA, the nominee of the depositor, after the death of the depositor acquires all his/her rights to the express exclusion of all other persons and, therefore, the respondent can not lay any claim to the money in the account or in regard to the articles that might be lying in the bank locker held by their deceased mother. The submission is quite fallacious and is of based on a complete misconception of the provision of the Act.
4. Sub-section 2 of the 45-ZA, reads as follows:-
rt "45-ZA xxx xxx xxx xxx (2) Notwithstanding anything contained in any other law for the time being in force or in any disposition, whether testamentary or otherwise, in respect of such deposit, where a nomination made in the prescribed manner purports to confer on any person the right to receive the amount to deposit from the banking company, the nominee shall, on the death of the sole depositor or, as the case may be, on the death of all the depositors, become entitled to all the rights of the sole depositor or, as the case may be, of the depositors, in relation to such deposit to the exclusion of all other persons, unless the nomination is varied or cancelled in the prescribed manner."
(emphasis added)
5. Section 45-ZA(2) merely puts the nominee in the shoes of the depositor after his death and clothes him with the exclusive right to receive the money lying in the account. It gives him all the rights of the depositor so far as the depositor's account is concerned. But it by no stretch of imagination makes the nominee the owner of the money lying in the account. It needs to be remembered that the Banking Regulation Act is enacted to consolidate and amend the law relating to banking. It is in no way concerned with the question of succession. All the monies receivable by the nominee by virtue of section 45-ZA(2) would, therefore, form part of the estate of the deceased depositor and devolve according to the rule of succession to which the depositor may be governed.
6. We find that the High Court has rightly rejected the appellant's claim relying upon the decision of this Court in V.N. Khanchandani & Anr. v. V.L. Khanchandani & Anr., (2000) 6 SCC 724. The provision under Section 6(1) of the Government Saving Certificate Act, 1959 is materially and substantially the same as the provision of Section ::: Downloaded on - 15/04/2017 19:15:49 :::HCHP 9 45-ZA(2) of the Banking Regulation Act, 1949, and the decision in V.N. .
Khanchandani applies with full force to the facts of this case."
14. In view of the aforesaid exposition of law, it is absolutely clear that a mere nomination in itself does not confer any 'beneficial interest' in the nominee and the retiral benefits of the deceased would of become part of his estate and would be governed by the law of succession. Since the plaintiff is admittedly class-I heir, her entitlement rt would be 1/4th share, whereas the defendants No. 3 to 5 who alone otherwise were the nominees would be entitled to the remaining 3/4th share, that too, not on account of their being the nominees, but because of their being the class-I heirs of the deceased. This is exactly what has been held by the learned lower Appellate Court while reversing the judgment and decree passed by the learned trial Court.
15. In view of the aforesaid discussion, the findings recorded by the learned lower Appellate Court are legally and factually correct and it does not suffer from any illegality, perversity much less impropriety. The learned lower Appellate Court has correctly interpreted the pleadings and has considered the law in its correct perspective and has also considered the effect of the nomination.
Accordingly, both the substantial questions of law are answered against the appellants.
16. In view of the aforesaid discussion, there is no merit in this appeal and the same is dismissed, leaving the parties to bear their own costs.
( Tarlok Singh Chauhan )
October 29, 2015 Judge.
(GR)
::: Downloaded on - 15/04/2017 19:15:49 :::HCHP