IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 2849 of 2008(L)
1. MRS. GITA SUBBA RAO,
... Petitioner
Vs
1. LIFE INSURANCE CORPORATION OF INDIA,
... Respondent
2. BRANCH MANAGER,
For Petitioner :SRI.T.L.ANANTHASIVAN
For Respondent :SRI.THOMAS MATHEW NELLIMOOTTIL
The Hon'ble MR. Justice T.R.RAMACHANDRAN NAIR
Dated :14/09/2010
O R D E R
T.R. RAMACHANDRAN NAIR, J.
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W.P.(C). No.2849/2008-L
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Dated this the 14th day of September, 2010
J U D G M E N T
The writ petition is filed by the petitioner seeking
for a direction to the respondents to make the payment of
the amount covered under Ext.P2 insurance policy which was
due for payment as early as on 06/02/2005.
2. The case of the petitioner is that her husband,
Dr.A.N.Subba Rao had taken an insurance policy No.66481751,
under the caption ‘Twenty Year Money Back Policy with
Profits’, in the year 1985, for a sum of Rs.1,00,000/- and
she was the nominee. His whereabouts were not known from
August 1999 and all her efforts to trace him out did not
succeed. He was working as a Neurosurgeon in the Medical
Trust Hospital, Ernakulam. He had executed a Will dated
15/05/1989 in favour of the petitioner, and their son and
daughter. Since the petitioner’s husband’s whereabouts
were not known for a period of more than seven years, she
filed an application for grant of Letters of Administration
with the Will annexed. This Court, by Ext.P1 Judgment
granted relief. It was held that since he was not heard
for more than seven years after he disappeared, it is
presumed, under Section 108 of the Evidence Act, that
Dr.A.N.Subba Rao is dead. Thereafter, the petitioner
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approached the first respondent for the insurance amount
which had matured on 06/02/2005 and the original policy was
also handed over, a copy of policy is produced as Ext.P2
herein. It shows that the she is the nominee under the
policy. Various correspondences ensued and finally, by
Ext.P7, she was informed to produce legal evidence of title
from a court of law. According to her, in spite of
production of all documents and the claim statement the
respondents refused to make the payment. It is in these
circumstances, she has sought for a direction for payment
of the amount covered by the policy with bonus and interest.
3. The respondents have filed a counter affidavit.
It is pointed out in the counter affidavit that even though
the petitioner was the nominee, the policy was assigned to
the Housing Development Finance Corporation Ltd on
12/09/1989 and it was re-assigned by HDFC Ltd to the life
assured on 29/12/1999. Thereafter, there was no fresh
nomination under the policy. Therefore, in the absence of
a fresh nomination, the petitioner is not entitled for
release of the amounts of the policy. It is further
pointed out that if there is no nomination of the policy,
the title is open and claim has to be settled to the legal
representatives/heirs of the deceased policy holder who
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prove title to the policy moneys. The said requirement
has not been satisfied by the petitioner.
4. The learned counsel for the petitioner raised
various contentions pointing out that a reading of Ext.P1
Judgment will show that this Court had drawn the
presumption under Section 108 of the Evidence Act to hold
that Dr.A.N.Subba Rao is dead. After appreciating the
evidence adduced, this Court was satisfied that Ext.P6 Will
produced therein, has been proved in accordance with law as
one duly executed by late Dr.A.N.Subba Rao. Accordingly,
Letters of Administration with Ext.P6 Will attached was
ordered to be issued. It is pointed out that in the light
of the same, title of the petitioner and children has been
proved. It is further pointed out that as policy has been
re-assigned as evident from the endorsement in Ext.P2
itself, the nomination survives going by the effect of the
proviso to Section 39(4) of the Insurance Act, 1938 (for
short ‘the Act’). It is also pointed out that being the
legal representative, she is entitled to claim the above
amount. It is pointed out that there is no merit in the
contentions raised by the respondents.
5. Section 38 of the Act relates to Assignment and
transfer of insurance policies. The nomination by a policy
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holder is covered by Section 39 of the Act. Sub-section 4
of Section 39 of the Act reads as follows:-
(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.]
Going by Sub-section 4 of Section 39 of the Act once there
is assignment of a policy in accordance with Section 38,
there will be an automatic cancellation of the nomination.
Going by the the proviso to Sub-section 4 of Section 39,
when an insurer bears the risk on the policy at the time of
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
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policy. Therefore, in such cases, when there is a re-
assignment, it will not cancel the nomination. Herein,
going by the endorsement in Ext.P2, there is a re-
assignment of the policy. Of course, there is no fresh
nomination. But, still going by the proviso of the Act, in
the light of the re-assignment, the nomination will
actually resurrect.
6. At any rate, the said issue need not deter this
Court from granting the relief, in the light of the fact
that the husband of the petitioner had been declared as
dead as per Ext.P1 by drawing the presumption under Section
108 of the Evidence Act. Ext.P1 Judgment is in favour of
the petitioner and her children. Going by the same, the
Letters of Administration has been issued with Ext.P6 Will
therein. Naturally, when a person is dead, going by the
terms of the policy itself, the legal representatives are
entitled for the benefit of the policy. Therefore,
evidently, Ext.P1 will come to the help of the petitioner
in the light of the fact that Dr.A.N.Subba Rao is declared
as dead by this Court. Further, in the light of Ext.P1,
the title to the property is also established. Section 273
of the Indian Succession Act embodies this principle.
7. There is no dispute that the petitioner is the
wife of Dr.A.N.Subba Rao. The objection whether the
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petitioner should have filed a suit and not a writ petition
which is raised in the counter affidavit, need not deter
the Court from issuing a direction when no disputed
questions of facts are available for adjudication. That
the policy has been issued in favour of Dr.A.N.Subba Rao
and the petitioner was a nominee under the policy are not
disputed. That the policy is matured is also not disputed.
In that view of the matter, the Corporation being a public
authority, this Court will be justified in issuing a
mandamus. Further the writ petition was admitted and was
pending for the last more than two years.
8. The learned counsel for the petitioner placed
reliance upon the Judgment of the Bombay High Court in W.P.
(C).No.999/2006 to point out that in similar circumstances,
after drawing the presumption under Section 108 of the
Evidence Act, the Bombay High Court directed the
Corporation to pay the petitioner therein the entire sum
assured with accrued bonus and interest at the rate of 12%
per annum from 13/11/1995 till payment.
9. Herein, the policy has matured in the year 2005
and the amount remains with the Corporation even now.
Therefore, actually, the petitioner will be entitled for
the payment of reasonable interest also for the delayed
payment. Therefore, the writ petition is allowed. There
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will be a direction to the first respondent to disburse the
amount covered by policy No.66481751 (sum assured) along
with accrued bonus and interest at the rate of 8% per annum
from 06/02/2005 till the date of payment. Since it is
pointed out that the petitioner’s daughter’s marriage is
scheduled to be held in November, 2010 the amount will be
disbursed on or before 30th October, 2010. No costs.
(T.R. Ramachandran Nair, Judge.)
ms