LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More


In Smt. Sarbati Devi & Another v. Smt. Usha Devi (1984) 1 SCC 424, the Supreme Court held that a mere nomination does not have the effect of conferring to the nominee any beneficial interest in the amount payable under the life insurance policy, on death of the insurer.  The nomination only indicates the hand which is authorized to receive the amount on 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.

In Vishin N. Khanchandani & Another v. Vidya Lachmandas Khanchandani & Another (2000) 6 SCC 724, the Supreme Court held that the law laid down in Sarbati Devi (supra) holds the field and is equally applicable to the nominee becoming entitled to the payment of the amount on account of National Savings Certificates received by him under Section 6 read with Section 7 of the Act who in turn is liable to return the amount to those in whose favour the law creates a beneficial interest, subject to the provisions of sub-section (2) of Section 8 of the Act.

      Following the above decisions, recently the supreme court in CIVIL APPEAL NO.809 OF 2002 Shipra Sengupta v. Mridul Sengupta & Others  decided on 20/08/2009 held that “In view of the clear legal position, it is made abundantly clear that the amount in any head can be received by the nominee, but the amount can be claimed by the heirs of the deceased in accordance with law of succession governing them. In other words, nomination does not confer any beneficial interest on the nominee. In the instant case amounts so received are to be distributed according to the Hindu Succession Act, 1956.”  It is notable that in this case  dispute was between widow and mother of diseased who was a bank employee and since he had joined the service before his marriage, he had nominated his mother as nominee. His widow filed an application under section 372 of the Indian Succession Act, 1956, in which she claimed that she was entitled to her share of insurance, gratuity, public provident fund etc. etc. Her claim was based on the principle that any nomination made by her husband prior to his marriage would automatically stand cancelled after his marriage.


"Loved reading this piece by Swami Sadashiva Brahmendra Sar?
Join LAWyersClubIndia's network for daily News Updates, Judgment Summaries, Articles, Forum Threads, Online Law Courses, and MUCH MORE!!"






Tags :


Category Civil Law, Other Articles by - Swami Sadashiva Brahmendra Sar 



Comments


update
Post a Suggestion for LCI Team
Post a Legal Query