Judgment

Mrs. Sujata V. Manohar, J.-These appeals arise out of the estate duty proceedings in respect of the estate of the deceased P. Madhusudhan Reddy. During his lifetime the deceased had taken out three life insurance policies of Rs. 50,000/- each. Two policies were from the Phoenix Assurance Company, Bombay and one policy was taken from the Standard Life Insurance Company, Calcutta. During his lifetime the deceased had obtained loans on the security of his two life insurance policies taken out from Phoenix­ Assurance Company, Bombay. It seems that the total loan amount was Rs. 78,400/-. The deceased had also, from time to time, repaid a part of the loan. The amount due in respect of the loans so taken at the time of the death of the deceased was Rs. 71,260/-.

2. During his lifetime on or about 29th of August, 1954 the deceased executed an assignment in respect of each of these three lie insurance policies in favour of his grand children. The deeds of assignment have been registered on 27.9.1954. A notice of the assignment was given to the insurance company in accordance with the provisions of Section 38 of the Insurance Act, 1938 and the assignments were registered with the Ins