The nomination made under section 39 of the Insurance Act does not vest the beneficial interest in the nominee and is subject to the law of succession. The insurance policy forms part of the estate of the deceased and devolves according to the law of succession applicable to the assured, unless validly excluded by a testament.

P. A. CHOUDARY, J.

( 1 ) THIS is an appeal filed by the Life Insurance Corporation of India (LIC) represented by the Divisional Manager, LIC of India, Hyderabad, against the judgment and decree passed by the learned Subordinate Judge, Cuddapah, in O. S. No. 106 of 1978. O. S. No. 106 of 1978 has been filed by one Nirmala Adireddi, wife of the late Adireddi Rangarao, and by her two minor daughters and one minor son represented by her as guardian ad litem against the LIC of India as the first defendant and against one Adireddi Achayamma, the mother of the late Rangarao and mother-in-law of the said Nirmala Adireddi. The late Rangarao took a life insurance policy with the first defendant, LIC of India, before he was married, bearing No. 3975 of 1967 for a sum of Rs. 25,000. He took this policy on 3/08/1971, and nominated his mother, the second defendant. Subsequently, he was married to the first plaintiff and took two other insurance policies for Rs. 10,000 each nominating his wife under these policies. As this litigation is not concerned with the last two policies, nothing more need to be said of them. Rangarao died on 23/12/1977. On his death, disputes arose about the payments to be made under the first policy. Under the law of Hindu Succession Act, 1956, the plaintiffs and the second defendant are entitled for equal shares in the first policy. Thus, the four plaintiffs are entitled to four shares in the first policy and the second defendant, the mother of Rangarao, is entitled to one share. But the mother of Rangarao, the nominee under the first policy, did not concede to the sharing of the policy money with the plaintiffs. The first plaintiff, therefore, sent a legal notice dated 2/03/1978, to the LIC of India demanding it to pay the four shares under the first policy to herself and her children. The LIC of India, in its reply dated 23/03/1978, stated that the mother of late Rangarao, Achayamma (the second defendant herein) was nominated by the late Ranga Rao and that, therefore, if the plaintiffs have titled or right to the amount payable by the LIC of India under the first policy, they can get their claim established in a court of law. The plaintiffs have, therefore, filed the above suit claiming a declaration of 4/5ths share in the above sum of Rs. 27,367. 40 payable by the LIC of India under the first policy. To that suit, the mother-in-law, who was added as the second defendant, remained ex parte and the LIC of India has filed a written statement, contending that the suit raised merely questions of inter se claims between the plaintiffs on the one hand and the second defendant on the others and that the LIC of India, the first defendant, has nothing to do with these disputes between the plaintiffs on the one hand and the second defendant on the other : that, therefore, the suit should be dismissed as against the first defendant.

( 2 ) THREE issues have been framed by the lower court and they are : 1. Whether the plaintiffs are entitled to the suit amount. 2. Whether the first defendant is not liable to costs ? 3. To what relief ?

( 3 ) THE first issue was answered in favour of the plaintiffs holding that the first plaintiffs being the wife and other three plaintiffs being the children of the late Rangarao would be entitled to four shares in the first policy and that the second defendant being the mother of the late Rangarao would be entitled to one share under the first policy.

( 4 ) THE second issue was answered the LIC of India, the first defendant and in favour of the plaintiffs. The lower court held that the plaintiffs were entitled to recover half of the suit costs from the LIC of India, the first defendant and the other half of the suit costs from the second defendant mother-in-law. The lower court also directed that half of the court fee should be paid to the Government by the LIC of India, the first defendant and the other half of the court-fee should be paid to the Government by the second defendant, the mother-i

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