The question of importance with reference to the proviso (kb) under subsection (1) of Section 60 of the Code of Civil Procedure 1908 (CPC) falls for consideration in this civil revision petition filed by the Judgment Debtors (J.Drs) whose application for exempting the LIC claim amount of their predecessor was rejected by the Court of I Additional Junior Civil Judge, Tanuku. For the sake of convenience, respondent is referred to as Decree Holder (D.Hr) and petitioners are referred to as J. Drs. Bomminayana Lakshmunaidu had borrowed certain amount from the D.Hr. He had taken Policy No.690589976 of Life Insurance Corporation of India (LIC), Rajam Branch, Vizianagaram District. Be that as it is, D.Hr filed O.S.No.95 of 2004 for recovery of a sum of Rs.81,000/- against wife and minor children of Lakshmunaidu, who died before filing the suit. During the pendency of the suit, D.Hr attached LIC policy of Lakshmunaidu. The suit was decreed on 22.6.2007 for Rs.81,229/- with interest. D.Hr then filed E.P.No.397 of 2007 for recovery of LIC amount attached earlier. J.Drs filed counter opposing the execution by attachment of insurance amount. The Court below rejected the objections, allowed E.P. and directed to send for the amount from the garnishee. Aggrieved by the said order dated 17.12.2005, J.Drs filed present civil revision petition.

After receiving notice, D.Hr appeared through the counsel. The counsel for both the parties made respective submissions. They also relied on precedents, to which reference is made hereafter.

On a plain reading of Clause (kb) of Section 60 (1) of CPC, the money payable under a policy of insurance of life of J.Drs shall not be liable for attachment or sale in execution of a decree. In this case, LIC policy is of Lakshmunaidu, predecessor of J.Drs, who himself not a defendant in the money suit. Hence the question is when a suit for recovery of money due from policy holder is filed against the legal representatives of such policy holder, can they seek exemption from attachment and sale. The answer must be in the negative. Had the policy holder been alive, certainly the money payable on such policy is unattachable. Even if a suit is filed for recovery of the amount due from the policy holder after his death, the effect of the Proviso is not taken away. This view is supported by the decisions of High Courts of Bombay, Madras and this Court.

In Federal Bank Ltd v Smt.Indiradevi Kunjamma (AIR 1986 Bom 101 (Panaji Bench, Goa)), it was held as follows. The reason behind this submission is that, according to the learned counsel, once the assured died, the monies payable under the policy come to his estate, and therefore his heirs and legal representatives are appropriating the said monies and as such, the said monies are entirely outside the scope of the aforesaid Cl. (kb). I am afraid that this reasoning of the learned counsel cannot be accepted. I say so, because, first of all one has to bear in mind the policy of the Legislature that caused the exemption to be laid down. I am of the opinion and I believe that the legislature had exempted from attachment the monies payable under a policy of insurance on the life of the judgment-debtor in order to give some security to the heirs and legal representatives of the deceased. This being the position, even though the said monies are becoming a part and parcel of the estate of the deceased, nevertheless the exemption laid down in Clause (kb) C.P.C. follows the same monies. I am fortified in this view by the observations of the Supreme Court in Sarbati Devi's case to the effect that the exemption was specifically laid down because the amounts payable under an Insurance Policy on the life of a person were otherwise attachable. In other words, the Supreme Court pointed out that had it not been for the specific provision of Cl.(kb) of Sec. 60(1) C.P.C., the monies payable under an Insurance Policy on the life of a person would have been liable to attachment and sale