The main legal point established in the judgment is that the surrender value of life insurance policies is exempt from attachment under Section 60(1)(kb) of the Civil Procedure Code.

K. Surendra Mohan, J.—The first respondent, Indian Overseas Bank Ltd. filed a suit O.S. 77/2003 for the realisation of amounts due from the revision petitioner who was an employee of the Bank. The allegation is that the revision petitioner had during the course of his employment with the bank, committed misappropriation of funds of the Bank. On the very same allegations the C.B.I. conducted an investigation and launched prosecution proceedings against the revision petitioner, in which it is reported that he has been convicted. The misappropriation is stated to be to the tune of Rs. 75,63,295/-. The Bank initiated disciplinary proceedings against the revision petitioner and has terminated his services. The Bank also filed the suit from which the above revision arises for recovery of the amounts misappropriated by the revision petitioner.

2. The petitioner is a subscriber to life insurance policies. The petitioner had kept these policies in his cabin, while he was working with the first respondent-bank. The policies in original were taken possession of by the Bank. In the suit, O.S. No. 77/2003 of the Sub-Court, Thiruvala, the first respondent filed an application as I.A. No. 957/2003 for attachment of the amount scheduled to the petition which represented the surrender value of the LIC policies in the name of the revision petitioner. It was alleged that the petitioner had applied for disbursement of the surrender value of the policies with the object of defeating his creditors. Therefore, the first respondent-bank prayed for the issue of a conditional attachment ordering the revision petitioner to furnish security and in the event of such security being not furnished, to attach the surrender value of his life insurance policies.

3. The revision petitioner filed counter objecting to the attachment. After hearing the contesting parties, as per order dated 6.11.2004 the Sub-Court, Thiruvalla passed the order under revision allowing the petition. As per the order, the revision petitioner has been directed to furnish security for an amount of Rs. 25,985/- to the Court on or before 7.1.2004. Meanwhile, conditional attachment of the scheduled amounts also has been ordered. The said order is under challenge in the above Revision Petition.

4. According to the Counsel for the revision petitioner, Section 60(1)(kb) of the Civil Procedure Code, amounts covered by Life Insurance Policies are not liable to be attached. Therefore, according to the Counsel the Court below exceeded its jurisdiction in ordering attachment of the surrender value of his life insurance policies. He relies on the decision of this Court reported in Sasidharan v. K.C.T.S.S. Sangam 1994(1) KLT 429, also on a decision of the Madras High Court in Canara Bank v. Palani dated 2.1.1995 rendered in 1995(1) KLT SN 29 (C. No. 40). As per the above decisions the surrender value of insurance policies are exempt from attachment by Court, it is contended.

5. The submissions of the Counsel for the revision petitioner are opposed by the Counsel for the first respondent. According to the Counsel, the provisions of Section 60(1)(kb) contained an exemption from attachment which was a beneficial provision that should be strictly construed. It was not a provision that should be given an amplitude larger than what is contemplated by the exemption. According to the learned Counsel, the revision petitioner was a person who had committed misappropriation of huge amounts of money, the prospects of recovery of which is very bleak. If the revision petitioner were allowed to receive and appropriate the amounts covered by the insurance policies, the Bank would be left with no means to recover the amounts due to it. Therefore, it is pointed out that the provision should be read down as done by the Court below and an order of attachment should be ordered.

6. I have heard Adv. Mr. Vivek Varghese for the revision petitioner, Advocate Mr. Philip Mathew for the first respondent and Advocate Mr. P.B. Sa