IMPORTANT POINT
On the death of policy holder, payment is to be made to nominee. District Forum cannot determine rights of legal heirs.

R.S. Mongia, President — The undisputed facts of this case are that Sh. Rajbir Singh was employed in the Central Cooperative Bask at Khiala Kalan. He had purchased three insurance policies bearing Nos.160669564, 16147874 and 161477729 in the sum of Rs.50,000/-, Rs. 1,50,000/- and Rs. 1,00,000/- respectively, from the Life Insurance Corporation of India (in short, the “LIC”) on different dates. During the subsistence of those policies, unfortunately Rajbir Singh died on 12.6.2003 while in service. In regard to the first policy of Rs.50,000/- Sh. Shamsher Singh, father of Rajbir Singh (deceased) was the nominee, whereas in the latter two policies Smt. Gurdial Kaur, mother of Rajbir Singh was the nominee. The appellant-complainant No. l Smt. Paramjit Kaur is the widow of Rajbir Singh, whereas the other two appellants-complainants Nos.2 and 3 Sonpreet Kaur and Yaadvir Singh are the minor children born out of the wedlock of Smt. Paramjit Kaur and Rajbir Singh. It was the case of the complainants that they had informed the LIC that Rajbir Singh had died and they being the legal heirs of Rajbjir Singh were entitled to receive the insured amount qua the three policies referred to above. However, the payment of the insured amount was released to the nominees. The complainants filed a complaint before the District Forum alleging deficiency in service in having released the amount of insurance to the nominees. It may be observed here that there is another child of Rajbir Singh, namely, Ms. Rubal, who was made opposite party in the complaint. The father of Rajbir Singh, namely, Shamsher Singh, was not arrayed as an opposite party in the complaint. The complaint was dismissed by the District Forum on 17.3.2005. Hence the resent appeal at the best of the complainants.

2. The question which arises for determination is : If the LIC pays the

insured value of the life insurance to the nominee without there being any order of any competent Court not to pay the amount to the nominee, can it be said that there is deficiency in service on the part of the LIC? To our mind, the answer has to be in the negative. Without there being any order of a competent Court restraining the LIC from making the payment of the insured value of the insurance policy to the nominee, the LIC is bound to pay the insured value to the nominee. Of course, the nominee will hold that amount as a trustee for the legal heirs of the deceased, who had taken the life insurance policy. In Smt. Sharbati Devi & others v. Smt. Usha Devi1 the apex Court in para 12 of its judgment observed as under:—

“A mere nomination made under Section 39 does not have the effect of conferring on the nominee any beneficial interest in the amount payable under the life insurance policy on the death of the assured. The nomination only indicates the hand, which is authorised to receive the amount, on the payment of which the insurer gets a valid discharge of its liability under the policy. Decision of Allahabad High Court reversed. AIR 1962 Allahabad 3552 ; AIR 1978 Delhi 2763 and AIR 1982 Delhi 364 overruled.”

3. As to who are the legal heirs, the legal heirs must get that factum determined from a competent Court in accordance with the Law of Succession governing them. The insurance company cannot determine or hold as to who are the legal heirs of the deceased. In accordance with the terms of the insurance policy, the insurance company has to release the insured value of the policy to the nominee. This is what precisely has been observed by the apex Court in the judgment referred to above.

For the foregoing reasons we find no ground to interfere with the order of the District Forum.

The appeal is dismissed in limine.

Appeal dismissed.

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