( 1 ) A question of considerable importance for holders of life insurance policies has arisen in this First Appeal arising out of a suit instituted by the widow and minor son of a policy holder claiming a declaration that they were entitled to the sum assured under the insurance policy upon the death of the policy holder in their capacity as his heirs and not the person named in the policy as a nominee under sec. 39 of the Insurance Act of 1938. The dispute was raised by the father of the policy holder who was the nominee named in the policy on the premise that he had a title to the said amount in his own right by virtue of his capacity as a nominee named by the policy holder. The trial Court having negatived the contention of the defendant nominee and having decreed the suit instituted by the plaintiffs the nominee (original defendant No. 1) has preferred the present First Appeal and has challenged the legality and validity of the judgment and decree passed by the learned Judge presiding over the City Civil Court 3 Court at Ahmedabad in Civil Suit No. 1137 of 1972.

( 2 ) THE facts are not in dispute. One Surendra Atmaram Panchal took a life insurance policy on his life on October 20 1970 The policy was issued by the life Insurance Corporation of India (original defendant No. 3 No. 4 herein ). The said Surendra was a minor at the time when the insurance policy was taken out. He was unmarried at that point of time. In the insurance policy Ex. 30 it was stipulated that the sum assured was payable to The Proposer or his Assigns or Nominees under sec. 39 of the Insurance Act or Proving Executors or Administrators or other Legal Representatives who should take out representation to his Estate or limited to the moneys payable under this Policy from any Court of any State or Territory of the Union of India Some two months after he had taken the aforesaid policy Surendra married Gunvantiben (plaintiff No. 1 respondent No. 1 ). He had a male child by her who has been impleaded as plaintiff No. 2-respondent No 2. About 1 1/2 years after his marriage Surendra died on September 29 1971 intestate without making a will. Upon his death the question arose as to who was entitled to the sum assured. The widow and the minor son of the deceased claimed that they along with defendant No. 2-respondent No. 3 Bai Jashi mother of Surendra were entitled to the sum payable under the insurance policy on the death of Surendra in their capacity as his legal heirs. It was contended by them that the fact that the father of deceased Surendra (appellant-original defendant No. 1 was named as a nominee under sec. 39 of the Insurance Act was of no consequence inasmuch as the only right which it conferred on the nominee was to collect the moneys for being paid to the rightful claimants. The father of the deceased policy holder assumed the posture that he was entitled in his own right to the said sum in his capacity as a nominee and resisted the claim of the window and the son of the deceased (his daughter-in-law and his grandson ). Thereupon the widow and the son of the deceased were constrained to institute the suit giving rise to the present appeal.

( 3 ) THE learned Judge has upheld the contention of the plaintiffs that a person who is named as a nominee in a life insurance policy under sec. 39 has a mere right to collect the money from the insurer and no more. The view has been taken by him that the persons entitled to claim the amount are the heirs of deceased Surendra inasmuch as it is an admitted position that Surendra died intestate.

( 4 ) SEC. 39 of the Insurance Act of 1938 which concerns the question of nomination by a policy holder deserves to be quoted in so far as material for a proper appreciation of the point at issue :39 (1) The holder of a policy of life insurance on his own life may when effecting the policy or at any time before the policy matures for payment nominate the person or persons to whom the money secured by the Polic