The main legal point established in the judgment is the entitlement of a nominee, particularly if a spouse, to the entire amount payable by the insurer under Section 39(7) of the Insurance Act, 1938, and the requirement for disbursement in accordance with the law governing the parties.

JUDGMENT :

Sanjay Kumar Medhi, J.

Heard Shri M. Rahman, learned counsel for the petitioners. Also heard Shri K.M. Hassan, learned counsel for the applicants.

2. At the outset, it is made clear that in the I.A. though the applicant No. 1 has been made party respondent No. 3, the applicant No. 2 is not a party respondent in the writ proceedings and therefore, the appearance would only be regarded for the applicant No. 1/respondent No. 3. Though the name of Standing Counsel, LIC appears in the cause list, none is present while the matter is called upon.

3. Considering the subject matter of the writ petition and the fact that the same is pending since the year 2017 along with the I.A. the writ petition is also taken up for final disposal at the admission stage.

4. The present writ petition has been instituted by the petitioners, who are the mother, father and son of the deceased Abu Shama Ahmed. The deceased was a LIC Policy Holder being numbered 998875019 and in the said policy he had nominated the respondent No. 3 as the nominee. However, on the death of Abu Shama Ahmed, the respondent No. 3 on the strength of being a nominee has purported to take the entire benefit of the policy.

5. It is the case of the petitioners that the representations were also not paid any heed to and therefore the writ petition has been filed.

6. This Court while issuing notice vide order dated 22.09.2017 had directed that beyond 1/8th portion of the amount involved, no other amount shall be released in favour of the respondent No. 3. The aforesaid direction was given considering that the parties were Muslims and as per Muslim Personal Law, the wife/widow would be entitled to 1/8th of the amount in question.

7. Shri Rahman, the learned counsel for the petitioners submits that the respondent No. 3 is only a nominee and as a nominee, she cannot usurp the entire amount and is entitled only to the amount which is admissible under the law governing the parties. He accordingly submits that appropriate direction may be issued to limit her entitlement only to her share as permissible under the Personal Law.

8. On the other hand, Shri Hassan, the learned counsel for the respondent No. 3/applicant No. 1 submits that there is an amendment of the Insurance Act, 1938 (herein after the Act) whereby the entire Section 39 has been amended.

9. By drawing the attention of this Court to Section 39(7) of the Act, the learned counsel for the respondent No. 3 submits that as per the said sub-section, since the nominee is the spouse, she would be entitled to the entire amount. He accordingly submits that the writ petition is liable to be dismissed.

10. This Court has duly considered the rival submissions made by the parties.

11. There is no manner of doubt that a nominee is at par with the position of a trustee and on the death of the policy holder, the amount is released to the nominee which however has to be disbursed in accordance with law governing the respective parties.

12. Since Section 39(7) of the Act has been pressed into service, it would be convenient to have a close look at the said sub-section which read as follows :

'39. Nomination by policyholder.-

.....

(7) Subject to the other provisions of this section, where the holder of a policy of insurance on his own life nominates his parents, or his spouse, or his children, or his spouse and children, or any of them, the nominee or nominees shall be beneficially entitled to the amount payable by the insurer to him or them under sub-section (6) unless it is proved that the holder of the policy, having regard to the nature of his title to the policy, could not have conferred any such beneficial title on the nominee.'

13. A careful perusal of the aforesaid sub-section, in the opinion of this Court would make it clear that if a nominee is a spouse or children or parents, the nominee would be entitled to such beneficial title as permitted under the law. The meaning sought to be given by the learned counsel for the respondent No. 3 that th