A nomination under Section 39 of the Insurance Act, 1938, does not confer beneficial interest on the nominee, and the amount payable under a life insurance policy becomes part of the deceased's estate subject to the law of succession.

1. - The petitioner has prayed that the State Insurance Department may be directed to make payment of Insurance Policy of her deceased husband Radheyshyam Hardenia, which are due and payable on account of death of her husband Shri Radheyshyam Hardenia. It is claimed that the marriage of the petitioner was solemnised in 1960 but, after some time the relations with her husband were strained and a petition fora decree of restitution of conjugal rights was also filed by the husband in the Court of Additional District and Sessions Judge Gangapur City, District Sawai Madhopur, which was subsequently withdrawn.

2. The petitioner has claimed that in the voter list, her name has been shown as wife of Radheyshyam Hardenia, who was teacher in Panchayat Samiti, Todabheem and expired on 1.11.92. A claim was made to the Assistant Director, State Insurance and General Provident Fund and the Block Development Officer, Panchayat Sanriti, Todabheem, District Sawai Madhopur has also recommended the case of the petitioner. In the service book, the petitioner has been shown as wife of Radheyshyam Hardenia, but, the Director State Insurance and General Provident has advised that the payment is to be made to the younger brother of the petitioner's husband, who has been shown as nominee.

3. Reliance has also been placed on the decision of the Apex Court in the case of Sarbati Devi v. Usha Devi, AIR 1984 SC 346 wherein it was observed that "a mere nomination under section 39 of the Insurance Act, 1938 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. The amount can he claimed by the heirs of the assured in accordance with the law of succession governing then". It was further observed that according to Section 39 the policy-holder continues to hold interest in the policy during his life time and the nominee acquires no sort of interest in the policy during the life-time of the policy-holder. On the death of the policy-holder, the amount payable under the policy becomes part of his estate which is governed by the law of succession applicable to him. Such succession may be testamentary or intestate. The provisions of Section 39 were interpreted. to mean that the words 'amount shall be payable to the nominee or nominees' does not mean that the amount shall belong to the nominee or nominees. The language of Section 39 was held not capable of altering the course of succession". In this case the nominee (wife) claimed absolute right to the amount payable under two policies to the exclusion of her son and her mother-in-law. A suit for declaration was filed through the next friend that the mother-in-law and her son were entitled to ⅔rd share of the amount due and payable under the insurance policies. The defendants resisted the suit which was ultimately dismissed. The first appeal by the District Court was dismissed and the second appeal by the High Court was also dismissed and, therefore, the matter was challenged by filing the appeal after obtaining permission special leave under Article 136 of the Constitution. The decision given by the High Court was reversed by the Apex Court.

4. The relevant provisions of Section 39 of the Insurance Act, 1938 are as under:-

"39. Nomination by policy-holder.

(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 policy shall be paid in the event of his death :

Provided that where any nominee is a minor, it shall be lawful for the policy-holder to appoint in the. prescribed manner any person to receive the money secured by the policy in the event of his death during the minority of the