Nominees under insurance policies do not hold beneficial interest; legal heirs must pursue civil suits for rights determination despite summary nature of succession certificate proceedings.

ORDER :

Nupur Bhati, J.

1. The instant petition has been filed by the petitioners under Article 227 of the Constitution of India challenging the order dated 22.11.2024 (Annex.8) passed by Additional District and Session Judge, Suratgarh (hereinafter as ‘trial Court’) in Civil Misc. Petition No.37/2024 whereby application filed by the petitioners under Section 151 of the Code of Civil Procedure, 1908 (hereinafter as ‘CPC’) for grant of temporary injunction has been dismissed. The petitioners seek following relief:

“It is, therefore, most humbly and respectfully prayed that the instant writ petition may kindly be allowed and by issuing an appropriate writ, order or direction and the impugned order dated 22.11.24 (Annex-8) may kindly be ordered to be quashed and set aside to the extent of deciding the application preferred by the petitioners u/s 151 of the Civil Procedure Code, 1908.

It is furthermore prayed that the application preferred by the petitioners under section 151, CPC may kindly be allowed in toto.

Any other appropriate relief which this Hon'ble High Court deems just and proper in the facts and circumstances of the case may kindly be passed in favour of the petitioner”

2. Briefly stated the facts of the case are that Petitioner Nos.1 and 2 are the husband and daughter, respectively, of Late Mrs. Priyanka (hereinafter as ‘deseased’). The deceased was a permanent employee of respondent Nos.2 and 3 (Life Insurance Corporation) at Suratgarh office. Subsequent to the death of the deceased the petitioners requested respondent Nos.2 and 3 to pay the service benefits of the deceased payable to them, being her class-I legal heirs, however, the respondent Nos.2 and 3 refused this request on the ground that the respondent Nos.4 and 5 are the nominees of the deceased in the service records and unless the petitioners produce succession certificate in this respect, the service benefits of the deceased cannot be granted to them. Thereafter, the petitioners filed an application (Annex.3) under Section 372 of Indian Succession Act, 1925 (hereinafter as ‘the Succession Act’) seeking, inter alia, for grant of succession certificate declaring them as class-I legal heirs of the deceased. The respondent Nos.2 and 3 filed reply (Annex.4) to the application (Annex.3) denying averments made therein. The petitioners also submitted a representation (Annex.5) to the Branch Manager of the respondent No.2 to not to disburse the service benefits of the deceased to respondent Nos.4 and 5 without the permission of the learned trial court. The petitioners also filed an application (Annex.6) under Section 151 of the Code of Civil Procedure, 1908 (hereinafter as ‘CPC’) before the learned trial court praying inter alia that during the pendency of the proceedings under Section 372 of the Act, the service benefits and amount of insurance policy of the deceased may not be disbursed to the respondent Nos.4 and 5 or anyone else. The respondent Nos.2 and 3 filed reply (Annex.7) to the application (Annex.6) denying the averments made therein. Subsequently, the application (Annex.6) filed under Section 151 of the CPC came to be dismissed by the learned trial court vide order dated 22.11.2024 (Annex.8). Aggrieved of the same, the instant petition has been filed by the petitioners.

3. Learned counsel for the petitioners submitted that the learned trial court has erred in rejecting his application (Annex.6) solely on the ground that petitioners can avail alternative remedy of filing a seperate civil suit for the relief claimed in application (Annex.6). He submitted that filing a seperate civil suit would create multiplicity of proceedings. He also submitted that the learned trial court has not considered the relevant legal principle that the nominee is merely a collecting agent and cannot be held to be a successor and mere nomination does not confer any beneficial interest upon the nominee. He also submitted that the nomination made under Section 39 of the Insurance Act,