The nominee under the Insurance Act does not have superior rights over legal heirs under the Hindu Succession Act, emphasizing the need for harmonious interpretation of both laws.

JUDGMENT :

Pankaj Bhatia, J.

1. Present petition has been filed challenging the order dated 12.07.2022 passed by District Judge, Unnao in Civil Revision No. 16 of 2022 (Smt. Kusum vs. Anand Kumar & Ors.).

2. The facts, in brief, are that the petitioner claims that she had taken out 15 life insurance in the name of her daughter namely Ranjeeta when she was unmarried and subsequently, the daughter was married to respondent no.1, and respondent no.2 – the granddaughter of the petitioner – was born out of the wedlock in between the daughter of the petitioner and respondent no.1. Unfortunately, daughter of the petitioner died on 01.09.2021 when respondent no.2 was about 11 months’ old. It is claimed that in the 15 life insurance policies, the petitioner was the nominee as named by her daughter before her death. However, to resist the said claim, respondent no.1 and respondent no.2 filed Civil Misc. Case No.08/2022 under Section 372 of Indian Succession Act before the Civil Judge (Senior Division), Unnao claiming succession including the claim arising out of life insurance policies. It is claimed that the petitioner was not even made a party. Subsequently, the said case was disposed off in the Lok Adalat on 12.03.2022 without hearing the petitioner. Aggrieved against the said judgment, the petitioner preferred an petition being Matters Related Under Article 227 No.2114 of 2022 in which an order came to be passed on 07.06.2022 holding that a revision would lie against the said order passed by the Civil Judge before the competent Court. In terms of the said order, Civil Revision No.16 of 2022 was preferred before the District Judge, Unnao. Ultimately, the revision came to be decided by means of the order impugned vide which the succession certificate was modified to the extent that the amount of all the 15 life insurance policies was directed to be excluded from the list of assets and further directions were issued to the revisionist for depositing the same in the form of Fix Deposit Receipts in the name of respondent no.2 till her attaining the age of 18 years.

3. Neat contention of learned counsel for the petitioner is that in terms of the mandate of Section 39(7) read with Section 39(8) of the Insurance Act, it is the petitioner who was named as a nominee, is entitled to the amounts under the policies as being a beneficial nominee. It is not denied that apart from the amounts under the policies, the respondent no.2 would be entitled to succession to her estate as admittedly the daughter of the petitioner died intestate.

4. Thus, the issue that arises for consideration is on the one hand the claim of the petitioner by virtue of her being nominee to be entitled to the beneficial interest arising out of the amounts payable for the insurance policies by virtue of Section 39(7) of the Insurance Act to the exclusion of respondent no.2 vis-a-vis the rights of succession in respect to the amounts under policies of the daughter flowing from the Hindu Succession Act.

5. It is essential to notice that Section 39(7) of Insurance Act was amended in the year 2015 by virtue of Act No.5 of 2015 on the recommendations made by the Law Commission. Section 39 after its amendment is recorded as under:

“39. Nomination by policyholder — (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 policyholder to appoint any person in the manner laid down by the insurer, to receive the money secured by the policy in the event of his death during the minority of the nominee.

(2) Any such nomination in order to be effectual shall, unless it is incorporated in the text of the policy itself, be made by an endorsement on the policy communicated to the insurer and registered by him in the records relating