Nomination under the Insurance Act, 1938, does not confer any beneficial interest on the nominee, and the amount payable under the insurance policy is subject to be disbursed amongst the legal heirs under the law of succession governing them.

ORDER : – This revision has been preferred by petitioner/respondent No. 8 against the order dated 2-12-2020 passed by 3rd ADJ, Bhopal in M.C.A. No. 48/2019 whereby order passed by 5th Civil Judge Class-I, Bhopal in M.J.C. Succession Case No. 74/17 on 27-4-2019 was affirmed.

2. Facts of the case are that the petitioner is the father of late Shri Chetan Singh Chouhan who died on 17-5-2017. He was employed on the post of Manager in Kotak Mahendra Old Mutual Life Insurance Ltd., Bhopal. He had purchased life insurance policy and nominated his father’s name. As per the amended provisions of year 2015 in Insurance (Amended) Act, 2015, the concept of Beneficial Nominee was introduced under section 39(7). It was alleged that as per the amendment, the parents, spouse and children have been put under the heading of “Beneficial Nominee”. The policy taken by deceased son of petitioner is governed by the aforesaid provisions.

3. It is further alleged by the petitioner that along with his deceased son, he had jointly applied for house loan valued about Rs. 9,50,000/-. The bank passed it in their favour for Rs. 8,50,000/-. The petitioner continued to repay all the installments. Deceased did not pay any EMI nor made any investment in the loan repaid so far. After his death, his wife filed false complaints at various forums to victimize him and his family so that they may give up their clams in respect of house jointly purchased by the petitioner and his son. After the death of his son, his wife respondent No. 1 sent a letter to Kotak Life Insurance Company to release of amount of death benefit under the policy No. ED000120NTR000419 which was declined on the grounds that the petitioner is the sole nominee. Then respondent No. 1 has filed an application under section 372 of Indian Succession Act, 1925 to issue a succession certificate in her favour which was partly allowed by the trial Court then the petitioner preferred miscellaneous civil appeal No. 48/2019.

4. The learned Appellate Court also dismissed the said appeal by affirming the order passed by learned trial Court holding that the respondent No. 1 is a widow of deceased. She is entitled to get all the benefits under section 8 of Hindu Succession Act because she is his legal heir. Only on the basis of nomination, petitioner and respondent No. 9 cannot claim any benefit as nominee.

5. The petitioner has alleged that he was sole nominee in the insurance policy of his son which amounts to will of the deceased. As per section 39 of Insurance Act, 1938, he can exclusively claim over the death benefits of his son. Section 39 of Insurance Act, is statutory and overriding declaration of right and entitlement of claim after the death of insured. Hence, impugned orders are liable to be set aside.

6. Learned counsel for the applicant placed reliance in the case of Smt. Shweta Singh Huria and ors. vs. Smt. Santosh Huria and anr. decided by the High Court of Delhi on 18 May, 2021.

7. Insurance (Amended) Act, 2015 came into effect from 26-12-2014. Since the policies in question matured after the 2015 Amendment came into force, thus, it is necessary to reproduce para 16 of the case of Smt. Shweta Singh Huria and ors. (supra), which reads as under :

By virtue of sub-section (7), where the holder of insurance policy, in his lifetime nominates his parents or spouse or children or any of them, the nominee(s) shall be beneficially entitled to the amount payable by the insurer, 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.

8. Learned counsel for the appellant submitted that provision of amended section 39 are applicable in this case. Thus, beneficial nominee has to be entitled for the benefits under the insurance policies to the exclusion of any other legal heir, who is not a nominee. But according to this Court nomination is only for the benefit of the insurer so that he gets a va