Rajadurai Et Al., V. Fonseka

1943 Present: Moseley A.C.J. and Jayatileke J.

RAJADURAI, et al. Appellant, and FONSEKA, Respondent.

145-D. C. Jaffna 15,889.

Railway Benefit Association-Money payable on death or retirement of member- Death of member-Money paid to next of kin-Not available to creditor- Ceylon Railway Benefit Association Ordinance (Cap. 208), Rule 9 (1).

Money which is payable on death during his employment in the Public Service or on his retirement of a member of the Railway Benefit Association and which according to the Rules has to be paid to the member, his nominee or next of kin cannot be followed by his creditors in the hands of the next of kin to whom it has been paid on the death of a member.

Letchchimipillai v. Sivakoluntu (25 N. L. R. 225) followed.

IN this action the plaintiff sued the defendants the widow and minor children of S. T. Rajadurai, deceased, for the recovery of Rs. 350 balance due on a promissory note made by the deceased. The defendants admitted the debt and the only question was whether a certain fund in possession of the defendants was available for execution. It was the amount payable to the deceased on his retirement or death by the Ceylon Railway Benefit Association of which the deceased was a member. The learned District Judge answered the question in the affirmative.

N. Nadarajah, K.C. (with him H. W. Thambiah), for the defendants, appellants.-The only question at issue is whether the defendants can be said to have adiated as their inheritance the sum payable to them under rule 9 (1) read with section 3 of the Railway Benefit Association Ordinance (Cap. 208). It is submitted that the money in question did not belong

to the deceased and does not form a part of his estate. Letchchimipillai v, Sivakoluntu[ (1923) 25 N. L. R. 225] is directly in point. The District Judge was wrong in holding that the deceased had a disposing power over the fund when in reality he had only a nominating power. The fund cannot be considered as part of the estate of the deceased. See Urquhart v. Butterfield [L. R. (1887) 36 ch. D. 55] and Attorney-General v. Rowsell 3[L. R. (1887) 36 Ch. D. at 67].

E. B. Wickremanayake (with him H. Wanigatunge), for the plaintiff, respondent.-Letchchimipillai v. Sivakoluntu (supra) has no application to the facts of this case. No nominee had been appointed in that case who predeceased the subscriber. The case of Ceylon Mutual Provident Association v, Mendis et al.4[ (1922) 24 N. L. R. 203.] is more in point. The decision in Letchchimipillai v, Sivakoluntu can be explained on the basis of a novation and contractual rights ; it was, therefore, held that the nominee had not only a legal right but also a beneficial interest.

The primary object of the Association in the present case is to benefit the member who subscribed. The member can obtain relief from the Association in times of distress and sickness. He can, further, draw the money for himself on his retirement. The money is the property of the member and, under rule 9 (1), where it is not paid to the member or his nominee, it becomes part of his estate and goes to his heirs. In the English cases cited on behalf of the appellants the funds had clearly been created not for the benefit of the subscribers but for the benefit of their widows and children. In re Griffin5[L. R. (1902) 1 ch. 135.] is an example of an English case where the money was recognized as that of the subscriber.

N. Nadarajah, K.C., in reply.-Rule 9 (1) constitutes a contract between the member and the Association as to the payment of the money. The terms of the contract cannot be varied in any manner other than that prescribed by the rules-Ashby v. Costin 6[ L. R. 21 Q. B. D. 401], Bennett v. Slater et al 7[L. R. (1899) 1 Q. B. 45.]

Cur. adv. vult.

March 5, 1943. MOSELEY A.C.J.-

The respondents sued the appellants, who are respectively the widow and two minor children of one S. T. Rajadura

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