1. Whether monies payable under an Insurance Policy on the life of the judgment-debtor after the latter's death can be attached, or whether the payment of such monies to the nominee after the death of the assured can be restrained in a suit for recovery of monies borrowed by the latter, is the question that this appeal gives rise to and falls for my determination.
2. The appellant Bank has filed a suit against the respondents for recovery of an amount of Rs. 2,15,720.20 p. based on an advance made to the late Dr. P.P Pillai. The respondents are the successors of the said Pillai and he was dead at the time the suit was instituted. Dr. Pillai had some Life Insurance Policies on his life issued by the Life Insurance Corporation of India, the respondent no. 1 being his widow and nominee in the said Policies. In the course of the suit, the appellant filed an application for attachment of the aforesaid Insurance Policies before judgment, under O. 38R. 5 Civil Procedure Code and the trial Judge by his order dated 22nd September, 1979, granted the alternative prayer restraining the Life Insurance Corporation of India from paying the amounts of the said policies and further directed the defendants in the suit to show cause as to why they should not furnish security. The suit was however dismissed for default of the plaintiffs on 27th June, 1980 and later on, another order dated 25th August, 1980, was passed by the learned trial Judge restraining the defendants nos. 1 and 2 in the suit from receiving the amounts of the Life Insurance Policies. Only on 17th October, 1980, the suit was restored to file by setting aside the order dismissing it for default. When the matter was thus standing, the appellant filed another application praying that the order dated 25th August, be made absolute and. In the alternative, that the defendants nos. 1 and 2 be directed to furnish Bank guarantee in the sum claimed in the suit. This application was opposed and ultimately, the learned trial Judge dismissed it on the grounds that the law is clear in a such as the amounts payable under a policy of Insurance cannot be attached. It is against this order that the present appeal has been filed.
3. Mr. Peres Cardozo, learned counsel appearing for the appellant, contended before me that the learned trial Judge has wrongly held that no order restraining the Life Insurance Corporation from paying the amounts of the Insurance Policies could have been passed in view of the provisions of Sec. 60(kb) Civil Procedure Code. According to the learned counsel, one has to distinguish an Insurance Policy on the life of the judgment-debtor that matures during the lifetime of the assured and an Insurance Policy which becomes payable after his death. It has been contended by him that in the first case; i.e when the Insurance Policy matures during the life-time of the assured, the provision of Sec. 60(kb) Civil Procedure Code operates and the monies paid cannot be attached. However, if the monies become payable after the death of the assured, in such cases, the monies enter into the estate of the deceased and can therefore be attached. The learned counsel placed reliance in support of these submissions on the decisions of the Allahabad High Court in ‘Raja Ram v. Mata Prasad . AIR 1972 All. 167, of the Gujarat High Court in “Atmaram Mohanlal Panchal v. Gunvantiben alias Geetaben w/o Surendrakumar Atmaram Panchal . AIR 1977 Guj. 134 and of the Supreme Court in ‘Smt. Sarbati Devi v. Smt. Usha Devi . 1984 1 SCC 424’. He submitted that in view of the provisions of Sec. 39 of the Insurance Act, the fact that the amount shall be payable to the nominee or nominees does not mean that the amount was belonging to the nominee or nominees. On the contrary, the said amount comes into the estate left behind by the deceased. This being so, according to the learned counsel, the trial Judge was wrong in holding that no direction could be given to the Life Insurance Corporation restraining it from making payments to the nominees of the amounts of the Policies mentioned in the suit.
4. As against this, Mr. Gama submitted that, first of all, the application filed by the appellant is not maintainable since, admittedly, the Bank had approached the trial Court initially for attachment before judgment under Order 38 Civil Procedure Code. It had sought the attachment of the same Insurance Policies, or a direction to the Life Insurance Corporation restraining it from making payments of the policies. It failed in the said application and after the suit was dismissed for default, surprisingly, even before its restoration, the Bank moved a fresh application praying that the Life Insuranace Corporation be restrained from making payments to the defendants in the suit of the monies under the Insurance Policies. This application was granted ex parte and it was only at a later stage that the suit was restored. According to the learned counsel, since the suit had been already dismissed, the question of passing any order restraining the Life Insurance Corporation in a non-existing suit was not arising and therefore, the order passed on 25th August, 1980 is ab initio null and void. Irrespective of this aspect of the case the learned counsel further contended that after having failed to obtain an interim relief under Order 38 Civil Procedure Code, it is not open to the appellant to seek the same relief, now under Order 39 Civil Procedure Code. In any event, the learned counsel further contended that no order of injunction under Order 39 Civil Procedure Code, could be granted to the appellant since no case, as envisaged under Rule 1, has been made out by the appellant. In fact, there is no property in danger of being wasted, damaged or alienated, the defendants do not threaten or intend to remove or dispose of their property with a view to defraud the creditors, nor they threaten to disposses the plaintiff or otherwise cause injury to the plaintiff. In such circumstances, according to the learned counsel, no case has been made out for granting an injunction, specially when the case of the plaintiff is that the monies were owed by the late Dr. Pillai. In addition, the fact remains that in view of the clear provision of Sec. 60(kb) Civil Procedure Code, the monies payable under an Insurance Policy on the death of the judgment-debtor are not subject to any attachment. Thus, the learned trial Judge was entirely correct in dismissing the application filed by the appellant.
5. I already said that after the suit had been dismissed for default on 27th June, 1980, the appellant herein moved on 25th August, 1980, an application under Order 39, Civil Procedure Code/and the trial Judge, surprisingly, granted an ex parte injunction though the suit had not been restored to file. It is thus apparent, as rightly pointed out by Mr. Gama, that the learned trial Judge did not appreciate that there was no suit pending in his Court, and, therefore, he could not have passed any order granting an interim relief in a non-existing suit. Therefore, as correctly submitted by Mr. Gama, the aforesaid order dated 25 August, 1980 had no legal meaning, being ab initio null and void. Despite this, after the suit was restored on 17th October, 1980, an application was moved by the appellant to get the order dated 25th August, 1980 made absolute. Mr. Gama urged that such application was liable to be dismissed, because the appellant had filed, alongwith the suit, an application for attachment before judgment of the Insurance Policies, or, in the alternative, to restrain the Life Insurance Corporation from making payment of the monies under the insurance policies. The said application had been dismissed by the Court and though no new facts had arisen, the appellant filed a fresh application, now under Order 39 Civil Procedure Code, to obtain the same relief. It would appear therefore, in this context of the facts, that the contention of Mr. Gama is correct and no injunction could have been granted to the appellant on the same facts, when it had failed once to obtain the same interim relief, though under a different provision of law. Besides, Mr. Gama appears also to be on strong ground when he submits that no case for injunction has been made out by the appellant. However, I do not think it necessary to go into these aspects of the case since, in my view, the application for injunction is unsustainable for the reasons given by the learned trial Judge.
6. The appellant, in fact, seeks a direction to the Life Insurance Corporation of India restraining it from making payments of the monies under some Insurance policies on the life of the late Dr. Pillai. Sec. 60(kb) of the Civil Procedure Code provides that all monies payable under a policy of insurance on the life of the judgment-debtor are exempted from attachment. It would therefore appear that, in view of this clear provision of law, no attachment is possible, and if no attachment is possible, it is not also possible to restrain the Life Insurance Corporation from making payments to the nominees of the assured. It was, however, contended by Mr. Peres Cardozo, that the said provision of law applies only to cases where the Insurance Policy matures during the lifetime of the assured. In such a case, according to the learned counsel, the monies payable under the Insurance Policy cannot be attached. However, if the monies become payable after the death of the assured, then since the said monies enter into the estate of the deceased, the same can be attached.
7. In Raja Ram v. Mata Prasad321 (supra), a Full Bench of the Allahabad High Court held the view that the policy-holder continues to hold interest in the policy till the moment of his death and if the policy matures during his lifetime, then, the benefit arising thereunder shall be his and not of his nominee. It further held that as the benefit secured by the policy forms part of the estate of the deceased policy-holder, his creditiors can realize their loans from the money paid to the nominee. The nominees, in such circumstances, would be the legal representatives of the deceased policyholder. This view was approved by the Supreme Court in Smt. Sarbati Devi v. Smt. Usha Devi325 (above). The Supreme Court observed that the summary of the relevant provisions of Sec. 39 of the Insurance Act establishes clearly that the policy-holder continues to hold interest in the policy during his lifetime and the nominee acquires no sort of interest in the policy during the lifetime of the policy-holder. If that is so, the Supreme Court further observed, 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, and there is no warrant for the position that Sec. 39 of the Act operates as third kind of succession which is styled as a “statutory testament”. It was also observed that the provision in sub-sec. (6) of Sec. 39 which says that the amount shall be payable to the nominee or nominees does not mean that the amount shall belong to the nominee or nominees and that the language of Sec. 39 is not capable of altering the course of succession under the law. Specifically, while disapproving the view of the Delhi High Court in ‘Mrs. Uma Sehgal v. Dwarka Dass Sehgal . AIR 1982 Delhi 36 the Supreme Court observed that the Delhi High Court had committed an error in placing reliance on the effect of the amendment of Sec. 60(1)(kb) of the Code of Civil Procedure which provides that all monies payable under a Policy of Insurance on the life of the judgment-debtor shall be exempt from attachment from his creditors. It was observed that the High Court has equated a nominee to the heirs and legatees of the assured and had proceeded to hold that the nominee succeeded to the estate with all ‘plus and minus points’. After having observed this much, the Supreme Court added that it is difficult to treat a nominee as being equivalent to an heir or legatee having regard to the clear provisions of Sec. 39 of the Act and that the exemption of the money payable under a Life Insurance Policy under the amended Sec. 60 of the Civil Procedure Code instead of ‘devaluing’ the earlier decisions which upheld the right of a creditor of the estate of the assured to attach the amount payable under the Life Insurance Policy, recognizes such right in such creditor which he could have exercised, but for the amendment. Therefore, the Court observed in addition that it is because the amount payable under the Life Insurance Policy was attachable that the Code of Civil Procedure exempts it from attachment in furtherance of the policy of Parliament in making the amendment.
8. In view of the above decision of the Supreme Court in Sarbati Devi's case, it is no more possible to hold the view that monies payable under an Insurance Policy do not become a part of the estate of the deceased. However, the question before me is not whether or not the said monies become part and parcel of the estate of the deceased, since the question is whether such monies are liable to be attached for payment of a decree. Sec 60 Civil Procedure Code deals with the property which is liable to attachment and sale in execution of a decree and its proviso lays down that some items are not liable to such attachment and sale. Clause (kb) speaks of all monies payable under a policy of insurance on the life of the judgment debtor and exempts such monies from attachment and sale. Now as already said, Mr. Peres Cardozo argued that since such monies are part and parcel of the estate of the assured person, the exemption in Clause (kb) of Sec. 60 is not attracted. The reason behind this submission is that, according to the learned counsel, once the assured died, the monies payable under the policy come to his estate, therefore his heirs and legal representatives are appropriating the said monies and as such, the said monies are entirely outside the scope of the aforesaid Clause (kb). I am afraid that this reasoning of the learned counsel cannot be accepted. I say so, because, first of all, one-has to bear in mind the policy of the Legislature that caused the exemption to be laid down. I am of the opinion and I believe that the Legislature had exempted from attachment the monies payable under a policy of insurance on the life of the judgment-debtor in order to give some security to the heirs and legal representatives of the deceased. This being the position, even though the said monies are becoming a part and parcel of the estate of the deceased, nevertheless the exemption laid down in Clause (kb) Civil Procedure Code follows the same monies. I am fortified in this view by the observations of the Supreme Court in Sarbati Devi's case to the effect that the exemption was specifically laid down because the amounts payable under an Insurance Policy on the life of a person were, otherwise attachable. In other words, the Supreme Court pointed out that had it not been for the specific provision of Clause (kb) of sec. 60 Civil Procedure Code, the monies payable under an Insurance Policy on the Life of persons would have been liable to attachment and sale for the satisfaction of a decree. I am thus of the firm view that monies payable under an Insurance Policy on the life of a judgment-debtor are entirely exempted from attachment and sale by virtue of the aforesaid Clause (kb) of sec. 60 Civil Procedure Code, irrespective of the circumstance as to whether the Insurance Policy matures during the lifetime of the assured or the monies become payable after his death.
9. The learned trial Judge dismissed the application for injunction filed by the appellant herein on the ground that since the monies payable to the respondents under the Life Insurance policy were not subject to attachment, it was not proper to restrain the Life Insurance Corporation from making the payment to the beneficiaries. In the light of the above discussion, I find no fault with this reasoning of the learned trial Judge and therefore, I see no reason for interference of this Court.
10. As a result, this appeal fails and-is consequently dismissed with costs.
11. The learned counsel for the appellant prays that the operation of the present judgment be stayed for 30 days. Mr. Kolwalkar, appearing for the respondents does not oppose. Accordingly stay granted for 30 days.
Appeal dismissed.
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