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Case Number

App. No. 355 of 1971

Attorney(S)

M.R Narayanaswami, for Mr. A.V Raghavan for Applt.
K.C Jacob, S.K.L Ratan, A.C Muthenna and T. Aravamudu Iyengar, for Respts.

Judges

Ismail, J.

Acts

provisions of the Insurance Act to the Corporation. Sub-S. (1) of Ss. 43
S. 38 of the Insurance Act 1938 (hereinafter referred to as the Act)
S. 43(1) of the Life Insurance Corporation Act. S. 43(2)
S. 49(1) of the Life Insurance Corporation Act, 1956,
MARRIED WOMEN S PROPERTY ACT
SECTION 6 MARRIED WOMEN S PROPERTY ACT 1874
1962, S. 44(2) of the Insurance Act, 1938,
(2) of S. 44 of the Insurance Act, 1938,
S. 33(b) of the Indian Succession Act,
S. 44(2) of the Insurance Act of 1938,
S. 44 of the Insurance Act, 1938,
44(2) of the Insurance Act, 1931,
S. 44(2) of the insurance Act
Corporation Act 1956,
S. 44(2) of Act,

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Smart Summary

Structured Summary of the Judgment

Factual and Procedural Background

This appeal arises from O.S. No. 2703 of 1969 on the file of the City Civil Court, Madras. The plaintiff in that original suit is the appellant before this Court.

Material facts reproduced from the opinion:

One Srinivasa Rao (an insurance agent) died issueless on 8 June 1966. The second respondent is his widow, married under the Special Marriage Act.
The appellant and respondents 3 and 4 are said to be his brothers; the fifth respondent is said to be his sister. The deceased's mother, Uma Bai, survived him but died on 29 June 1968.
Under S. 33(b) of the Indian Succession Act (as stated in the plaint), the widow would be entitled to half the estate and the siblings to the remaining half.
After the death of Srinivasa Rao the second respondent took charge of the estate. The appellant alleged that despite repeated requests the second respondent did not pay the shares due to him and other heirs.
The appellant claimed that in respect of renewal-premium commission payable by the Life Insurance Corporation (first respondent), he had served a notice; the Corporation replied that S. 44 of the Insurance Act, 1938 had been applied to the Life Insurance Corporation by Central Government notification (Ministry of Finance No. G.S.R. 734 dated 23 August 1958, as stated in the plaint) and that, under the modified provision, the nominee of the agent (the second respondent) was entitled to receive the commission and payments were being and would continue to be made to her.
The appellant instituted the suit seeking: (a) a declaration that he (as an heir) was entitled to a 1/8 share of the renewal commission, (b) an injunction restraining the first respondent from paying the second respondent any amount in excess of her half share, and (c) a direction to pay to the appellant 1/8 of the commission (estimated at Rs. 5,000).
The appellant placed in issue the effect of S. 44(2) of the Insurance Act, contending it directed payment to heirs, and he put the first and second respondents to strict proof of any nomination and of the validity of the notification as having the previous approval required under the Life Insurance Corporation Act (reference in the plaint to S. 49(1) of the Life Insurance Corporation Act, 1956).
The first respondent's written statement relied on the Central Government notification applying S. 44(2) (as amended) to the Corporation and contended the nominee (second respondent) was entitled to the commission.
The second respondent pleaded that the suit was not maintainable, relied on the notification to claim entitlement, and asserted an agreement (Ex. B-1 dated 22 June 1966) by which the appellant, respondents 3 and 4 and their mother agreed that the second respondent would administer the estate and that they waived rights (the second respondent also alleged she had agreed to pay sums to family members). Respondents 3–5, however, supported the appellant at trial.
Seven issues were framed for trial (see Legal Issues Presented below).
The trial court (IV Assistant Judge, City Civil Court, Madras) by judgment and decree dated 23 March 1970 held: (a) under the nomination effected by Srinivasa Rao in accordance with S. 44(2) of the Insurance Act as amended by the Central Government notification, the second respondent was entitled to receive the money; and (b) alternatively, Ex. B-1 operated to give the second respondent an exclusive right to the renewal commission. The trial court dismissed the appellant's suit. The present appeal challenges that dismissal.

Legal Issues Presented

Whether the trial court had no jurisdiction to try the suit?
Is the plaintiff (appellant) entitled to a share in the renewal commission?
What is the effect of the nomination made by the deceased?
Whether the plaintiff has waived his rights?
Is the discharge of the second defendant valid under S. 44 of the Insurance Act?
Is the plaintiff entitled to the declaration and injunction prayed for?
To what relief are the parties entitled?

Arguments of the Parties

Appellant's Arguments (as presented by Mr. M. R. Narayanaswami)

The appellant denied and put to strict proof the alleged nomination by Srinivasa Rao in favour of the second respondent; the trial court nevertheless treated nomination as established and the appellant complains it did not decide this point in his favour.
The amendment of S. 44(2) as applied to the Life Insurance Corporation (by Central Government notification) did not confer a beneficial proprietary right on the nominee; at most the nominee would be an agent to receive the money on behalf of the estate and the heirs.
Exhibit B-1 (the alleged agreement dated 22 June 1966) was not admissible in evidence.
Even if Ex. B-1 were admissible, it did not effect the waiver or transfer of the appellant's and others' rights so as to confer an exclusive right on the second respondent to receive the renewal commission.

First Respondent's Arguments (Life Insurance Corporation)

The first respondent relied on the Central Government notification applying S. 44 (specifically S. 44(2) as modified) to the Corporation and submitted that under that modified statutory provision the nominee (the second respondent) was entitled to receive the commission.

Second Respondent's Arguments

The second respondent contended that the suit was not maintainable and, relying on the Central Government notification, asserted entitlement to receive the commission as nominee.
She pleaded Ex. B-1 (22 June 1966) to show that the appellant, respondents 3 and 4 and the mother had agreed she would administer the estate and that they had waived any rights; she also stated she had agreed to pay substantial sums to other family members.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Mohanavlu Mudaliar v. Indian Insurance and Banking Corporation Ltd., Salem (Bench of this Court)	Interpreted nomination under S. 39 of the Insurance Act: held that such a nomination did not confer beneficial ownership on the nominee; the nominee was only entitled to receive the sum (acting effectively as an agent to collect), and the money formed part of the deceased's estate.	The Court distinguished this authority. It concluded the principle in that case—applying to nominations under S. 39 concerning sums assured under a policy—did not apply to S. 44(2) as amended by the Government notification. The Court explained the statutory right created by S. 44(2) (and the proviso added by notification) operates differently and can confer proprietary entitlement on a nominee where the proviso so provides.

Court's Reasoning and Analysis

The Court's analysis proceeds in distinguishable steps, closely tied to statutory text and to the sequence of Central Government notifications that made S. 44 applicable to the Life Insurance Corporation with a proviso:

Procedural point about the nomination fact: The trial court's judgment contained a statement that "It is not disputed that the deceased Srinivasa Rao has nominated the second defendant to receive the commission after his death." The appellate Court observed that the appellant had not successfully preserved a challenge to that factual finding: there was no ground in the memorandum of appeal attacking this specific statement, and it appeared the appellant may have abandoned the objection during trial. The Court applied the settled principle (as described in the opinion) that a party cannot ordinarily contest such a statement on appeal without having sought correction from the trial court first. Accordingly, the appellant did not press a contest on the existence of the nomination.
Statutory framework examined: The Court reviewed relevant statutory provisions:
- S. 38 (assignment/transfer of policies) and S. 39 (nomination by a policyholder) were examined to show the nature of nominations under S. 39—i.e., nominations to receive sums assured upon death under the contract; S. 39 contains registration, variation and cancellation provisions.
- S. 44 of the Insurance Act (renewal commission) was analysed: S. 44(1) gives the agent a statutory right to commission on renewal premiums notwithstanding termination of the agency (subject to qualifications); S. 44(2) (original wording) provides that commission payable under certain clauses shall, notwithstanding death, continue to be payable to the agent's heirs for as long as the commission would have been payable had the agent lived.
- The Life Insurance Corporation Act, 1956 (S. 43) does not automatically apply all sections of the Insurance Act to the Corporation; S. 43(2) empowered the Central Government to apply specified sections to the Corporation by notification subject to modifications. The Central Government applied S. 44 to the Corporation by a notification (Ministry of Finance No. G.S.R. 734 dated 23 August 1958, as described in the plaint), and subsequently a modification was introduced by G.S.R. 285 (issued 1 March 1962, published in Gazette 10 March 1969) which added a proviso to S. 44(2) as applicable to the Corporation.
Effect of the 1962 proviso to S. 44(2): The proviso introduced by the 1962 modification provided that where the agent had nominated in writing any person (including social or charitable institutions) to receive the commission after his death and such nomination was registered in the Corporation's records, the commission shall be paid to the person so nominated unless the nomination was varied or cancelled with written notice delivered to the Corporation before payment. The Court emphasised that:
- Under the unamended S. 44(2) the statutory right to receive commission after the agent's death vested in the heirs by virtue of the statute itself (not by general succession law), and the proviso operates as a qualification or exception that can remove that right from the heirs in favour of a valid registered nominee.
- By ordinary rules of construction, a proviso qualifies or excepts from the principal enactment; therefore, whatever capacity or right the heirs had under the main part of S. 44(2) can be qualified or taken away by the proviso in stated circumstances.
Distinguishing S. 39 nominations (and the precedent relied upon): The appellant relied on prior decisions (in particular the Mohanavlu Mudaliar decision) that treated a nomination under S. 39 as conferring no proprietary title on the nominee (the nominee being merely an agent to receive the sum assured). The Court considered that reasoning but found crucial differences:
- S. 39 nominations relate to the sum assured under the insurance contract and arise upon the death of the insured; the right to the sum assured arises from the contract and the nomination does not alter title which, in the view of earlier decisions, remained part of the deceased's estate.
- By contrast, S. 44 creates a statutory right in favour of heirs to receive renewal commission; the proviso (as introduced by notification) is a statutory exception that can convert the recipient (a registered nominee) into the person entitled to receive commission in place of the heirs.
- The Court reasoned that the language of the proviso (specifically including social or charitable institutions among possible nominees) indicates an expectation that nominees will receive the commission as owners and not merely as agents collecting on behalf of the estate.
Conclusion of legal construction: Applying ordinary rules of statutory interpretation and the statutory scheme, the Court concluded that S. 44(2) as amended by the 1962 notification conferred on the agent the right (during his life) to nominate a person who, if the nomination was registered and not varied or cancelled, would receive the commission in his own right after his death. Thus the proviso displaces the heirs' statutory claim where the proviso's conditions are met.
Application to the facts: Given the trial court's factual finding (unchallenged on appeal) that a nomination in favour of the second respondent existed and (on the trial court's view) that it was effective/registered as required, the appellate Court held that the second respondent was entitled to receive the commission "in her own right." The first respondent therefore was entitled to pay and continue paying the commission to the second respondent alone.

Holding and Implications

Holding:

Appeal dismissed.

Direct consequences and implications (as stated in the opinion):

The Court held that S. 44(2) of the Insurance Act, 1938, as made applicable to the Life Insurance Corporation of India with the proviso introduced by the Government of India notification (1962), permits a valid registered nomination to entitle the nominee to receive the renewal commission as owner. On the facts (the nomination being treated as established in the trial court's judgment), the second respondent was entitled to receive the commission in her own right.
The first respondent (the Life Insurance Corporation) was therefore justified in paying the commission to the second respondent and in stating that it would continue to pay the money to her alone.
The appellant's other points (inadmissibility of Ex. B-1; that Ex. B-1 did not operate to transfer exclusive rights) were not considered because the Court's conclusion on the statutory construction point made further consideration unnecessary.
Having considered a question of law for the first time in the appeal, the Court made no order as to costs.
This decision directly resolves the dispute between the parties by affirming the trial court's dismissal of the appellant's suit; the opinion does not state that it establishes a broader binding precedent beyond the reasoning supplied in the judgment.

V.C.S

Note: This summary reproduces and structures matters expressly set out in the provided opinion. It does not add any facts, dates, authorities, or procedural history beyond what appears in the opinion itself.

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B.M Mundkur v. Life Insurance Corporation Of India, Rep. By The Zonal Manager, Mount Road, Madras And Others

JUDGMENT

1. The plaintiff in O.S No. 2703 of 1969 on the file of the City Civil Court, Madras, is the appellant herein. Most of the facts are not in controversy. One Mr. Srinivasa Rao was an insurance agent who died issue less on 8th June 1966. The second respondent herein is his widow. The appellant and the third and fourth respondents are said to be his brothers, and the fifth respondent is said to be his sister. At the time of his death, his mother, by name Uma Bai, also survived, but she died on 29th June 1968. The said Srinivasa Rao had married the second respondent herein under the Special Marriage Act, and, accordingly, under S. 33(b) of the Indian Succession Act, on the death of the said Srinivasa Rao, the second respondent herein being his widow would be entitled to a half share, and the appellant and respondents 3 to 5 would be entitled to the remaining half share in the estate of Srinivasa Rao. It is averred in the plaint that after the death of Srinivasa Rao, the second respondent took charge of the estate and that despite several requests she has not given the shares due to the appellant and respondents 3 to 5. The case of the appellant in the plaint was that, with regard to the commission payable on the renewal premiums, he sent a notice to the Life Insurance Corporation, the first respondent herein, calling upon it to pay his share of the commission, but the said Corporation sent a reply stating that S. 44 of the Insurance Act, 1938, had been modified by the Central Government and made applicable to the Life Insurance Corporation of India, as per the notification of the of Ministry of Finance, No. G.S.R 734 dated 23rd August 1958, that as per the modified Section, the nominee of the agent was entitled to receive the commission, that the second respondent herein bad been so nominated by the late Srinivasa Rao and that payments were being made to her and would continue to be made to her. It was thereafter that the present suit was instituted for a declaration that the appellant herein was entitled to as an heir of the deceased Srinivas Rao, to 1/8 share of the renewal commission and for an injunction restraining the first respondent herein from paying to the second respondent herein any amount in excess of her half share in the renewal commission and for directing the first and second respondents to pay to appellant 1/8 of the commission which the appellant tentatively estimated at Rs. 5000. In support of this claim of his, the appellant contended that S. 44(2) of the insurance Act specifically directed payment only to the heirs of the deceased, and he put the first and second respondents to strict proof that the modification was made with the previous approval of the Central Government as contemplated under S. 49(1) of the Life Insurance Corporation Act, 1956, and that the same was not inconsistent with the Act, regarding the payment of the amounts to the heirs of the deceased agent. It was also stated in paragraph 6 of the plaint that the appellant did not admit the alleged nomination in favour of the second respondent and put the first and second respondents to strict proof of the same.

2. There were different written statements filed by the first respondent and the second respondent. The first respondent sole relied on the notification of the Central Government applying S. 44(2) of the insurance Act of 1938, to the Life Insurance Corporation, as amended by the said notification, contending that in view of that notification the commission was payable only to the second respondent, nominee of the deceased Srinivasa Rao.

3. In the written statement filed by the second respondent herein, she contended that the suit was not maintainable and that, in view of the notification of the Central Government referred to above, she was entitled to receive the money. She also contended that on 22nd June, 1966 an agreement was entered into by the appellant, respondents 3 and 4 and their mother to the effect that the second respondent shall be entitled to administer the estate of Srinivasa Rao and they had also waived their rights, if any, in favour of the second respondent, and that the second respondent had agreed to pay large sums of money to the other members of the family. Respondents 3 to 5 supported the appellant herein.

4. On the pleadings of the parties, the following issues were framed for trial

1. Whether this court has no Jurisdiction to try the suit?

2. Is the plaintiff entitled to a share in the renewal commission?

3. What is the effect of the nomination made by the deceased?

4. Whether the plaintiff has waived his rights?

5. Is the discharge of the second defendant valid under S. 44 of the insurance Act?

6. Is the plaintiff entitled to the declaration and injunction prayed for?

7. To what relief are the parties entitled?

5. The learned IV Assistant Judge of the City Civil Court, Madras by his judgment and decree dated 23rd March, 1970, held that, under the nomination effected by Srinivasa Rao, in accordance with 5. 44(2) of the Insurance Act, 1931, as amended by the Government of India Notification referred to above, it was the second respondent who was entitled to receive the money. The trial court also held that, in any event, under Ex. B-1 dated 22nd June, 1966, being the photostat copy of the agreement referred to by the second respondent herein, the other parties to the agreement had given up their rights to claim renewal commission and had given that right exclusively to the second respondent herein and on that ground held that the second respondent was entitled to receive the commission from the Life Insurance Corporation of India with the result that the suit instituted by the appellant was dismissed. It is against this dismissal the present appeal has been filed.

6. Mr. M.R Narayanaswami, learned counsel for the appellant, put forward the following four points in support of the appeals

1. The appellant in the plaint had put the first and second defendants to strict proof of the nomination said to have been made by Srinivasa Rao in favonr of the second respondent herein and bad stated that be did not admit the all age nomination and that notwithstanding this, the court below had not given a lading on this question.

2. S. 44(2) of the Act, as applied to the Lift Insurance Corporation of India, with the amendment made by the Government of India notification already referred to, did not have the effect of conferring a right on the second respondent to receive the renewal commission for herself and that it merely constituted the second respondent an agent for receiving the money from the Life Insurance Corporation on behalf of the estate of Srinivasa Rao.

3. Ex. B-1 was not admissible in evidence.

4. Even if Ex. B-1 was admissible in evidence, the document did not have the effect of the appellant and the others giving up their rights to the renewal commission and conferring an exclusive right on the second respondent to receive the renewal commission.

I shall deal with these points in that order.

7. As far as the first point is concerned, there It one formidable hurdle which the appellant has to cross. In paragraph 8 of the judgment of the trial court it is stated:

“It Is not disputed that the deceased Srinivasa Rao has nominated the second defendant to receive the commission after his death.”

In view of this statement contained in the judgment, it is not open to the appellant to question the correctness of the said statement in this appeal. It may be that, having put forward the contention in the plaint that the appellant did not admit the nomination and put respondents land 2 to strict proof of the tame, the appellant gave up the objection in the course of the trial, and did not dispute the existence of the nomination, at contended for by respondent 1 and 2. This inference derives further strength from the fact that there is not even a ground in the memorandum of grounds of appeal filed before this Court in the present appeal, which contains as many as 37 grounds, to the effect that the said statement contained in the judgment of the trial court was erroneous. On the other hand, ground No. 4 therein would appear to proceed on the basis of the correctness of the nomination of the second respondent herein. The said ground it as follows.

“The lower court should have held that the second defendant, who is the nominee, is nothing more than an agent to receive the money which remains as the property of the deceased, forming part of the estate.”

As I pointed out already, this ground proceeds on the basis that the second respondent herein is the nominee, which must be based on the concession that the nomination was there validly made. In view of this position, and in view of the law laid down by this court as well as by the Supreme Court that the correctness of such a statement contained in the judgment of the court cannot be challenged in appeal, without the party or counsel moving the very court which made the statement in the judgment at the first instance, for correction thereof if that was a mistake. Mr. Narayanaswemi, once realised this position, did not pursue the point further.

8. As far as the second point is concerned, which is the most important and vital point of controversy in this appeal, if the appellant loses on this point, it will be unnecessary to consider points 3 and 4, and therefore, I shall deal with this point now. S. 38 of the Insurance Act 1938 (hereinafter referred to as the Act) deals with the assignment or transfer of insurance policies. S. 39 dealt with nomination by a policy holder, and the language of S. 39(1) makes it absolutely clear that the nomination contemplated therein was nomination to receive the money secured by the policy in the event of the death of the insured. There are detailed provisions made in S. 39, which provides for the registration of the nomination with the insurer, subsequent cancellation or change of such nomination and living notice in writing of such cancellation or change to the insurer. S. 44 of the Act deals with renewal commission or commission on renewal premium. S. 44(1) provides that, notwithstanding anything to the contrary contained in any contract between any person and an insurance agent providing for the forfeiture or stoppage of payment of renewal commission to such insurance agent, no such person shall, in respect of life insurance business transacted in India, refuse payment to an insurance agent of commission due to him on renewal premium under the agreement by reason only of the termination of his agreement, except for fraud. There are three provisos to this sub-section, which refer to the qualifications which the Insurance agent should possess for being eligible to receive the renewal commission. Sub-S. (2) of this section, which is important, is as follows:

“Any commission payable to an insurance agent under the provisions of Cls. (b) and (o) of the proviso to sub-S. (1) shall notwithstanding the death of the agent, continue to be payable to his heirs for so long as such commission would have been payable bad such insurance agent been alive.”

Thus, it will be seen that sub S. (1) deals with the payment of commission on renewal premium to the insurance agent hire self during his lifetime even after the termination of the agreement under which he was entitled to such commission, and sub-S. (2) provides for the continued payment of such commission to the heirs of the insurance agent on his death for so long as such commission would have been payable had such insurance agent been payable. When the Life Insurance Corporation Act 1956, was passed, under which the first respondent was constituted, S. 43 of that Act provided for the application of certain provisions of the Insurance Act to the Corporation. Sub-S. (1) of Ss. 43 enumerated certain sections of the Insurance Act which shall apply to the Corporation as they applied to any other insurer, and S. 44 is not one of the sections mentioned In S. 43(1). Therefore, S. 44 to which I have drawn attention did not apply to the Life Insurance Corporation straightway by virtue of S. 43(1) of the Life Insurance Corporation Act. S. 43(2) conferred power on the Central Government to direct by notification in the Official Gazette that the sections enumerated therein shall apply to the Corporation subject to such conditions and modifications as may be specified in the notification, and one of the sections enumerated in sub-S. (2) of S. 43 is S. 44. The Central Government would appear to have applied S. 44 with tome modification, forward the contention in the plaint that the appellant did not admit the nomination and put which are not relevant to this appeal, to the Life Insurance Corporation, in the notification of the Government of India in the Ministry of Finance No. G.S.R 734, dated 23rd August, 1938. However, a modification was made to this notification by G.S.R 285 issued by the Government of India in the Ministry of Finance (Department of Economic affairs) on 1st March, 1962, and published in the Gazette of India, dated 10th March, 1969. This notification provided that to sub-S. (2) of S. 44 of the Insurance Act, 1938, as made applicable to the Life Insurance Corporation of India, the following proviso shall be added.

‘Provided that, where the agent has nominated in writing any person including social or charitable institutions to receive the commission after his death and the nomination is registered in the records of the Corporation, the commission shall be paid to the person so nominated, unless, before the payment is made, the nomination has been varied or cancelled and notice in writing of such variation or cancellation has been delivered to the Corporation.”

9. Thus, after this amendment, made by the Government of India, in 1962, S. 44(2) of the insurance Act, 1938, as applicable to the Life Insurance Corporation of India, read as follows:

44 (2) Any commission payable to an Insurance agent under the provisions of clauses (b) and (c) of the proviso to sub-S. (1) shall, notwithstanding the death of the agent, continue to be payable to his heirs for so long as such commission would have been payable bad such insurance agent been alive.

Provided that, where the agent has nominated in writing any person including social or charitable Institutions to receive the commission after his death and the nomination is registered In the records of the Corporation, the commission shall be paid to the person so nominated unless, before the payment is made, the nomination has been varied or cancelled and notice in writing of such variation or cancellation has been delivered to the Corporation.”

10. Thus, it is this statutory provision which is the subject-matter of construction in this court. Mr. M.R Narayanaswami, learned counsel for the appellant, relying upon certain decisions of courts, in particular, the decision of a Bench of this court in Mohanavlu Mudaliar v. Indian Insurance and Banking Corporation Ltd. Salem(1), dealing with the case of a nomination under S. 39 of the Act, for receiving the insured amount, contended that the said decision had held that such a nomination did not held the effect of conferring a beneficial interest on the nominee to the money which such nominee was authorised to receive, that the moneys formed part of the estate of the deceased, that the principle laid down in that decision must be applied to the present case also in respect of the nomination to receive the commission on the renewal premium, that to applied the second respondent herein did not acquire any beneficial interest in the commission on the renewal premium, that it formed part of the estate of the late Srinivasa Rao and that the second respondent would be entitled only to a half share in the said commission. The question for consideration is whether such a contention it correct or not After a careful consideration of the statutory provisions as well as the judgment referred to above, I have come to the conclusion the the principle laid down in that decision would not apply to the construction of S. 44(2) in this case. The learned Judges of this court in that decision considered the scope and effect of the assignment of an Insurance policy under S. 38 of the Act and the nomination made under S. 39 of the Act. After referring to certain English decisions and certain principles, Govinda Menon, J. observed:

“The result of the above discussion seems to me to be this: If the construction placed upon the declaration is that a trust has been created under the provisions of the Married Women's Property Act, the beneficiary would take the assured amount free of all the liabilities of the insured and, if it is construed as a mere nomination, the nominee would have no more right than to receive the amount subject to all the liabilities as if the disposition was by means of a testamentary instrument.

In the case now in question I agree with my learned brother that nomination can only be construed as a testament which would be subject to all the liabilities which the assured has to discharge. That being the case the decision of the lower court is correct and the appeal must be dismissed.”

This was the view taken by the other learned Judge also. In that case also the nomination was made in favour of the wife and the reference to the provisions contained in the Married Women's Property Act was made in view of sub-see. (7) of S. 39 of the Act, which stated that the provisions of S. 39 shall not apply to any policy of life insurance to which S. 6 of the Married Women's property Act 1874, applied or had at any time applied.

11. Though there are case in difficult in fully understanding the scope of this decision, in view of the language need in the judgment, still I am of the opinion that the decision, holding that the nomination made under S. 39 constituted the nominee only an agent to receive the sum assured on behalf of the estate of the deceased and that it did not confer any beneficial interest on the nominee himself or herself to the money in question, will have no application to the present case. There are vital differences between the nomination contemplated under S. 39 of the Act and the nomination contemplated under the proviso to S. 44(2) of the Act. In the first place, the sum assured, with which alone S. 39 was concerned, was to be paid in the event of the death of the assured under the terms of the contract entered into between the insurer and the assured, and consequently, it was the contractual right which remained vested in the insured with reference to which the nomination happened to be made. It should be pointed out that the nomination at well as the liability on the part of the insurer to pay lie sum assured become effective simultaneously, namely, at the moment of the death of the assured. So long as he was alive, the money was not payable to him, in the case of a whole life policy, and equally, having regard to the language of S. 39(1) of the Act, the nominee's right to receive the money arose only on the death of the assured, S. 39 itself did not deal with the title to the money assured, which was to be paid by the insured to the nominee who was bound to give discharge to the insurer. It was in this context that the court took the view that the title remained with the estate of the deceased and, therefore, with the heirs of the deceased, that the nomination did not in any way affect the title and that it merely clothed the nominee with the right to receive the amount from the insurer.

12. On the other band, the provisions and purport of S. 44 of the Act are different. In the first place, under S. 44(1) it was a statutory right conferred on the agent to receive the commission on the renewal premium, notwithstanding the termination of the agreement between the agent and the insurer, which provided for the payment of such commission on the renewal premium. The statute also prescribed the qualification which rendered the agent eligible to receive commission on such renewal premium. S. 44(1) provides for the the payment of the commission to the agent during his lifetime only and does not contemplate the contingency of his death and the commission being paid to anybody even after his death. It is S. 44(2) which deals with the payment of commission to the heirs of the deceased for so long as such commission would have been payable had such insurance agent been alive. Thus it was not the general law of inheritance which conferred title on the heirs of the deceased insurance agent to receive the commission on the renewal premium, but it was only the particular statutory provision, namely, S. 44(2) which-conferred the right or the heirs of the deceased agent to receive the commission on the renewal premium. In other words, the right of the heirs to receive the commission on renewal premium does not arise under any law of succession and is is a right directly conferred on the heirs by S. 44(2) of Act, even though who the heirs of the deceased insurance agent are will have to be ascertained under the law of succession applicable to him. Thus the statute which conferred such a right on the heirs is certainly competent to provide for an exception in certain cases and take away such a right from the heirs; and the provision which ha been introduced by the Government of India notification 1962 hat done exactly this in taking away the right of the heirs conferred under the main part of S. 44(2), in the event of the agent, during his lifetime, making a nomination in favour of a particular person and not cancelling or altering that nomination subsequently. If the statute itself was competent to confer such a right for the first time on the heirs of the deceased agent, it is indisputable that the statute could take away that right under stated circumstances. In this case, that right has been taken away by the proviso to S. 44(2) introduced by the Government of India Notification, 1962, in case a nomination had been made at contemplated by the said proviso. It is settled that, according to the ordinary rules of construction, the effect of an excepting or qualifying proviso is to except out of the preceding part of the enactment or to qualify something enacted therein, which but for the proviso would be within it. As I pointed out already the main part of S. 44(2) confers a right on the heirs to receive the commission, and the proviso to that sub-section enables the agent to make a nomination to receive the commission after his death, which would have the effect of taking away that right from the heirs themselves.

13. Here again, Mr. Narayanaswami brought In the analogy of the nomination under S. 39 and contended that, though the second respondent might be entitled to receive the money from the first respondent, she did not have title to the money by virtue of the nomination itself. This argument overlooks the fact that it is S. 44(2) which confers the right on the heirs and that the proviso in question constitutes a qualification to that section. Apart from that, the very language of S. 44(2) also would support my conclusion in this behalf. I have extracted S. 44(2) before its amendment by the Government of India notification, 1962, and after its amendment also, The main part of sub-S. (2) of S. 44 states that the commission shall continue to be payable to his heirs. On the other hand, the proviso states that, where a nomination has been made, which has not been cancelled or varied, the commission shall be paid to the person so nominated. Therefore, having regard to the ordinary rules of construction, whatever right or capacity the heirs had under sub-S. (2) of S. 44, the nominee will have under the proviso to S. 44(2). It cannot be contended that under the main part of S. 44(2) the heirs will receive the money as owners of the money, but under the proviso to S. 44(2), the nominee will receive the money not as owner but merely as an agent on behalf of somebody else, for such a contention would be opposed to all recognised rules of construction of statutory provisions along with their provisos.

14. There is a further indication in the language of the proviso itself to show that the nominee contemplated by the proviso is a person entitled to the money itself and not merely entitled to receive the money on behalf of the estate of deceased. The proviso refers to social or charitable institutions also being nominated to receive the commission. The very idea of the inclusion of social or charitable institutions among the nominees clearly contemplates a nomination under which the money itself shall be paid to such institution as owner thereof, and it could not have been contemplated that such social or charitable institutions were constituted merely as agents to receive the money on behalf of the estate of the deceased with an obligation to pay it over to such estates As a matter of fact, Mr. Narayanswami himself realised the difficulty posed by the proviso, when it included social and charitable institutions among the persons who could be nominated, when he put forward the contention that the nomination contemplated by the proviso has the effect of constituting the nominee only as agent to receive the money on behalf of the estate of the deceased. Consequently, I am of the opinion that S. 44(2) as amended by the Government of India notification, 1962, conferred a right on the late Srinivasa Rao to nominate the second respondent herein to receive the commission as owner thereof, and in view of the nomination made by the late Srinivasa Rao in this behalf, the second respondent nominee was absolutely entitled to receive the commission from the first respondent herein in her own right. I may also point cut that the learned counsel for the appellant did not contend that the notification issued by the Government of India was itself in any way illegal. Therefore, my conclusion on the second point is that the second respondent is entitled to receive the money to her own right and that the first respondent is justified in paying it to the second respondent and stating that it would continue to ray the money to her alone.

15. In view of this conclusion of mine on the second point it is unnecessary to consider points 3 and 4 enumerated by me above.

16. Under these circumstances, the appeal fails and is dismissed. Having regard to the question of law considered by me for the first time in this appeal, I do not make any order as to costs.