Mukerji and Bennet, JJ.:— This appeal raises a question which is of great importance to companies doing life insurance business.
It appears that a gentleman named Raja Hukum Pratap Singh took out a policy of insurance on the 15th of August, 1917, which was payable either when the Raja attained the age of 40 or on his death. The Raja died on the 17th of May, 1925. One day previous to his death he adopted a minor, who subsequently became Raja Maha Bindeshwari Pratap Singh, and he also executed a will in favour of the adopted son. The proprietor of the estate being a minor, the Court of Wards took over superintendence and management of the estate. The policy having become payable on the death of the assured, the Court of Wards called upon the appellant to pay the sum of Rs. 15,0000 the Court of Wards as represented by the Collector of Etawah. The company asked for proof of title and stated that they were ready to pay the money as soon as they were satisfied as to the title of the claimant. Their latter stated: “Kindly now submit us the probate of the will of the deceased as mentioned in the, court's decree, when we shall be pleased to give instructions for the final discharge.” The Court of Wards was advised by the Government Pleader of Etawah that there was no necessity for taking out a probate of the will, as it would be a costly affair and without any legal necessity. The company having refused to pay without what they called proof of title, the suit out of which this appeal has arisen was instituted. The suit was decreed by the court below with costs and future interest. The decree however grants-interest during the pendency of the suit. In appeal it has been contended by the learned counsel that under the terms of the policy granted to the late Raja the company were entitled to insist on the production of either probate or Letters of Administration. It was also contended that under the law for the time being in force the appellant was entitle to insist on the production of either a probate or Letters of Administration or at least a succession certificate, and, therefore, no decree should have been made against, the company without production of any one of these documents.
It appears that after the decree was made by the court below, the company paid the decretal amount in court under protest and filed this appeal. Two questions arise for determination in this case: (1) whether I the contract of policy by which the assured agreed that the money would be paid to either himself or to his assign, or to his executor or administrator is a binding contract, and (2) whether, if it is not, the defendant can insist on the production of either a probate or Letters of Administration or a succession certificate.
We shall take the second point first. As the suit is based on the ground that the young Raja Mahal Bindeshwari Pratap Singh succeeded to the property of his adoptive father by virtue of the adoption and also by virtue of the will, this is, therefore, a case where there is no allegation that the family was a joint one. It may be mentioned casually that if the family be a joint one; the will would be invalid in law and the right to obtain the property would be by survivorship and not under the will.
The claim being, therefore, by one who claims, to be the heir of a deceased creditor, we have to see what rule of law applies. Section 214 of the Indian Succession Act, 1925, lays down that “No court shall pass a decree against a debtor of a deceased person for payment of his debt to a person claiming on succession to be entitled to the effects of the deceased person, except on the production by the person so claiming of either a probate or Letters of Administration… or a succession certificate granted under part X and having the debt specified therein etc.” This is a case in which the plaintiff claims by right of succession the effects of a deceased person and wants that the debt due to the deceased should be paid to the plaintiff. In the circumstances there is no escape from the provision of section 214 of the Succession Act, and the plaintiff must supply either probate or Letters of Administration or a succession Certificate.
In the case of a will executed by a person who is either a Muhammadan nor a Hindu nor a Buddhist or a Sikh nor a Jaina, mentioned in section 57 of the ct, it cannot be insisted that approbate shall be taken out (section 213). But there is no prohibition against Letters of Administration being taken out in the case of the estate of a deceased Muhammadan, Buddhist, Sikh or Jaina, vide section 218. Where the testator as not appointed an executor, as in this case, section 232 of the Indian Succession Act permits Letters of Administration being granted to the plaintiff who claims as the sole legatee.
In any case there is no bar whatsoever to the grant of a succession certificate under section 370 of the Succession Act. A succession certificate is permissible to be issued in the case of even a particular debt. It is thus a comparatively, less costly matter than faking out letters of Administration to the entire estate.
On a consideration of the law on the subject we are therefore, of opinion that the appellant can insist on the production by the claimant of either a probate or Letters of Administration, or a succession certificate in order to be satisfied that the person to whom it would pay the money was really the person entitled to it.
It was argued by the learned Government Advocate that the production of any of these documents has be come unnecessary by the fact that the plaintiff has established his title by the suit and the company must pay to him. This argument, however, is not sound. A decree between the parties does not bind people he are no parties to it, and therefore if there be any claim for the money by any other person, the decree would be no answer for the defendant to such a claim. It is only a probate or Letters of Administration or a succession certificate which grants a complete immunity to the debtor who pays off his debt to the holder of and one of these documents. These are called judgments in rem and have force as against all possible claims we hold, therefore, that the defendants were entitled succeed.
On the first point we are of opinion that the defence is equally strong. There is nothing in law to prevent a company from entering into a contract with a proposer for life assurance that the company would pay the money only to him or his assign or to his executor or administrator. The law of succession varies in different parts of the country, and it cannot be expected of a company doing life insurance business to know the law obtaining in different parts of the country, nor can it be expected that it would undertake an investigation into the title of a claimant or of claimants in general and to decide for itself who is the person best entitled to the money. In the circumstances an agreement that the money under the policy would be paid only the assumed or to his assign or to his executor or administrator is a good contract which must bind not only the assured, but also anybody claiming title under him. In this view also the defendant was entitled to insist on the production of any of the three documents mentioned above. It may be pointed out that even a successor to a property by right of survivorship may take out a succession certificate; see Banwari Lal v. Maksudan Lal (1).
In the result, the appeal must succeed. The law does not contemplate the dismissal of a suit where a suit pas already been instituted. All that it provides against is the passing of a decree without the production of any of the title deeds. In the circumstances, it would not be desirable to dismiss the suit altogether. We should grant the plaintiff respondent some time in order to enable him to produce either a probate or Letters of Administration or a succession certificate, in which last case the debt in question may be specifically mentioned.