Madhya Pradesh High Court
Smt.Bharati Devi vs Sainani 18Th Vahini Bharat Tibbat Seema on 23 July, 2025
Author: Gurpal Singh Ahluwalia
Bench: G. S. Ahluwalia
NEUTRAL CITATION NO. 2025:MPHC-GWL:15292
1 SA No. 772 of 2006
IN THE HIGH COURT OF MADHYA PRADESH
AT GWALIOR
BEFORE
HON'BLE SHRI JUSTICE G. S. AHLUWALIA
ON THE 23rd OF JULY, 2025
SECOND APPEAL No. 772 of 2006
SMT. BHARATI DEVI
Versus
SAINANI 18TH VAHINI BHARAT TIBBAT SEEMA AND OTHERS
Appearance:
Shri K.N. Gupta- Senior Advocate with Ms. Suhani Dhariwal - Advocate for
appellant.
Shri Rajeev Shrivastava- Advocate for respondent No.1.
JUDGMENT
This Second Appeal, under Section 100 of CPC, has been filed by
appellant against the observation made by Fourth Additional District Judge (Fast
Track), Shivpuri (M.P.) in its judgment and decree dated 05.08.2006, in Civil
Appeal No.163/2005 thereby setting aside judgment and decree dated 25.06.2005
passed by Second Civil Judge Class-II, Shivpuri (M.P.) in Civil Suit
No.29A/2005.
2. The facts, necessary for disposal of present appeal, in short, are that
respondent No.2 filed a suit for declaration that on the basis of her nomination
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she is entitled to receive the dues of her deceased son-Hukam Singh. It was the
case of respondent No.2 that she is the biological mother of her son Hukam
Singh, who was working in 18th Battalion in ITBP on the post of Sainik. Her son
Hukam Singh had made his wife Smt. Sharda Devi as nominee. However, on
01.07.1997, divorce took place between her son Hukam Singh and Sharda Devi
and accordingly, in place of Sharda Devi, plaintiff/respondent No.2 was
nominated as nominee and accordingly the orders were also issued. It was
claimed that appellant/defendant No.1 was residing with her son Hukam Singh
but by projecting in an illegal manner that she is the wife of Hukam Singh, is
trying to receive the entire dues of Hukam Singh after his death. It was claimed
that defendant No.1/appellant was never married to her son Hukam Singh and by
preparing forged documents she is out and out to receive the dues of her son after
his death. Thus, it was claimed that plaintiff may be declared as entitled to
receive the dues on the basis of her nomination and defendant No.2/respondent
No. 1 be directed to pay the dues of her son to the plaintiff.
3. Appellant/defendant No.1 admitted that deceased Hukam Singh was earlier
married to Sharda Devi but also admitted that divorce had taken place. It was
claimed that appellant/defendant No.1 was not the keep of Hukam Singh but in
fact she is the legally wedded wife of Hukam Singh. After the divorce took place
with the first wife, Hukam Singh married defendant No.1/appellant in accordance
with Hindu rites and rituals on 08.06.1998 in Orccha Temple. The marriage was
performed by observing all necessary rituals; even a reception was organized by
her husband. After the marriage, she was residing with her husband at the place
of his posting. She resided with her husband Hukam Singh as a wife and was
blessed with a son. After two years of birth of her son, her husband Hukam Singh
fell ill and ultimately he died during treatment. Accordingly, it was prayed that
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the defendant No.1/appellant is the legally wedded wife of Hukam Singh and
therefore she is entitled to receive the dues of Hukam Singh after his death.
4. The Trial Court, after framing issues and recording evidence, held that
appellant/defendant No.1 is the legally wedded wife of deceased Hukam Singh
but also held that plaintiff being nominee was entitled to receive the dues of late
Hukam Singh. Thus suit filed by respondent No.2 was decreed.
5. Being aggrieved by the judgment and decree passed by the trial court,
respondent No.1/defendant No.2 preferred an appeal, which was decreed vide
judgment and decree dated 05.08.2006 passed by Fourth Additional District
Judge (Fast Track), Shivpuri (M.P.) in Civil Appeal No.163/2005 and suit filed
by plaintiff was dismissed. However, in paragraph 14 of judgment, it was
mentioned that the ITBP Authority/defendant No.2 had made payment of dues of
late Hukam Singh to a person other than the nominee and thus it has committed a
serious irregularity. Accordingly, it was directed that action be taken against the
concerned employee of the ITBP.
6. It is submitted by counsel for appellant that so far as dismissal of the suit
filed by plaintiff/respondent No.2 is concerned, appellant has no grievance. But
appellant has grievance to the observation made by the appellate court that ITBP
had committed an illegality by making payment of the dues of late Hukam Singh
to a person other than the nominee /appellant.
7. It is submitted that a nominee is nothing but a trustee who holds the money
on behalf of the real owner. Once the trial court had given a categorical finding
that appellant is the legally wedded wife of Hukam Singh, then without reversing
that finding, the Appellate Court could not have held that the ITBP had
committed a material irregularity by making payment of dues of Hukam Singh to
a person other than the nominee.
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8. None appears for respondent No.2, though served.
9. Considering the submissions made by counsel for appellant, this appeal is
admitted on the following substantial questions of law:
“1. Whether the Appellate Court erred in law by holding that ITBP
had committed a material illegality by making payment of dues of
late Hukam Singh to a person other than nominee?
2. Whether the sweeping comment made by the Appellate Court in
paragraph 14 of its judgment was warranted?”
10. This appeal is pending since 2006 and 19 long years have passed.
Accordingly, the appeal is also heard finally.
11. The moot question for consideration is as to what are the rights of a
nominee? Whether the nominee holds the property to the exclusion of the claim
of the heirs of the deceased or the nominee holds the property as a trustee on
behalf of the heirs?
12. The Hon’ble Supreme Court in the case of Sarbati Devi (Smt) And
Another Vs. Usha Devi (Smt) reported in (1984) 1 SCC 424, has held in
paragraphs 4 and 8 as under:-
4. At the outset it should be mentioned that except the decision of
the Allahabad High Court in Kesari Devi v. Dharma Devi [AIR 1962
All 355 : 1962 All LJ 265] on which reliance was placed by the High
Court in dismissing the appeal before it and the two decisions of the
Delhi High Court in S. Fauza Singh v. Kuldip Singh [AIR 1978 Del
276] and Uma Sehgal v. Dwarka Dass Sehgal [AIR 1982 Del 36 : ILR
(1981) 2 Del 315] in all other decisions cited before us the view taken
is that the nominee under Section 39 of the Act is nothing more than
an agent to receive the money due under a life insurance policy in the
circumstances similar to those in the present case and that the money
remains the property of the assured during his lifetime and on his
death forms part of his estate subject to the law of succession
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are Ramballav Dhandhania v. Gangadhar Nathmall [AIR 1956 Cal
275] ; Life Insurance Corporation of India v. United Bank of India
Ltd [AIR 1970 Cal 513] ; D. Mohanavelu Mudaliar v. Indian
Insurance and Banking Corporation Ltd., Salem [AIR 1957 Mad 115 :
(1956) 1 LLJ 498 : (1955-56) 9 FJR 160] ; Sarojini
Amma v. Neelakanta Pillai [AIR 1961 Ker 126 : (1961) 31 Com Cas
86 : 1960 KLT 1319] ; Atmaram Mohanlal
Panchal v. Gunvantiben [AIR 1977 Guj 134 : 18 GLR 668] ; Malli
Dei v. Kanchan Prava Dei [AIR 1973 Ori 83] and Lakshmi
Amma v. Saguna Bhagath [ILR 1973 Kant 827] . Since there is a
conflict of judicial opinion on the question involved in this case it is
necessary to examine the above cases at some length. The law in force
in England on the above question is summarised in Halsbury’s Laws
of England (4th Edn.), Vol. 25, para 579 thus:
“579. Position of third party.–The policy money payable on
the death of the assured may be expressed to be payable to a
third party and the third party is then prima facie merely the
agent for the time being of the legal owner and has his authority
to receive the policy money and to give a good discharge; but
he generally has no right to sue the insurers in his own name.
The question has been raised whether the third party’s authority
to receive the policy money is terminated by the death of the
assured; it seems, however, that unless and until they are
otherwise directed by the assured’s personal representatives the
insurers may pay the money to the third party and get a good
discharge from him.”
8. We have carefully gone through the judgment of the Delhi High
Court in Uma Sehgal case [AIR 1982 Del 36 : ILR (1981) 2 Del 315] .
In this case the High Court of Delhi clearly came to the conclusion
that the nominee had no right in the lifetime of the assured to the
amount payable under the policy and that his rights would spring up
only on the death of the assured. The Delhi High Court having reached
that conclusion did not proceed to examine the possibility of an
existence of a conflict between the law of succession and the right of
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the nominee under Section 39 of the Act arising on the death of the
assured and in that event which would prevail. We are of the view that
the language of Section 39 of the Act is not capable of altering the
course of succession under law. The second error committed by the
Delhi High Court in this case is the reliance placed by it on the effect
of the amendment of Section 60(1)(kb) of the Code of Civil Procedure,
1908 providing that all moneys payable under a policy of insurance on
the life of the judgment debtor shall be exempt from attachment by his
creditors. The High Court equated a nominee to the heirs and legatees
of the assured and proceeded to hold that the nominee succeeded to
the estate with all ‘plus and minus points’. We find it difficult to treat
a nominee as being equivalent to an heir or legatee having regard to
the clear provisions of Section 39 of the Act. The exemption of the
moneys payable under a life insurance policy under the amended
Section 60 of the Code of Civil Procedure 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 recognises such a right in such creditor which he could have
exercised but for the amendment. It is because it was attached the
Code of Civil Procedure exempted it from attachment in furtherance
of the policy of Parliament in making the amendment. The Delhi High
Court has committed another error in appreciating the two decisions of
the Madras High Court in Karuppa Gounder v. Palaniamma [AIR
1963 Mad 245 at para 13 : (1963) 1 MLJ 86 : ILR (1963) Mad 434]
and in B.M. Mundkur v. Life Insurance Corporation of India [AIR
1977 Mad 72 : 47 Com Cas 19 : (1977) 1 MLJ 59 : ILR (1975) 3 Mad
336] . The relevant part of the decision of the Delhi High Court
in Uma Sehgal case [AIR 1982 Del 36 : ILR (1981) 2 Del 315] reads
thus: (AIR p. 40, paras 10, 11)
“10. In Karuppa Gounder v. Palaniamma [AIR 1963 Mad 245 at
para 13 : (1963) 1 MLJ 86 : ILR (1963) Mad 434] , K had
nominated his wife in the insurance policy. K died. It was held
that in virtue of the nomination, the mother of K was not
entitled to any portion of the insurance amount.
11. I am in respectful agreement with these views, because they
accord with the law and reason. They are supported by Section
44(2) of the Act. It provides that the commission payable to an
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insurance agent shall after his death, continue to be payable to
his heirs, but if the agent had nominated any person the
commission shall be paid to the person so nominated. It cannot
be contended that the nominee under Section 44 will receive the
money not as owner but as an agent on behalf of someone else,
vide B.M. Mundkur v. Life Insurance Corporation [AIR 1977
Mad 72 : 47 Com Cas 19 : (1977) 1 MLJ 59 : ILR (1975) 3
Mad 336] . Thus, the nominee excludes the legal heirs.”
13. Similarly, the Hon’ble Supreme Court in the case of Vishin N.
Khanchandani And Another Vs. Vidya Lachmandas Khanchandani And
Another reported in (2000) 6 SCC 724 has held in paragraphs 7 and 13 as under:
7. Mr Sanjay K. Kaul, Senior Advocate appearing for the
appellants submitted that Section 6 of the Act very unambiguously
provides that notwithstanding anything contained in any law for the
time being in force or in any disposition, testamentary or otherwise, in
respect of any savings certificate where a nomination is made, the
nominee shall, on the death of the holder of the savings certificate,
become entitled to the savings certificate and to be paid the sum due
thereon to the exclusion of all other persons. Referring to sub-section
(3) of Section 6, the learned counsel submitted that in case where the
nominee is a minor, the holder of the savings certificate has a right to
make the nomination to appoint in the prescribed manner any person
to receive the sum due thereon in the event of his death during the
minority of the nominee. It is contended that if the intention was not to
entitle the nominee to be paid and to retain the sum due on such
National Savings Certificates, there was no necessity of making a
provision as has been incorporated in sub-section (3) of Section 6.
Section 7 was also relied upon to urge that after the death of the
holder, the nominee becomes entitled to the payment of the sum due
without there being any further obligation upon him. In support of
such an argument further reliance was placed upon sub-sections (3)
and (4) of Section 7. He also tried to distinguish the verdict of this
Court in Sarbati Devi v. Usha Devi [(1984) 1 SCC 424 : 1984 SCC
(Tax) 59] by pointing out the difference of the language and
phraseology in Section 6 of the Act and Section 39 of the Insurance
Act. According to him the words, “on the death of the holder of the
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savings certificate, become entitled to the savings certificate and to be
paid the sum due thereon to the exclusion of all other persons”,
appearing in Section 6 of the Act have not been incorporated in
Section 39 of the Insurance Act suggesting that the legislature had
intended to make the nominee absolute owner of the value of the
certificates.
13. In the light of what has been noticed hereinabove, it is apparent
that though the language and phraseology of Section 6 of the Act is
different from the one used in Section 39 of the Insurance Act, yet, the
effect of both the provisions is the same. The Act only makes the
provisions regarding avoiding delay and expense in making the
payment of the amount of the National Savings Certificates, to the
nominee of the holder, which has been considered to be beneficial
both for the holder as also for the post office. Any amount paid to the
nominee after valid deductions becomes the estate of the deceased.
Such an estate devolves upon all persons who are entitled to
succession under law, custom or testament of the deceased holder. In
other words, the law laid down by this Court in Sarbati Devi
case [(1984) 1 SCC 424 : 1984 SCC (Tax) 59] holds the field and is
equally applicable to the nominee becoming entitled to the payment of
the amount on account of National Savings Certificates received by
him under Section 6 read with Section 7 of the Act who in turn is
liable to return the amount to those in whose favour the law creates a
beneficial interest, subject to the provisions of sub-section (2) of
Section 8 of the Act.
14. Thus, it is clear that merely because a person has been made a nominee,
would not receive the benefits in his own personal and individual capacity, but he
would receive it as a trustee with liability to return the amount to those in whose
favour the law creates a beneficial interest. The nominee will be governed by the
law of succession.
15. If the facts of this case are considered, then it is clear that the Appellate
Court, without disturbing the findings recorded by the Trial Court that
appellant/defendant No.1 is the legally wedded wife of Hukam Singh has given a
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sweeping comment that the officers of ITBP had committed a material illegality
by making payment of money to a person other than the nominee. If the ITBP
authorities have made payment to the wife of the deceased employee, then it
cannot be said that they have committed any illegality by making payment to her.
16. Under these circumstances, this Court is of considered opinion that not
only the observation made by the lower Appellate Court in paragraph 14 was
unwanted, but it is also contrary to law.
17. Both the Substantial Questions of Law are answered in affirmative.
18. Accordingly, the observation made by the Appellate Court [(i.e. Fourth
Additional District Judge (Fast Track), Shivpuri (M.P.)] in paragraph 14 of the
impugned judgment and decree dated 05.08.2006 passed in Civil Appeal
No.163/2005 is hereby set aside.
19. Appeal succeeds and is allowed.
(G.S. Ahluwalia)
Judge
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