LIFE INSURANCE CORPORATION OF INDIA vs Nagaratna

THIS appeal is by opposite party (for short, the ''O.P.'') Nos. 1 and 2/Insurance Company challenging the order of the District Forum allowing the complaint filed by the complainants.

THE facts in this case are as follows : One Sri Gurushanthappa had obtained a Life Insurance Policy from the Insurance Company. In the said policy, he made his mother Smt. Veerupavva as the Nominee. The Insured died on 13.11.2001. After the death of the Insured, the Nominee and her husband made a claim before the Insurance Company. In the meanwhile, the wife and children of the Insured filed a Civil Suit in O.S. No. 62/2002 in the Civil Court for a direction to the Insurance Company to settle the claim in their favour. During the pendency of the said Suit, the Nominee Smt. Veerupavva passed away. Since Smt. Veerupavva had passed away, the Legal Representatives of the Insured withdrew the Suit and requested the Insurance Company to settle the claim in their favour. In the absence of any dispute regarding the legal heirship of the Insured, the Insurance Company has paid the money due under the Policy to the wife and children of the Insured. After the settlement of the claim, the children of Smt. Veerupavva, who was a Nominee, filed the complaint before the District Forum as against the Insurance Company for a direction to recall the payment made to the wife and children of the Inusured. The complaint has been allowed by the District Forum. That order is under challenge in this appeal by the Insurance Company. Under the provisions of the Insurance Act, a Nominee can only hold the money as a trustee for and on behalf of the legal heirs of the Insured. Smt. Veerupavva no doubt made a claim as a Nominee during her life -time. But she died thereafter. When the Nominee herself died, it is only the Legal Heirs of the Insured who are entitled to receive the money due under the policy. The case of the complainants before the District Forum is that Smt. Veerupavva had left a Will stating that the amount due under the Insurance Policy be paid to the complainants. When Smt. Veerupavva herself had no legal right to enjoy the money due under the Policy, she had no right to bequeath the same in favour of others. If that is so, the District Forum is not right in directing the Insurance Company to recall the money already paid to the wife and children of the Insured.

THE complaint also ought to have been dismissed for non -joinder of parties, inasmuch as necessary parties, namely the wife and children of the Insured, have not been impleaded as parties to the Complaint. Admittedly, the amount due under the Policy has been paid to the wife and children of the Insured. If that so, in their absence no relief could be granted on the complaint filed by the complainants. Therefore, on this ground also, the complaint filed by the complainants is liable to be dismissed.

IN the result, we pass the following order: (1) The Appeal is allowed. The Impugned Order is set aside. (2) The Complaint filed by the complainants is dismissed. (3) However, this order will not come in the way of the complainants approaching the Civil Court for appropriate relief, if they are so advised. Appeal allowed.