SCA/628719/1997 1/9 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 6287 of 1997 For Approval and Signature: HONOURABLE MR.JUSTICE S.R.BRAHMBHATT ================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================= JANAKKUMAR V AMARKOTIYA & 1 - Petitioners Versus CHIEF POST MASTER GENERAL & 1 - Respondents ================================================= Appearance : MR PJ YAGNIK for Petitioners : 1 - 2. MR KETAN A DAVE for Respondent : 1, RULE SERVED BY DS for Respondent : 2, ================================================= CORAM : HONOURABLE MR.JUSTICE S.R.BRAHMBHATT Date : 19/11/2008 ORAL JUDGMENT Heard learned counsels for the parties. 1. The petitioners – claimants of the Postal Insurance amount have preferred this petition under Article 226 of the Constitution of India challenging the communication dated 7/2/1997 where under the respondents asked for SCA/628719/1997 2/9 JUDGMENT production of guardianship certificate in case of petitioner no.2 as he was minor for receiving the amount insured on the death of the insured i.e. wife of petitioner no.1 and mother of petitioner no.2. 2. Facts in brief deserves to be set out as under. The petitioner No.1's wife and No.2's mother was insured and she had nominated her husband-petitioner no.1 and son–petitioner no.2 as legal nominees. Unfortunately the insured died and hence the insurance money were claimed by the petitioners. In response to the claim put up by the petitioners the department – respondents communicated that as policy contains nomination of petitioner no.2, i.e. minor son of the husband, husband was required to produce guardianship certificate in respect of their minor son Jaykumar- petitioner no.2 herein issued by the competent Court in favour of the father for receiving full claim in his favour. As the claim remains unsettled the petitioners moved this petition as stated herein above. Way back on 7/10/1998 this Court (Coram: C.K. Buch, J) observed inter alia that “prima facie it seems that the Respondents have withheld the amount of insurance without any legal, cogent or convincing grounds. Hence Respondents are also directed to show cause as to why interim mandatory order should not be passed in favour of the petitioners as to the payment with interest”; and the matter was ordered to be listed on admission board on 6/11/1998. Ultimately under the SCA/628719/1997 3/9 JUDGMENT order of this Court dated 20/12/2007 the amount of insurance money came to be deposited only in the year 2007 which has been deposited in the name of Registrar of this Court, who in turn was directed to invest in FDR initially for a period of three months on or before 24th December 2007. Accordingly the amount was deposited vide cheque dated 20/12/2007. 3. Shri Yagnik for the petitioners contented that, despite there being a clear nomination made by the deceased insured, for no reason the amount of insurance money has been withheld contrary to the provision of law and the petitioners were constrained to file this petition. Even after filing the petition they were not paid the money and ultimately only in December 2007 the amount came to be deposited after the orders passed by this Court for depositing the same. He submits that in absence of any cogent reason or rule enabling them to withhold the money they were not justified in insisting for production of guardianship certificate in case of minor son, and who is minor even today. Shri Yagnik submits that in fact petitioner no.1 – father is always working in the interest of his son and under the instruction of petitioner no.1, Shri Yagnik states that the petitioner has no interest in the share of money of his son except his welfare and therefore, the apprehension on the part of the concerned respondent was absolutely ill-founded and unwarranted which has caused tremendous agony and has in fact acted contrary to the philosophy of insurance which is actually required to be helpful in time of need. Today the minor is SCA/628719/1997 4/9 JUDGMENT prosecuting his studies and is residing with his father petitioner no.1 and had this money been made available as & when it became due, then certainly same would have helped in overcoming the crisis that were faced by the family on account of dire need and sudden demise of the insured. Shri Yagnik has submitted that, therefore, not only that the petition deserves to be allowed but the respondents be saddled with appropriate cost and interest and direct them to pay interest for withholding the amount wrongfully for all these years. 4. Shri Dave appearing for the respondents while placing reliance upon Rule 9 (4) (b)(g) of the Rules relating to Postal Life Insurance And Endowment Assurance submitted that, as the certificate of guardianship was not produced in case of petitioner no.2 whose name was first in the list of nominees the amount was withheld. Though Shri Dave could not answer to the query as to why he was not offered apportionment of the amount then atleast the said apportionment would have been received by the petitioner no.1 husband. Shri Dave has further submitted that in the affidavit in reply the respondents have volunteered to deposit the amount before this Court and as there is no relief by way of interim relief as sought for, payment without there being any order of this Court was not made, but that in itself would not sufficient to order payment of interest. Shri Dave has further submitted that, however, in case this Court is inclined to accept the submissions made on behalf of the petitioners then the interest at the rate of Post Office Savings Bank Rate only be awarded as the Postal SCA/628719/1997 5/9 JUDGMENT department could not also utilise this amount for any other purpose and ultimately it is the public exchequer which is likely to be affected by the order of awarding interest. 5. This Court has heard learned counsels for the parties and perused the impugned communication. The Rules which are placed in to service go to show that the respondents were not justified at all in withholding the amount. Relevant clause of Rule-9 deserves to be set out in order to appreciate the rival contentions of the parties. “ Rule 9. Assignments and Nominations :- (1) In registering any assignment, nomination or appointment of any person to receive the money secured by the policy in the event of the insurants' death during the minority of the nominee, the Post Office Insurance Fund assumes no responsibility as to the validity thereof. (2) While the Fund does not prescribe any particular forms for assignment or nomination, or for the notice thereof, specimens of the forms that may be used can be had from the Postmaster-General on application. (3) Assignment. (a) Policies may be assigned by the policy holder, either :- (i) for valuable consideration; or (ii) by way of gift. (b) The assignment may be made either by an endorsement on the reverse of the policy itself or by a separate deed. The assignment must be dated and signed by the assignor in the presence of a witness. Except in the case of an assignment in favour of the President of India as a security for the repayment of any loan granted out of the Fund, an assignment, otherwise complete, will be inoperative against the Fund, unless a notice in SCA/628719/1997 6/9 JUDGMENT writing of the assignment has been delivered to the Postmaster-General. The notice of assignment must be accompanied by the policy duly endorsed or, where the assignment has been effected by a separate deed, by the deed or assignment or a copy thereof duly certified to be correct by both the assignor and the assignee or their duly authorised agents. The priority of claim under a policy will be governed by the dates on which the notices of the assignments have been received by the Postmaster-General at his office. (c) After the assignment of a policy is once effected, the policy cannot be dealt with any further by the assignor and the only person competent to deal with it will be the assignee. In order to enable the policy- holder to deal with the policy again he should have a re- assignment in writing in his own favour executed by the assignee, attested by one or more witnesses, and registered in the records of the postmaster General. (4) Nomination, (a) A policy holder is advised to nominate a person to whom the sum assured shall become payable in the event of his death so as to save his legal heirs the trouble and expense of obtaining legal title to the sums payable under the policy. (b) The holder of a policy of life assurance on his own life may, when effecting the policy or at any time before the policy matures for payment nominate the person or persons to whom the money secured by the policy is desired to be paid in the event of his death. (c) Where the proposer gives the name of he intended nominee or nominees in the proposal form itself, the Fund will incorporate the name of such nominee or nominees in the text of the policy. A nomination, if not incorporated in the text of the policy, can be made only by an endorsement on the policy. In order to be effective, such endorsement must be communicated to the Postmaster-General for being recorded in his books. A nomination may, at any time before the policy matures for payment, be cancelled or changed by the assured by an endorsement or a further endorsement or a will, as the case may be, but the Fund will not be liable for any payment under the policy made bona fide by it to a nominee mentioned in the text of the SCA/628719/1997 7/9 JUDGMENT policy or to be one nominated by an endorsement on the policy and registered in the records of the Fund unless notice in writing in any such cancellation or change has been received by the Postmaster-General prior to such payment. (d) A transfer or assignment of a policy made in accordance with the provisions of section 38 of the Insurance Act, 1938 (4 of 1938) shall automatically cancel a nomination, provided that the assignment of a policy to the insurer who bears the risk on the policy at the time of the assignment, in consideration of a loan granted by that insurer on the security of the policy within its surrender value, or its re-assignment by the insurer or repayment of the loan shall not have the effect of cancelling a nomination, but shall affect the rights of the nominee only to the extent of the insurer's interest in the policy. (e) Where the policy matures for payment during the life time of this person whose life is insured or where the nominee or, if there are more nominees than one, all the nominees die before the policy matures for payment, the amount secured by the policy shall be payable to the policy holder or his heirs or legal representatives of the holder of a succession certificate as the case may be. (f) Where the nominee, or, if there are more nominees than one, a nominee or nominees survive the person whose life is insured the amount secured by the policy shall be payable to such survivor or survivors. (g) Minor Nominee:- The holder of a policy of life insurance may, in any case where the nominee is a minor, appoint any person or receive the money secured by the policy in the event of his death during the minority of the nominee and communicate such appointment to the Fund by forwarding the documents relating to such appointment to the Postmaster-General. The consent of the appointee should be obtained at the same time as the appointment is made. (h) Nominations as above are not permissible in the case of policy effected by any married man on his own life and expressed on the face of it to be for the benefit of his wife, or of his wife and children or any of SCA/628719/1997 8/9 JUDGMENT them; in such a case the policy ensures and is deemed to be a trust for the benefit of the insurant's wife or for the benefit of his wife and children or any of them according to the interest so expressed. “ 6. Thus Rule (1) under the caption of 'Assignments and Nominations' itself go to show that Post Office Insurance Fund assumes no responsibility as to the validity thereof in case in registering any assignment, nomination or appointment of any person to receive the money secured by the policy in event of the insurants' death during the minority of the nominee. Thus the over anxiety expressed by the concerned official at the relevant time in insisting for guardianship certificate issued by the competent court in favour of minor was absolutely justified to say the least. A profitable reference could be had from sub rule (f) also which go to show that ' where the nominee or, if there are more nominees than one, a nominee or nominees survive the person whose life is insured the amount secured by the policy shall be payable to such survivor or survivors.' This would go to show the denial of insurance payment and insistence for production of guardianship certificate was uncalled for, unjustified and without any rime or reason. The reliance placed upon sub clause (g) of clause (4) of Rule-9, is absolutely misconceived as it does not preclude the postal agency – respondents from disbursing the amount to the nominees, rather it is an enabling provision to the insured to give name of person who will act as guardian. In absence of any malafide made by the petitioners, this Court is restrained from observing or attributing any modus other than mere over cautious on the part of the SCA/628719/1997 9/9 JUDGMENT department. However the ill founded over cautious or reluctance to part with the money have in fact restrained into depriving legitimate claim of petitioners and their legitimate right to use money in time of galloping inflation. Therefore this Court is not only inclined to order payment of policy money forthwith to the claimants but also order appropriate interest from the date the policy money become payable to the claimants i.e. the date of legitimate claim till the money is actually deposited in this Court. The said amount shall carry interest at the rate of 6 % p.a. The policy amount with interest shall be paid within six months from the date of receipt of writ of this order. 7. The petition is accordingly allowed. Rule made absolute to the aforesaid extent. However there shall be no order as to costs. [ S.R. BRAHMBHATT, J ] /vgn