THE HON’BLE SRI JUSTICE N.R.L. NAGESWARA RAO APPEAL SUIT No.655 of 1993 Date: 26.11.2010 Between: K. Babyammal … Appellant And The Oriental Insurance Company Limited, Rep.by its Branch Manager, Chittoor and another. … Respondents THE HON’BLE SRI JUSTICE N.R.L. NAGESWARA RAO APPEAL SUIT No.655 of 1993 JUDGMENT : The plaintiff in O.S.No.109 of 1990 on the file of the Principal Sub-Judge, Chittoor, is the appellant herein. She claims to be the nominee of one Natarajan under the Insurance Policy, bearing No.43247/Z/14/MISC/PA/22/86 with the 1st defendant effective from 5.8.1986 to 4.8.1987 and the said Natarajan died on 21.1.1987 and she is no other than the mother of Natarajan. The appellant has given a laywer’s notice on 16.5.1987 and also claims to have filed an application on 4.3.1989, and as the defendants seems to have received an objection from one Palani, who is the step-brother of Natarajan, claiming the amount, the plaintiff was directed to get succession certificate and as it was not done, the amount was not paid. The defendants contended that though the plaintiff is the nominee under the Insurance Policy, as Sri Palani raised an objection, the amount was not paid. The 2nd defendant also further contended that the plaintiff could have sought a declaration for her entitlement of the amount without obtaining a succession certificate. The defendants also pleaded that Sri Palani is a necessary party to the suit and the suit is bad for non-joinder of proper parties. It is further pleaded by them that they are not liable to pay interest and costs. 2. On the above pleadings, the following issues have been framed for trial: 1. Is the plaintiff the mother of late Natarajan and did he nominate the policy in question in favour of the plaintiff as his nominee? 2. Is the plaintiff entitled to succeed to the entire estate of Natarajan as per Hindu Succession Act? 3. Is R. Palani, s/o. Raghavan, a necessary and proper party to this suit and, if so, is the suit and for non-joinder? 4. Are the defendants liable to pay interest at 12% p.a.? 5. In any event, are the defendants liable to pay costs of the suit? 6. To what relief? 3. On behalf of the plaintiff, P.Ws.1 and 2 were examined and marked Exs.A-1 to A-11. On behalf of the defendants, D.W.1 was examined and marked Exs.B-1 to B-5. After considering the evidence on record, the learned Senior Civil Judge decreed the suit of the plaintiff with costs, but however, without interest. Aggrieved by the said judgment, the present appeal is filed. 4. The points that arise for consideration are— 1. Whether the rejection of interest by the lower Court is legal and sustainable? 2. Whether the judgment of the lower Court is legal? 3. To what relief? 5. The lower Court has refused to grant interest only on the ground that as per the conditions in the policy, the party has contracted not to claim any interest and, therefore, the plaintiff is not entitled for interest. 6. It is the strong contention of the learned counsel for the appellant that it may be true that the claim for interest is sought to be waived and arises only in the circumstances if the claim is expeditiously settled and not in circumstances where the settlement is delayed without any bonafides or legal grounds. According to him, the appellant is no other than the nominee under the policy and as per the Law of Insurance, the nominee is entitled to receive the entire amount and if there are anybody else interested, they have to pursue the remedies against the plaintiff. But, when once the nomination has been accepted, the Insurance Company would not have denied the payment to the appellant on the ground that an objection has been raised by Mr. Palani, who is nowhere in the picture in the suit and evidently he has not impleaded himself in the suit nor filed any suit for the said amount. Therefore, the Insurance Company has not acted according to the terms of the policy, in not paying the amount to the nominee when the nomination is validly accepted. Having failed to do so and having driven the plaintiff to the Court, it is not open to the defendant Company to rely upon the terms of the policy, having violated the terms of the policy. Therefore, rejection of interest by the lower Court is not legal and the Insurance Company is liable to pay interest. 7. In this regard, it is useful to refer sub-section (6) of Section 39 of the Insurance Act, 1938, which reads as under: “(6) Where the nominee or, if there are more nominees than one, a nominee or nominees surviving the person whose life is insured, the amount secured by the policy shall be payable to such survivor or survivors.” The appellant has claimed interest from 5.2.1987 till the date of suit at 12% per annum. Taking into consideration the above aspects, I feel if interest is granted at 7.5% per annum will meet the ends of justice. 8. Accordingly, the judgment, dated 3.8.1992, of the lower Court is set aside insofar as it relates to the granting of interest and the plaintiff is held entitled to interest at 7.5% per annum from the date of claim on 5.2.1987 till the date of suit. 9. In the result, the appeal is allowed with costs, holding that the appellant is entitled for interest at 7.5% per annum from 5.2.1987 till the date of suit. ____________________________ N.R.L. NAGESWARA RAO, J 26.11.2010. Msr THE HON’BLE SRI JUSTICE N.R.L. NAGESWARA RAO APPEAL SUIT No.655 of 1993 26.11.2010 (Msr)