FEDERAL BANK LTD Vs. INDIRADEVI KUNJAMMA

JUDGEMENT

(1.) Whether monies payable under an Insurance Policy on the life of the judgment-debtor after the latter's death can be attached, or whether the payment of such monies to the nominee after the death of the assured can be restrained in a suit for recovery of monies borrowed by the latter, is the question that this appeal gives rise to and falls for my determination.

(2.) The appellant Bank has filed a suit against the respondents for recovery of an amount of Rs. 2,15,720.20 p. based on an advance made to the late Dr.P.P. Pillai. The respondents are the successors of the said Pillai and he was dead at the time the suit was instituted Dr. Pillai had some Life Insurance Policies on his life issued by the Life Insurance Corporation of India, the respondent No. 1 being his widow and nominee in the said Policies. In the course of the suit, the appellant filed an application for attachment of the aforesaid Insurance Policies before judgment, under O.38 R.5, C.P.C. and the trial Judge by his order dated 22nd Sept 1979, granted the alternative prayer restraining the Life Insurance Corporation of India from paying the amounts of the said Policies and further directed the defendants in the suit to show cause as to why they should not furnish security. The suit was however dismissed for default of the plaintiffs pn 27th June, 1980 and later on, another order dated 25th Aug. 1980, was passed by the learned trial Judge restraining the defendants Nos.1 and 2 in the suit from receiving the amounts of the Life Insurance Policies. Only on 17th Oct. 1980, the suit was restored to file by setting aside the order dismissing it for default. When the matter was thus standing, the appellant filed another application praying that the order dated 25th August 1980, be made absolute and, in the alternative, that the defendants Nos.1 and 2 be directed to furnish Bank guarantee in the sum claimed in the suit. This application was opposed and ultimately, the learned trial Judge dismissed it on the grounds that the law is clear inasmuch as the amounts payable under a Policy of Insurance cannot be attached. It is against this order that the present appeal has been filed.

(3.) Mr. Peres Cardozo, learned counsel appearing for the appellant, contended before me that the learned trial Judge has wrongly held that no order restraining the Life Insurance Corporation from paying the amounts of the Insurance Policies could have been passed in view of the provisions of S. 60(1)(kb), C.P.C. According to the learned counsel, one has to distinguish an Insurance Policy on the life of the judgment-debtor that matures during the lifetime of the assured and an Insurance Policy which becomes payable after his death. It has been contended by him that in the first case, i.e. when the Insurance Policy matures during the lifetime of the assured, the provision of Sec.60(1)(kb) C.P.C. operates and the monies paid cannot be attached. However, if the monies become payable after the death of the assured, in such cases, the monies enter into the estate of the deceased and can therefore be attached. The learned counsel placed reliance in support of these submissions on the decisions of the Allahabad High Court in Raja Ram v. Mata Prasad, AIR 1972 All 167 (FB), of the Gujarat High Court in Atmaram Mohanlal Panchal v. Gunvantiben, AIR 1977 Guj. 134 and of the Supreme Court in Smt. Sarbati Devi v. Smt. Usha Devi AIR 1984 SC 346. He submitted that in view of the provisions of Sec. 39 of the Insurance Act, the fact that the amount shall be payable to the nominee or nominees does not mean that the amount was belonging to the nominee or nominees. On the contrary, the said amount comes into the estate left behind by the deceased. This being so, according to the learned counsel, the trial Judge was wrong in holding that no direction could be given to the Life Insurance Corporation restraining it from making payments to the nominees of the amounts of the Policies mentioned in the suit.