MARIA ANTONICA RODRIGUES Vs. D R BALIGA

JUDGEMENT

(1.) THE appellant, Maira Antonica Rodrigues, is the daughter of respondent No. 3, Baltazar M. Rodrigues, who effected a policy of insurance with the Oriental Government Security Life Assurance Company, Ltd. (hereinafter referred to as "the Insurance Company" ). The policy was a marriage endowment policy, issued on the 25th of September 1933, for a sum of Rs. 5,000. The premium on the policy was payable "during the joint lifetime of the proposer and the said Maria Antonica Rodrigues for a period of 19 years". The sum assured was payable to "the proposer whom failing to the said Maria Antonica Rodrigues provided she shall have attained majority, failing which to the legally appointed guardian of the said Maria Antonica Rodrigues. " It is also mentions the following special provisions:-

(2.) SECTION 6 of Act II of 1874, to the extent relevant, is as follows: "6. (1) A policy of insurance 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 them, shall enure and be deemed to be a trust for the benefit of his wife, or of his wife and children, or any of them, according to the interest so expressed, and shall not so long as any object of the trust remains, be subject to the control of the husband, or to his creditors, or form part of his estate. When the sum secured by the policy becomes payable, it shall, unless special trustees are duly appointed to receive and hold the same, be paid to the Official Trustee of the State in which the office at which the insurance was effected is situate, and shall be received and held by him upon and trusts expressed in the policy, or such of them as are then existing". In order that this section should apply to a policy of insurance, the policy must be 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 them. If this condition is complied with, then the policy shall enure and be deemed to be a trust for the benefit of his wife, or of his wife and children, or any of them, according to the interest so expressed and as long as any object of the trust remains, the policy shall not be subject to the control of the husband, or to his creditors, or form part of his estate. Respondent No. 3, the father of the appellant, undoubtedly effected the present policy of his own life but the question which falls for determination is whether this policy is expressed on the face of it to be for the benefit of his wife or of his wife and children, or any of them. If it is so, it will be beyond the control of respondent No. 3 or of his creditors, inasmuch as it ceases to be a part of his estate. In the present case, the question arose in these circumstances:-Respondent No. 3 carried on business in the name of Baltazar and Sons. The 2nd Income-tax Officer, C-IV Ward, Bombay, who is respondent No. 1 to this appeal, issued a certificate to the Collector of Bombay under Section 46 (2) of the Indian Income-tax Act for recovery of income-tax due to respondent No. 2, the Union of India, amounting to Rs. 3,61,266-10-0 from respondent No. 3 for the assessment year 1945-46. The appellant stated in the plaint that similar certificate were issued for subsequent years and the total liability of respondent No. 3 was to the tune of nearly five and half lakhs. Respondent No. 3 was unable to meet a major part of his income-tax liability and that is why respondent No. 1 issued a general notice under Section 46 (5) of the Income-tax Act requiring the Insurance Company to pay to him the money due and payable to respondent No. 3 under several policies taken out by him including the present Marriage Endowment Policy No. / 389928. The appellant applied to the Collector of Bombay on the footing that the notice issued by respondent No. 1 under Section 46 (5) was like an attachment under Section 46 (2) of the Income-tax Act. She represented to the Collector of Bombay that she has been expressly mentioned as the beneficiary of the policy and the policy itself bore an endorsement that her mother had been appointed her guardian with regard to the said policy moneys during her minority and that she having attained majority the policy moneys had to be held in trust on her behalf and that respondent No. 3 had no claim or interest therein. The appellant also wrote to the Insurance Company to the same effect, but she was informed that the amount of the policy had already been paid by them to the first respondent. On the 29th of March 1955 the Additional Collector of Bombay made an order that attachment of the present policy and become infructuous inasmuch as the moneys had already been recovered by the Income-tax Officer and that, therefore this policy should be released from attachment. The appellant then filed a suit in the City Civil Court for a declaration that valid trust was created in favour of the appellant in respect of this policy and that the Insurance Company and respondent No. 3 held the said policy and the moneys thereunder as trustees of the appellant. The relief claimed was that the respondents, including the Union of India, be ordered and decreed to pay to the appellant the moneys under the policy.

(3.) DEFENDANT No. 1 and Defendant No. 5, the Income -tax Officers, and Defendant No. 2, the Union of India, contested the claim of the plaintiff. The principal ground taken in defence was that Section 6 of Act III of 1874 was not applicable and that the policy did not create any trust in favour of the plaintiff, inasmuch as it was not for the benefit of the Plaintiff.