S. VENKATACHALAM AND OTHERS Vs. B. SARAMMA

JUDGEMENT

(1.) This is a Letters Patent Appeal against the judgment of Rajagopalan, J., of the Madras High Court.

(2.) The facts that gave rise to the appeal may be briefly stated. One Venkatanarayana died without issue on 31st November, 1937, leaving behind him his mother Saramma and his widow Subhadramma. He was in the service of the District Board as a school teacher. He contributed to the Provident Fund. He took out policy No. 24706 in the Lakshmi Insurance Company. He assigned the policy in favour of the President, District Board, East Godavari, as security for the payment of sums which, under the Local Boards Provident Fund Rules, he might become liable to pay to that fund. The premiums under this policy were paid from and out of the Provident. Fund amount lying to the credit of Venkatanarayana. On death of Venkatanarayana, the President of the District Board assigned the policy to his widow Subhadramma, who was registered as his nominee under the Provident Fund Rules. After his death, Subhadramma succeeded to his separate properties, which consisted of (i) the amount payable under the insurance policy which her husband had taken out and (ii) the amount lying to the credit of Venkatanarayana in the Provident Fund account. Item 1 of the plaint schedule was acquired by Subhadramma with the insurance amount and item 2 was purchased by her with the Provident Fund. Subhadramma by executing a will bequeathed the properties acquired by her out of the said amounts to the defendants. After the death of the widow, the mother filed O. S. No. 210 of 1946 on the file of the Court of the District Munsif, Amalapuram, against the defendants for recovery of possession of the said two items. The District Munsif held that the said two items were the absolute properties of Subhadramma and that they were validly bequeathed to the defendants. But, on appeal, the learned Subordinate Judge held that the Provident Fund amount was her absolute property but she had only a widow's interest in the insurance amount. In that view, as item I was purchased with the insurance amount, the learned Subordinate Judge gave a decree to the plaintiff in respect of the said item. The defendants preferred a second appeal to the High Court against the decree in so far as it went against them. Rajagopalan, J., who heard the Second Appeal, agreed with the Subordinate Judge and dismissed the same. With the leave of the learned Judge, this Letters Patent Appeal was filed by the defendants.

(3.) The short question in the appeal is whether, the amount covered by the insurance policy effected by Venkatanarayana was the absolute property of Subhadramma. The answer to this question turns upon the provisions of the Provident Funds Act and the rules framed by the Government for the working of the Provident Fund maintained by District Boards. It will be convenient to read the relevant provisions of the Act and the rules made thereunder.