2011 PLP 1528 (CLC)

FAISAL ARAB, J.

This Civil Miscellaneous Appeal arises from the order dated: 26-5-2009 passed by the IInd Additional District Judge Moro in Succession Application No.33 of 2007. One Mst. Hakimzadi expired on 3-3-2005. At the time of her death she was serving as Staff Nurse at Shah Bhitai Government Hospital Latifabad Hyderabad. She was married but issueless and left behind her Mother Maryam, her husband Pir Asif Ali Shah and four brothers as her surviving heirs. Her service benefits included payment of gratuity, family pension, leave encashment, group insurance and G.P. Fund. Mst. Hakimzadi while in service had obtained a loan from the Bank which was to be adjusted against her salary and after her death against her service benefits. Mst. Hakimzadi during her lifetime nominated her mother to receive group insurance, family pension and gratuity. One of the brothers of the deceased Hakimzadi filed succession application claiming that the right to receive group insurance, family pension and gratuity is only of mother of the deceased as she was nominated by the deceased herself in her lifetime and only leave encashment and G.P. Fund is to be distributed among all the legal heirs according to their respective shares in the inheritance. The other three brothers and husband of the deceased contested such claim on the ground that all service benefits are to be distributed amongst all the heirs as per their shares in the inheritance. The Additional District Judge, Moro held that all benefits of whatsoever nature are to be distributed according to law of inheritance and awarded 1/3rd share to the mother, 1/6th share to the father 1/2 share to the husband and remaining to her four brothers in equal shares. The present appeal has been preferred on the ground that the Additional District Judge, Moro ought to have first laid down the distinction between what is heritable and what constitutes a grant of the employer as any service benefit which a grant of the employer is only to be given to the person who becomes entitled to it either under the service rules and regulations of the employer. It was contended that the distinction between heritable service benefits and the benefits that are grant of the employer have been laid down by Shariat Appellate Bench of the Supreme Court in the case of Federal Government of Pakistan v. Public-at-Large in Shariat Appeal No.3 of 1990 decided on 7th May, 1991 and reported in PLD 1991 SC

731. In this judgment, the Supreme Court held that only such benefits are inheritable that have already become receivable by the deceased during his lifetime i.e. became payable to the employer when he was alive but any service benefit which the employer gives as a grant to an employee and employee has the option to nominate any member of his family member to receive it after his death then such service benefit being a grant does not become inheritable by all heirs of the employee. In the case reported in PLD 2010 Kar. 153 this Court held that there are certain service benefits of an employee, definable as grant which become payable at the time when his service comes to an end, and some of such benefits may also continue to be paid to certain members of employee's family after his death. These benefits are generally described as pensionary or retirement benefits, gratuity, death gratuity, death compensation, provident fund, benevolent fund, group insurance, medical grants, benefits under an award etc. Whether an employee dies while in service or dies after retirement, in both the situations there can be an occasion where he may not have received certain service benefit from his employer that had already become due for payment in his lifetime. Such unpaid service benefits shall invariably become part of the estate of the deceased employee and are to be distributed among all his heirs according to the personal law of the deceased employee. It matters not whether any of those service benefits fall under any of the two categories of benefits defined by Shariat Appellate Bench of the Hon'ble Supreme Court in PLD 1991 SC

731. The reason being that any of the two categories of service benefit upon their becoming due for payment in the lifetime of an employee but remained unpaid to him becomes part of his inheritance and thus inheritable by all his heirs according to their respective share in the estate left by the deceased. However, the service benefits that have accrued i.e. become due for payment after the death of the deceased employee need to be first classified on the basis of interpretation given in the case reported in PLD 1991 SC

731. If a service benefit is definable under the category of a 'grant' or 'concession' on the part of the employer and have accrued for payment after the death of the employee, then the same cannot be treated as part of the estate of the deceased employee. They can only to be paid to such persons who are made beneficiaries of such grant or concession under the rules and regulations of service or under any law. Any heir of the deceased employee, not being beneficiary of such grant or concession cannot claim any share in such benefits merely because he is also an heir of the deceased employee. The upshot of the above discussion is that any service benefit which an employee can claim from his employer in his lifetime and have also become payable to him in his lifetime but for any reason remained unpaid then to such extent only would become part of his estate and become heritable by all his heirs according to their respective shares. However, a service benefit, which has not fallen due to a deceased employee in his lifetime and is of a nature definable as a grant or concession on the part of the employer, then whatever amount that becomes payable after the death of the employee under such benefit is to be distributed only to those members of his family who are entitled for the same as per rules and regulations of service or under any provision of law. It is the discretion of the employer to make rules and regulations in relation to any grant or concession that an employer intends to give to an employee or after employee's death to any member of his family. Thus benefits such as gratuity, group insurance and family pension being grants and concessions on the part of the employer if payable to the employee after his death cannot be treated as heritable by all heirs of the employee but are to be distributed to those who are entitled to it under the rules and regulations of employment or under any law for the time being in force. In the present case therefore group insurance, family pension and gratuity payable after the death of an employee being a 'grant' or 'concession' on the part of the employee cannot be treated as part of inheritance and are to be received by the person entitled to it under the service rules and regulations of the employer. This appeal is allowed in the above terms. S.A.K./Z-10/K Appeal allowed.