1995K90 (PLP)

This suit is for the administration, partition, possession and accounts of the estate and properties left by deceased Muhammad Younus Khan. Plaintiff No.l Mst. Shaista Younus Khan is the widow of Muhammad Younus Khan while plaintiffs Nos.2, 3 and 4 are the sons and daughter respectively. Defendant No.1 is the mother of deceased, defendant No.2 is the real brother of deceased while defendants Nos.2 and 3 are stated to be the partners of deceased. On 11‑4‑1993 x preliminary decree was passed and Official Assignee was appointed Receiver of the properties of the deceased with the direction to take over the physical possession and‑ to administer ‑ the same. In the preliminary decree following shares of the heirs of the deceased was also determined:‑‑ In these circumstances, the respective shares of the heirs, of the deceases would be as under:‑‑ (i) Mrs. Asia Khatoon‑‑Defendant No.l Mother 16.66%. (ii) Mrs. Shaista Younus Khan‑‑Plaintiff No.l widow 12.50%. (iii) Babar Khan, Plaintiff No.2 son 28.34%. (iv) Hammad Khan, Plaintiff No.3 son 28.34%. (v) Felza Younus, Plaintiff No.4 daughter 14.16%. All the properties and assets left by the deceased would be inherited by heirs as mentioned above." Several movable and immovable properties were included in the schedule of properties left by the deceased. At serial No.8 of the said order it was also mentioned that seven Insurance Policies of the deceased will also be administered by the Receiver. It was in this circumstance, that on 7‑8‑1993 Official Assignee Receiver has submitted his report which has come for consideration before this Court. I have heard Mr. Saalim Salam Ansari, Advocate for the plaintiff and Mr. A.F.M. Mukarim, advocate for the defendants. Para. 4 of the report of Official Assignee dated 7‑8‑1993 is very relevant which is reproduced as hereinunder:‑‑ "As regards Insurance Policies which have been disclosed by Mr. Shafaat Hussain in his letter dated 27‑7‑1993 photocopy annexed as `A'. since plaintiff was nominee in all the Insurance Policies, Mr. Shafaat Hussain, Advocate has taken stand that plaintiff is entitled to the amount. Mr. A.F.M. Mokarim, Advocate has urged under his application dated 28‑7‑1993 annexed as `B' requesting that the enquiry be closed and ' matter be referred to the Hon'ble Court." Mr. Saalim Salam Ansari, Advocate for the plaintiff has strenuously argued that the plaintiff No.l being widow of the deceased and being mother of other legal heirs who are minors was appointed by the deceased as "nominee" of these Insurance Policies which were accordingly encashed from. the Insurance Company and the payment was received by her on 26‑11‑1991. According to the learned counsel, the plaintiff No.l being lawfully appointed nominee by the deceased for the Insurance policies and by virtue of section 6(1) of the Married Women's Act, 1874 she was entitled and justified for the realization of the insurance amount. He has relied upon the case of Mrs. Aiasha Koreshi and anothers v. Hishmatullah Koreshi and another PLD 1972 Ku. 653, Mst. Maqbool Begum and 7 others v. Mst. Taj Begum and 7 others PLD 1973 Note 128, at p.195 and on the case of Messrs Latif Ebrahim Jamal v. The Controller of Estate Duty 1989 PTD 1027. Mr. A.F.M. Mokarim, Advocate for the defendants has vehemently argued that plaintiff No.l was simply a "nominee" appointed by her deceased husband and was not entitled to realize and use the amount of insurance policies. Learned counsel for the defendant has further stated that according to the Islamic law of Inheritance the benefits arising oat of insurance policies are: also included ire the estate and properties of the deceased and are liable to be shared amongst the legal heirs according to their respective shares. He has relied upon the: cases of Mst. Amtul Habit) and others v. Mst. Musarrat Parveen and others PLW7SC 185, Latian Bai v. Sakina Bai AIR 1939 Sindh W7, Noor Muhammad v. Sardar Khatun and others PLD 1951 Sindh 1, Muqaddar Khan v. Bumah Shell Oil Storage and Distributing Co. Ltd., Karachi and another PLD 1968 Kar. 523 and Mrs. Aiyasha Koreshi and another, v. Hishmatullah Koreshi and another PLD 1972 Kai.

653. He has prayed that the plaintiff No.l be directed to deposit all the amount which she has received against the encashment of insurance policies. In the case of Mrs. Aiyasha Koreshi v. Hishmatullah Koreshi, upon which Mr. Ansari has heavily relied upon, plaintiff Mrs. Aiyasha Koreshi was widow of the deceased while defendant No.l was the father of the deceased. The properties left by deceased included insurance policies, provident fund, gratuity, part of salary, N.LT, units, Income‑tax Bonds etc. etc. The learned Single Judge of this Court after considering impact of section 39 of the Insurance Act, 1938, section 6 of the Married Women's Property Act, 1874, and couple of reported cases from the Indian jurisdiction held as follows:‑‑ "All these four cited cases, therefore, clearly lay down the proposition of law that nominee of the life insurance policy is to be entitled to the payment of the amount covered by the policy on behalf of all the legal heirs of the deceased assured and he cannot claim that exclusively for himself or herself. The very words of section 39, subsection (6) also suggest the same meaning. I am also further fortified in this view from the very provision, of section 6(1) of the Married Wutnen s Property. Act, wherein it has been laid down that the assured person, if he expresses on the face of the policy to be for the benefit of his wife or his child then the policy shall ensure and be deemed to be a trust for the benefit of such a nominee and shall not form part of his estate,' But this view was not approved by the Hon'ble Supreme Court of Pakistan in the case of Mst. Amtul Habib PLD 1974 SC

185. In the case of Messrs Latif Ebrahim Jamal v. The Controller of Estate Duty, a learned Division Bench of this Court while considering Income Tax reference on the question of Excise Duty Act and Married Women's Property Act, 1874, held that the Married Women's Property Act is intended to protect the rights of married women in their properties, earnings and wages earned by them from any employment, occupation or trade and such property is deemed to be a separate property. It was further held that an insurance policy if effected by any married man on his own life and expressly assigned for the benefit of his wife or children than it will be deemed to be a trust for the benefit of the wife or children or both and shall not remain in the control of the husband or his creditors or form part of his estate. It was further held by `the said Division Bench as follows:‑‑ "The provisions of Married Women's Property Act is a beneficial legislation for the purposes of protecting the interest of . married women. Therefore, a liberal construction should be placed to broaden the scope of its applicability. The restrictions placed by the Allahabad High Court and by the Judicial Commissioner's Court Sindh, we may say so with respect, have narrowed down the scope, operation and benefit under the Act. In the case before us the deceased had assigned the policies in favour of his two wives therefore, it shall be deemed to be for the benefit of the wives to whom they were assigned. Consequently section 6 of the Married Women's Property Act shall be applicable and a trust shall be deemed to have been created. From the date of assignment the deceased ceased to have control on the policy and was not competent to dispose it of." . In the case of Mst. Maqbool Begum v. Mst. Taj Begum no formal opinion was expressed by this Court and the matter was kept open., It will be advantageous to consider section 6 of the Married Women's Property Act and section 39 of the Insurance Act, 1938. Both these sections are relevant for the purpose of deciding the‑ issues involved: , Married Women's Property. Act, 1874. section 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 wile, or of his wife and children, or any of them, shall ensure and be deemed to be a trust Lop the benefit of his wife, or of his wife and childern, 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. Insurance Act, 1938, section 39: ‑(1) The holder of a policy of life insurance on his own life may, when effecting the policy or at any time before the policy matures for payment, nominate the person or persons to whom the money secured by the policy shall be paid in the event of his death. (6) Where the nominee or, if there are more nominees than one, a nominee or nominees survive the person whose life is insured the amount secured by the policy shall be payable to such survivor or survivors. (7) The provisions of this section shall not apply to any policy of life insurance to which section 6 of the Married Women's Property Act, 1874, applies or has at any time applied." Besides section 39 of the Insurance Act, 1938 which provides for the nomination, there is another provision for assignment or transfer of the policy of life insurance which is section

38. Through this provision of law any holder of life insurance policy is entitled to assign or transfer the benefits of the policy, with or without consideration in favour of any other person by making an endorsement upon the policy or through a separate instrument. Under subsection (5;r vi section 38 of the Insurance Act the transferee or the assignee is the only person entitled to the benefit under the policy. According to this section 38 if a transfer o, assignment is made then for all legal intent and purpose the transferee or assignee is entitled for the benefits of the policy lout such rights are not created in favour of a person who has been nominated in pursuance of section 39 of the Act, 1938. It is also pertinent to note that the nomination is revocable and not permanent in nature. Subsection (3) of section 39 provides one‑of the conditions of cancellation as well as change of nomination. Subsection (4) to section 39 provides that in case if a transfer or assignment is made then the nomination will automatically stand cancelled. Plea of the, learned counsel for the plaintiff that section 6 of the Married Women's Property Act, 1874 gives entitlement to a married woman to the benefit of insurance policy, in case if wife is appointed as nominee is misconceived. The law on the nature and scope of the "nomination was settled by the Supreme Court in the case of Mst. Amtul Habib and others, v. Mst. ': Musarrat Parveen and others PLD 1974 SC 185, wherein it was, held that the nomination merely confers a right to collect or receive money. It does not operate either as a gilt or as a will and, therefore, cannot deprive the other heirs of the nominator who may be entitled thereto under the law of succession applicable to the deceased, and that the nomination sloe, not pass title to the nominee nor such nominee give right to ‑ change the law of succession. Following is the relevant portion of the reported case:‑_ "We ate of the opinion, however, that the correct view has been takers in the cases referred to earlier, namely, that the nomination merely confers a right to collect the money or to 'receive the money'. It does not operate either as a gift or as a will and, therefore, cannot deprive the other heirs of the nominator who may be entitled thereto under the, law of succession applicable to the deceased. The nominee thus collects as a trustee for the benefit. of all persons entitled to inherit from the deceased employee. it is not without significance that section ~ of the Provident Funds Act neither vests the amount in the nominee nor declares him to be the owner thereof. It merely gives him the exclusive right to receive the amount and nothing more. In any event the position under section 7 of the Bombay Cooperative Societies Act is different because the wording of this section is materially different. There is no analogy between the two." Through this judgment the Supreme Court of Pakistan did not approve they case of Mst. Aysha Kureshi v. Hashmatullah Kureshi PLD 1972 Kar.

765. Section 6 of the Married Women's Property Act, in fact extends protection to a married woman in connection with benefits of life insurance policy, transferred or assigned to her vide section 38 of the Insurance Act. My view is fortified by the case of Latif Ibrahim Jamal v. The Controller of Estate Duty 1989 F1` l) 1027 whet'. ‑n a Division Bench of this Court held that section 38 of Insurance Act prescribed assignment which is completely different from nomination. In case of assignment an assignee is entitled for the benefit of policy and in case of nomination the nominee received insured amount or interest on behalf of all the legal heirs as a trustee. In view of the law laid down by the Supreme Court in the case of Amtul Habib v. Musarrat Parveen and the law laid down by the Division Bench of this Court in the case of Latif Ibrahim Jamal v. The Controller of Estate Duty, it can be safely held that the plaintiff No.l who on her own averments claimed to be a nominee of the insurance policies was entitled only to receive amount of the same in trust on behalf of other legal hers and since it is not claimed by her that there was 'any assignment or transfer in her favour as provided under section 38 of the Insurance Act, as such the plaintiff No.1's rights to retain insurance amount are not protected under section 6 of the Married Women's Property Act, 1874. Now, the question remains to be determined is that what order should be passed as the plaintiff No.l has already received the amount of insurance policies prior to the filing of this suit? The instruments of insurance policy are not before the Court and therefore it will be not fair to say with certainty whether the plaintiff No.1 was nominee or an assignee? I therefore leave this issue open for determination by the Administrator who is permitted to obtain copies of all insurance policies from the State Life Insurance Corporation of Pakistan and after allowing the parties to lead evidence may submit his report as to whether plaintiff No.l vas a nominee or an assignee? Meanwhile, plaintiff No.l is directed to deposit the share of defendant No.l Mrs. Asha Khatoon at the rate of 16.66% from the total amount which she has received against encashment of insurance policies from State Life with the Nazir of this Court within one month. Nazis of this Court will deposit the same in some profitable securities. This amount shall be paid to the concerned party after considering the report of the Administrator as stated hereinabove. Accordingly, Official Assignee's reference dated 7‑8‑1993 stands disposed of. AA./S‑1143/K Order accordingly.