P L D 1953 Sind 10 (PLP)

VELLANI, J.‑The insolvent is an employee of the Karachi Port Trust, and is a subscriber of the Karachi Port Trust Provident Fund, at the time of his adjudication, he had taken out policies of insurance on his life from various companies, the premia of which were being paid by the Karachi Port Trust under rule 9 of its Provident Fund Rules. Some of these policies have matured, and others are in the course of maturing. The Official Assignee has held that all these poli cies vest in him, subject to a charge in favour of the Port Trust Provident Fund for the premia paid out of the compul sory deposits standing to the credit of the insolvent in the Provident Fund, and has informed the Trustees and the res pective Insurance Companies accordingly. Against this order, the insolvent has come in appeal under section 86 of the Presidency Towns Insolvency Act, 1909. Under section 8 of the Provident Funds Act, 1925, the Governor‑General‑in‑Council by a notification, dated 1st November 1927 bearing No. 9921/721 made the provisions of that Act applicable to the Provident Fund established by the Karachi Port Trust for the benefit of its employees. It was contended for the insolvent that the policies were the fruits of and represented the compulsory deposits which were beyond the reach of the Official Assignee by reason of the provisions of section 3 of the said Act. The words `not

repayable on demand otherwise than for the purposes of premia in respect of a policy of life insurance, "appearing in section 2 (a) of the Act which defines" compulsory deposit show that the Act treats payments of insurance premia by the trustees as repayments made to the subscriber. Indeed, if the benefits of the policy were still in the category of compulsory deposits, it would not be necessary to take an assignment in favour of the trustees; and this view is supported by rule 9 (3) of the Provident Fund Rules which says that the insurance premia are to be paid on the subscriber's behalf and debited to the relevant Provident Fund Account of the subscriber, and that interest is to cease to run on sums so paid and debited. The rules of the Provident Fund under which the em ployee becomes a subscriber constitute a contract between the employee and the Trustees, Rule 9 of the Karachi Port Trust Provident Fund Rules provides that the subscriber's subscrip tion may be applied to the payment of premia on the policies of life insurance taken out by the subscriber in an approved company, subject to the condition which are specified in sub -rules (1) to (10). The assignment contemplated under this rule is an abso lute assignment in favour of the Trustees. Sub‑rules (7), (8) and (9) provide for the eventualities of death, retirement or dismissal of the subscribing employee, and prescribe what is to happen to the policies or to their proceeds in such an event. It seems to me, therefore, that, at the time of his adjudi cation the insolvent was entitled to the benefits of this con tract, and unless the contract has been disclaimed by the Official Assignee (which has not happened), these benefits vested in the Official Assignee at the date of adjudication. It is the contention of the Official Assignee that the policies vested in him subject to a change in favour of the Port Trust for the premia paid out of the subscriptions of the insolvent. This; is not correct. The policies have been assigned absolutely to the Trustees under rule 9 of the Provident Fund Rules, and the Trustees will deal with them in accordance with their contract with the insolvent, the benefits of which are vested in the Official Assignee. Order accordingly. A. H. Order accordingly.