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Rewant and Others Vs. Divisional Manager, Life Insurance Corpn. of India and Another - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtMumbai High Court
Decided On
Judge
Reported in[1986]59CompCas792(Bom)
ActsInsurance Act
AppellantRewant and Others
RespondentDivisional Manager, Life Insurance Corpn. of India and Another
Excerpt:
.....no provision in insurance act under which respondent-corporation under obligation to pay surrender value to guardian or assignee without asking for certificate of proof - no statutory obligation on part of respondent corporation to pay surrender value to petitioners - it was only contractual obligation - writ can be granted only in case where there is statutory duty imposed upon officer and there was failure on part of officer to discharge statutory obligation - article 226 cannot be availed to enforce obligation flowing from contract. - maharashtra scheduled castes, scheduled tribes, de-notified tribes (vimukta jatis), nomadic tribes, other backward classes and special backward category (regulation of issuance and verification of) caste certificate act (23 of 2001), sections 6 & 10:..........obligation , subject to the terms of the relevant contract between them and the assured, to pay surrender value even to a hindu minor absolute assignee of the contract, acting through his natural or legal guardian'' and for a writ of mandamus commanding the respondents to pay forthwith to the petitioners, acting through the father and natural or legal guardian, surrender value of all the three policies.2. the facts leading to the present writ petition, briefly stated, are as follows:the petitioners were born on march 20, 1961, october 4, 1963, and december 13, 1965, respectively. their father, who is admittedly their natural guardian, had obtained 17 policies of life insurance from the second respondent. on the advise given by an insurance agent, he decided to surrender five of them.....
Judgment:

1. The petitioners, who were minors at the time when this petition was filed on August 9, 1978, seek a declaration 'that the respondents are under a legal obligation , subject to the terms of the relevant contract between them and the assured, to pay surrender value even to a Hindu minor absolute assignee of the contract, acting through his natural or legal guardian'' and for a writ of mandamus commanding the respondents to pay forthwith to the petitioners, acting through the father and natural or legal guardian, surrender value of all the three policies.

2. The facts leading to the present writ petition, briefly stated, are as follows:

The petitioners were born on March 20, 1961, October 4, 1963, and December 13, 1965, respectively. Their father, who is admittedly their natural guardian, had obtained 17 policies of life insurance from the second respondent. On the advise given by an insurance agent, he decided to surrender five of them and to invest the surrender value in fixed deposits. Out of these five policies, he assigned two policies to his wife under an irrevocable deed of assignment dated October 8, 1972, which was acknowledged by the respondent corporation under its letter dated January 13, 1973. The guardian's wife, who is the mother of the petitioners, irrevocably assigned these two policies to petitioners Nos.2 and 3, by making an endorsement on them on April 19, 1976, which also has been accepted by the respondent corporation under its letter dated April 23, 1976. The petitioner's mother ignoring the irrevocable assignment in favour of petitioners Nos. 2 and 3, wrote to the respondent corporation on April 1, 1978, of her desire to avail of the surrender value of the said tow policies. She was informed that it was not possible for anyone else except the assignees to surrender the policies and the minors could do so o their attaining majority. This gave rise to certain correspondence between the father and the mother of the petitioners on the one hand and the respondent corporation on the other. Ultimately, the father of the petitioners, in his capacity as their natural guardian , requested the respondent corporation to pay him the surrender value of the policies. The respondent corporation, by its letter dated April 26, 1978, informed the guardian that it would be open to him to surrender the policies so long as the assignees were minors and not in the position to give a valid discharge. The respondent corporation, however, further said that it was prepared to pay the surrender value to the guardian if he obtained and forwarded to it a guardianship certificate from a competent court of law under the Guardians & Wards Act specially empowering him to surrender the policies. The guardian , by his letter dated April 27, 1978, demurred from this position and maintained that he was in his capacity as a legal guardian entitled to surrender the two policies and obtain the surrender value from the respondent corporation. However, by its letter dated June 9, 1978, the respondent maintained its stand taken earlier. It is in this context that the present writ petition has been filed by the three petitioners for the reliefs stated above.

3. During the pendency of the petition and by now , petitioners Nos.1 and 2 have attained majority. It is not clear why petitioner No.1 has been joined in this petition since this petition concerns the two polices which are alleged to have been assigned to petitioners Nos. 2 and 3 only. During the pendency of this petition, the respondents, under C.A. No. 913 of 1981, filed on January 23, 1981, sought permission of this court to deposit in this court the surrender value due to the said tow policies within a reasonable time and, thereafter, for investment in the aforesaid securities. This court, by its order made on the same day , permitted the respondents to invest the deposit the amount due under the said policies in fixed deposits for a period of 61 months in a nationalised bank in the name of the minor assignees. It would, therefore, appear that the surrender value of the said two policies now stands invested in fixed deposits under the orders of the court. We are told that this order was passed after hearing of both the counsels.

4. In support of the petition , the learned counsel for the petitioners submitted that since the respondent corporation did not dispute the fact that the father of the petitioners is their natural guardian, it was open to it to permit the said guardian to surrender the said two policies on behalf of the said minors as assignees and to obtain the surrender value. He further submitted that the insistence on the part of the respondent corporation for the said guardian to produce a guardianship certificate under the Guardians & Wards Act is not possible to be complied with inasmuch as the court under the Act would not issue such a certificate since it is not a case of a guardian being appointed or being declared. It is further submitted that under section 8 of the Hindu Minority and Guardianship Act, 1955, the natural guardian of a Hindu minor has all the powers to act for the benefit and interest of the minor and is not for the respondent corporation to challenge his authority or doubt it. It is further submitted that under section 38(5) of the Insurance Act, 1938, it is incumbent upon the respondent corporation, acting as an insurer, to pay the surrender value to the guardian , it having accepted the assignment and registered it in its books. It is further submitted that the refusal on the part of the respondent corporation to pay the surrender value of the natural guardian of the petitioners is tantamount to expropriation of property by the respondent corporation which is in breach of the fundamental right of the petitioners to hold property under articles 19 and 31 of the Constitution.

5. On September 10, 1979, the petitioners had filed Civil Application No. 2513 of 1979 of amendment of the petition by incorporating paragraphs Nos. 25 and 26 therein. It is stated in this application that petitioner No. 1 attained majority on March 20, 1979, and that on August 9, 1979, he received a cheque of Rs.6082.10 in respect of the surrender value of the policies assigned to him. It is contended that by retention of the amount, petitioner No.1 has been illegally deprived of the returns he would have obtained if the payment has been made immediately on demand. In this background, the petitioners wanted to amend the petition by incorporating demand for interest on the amount of Rs. 6082.10 by way of damages. The paragraphs which are proposed to be introduced in this petition by this amendment relate to the policies which had been assigned to petitioner No.1. On November 27, 1979, this court ordered that the said application shall be considered alone with he final hearing of the writ petition. We find that hits question of permitting the amendment as prayed for cannot be granted for the simple reason that it relates to policies which are purported to have been assigned in favour of petitioner No.1. As we have stated above, the subject-matter of this petition consists of the two policies which have been assigned by the mother of the petitioners in their favour and it does not relate to the policy or policies which are alleged to have been assigned to petitioner No. 1. This civil application for amendment is, therefore,rejected.

6. The learned counsel for the respondents has raised objection to the maintainability of the writ petition. He has submitted that in fact the writ petition is filed by the petitioners to enforce a right which flows from the contract of insurance and such a writ petition would not be maintainable under article 226 of the COnstitution. He also submitted that there is no statutory obligation or duty cast upon the respondent corporation to pay the surrender value to the guardian of a minor and since there is no breach of any statutory obligation or duty, the writ petition would not be maintainable. He further contended that at any rate the payment of the surrender value having been made by the respondent under the orders of the court by investing it in fixed deposits in a nationalised bank, the writ petition becomes infructuous inasmuch as the declaration and the direction which the petitioners seek against the respondents cannot be now made and given. In so far as the merits of the petition is concerned, he submits that under section 8 of the Hindu Minority and Guardianship Act, the power of a natural guardian of a Hindu minor or for the realisation , protection or benefit of his estate and hence while dealing with such a guardian , it is the duty of the corporation to see that the act of surrender on the part of the natural guardian is necessary or reasonable and proper for the benefit of the minor assignees. He submits that it is for this reason that the respondent corporation insisted upon a certificate being obtained from the appropriate court so that it is absolved of its responsibility under section 8 of the said Act and gets a valid discharge.

7. We find that it is not necessary to go not the rival contentions urged by the parties with regard to the reliefs which have been sought in this writ petition , for two reasons. Firstly, as has been rightly submitted ny the learned counsel for the respondents , the writ petition has become infructuous inasmuch as the surrender value to the two policies, in respect of which this petition has been filed a direction in respect of which is sought, has already been deposited and invested by the respondent corporation in a nationalised bank under direction of this court and after hearing the parties. In view of this intervening development, the rival contentions would lead merely to an academic discussion without any useful purpose. In our view , that cannot be done in a writ petition. Secondly, as has been held by the Supreme Court in several of its decisions and particularly in Bihar Eastern Gangetic Fishermen Co-operative Society Ltd. v. Sipahi Singh, : [1978]1SCR375 , a writ of mandamus can be granted only in a case where there is a statutory duty imposed upon the officer concerned and there is a failure on the part of the officer to discharge the statutory obligation and that the chief intention of a writ is to compel performance of public duties prescribed by statute and to keep subordinate tribunals and officers exercising public functions within the limits of their jurisdiction. It has further been held that in order that a mandamus may issue to compel the authorities to do something , it must be shown that there is a statute which imposes a legal duty and the aggrieved party has a legal right under the statute to enforce its performance. It is also well settled by now that the extraordinary jurisdiction of the High Court under article 226 of the Constitution cannot be availed of to enforce an obligation flowing from a contract or a contract qua contract : see Kulchhinder Singh v. Hardayal Singh Brar, : (1976)IILLJ204SC .

8. Now, while the petitioners want this court to declare that the respondents are under a legal obligation to pay the surrender value even to a Hindu minor acting through his natural guardian, and further to issue a writ of mandamus as a consequential relief, what they in effect purport to do is to oblige the respondent corporation to pay the surrender value to the guardian. Now , the question of payment of the surrender value either to the assignee or to his guardian may arise in a given case under the contract of insurance, which is not the same thing as discharge of statutory duty in the sense as has been said by the Supreme Court in the above said case. We do not find any provision either under the Insurance Act or in the enactment under which the respondent corporation has been incorporated casted upon it any duty or obligation to pay the surrender value to the guardian or the assignee without asking for any certificate of proof. As said above, the learned counsel for the petitioners relied on sub-section (5) of section 38 of the Insurance Act. But this sub-section deals only with the recognition of a transferee or assignee by the insurer and it says that the transferee or assignee named in the notice is the only person entitled to the benefit under the policy and he will be subject to all liabilities and equities to which the transferor or assignor was subject at the date of the transfer or assignment and may institute any proceedings in relation to the policy without obtaining the consent of the transferor or assignor or making him a party to such proceedings. It is not possible to spell out from this provision any duty or obligation on the part of the respondent corporation to pay the surrender value or the sum assured to the transferee or assignee in particular circumstances. The fact, therefore, remains that there is no statutory obligation as such apart from being a contractual obligation on the part of the respondent corporation to pay the surrender value to the petitioners. This could at the most be subject-matter of a suit if there is no other remedy available under the Insurance Act. We, therefore, find that the writ petition is not maintainable .

9. For the above said two reasons, therefore, we find that the writ petition stands dismissed but without any order as to costs.

10. The learned counsel for the petitioners prayed for a certificate of fitness to prefer an appeal to the Supreme Court. We find that the writ petition does not involve any substantial question of law a general importance which needs to be decided by the Supreme Court. The prayer for the certificate is , therefore, refused.

11. The deposit receipts which are with the respondent corporation shall be handed over to the petitioners within 15 days from today.


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