1. The only question for decision in this Miscellaneous Appeal is whether certain insurance policy amount which has been sought to be attached by the respondent decree-holder can be held to be 'assets' of the late Kerala Varma Raja in the hands of the appellant.
2. The appellant is the widow of Kerala Varma Raja. The policy in question was an endowment policy obtained by the deceased in 1927 and was payable on the 5th April, 1952, or on the death of the assured earlier. On the 3rd July, 1933, the assured assigned this policy by an endorsement on the policy itself. This assignment was duly communicated to the insurance company and there registered, though as usual the company guarded itself from admitting the validity of the assignment. The assured died in 1933 and the decree under execution was passed against the appellant as his legal representative. The question does not now arise between the company and the assignee but between the assignee and a person who has obtained a decree against the assets of the assured.
3. The Court of first instance released the policy amount from attachment on the ground that by reason of the assignment the policy amount belonged to the assignee and did not form part of the estate of the assured at his death. The learned District Judge reversed this decision on the ground that the assignment was not an absolute or outright assignment taking effect at once but was only contingent; he thought it followed that the amount due to the assured under the policy formed part of the estate of the deceased. The decision of the learned District Judge is opposed to the judgment of this Court in Yacoob Sahib v. Pacha Bibi (1915) 38 I.C. 248. The only other reported decision on the point which has been brought to our notice is a decision of the Sind Judicial Commissioner's Court in Shamdas v. Savitribai A.I.R. 1937 Sind 181 and the principle of that decision is also in favour of the appellants' contention.
4. Learned Counsel for the respondent has contended that the endorsement on the policy is no more than a mandate or at best it operates only as a testamentary transfer and that no interest in the policy passed to the assignee during the lifetime of the assignor. He also repeated the argument which had found favour with the lower Court that the words of transfer did not amount to an absolute interest. The endorsement, which appears in a usual form suggested by the company, runs as follows:
In consideration of natural love and affection, I do hereby assign the benefit of all moneys to become payable Under the policy (reserving, to myself the right to receive in cash or apply in reduction of premia any bonuses that may be declared upon such policy from time to time) to my wife and declare that her receipt shall be a sufficient discharge to the company for the same, provided however that in the event of my wife predeceasing me or-in the event of my surviving the date on which the said policy, if so expressed, would mature, the benefit of the policy and the right to receive moneys thereunder shall revert to me as if this assignment has not been made.
5. In support of the first contention, respondent's learned 'Counsel relied upon the judgment of the Court of Appeal in England in In re Williams : Williams v. Ball (1917) 1 Ch. 1 and on some-observations of the Rangoon High Court in Ma Nu v. Ma Gun I.L.R.(1924) 2 Rang. 388. The language of the document which the Court had to construction the English case was quite different. The very point made in that connection in the English case was that the endorsement relied on did not purport to assign at all but only purported to authorise the named person to draw the insurance amount in. the event of the assured predeceasing her. It was significant that no notice of the so-called assignment had even been given to the insurance company in that case. Astbury, J., held that there were no present words of gift at all. In the Court of Appeal, the learned-Judges were inclined to construe the so-called endorsement as a mere power-of-attorney. Alternatively, they added that at best it might have operated to give to the named person an interest on the death of the assured if it had complied with the formalities required by law for a will. No help can be derived from that judgment in the construction of the terms of the endorsement in the present case, because the words here used are that the assured doth 'hereby assign the benefit of all money, etc., to the wife'. On these words it cannot be said that the endorsement amounted to a mere power-of-attorney or that the transfer was one in futuro. In the Rangoon case, Ma Nu v. Ma Gun I.L.R.(1924) 2 Rang. 388 the argument turned on the effect of a mere nomination. Reliance was placed by learned Counsel before us on the way that the observations in In re Williams : Williams v. Ball (1917) 1 Ch. 1 had been understood by the learned Judges of the Rangoon High Court. As we have dealt with the English case ourselves, the observations of the Rangoon High Court on that case cannot carry the matter further.
6. It was next argued that because in certain contingencies the assignee will not on the terms of the endorsement be entitled to receive the policy amount or the assignor might become entitled to recover the same, the transaction was only revocable and in that sense the disposition if any was only testamentary. This argument seems to us to confound a contingent transfer with a revocable transfer. Even this distinction is immaterial here, because on its true construction the endorsement in this case operates in our opinion as a present transfer in favour of the assignee, though provision has also been made for a reverter to the assignor, in certain contingencies. The provision for reverter only emphasises the immediate operativeness of the transfer. If the events that have happened have brought the reverter clause into operation, the creditors of the assured would no doubt be entitled to treat the policy amount as having become part of the estate of the assured. But it cannot be disputed that in the events that have happened the assignee is entitled to recover the policy amount and there is no scope for the operation of the reverter clause.
7. It was finally contended that an assignment of an actionable claim within the meaning of Section 130 of the Transfer of Property Act must be 'absolute' and that the assignment in the present case is not absolute. Reliance was placed in this connection on the observations of Beaman, J., in Haridas Lalji v. Narotam Raghavji (1911) 14 Bom. L.R. 237 . The learned Judge has not expressed, any final opinion on this point, in the case referred to. The question of the 'absolute' character of the transfer may be material when there is a dispute as to the transferee's right to sue the insurance company, no such question arises here. We may however observe that there is no possibility in this case, of the assignor and the assignee having fractional rights in the policy amount at one and the same time. The only qualification on the rights of the transferee (apart from the bonus amount with which we are not now concerned) is by way of a defeasance clause (cf. Section 31 of the Transfer of Property Act and Section 134 of the Succession Act). The result is that so long as the transferee's interest exists, she has the whole interest and when the defeasance clause comes into operation the interest of the person who takes under the defeasance clause is equally an absolute interest. We do not find anything in the terms of Section 130 of the Transfer of Property Act or in the principle underlying it that excludes a transfer of this kind from its scope.
8. As desired by Mr. Govinda Menon, the learned Counsel for the respondent, we wish to make it clear that this judgment will not apply to any amount that the deceased might be entitled to receive by way of bonus in respect of the policy, because the endorsement expressly reserves to the assignor the right to the bonus, so that he may, if he so desired, apply it in reduction of the premia. If the bonus has been appropriated by the assured himself towards the premia due on the policy, there will be nothing left for the assured or his creditors to claim. If on the other hand there is any sum remaining payable by way of bonus, that cannot be held to have passed under the assignment.
9. We set aside the decision of the learned District Judge and restore that of the District Munsif with costs here and in the Court below.