1. This is is a petition for succession certificate by the step-mother, full-brother, stepbrothers and step-sisters of deceased Zaibunnissa Begum in respect of a 3/4th share in regard to two insurance policies viz., Policy No. 227835 for Rs. 2000 with the Oriental Life Assurance Company Ltd., and Policy No. 25065 for Rs. 3000/- with the United India Life Assurance Company Ltd. This petition is opposed by the heirs of the deceased Zaibunnissa's husband Mohamed Abdulla, the assured under these policies.
2. The facts are: Mohamed Abdulla who was employed in the Prohibition Department took out these two policies maturing after a stated period or payable at death. He assigned on 9-10-1928 the policy taken with the Oriental Insurance Company in favour of his wife Zaibunnissa Begum. The endorsement of assignment recites that the assignment was made out of natural love and affection and that the benefits under the policy are to revert to the assignor or to his estate on the previous death of the assignee or on the assignor surviving the period of maturity, if any.
In the case of the policy taken with the United India Assurance Company, though the petition has wrongly stated that a similar assignment was made in favour of the wife, it is now found from the letter dated 24-6-1954 of that Company that the policy had been assigned on 1-11-1935 by the assured in favour of the Secretary of State for India in Council now represented by the President of the Indian Union and now actually in the custody of the Accountant-General, Madras. It is obvious that this assignment has been made in favour of the Government as the assured must have been paying the premium thereunder from out of his monthly provident fund contributions. This Mohamed Abdulla died on 22-8-1952 long surviving his wife Zaibunnissa Begum who died on 24-3-1943. The dispute between the petitioners and objectors is that the petitioners claiming to be the heirs of this Zaibunnissa claim 3/4th of the amount and the objectors claiming to be the heirs of Mohamed Abdulla state that the petitioners are not entitled to more than one-half. There is no dispute that if the petitioner's claim as heirs of Zaibunnissa, their shares will amount to 3/4th and if they claim as heirs of Abdullah, their shares will amount to 1/2.
3. The case for the petitioners is that on account of these assignments which according to them were both in favour of Zaibunnissa, she has got a vested interest in the amounts covered by the two policies and that on her death the amounts due to her are collectable by her heirs. I have already pointed out that in the case of the United India policy the assignment bus been made in favour of the Government and not in favour of the wife. Therefore, on the death of Mohamed Abdulla it is only his heirs who will be entitled thereto, naturally subject to the rights of the Government, if any. Therefore the succession certificate can be granted to the petitioners on the foot of their being the heirs of Mohamed Abdulla in regard to the United India policy in the following form viz., that succession certificate will be issued in their names with a rider added that the insurance amount he directly be made payable into this Court and that on its being so deposited the petitioners will be entitled to draw one-half of the amount and the other half will be allowed to be drawn by the respondents on payment to the petitioners one-half of the expenses incurred by them for obtaining the succession certificate.
4. In regard to the Oriental policy, which has been assigned to the wife who predeceased her husband, the assured, the law governing the assignment is Section 130, T. P. Act and not Section 38, Insurance Act, 1938. Before the enactment of Section 38, transfer of a life insurance policy constituting as it does actionable claim was governed by Section 130, T. P. Act; -- 'Mulraj Khatau v. Vishwanath Prabhuram', 37 Bom 198 (A); -- 'Shamdas v. Savitribai', AIR 1937 Sind 181 (B); -- 'Dinbai Hormasji v. Bamansha Jamasji', AIR 1934 Bom 298 (C). On such a conditional assignment it is settled law that the assured created an immediate vested interest in the assignee and such an assignment is not revokable. The effect of an assignment is, it operates to completely divest the assignor of any right under it. ('Rayner v. Preston', (1881) 18 Ch D 1 (D); 37 Bom 198 (A)). In other words the policy became the asset of the assignee and ceases to be that of the assignor. This is the basis of the line of decision in -- 'Lakshmi Kntty v. Vishnu Nambison', AIR 1939 Mad 411 (E) followed in -- 'Bai Lakshmi v. Jaswantlal', : AIR1947Bom369 (F). The only effect of the condition was to make the assignment inoperative upon the subsequent happening of either of the two contingencies. Section 38(7), Insurance Act, states:
'Notwithstanding any law or custom having the force of law to the contrary, an assignment in favour of a person made with the condition that it shall be inoperative or that the interest shall pass to some other person on the happening of a specified event during the lifetime of the person whose life is insured, and an assignment in favour of the survivor or survivors of a number of persons, shall be valid.'
But even prior to the enactment of Section 38(7), an assignment of a life policy on condition that the policy should revert to the assured if the assignee predeceased him before maturity was valid in law: -- 'Soma Shekhara Rao v. K. S. Mishra', (G). See also : AIR1947Bom369 (F). The only difficulty which arose and which has been sought to be set aright by Section 38(7) is as regards a Muhammadan assured.
5. Much difficulty was felt when a Muhammadan policy-holder executed such an assignment, as under the rules of the Muhammadan Law conditions to gifts are void: -- 'Abdul Karim v. Abdul', 28 All 342 (H); -- 'Amtul Nissa v. Mir Nuruddin', 22 Bom 489 (I); -- 'Yusuf Ali v. Collector of Tipperah', 9 Cal 138 (J); -- 'Chekkone Kutti v. Ahmad', 10 Mad 196 (K); -- 'Roshan v. Hussein', 5 Suth WR 4 (L) affirmed as -- 'Khajooroonissa v. Rowshan Jehan', 3 Ind App 291 (M). These conditional assignments are construed as contingent gifts under Mohammadan Law. See K. P. Saksena, Muslim Law as administered in India and Pakistan, Third Edition, 1949 (N. M. tripathi) and Co., p. 209; Mulla's Muhammadan Law, Thirteenth Edition, p. 150; Wilson's Anglo-Muhammadan Law, Fifth Edition, p. 334; Tyabji Muhammadan Law (Third Edition), p. 350 (originals referred to Baillie, 1,508 and Macnaughton 50). This is especially the case where the assignment was made out of natural love and affection.
It would be different if the assignment was made by a Muhammadan policy-holder to his wife by way of dower. But there can be no presumption of the assignment being in lieu of dower where on the face of it the assignment is for consideration of natural love and affection and does not state to have been made in consideration of dower: -- 'Sadiq Ali v. Zahida Begum : AIR1939All744 . It should be remembered, however, that though under the rules of the Muhammadan Law a condition to a gift is considered to be void, the gift itself is not affected thereby. The condition goes but the gift remains and takes effect as an absolute one: The Muhammadan Law defeats not the grant but the condition though this does not mean that conditions of some kind which do not concern us here may be annexed to gifts (Tyabji, ibid Section 348, p. 357). Under present Sub-section (7) to Section 38, Indian Insurance Act the defect of contingency is validated: AIR 1939 Mad 411 (E).
An assignment effected prior to the coming into force of the Insurance Act would not however be governed by the present Sub-section (7); vide Sub-section (6) as in the present case. Section 38(7) has no retrospective effect. I have already pointed out that the right of the assured not governed by the Muhammadan Law, to make a conditional assign-ment of this nature has been recognised as valid from even before passing of the Insurance Act: : AIR1939All744 . There-fore, as the assignment of this Oriental policy has been made prior to the coming into operation of Section 38, Indian Insurance Act, conditional assignment will have to be construed as contingent gift with the condition going and the gift remaining and taking effect as an absolute one.
6. In this view the petitioners will be entitled to succession certificate in respect of 3/4th of the amount in respect of this policy and the succession certificate issued in regard to this debt will be in the following terms viz., that it will be issued subject to the amount being put into Court directly by the insurance company and the petitioners being at liberty to draw 3/4th of the amount and the respondents the remaining one-fourth after paying the petitioners one-fourth of the expenses incurred by them for obtaining this succession certificate (No security).
7. This petition is disposed of accordingly.