Smt. Daruvuri Subbayamma v. Life Insurance Corporation Of India,

THE HON'BLE SRI JUSTI CE A.V. SESHA SAI W RI T PETI TI ON No.9 6 5 1 OF 2 0 1 2 ORDER:

Heard Sri Ganta Rama Rao, learned Senior Counsel for the petitioners and Sri Karra Srinivas for the respondent-Life Insurance Corporation of India.

02.

The son of the 1st petitioner and who is father of petitioners 2 and 3, namely D.Sudhakar Rao had taken LIC policy for an amount of Rs.10,00,000/ -. The said policyholder had showed the name of his wife Smt D.Anitha as nominee for the said policy. The said policy was taken on 27-03-2007 for an amount of Rs.10,00,000/ -. In a road accident D.Sudhakar Rao and his wife died. Subsequent to their death, a claim was made for the payment of the amount. In response to the said claim, the respondent- Corporation by way of letter dated 06-09-2010 requested the 1st petitioner herein to submit a succession certificate from a court of law on the ground that nominee under the said policy also died along with the policyholder. On 07-092011 the 1st petitioner herein who is the mother of D.

Sudhakar Rao got issued a legal notice asking the respondent-Corporation to make necessary arrangements for payment of the claim amount while stating therein that the claim amount being neither debt nor security as defined under the Indian Succession Act and there was no need to submit a succession certificate. Thereafter, on 12-09-2011 responding to the said legal notice, respondent-Corporation asked for correct policy number to proceed further in the matter.

rejoinder was also got sent by the 1st petitioner through her counsel to the respondent-Corporation. In response to the same, on 27-10-2011 the respondent-Corporation turned down the claim with an endorsement that the 1st petitioner had to obtain a succession certificate from a competent court of law and to submit the same in order to settle the monies due from the respondent-Corporation on respect of policy No.645611111. According to the learned counsel for the petitioners, the said action on the part of the respondent-Corporation is highly illegal, arbitrary and violative of Article 14 of the Constitution of India. It is further submitted that in the absence of rival claim on the policy amount, there is absolutely no justification on the part of the respondent-Corporation to insist on production of a succession certificate.

It is further submitted that except the respondent-Corporation other banks wherever amounts of the deceased were lying paid the amounts. It is further submitted that though the 1st petitioner herein produced the proper person and family members certificates dated 30-01-2008, the respondent-Corporation did not finalise the claim. 03.

On the contrary, it is submitted by Sri Karra Srinivas, learned Standing Counsel for the respondent-Corporation that there is no illegality nor there exists any procedural infirmity in the impugned action and in the absence of the same, the action impugned is not amenable for any judicial review under Article 226 of the Constitution of India. It is further submitted that there is no illegality on the part of the respondentCorporation in settling the claim.

04.

There is absolutely no dispute with regard to reality nor there is any objection of the respondent-Corporation that there is a rival claim on the claim made by the petitioners herein. It is also not in dispute that 1st petitioner herein produced proper person and family members certificates before the respondentCorporation. The material available on record discloses that obviously by the time claim was made by the 1st petitioner herein, petitioners 2 and 3 were minors and continued to be minors till the date of filing the writ petition also. Evidently, the said status perhaps prompted the respondent-Corporation to insist on the succession certificate. Admittedly, petitioners 2 and 3 have attained majority now. Section 39 of the Insurance Act, 1938 deals with the nomination by policyholder.

Sub-section (5) of Section 39 of the Insurance Act,1938 reads as under: - "Where the policy matures for payment during the lifetime of the person whose life is insured or where the nominee or, if there are more nominees than one, all the nominees die before the policy matures for payment, the amount secured by the policy shall be payable to the policyholder or his heirs or legal representatives or the holder of a succession certificate, as the case may be." 05.

Therefore, it is very much clear from the above provision of law that the amount covered by the policy shall be payable to the policyholder or his heirs or legal representatives or the holder of a succession certificate, as the case may be. In the instant case, as the petitioners 2 and 3 have attained majority now, they can make representation along with 1st petitioner for settlement of their claim in accordance with the said provision of law by enclosing all necessary documents as were submitted earlier by the 1st petitioner for consideration of the respondent.

For the aforesaid reasons, the writ petition is disposed of keeping it open for the petitioners herein to make a representation to the respondent-Corporation herein by enclosing all the relevant certificates/ documents within a period of one month from the date of receipt of a copy of this order and if any such representation is made within the time stipulated, the same be considered and appropriate action be taken in accordance with the above said provision of law within a period of two months thereafter. No costs. Miscellaneous petitions pending, if any, shall stand closed.

_ _ _ _ _ _ _ _ _ _ _ _ _ A.V.SESHA SAI , J 2 8 .0 6 .2 0 1 7 TSNR