Report No. 66
8.35. Illustrative cases from Andhra.-
The facts in one Andhra case1 were as follows:-
A debtor, executed a promissory note in favour of the appellant in 1950. A decree was obtained by the appellant in 1952 against the widow and son of the debtor, who had died during the pendency of the suit. In execution of the decree, the appellant sought to attach a life policy taken by the debtor on his own life. The widow raised an objection that having been nominated under section 39 of the Insurance Act, 1938, she was entitled to the proceeds thereof and her husband's creditor had no right. This objection was accepted by the courts below. The decree-holder appealed to the High Court. The High Court held that under section 39 of the Insurance Act, 1938, the holder of the policy continues to have an interest in the policy notwithstanding the nomination made by him. The nomination does not divest him of the rights in the policy, and he retains disposing power over it.
The title does not pass to the nominee by reason of the nomination. Consequently, the nominee gets the property in the policy subjects to all the liabilities of the policy-holder. It was also held that under sections 39(2) and 39(4) "it is competent for the holder of the policy to bequeath to somebody or make an assignment of it, and this automatically cancels the nomination, which implies that a nominee has no vested right in the document." "It is not necessary for me to consider whether section 6 of the Married Women's Property Act could apply to a nomination under section 39 of the Insurance Act, in view of the proviso to sub-section (7). It is manifest that it does not apply to a nomination."
Therefore, section 6 did not apply in this case, and the nominee's right was subject to the discharge of any liability of her husband.
1. Brahmamma v. Venkatramana Rao, AIR 1957 AP 75.