Report No. 66
8.36. Calcutta case.-
In one Calcutta Case1, the nomination in the endowment insurance policy of the deceased was as follows: "I nominate my wife and my son-in-law, the survivor or survivors, as the persons to receive the moneys under the above policy in the event of my prior death."
It was argued by the widow that moneys payable to her under the terms of the above nomination did not form part of the estate of the deceased judgment-debtor, The Calcutta High Court held that section 39, Insurance Act, conferred on the nominee the right to receive the insurance money as between such nominee and the Insurance Company, but it did not provide for the title of ownership of that money in general. It was held:
"such insurance moneys really belonged to the estate of the assured and continued to do so. It only provided, in the event of the death occurring before the period of endowment was over, who should receive the money in place of the assured. The title to receive the money does not necessarily create a title in rem to that money which can be said to be good as against the whole world."
It was also held that the terms of nomination in this case did not show that the policy was expressed on the face of it to be for the benefit of the wife within the meaning of section 6, Married Women's Property Act. The terms of nomination here were held to be nomination simpliciter, which comes under section 39, Insurance Act. Here the nomination was not for wife and or children, but joint nominee, one being the wife and the other the son-in-law.
The court explained why section 39, Insurance Act, did not apply to trusts created under section 6, Married Women's Property Act. Such trusts are expressly said to he beyond the control of the policy-holder, and are expressly said not to form part of the estate of the policy-holder. But the policy-holder cannot have the best of both the worlds, namely-on the one hand, the policy-holder to have full right of disposition in spite of the "nomination" and, at the same time, the nominee to have title to the money. The court, therefore, dismissed the application of the widow, who was a mere nominee.
1. Ramballav v. Gangadhar, AIR 1956 Cal 275.