UP News: The Lucknow Bench of Allahabad High Court ruled that the nominee of the insurance policy does not have ownership of the amount. Kusum’s petition was rejected and she was advised to take the matter to the Supreme Court.
The Lucknow Bench of the Allahabad High Court has given an important verdict. The High Court has clarified that the nominee of an insurance policy does not have ownership of the policy amount. The court said that it is not appropriate to consider the beneficiary as a ‘beneficiary nominee’ under the Insurance Act and on the other hand to keep the legal heirs out of it. The High Court considered the claim of the succession law to prevail over the provisions of the Insurance Act.
According to Section 39 (7), a nominee will have a beneficial right to the amount received from the insurer. The court said that before the amendment in this Act, the nominee of the policy was entitled to keep the amount under the benefit of the heir. Justice Pankaj Bhatia recently gave this decision on a petition filed by a woman Kusum from Unnao district of UP. Kusum was having a dispute with her son-in-law and daughter-in-law over the ownership of her daughter Ranjita’s insurance policies. Kusum had taken 15 life insurance policies in Ranjita’s name when she was unmarried. Later Ranjita got married and had a daughter. However, Ranjita died in 2011 when her daughter was 11 months old.
Kusum being the nominee of the insurance policies, claimed the amount of the policies. This was challenged by her son-in-law and granddaughter in civil court and the decision was in their favour. In the revision petition, the Unnao district judge ordered Kusum to deposit the amount of these insurance policies in the form of fixed deposit receipts (FDRs) in the name of the granddaughter until she attains majority.
After this, Kusum approached the High Court and argued that she is entitled to the amount under the policies because she is the nominee of that policy. However, the court dismissed the petition, considering the claim of the succession law to prevail over the provisions of the Insurance Act. However, the court also said that due to the contradictory decisions of different High Courts on this issue, it would be appropriate to take this matter to the Supreme Court.
