Mr. J who governed by the Hindu Succession Act, 1956, died intestate on June 15, 1967 leaving behind his son. Mr. A (plaintiff No. 2), his widow, Mrs U (defendant) and his mother Mrs S (plaintiff No. 1) as his heirs. He

The fundamental principle applicable in a life insurance policy is insurable interest and secondly, Utmost good faith . While Insurable interest refers to the legal right of the insured to take a policy, utmost good faith refers to the materiality in the disclosures made by the policyholder in the application. This principle mandates the policyholder to make complete disclosure of all material facts affecting the insurance policy. With reference to the case, as cited before, the nominee under section 39 of the Act is nothing more than an agent to receive the money due under a life insurance policy. In such circumstances, the money remains the property of the assured during his lifetime and on his death forms part of his estate subject to the law or succession applicable to him. There are vital differences between the nomination contemplated under Section 39 of the Act and the nomination contemplated under the proviso to Section 44(2) of the Act. In the first place, the sum assured, with which alone Section 39 was concerned was to be paid in the event of the death of the assured under the terms of the contract entered into between the insurer and the assured and consequently it was the contractual right which remained vested in the insured with reference to which the nomination happened to be made. It should be pointed out that the nomination as well as the liability on the part of the insurer to pay the sum assured become effective simultaneously namely at the moment of the death of the assured. So long as he was alive the money was not payable to him, in the case of a whole life policy and equally, having regard to the language of Section 39(1) of the Act the nominee's right to receive the money arose only on the death of the assured. It was in this context that the Court took the view that the title remained with the estate of the deceased, and therefore with the heirs of the deceased that the nomination did not in any way affect the title and that it merely clothed the nominee with the right to receive the amount from the insurer. On the other hand the provisions and purport of Section 44 of the Act are different. In the first place under Section 44 it was a statutory right conferred on the agent to receive the commission on the renewal premium notwithstanding the termination of the agreement between the agent and the insurer, which provided for the payment of such commission on the renewal premium. Section 44 provides for the payment or the commission to the agent during his lifetime only and does not contemplate the contingency of his death and the commission being paid to anybody even after his death. Thus it was not the general law of inheritance which conferred title on the heirs of the deceased insurance agent to receive the commission on the renewal premium, but it was only the particular statutory provision under the Insurance Act. Therefore. the Court held the opinion that the meaning of section 39 or the Act and hold that a mere nomination made under section 39 of the Act does not have the effect or conferring on the nominee any beneficial interest in the amount payable under the life insurance policy on the death of the assured. The nomination only indicates the hand which is authorised to receive the amount on the payment or which the insurer gets a valid discharge of its liability under the policy. The amount, however, can be claimed by the heirs of the assured in accordance with the law of succession governing them. In the present case, it is not disputed that the plaintiffs (Mr. J's mother and son) are under the law of succession governing them each entitled to 1/3rd share in the estate of the deceased. Therefore, it was decided by the Court that each of the plaintiffs (Mother and Son) is entitled to 1/3rd share in the amount received under the insurance policies in question and the interest which may have been earned by its investment. This confirms the validity of the plaintiffs' claim for compensation.