JUSTICE (R) ALI AKBAR QURESHI, CHAIRMAN. The petitioner, Muhammad Umar, who is son of the deceased/insured person (Muhammad Ayub), instituted this insurance petition to recover the policy proceeds of following two policies, purchased by his father from the respondent/company:-
1. On 28 October 2020, Mr. Abdul Ayub, father of the minor applicant, purchased a "Tabeer Takaful Plan" bearing membership No. 20350154, having his wife, Mst. Sobia Bibi/respondent No.3 as the nominee of the said membership plan with a sum covered for Rs. 5,00,000/- against basic contribution of Rs.50,000/- (the "Tabeer Takaful Plan).
2. On 10th October 2020, Mst. Sobia Bibi had also purchased an "Aiflat Takaful Plan" being Membership No.20350015, covering the deceased Mr. Abdul Ayub. The respondent No.3, was the participant and was also the nominee of the said plan with a sum covered of Rs.3,00,000/- against basis contribution of Rs. 30,000/- (the "Aafiat Takaful Plan).
Further, the father of the petitioner was also an employee in the respondents Nos.1 and 2's company as Assistant Branch Manager, and was covered by the company under group life insurance (Group Life Insurance Plan) and was insured for sum of Rs.8,00,000/-.. That the respondent No.3, who is step mother of the petitioner and also nominee; secretly and without informing or impleading the petitioner, filed the claim with the respondents to receive the policy proceeds to deprive the petitioner from his lawful right. The petitioner is the real and only son of the deceased and by this way, the respondent No.3 is only entitled to receive 1/8th share according to the principal of Muhammadan Law and lastly prayed that the policy proceeds of the aforementioned policies be given to petitioner and the respondent No.3 according to share as prescribed in the Muhammadan Law.
2. The respondents Nos.1 and 2 filed their written statement, admitting the claim of the petitioner and only contested the matter on the ground that under the rules of the company and terms of the policy, only the nominee (respondent No.3) is entitled to receive the total policy proceeds and the petitioner, although, is the real son of the deceased/insured person, is rot entitled to receive a single penny.
3. The learned counsel for the parties on 07.02.2023 while arguing the matter at preliminary stage stated as under. The order is reproduced:- Present:- Mr. Usman Ali Butt Adv: for the petitioner.
Barrister Hammad Ahmad for respondent.
Both the learned counsel for the parties on the last date of hearing unanimously pointed out that in this case only a legal question is involved which is as under :- Whether the nominee, 'mentioned in the policy documents, is entitled for policy proceeds, in presence of the legal heirs?
Both the learned counsel for the parties submits, that since a legal question is involved, therefore, they do not want to produce any type of evidence and elected to argue the matter on this legal issue.
In view of the above, let the case be fixed for final arguments on 08.02.2023.
Announced: Member Legal Chairman 07.02.2023
4. As regards respondent No.3, earlier she participated in the proceedings, but never filed the written reply and finally disappeared and proceeded against ex-part on 08.02.2023.
5. Learned counsel for the petitioner submits, that no doubt, the deceased father of the petitioner nominated as nominee to the respondent No.3, who is step-mother of the petitioner, but under the law declared by the superior courts, is not entitled to receive the total policy proceed in the presence of petitioner, who is one of the legal heirs being the only-real son of the deceased.
Learned counsel has relied upon 2005 SCMR 512, Mst. Ameer Khatoon v. Mst. Shamim Akhtar and others and finally submitted, that the role of the nominee as determined by the aforementioned esteemed judgment is to collect the policy proceeds and to distribute the same among the legal heirs of the deceased/insured person. Also submitted that the respondent No.3 being widow of the deceased is entitled to the extent of her share.
6. In response thereof learned counsel for the respondents Nos.1 and 2 vehemently argued, that only nominee is entitled to receive the total policy proceeds in view of section 72 of the Insurance Ordinance, 2000. Further argued, that the law declared in the judgment cited as PLD 1991 SC 731 is also squarely applicable in this case, however, the learned counsel did not deny the fact that the deceased/insured person purchased two policies and he was also covered by the company under the Group Life Insurance Plan. Also submitted, that the respondent/ company is ready to pay the fruits of the policies, including the group insurance to the nominee and not to the petitioner, who is albeit, the real son of the deceased/insured person.
7. Heard and record perused.
8. The Deeper dive into the documents and the arguments advance by the learned counsel for the parties reveals that the following questions need adjudication by this Tribunal:-
(i) Appointment of the nominee in the policy document by policy holder;
(ii) The Status-of the nominee to collect the policy proceeds and its distribution among the legal heirs, and whether nomination of itself does operate either as a gift;
(iii) Whether nominee can exclude all the legal heirs of the deceased insured person.
Section 72 of the Insurance Ordinance, 2000, empowers the policy holder, when effecting the policy or at any time before the policy matures for payment, nominate the person or the persons as nominee to whom the money secured by the policy shall be paid in the event of the death of the insured person. The proposition regarding the status of the nominee has been thrashed out and discussed in plethora of judgments delivered by the Hon'ble Superior Courts of the country. The Hon'ble Supreme Court of Pakistan in way back in 1974 in a landmark judgment (PLD 1974 SC 185, titled Mst. Amtal Habib and others v. Mst. Musarat Perveen and others) has held, that the nominee is only entitled to collect the policy proceeds as trustee for the benefits of all the legal heirs entitled to inheritance and cannot deprive the legal heirs of the nominator to inheritance,' the assets of the deceased under the law of succession applicable to the deceased. The learned counsel for the respondent cited PLD 1991 SC Page 731 titled Government of Pakistan v. Public at Large and submitted, that in this case, the Hon'ble Supreme Court of Pakistan has declared, that the amount of Group Insurance and Benevolent Fund, does not fall within the definition of the TARKA of the deceased. The afore referred esteemed judgment deals with the issue of Benevolent Fund, Provident Fund and the Group Insurance. No doubt, in the judgment supra it has been held that the group insurance and the benevolent fund are not the assets or TARKA of the deceased/employee, but respectfully submitted, that this judgment is not applicable in the present case as this case relates to life insurance policy and the nominee was appointed by the nominator under section 72 of the Insurance Ordinance, 2000, to fulfill the legal requirement. The status of nominee was again came under consideration in a case Mst. Ameeran Khatoon v. Mst. Shahmim Akhtar and others (2005 SCAM 512). In this judgment, the Hon'ble Supreme Court of Pakistan held as follows while keeping in view the earlier judgment, Government of Pakistan v. Public at Large PLC 1991 SC 731:- "applying above test on the facts of the instant case, we are persuaded to hold that deceased Muhammad Ayub was not entitled for the benevolent fund and group insurance during his life time and on his death, such amount shall be deemed to be owned by him thus they will devolve upon his legal heirs being his TARKA, therefore, the petitioner would not be entitled exclusively to claim these amounts except to the extent of her entitlement as per Shariat, with other legal heirs of the deceased, as it has been held by this court in the case of Mst. Amtal Habib and others v.
Mst. Musarat Perveen and others (PLD 1974 SC 185)".
9. In another unreported judgment titled as "State Life Insurance Corporation of Pakistan through Zonal Head Lahore v. Rabia Jamshaid and others" (C.P No. 1810/2011) the Hon'ble Supreme Court of Pakistan dealt with the status of the nominee in para No.5 in the following words:- It is by now settled that the status of the nominee is no better than that of a TRUSTEE. The purpose behind his nomination is to facilitate the process of disbursement of the amount, left behind the deceased, among his legal heirs. No nominee can claim that amount to the exclusion of other legal heirs. Once, it has been settled by the superior courts of the country that the status of a nominee is that of a trustee, no bank, financial institution or corporation is supposed to entertain the claim of a nominee without much questioning about that and without ascertaining who else besides the nominee is entitled thereto. There may be not by any illegality in disbursing such an amount to a nominee yet much greater care and circumspection are to be exercised before doing that. Else it would give rise to a multiplicity of litigation in one form or another. The petitioner which may have disbursed amount to the nominee on furnishing indemnity bond as is often done can recover it on the strength of the shares determined in the succession certificate. We, in the circumstances of the case, would not like to pass an order, which would expose the legal heirs of the person insured to yet another round of litigation. The impugned order in that background would nor got to the detriment of the petitioners. The judgments cited at the bar despite being relevant to the controversy urged before us don't call for the reversal of the impugned order. We, therefore, don't fell persuaded to grant leave to appeal".
10. In the afore referred judgment, the Hon'ble Supreme Court of Pakistan has further elaborated the law on the point of status of the nominee keeping in sight the earlier judgments of the superior courts of the country. There are also some other judgments referred at the bar, wherein same question was discussed and finally concluded that the status of the nominee is simply to collect the policy, proceeds being trustee and to disbursed the same among the legal heirs of the deceased/insured.
11. Learned counsel for the respondent while interpreting the terms, group insurance, benevolent fund and provident fund, has relied upon PLD 1991 SC P-731, wherein, the Hon'ble Supreme Court of Pakistan declared, that the group insurance, benevolent fund etc. does not fall in the definition of the assets/TARKA and therefore, the heirs of the deceased are not entitled to inherent out of the proceeds of the group insurance etc. With all humility, it is submitted that the Hon'ble Supreme Court of Pakistan in a judgment reported as Mst. Ameeran Khatoon v. Mst. Shahmim Akhtar and others (2005 SCMR 512) dealt with this question, keeping insight the earlier judgment titled Government of Pakistan v. Public at Large (PLD 1991 P-731) has held that the proceeds/amount of benevolent fund and group insurance being "TARKA" of deceased will devolve upon his legal heirs and in other words, the nominee would not be entitled exclusively to claim these amounts except to the extent of her entitlement as per Sharia with other legal heirs of the deceased.
12. The learned counsel for the respondent also submitted a comparison of the provisions of the Insurance Ordinance, 2000, of the Insurance Act, 1938, as has been amended by Insurance Laws (Amendment Act, 2015). In Pakistani Laws, section 72 of the Insurance Ordinance, 2000, authorizes and empowers the policy holder to nominate the person or persons to whom the money secured by the policy shall be paid in the event of his death, but this provision of law does not exclude the legal heirs to inherent the assets including policy proceed of the deceased according to the principle of Muhammdan Law, because of the reason that there is a constitutional guarantee enunciated in the constitution by the people of Pakistan, that no law can be made which is contrary to the injunctions of Quran and Sunnah. It is a Quranic injunction that the legal heirs of a Muslim deceased, will inherent their assets according to the principle of Muhammdan Law, therefore, for this reason, the Hon'ble Superior Courts of the country finally held, that the nominee is only supposed to collect the policy proceed and to disburse among the legal heirs and further the nominee in any case shall not exclude or deprive the legal heirs by the fruits of the policy.
13. In view of the above, and keeping in view the facts and circumstances of this case that this petition is allowed and it is held that the nominee is only entitled to receive the policy proceeds/secured amount and to disburse the same among the legal heirs according to the principle of Sheria. Since, there is, dispute between the petitioner and nominee, who are otherwise, legal heirs of deceased insured, therefore, the respondent/company is ordered to pay the amount of the policy proceeds to the petitioner and respondent No.3 according to their shares, as described in the law of inheritance.