Conflicting Views By Various Courts Create Confusion: Karnataka High Court Explains Points For Better Practices While Enacting Or Amending Law
The Karnataka High Court dismissed an Appeal in a case regarding the conflicting claims of a nominee and an heir under personal law, over the benefits flowing from a life insurance policy.
The Karnataka High Court has explained certain important points for better practices while enacting or amending any law.
The Dharwad Bench was dealing with an Appeal relating to a case which was about the conflicting claims of a nominee and an heir under personal law, over the benefits flowing from a life insurance policy.
Being conscious of the fact that the Courts do not have legislative power, a Single Bench of Justice Anant Ramanath Hegde took note of the following things to invite the attention of the stakeholders to debate/deliberate and to come out with better practices when it comes to enacting or amending a law –
(i) The Objects and Reasons for enacting or amending a law must contain a clear unambiguous statements as to why the law is introduced, what is the mischief sought to be remedied by way of amendment.
(ii) Whenever the law is amended, the law must in clear specific terms state as to whether the amendment is prospective or retrospective in its operation. Whether the amendment is prospective or retrospective should not be left to speculation or interpretation by resorting to tools/rules of interpretation by interpreting the terms like “inserted” “amended” “substituted” and the like which are used to amend the law. Rules of interpretation cannot have a universal application and it will have its own limitation in ascertaining the intention of the legislator.
(iii) Acts like the Indian Contract Act, Transfer of Property Act, Indian Evidence Act etc have plenty of illustrations which explain the law with clarity and precision. Wherever needed, the law should be explained with illustrations which provide clarity to the provision of law. The practice appears to have been completely forgotten, and it is high time that such good practice is revived to bring in much needed clarity in law.
(iv) Whenever different High Courts take a different view in interpreting the law, the law maker should spring into action and clarify the position by way of an amendment and should not wait for the issue to be resolved by the Apex Court as the process may take a considerably long time. To cite an example, the controversy, whether Section 6 of the Hindu Succession Act, 1956 as amended in 2005, is prospective or retrospective is finally resolved in 2019, 14 years after the amendment. As soon as different High Courts took a different view, an amendment clarifying the position would ensure the timely resolution of many cases.
(v) There should be a conscious endeavour to frame/structure the law in simplest and easy to follow short sentences. The wholly undesirable practice of framing law, with long and complicated sentences is to be discarded at any cost. After all, the law is meant for a common man to understand and follow. The law should never be a riddle or puzzle to be solved by a trained legal mind.
Advocates J.S. Shetty and N.M. Patil appeared for the Appellant while Advocates Chandrashekhar M. Hosmani and Mrutyunjaya Tata Bangi appeared for the Respondents.
Case Background
Almost similar claims over the estate covered by nomination under different provisions of law, have been the subject matter of discussion in multiple Courts. On innumerable occasions, the Courts have held that nomination cannot override the provisions relating to succession. In this case, the insured who had subscribed to two Life Insurance Policies died in 2019 and was a bachelor when the policies were issued. He had nominated his mother as the nominee to the benefits (Rs. 19,00,000/- and Rs. 2,00,000/-) flowing from the policies in the event of his death. By the time, the insured died, he had married and had a son from the marriage.
However, the insured had not effected any changes in the nomination to the said policies. The Plaintiffs i.e., the widow and minor son of the insured, filed a Suit against his mother, claiming share in the benefits flowing from the insurance policies. The Suit was decreed and the Trial Court rejected the nominee’s claim for entire benefit under the policies. The Court held that each of the Plaintiffs and the Defendant is entitled to 1/3rd share despite nomination. Being aggrieved, the Defendant filed an Appeal before the High Court.
Reasoning
The High Court in the above context of the case, observed, “It is required to be emphasised that the Apex Court and various Courts, despite the use of the expression “vest absolutely” or “Notwithstanding anything contained in any law for the time being in force” and “to the exclusion of all” in various provisions of law governing nominations have held that such provisions have to be understood in the background of the scheme of the Act in which the provisions relating to nomination are found. The contentions suggesting nomination overriding the provisions of law have been rejected, in various decisions.”
The Court noted that the Insurance Act, 1938 does not deal with issues relating to Succession and the whole object of providing insurance is to cover the risk of the “family of the insured”.
“Treating certain class of nominee/s as exclusive successors to the benefit flowing from the policy, to the exclusion of heirs who are not named in the nomination form will defeat the very purpose of the Act of 1938 which seeks to cover the risk of the family/dependants of the policy holder”, it added.
The Court also said that it is difficult to hold that the Parliament has enacted a parallel law relating to succession in so far as benefits flowing from the policy of insurance.
“One comes across many situations where various Courts express different views interpreting the same law. This happens because of ambiguity or lack of clarity in the language of law. The provision relating to nomination vis-à-vis law relating to succession is one such instance. Conflicting views by various Courts create confusion, lead to multiplicity of litigation, and cause delays in the disposal of cases”, it further remarked.
The Court held that since Section 39 of the Insurance Act does not override the provisions of Hindu Succession Act, 1956, the Appellant who is the nominee described in Section 39 (7) of the Insurance Act cannot claim absolute ownership over the benefits flowing from the insurance policy as other Class-I heirs of the deceased have also laid a claim over the benefits flowing from the policy.
“Though the Trial Court has not noticed the amended Section 39 and decreed the suit for partition by referring to un-amended Section 39, this Court is confirming the judgment and decree for the reasons already recorded”, it concluded.
Accordingly, the High Court dismissed the Appeal and directed the Respondents to deposit the benefits flowing from the insurance policies before the Trial Court along with interest, if any.
Cause Title- Neelavva @ Neelamma v. Chandravva @ Chandrakala @ Hema & Ors. (Case Number: RFA NO.100471 OF 2023)
