On 29th March 1910, one Bihari Lal Sircar insured his life for a sum of Rs. 500
at Hindustan Co-operative Insurance Society Ltd. According to the conditions
laid down in the policy, society guarantees that "if Mr. Bihari Lal (insured)
pays them Rs. 1910 every year on 5th of March, including the year of his death
the sum of Rs.21 and 11 annas only or in lieu of any such annual premium the
full number of installments thereof as may be agreed upon (of which agreement
the receipt granted by the Society shall be full.
Sufficient evidence then upon the proof to the satisfaction of the office
committee of society of the death of insured & the little of the policy the
Society will pay to Srimati Pramila Bala Dashi, wife of the insured (hereinafter
called the nominee at the head of the Society, in Calcutta or at the permanent
residence of the nominee whichever may be preferred the sum of Rs. 500 only
together with such additional sum or sums by way of profits as �according to the
Society's regulations may accrue & become payable in respect of the policy after
- the balance of the premium, if any payable in respect of the year of the
insured's death ; and
- also another sums or sums if any due from him to the Society"
Decided on:- 22 February, 1928
At Calcutta High Court
Bench: G C Rankin, C C Chose
Judgment: Charu Chunder Ghose.d.
Citations:- 114 Ind Case 658
Till death the insured paid all the premiums on time, leaving behind his widow
Pramila Bala Dashi (plaintiff) & his 3 sons. The heirs & the plaintiff claimed
the policy amount. It was observed that the Society was about to pay the claimed
amount but due to defendant 1 & defendant 2 who obtained an official order from
court against the heirs of the deceased & also defendant 3 who insisted on using
the payable insurance money for paying off of the 3 creditors the deceased owed.
After 3 defendants obtained a decree against the plaintiff's sons & the policy
Mrs. Pramila claimed under provisions of Code of civil Procedure but the
decision was not in her favor & the insurance money was distributed among the
defendants i.e. the creditors of the deceased Then she filed a case in Court of
First instance for the recovery of money & it was held that the money due under
the Policy became the property of the plaintiff, on the death of the deceased,
and did not form part of the assets of the estate left by him.?? The lower
Appellate court stated the decree of First court i.e. only Defendant 1 & 2 are
considered as appellants & Defendant 3 is dismissed as an appellant before them.
- Married Women's Property Act whether applicable or not in this case?
- Whether the wife of the deceased is entitled to realize the insurance money from Hindustan Co-operative Insurance society?
- Can the plaintiff being no party to the contract between the deceased &
Insurance society has the right to sue? (Section 2(d))
- Whether the deceased creditors were entitled to attach the insurance amount in execution of their decree under the Code of Civil Procedure?
Plaintiff was not a party of the contract made between deceased & the Insurance
society, but it can't be denied that she was the nominee of the deceased.
According to the English Law, if2 persons form a contract unorder to benefit the
3rd person who is not a party to the contract, then the 3rd person gam 'at sue
except the contracting party was a trustee of the 3rd person & the other
exception is for the benefit of the children from marriage asks to enforce the
contract under the marriage settlement.
Following the Khawaja Mohammad Khan vs Hussain Begum' it was sighted that if a
3rd party to the contract is the sole beneficiary of the amount then it may not
claim under any law but under Principle of Equity only. Also the married women's
Property Act 1874 doesn't applies to this case as it's only applicable to Muslim
As per Section 2(d) of Indian contract Act which ONLY talks about consideration
of both parties further limiting the scope that any new party which did not pay
any consideration isn't likely to be added as apart to the contract; so the
plaint lift being the widow of the deceased was benefitted from the contract but
can't claim performance as she was not a party of the same.
According to section 6, if a trust has been created in the favor of wife of the
deceased , then only she has the right to claim. But it's also stated in section
2(7) that this act is only applicable to Muslim married women & not to any bind
So the necessity of consideration for a party to be part of a contract is not
fulfilled in this case.
The appeal of the defendants succeeded with the cost entitled in the court & the
plaintiff failed to get the insurance amount.
The precedent of section 60 of civil procedure code was inapplicable in this
case as because it was mentioned that " a security for money or other saleable
property belonging to the judgement debtor over which he had a disposing power
which he might exercise for his own benefit's, so the defendants (creditors of
the deceased) had the right to take the money from the policy amount.
The final decision of the court was in favour of the defendants.
The insurance money was distributed among the Defendants to clear the credit of
Plaintiff being no party of the contract has no right to claim the insurance
amount as the Section(d of Indian contract Act says that any new party which has
no consideration with the contract can't be considered as a party to the same,
Regarding the Married Women's Property Act 1874, can't be applied in this ease
as this case is related to the Hindu community & this act is only applicable for
- Khawaja Mohammad Khan vs Hussain Begum, (1910) 12 Bom.L.R.638