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Judgment
Gokulakrishnan, C.J.—This letters Patent Appeal filed by the appellant, National Insurance Co. Ltd., is directed against the order passed by
the learned single judge of this court in Special Civil Application No. 4589 of 1985. Respondent No. 1 Herein straightaway moved the learned
single judge under article 226 of the Constitution of India for a writ of mandamus or any other appropriate writ, order direction, directing the
appellant insurance company to pay a sum of Rs. 1,00,000 to respondent No. 1 payable under the personal accident policy of her husband. The
learned single judge allowed the said petition and directed such payment, claimed by respondent No. 1 subject to certain conditions regarding
obtaining a declaration from the competent court that she is the guardian of the property of the two minors and also a direction from the said court
to deal with 2/3rds share of the amount that is payable to the said minors. The learned Advocate - General, appearing for the appellant insurance
company, pointed out the decision in LIC of India v Kiran Sinha AIR 1985 SC 1265, and submitted that the order passed by the learned single
judge cannot be sustained in view of the said judgment. In the said judgment, the Supreme Court has specifically held as follows (p.1265):
We have heard the learned Attorney-General and Shri A. K. Sen, learned counsel fir respondent, The High Court could not have, in the
circumstances of this case, directed the payment of the money claimed under the insurance policies in question in a petition filed under article 226
of the Constitution. The only remedy available to the respondent in this case was a suit before a civil court. The judgment of the High Court is,
therefore, set aside.
Following the aforesaid decision, this letters patent Appeal has to be allowed. The result will be that Special Civil Application No.4589 of 1985
will stand dismissed.
Nevertheless, the learned Advocate-General, appearing for the appellant insurance company, states that the amount of Rs.1,00,000 being the
amount claimed by respondent No.1 herein has already been deposited in this court. On behalf of the appellant insurance company, he further
states that the said amount may be ordered to be paid over to respondent No.1 herein by way of compensation claimed by her. Learned counsel
appearing for respondent No.1 states that the said amount may be invested in a fixed deposit till the two minors who have a share in the said
amount attain majority. In view of these statements made by learned counsel appearing for the respective parties, instead of driving respondent
No.1 to a civil suit, the matter can be disposed of here itself on the following terms:
The amount of Rs. 1,00,000 now lying deposited in the High Court will be invested in a fixed deposit for a period of two years in a nationalised
bank at the choice of respondent No. 1, by the Registrar of this court in the names of respondent No. 1 will and the two minors, within a period of
one week from today. The said fixed deposit will be renewed on expiry of the period of two years till the two minors attain majority. Respondent
No.1 is at liberty to withdraw the interest which may accrue due on the said fixed deposit without giving any security. Respondent No. 1 will also
execute a bond and file the same in this court undertaking that she will indemnify the appellant insurance company in respect of claims which may
be made by third parties in respect of the said amount of Rs.1,00,000 which is directed to be invested on behalf of the respondent and her two
minors. Such indemnity bond has to be filed before the amount is invested in a nationalised bank by the Registrar.
This appeal is allowed to the aforesaid extent only.