People nominated by government servants to collect terminal benefits in the event of their death in harness cannot claim a right over the entire quantum of money, irrespective of the right of other legal heirs of the deceased to receive a part of the amount, the Madras High Court Bench here has held.
Justice S. Vimala passed the order while allowing a writ petition filed by P. Panchali, mother of a Tamil Nadu Generation and Distribution Corporation (TANGEDCO) Field Assistant P. Sivalingam who died here on March 4 after having nominated his wife in his Service Register, to receive the terminal benefits after his lifetime.
The judge set aside an order passed by the Executive Engineer, Tangedco, Madurai East Division, refusing to disburse 50 per cent of the terminal benefits to the petitioner and directed the officer to disburse the money in equal proportion to the petitioner and her daughter-in-law in two weeks.
“Whether the nominee is a legatee or a trustee in respect of terminal benefits of the deceased is the issue raised in this case. The contention of Tangedco is that the nominee is the owner of the property and, therefore, the nominee alone is entitled to get the benefit but the contention of the petitioner is that the nominee is not the owner of the asset. It is also contended that unless rules of Tangedco provide that they will override succession laws, legal heirs also would be entitled to terminal benefits and not the nominee alone. Whose contention is right is the issue to be decided in this case,” Ms. Justice Vimala said before ruling in favour of the petitioner.
Taking a cue from a 2009 Supreme Court judgment which said: “the nomination only indicates the hand which is authorised to receive the amount on payment of which the insurer gets a valid discharge of its liability under the policy” but “the amount can be claimed by the heirs of the assured in accordance with the law of succession,” the judge held that the petitioner was entitled to 50 per cent of the benefits.
