LAHORE: A higher appellate forum has held that the insurance policy proceeds fall within the definition of “tarka” of the policyholder after his death.

According to details, the mother of an insurance policy holder had filed an application for the issuance of succession certificate by maintaining that her deceased son had obtained an insurance policy worth Rs1,000,000.

Being mother and one of the legal heirs of the deceased, she was entitled to inherit 1/6th share out of the policy amount, the application added.

However, the preliminary appellate forum dismissed her application and directed the insurance company to pay the entire amount to the wife of the deceased being nominee.

An appeal against this order met the same date on the ground that the amount of the insurance policy does not fall within the ambit of “Tarka”, therefore, not liable to be inherited to the legal heirs and only the nominee is entitled to receive the amount of said life insurance policy.

But the relevant higher appellate forum turned down the orders below while maintaining that the concept of nominee is alien to Muslim law, according to which the legal heirs are the only persons entitled to receive the property left by their predecessor and no Muslim heir can exclude the other heir on the ground that he is a nominee.

It further held that it is an established principle of law that a nominee, if appointed, does not become the sole owner of the assets left by the deceased but he/she is only authorized to collect the amount or to hold the property of the deceased as an administrator and then to distribute the same among all the legal heirs.

The forum further held that the nomination does not make the nominee as donee nor the nomination amounts to a gift, in the absence of delivery of possession of the property gifted.

The nominee cannot claim as exclusive owner of the amount of the insurance policy. In the light of Muslim Law of Inheritance, all the legal heirs of the deceased are entitled to receive the property (Tarka) left by the deceased, according to their shares.

Copyright Business Recorder, 2025