Muhammad Naeem Haider etc Vs Mst. Shazia Riaz & others

JUDGMENT SHEET

PESHAWAR HIGH COURT

ABBOTTABAD BENCH

(Judicial Department)

W.P. No. 1267-A/2021

Muhammad Naeem Haider etc.

---- (Petitioners)

V/S

Mst. Shazia Riaz & others.

---- (Respondents)

Present: Malik Asif Ali, Advocate, for petitioner.

Haji Sabir Hussain Tanoli & Hafiz Iftikhar Ahmed, Advocate, for respondents.

Date of hearing: 02.04.2026

JUDGMENT

SYED MUDASSER AMEER, J.- Through this petition filed under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973, the petitioners have called in question the judgment dated 01.07.2021 passed by the learned Additional District Judge-VIII, Abbottabad whereby the appeal of the petitioners was dismissed and the order dated 14.10.2019 passed by the learned Senior Civil Judge, Abbottabad was upheld, through which the succession certificate earlier issued in respect of the estate of

the deceased Muhammad Naveed Haider was revoked.

2.Briefly stated, Muhammad Naveed Haider son of Ghulam Haider died on 08.12.2016 leaving behind his legal heirs including the present petitioners and respondent No.1, who is the widow of the deceased. After his death, the petitioners instituted proceedings for grant of succession certificate in respect of the assets left by the deceased. The learned Senior Civil Judge, Abbottabad vide order dated 22.03.2017 allowed the petition and issued succession certificate in favour of all the legal heirs.

3.Respondent No.1 subsequently filed an application seeking revocation of the said succession certificate. Her case was that the deceased during his lifetime had obtained certain insurance/takaful policies and had nominated her as nominee therein. According to her, the proceeds of those policies were exclusively payable to her and did not form part of the estate of the deceased. The learned trial court accepted the application and cancelled the succession certificate vide order dated 27.01.2018. In appeal, the learned appellate court remanded the matter for fresh decision. After remand the

learned trial court again accepted the application and revoked the succession certificate vide order dated 14.10.2019. The appeal preferred by the petitioners against the said order was dismissed on 01.07.2021. Hence this petition. 4. Heard.

Record perused.

5.Learned counsel for the petitioners placed reliance upon the judgments reported as Mst.

Ameeran Khatoon v. Mst. Shamim Akhtar and others (2005 SCMR 512), Muhammad Rashid v.

Mst. Sosan Jan and others (WP No.1639- A/2022), Mst. Razia Begum v. Public at Large (PLD 2025 Lah. 40), Dr. Asma Nighat Zaidi and others v. Syeda Safoora Begum and others (2024 CLC 1288), Inam Shah v. Public at Large and another (PLD 2018 Pesh. 30), Muhammad Afzal v. Muhammad Hafieez-ur-Rehman and others (2015 MLD 420) and Mst. Hussan Jamala and another v. Government of KP (PLD 2013 Pesh.

6.On the other hand, learned counsel for respondent No.1 relied upon the judgments reported as Wafaqi Hakoomat-e-Pakistan v.

Awamunnas (PLD 1991 SC 731), Noor Asia and another v. Federation of Pakistan and another (PLJ 2024 Cr.C. Note 236), Mst. Razia Ameer v.

State Life Insurance Corporation of Pakistan (2018 CLD 289), Muhammad Naseem Ahmad v.

Mst. Shama Khatoon (PLD 2014 Sindh 290), Mst. Riffat Yasmeen v. Hassan Din (2014 CLC 126), Zaheer Abbas v. Pir Asif (2011 CLC 1528), Dr. Nasar Ullah v. Abdul Majeed Soomro (2009 PLC C.S. 263) and M/s Pakistan International Airlines Corporation v. Mst. Alia Siddiqa (2001

MLD 1).

7.The controversy involved in the present case lies in a narrow compass. The question is whether the proceeds of insurance or takaful policies in respect whereof respondent No.1 was nominated constitute part of the estate (Tarka) of the deceased Muhammad Naveed Haider or whether the nomination confers exclusive ownership upon the nominee.

8.The law relating to nomination has been authoritatively explained by the august Supreme Court of Pakistan in Mst. Amtul Habib v. Mst.

Musarrat Parveen (PLD 1974 SC 185). The Court held that nomination does not operate as a gift, will or transfer of ownership. It merely confers upon the nominee the right to receive the amount from the concerned institution. The nominee receives the amount as a trustee for the

benefit of all persons entitled to inherit from the deceased.

9.The principle was reaffirmed by the august Supreme Court in Mst. Ameeran Khatoon v. Mst.

Shamim Akhtar (2005 SCMR 512) wherein it was held that amounts payable under benevolent fund or group insurance devolve upon the legal heirs of the deceased being part of his estate and the nominee cannot claim exclusive ownership merely by virtue of nomination.

10.The scope of estate or “Tarka” has been explained by the Shariat Appellate Bench of the Supreme Court in Wafaqi Hakoomat-e-Pakistan v. Awamunnas (PLD 1991 SC 731). The Court held that every proprietary or financial right which a person possesses or is entitled to enforce during his lifetime forms part of his estate upon death unless it is strictly personal in nature and extinguishes with the death of the right holder.

11.The authorities therefore disclose a clear doctrinal framework. The inquiry in such matters proceeds in two stages. The first inquiry concerns the character of the benefit itself, namely whether it arises from a proprietary or financial right of the deceased and therefore forms part of his

estate. The second inquiry concerns the legal effect of nomination. Even where such nomination exists, it merely authorizes the nominee to receive the amount and does not confer beneficial ownership.

12.This distinction also explains the different treatment sometimes accorded to statutory welfare benefits such as pension or certain family benefits. Where the payment is created purely by statute for the benefit of specified dependents and the deceased himself possessed no proprietary or enforceable right in respect thereof during his lifetime, such benefit may not form part of the estate. Insurance or takaful proceeds, however, stand on a different footing. They arise from a contractual arrangement entered into by the deceased himself and funded through premiums or contributions paid during his lifetime. The benefit therefore represents the crystallization of a financial right originating from the deceased and consequently forms part of his estate.

13.It was also argued that the proceeds of the insurance policies could not be treated as part of the estate because the amount was not payable to the deceased during his lifetime and became

payable only upon his death. The argument, though attractive, cannot be accepted. The relevant consideration, in light of the settled jurisprudence, is not the time when payment becomes due but the existence of the underlying right. An insurance policy creates a contractual entitlement in favour of the insured. The fact that the benefit matures upon death does not alter the nature of the right. Death merely triggers the payment under the contract. The resulting proceeds therefore represent the fruition of a financial right created during the lifetime of the deceased and must accordingly be treated as part of his estate.

14.Applying these principles to the present case, the insurance/takaful policies in question were obtained by the deceased himself and were funded through contributions made during his lifetime. The resulting benefit therefore arises directly from a contractual right of the deceased and forms part of his estate. The nomination made in favour of respondent No.1 only authorizes her to receive the amount from the insurer. It does not confer exclusive ownership upon her nor does it extinguish the rights of the other legal heirs.

15.The learned courts below, while revoking the succession certificate, appear to have proceeded on the assumption that nomination itself confers beneficial ownership upon the nominee. Such an approach is not in consonance with the law laid down by the august Supreme Court. The nomination could not override the rules of inheritance nor deprive the other heirs of their lawful shares.

16.The conclusion therefore becomes inevitable. The proceeds of the insurance/takaful policies obtained by the deceased form part of his estate and are liable to be distributed among his legal heirs according to their respective shares under the law of inheritance.

17.Consequently, the impugned orders dated 14.10.2019 and 01.07.2021 passed by the learned courts below cannot be sustained and are hereby set aside. The succession certificate issued on 22.03.2017 in favour of all the legal heirs of the deceased is restored. It is clarified that if the policy proceeds have been received by respondent No.1 as nominee, she shall hold the same for the benefit of all the legal heirs and distribute the amount among them in accordance with their respective shares.

18.The petition is allowed in the above terms.

Order accordingly.

Announced

Muhammad Tariq

JUDGE