John Beaumont, Kt., C.J.
1. This is a special case stated for the opinion of the Court as to the true construction of Section 27(1) of the Indian Insurance Act, 1938.
2. Section 27 provides for the making of a deposit by insurance companies incorporated or domiciled in British India, and in construing such a section one must remember the reason why, in the case of insurance companies, the Legislature requires deposits to be made. The general nature of insurance business is that in return for a present payment the insurer undertakes to discharge a future liability, and the obvious risk is that, when the time arrives for discharging the future liability, the insurer may have no assets. In order to avoid or minimise that risk Legislatures frequently impose on insurance companies the obligation of covering their future liabilities, and Section 27 is one of the sections imposing such liability. That is perfectly plain from its language. Now, what the section says is this :
Every insurer incorporated or domiciled in British India shall, subject to the provisions of Sub-section (3), at all times invest and hold invested assets equivalent to not less than fifty-five per cent. of the sum of the amount of his liabilities to holders of life insurance policies in India on account of matured claims and the amount required to meet the liability on policies of life insurance maturing for payment in India, less the amount of any deposit made under Section 7 or Section 98 by the insurer in respect of his life insurance business and less any amount due to the insurer for loans granted by him on policies of life insurance maturing for payment in India and within their surrender values, in the manner following, namely, twenty-five per cent. of the said sum in Government securities and a further sum) equal to not less than thirty per cent. of the said sum in Government securities or other approved securities or securities of or guaranteed as to principal and interest by the Government of the United Kingdom.
3. Reading that section in its natural sense, it seems to me to direct that the insurer should invest fifty-five per cent. of a sum arrived at by taking the liabilities on the matured claims, plus the liabilities on claims maturing, less any deposits made under s, 7, and less the amount of loans. That is the figure in respect of which the deposit of fifty-five per cent. has to be made. The scheme, to my mind, is that you take the gross liabilities, and then deduct the amount of deposits' made under Section 7, because; to that extent the liabilities are covered, and deduct further the amount of the loans, because to that extent the policies have been in effect already discharged, and the balance represents the uncovered liability of the insurer, and on those uncovered liabilities the deposit of fifty-five per cent. has to be made; twenty-five per cent. of such uncovered liabilities to be invested in Government securities, and thirty per cent. in approved securities. That seems to me the plain meaning of the section, and it carries out what I gather from the section to be the intention of the Legislature, namely, to provide as cover a proportion of the amount of uncovered liabilities. That is the contention for which the plaintiff, who is the Superintendent of Insurance, contends. The figures are all agreed, and he has stated in paragraph 7 of the case the amount of deposit required on that basis.
4. The contention of the defendants is that to work out the section you ascertain the gross liabilities, and then take fifty-five per cent. of such gross liabilities, and from the resulting figure deduct the amount of deposits and loans. On that basis, if it happened that the amount of deposits and loans amounted to fifty-five per cent. or more of the gross liabilities, no deposit at all would have to be made under Section 27, although there might be large uncovered liabilities. That does not seem to be a likely intention to attribute to the Legislature; one would expect the required cover to be based on uncovered, and not on gross, liabilities. Moreover, it seems to me that the construction put by the defendants upon the section does considerable violence to the language ' used. It gives no effect to the expression 'the sum of the amount'; and' the expression 'less the amount of any deposits' would have to be read as 'and deduct from the resulting figure the amount of any deposit' etc. It is further to be observed that, as the figures worked out in paragraphs 8 and 9 of the case show, the defendants' construction does not give full efiect to the section. Under the first scheme worked out in paragraph 8, fifty-five per cent. of the figure arrived at on the defendants' construction is not kept as a deposit, and on the alternative scheme worked out in paragraph 9 the twenty-five per cent. and thirty per cent. become 25/55ths and 30/55ths.
5. In my opinion, the construction of the section really presents no difficulty, and by giving the words their natural meaning, effect is given to what would appear to be the natural intention of the Legislature, namely, to provide a cover for uncovered liabilities.
6. The actual question raised is :
Whether on the true interpretation of Section 27(2) of the said Act and on the basis of the agreed figures set out in paragraph 6 hereof the defendant company is bound to invest in Government securities and/or approved securities mentioned in the said sub-section the total sum of Rs. 36,072 in the manner set forth in paragraph 7 hereof or the total sum of Rs. 1,100 in the manner set forth in paragraph 8 hereof or the total sum of Rs. 2,011-3-7 in the manner set forth in paragraph 9 hereof.
The answer will be that the defendants are bound to deposit Rs. 36,072 in the manner set forth is paragraph 7 of the case.
7. The decree will follow judgment. Costs not to exceed Rs. 2,000 as agreed in the case.
8. The short point before us arises on the construction of Section 27, and, in my opinion, the answer should be given as stated in the judgment of the learned Chief Justice. I shall briefly state the reasons for that conclusion.
9. The use of the expression 'of the sum' followed by 'of the amount' shows that the intention of the Legislature in framing the section was to keep these two figures distinct and separate. The construction suggested on behalf of the defendants would render the use of one or the other of these phrases in the first part of the section redundant.
10. It was argued on behalf of the defendants that the comma after the word' 'India' made the first part of the section as one amount or sum, and from that the deductions mentioned thereafter should be made. That would make the use of the words 'the said sum' towards the end of the paragraph quite inappropriate. In the normal course, when in the same section the same words are used, they should be given the same meaning and effect. The words 'of the sum' in the first part of the section must, therefore, be given the same meaning as the words 'the said sum' at the end. It is only on the construction, which is natural to the section and which is urged by the plaintiff, that 'the sum' will denote the same figure in the two places. The defendants' contention would result in 'the sum' being a particular figure under the first part, and 'the said sum' being a totally different figure under the last part.
11. The word 'sum' and the word 'amount' are distinctively used for working out the figure ultimately to be arrived at. The section provides that the assets to be invested and held invested should be fifty-five per cent. of 'the sum'; then follow four amounts which are to be added and deducted in arriving at 'the sum' firstly mentioned. At the end, as I, have already pointed out, the expression 'the said sum' is used again so as to connect up the result with the figure indicated at the beginning of the section. Therefore, the section clearly means that in arriving at the sum all the four amounts mentioned thereafter should be worked out as mentioned therein, and on the basis of that working the sum is to be arrived at. Of that 'sum' fifty-five pen cent has to be kept invested as follows : twenty-five per dent should be in the first group of investment and at least thirty per cent. in the second group, as mentioned in the last part of the section.
12. Sub-section (2) of Section 27 lends further support to this construction. In that sub-section provision. is made for investment on account of an insurer not incorporated or not domiciled in British India or the United) Kingdom:. The scheme is that such insurer has to deposit the whole sum, (and not fifty-five per cent. only), viz. the difference between the amounts mentioned in the sub-section which are the same amounts as those mentioned in the first subsection. Therefore, the contention urged on behalf of the plaintiff appears to be correct.