1. This is a suit by the appellant upon two policies of life insurance on the life of his mother Bai Kesar, widow of Kalidas Tejaji, to recover the assurance moneys payable under the said policies as the assignee thereof.
2. The defendants raised several pleas, the most material of which are those contained in paragraphs 6 and 7 of the written statement. The plea in paragraph 6 is in these terms:
The defendants say that the said proposal and declaration and information purporting to be signed by the said Bai Kesar was not signed by her nor was the person produced if at all, before the medical examiner the same individual as the said Bai Kesar. The defendants therefore submit that a fraud was perpetrated on the said company and that the contract of assurance is null and void, and that the defendants are not bound and liable to pay the moneys in respect of or under the said contract of assurance.
It will be seen that sufficient particulars of the alleged fraud were here not given. But the defendants' case is that Bai Kesar did not sign the proposal and the declaration and that on material occasions she was represented by a woman by name Kesar Anraj. The plea in paragraph 7 is to the effect that in the proposal and declaration untrue statements and misrepresentations were made, namely :-(a) that Bai Kesar ordinarily enjoyed good health; (b) that she had not been ill; (c) that she had not suffered from disease or illness ; (d) that she had no medical attendant; (e) statement as to age is untrue ; and (f) that prior to the date of the proposal she was suffering from asthma and other ailments and had been treated for the same. The plea as to the statement in; (b) and (c) was disposed of by the lower Court and need not here be referred to specifically. The plea as to the statement in (d) about the medical attendant as also that she suffered from ailments other than asthma in (f) have been now given up by the learned Counsel of the respondents.
3. The First Class Subordinate Judge of Ahmedabad accepted the defendants' case in its entirety and dismissed the suit, and hence this appeal. There is no dispute that all things had happened which were necessary to entitle the plaintiff to recover. His title was disputed in the written statement but has been held established by the Judge and not disputed before us. The question as to want of jurisdiction was answered against the defendants, and that finding is not challenged.
4. The facts are as follows : The plaintiff is a well-to-do merchant of Ahmedabad having a fairly large business and is the only son of his parents. His father died in 1925, and although the learned Judge states that there is nothing to show if he had been insured during his lifetime in a large sum with the Oriental Insurance Company, the fact remains that the plaintiff stated it and the statement remains unchallenged. The home of the family has been in Ahmedabad for the last fifty to sixty years. There the plaintiff lived with Bai Kesar, his wife and children. One of the plaintiff's maternal uncles, that is to say one of the brothers of Bai Kesar, had also been insured. The plaintiff himself has effected insurance on his own life in 1925 or 1926 to the extent of about Rs. 20,000 in several companies. On July 13, 1928, Bai Kesar submitted a proposal to the Bharat Insurance Company through their agent Motilal for an insurance on her life for Rs. 2,000. Query No. 3 in the proposal form, which related to ' place and date of birth ' is the only query material. In answer to it she stated that she was born at Badli, District Jodhpur, on Samvat 1942, Aso sud 5, October 13, 1885, and would produce her horoscope. Bai Kesar affixed her thumb impression on the proposal, and the plaintiff signed it on her behalf. She was medically examined by the company's doctor, one Dr. N. C. Mehta, in September, 1928. Then there was her personal declaration before Dr. Mehta in which her age next birth date inter alia was stated to be forty-two. She put her thumb mark on the personal declaration; in the presence of Dr. Mehta. In describing her personal appearance in his confidential report he stated that there were two moles near the lower lip and that her weight was 108 lbs. and height five feet four inches. He considered that the life was 'Average life. May be accepted at ordinary rate.
5. On October 14, 1928, the plaintiff's mother submitted a proposal to the defendant company through Motilal who was also their sub-agent, for a policy on her life for a sum of Rs. 5,000. In this proposal, which was signed by her in the presence of Dr. Mehta, who also happened to be the medical adviser of the defendant company, she stated that she was born at Vadli district Jodhpur on October 14, 1887, and her age next birth day was forty-two ; that she had been vaccinated and that she did not suffer from asthma or any disease of the lungs or habitual cough. In answer to the question ' Do you ordinarily enjoy good health? ', she stated 'Yes'. To the question 'Who is your ordinary medical attendant?.', her answer was 'None in particular'. The declaration at the foot of the proposal is in the usual form, and inter alia provided that the proposal and declaration shall be the basis of the contract between her and the defendant company, and that if any material information had been withheld, or any of the statements were not truly or fairly set forth, then the premiums paid to the company were to be forfeited and the contract of insurance was null and void. The declaration was signed by Bai Kesar herself in the presence of Dr. Mehta.
6. The proposal was forwarded by Jayantilal, the agent of the company, with a letter dated October 14, 1928, in which he stated that the proponent, i.e. Bai Kesar, was quite healthy. The letter contains the queries to be answered by the agent, and both he and the sub-agent Motilal stated that they were in the habit of seeing Bai Kesar frequently and considered her to be then in sound health and in her general appearance healthy and that they recommended the case to the directors. Exhibit 28, which is dated October 20, 1928, is a form of information which the medical examiner has to obtain from the applicant for a policy duly filled in. It is in two parts. The first contains certain questions to be answered by the applicant. In answer to the question what was the present and general state of her health, Bai Kesar stated that it was good. In answer to question 6 (b) she stated that she had not suffered from habitual cough, blood spitting, asthma, pleurisy, pneumonia or any other affection of the lungs. Question 7 (a) was 'Who have been your medical attendants? 'and her answer was' None in particular.' There is nothing to show that questions in 7(b), (c) and (d) were put to Bai Kesar, and this is not denied, A declaration at the foot of this document signed by Bai Kesar stated that the answers given were true and that she had not withheld any important circumstances and that the declaration should be held to form a part of the proposal for assurance on her life made to the company. The declaration was signed by Bai Kesar presumably in the presence of Dr. Mehta. The second part of the document consists of the confidential report of the doctor in the form of questions and answers. In answer to the first question about general appearance Dr. Mehta stated that there were no physical peculiarities and that the appearance corresponded with the stated age. In answer to question 9 'Special circumstances', he stated that in his opinion she was of good constitution and free from disease. In the doctor's opinion the life was average and might be accepted at ordinary rates. The usual friends' reports were also sent to the company.
7. The defendants' witness Fardunji in his evidence states that after these papers were submitted to the company and before the issue of the policy, it was reported by Jayantilal that a fresh proposal was made by Bai Kesar to increase the value of the policy by another Rs. 5,000, and a question arose whether a fresh medical examination should be held or not. The agent suggested that fresh medical examination was unnecessary as the new proposal was made within a month of the first proposal. Thereupon in the proposal the amount was changed from Rs. 5,000 to Rs. 10,000. In connection with the new proposal to increase the amount of insurance, a declaration of unimpaired health had to be signed and that was done on February 9, 1929, purporting to be signed by Bai Kesar herself in the presence of the witness Nanalal. After compliance with the necessary requirements in this manner the company accepted the proposal and issued two policies (exhibits 32 and 33) dated February 21, 1929, and November 22, 1928.
8. The policies are similar in terms and are very much in the usual form of such policies, the material part thereof being this:
provided always (1) that the Proposal and Declaration and the answers mentioned in the said Schedule shall be held to form the basis of this contract and (2) that this Policy shall have the several privileges and shall be subject to the several conditions stated below or hereupon endorsed which are to be deemed part of the policy.
9. The only condition which calls for notice is condition No. 9.
PROOF OF AGE. Proof satisfactory to the Directors of the date of birth of the life assured must be furnished before any payment is demanded from the Company under the policy. Should it be found at any time that the age of the life assured has been understated in the proposal the reduced amount assured by the Premium actually paid (with a corresponding deduction in respect of bonuses if any) will alone be payable on the happening of the event or contingency described in the schedule notwithstanding that prior to such happening the Company may have had knowledge of such understatement.
10. It appears from the evidence that some time after the issue of the policies Bai Kesar sent to the defendant company in Bombay her horoscope on which she had relied in the proposal in support of the proof of her age. It is not quite clear when it was sent, but it appears that it must have been sent some time before May 7, 1929, for on that date the company admitted the age to be correct and sent two certificates to Bai Kesar to that effect. The two certificates were in the form of two small slips presumably intended to be attached to the two policies. It is well-known that in some insurance companies it is the practice to endorse the admission of the age on the policies themselves and in others to issue certificates to be annexed to the policy itself as in this case. On May 5, 1929, and March 11, 1929, the policies (exhibits 32 and 33) were assigned in favour of the plaintiff. The assignment was executed in Ahmedabad, that in respect of the first policy (exhibit 32) in the presence of Chunilal and in respect of the second policy (exhibit 33) in the presence of a witness called Sunderlal.
11. On March 6, 1930, another proposal for an insurance of Rs. 5,000 was made by Bai Kesar to the defendant company (exhibit 49). It is signed by Bai Kesar and the other necessary documents were furnished. She was examined by Dr. Mehta and the form of information was signed by her before him but it was undated. The doctor signed his report, but that too was undated. The life was stated to be average and was recommended for acceptance at ordinary rates. After the papers were sent to the head office, the agent on March 21, 1930, wrote to the company stating that the medical report was incomplete and therefore should be returned for completion. According to the learned Judge, upon the receipt of these papers the defendant company's suspicions were aroused. In my opinion there is no foundation for this remark. There is no evidence to show that at this time there was any suspicion, in the mind of the defendant company about any fraud being practised on them and on the other hand Fardunji's evidence is to the contrary. The company asked their agent to get Bai Kesar examined by the Civil Surgeon of Ahmedabad. But nothing further was done in the matter and s the history of this particular transaction does not appear to be material.
12. The Bharat policy had about this time lapsed. Bai Kesar, however, applied to the company to have it renewed. Under their rules lapsed policy can only be renewed within twelve months without any medical examination, but as the application made was beyond this period, the company asked her to pay a certain additional amount and to send a medical certificate of the Assistant Surgeon of Ahmedabad. The evidence shows that shortly after this she fell ill and never recovered from that illness. She died on November 29, 1930. The certificate of death stated that her age was forty-three and she had died of fever.
13. After the death of his mother, the plaintiff as the assignee of the policies called upon the defendant company to pay to him the amount due in respect of the policies with the bonus accrued due thereon. Correspondence ensued in the course of which the company called upon the plaintiff to produce the horoscope of Bai Kesar, although as stated above the horoscope had been examined by them and they had admitted the age. The plaintiff wrote back to say that he had not the horoscope with him and he would try to search for it, and ultimately he reported that he was unable to find it. The company in the meanwhile was making inquiries in the matter through one Cooper who was always employed by the company in connection with work of this character and remunerated by them. They also wrote to Dr. Mehta about it on March 6, 1931, and in answer to some questions put to him he stated that he had known Bai Kesar since 1928 when she was introduced to him by the agent. He further stated that she was examined by him in his dispensary, and that the necessary signatures on the proposal and medical forms were made in his presence and the same were attested by him. He then stated that he and Motilal were fully satisfied about her identity, and that the person of the name of Bai Kesar examined by him for the Bharat Insurance Company, Limited, was the same person that was examined by him for the defendant company. Then he was asked ' Had you any further occasion to meet Bai Kesar subsequently to the two examinations? 'and he answered ' Yes, I was twice or thrice called by Mr. Maneklal, son of the deceased, for medical advice in case of his wife and child and hence I had the occasion to see Bai Kesar at his place.' This last statement is borne out by his evidence in Court (see vernacular deposition).
14. These facts are not in dispute, and it is upon these facts that some of the questions which we have to decide arise. In my opinion, and with respect to the learned Judge, a perusal of his judgment shows that he allowed himself to be influenced by irrelevant considerations and in some instances his remarks are not warranted by the evidence. However, having regard to the fair attitude taken by the learned Counsel for the respondents, it is not necessary to discuss the judgment. It is clear that the whole burden of showing that the representations made by Bai Kesar were false and that a fraud was practised on the company is on the latter. The only question is whether the burden was discharged. The question whether the policies were effected by the plaintiff on his mother's life for his benefit and whether he paid the premia on them is hardly of importance. The plaintiff was the only child of Bai Kesar and lived with her, and it is not unusual having regard to the class to which the parties belonged that the son would pay the premia. The plaintiff 's evidence, however, is that although he paid the premium from time to time, he debited the amount in a new account in his books. The books were not challenged. The mere fact that there was a deposit account to the credit of Bai Kesar and this amount was not there debited, does not R seem to me to be material. The question as to whether there was any necessity for Bai Kesar to insure herself and, as held by the Judge, that a policy of Rs. 2,000 was sufficient is in my opinion irrelevant. It is a serious thing to impute fraud to a person who was, as held by the Judge, rich and in good position, and the Court must require the strictest proof of it. One other circumstance to which the Judge seems to have attached some importance is that as stated by Fardunji the company does not insure female lives over forty-five years, but the prospectus shows they do so at least in certain cases, and the fact remains that in this case Bai Kesar's life was accepted by them. It may be stated here that no attempt was made to examine either Jayantilal or Cooper, although the latter was present in Court throughout the case, and in the cross-examination of one of the defendant's witnesses it was suggested that Cooper had tried to collect false evidence.
15. Mr. Coyajee relies on statements in answer to the questions as to whether (1) Bai Kesar had asthma ; (2) whether she ordinarily enjoyed good health; (3) as to her age, and further relies on (4) the alleged fraud. He gives up the case as to her statement as to medical attendants as also the case that the admission of age was obtained by fraud.
16. Before dealing with these matters the question arises whether on the facts of this case it is open to the defendant company to raise the contention that the representation as to age made by Bai Kesar in the proposal form, which formed part of the policy and therefore became an essential term of the contract, is incorrect. On the printed form of proposal there is a note in the margin which inter alia says that it is recommended that proof of age should be furnished at once in order that the age may be admitted at once. That note is in accordance with the practice generally adopted in this respect by insurance companies. The following observations are made in 'The Law of Life Assurance' by Bunyon at p. 91:
A usual condition requires evidence that the age is correctly stated in the declaration to be given at some time before payment of the claim, unless that fact shall have been previously established ; in which case the same will be admitted by an indorsement on the policy.
Then the learned author points out that difficulties are likely to arise if this course is not adopted, and; as time goes on, chances are that the evidence may not be available when the payment of the sum assured becomes due. Then the author says:
It often happens, too, that persons make mistakes as to their age, which on reconsideration, and after search for the evidence of the facts, they would be able to rectify. When the mistake occurs, it is usual for the office not to declare the policy forfeited, but to deduct from the sum assured the amount of the premiums underpaid, with interest thereon to the time of the death.
17. Then the learned author further observes:
A mode of adjusting the claim, when the misstatement was unintentional, is to declare the policy good for such a sum as would have been insured at the real age by the premium actually paid.
18. It is somewhat in accordance with these observations that condition No. 9 in the policy was inserted by the company, and it is admitted by Fardunji that this condition was inserted in the policies of the company to condone a bona fide mistake as regards birth date. Then at p. 106 the learned author observes as follows:
To prevent a possible dispute, proof should be given at the time when the policy is issued as to such facts as are susceptible of it-as for example as to the age of the assured-and their correctness admitted by indorsement upon the policy. This having been done, no question could arise, unless fraud had been used to obtain the admission.
Apart from these observations, it seems to me that once the age is admitted by the insurance company, there is no reason why they should not be held to be precluded from disputing the correctness of it unless the admission was procured: by fraud. Where the age is not admitted, the burden of proving the age initially would be on the person claiming under the assurance ; but where the age is admitted, then on the principle under the Indian Evidence Act that facts which are admitted need not be proved, it is for the company to prove that the admission of age was procured by fraud and that the representation as to age is untrue. Fraud, of course, vitiates even the most solemn transaction ; but if there is no fraud, there is no reason why the company should not be held bound by the representation made by them to the assured that they will not dispute the correctness of the age admitted by them. The case that admission of age was procured by fraud is now given up. The point has not come specifically for decision, but in The Oriental Government Security Life Assurance Co. Limited v. Sarat Chandra Chatterji (1895) I.L.R. 20 Bom. 99, it was observed by Sir Charles Farran (p. 102):
If the evidence has been given in the lifetime of the assured, and an admission of age is attached to the policy, no further proof will be needed, and the onus of disputing the age will be thrown on the Company ; but in the absence of such evidence and of such admission, it lies, we think, upon those claiming upon the policy by reasonable proof to satisfy the Court as to the age of the assured.
These observations were considered by that eminent Judge, Mr. Justice Bhashyam Ayyangar, in Oriental Government Security Life Assurance Co. Ltd. v. Namsimha Chari I.L.R. (1901) Mad. 183 and, if I may say so respectfully, I am in entire agreement with what the learned Judge says. This is what he observes after referring to the view taken by Sir Charles Farran (p. 204):
With all deference to Farran, J., I am unable to concur in the view taken by him in the above case that the effect of such admission (under Section 58 of the Indian Evidence Act) will only be 'that the onus of disputing (disproving) the age will be thrown on the Company' (p. 102). Nor am I able to agree in the view taken by that learned Judge that, notwithstanding the saving clause (contained in the prospectus which was incorporated in the policy on which the said case was based) to the effect that policies held by parties on their own life are indisputable on any ground whatsoever except fraud-a clause which has been deleted from a later prospectus of the same company, which is the one incorporated into the policy on which the present suit is brought-a person claiming under such policy is not relieved from the burden of giving proof of the age of the assured, but that the legal effect of such saving clause would only be to relieve the assured from the consequences of an innocent misrepresentation as to his age which would otherwise ensue tinder the strict terms of the contract. If age had been admitted in writing by the company after being satisfied with the proof furnished by the assured, not only would the person claiming under the policy be relieved from the necessity of proving the age in an action brought on the policy, but the company also would be precluded from producing, as of right, evidence to disprove the age as admitted. If, however, the Court is satisfied that the admission has been obtained by fraud or that there is other good and sufficient cause, it will be in its discretion, under the proviso to Section 58 of the Evidence Act to require the fact to be proved otherwise than by such admission.
19. Issue No. 4 was raised by the learned Judge as he seems to be of the opinion that it arose under paragraph 5 of the written statement. It may be pointed out that the issue did not arise upon the pleadings. All that is stated in paragraph 5 is that the defendants did not admit the genuineness of the horoscope, which in other words means that they put the plaintiff to its strict proof. It is true that they further alleged that they acted upon the faith of the horoscope and also upon the faith of the representations and answers made by Bai Kesar, but how the representations and answers made by Bai Kesar, apart from the horoscope, would influence the defendant company in accepting her age is rather difficult to comprehend.
20. [After discussing evidence bearing on the age of Bai Kesar, the judgment continued :] The burden of proving that the age was false, and when the horoscope was ultimately put in, the burden of showing that it was not genuine, was on the defendants, they having once accepted it as genuine, and they have not discharged that burden. I think, therefore, the defendant company have failed to prove that the representation as to age made by Bai Kesar in the proposal was untrue to her own knowledge.
21. [The judgment dealt with other points arising in the case and concluded :] In my opinion, on a careful consideration of the evidence and the probabilities in the case, the defendants have failed to establish the alleged fraud, and it is not necessary to consider the question whether the plaintiff was a party to it. But assuming that there was a fraud, there is no evidence to show that he was a party to it. The case that he was a party to the fraud rests on mere suspicion, but mere suspicion is not enough, and on this question also our conclusion must be against the defendant company.
22. I have already referred to Clause 9 of the policy, and if it had been necessary to express our conclusion on the evidence, we should have held that in any case he would have been entitled to the benefit of that clause.
23. In the result the appeal must be allowed and the decree made by the lower Court set aside. There will be a decree in favour of the plaintiff for Rs. 10,220 with interest at six per cent, per annum thereon from the date of suit till judgment, and costs and interest on judgment at six per cent, till payment. Two pleaders' fees allowed both here and in the lower Court.
N.J. Wadia, J.
24. The defendant company contended that they were entitled to avoid the contract of assurance on three grounds : that the age of the assured Bai Kesar had been wrongly stated in the proposal and in the declaration before the doctor ; that untrue statements had been made with regard to the state of her health; and that the real person insured, Bai Kesar, had not been produced before the doctor for medical examination and that in her place one Kesar Anraji had been produced. The allegations made amount to fraud of a very serious kind and very strong evidence would be necessary to establish the defendants' case, especially when the admitted circumstances of the plaintiff's family are taken into consideration. The learned Judge has found, and the fact is not disputed, that the plaintiff is a substantial man doing different kinds of business and with a good income. He is the only son of his parents and was not in any financial difficulties at the time when the insurance on his mother's life, which is the subject-matter of this appeal, was effected. The defendants have in my opinion failed to substantiate any of the three charges which they have made against the plaintiff.
[The judgment dealt at length with the evidence in the case and concluded.]
25. I agree, therefore, that the defendants have failed to show that there are any grounds on which they would be justified in considering the policies as null and void.
26. The appeal must, therefore, be allowed and a decree made in favour of the plaintiff.