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Life Insurance Corporation of India Vs. Thilothama - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtKarnataka High Court
Decided On
Judge
Reported in[1967]37CompCas201(Kar); (1966)2MysLJ718
ActsInsurance Act, 1938 - Sections 44(1) and 44(2)
AppellantLife Insurance Corporation of India
RespondentThilothama
Appellant AdvocateS. Vijaya Shankar, Adv.
Respondent AdvocateB.S. Puttasiddiaiah, Adv.
Excerpt:
.....leaving behind him his widow and two minor daughters. the question is whether the only remaining daughter of revannaiah is entitled to received the commission after the death of revannaiah as well as his wife......after his death. his widow also dies on july 3, 1955. the plaintiff respondent claims to be the heir of revannaiah and as such she has laid claim for the payment of the commission that would have been payable to revannaiah had here been alive. she has made this claim under sub-section (2) of section 44 of the act. the insurance corporation is resisting her claim. its case is that she is not a 'heir' within the meaning of that expression in sub-section 92) of section 44 of the act. that contention has been repelled by both the courts below. but the same is pressed before me for acceptance. 3. the term 'heir' found in section 44(2) of the act is not defined in the act. the courts below have come to the conclusion that that term has not been used in any technical sense, but the same has.....
Judgment:

1. The question of law arising for decision in this appeal is an interesting one and I am told that that question is not covered by any decision of this court or any other High Court.

2. The material facts in this case are few and they lie within a very narrow compass : One B.S.Revannaiah was an insurance agent working under the appellant, the Life Insurance Corporation of India. During his lifetime, he appears to have canvassed a good deal of business in respect of which he was entitled to commission under section 44(1) of the Insurance Act, 1938, to be hereinafter referred to as the 'Act'. He died on May 11, 1954, leaving behind him his widow and two minor daughters. Admittedly he had no other preferential heirs. One of his minor daughters died very soon after his death. His widow also dies on July 3, 1955. the plaintiff respondent claims to be the heir of Revannaiah and as such she has laid claim for the payment of the commission that would have been payable to Revannaiah had here been alive. she has made this claim under sub-section (2) of section 44 of the Act. the Insurance Corporation is resisting her claim. Its case is that she is not a 'heir' within the meaning of that expression in sub-section 92) of section 44 of the Act. that contention has been repelled by both the courts below. But the same is pressed before me for acceptance.

3. The term 'heir' found in section 44(2) of the Act is not defined in the Act. The courts below have come to the conclusion that that term has not been used in any technical sense, but the same has been used in a popular sense. Admittedly, on the date of the suit, the nearest heir of Revannaiah was the plaintiff and that being so, the courts below have held that she is entitled to the relief sought.

4. On behalf of the appellant it is concerned that the plaintiff has a right to claim all commission accruing on or before the death of her mother, i.e., on July 3, 1955. therefore, the controversy is now limited to the question whether she is entitled to the commission accrued on or after that date.

5. Sub-section (1) of section 44 of the Act lays down the circumstances under which an insurance agent is entitled to renewal commission. It is not disputed that Revannaiah would have been entitled to renewal commission had he been alive. Sub-section (2) of section 44 says :

'Any commission payable to an insurance to an insurance agent under the provisions of clause (b) and (c) of the proviso to sub-section 91) shall, notwithstanding the death of the agent, continue to be payable to his heirs for so long as such commission would have been payable had such insurance agent been alive.'

6. This sub-section was substituted by the Insurance (Amendment) ACt, 1950 (Central Act XLVII of 1950). What is meant by the expression 'payable to the heirs ?' Does it mean that the right to receive payments vests in the nearest heir of the deceased agent on the date of his death Or is it a continuing liability, the Insurance Corporation being required to continue to make the payment during the period mentioned in that sub-section to that person who is the nearest heir of the deceased agent on the date the liability to pay the commission accrues It may be seen that under section 4(1) of the Mysore Hindu Law Women's Rights Act, 1933 (Mysore Act No.X of 1933), the succession to a Hindu male dying intestate would take place in the following order :

(i) the male issue to the third generation; (ii) the widow; (iii) the daughters.

The other heirs need not be referred to as they are not relevant for our present purpose. On the death of Revannaiah, admittedly, the widow of the deceased was his preferential heir, he having had no sons. she was entitled to receive the commission payable under section 44(2). There is no dispute on that question. The question is whether the only remaining daughter of Revannaiah is entitled to received the commission after the death of Revannaiah as well as his wife.

7. Mr. Vijaya Shankar, the learned counsel for the Insurance Corporation, urged that on the date of Revanniah's death, the right to receive the commission in question vested on his widow, she being his preferential heir at that time; therefore, the plaintiff did not become the heir of Revannaiah under section 44(2); the Life Insurance Corporation is liable to pay the renewal commission only to the heir of the deceased agent; the question as to who is the heir of the agent has to be determined as on the date of the death of the agent; once that determination takes place, there can be no change in the heirship of the deceased.

8. I am unable to accept that contention as correct. the liability to pay the renewal commission is made absolute by section 44(1). The only question is as to whom it should be paid. On the language of the section, it is reasonable to assume that the legislature intended that the renewal commission should be paid to that person who can be considered as the heir of the deceased on the date the commission became payable. the period during which the payment has to be made has been determined by the legislature. At present, Revannaiah has no other relative living who is a nearer heir to him than the respondent. IN the popular sense of that word, she is the 'heir' to Revannaiah now.

9. For the reason mentioned above this appeal fails and the same is


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