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Union of India (Uoi) Represented by the Post Master General, Madras Vs. Pappu Datter Sarma and ors. - Court Judgment

LegalCrystal Citation
SubjectInsurance
CourtAndhra Pradesh High Court
Decided On
Case NumberLetters Patent Appeal No. 32 of 1959
Judge
Reported inAIR1961AP67
ActsTransfer of Property Act - Sections 130
AppellantUnion of India (Uoi) Represented by the Post Master General, Madras
RespondentPappu Datter Sarma and ors.
Appellant AdvocateSecond Government Pleader
Respondent AdvocateG. Chandra Sekhara Sastry, Adv.
DispositionAppeal dismissed
Excerpt:
.....holder of insurance policy - assigned his right on policy in favour of sons - a demanded surrender value from authorities - authorities refused to provide surrender value on ground that policy had been assigned - a obtained reassignment letter form sons - requested for surrender value - authorities did not pay any regard to request - a died - sons applied for policy amount - refused by authorities providing only surrender value - suit filed by sons demanding policy amount - held, no valid surrender of policy by deceased - sons entitled for policy amount. - - rule 9: a life insurance or endowment assurance policy, like other personal property forms a portion of the estate of the holder, and his legal representatives are entitled to the payment of the sum assured in the..........who was in need of money for educating his children, wanted to surrender his policy and obtain the surrender value under a letter dated 8-7-1948.the post-master-general informed him that without a re-assignment of the policy in his favour, he could not apply for the surrender value. thereupon the assured got a re-assignment effected on 31-7-1948 and it was registered in the office of the post-master general on 24-8-1948. this fact was communicated by the insurant by a letter dated 25-8-1948. the insurant died on 13-9-1949 without receiving the surrender value- of the policy.3. thereafter, his sons demanded the full amount of the policy, namely rs. 4,000/- with interest thereon amounting to rs. 1,364-15-6. the department replied that the sons of the assured could only claim the surrender.....
Judgment:

Chandra Reddy, C.J.

1. This appeal is filed by Union of India under Clause 15 of the Letters Patent against the judgment of our learned brother, Manohar Pershad, J., dismissing A. S. No. 340 of 1953.

2. The material facts may be briefly set out. One Lakshminarasimha Sarma, an employee in the Subordinate Judge's Court, Amalapuram, East Goda-vari District, effected postal life insurance policy for Rs. 4000/- on 3-4-1939 and assigned the same on an endorsement in favour of two of his sons and the said assignment was registered in the office of the Post Master General, Madras on 9-8-1947. The said Lakshminarasirnha Sarma who was in need of money for educating his children, wanted to surrender his policy and obtain the surrender value under a letter dated 8-7-1948.

The Post-Master-General informed him that without a re-assignment of the policy in his favour, he could not apply for the surrender value. Thereupon the assured got a re-assignment effected on 31-7-1948 and it was registered in the office of the Post-Master General on 24-8-1948. This fact was communicated by the insurant by a letter dated 25-8-1948. The insurant died on 13-9-1949 without receiving the surrender value- of the policy.

3. Thereafter, his sons demanded the full amount of the policy, namely Rs. 4,000/- with interest thereon amounting to Rs. 1,364-15-6. The Department replied that the sons of the assured could only claim the surrender value and not the whole amount due under the insurance policy on the plea that their father had already surrendered the policy.

4. It is this attitude of the Postal Department that obliged the plaintiffs to raise an action for recovery of the amount due under the policy.

5. The suit was resisted by the Union Government on the defence that the policy was surrendered during the life time of the insurant and hence his heirs were not entitled to the whole amount but only to a sum of Rs. 859/- being the surrender value.

6. The trial court overruled the objection and held that the plaintiffs were entitled to the whole amount of the policy as there was no valid surrender by the insurant.

7. On appeal, this decision was upheld by our learned brother, Manohar Pershad, J., who concurred with the opinion of the trial Judge as regards the nature of the surrender.

8. It is this view of the learned Judge that is canvassed before us by the Government pleader appearing for the Union of India. It is urged by him that since the re-assignment was obtained On the 31st July 1948 and that a letter was sent by the insurant enclosing the policy with an endorsement of re-assignment and with a request that immediate action might be taken, this operated as a valid surrender and a further letter after the re-assignment was unnecessary. It is said that re-assignment takes effect immediately it was made and the registration of the re-assignment in the books of the office of the Post-Master General was not a condition precedent to the re-assignment coming into operation. In support of this proposition, reliance is placed on Section 130 of the Transfer of Property Act.

9. This proposition is contested by Sri Chand-rasekhara Sastry appearing for the respondent. He argues that Section 130 does not govern the instant case, as the rights of the parties are to be adjudged with reference to rules 9 and 34 of the Postal Insurance Fund Rules. It is further contended by him that a letter by the insurant after obtaining re-assignment of the policy was necessary before he could validly surrender the policy. We have to decide as to which of two contentions is correct.

10. It is convenient here to read Section 130 of the Transfer of Property Act:

'Section 130(1): The transfer of an actionable claim whether with or without consideration shall be effected only by the execution of an instrument in writing signed by the transferor or his duly authorised agent, shall be complete and effectual upon the execution of such instrument, and thereupon all the rights and remedies of the transferor, whether by way of damages or otherwise, shall vest in the transferee whether such notice of the transfer as is hereinafter provided be given or not:

Provided that every dealing with the debt or other actionable claim by the debtor or other persons from or against whom the transferor would, but for such instrument of transfer as aforesaid, have been entitled to recover or enforce such debt or other actionable claim shall (save where the debtor or other person is party to the transfer or has received express notice thereof as hereinafter provided) be valid as against such transfer:

(2) The transferee of an actionable claim may, upon the execution of such instrument of transfer as aforesaid, Sue or institute proceedings for the same in his own name without obtaining the transferor's consent to such suit or proceedings and without making him a party thereto.

Exception: Nothing in this section applies to the transfer of a marine or fire policy of insurance (or affects the provisions of Section 38 of the Insurance Act, 1938, IV of 1938).'

11. Prima facie, Section 130 of the Transfer of property Act would apply to a life insurance policy for the reason that such a policy is also a chose-in-action. This is borne out by the exception to that section. Otherwise, the exception has no meaning. However, we need not express any final opinion on this subject. We may proceed on the assumption that Section 130 of the Transfer of Property Act is applicable to the present case.

12.-13. We will now turn to rules 9 and 34 of the Rules relating to Postal Life Insurance and Endowment Assurance on which reliance is placed by the respondents' counsel.

Rule 9: 'A life insurance or endowment assurance policy, like other personal property forms a portion of the estate of the holder, and his legal representatives are entitled to the payment of the sum assured in the absence of any provision to the contrary. The holder can, however, by an assignment make the sum assured payable to any person he chooses to name. This may be done either by an assignment endorsement on the policy or by a separate deed of assignment. Written notice of such assignment should be given to the Post-Master General. The policy holder may arrange with the assignee of the policy that all future premia shall be paid by the latter in the manner prescribed. Re-assignments of polities are also admissible and such re-assignments should be registered in the office of the Post-master General.....'

Rule 34 is in these words:

'If the purchaser of a life insurance or endowment assurance policy under these rules wishes to surrender his policy for an immediate payment of cash, he must give notice in writing to the Post-master General of his intention to do so, deliver up his policy, together with the premium receipt-book, and at the same time intimate the fact of his having done so direct to the Deputy Accountant General, The notice to the Post-master General should be Forwarded through the Principal District Officer of the insured person, but the intimation to the Deputy Accountant General should be given direct. With the sanction of the Post-master General and provided that three years' premia shall have been paid on the policy to be surrendered and that the policy is not less than three years' duration the purchaser shall, on surrendering his policy be entitled to obtain the surrender value thereof which will be calculated by the Deputy Accountant General according to the method prescribed by the Government Actuary which involves the use of certain formulae and tables not printed for publication'.

The question that arises for consideration is whether notwithstanding Section 130 T. P. Act Rules 9 and 34 also would apply to this case, they being special provisions. In the context of this enquiry, it is unnecessary for us to consider whether they are special provisions and therefore, the maxim generalia specia-libus non derogant comes into play. Despite the application of Section 130 of the Transfer of Property Act to the instant case, we think that the elements necessary to constitute a valid surrender are not present in this case. We are unable to accede to the theory of the learned Government Pleader that after the letter of 31-7-1948 there was nothing further to be done by the insurant and that a letter sent by him along with the re-assignment of the policy had resulted in a valid surrender of the policy. Before we proceed to consider the merits of this contention, we will read the letter of 31-7-1948.

'xx xx xx

Point No. 1: The re-assignment of policy underreference has been duly made by second and thirdsons as pointed out.

Point No. 2: Two certificates of majority are enclosed herein duly attested by the postmater, the reason necessitated for submitting two certificates being that my third son (second assignee) had to leave the place again on 31-7-1948 for his study. The policy is duly returned herewith.

I therefore beg to request that proper action may kindly be taken in the matter in view of the fact I am hard-pressed for money'. Emphasis is laid by the learned Government Pleader on the last paragraph of that letter, namely,

'I therefore beg to request that proper action may kindly be taken in the matters in view of the fact that I am hard-pressed for money'.

The point presented by the learned Government Pleader is that this amounts to re-affirming the first letter and this taken in conjunction with re-assignment of the policy sufficed to effect a valid surrender. But this letter cannot be considered isolated from the subsequent correspondence that passed between the assured and the Postal Department. By and under Ex. B. 8, the Post-master General informed the insurant that the re-assignment of the policy was registered in his books.

Whatever might be the force of the submission of the learned Government Pleader if the Postmaster had contented himself with this information, the further recitals in the document furnish a clinching answer to the argument of the learned Government Pleader. After intimating that the reassignment was registered, the insurant was told that further premia should be paid by him as usual. He was also told that the Post-master General expressed no opinion as to the legality of the assignment and that a separate communication would issue regarding the claim of surrender value of the policy.

These statements clearly indicate that the authorities concerned did not regard the earlier letters as being sufficient to enable the insurant to get the surrender value of the policy. According to this, the Postmaster General had not yet decided whether the re-assignment of the policy was valid or not and they would later on write to the insurant about this matter. It is thus abundantly clear that the Department did not regard the request contained in the last part of Ex. B. 6 as answering the purpose of a letter from the insurant for making a surrender of the policy.

14. It is not disputed by the learned Government pleader that the letter written on 8-6-1948 had no validity because at that time the insurant was not the owner of the policy having assigned it in favour of his two sons and he acquired title only after the re-assignment of the policy. Ho also concedes that it was only thereafter that he could make a request for payment of the surrender value of the policy. Having regard to the abovementioned circumstances, we do not think that the last part of Ex. B. 6 will have this effect. In the circumstances, there is no force in the contention that there was a valid surrender of the policy.

15. In this view of the matter, it is needless for us to consider the further question whether it is audit Note 2 as it existed at the time of the purchasing of the policy that applies or it is the one as amended subsequently that governs the case. Audit Note 2 to Rule 34 as it stood originally reads:

'In the case of an insurant who applies for the surrender value of the policy, but dies before taking payment thereof, the full value of the policy may be paid to the legal heir, or the assignee, as the policy should be regarded as active so long as the payment of the surrender value has not been effected'.

After amendment, the rule reads thus:

'In the case of a policy which has acquired surrender value and has not been forfeited to Government, should the insurant die during the month in which his application for surrender value of the policy is received in the Postmaster General's office, the full value of the policy may be paid, subject to the deduction of any surrender value already paid, and the policy treated as active till the end of the month referred to above'.

16. Though, prima facie, it appears that it is the unamended note that applies to the case, we refrain from expressing any opinion as to which of them governs the instant case, as we have already held that there was no valid surrender. It follows that the plaintiffs are entitled to the policy amount and not only to the surrender value.

17. This leads to the question whether they are entitled to interest as and from the date of demand for payment. Admittedly, there was no stipulation to pay interest, nor was any usage entitling the heirs of the insurant to claim interest proved. The learned Judge had found against the respondents in this matter. But he thought that there were equitable considerations entitling the plaintiffs to get interest, since the Department accepted to pay the surrender value plus the bonus and not the full value of the policy. We are in entire agreement with the learned Judge in his View that such equitable considerations exist in this case and that they are entitled to interest. In the circumstances, the judgment and decree of the courts below are confirmed. Having regard to the circumstances of the case, we direct the parties to beartheir own costs throughout.


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