1. This is a plaintiff's appeal against the judgment of the Additional Subordinate Judge, Cuttack, reversing the judgment of the Munsif of Cuttack ana dismissing the plaintiffs suit for recovery of Rs. 3,393/8/- as agent's commission from defendant 1 who is the Lakshmi Insurance Co. Ltd.
2. On 27-8-1942 the Maharaja of Parlakhemedi, one of the premier zamindars of Orissa, signed a proposal form (Ex. J.) for insuring his life with the Lakshmi Insurance Company for a sum of one lakh of rupees. The proposal was in due course accepted by the Company & he paid the first annual premium amounting to Rs. 9,024/14/-. The commission due to the agent oh this first premium, according to the terms of contract between the Company and its agent was Rs. 3,393/8/-. The plaintiff was one of the insurance agents of the Company and he claimed the commission alleging that the business was secured through his agency. The nominal Chief Agent of the Company at Cuttack in August, 1942 was defendant 2 Gopinath Misra. He claimed the aforesaid commission alleging- that though the plaintiff was given out as the agent in respect of the said business, in reality the business was secured through the Chief Agent's endeavours. In support of this claim he relied mainly on a letter (Ex. C) written by the plaintiff himself to the Insurance Company directing it to pay the entire commission including the renewal commissions on the Policy of the Maharaja of Parlakhemedi to the Chief Agent of Orissa who was said to be 'really responsible for this case'. The trial Court, disbelieved the claim of the Chief Agent (defendant 2) and decreed the suit holding that Ex. C was brought about by undue influence andcoercion and that no weight should be attached to the recitals contained therein. The lower appellate Court, however, held that Ex. C was written out voluntarily by the plaintiff and that in view of the admissions contained therein and other unsatisfactory features in his evidence it could not be held that the said business was secured through him.
3. To appreciate the dispute it will be useful if certain admitted facts are first recapitulated. Pandit Godavaris Misra who is one of the prominent politicians of Orissa and formerly a Congressman, was mainly responsible for expanding the business of the Lakshmi Insurance Company (whose headquarters was then in Lahore) in Orissa. He was the Chief Agent of the Company from, 1927 and the office of the Company at Cuttack was located in a part of his own residence. The business of the Company was practically managed, as if it were his family affairs and his two sons Lokanath and Ranganath and his daughter were appointed as agents of the Company for some years. When Pandit Godavaris Misra resigned his position as the Chief Agent of the Company in November, 1941 his elder son Lokanath was appointed as the Chief Agent for some months. Prom 1-3-1942, however, defendant 2 Gopinath Misra was appointed as the Chief Agent and continued in that capacity till 1946. But even during that period the family of Pandit Godavaris Misra continued to take active part in the management of the Company at Cuttack and his son Lokanath continued to remain interested in the Company even on the date on which Pandit Godavaris Misra deposed before the lower Court (15-11-46).
Defendant 2 Gopinath Misra, though not a relation of Pandit Godavaris Misra, had worked with him for about fifteen or twenty years assisting him in several capacities and used to be given some remuneration in the early stages of his career. The plaintiff alleged that Gopinath Misra was merely a cook of Pandit Godavaris Misra. This was, however, denied; but it is admitted that Gopinath Misra used to drive the motor-car of Pandit Godavaris Misra now and then. It was also admitted by D. W. 3 that Gopinath learnt car driving for the convenience of Pandit Godavaris Misra. It is also admitted that Gopinath used to look after the garden of Pandit Godavaris Misra on some occasions, has been associated with him since his boyhood and had lived in his house for about ten years. Gopinath was also running a cloth shop in which Pandit Godavaris Misra's son Ranganath was a partner. It is also admitted that Gopinath does not know English and can just sign his name with some difficulty in that language. Gopinath was also working as an agent of the Insurance Company till his appointment as Chief Agent on 1-8-1942.
4. Pandit Godavaris Misra was one of the leading Congressmen and a member of the then Orissa Legislative Assembly. The Maharaja of Parlakhemedi was also a member of the Assembly but was in the Opposition. Sometime in 1941 Pandit Godavaris Misra and a few Congress members of the Assembly seceded from the Congress Party, organised a new Party known as the Swaraj party and formed a Coalition Ministry with the Maharaja of Parlakhemedi as the Prime Minister. Pandit Godavaris Misra became Minister in that Coalition Ministry and it was on account of his becoming a Minister that he resigned his post as the Chief Agent of the Insurance Company. The plaintiff was a Congress worker of Ganjam district who also joined the Swaraj Party at the time of the secession. But after August 1942, he left the SwarajParty and again joined the Congress. While he was in the Swaraj Party he was on good terms with Pandit Godavaris Misra and on several occasions he used to stay with him whenever he came to Cuttack.
5. The Insurance Act, 1938 provides for the licensing of insurance agents (S. 42) who alone are entitled to commission from, the Insurance Company for soliciting or procuring business. Life insurance business is defined, in Section 2(11) of that Act as 'the business of effecting contracts of insurance, for the granting of annuities upon human life'. The maximum amount of commission payable to an insurance agent is limited to 40 per cent, of the first year's premium by Sub-section (2) of Section 40 of the Act. A person who is appointed by the Company to employ insurance agents and to supervise their work is known as the Chief Agent and he is also entitled to an overriding commission for the insurance business secured by all agents working under him. The main work of the insurance agent for which he is entitled to his commission consists in his 'soliciting or procuring insurance business' that is to say, canvassing on behalf of the Company with various persons and inducing them to take out Policies. Where the person whose policy he is anxious to secure' is rich and influential there is no objection to his approaching that person through the latter's friends.
Sometimes the Chief Agent and the Branch Manager of the Company also may assist him; but on that account the right of the insurance agent to his commission will not be in any way jeopardised. Once a person agrees to take out a policy the next step is to induce him to sign the proposal form, then to get him medically examined and forward the proposal form and the medical examination report to the Company along with a confidential report from the agent himself. When the proposal is finally accepted by the Company the proponent is required to pay the full premium and the agent's commission is based on a certain percemtage (not exceeding 40 per cent) of the premium. The actual percentage payable to an insurance agent is generally fixed in accordance with the terms of the contract entered into between him and the Company at the time of his appointment as an insurance agent. In the present case the contract of the plaintiff's appointment (Ex. 12) shows that the percentage varies with the total amount of completed business secured through the agent. Thus if the total business is not more than Rs. 20,000/- the percentage of commission is only 30 whereas if it is above Rs. 50,000/- it is 40.
6. The plaintiff's case was that he had approached the Maharaja of Parlakhemedi on some occasions and requested him to take out a policy through him and the Maharaja had expressed his willingness. He had also requested Pandit Godavaris Misra (his leader) to speak to the Maharaja on his behalf on the subject. As already pointed out, Pandit Godavaris Misra had himself worked us the Chief Agent of the Insurance Company for several years and was thus as much interested as the plaintiff himself to expand the business of the Company. Moreover, from 1941 he had become a colleague of he Maharaja in the Coalition Ministry and was thus in a position to influence him. As a result of their combined efforts the Maharaja agreed to take out a Policy and in pursuance of the agreement wrote out the proposal form (Ex J) on 28-7-42. The Manager of the Calcutta Branch of the Insurance Company named Mr. Bagchi had also come to Cuttack on that day and was present when the proposal form was signed by the Maharaja. Strangely enough the column in the proposalform in which the agent's name and address should toe written was left blank. But it is admitted that it was the plaintiff who sent the agent's confidential report to the Company in respect of the proposal of the Maharaja.
The medical examination of the Maharaja- appears to have been done by one Dr. P. C. Roy at 10-30 a.m. on that day and by Dr. H. Bose (D.W. 1) at 5 p.m. on the same day. The plaintiff alleged that soon afterwards he went to the Dak Bungalow where Mr. Bagchi was staying accompanied by Pandit Godavaris Misra and there the latter threatened that unless he gave a statement in writing giving up his claim to the commission on the policy of the Maharaja he (Godavaris Babu) would induce the Maharaja to cancel the proposal and insure through another agent. Mr. Bagchi also asked the plaintiff to accept the suggestion of Godavaris Babu. Being overawed and under their undue influence the plaintiff in his own hand wrote out a document (Ex. C) in the following terms:
THE BRANCH MANAGER,
LAKSHMI INSURANCE CO., CALCUTTA.
The 1st year and the renewal commissions payable to me on the case for one lakh introduced today on the life of the Hon'ble Sri Sri Sri Krishna Chandra Gajapati Narayan Deo of Parlakhemedi may be paid to the Chief Agent, Orissa, who is really responsible for this case. I undertake to discharge the Commission Bills made out in my name regarding this case for favour of payment to the said Chief Agent. It is, however, understood that I shall be entitled to the higher rate of commission if this case is accepted and paid for i,e., completed.
In this document the plaintiff not only directed the Company to pay the entire commission to the Chief Agent but also admitted that the Chief Agent was 'really responsible for this case'. The name of the Chief Agent was, however, not noted in the letter. But the plaintiff's case is that thougn, defendant 2 Gopinath Misra was then a nominal Chief Agent in the books of the Company he was merely a name-lender on behalf of Pandit Godavaris Misra who notwithstanding his being a Minister in the Coalition Ministry was anxious to continue the business in the name of defendant 2. The next day, however, the plaintiff met one Mr. G.S.B. Rao, an Inspector of another Insurance company, (P. W. 3) and told him how he had been coerced into relinquishing the entire claim to the commission on the Policy of the Maharaja. Then on the advice of Mr. Rao he wrote a letter to the Company cancelling the directions given by him in Ex. c. Presumably the letter Ex. C was not immediately sent to the Head Office of the Company & remained at Cuttack for some time, consequently the Company continued to write in its letters Ex. 5 dated 16-11-43 and Ex, 6, D. 24-9-43 that it was the plaintiff who was the agent who had secured the policy of the Maharaja. The commission was duly credited to his account. In the meantime, however, the plaintiff had been arrested and detained in Berhammur Jail from 5-12-42 to 2-9-43. While he was in jail an attempt was made by Pandit Godavaris Misra's sons and defendant 2 to secure his signature on the bills so that they could appropriate the entire commission. But the plaintiff was too careful to be caught in the trap. On his return from jail he wrote another letter (Ex. 16) dated 18-9-43 to the Head Office of the Company claiming the entire commission on the policy. Subsequently, however, the Company expressed its inability to pay the commission to him1 in view of his letter Ex. C directing that the payment of the entire commission should be made to the Chief Agent. Hence the present litigation,
7. The Company who is defendant 1 stated that it was prepared to pay the amount to the rightful claimant and practically left it to the Court to decide as to who was entitled to the commission. Defendant 2 is the main contestant in the case and he alleged that the policy of the Maharaja was secured by him, doubtless with the help 01 Pandit Godavaris Misra. But as at that time this defendant was also the Chief Agent and he was anxious to secure not only the agent's commission but also the overriding commission of the Chief Agent he induced the plaintiff to lend his name as the agent for this business though in fact the plaintiff did nothing. The plaintiff was also benefited by such an arrangement inasmuch as this business would be shown in his account thereby increasing the rate of his commission in respect of other Policies secured by him. It was further contended that Ex. C was not brought out by threat or undue coercion and that it was voluntarily executed by the plaintiff for the mutual advantage of himself and defendant 2 though subsequently he thought it fit to resile from the agreement with a view to claim the whole of the commission.
8. Thus the admitted position is that it was the plaintiff who, as the agent of the Company, sent the confidential report about the Maharaja of Par-lakhemedi in respect of this business. But for such confidential report the Company would not have accepted the proposal of the Maharaja. In the Company's books the plaintiff was shown as the agent in respect of this business and the commission was credited to his account. But lor the document Ex. C the Company would, in due course, have paid the entire commission to the plaintiff.
9. The lower appellate Court has approached the case from a wrong perspective. It thought that it was the plaintiff's duty to prove that the Policy was secured through his efforts. Though doubtless as the plaintiff in the case the primary duty of proving his case rests on him, in the present case in view of the admitted position that the plaintiff was shown as the agent in respect of the business the burden shifts on defendant 2 to show that the plaintiff was merely a name-lender. Apparent things should be taken as real until the contrary is proved. The various circumstances on which the lower appellate Court has relied to discredit the plaintiff's claim if approached from this perspective would be found to be inconclusive and not sufficient to establish that the plaintiff was merely a name-lender. Moreover, the lower appellate Court failed to follow the rule repeatedly laid down regarding the extent of interference by art appellate Court on a finding of fact arrived at by a trial Court as regards appreciation of oral evidence. This rule was recently reiterated by the Supreme Court in -- 'Sarju Pershad v. Jwaleshwari', A. I. R. 1951 SC 120 (A) as follows:
'The rule is -- and it is nothing more than a rule of practice -- that when there is conflict of oral evidence of the parties on any matter in issue and the decision hinges upon the credibility of the witnesses, then unless there is some special feature about the evidence of a particular witness which has escaped the trial Judge's notice or there is a sufficient balance of improbabilityto displace his opinion as to where the credibility lies, the appellate Court should not interfere with the finding of the trial Judge on a question of fact:'
The finding of the lower appellate Court is not, therefore, binding on us.
10. To establish that the plaintiff was not the real agent in respect of this business the defendants have relied on the following circumstances.
(i) certain admissions made by the plaintiff in his cross-examination whiclx show that he was not present when the proposal form was filled up by the Manaraja and when he was medically examined:
(ii) the admission made by the plaintiff in Ex. C to the effect that the Chief Agent was 'really responsible for this case';
(iii) the evidence of the defence witnesses.
11. The plaintiff was unable to state during his. cross-examination as to whose name was given by the Maharaja as his nominee in the proposal form. He could not say who filled up the entries in that. form. He was also unable to say who was referred to as the intimate friend in the proposal form from whom the Company might obtain the usual friend's report. He also stated that he filled up the column in the proposal form giving out his name as the agent in respect of this business. These statements indicate that he was not present when the proposal form (Ex. A) was written out by the Maharaja. The column containing the agents-name was left blank in that form. The friend referred to in the form is Hon'ble Mr. A. S. Khan, one of the Ministers in the Coalition Cabinet and the nominee as given out by the proponent' is his own son Raj Kurnar Madhab Sundar Gajapati Narayan Deo. The plaintiff's inability to mention these facts correctly is inconsistent with his having been present when the form was signed. Similarly his. statement that one Dr. Sen and one Dr. Acharya medically examined the Maharaja cannot be believed inasmuch as the medical reports (Exs. F and G) show that one Dr. Bose (D. W. 1) conducted the medical examination. The attempt made on behalf of the plaintiff to show that the proposal form (Ex. J.) and the medical reports (Exs. F and G) were not the real ones that were sent at that time and that these were substituted later on, can hardly be believed. But the mere fact that the plaintiff was not present when the proposal form was signed by the proponent or during the medical examinations will not necessarily show that he-could not possibly have been the agent. The fact that he was at Cuttack on that day and was interested in this business is clear from the admission that it was he who sent the confidential report as agent to the Company in respect of the Maharaja. (After considering the evidence his Lordship concluded:) I see no reason, to disturb the trial Court's finding that it was through the plaintiff's agency that the business was secured. The absence of his name in the proposal form (Ex. A) cannot be given much significance because defendant 2 admitted in his cross-examination that neither he nor the Company attached any importance to the omission inasmuch as the agent's confidential report was sent by the plaintiff and by none else. Hence there could be no doubt as to who the age'nt was. The actual presence during the signing of the proposal form and active efforts in introducing the Medical Officers to the proponent are not decisive on the question as to who the agent was though they are ordinarily taken into consideration for that purpose.
In a Patna case reported in -- 'Satgur Das v. Bombay Life Assurance Co Ltd', 201 Ind Gas 289(Pat) (B) it was held that where the insurance policy was effected substantially through the efforts of an agent but the technical completion of the contract was brought about by another person the former alone was entitled to the commission. The test in. ail these cases is whose efforts were responsible for the proponent agreeing to effect the contract of insurance with the Company in respect of the sum. The Maharaja's signing the proposal form and getting himself medically examined are merely technicalities to be completed. But if as stated by the plaintiff it was he who first requested the Maharaja and induced him to agree though he sought the help of an influential person like Pandit Godavaris Misra to assist him, his claim cannot be dei'eated merely because he was not present when technical formalities for effecting the contract were made, especially when the admitted position, of the defendants was that the plaintiff signed the confidential report as the agent and in the Company's papers this Policy was shown as haying been secured through the Agency of the plaintiff and the commission was also credited to his account.
12-13. The evidence of defendants' witnesses also is not sufficient to disprove the plaintiff's case or to establish that he was only a name-lender in, respect of this business. (Then his Lordship adverted to the evidence of defendant 2, Gopinath Misra, the only other witness to disprove the plaintiff's case, observed that it was difficult to believe how asemi-illiterate person (viz. defendant 2) who had no knowledge of insurance business would ever be able to canvass as an agent, convince the proponents about the merits of the Lakshmi Insurance Company or persuade them to agree to take out any Policy, that he was equally incompetent to be the Chief Agent of the Company so as to control the activities of the various agents and concluded that he was inclined to accept the finding of the trial Court that defendant 2 was himself a mere name-lender and that the real Chief Agent of the Company in August 1942 was either Pandit Godavaris Misra himself or his son Lokanath who for reasons best known to them set up defendant 2 as the nominal Chief Agent.
14. I now take up Ex. C which is the main strength of the defendant's case. It is admittedly in the handwriting of the plaintiff and in it the plaintiff admitted that the Chief Agent was really responsible for securing the policy from the Maharaja. The name of the Chief Agent was not mentioned. The plaintiff's statement that it was obtained from him by coercion and undue influence might not have been established. But the question for consideration at present is whether theplaintiff's statement that the Chief Agent was really responsible for securing the policy is itself sufficient to discredit his evidence that he canvassed with the Maharaja for securing the Policy though he sought the help of an influential person like Pandit Godavaris Misra. I am, however, unable to find any material inconsistency between the two versions. The real Chief Agent as already pointed out was either Pandit Godavaris Misra or his son Loknath, Pandit Godavaris Misra was then occupying a very influential position being a colleague of the Maharaja and was long associated with the affairs of the Company in Orissa. The plaintiff sought his aid to induce the Maharaja to take out the Policy and Godavaris Babu admitted that he spoke to the Maharaja to insure' with the Company. Therefore, even if the plaintiff admitted that the Chief agent was really responsible for this business, it is a true statement in the seme that but for Godavaris Babu's speaking to the Maharaja the latter may not have taken the Policy.
But it does not disprove the plaintiff's case that he was the agent inasmuch as he had initially requested the Maharaja and prepared the ground. It is also wholly insufficient to show that the plaintiff was a mere name-lender, The following answers given by D. W. 4 in his cross-examination are ma terial in this connection.
'Except when there is mutual understanding or consent by the agent in writing, the agent alone 3S entitled to get the commission even though the Policy is secured without his endeavours or intervention. For assisting any agent for procuring business, the Chief Agent cannot get any remuneration. Whenever any business is secured the agent earns the commission whether he secures it through his own efforts or not.'
These answers show that an agent does not forfeit his right to commission merely because he was frank enough to admit that it was the efforts of the Chief Agent that were mainly responsible for securing the Policy. At that time the plaintiff and Pandit Godavaris Misra were on friendly terms and Pandit Godavaris Misra admitted that he had recommended the plaintiff for appointment as an agent of the Company and that the plaintiff used to stop at times with him at Cuttack. I, therefore, find nothing in Ex. C which materially contradicts the evidence of the plaintiff so far as his claim to be the agent of the Company in respect of this business is concerned.
15. The next question for consideration is whether Ex. C, would amount in law to an assignment of the commission due to the plaintiff from the Company in respect of the business in favour of the Chief Agent so as to disentitle him from any relief in this litigation. Both the Courts have held that it may amount to pay order and not an assignment though they have given divergent reasons for taking this view. Mr. Mohapatra on behalf of the defendants also seriously did not contest the legal position that Ex. C would not amount to an assignment. An assignment of an action able claim must conform strictly to the provisions of Section 130, T. P. Act as pointed out by the Patna High Court in -- 'B.N. Railway Employees Urban Bank Ltd. v. Eric Walter Seager', A. I. R. 1942 Pat 307 (C). The letter Ex. C does not, in terms show that the plaintiff was transferring his interest in the commission to the Chief Agent. It was not addressed to the Chief Agent at all. It is just an order to the Branch Manager of the Company to pay the commission due to the plaintiff to the Chief Agent. Both the Courts rightly relied on -- 'Doraisami v. Doraiswami', A. I. R. 1925 Mad 753 (D) and held that to effectuate an assignment there must be words of transfer in the instrument. Exhibit C is merely a pay order and it is open to the plaintiff to cancel the same. The fact that he subsequently cancelled it by writing to the Company was admitted by the Company (defendant 1) in its written statement.
There is some discrepancy as regards the actual date when the cancellation order was sent by the plaintiff. But there seems no doubt that the cancellation order was sent long before the plaintiff was sent to jail in December, 1943. This inference follows from a perusal of Ex. 5 which is a letter from the Company to the plaintiff dated 16-11-43. There the Company assured him that as the agency was in his name the question of payment, of commission to any other agent did not arise and that the payment would be made to him in due course. This letter was written on the 16th November obviously with a view to alley his anxiety about payment being made to some one else. Thus there is adequate corroboration of the plaintiff's case that he cancelled Ex. C. Its effect as a, pay order disappears and the plaintiff's claim to the commission cannot be defeated.
16. The lower appellate Court has made some observations about the plaintiff being a party to a fraud practised on the Insurance Company and that he should not be allowed to take advantage of his own fraud. The question of fraud does not arise in view of the aforesaid finding. The plaintiff is the agent who secured this business through the intervention of the 'real Chief Agent Pandit Godavaris Misra was decisive. The plaintiff was thus entitled to his commission. It is true that on 27-8-42 he agreed to the commission being taken by the Chief Agent and consequently wrote Ex. C it is immaterial whether he wrote it voluntarily or due to coercion and undue influence. Its legal effect is that of a pay order and as soon as he cancelled it it ceased to be operative. By writing that letter he was not attempting to commit any fraud on the Insurance Company because as an agent he was entitled to his commission and he could validly direct its payment to anyone else. Such a direction would not amount to fraud on Section 40 (2), Insurance Act. Doubtless if the defendant's case about the circumstances under which Ex. C. was written had been accepted it may amount to fraud on Section 40 (2) inasmuch as the Chief Agent who himself does the work of an agent may not be entitled to more than 40 per cent of the commission and the document was primarily intended to give him not only the agent's commission but also the overriding commission in violation of the provisions of the statute. But once the defendant's case has been shown to be not believable there can be no question of fraud nor can it be said that the plaintiff attempted to take advantage of his own fraud.
17. I would, therefore, allow the appeal, set aside the judgment of the lower appellate Court and affirm the judgment of the trial Court. The appellant is entitled to costs throughout.
18. I agree.