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Life Insurance Corporation of India Vs. Gurdial Singh - Court Judgment

LegalCrystal Citation
SubjectInsurance
CourtPunjab and Haryana High Court
Decided On
Case NumberSecond Appeal No. 1225 of 1959
Judge
Reported inAIR1960P& H607
ActsInsurance Act - Sections 44; Limitation Act - Schedule - Articles 64, 85 and 120; Code of Civil Procedure (CPC), 1908 - Sections 100
AppellantLife Insurance Corporation of India
RespondentGurdial Singh
Cases ReferredRam Lal Kapur and Sons v. Asian Commercial Assurance Co.
Excerpt:
.....passing of the said order. - as he failed to prove his pauperism, permission was not allowed to sue in forma pauperis. the claim beyond 30th of august, 1951, is clearly within time. it cannot be disputed that the right to recover renewal commission is a recurring right and it can only be defeated if it is found by a competent court that the termination of the agency was on account of fraud.(1) this is a defendant's appeal in a plaintiff's suit for recovery of renewal commission insurance policies effected by him before the 13th of july, 1951.(2) plaintiff gurdial singh was an insurance agent of the oriental government security life assurance company ltd., hereinafter called the company. his services were terminated on the 13th of july, 1951, on the ground that he had received two insurance premiums from smt. rattan devi jain and shri k. n. khosla and had kept them for a period of two months and only after repeated reminders forwarded these amounts to the company. originally, the suit was filed in forma pauperis.as he failed to prove his pauperism, permission was not allowed to sue in forma pauperis. the present suit has been filed by the plaintiff for accounts against the.....
Judgment:

(1) This is a defendant's appeal in a plaintiff's suit for recovery of renewal commission insurance policies effected by him before the 13th of July, 1951.

(2) Plaintiff Gurdial Singh was an insurance agent of the Oriental Government Security Life Assurance Company Ltd., hereinafter called the Company. His services were terminated on the 13th of July, 1951, on the ground that he had received two insurance premiums from Smt. Rattan Devi Jain and Shri K. N. Khosla and had kept them for a period of two months and only after repeated reminders forwarded these amounts to the Company. Originally, the suit was filed in forma pauperis.

As he failed to prove his pauperism, permission was not allowed to sue in forma pauperis. The present suit has been filed by the plaintiff for accounts against the Life Insurance Corporation of India--hereinafter called the Corporation--as in the meantime all the life insurance business has been taken over by the Corporation from all the insurance companies. Defence to the suit was that the forma pauperis application's rejection amounted to the dismissal of the suit on the same cause of action and therefore operated as res judicata, that the suit was barred by time, that no suit for accounts lay, the plaintiff being an agent and in any case the plaintiff's services having been terminated on account of fraud he was not entitled to any renewal commission under Section 44 of the Insurance Act (No. 4 of 1938). Number of issues were framed on these contentions.

All this issues were found against the defendant excepting limitation by the trial Court. Holding the suit to be barred by time, the plaintiff's suit was dismissed by the trial Court. On appeal, the finding given by the trial Court were maintained by the lower appellate Court, but the decision on the question of limitation was reversed and it was held that the suit was within limitation. It was common ground in both the Courts below that the Article applicable to the suit was Article 120 of the Limitation Act there being no other specific Article in the Act which would cover a suit of the present type. Dissatisfied with the decision of the lower appellate Court, the Corporation has come up in second appeal to this Court.

(3) Mr. Sachar, who appears for the Corporation, contends that no suit for accounts is competent against he Corporation because the position of the plaintiff is that of an agent and that of defendant of principal. For this he relies on a decision of the Calcutta High Court in Narmada Chandra Banerjee v. Maharaj Bahadur Singh Durgar, AIR 1937 Cal. 359. His other contention is that the suit is barred by time as Article 64 or 85 of the Limitation Act is applicable. His last contention is that on the facts proved on the record, the plaintiff's services were terminated on ground of fraud and therefore he is not entitled in law to the renewal commission.

(4) After hearing the learned counsel for the appellant, I find that there is no merit in this appeal. So far the first contention is concerned, there is a Full Bench decision of this Court in Ram Dev Jai Dev v. Seth Kaku, (1950) 52 Pun LR 31: (AIR 1950 EP 92) and two Single Bench decisions of this Court in Diwan Chand Sant Ram v. Bhagat Ram, 47 Pun LR 407: (AIR 1946 Lah 82) and Punjab National Bank Ltd. v. Kirpa Ram, (1954) 56 Pun LR 135, wherein it has been filed that where the plaintiff can only be given relief after accounting, it is no bar to a suit for accounts, where ordinarily the plaintiff would not be entitled to file a suit for accounts. These decisions are contrary to the Calcutta view in Narmada Chandra Banerjee's case. AIR 1937 Cal 359 and I therefore follow the decisions of this Court in preference to the decision of the Calcutta High Court, and hold that the suit for accounts is maintainable.

(5) The commission is payable or renewal of policies and it is a matter of common knowledge that policies keep on lapsing. Therefore, it is not possible for the plaintiff to know exactly when amount is due to him each year because the amount of commission will keep on fluctuating on the number of policies, which have been renewed and those which have not been renewed. In a similar situation, it was held in Ram Lal Kapur and Sons v. Asian Commercial Assurance Co., Ltd., AIR 1933 Lah, 483, that a suit for accounts is maintainable by an insurance agent against the Company. In this view of the matter, I repel the learned counsel's first contention.

(6) So far the second contention is concerned, I have gone through the entire schedule of the Limitation Act and find that barring Article 120 of the Limitation Act, there is no other Article which covers the present case. The case does not fall either under Article 64 or Article 85 as contended for by the learned counsel. So far the period of limitation under Article 120 is concerned, it is six years, and all renewal commission, which falls within six years of the date when the cause of action accrued, namely, the 13th of July, 1951, will be within time. The claim in the suit is for the renewal commission from the 13th of July, 1951.

Therefore qua the renewal commission which falls due between the 13th of July, 1951, to the 30th of August, 1951, the suit is certainly barred by time, the suit having been filed on the 30th of August, 1957, and the decision of the lower appellate Court thereon cannot be maintained. The claim beyond 30th of August, 1951, is clearly within time. It cannot be disputed that the right to recover renewal commission is a recurring right and it can only be defeated if it is found by a competent Court that the termination of the agency was on account of fraud. If the termination of the agency was not on account of fraud, then the plaintiff would be entitled to the renewal commission.

(7) Coming to the third contention, initially it is a question of fact and the concurrent decision of the Courts below thereon would be concluded by the provisions of Section 100 of the Code of Civil Procedure and no second appeal would be competent, but the learned counsel contends that on the facts found it can be held that fraud is proved on the record. The facts found are that two premiums from Smt. Rattan Devi Jain and K. N. Khosla were received by the plaintiff and were retained by him for a period of two months and thereafter were paid to the Corporation. There is nothing on the record to establish that when he received these premiums there was a dishonest intention on his part not to forward these premiums to the Corporation. That dishonest intention may have come sometimes later than the time of the receipt of the money and this possibility has not been excluded. Therefore, it cannot be held that on these facts it is conclusively proved that there was fraud on the part of the plaintiff. This contention also fails.

(8) For the reasons given above, I dismiss the appeal with this modification that the plaintiff's suits for renewal commission, which fell due from the 13th of July, 1951, to the 30th of August, 1951, would be barred by time and on that basis he would not be entitled to that renewal commission, otherwise the decision of the Additional District Judge is maintained. There will be no order as to costs in this Court. The order as to costs by the Additional District Judge will stand.

(9) Order accordingly.


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