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G.D. John Vs. K.P. Sambamurthy Aiyar (Deceased) and ors. and the Oriental Government Security Life Assurance Company, Limited - Court Judgment

LegalCrystal Citation
SubjectInsurance
CourtChennai
Decided On
Reported in121Ind.Cas.155; (1929)56MLJ299
AppellantG.D. John
RespondentK.P. Sambamurthy Aiyar (Deceased) and ors. and the Oriental Government Security Life Assurance Compa
Excerpt:
- - as regards the first objection it seems to me that, under the terms of the policy the company is to be satisfied with the proof of death which has been furnished to it. 6. before the money becomes a debt, that is, an obligation which has matured into an enforceable demand against the company, this condition has to be satisfied, vis. this was not done at the time of the taking out of the garnishee summons, and it seems to me that the company can well resist any garnishee order until the condition requisite by the policy has been satisfied, that is, until such proof is given as the company requires or, if no rules have been framed by the company, as the company thinks sufficient to enable a reasonable person to be satisfied as to the death of another......the policy amount has become due and payable and the money is attached as a debt payable by the life assurance company.2. a copy of the policy has been filed and the terms of the policy are not in dispute. it says:.the sum of rs. 1,000 or such other sum as shall become due and payable by virtue of these presents, agreeably to the regulations of the company, on proof to the satisfaction of the directors of the death of the said assured or that he has completed the age of 50 years and of the title of the person claiming payment.3. the amount of the policy is expressly made payable at bombay. rule 1 of order 20 of the original side rules runs as follows:this order applies in the case of (1) a debt due to a judgment-debtor, not secured by a negotiable instrument, (2) a debt secured by a.....
Judgment:
ORDER

Kumaraswami Sastri, J.

1. This is an appeal from the order of the Master in garnishee proceedings instituted by the decree-holder in this suit against the Oriental Government Security Life Assurance Company,' Limited, in respect of a policy taken out by one K. P. Sambamurthy Aiyar, the defendant in the suit, who is alleged to have died. It is stated that the policy amount has become due and payable and the money is attached as a debt payable by the Life Assurance Company.

2. A copy of the policy has been filed and the terms of the policy are not in dispute. It says:.the sum of Rs. 1,000 or such other sum as shall become due and payable by virtue of these presents, agreeably to the regulations of the Company, on proof to the satisfaction of the Directors of the death of the said assured or that he has completed the age of 50 years and of the title of the person claiming payment.

3. The amount of the policy is expressly made payable at Bombay. Rule 1 of Order 20 of the Original Side Rules runs as follows:

This order applies in the case of (1) a debt due to a judgment-debtor, not secured by a negotiable instrument, (2) a debt secured by a negotiable instrument which has been attached under Order 21, Rule 51 of the Code, and (3) moveable property not in the possession of the judgment-debtor, when the person by whom the debt is due, or who is in possession of the moveable property, hereinafter called the 'garnishee' resides, or carries on business, or personally works for gain within the local limits of the Court.

4. The Master ordered the Company to pay the amount due on the policy acting under this order.

5. Two objections are taken. The first is that, as proof of death to the satisfaction of the Company was not given at the time when the application was made, the Company is not bound to pay the money. The second objection is that the Company does not carry on business or personally work for gain or reside in Madras within the local limits of the Court. As regards the first objection it seems to me that, under the terms of the policy the Company is to be satisfied with the proof of death which has been furnished to it. The condition is,

Rs. 1,000 or such other sum as shall become due and payable by virtue of these presents, agreeably to the regulations of the Company, on proof to the satisfaction of the Directors of the death of the said assured.

6. Before the money becomes a debt, that is, an obligation which has matured into an enforceable demand against the Company, this condition has to be satisfied, vis., proof should be given of the death in such manner as the rules of the Company require. No doubt, if such proof is given, the Company cannot arbitrarily say that it is not proper proof, but it should be such proof of death as is ordinarily required by the Company under the rules, or as required by law to prove death. This was not done at the time of the taking out of the garnishee summons, and it seems to me that the Company can well resist any garnishee order until the condition requisite by the policy has been satisfied, that is, until such proof is given as the Company requires or, if no rules have been framed by the Company, as the Company thinks sufficient to enable a reasonable person to be satisfied as to the death of another.

7. The other objection depends upon the question whether the Oriental Government Security Life Assurance Company, Ltd., carries on business in Madras. It is no doubt true that the Company has got an agency in Madras; but it is not stated that this agency has any directors here or any persons who form a kind of controlling board in Madras or at least have some discretions as regards the policies. The affidavit filed on behalf of the Company is to the effect that so far as the Madras office is concerned, it has no independent discretion in the matter but simply acts as a post office which receives applications or moneys and passes them on to the Head Office in Bombay, and that is the Head Office that issues all orders, there being no vestige of discretion in the local office here to do anything. These facts are not contradicted and the question is whether it can be said that the Oriental Government Security Life Assurance Company, Ltd., carries on business in Madras. I think this question is really concluded by the judgment of Beasley, J., in C.S. No. 257 of 1926 which was a suit filed by the Bombay Company, Ltd., Madras, against the Municipal Council of Dindigul. It was there shown that the representatives of the Bombay Company in Dindigul had no discretion except receiving orders and sending them on. The question was whether they carried on business in Dindigul to be taxed. It was held that they were not, and Beasley, J., in an elaborate review of the authorities states that there is no difference in principle between residence for purposes of either the Income-tax Act or the Municipal Act, or for purposes of jurisdiction. This judgment was affirmed by the Chief Justice and Madhavan Nair, J., in O.S. Appeal No. 6 of 1928 where all the authorities have been discussed by the learned Judges. I think that on the facts disclosed in the present case in the affidavit, namely, that the agency in Madras does nothing but act as a post office forwarding proposals and sending moneys and not having any discretion in the matter either to conclude contracts or to vary them or to enter into them, the Oriental Government Security Life Assurance Company does not carry on business in Madras. It was stated that a suit may lie under Section 12 of the Letters Patent if the money is not paid. That may be so not on the ground that there is business carried on in Madras, but because the proposal was made in Madras and forwarded and part of the cause of action arose in Madras and on that ground leave may be given. I do not think we can confuse the fact of jurisdiction arising out of a part of the cause of action with jurisdiction arising out of the carrying on of business. Unfortunately, our rules do not provide for garnishee proceedings in cases where a part of the cause of action arises in respect of a debt sought to be enforced by garnishee proceedings.

8. Under these circumstances, I think the application of the Oriental Government Security Life Assurance Company, Ltd., should be upheld. The order of the Master is set aside.

9. The amount is a small sum of money Rs. 1,000, of which Rs. 800 and odd is now said to be due. The amount is payable to the widow of the deceased and has been attached by the creditors. The question is whether, having regard to the fact that the contention is purely one of law, I can allow costs. Having regard to the smallness of the amount and the fact that the Life Assurance Companies fight it more as a matter of principle than with any desire to be obstructive, I think that each party will bear his own costs.


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