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The Oriental Government Security Life Assurance, Limited Vs. Vanteddu Ammiraju and ors. - Court Judgment

LegalCrystal Citation
SubjectInsurance
CourtChennai
Decided On
Judge
Reported in(1912)ILR35Mad162
AppellantThe Oriental Government Security Life Assurance, Limited
RespondentVanteddu Ammiraju and ors.
Cases ReferredMajumdar v. Adyanath Bhattaeharjee I.L.R.
Excerpt:
.....beyond obtaining the policy (exhibit 1) nagayya took no steps to create any trust in favour of his wife and children with respect to the policy. the wife is no party to it, apart from the statute, the right to sue on such a contract would clearly pass to the legal personal representatives of the husband. we are clearly of opinion that the policy money was part of the estate of the deceased nagayya and that under section 16 of the succession certificate act, the plaintiffs obtained a conclusive title be recover it from the defendant company and that the company acted wrongly in refusing to make payment and that the decision of the district court awarding interest to the plaintiff is right, we dismiss the appeal with costs......that he was the guardian of his minor brothers under the hindu law and was entitled to receive the policy money without any order appointing him as guardian under act viii of 1890, but offering to obtain such an order if insisted on, and wished to know whether the company would be prepared to pay him four-sixths of the amount due to himself and his brothers leaving the question of their right to the remaining two-sixths to be determined by a court of competent jurisdiction (see exhibit vii). he also pointed out in the letter, that the additional sub-court of rajahmundry had decided in a suit brought by the son of the deceased daughter claiming a portion of the policy amount against nagayya's sons that the daughter was not entitled to any share of the policy money. the company replied.....
Judgment:

1. This is an appeal from the decision of the District Court of Rajahmunchy in a suit by the four sons of one Nagayya against the Oriental Government Life Assurance Company to recover the amount alleged to be due to them on a life insurance policy dated the 9th December 1896, executed by the company in favour of the said Nagayya. The policy was intended for the benefit of Nagayya's wife and children. He died in 1902, leaving four sons and two daughters. The sons a were all minors. A succession certificate, exhibit B, was obtained on their behalf by their maternal uncle as their guardian for the amount due on the policy. The four sons claimed to be entitled to the amount to the exclusion of the two daughters of Nagayya on the ground that the policy was the ancestral property of Nagayya, But the, Company repudiated their exclusive claim, being of opinion that under the contract of insurance all the children of Nagayya including the daughters were entitled to the amount due under the policy, exhibit I, in the case. This document sets out that the insurance was intended for the benefits of Nagayya's wife and children and the company undertook on the death of Nagayya to pay the amount due to 'the trustee or trustees who may be appointed by the assured in terms of the Married Woman's Property Act of 1874 by separate writing duly executed by him and of which the Company shall have due notice given to them in trust for the benefit of his wife Winitesthu Bowaramma and children by her marriage and in default of any such trustee or trustees to the beneficiary or beneficiaries, if she, he or they be of age and otherwise capable of giving a discharge to the Company and, if any one or more of them be not of age, then jointly those of the beneficiaries who shall be of ago and to the legal guardian of such of them as shall not be of ago.' We may point out that the Married Woman's Property Act is not applicable to Hindus. The Company overlooked this important circumstance and a printed form of policy appropriate to cases to which the Act would be applicable was used for the occasion. One of the daughters died subsequently, and the Company required the production of an order appointing some one as guardian to the miners under the Guardian and Ward's Act, VIII of 1890, and a succession certificate for the share which according to them was due to the deceased daughter, and they took up the position that the certificate granted for the policy amount as a debt due to the deceased Nagayya was of no use (see their letter exhibit E, dated the 6th October 1904, to the plaintiffs' pleader Mr. Venkata Reddi). The first plaintiff en the 17th October 1905 wrote to the Company stating that he had attained majority, that he was the guardian of his minor brothers under the Hindu Law and was entitled to receive the policy money without any order appointing him as guardian under Act VIII of 1890, but offering to obtain such an order if insisted on, and wished to know whether the Company would be prepared to pay him four-sixths of the amount due to himself and his brothers leaving the question of their right to the remaining two-sixths to be determined by a court of competent jurisdiction (see exhibit VII). He also pointed out in the letter, that the Additional Sub-Court of Rajahmundry had decided in a suit brought by the son of the deceased daughter claiming a portion of the policy amount against Nagayya's sons that the daughter was not entitled to any share of the policy money. The Company replied declining to accept the decision of the Additional Subordinate Court as concluding the right of the daughters, and stating that the amount due on the policy was not part of the estate of the deceased Nagayya, and insisting on the production of an order under Act VIII of 1890 referred to in the previous letter. They subsequently offered however by letter, dated the 31st October, 1905, to pay the first plaintiff his one-sixth share of the amount, but insisted with respect to the remainder on the production of a guardianship order and succession certificate which they had already demeaned. The first plaintiff by another letter, dated the 6th November 1905, pointed out the difficulty in obtaining an order appointing a guardian to his minor brothers as the property belonged to his undivided family and offering to give an indemnity bond with respect to the amount due to his minor brothers. But the Company adhered to the position already taken up by it. In their defence to the suit also the Company took up the same position and contended that the plaintiffs were entitled only to four-sixths of the policy amount. The District Judge held that the premia paid for the policy came out of the joint family property of Nagayya and his children and that the plaintiffs alone were entitled to the amount. This finding has not been impeached before us, and the plaintiffs' title to recover the whole amount is admitted. There can be no doubt that this view is correct (see Rajamma v. Ramakrishnayya I.L.R. (1906) Mad. 121 and Mahadeva Pandia v. Rama Narayana Pandia (1903) 13 M.D.J. 76 The Company denied the plaintiffs' claim for any interest, the plaintiffs allege that they were entitled to it from the 9th July 1904, the date when that plaintiff's guardian first gave notice that interest would be charged. The District Judge held that the plaintiffs were entitled to interest on Rs. 1,461 2 8, i.e., torn-sixths of the amount due from the. 9th October 1904 when the Company refused to recognise the succession certificate {exhibit B) and insisted on the production of the guardianship order and succession certificate for the deceased daughter's one-sixth share, up to the 26th February, 1906, on which date the Company paid the above amount into Court. But he held that, with regard to the remaining two-sixths 'share having regard to the terms of the policy, the Company was justified in withholding payment as the proof now given in respect of the plaintiffs' claim for such a share was not before the Company, and it would not be in safe position in paying it to the plaintiffs. The fourth issue in the case was whether the plaintiffs are entitled to collect the whole amount under the succession certificate obtained by them from the District Court. The District Judge observes that it was conceded for the plaintiffs that the finding on this issue should be in favour of the Company. The learned Counsel for the appellant contends that the reason given by the lower Court for disallowing interest on the two sixths share is equally applicable to the sum of 1,461-2-8, that the Company had no proof that the policy was joint family property, and that the Company was justified in requiring a guardianship order for the minor sons. Mr. Seshagiri Aiyar for the respondents contends that the amount due on the policy was due to the deceased, that the succession certificate (exhibit B) gave a conclusive title to the sons of Nagayya to recover it from the Company, and that the Company was in law guilty of wrongful detention of the money in refusing to recognise the plaintiffs title be recover it under exhibit B and that the admission made by the plaintiffs' pleader in the lower Court relating to a question of law is not binding on his clients. We are of opinion that his contention is well founded, and must he upheld, Beyond obtaining the policy (exhibit 1) Nagayya took no steps to create any trust in favour of his wife and children with respect to the policy. The decision in Cleaver v. Mutual Reserve Fund Life Association (1892) 1Q. B. 147 is exactly applicable to this case, and shows conclusively that the policy was part of the estate of Nagayya, and that his heirs were entitled to the payment of the money on his death. In that case one James May brick effected an insurance on his life with the Assurance Company for a sum of money in favour of his wife. The Company promised by the policy be pay the amount to the wife if living at the time of the death of the insured. The question arose whether the executors of James Maybrick's will were entitled to but the Company upon the policy granted by it to the testator. There was another important question in the case be which it is not necessary to refer here. The Court of Appeal held that apart from the Married Woman's Property Act no one would have any right under the policy except the assured and his representatives. Lord Esher, Master of the Rolls, observes: 'The contract is with the husband, and with nobody else. The wife is no party to it, Apart from the statute, the right to sue on such a contract would clearly pass to the legal personal representatives of the husband. The promise is one which could only take effect upon his death, and therefore it must be meant to be enforced by them. The condition on which the money is to become payable is the death of James May brick. Apart from the statute, what would be the effect of making the money payable to the wife? It seems tome that as between the executors and the defendants is could have no effect. She is no party to the contract, and I do not think that the defendants could have any right to follow the money they were bound to pay and consider how the executors might apply it does not seem be me that apart from the statute, such a policy would create any trust in favour of the wife. James Maybrick might have altered the destination of the money at any time, and might have dealt with it by will or settlement. If he had done so, the defendants could not have interfered. I think that, apart from the statute, no interest would have passed to the wife by reason merely of her being named in the policy; and, if the husband wished any such interest to pass to her, he must have left the money to her by will or settled it upon her during his life, otherwise it would have passed to his executors or administrators.' Fry, Lord Justice, says: 'Independently of the Married Woman's Property Act, 1882, the effect of this transaction was, in my opinion, to create a contract by the defendants with James Maybrick that the defendants would, in the event which has occurred, pay Florence Maybrick two thousand pounds assured; it would be broken by non payment to her; but the cause of action resulting from such breach would rest in the executors of the assured, and not in the payee, She was, independently of the ' statute, a stranger, to the contract, it might have been put an end to by the contrasting parties without her consent, and the breach of it would have given her no cause of action against anyone.' Cleaver v. Mutual Reserve Fund Life Association (1892) 1 Q.B., 147. In Rajamma v. Ramakrishnayya I.L.R. (l906) Mad. 121, this Court held that the widow of a person holding a policy of insurance would be entitled to a succession certificate if it was his self-acquired property. In Banohhiram, Majumdar v. Adyanath Bhattaeharjee I.L.R. (1908) Calc. 936, the Full Bench of the Calcutta High Court held that the fact that a debt existing during the lifetime of the creditor was not payable until after his death did not affect its being a part of his estate, and that a decree could not be passed for it in favour of his representatives without a succession certificate. We are clearly of opinion that the policy money was part of the estate of the deceased Nagayya and that under Section 16 of the Succession Certificate Act, the plaintiffs obtained a conclusive title be recover it from the defendant Company and that the Company acted wrongly in refusing to make payment and that the decision of the District Court awarding interest to the plaintiff is right, We dismiss the appeal with costs.


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