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Anil Ch. Mitra Vs. Indian Economic Insurance Co. Ltd. - Court Judgment

LegalCrystal Citation
SubjectInsurance
CourtKolkata
Decided On
Reported inAIR1941Cal579
AppellantAnil Ch. Mitra
RespondentIndian Economic Insurance Co. Ltd.
Cases ReferredHarihar Mukerji v. Harendra Nath Mukarji
Excerpt:
- .....defendant company not to pay the money to anybody else. on 1st february 1940 the calcutta national bank in suit no. 1666 of 1939 applied for attachment of the moneys due or to become due under the policy of insurance, and this was served on the defendant company. on 7th february the defendant company wrote to the plaintiff saying that the requirements connected with the claim had not yet been furnished and in consequence the claim had not been admitted and asking for a certified copy of the decree passed in the administration suit. this was sent, but on 23rd february a garnishee notice was served on the defendant company on behalf of the bank. on 5th march the defendant company entered appearance in suit no. 1666 of 1939 and the garnishee proceedings were disposed of by agreed minutes to.....
Judgment:

Lort-Williams, J.

1. In this case the plaintiff as receiver to the estate of Subodh Chunder Mitter deceased sues the defendant company for a declaration that the plaintiff is en-titled to all moneys due and payable under an insurance policy No. 951, dated 30th March 1939 for Rs. 15,000 issued by the defendant company on the life of the deceased, for a decree for Rs. 15,000 and for other reliefs. The defence is discharge by payment under an order of this Court. No oral evidence has been given on behalf of either party. The relevant facts and dates are as follows: On 5th August 1939 a suit No. 1555 of 1939, Bhupat Singh v. Mitters Ltd. and others, was filed inter alia against Subodh Chunder Mitter for money due on a hundi. On the 11th of the same month he died. On the 16th a suit, No. 1666 of 1939, was filed by the Calcutta National Bank Ltd., against the heirs of the deceased man for Rs. 22,500, and on the 30th suit No. 1555 of 1939 was amended by substituting the heirs and praying for administration of the estate of the deceased, and for the appointment of receiver. On 22nd December 1939 a decree was passed in suit No. 1666 of 1939 for Rs. 23,164 with interest and costs to be paid out of the assets of the estate of the deceased. On 16th January 1940 an administration decree was passed in suit No. 1555 of 1939 and the plaintiff was appointed receiver of the moveable property and of the rents, issues and profits of the immovable properties belonging to the estate of the deceased with power to get in and collect the outstanding debts and claims due in respect of the estate. It was further ordered that the receiver do take possession of the estate and collect the rents, issues and profits thereof, and that the tenants and occupiers should attorn to him.

2. In Section 3 Sub-section (34), General Clauses Act, 1897, 'moveable property' is defined as meaning 'property of every description except immovable property.' On 31st January 1940 the plaintiff wrote to the defendant company informing them of his appointment as receiver and asking what amount was due on the insurance policy and telling them that he was entitled to realise the moneys due under the policy and requesting the defendant company not to pay the money to anybody else. On 1st February 1940 the Calcutta National Bank in suit No. 1666 of 1939 applied for attachment of the moneys due or to become due under the policy of insurance, and this was served on the defendant company. On 7th February the defendant company wrote to the plaintiff saying that the requirements connected with the claim had not yet been furnished and in consequence the claim had not been admitted and asking for a certified copy of the decree passed in the administration suit. This was sent, but on 23rd February a garnishee notice was served on the defendant company on behalf of the bank. On 5th March the defendant company entered appearance in suit No. 1666 of 1939 and the garnishee proceedings were disposed of by agreed minutes to the following effect : (1) The garnishee has not admitted the claim of the policy-holder, Subodh Chunder Mitter deceased and no claim paper in respect of the said policy has been filed and reserves the right to reject it for non-compliance of any of the conditions of the policy. (2) Without prejudice to the aforesaid rights the garnishee is willing to pay the amount of the claim due on the policy to the plaintiff when called upon by the plaintiff. (3) In the event of the claim being rejected or any dispute arising out of such claim the plaintiff undertakes to refund the amount to the garnishee.

3. Upon these agreed minutes a decree was passed which inter alia gave the insurance company liberty to pay the amount of the claim due on the policy to the plaintiff bank when called upon to do so and without prejudice to the rights claimed by the insurance company as stated in the agreed minutes. On the next day, 7th March, the bank wrote to the defendant company asking them to send the amount of the claim. This was done on 9th March and a cheque was sent to the bank for Rs. 15,000. Subsequently solicitors on behalf of the receiver wrote to the defendant company asking for the necessary forms in order that he might file a claim. After some further correspondence these forms were sent on 25th April 1940 with a request that they be duly filled in and that proof of age be submitted. These were subsequently forwarded to the defendant company who acknowledged receipt and stated that they were forwarding them to the company's solicitor. Finally on 20th June 1940 the defendant company wrote saying that the amount of the claim payable under the policy was paid to the Calcutta National Bank Ltd., in execution of the decree in suit No. 1666 of 1939 under order of Court dated 6th March 1940. And on 4th December the solicitor to the defendant company wrote admitting the claim subject to the production of a succession certificate, but went on to state that the amount had been attached and pursuant to an order of the Court, paid to the bank, and he claimed that such payment had discharged his clients, and that the plaintiff had no claim against the defendant company. Upon these facts the plaintiff contends that the defendant company has not been discharged and that the policy monies are due and owing to the plaintiff.

4. In the first place it is necessary to observe that neither party to the garnishee proceedings informed the Court that a receiver had been appointed. The insurance company had had notice by letter, and the relationship between the insurance company and the bank raises a strong presumption that the bank also had been informed of this fact. Both the bank and the insurance company have the same address and use the same telephone number. Several directors are common to both companies, and each company holds a large number of shares in the other company's undertaking. It was the duty of the garnishee to give notice to the receiver or to have informed the Judge before the order was made. Having failed to do this, the payment cannot amount to a discharge : The Leader (1869) 2 Adm 314; Plunkett v. Barclay's Bank Ltd (1936) 2 KB 107 at p. 118. If the Court had been informed of these facts, I am quite sure that the so-called garnishee order would not have been made without giving notice to the receiver. In any case, it cannot be binding on either the receiver or the heirs, because neither were parties to the settlement. I am satisfied from these facts that the garnishee proceedings were collusive and ware designed to forestall the other creditors of the estate of the deceased assured. Further, I have no doubt that the design failed, because the order obtained was not and could not have been a garnishee order. The terms of settlement are sufficient in themselves to negative any such effect of the decree, because it is stated that the claim has not been admitted. No proof had yet been given of either age or death, and no due debt then existed which could have been the subject of a garnishee order. The payment was a voluntary payment and was so expressed in the agreed minutes, subject to an agreement to refund the money in the event of rejection of the claim, or any dispute arising out of the claim. There was no order to pay, which is a necessary ingredient of every garnishee order. As stated by Baron Bramwell in Turner v. Jones (1857) 1 H&N; 878 'at page 883:

A garnishee is not protected unless he is served with the order of a Judge for payment of the debt. Ho cannot volunteer to do that which his obligation to the judgment-debtor did not compel him to do. Perhaps if a Judge erroneously ordered him to pay money which he actually owed, but which was not then due, he might be protected; but it is manifest that he cannot discharge himself by agreeing with the execution creditor to fulfil an obligation different from that which he was under to the judgment-debtor. That is obvious from Section 65, which declares that the amount paid or levied shall be a valid discharge to the garnishee, as against the judgment-debtor, even though the proceeding be set aside or the judgment reversed. How can this be said to be a payment under the proceeding, when the proceeding did not compel him to make it? It is merely an arrangement which he chose to make with the execution creditor. Suppose the judgment-debtor chose to pay the debt due from him to the execution creditor, and then to proceed to judgment and execution against the garnishee for the debt due from him, could the latter say that the debt was paid by his arrangement with the execution creditor? Other instances might be put, but without multiplying instances, It seems to me that the case may be decided on this short ground, that in order to discharge the garnishee, he must show that he has done that which his obligation to the judgment-debtor required, and further the order of the Court compelled him to do it.

5. Again in London Corporation v. London Joint Stock Bank (1881) 6 AC 393 it was decided that no payment but a payment made by compulsion of law, can discharge a garnishee from his original liability to his creditor. Chapter 18 of the rules of the original side has no relevance, because the rules themselves apply only to debts due at the time when the order is made. In Gourgopal v. Kamalalika Datta : AIR1934Cal559 it was decided upon the authority of the decision in Soobul Chunder Law v. Russick Lal ('88) 15 Cal 202 that where a preliminary decree has been made in an administration suit, a creditor who has obtained attachment on the judgment-debtor's property prior to the decree is not entitled to priority over other creditors. In the present case the attachment was obtained subsequent to the decree. It has been argued on behalf of the defendants that the plaintiff had not taken possession of the property at the time when the so-called garnishee order was made and therefore had not perfected his title as receiver. But the property in the present case being a contingent debt which at the time when the receiver was appointed had not accrued due, the only way in which the receiver could take possession was by giving notice to the defendants as he did. When the defendants admitted his claim, this admission plus the notice already given immediately perfected his title. Further, it has been argued that the defendant company required and were entitled to require a succession certificate to be furnished before they could be under any obligation to pay the claim. This would have been so if the plaintiffs had been the heirs of the deceased assured, but in the present suit the plaintiff is the receiver and an officer of this Court, and as such requires no succession certificate.

A receiver who is an officer of the Court, although he represents the estate of the deceased, does not claim by right of succession. Therefore he can maintain a suit for a debt due to a deceased person to whose estate he has been appointed a receiver without a succession certificate: Harihar Mukerji v. Harendra Nath Mukarji ('10) 37 Cal 754.

6. The result is that there must be judgment for the plaintiff for the amount claimed, with costs.


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