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Judgment
Sathiadev, J.—Defendant in O.S. No. 2315 of 1981 on the file of First Additional Judge, City Civil Court, Madras is the appellant. Legal
representatives of the deceased first plaintiff and the second plaintiff are the respondents herein. First plaintiff is the brother and second plaintiff is
the mother of late Captain G. Selvarajan, who was a Pilot in Indian Airlines Corporation (hereinafter referred to as Corporation), who has taken
out a life insurance policy from the defendant on 28.3.1973 for a sum of Rs. 50,000 with accident benefit. The premium was payable annually and
after paying the first annual premium of Rs. 4,684 he had applied for conversion of the policy into one under Salary Savings Scheme whereby the
premium is payable by the Corporation monthly and which will be deducted from his salary. This proposal was accepted by the defendant by
making an endorsement on the policy on 24.4.1974, and he had given necessary authorisation for the premium amount to be deducted from his
salary every month. He died on 2.6.1974, and therefore, first plaintiff, as nominee and second plaintiff as heir, made a demand for payment of the
policy amount, but on defendant unjustly rejecting, it had led to the filing of the suit. Defendant admitted the existence of the policy and of the
endorsement made on 24.4.1974 and of conversion of the same into Salary Saving Scheme. It is claimed that, when this conversion takes place, it
could be effected only from May, 1974, and therefore, the life assured was asked to remit the premium amount of Rs. 390.40 per month of March
and April, 1974 directly to defendant, and as he had failed to pay the amount, the policy had lapsed, and therefore, the amount as claimed is not
payable.
On trial Court decreeing the suit as prayed for, in this appeal, it is contended that the following points arise for consideration :
Has not the policy-holder by failing to pay the monthly premium for the months of March and April, 1974, allowed the policy to lapse?
Would the facts and circumstances of the case attract the accident clause in the policy?
Has the policy been converted into a policy under Salary Saving Scheme from March 1974 onwards?
Point No. 1: There is no dispute that Exhibit A1 policy dated 26.4.1973 was issued to late Selvarajan for Rs. 50,000 that the annual premium
payable thereon was Rs. 4,684 that this policy was converted and brought under Salary Saving Scheme by an endorsement made on the policy on
24.4.1974 (Exhibit A3) and that the monthly premium was fixed at Rs. 300.40 payable by the Airlines Corporation. It is a fact that the monthly
premiums for March and April 1974 had not been paid either by the policyholder or by Corporation. Later on, no payment was made for the
subsequent months, because Selvarajan died on 2.6.1974.
Mr. Ramamurthy, learned Counsel for appellant, strenuously pleads that, when the monthly premiums for two months had not been paid, and
the policy holder having committed default relating to the insurance contract, and a breach of contract having occasioned thereby, the policy had
lapsed and hence equities cannot be pleaded nor entertained, and that the terms and conditions of the policy alone should be looked into; and in
this view, plaintiffs are not entitled to claim the policy amount. The annual premium was due on 28.3.1974. Even before that date, on 16.3.1974,
Selvarajan had asked for conversion of the policy, and this was accepted by appellant by making an endorsement in the policy (Exhibit A3) on
24.4.1974, and in following the letter on the same date under Exhibit A2 it was intimated to him. Hence, appellant having agreed to apply Salary
Saving Scheme on and from March, 1974, it is bound by the said stipulation and cannot claim that the Scheme was made applicable only from
May 1974 onwards, because it was only then it could send the first demand to Corporation for deducting the monthly premium from the salary of
Selvarajan. He had sent his application before annual premium became payable. It is not in dispute that a grace period of one month is available
even as per the policy issued in Ex.A1. Having taken a decision to apply the Scheme from March, 1974, it is the appellant who ought to have
diligently and promptly intimated not only Selvarajan but the Corporation also. In Exhibit A2, it is stated that ""the premium as from March 1974
will have to be paid by your employer by salary deductions at the rate of Rs. 390.40"". Appellant takes its own time and signs Exhibit A2 only on
20.4.1974 which could not reach the Corporation well before it could disburse salary to Selvarajan for May 1974. Appellant is quite aware as to
when deductions are made by Companies, Corporation, etc., under the Scheme, and therefore, by signing a letter of this nature on the last but one
day in the month, it had deprived itself from collecting the monthly premium from the Corporation when it disbursed the salary in May 1974.
It is contended that Selvarajan ought to have paid the annual premium by 28.4.1974, but this contention is baseless because even by 24.4.1974,
appellant had taken the decision to implement the Scheme from March 1974 onwards. The terms of the policy having stood altered from March
1974 onwards by the said decision taken by the appellant, the original terms of the policy cannot be relied upon and put against Selvarajan. When
so much stress is put by appellant on the life insurance contract, as to what are the binding terms between the parties on the relevant date could be
only with reference to what decision appellant had taken in converting the policy into Salary Saving Scheme, on and from March 1974 onwards. It
ought to have along with Exhibit A2 asked the Corporation to deduct premiums for two months from the salary of Selvarajan when the next salary
disbursement takes place. It sent the demand list only in the month of May, 1974. It had not even taken care to include in the said list, premiums
for the months of March and April 1974, which could not be recovered because it had taken longer time to take the decision in favour of
Selvarajan. Lack of diligence on its part had been responsible for failure to collect premium on time. On 24.4.1974, while effecting endorsement
on the policy, knowing quite well that it had already allowed two months to lapse, it could have implemented the Salary Saving Scheme from June
onwards if permissible under the Rules, and should have informed Selvarajan that he could avail of the Scheme only from a future date, which, if
permissible under the Rules and Regulations of appellant Corporation. Having chosen to take the decision that the Scheme would be
retrospectively applicable, it is only the appellant Corporation which will have to take the consequence of its belated performance. Once as in
Ex.A2, the Scheme was made effective from March 1974 onwards and appellant having agreed to recover the amounts only from the
Corporation-the employer of late Selvarajan it should have addressed the employer to pay for March and April 1974 as well since it is permissible
under para 15 of Scheme as per the terms and conditions of the insurance contract read with Scheme appellant cannot therefore look to
Selvarajan to pay the premium accounts for March and April. Even in Exhibit A2, in the last paragraph, there is no indication of the time granted to
him within which he should remit the premium for the two months. It is contended that as per the terms of the policy, the grace period is 15 days.
The said period would have no application to the instant case because the premiums are recoverable from the employer, and contrary to it, the
demand was made on the policy-holder. He should have been informed about the period within which the demand is to be complied with para 15
of scheme allows six defaults to employer before reconversion. For two months, appellant ought to have addressed employer for recovery.
Belatedly this was attempted after Selvarajan''s death. Non-payment for the said two months has not resulted in contravention of scheme
condition, nor breach of terms of policy. B11 dated 16.7.1974 is the letter from Corporation, which refers to memo issued by appellant on
3.7.1974 making a demand for the recovery of the premium amount with effect from March 1974 relating to Selvarajan. Therefore, it is crystal
clear that appellant had made the demand as per the terms of the revised policy on the employer for the months of March and April, 1974. This
demand made by it is in accord with the conditions stipulated in Exhibit A2 to the effect that ""the premium as from March 1974 will have to be
paid by your employer by salary deductions at the rate of Rs. 390.40."" Hence, the concluding party of Exhibit A2 cannot override the agreed
terms between the parties. Because of the lethargic manner in which in respect a Scheme which had been ushered in March 1974 relating to
Selvarajan, appellant took a decision only on 29.4.1974 and hence the premiums for the two months could not be recovered.
It is then contended by relying on Exhibit B8 dated 16.3.1974, a letter by Selvarajan addressed to Corporation stating that he would be
responsible for any consequence of non-payment of premium under the policy for reasons beyond the control of the Corporation, such as himself
proceeding on leave without pay or on himself drawing advance salary without deduction of premium, etc, This is not a case wherein he has drawn
his salary in advance. He drew the salary for the months of March and April, 1974 because the appellant had not intimated the Corporation on
time about deduction of the premium from his salary. Having never been intimated as to what would be the amount recoverable from his salary, he
cannot abstain from getting the salary without deduction. He cannot live without salary till appellant takes a decision, therefore, in the absence of a
timely demand made by appellant, there was no breach of contract committed by him in drawing the salary for the said two months in full.
Therefore, non-payment of premium for the said two months having resulted because of the delayed communication sent by the appellant, it cannot
any longer claim that it was either Selvarajan or the employer-Corporation which was responsible for non-realisation of the amount on time, and
hence, this point is held as against the appellant.
Point No. 2: Selvarajan had gone to Kodaikkanal accompanied by his elder brother, first plaintiff, to settle a bride for him, and during his stay
therein, he used to go for walk in the mornings. The family was staying in a hotel from 28th May, 1974 onwards, and even though he left the hotel
the morning at 7 am. on 2.6.1974, as he had not turned up, first plaintiff in the afternoon of the next day (3.6.1974) made a complaint to the police
and late in the night on that day, they brought the dead body of Selvarajan claiming that he had fallen down near the suicide point. Exhibit B3
Certificate of Register of Deaths shows that the cause of death was ""accidental fall"". The relevant clause in the policy (Ex.A1) states ""if/any bodily
injury is suffered solely or directly from accident caused by outward violent and visible means ""then it would enable policy holder to claim the
accident benefit. Mr. Ramamurthy, relies upon the proviso which deals with intentional injury, suicide or attempted suicide, insanity or immorality,
etc., which would exclude the liability of the appellant Corporation from its liability, but there is no evidence let in to show that it was a case of
suicide. Selvarajan had gone to Kodaikkanal with the entire family to find out a bride for him. On the even of his marriage, nothing is disclosed as
to why he should commit suicide. His service records had not been summoned to show that there are circumstances warranting himself to commit
suicide. Appellant had not produced any medical evidence to show that he was suffering from insanity or mental disability or prone to commit
suicide. Having relied upon the proviso, the burden is on the appellant to establish those claims. Appellant relies upon the following passage at para
2094 of page 822 of MacGillivray & Parkington on Insurance Law (Sixth Edition):
...Crossing or walking along railway track without looking to see if trains are coming, going too near the edge of a cliff in search of wild flowers,
travelling in an unlighted vehicle at dusk or in the dark, boarding a moving train, climbing a fence with a loaded gun have all been held to be
unnecessary exposure to danger within the meaning of the exception.
He submits that this sort of instances would come under the definition of ""unnecessary exposure to danger"" and in turn they would amount to gross
or wanton negligence with regard to the personal security of the insured, and hence, the policy amount cannot be claimed when an insured exposes
himself to anyone of such acts. The late Selvarajan having gone near the edge of the cliff and that too called as a ""Suicide point"", he had brought
about the accident by his wanton negligence, and hence, the plaintiff''s claim has to fail.
As to what is an ''accident'', in Halsbury''s Laws of England (4th Edition, Volume 25) in paragraph 594, it is stated as follows:
...The idea of something haphazard is not necessarily inherent in the word; it covers any unlooked for mishap or an untoward event which is not
expected or designed, or any unexpected personal injury resulting from any unlooked for mishap or occurrence...
When appellant is unable to show that any of the factors in the proviso to the accident benefit clause could be applicable, the entry in Exhibit B13
that the cause of death of Selvarajan was ""due to accidental fall"", will have to be accepted and acted upon. It is claimed that he could not have
fallen if he had not walked very near to the edge of the rock, and therefore, by taking the said risk, he had brought about the accident in a
notorious place called ""Suicide point"" and hence proper inference to be drawn is that, he had committed suicide. Even at a place named
thoughtlessly as a ""Suicide point"" and publicised in that mannar, and to which general public are invited to go and have a close look at it, an
accidental fall could occasion. Going very near to the edge of the rock in a hilly terrain and which interestingly turns out to be a tourist spot, could
not be a ground to disentitle the heirs of a policy holder from claiming compensation in the event of death due to accidental fall of the policy holder
at such a place. Unless an intention to commit suicide is made out, even for an accidental fall, suicide cannot be imputed. Therefore, when the
appellant had failed to discharge the burden that anyone of the factors in the proviso to the accident benefit clause is applicable, it has to be held
that Selvarajan died only due to an accidental fall at a tourist spot.
Point No. 3: Already, while dealing with point No. l, the documents, the endorsement made in Exhibit A1 policy, the letters exchanged between
the appellant, the Corporation and the late Selvarajan had been referred to and they all go to show that the policy taken under Exhibit A1 with a
liability to pay premium annually stood altered as one which could come under the Salary Saving Scheme on and from March 1974 onwards. Both
in Exhibits A1 and A3, appellant had clearly stated that the premiums will have to be paid from March 1974 onwards by the employer of
Selvarajan at the reduced rate of Rs. 390.40. Once an endorsement is made in the policy to that effect, forwarding a demand list in May 1974 to
Corporation which is a follow up action to the conversion Scheme, would not make it as having come into existence only from May 1974
onwards. Based on the Scheme coming into force only with effect from March, 1974, on 3.6.1974, appellant had addressed the Corporation in
Memo No. Dept/SSS/PA/187/CSM dated 3.6.1974 demanding premium amount of Rs. 390.40 per month with effect from March, 1974. It is
claimed by appellant that a copy of this memo had been destroyed in the fire in L.I.C. Building at Madras. When the particulars of the letter have
been disclosed in Exhibit B11, and when Exhibit A1 policy had been affixed an endorsement (Exhibit A3) that the Scheme had come into effect
from March 1974 onwards, it is strange that the appellant should raise an issue regarding the month in which the Scheme had come into force in so
far as Selvarajan is concerned. It has taker, an unreasonable stand in spite of its delayed manner of taking decision and which has been already
referred to. For holding the amount unjustly, an interest at the rate of 18% p.a. could have been awarded, but no cross-objection have been filed,
it only results in awarding of costs.
First plaintiff is admittedly a nominee and was not entitled to a share in the policy amount. It is only the mother, who is entitled to the entire
amount, and in granting the decree, this aspect had not been spelt out clearly in the decree, decree was passed as if both the plaintiffs are entitled
to that amount. It is stated that first plaintiff is since dead and his legal representative have come on record. Under Hindu Law, Selvarajan having
died as a bachelor, it is only his mother, who is entitled to the entire compensation amount. First plaintiff had to join the suit because he was the
nominee, which means that he had a right to collect the amount, but hand over the same to the lawful heir in full. Hence, the decree passed enables
only the second plaintiff to claim the entire amount. Hence, this appeal is dismissed with costs.