Panchanan Laha vs Sudharani Laha

P.N. Mookerjee, J.—The dispute in this appeal relates to certain insurance money. The instant suit was for a declaration it an assignment, dated January 13, 1958, made by the assured corned, namely, Manindra Nath Laha, deceased, in favour of his fe, who is Respondent No. 1 before us, was obtained by fraud, the influence, coercion and extortion and was not, therefore, ding on the present Appellant, who was a prior nominee of the active insurance money and policy and was the Plaintiff in the suit. ;re was also a prayer for a certain injunction. That prayer, /ever, does not appear to have been very clearly worded or expressed and, as it appears, the learned trial Judge did not ly pay any attention to the same. We also in this appeal are so much concerned with the said prayer.

As sufficiently indicated hereinbefore, the Plaintiff Appellant claims to be a nominee in respect of the policy, which purported to be the subject-matter of the aforesaid assignment. The Plaintiff was a nephew, of the assured. There is no dispute that there was the aforesaid nomination in his favour in respect of the said policy, but Respondent Defendant No. 1 (who is the widow of the deceased assured) claims title to the insurance money on the strength of the above assignment which, according to her, was made subsequently by the assured. The contest, therefore, arises between the above nomination and assignment and the point to be decided is which of the two should prevail.

The learned trial Judge was of the opinion that, in fact and in law, the assignment would override the nomination in the circumstances of this case and, in that view, and upon the evidence before him, he refused the Plaintiff the declaration, prayed for in the suit, o. any relief therein. It is against this decree of dismissal that the present appeal has been filed by the unsuccessful Plaintiff.

The policy in question is a Policy of Insurance (No. 62921) (sic) the North British Mercantile Insurance Co., Ltd., on the life of the assured Manindra Nath Laha for a sum of Rs. 5,000. The police bears the date April 5, 1928. It appears to have been original assigned by the assured in favour of the present Respondent No. 1 who was his wife, sometime in the year 1938, but, thereafter, appears, there was a re-assignment by this lady in favour of the original assured, namely, her husband, on or about September (Sic) 1955. The nomination in favour of the Appellant bears the da(Sic) September 14, 1955. It appears to have been duly made on the Policy by a requisite endorsement and it was notified to the Company and duly accepted and registered by them. Thereafter, on January 13, 1958, the disputed assignment appears to have been made the assured Manindra Nath Laha in favour of Respondent No. 1, (Sic) wife.

The Plaintiff''s main allegation against this assignment appears be that it was obtained by fraud, undue influence and coercion duress. On this point, the Plaintiff purports to have led evidence oral and documentary. The Plaintiff Appellant also challenges validity and effectiveness of this assignment as against his p(Sic) nomination upon the ground that the said nomination was(Sic) cancelled according to law under and in terms of Section 39(2) of(Sic) Insurance Act and that, accordingly, the said nomination Sub-section rendering the subsequent assignment invalid and ineffective ag(Sic) it.

This contention of the Plaintiff has been overruled by the learned trial Judge, relying upon Sub-section (4) of Section 39 of the Act, which, in express terms, provides that a transfer or assignment of a policy, made in accordance with Section 38, shall automatically cancel a nomination. There is a proviso appended to the said Sub-section which, though very seriously relied on on behalf of the Appellant in this Court, does not, for reasons to be given hereinbelow, seem to us to be of much relevance in the instant case. The learned trial Judge also rejected the Plaintiff''s case that the above disputed assignment was vitiated by fraud, undue influence, coercion or duress, or any infirmity, recognised by law. It is the propriety of this decision of the learned trial Judge which is under challenge in this appeal.

We must first take up the points of law, which were urged by Mr. Bose in support of this appeal and, thereafter, we will address ourselves to the dispute or disputes on facts. Mr. Bose argues that Sub-section (4) of Section 39 only applied to an assignment, which is spoken of and contemplated in the proviso. It has no wider application. He contends, further, that the assignment in question in the instant case is not an assignment, as contemplated in the said proviso, and, accordingly, Sub-section (4) would not apply to that assignment and would not protect it, or give it precedence over the earlier nomination in favour of the Plaintiff Appellant.

In our opinion, this argument stands to be rejected on a reading of the Sub-section itself, either taken alone or taken along with the other relevant provisions of the statute. It is clear from the wording of the aforesaid Sub-section (4) and its proviso that the said proviso was intended to restrict the scope of the main part of Sub-section (4). Under the said Sub-section (4), in its main part, standing alone, any transfer or assignment of a policy, made in accordance with Section 38 would ipso facto by itself and without more, amount to automatic cancellation of a prior and existing nomination. A limited assignment of the type, contemplated in the proviso, namely, where the assignment is made or taken for securing a loan, which, normally, would be much less, or, it least, less than its surrender value, is also contemplated u/s 38 ind, if such a limited assignment is made in accordance with the said section, under the main part of Sub-section (4) of Section 39, standing above, hat, by itself, would have meant automatic cancellation of a nomination n respect of the policy. That was obviously an inequitable situation md might, in some cases, have led to an absurdity. That explains the necessity and the reason of the proviso and its only purpose is that, n case of limited assignments, as contemplated therein, the automatic cancelation in terms of the main part of the Sub-section, would be only pro tanto, or, to the extent of the interest, created by the assigning. Except to that extent, it leaves unchecked and unrestricted the operation of the main part of Sub-section (4) which, on its plain terms, would be sufficient, provided the assignment is made in accordance with Section 38, to cancel automatically a prior and then existing nomination.

Mr. Bose contended before us that the only way of cancelling a nomination was provided in Sub-section (2) of Section 39. We are unable to accept this submission in the face of Sub-section (4) of the section. Sub-section (2) speaks of express and specific cancellation; Sub-section (4) contemplates cancellation by implication and it is, what is known in law, a deeming provision for cancellation. In other words, except where the proviso to Sub-section (4) applies, as soon as an assignment is made in accordance with Section 38, the result will be that a then existing nomination would stand automatically cancelled without any express words of cancellation and without resort to the procedure or mode for express cancellation, laid down in Sub-section (2). It is also to be remembered that, in Section 39, the first Sub-section deals with and preserves the right of the policy-holder to make a nomination. Sub-section (2) prescribes the mode for an effectual nomination and also for its express alteration or cancellation and provides further for protection of the insurer in respect of a bona fide payment, made without notice of such alteration or cancellation. The statute, however, in Sub-section (4) also provides for implied and automatic cancellation by assignment. The provision for assignment is contained in the prior section, namely, Section 38, which prescribes the mode for the same with necessary safeguard to the insurer against assignment without notice. Thus Sub-section (1) of the said Section 38 says that assignment may be made by an endorsement on the policy itself or, by a separate deed, signed, in either case, by the transferor or by the assignor or his duly authorised agent and attested by, at least, one witness, and specifically setting forth the fact of transfer or assignment. These indeed, are the requisites of a valid assignment u/s 38 and Sub-section (2) of that section expressly provides that an assignment, made as aforesaid, shall be complete and effectual upon the execution of such endorsement or instrument, duly attested, while, at the same time, protecting the insurer against an un-notified assignment by insisting on a notice to him for enforcing the assignment, so far as he is concerned. That, however, is a matter between the insurer and the insured or the assignee. As against other persons, the assignment becomes complete and effectual as soon as it is made in the mode, prescribed in Sub-section (1) of Section 38. Such an assignment is, u/s 39(4), given the overriding effect of cancelling automatically a prior and then existing nomination. There can be no doubt about the above position, on a reading of the two sections together, and, as, in the present case, the disputed assignment satisfies all the requirements of Section 38, and that is not disputed by Mr. Bose, it must prevail over the " Plaintiff''s nomination, provided, of course, the Plaintiff''s challenged to the same, on the ground of fraud, undue influence, coercion o: duress fails.

Mr. Bose, in the above connection, also drew our attention to the definition of "policy-holder" in Section 2(2) and also to Section 111, which provides for statutory notices in certain cases. We are not much impressed by the relevance of these two sections in the present case and, in our opinion, neither of the said two sections has even the remotest bearing on the point or points at issue before us.

That leaves us only with the question of the Plaintiff''s challenge to the disputed assignment on the ground that it was vitiated by fraud, undue influence, coercion or duress. Very fairly, Mr. Bose placed before us the entire evidence in the case on this point, both in his favour and against him. Very fairly also, Mr. Bose frankly conceded that, so far as oral evidence was concerned, there was not much on the point said by any of his witnesses and only certain inferences, not very immediate may be drawn from that evidence in his client''s favour. Mr. Bose, however, very strongly relied upon Ext. 2-F, which purports to be a letter, addressed by the deceased insured during his lifetime to the Insurance Company, containing some serious allegations against his wife, and alleging, in particular, that, through foul means, certain documents had been got executed by him and other documents may also be obtained from him through the same process in future. If this letter (Ext. 2-F) could be accepted, a prima facie case may be said to have been made out in favour of Mr. Bose''s client, but there are certain circumstances and certain aspects, which make it impossible for us to palace intrinsic reliance upon this letter. The letter (Ext. 2-F) will also be inconsistent with the oral evidence, adduced by the Plaintiff himself, at least, in some material particulars. In the oral evidence, the Plaintiff himself has spoken, only generally, about the relations between the insured and his wife and all that he has said is that they were not on friendly terms. Beyond that, we find nothing in his oral evidence which will be of assistance to him on this particular point. The Plaintiff''s son, who was examined as Plaintiff''s witness No. 2, also practically confines himself within the same limits. He, however, speaks of a letter, possibly the letter which was subsequently marked as Ext. 2-F, as having been given to him by the insured for delivery to the Insurance Company and, according to his evidence, it was duly delivered. We are, however, not inclined to place much reliance upon this evidence and, even if this evidence be accepted to the extent that a letter was actually delivered by him to the Insurance Company,-and that may be supported by the fact of production of the letter by the Insurance Company from its custody, it is hardly sufficient to prove that this was a letter, written or authorised by the insured himself. On the other hand, there are various circumstances in the case which cast a suspicion on the genuineness of this letter and, in the face of the other admitted correspondence between the insured and the Insurance Company, we are unable to place any credence on the statements obtained in this letter, Ext. 2-F. And Ext. 2-F being thus out of the way, there is practically no evidence of any fraud, undue influence, coercion or duress in respect of the disputed assignment. On the other hand, the probabilities of the case would support the said assignment and, to some extent, that would acquire strength, corroboration and confirmation from the evidence of the Plaintiff''s last two witnesses, according to whom, there were only occasional quarrels between the husband and the wife, but otherwise their relations were cordial. In view of the above evidence, we do not find any reason to interfere with the finding of the learned trial Judge, rejecting the Plaintiff''s case of undue influence, fraud, coercion or duress in respect of the disputed assignment, and, as we have also overruled earlier Mr. Bose''s legal arguments on the provisions of the Insurance Act in favour of his client, this appeal must fail.

The appeal is, accordingly, dismissed with costs to the Defendant No, 1 Respondent.

N.K. Sen, J.

T agree.