The National Insurance Company, Limited vs Seethammal

Horace Owen Compton Beasley, Kt., C.J.—This is an appeal from a judgment of Stone, J. He held that an insurance policy effected with

the National Insurance Co., Ltd., which has its head office at 7, Church Lane, Calcutta, on the 7th July, 1919, for Rs. 1,500 was effected in

Madras. He has, however, stated no reasons in his judgment for so holding.

The point to be considered by us here is, where was this policy of insurance effected? If it was effected in Madras, then a trust has been created

in favour of the assured''s wife and the policy money has to be paid to the Official Trustee of Madras; and that is by reason of Section 6 of the

Married Women''s Property Act. If, on the other hand, the policy was effected in Calcutta, it having been effected in 1919, that is to say, before

1923, there is no trust and letters of administration will have to be taken out by the widow of the assured for the purpose of obtaining the policy

money.

It is contended for the appellants that this policy was effected in Calcutta. A copy of the insurance policy has been put in and it is therein stated

that

the assured has caused to be delivered at the Head Office of the Company a form of proposal and declaration signed by him and dated the 25th

day of May, 1919, which he has agreed shall be the basis of the contract of assurance between him and the Company.

It is, of course, conceded on both sides that this policy of insurance was put through by means of the local agent in Madras of the Insurance

Company; and this proposal was accepted by the Insurance Company by its directors in Calcutta. It is contended on behalf of the appellants that

the contract between the assured and the Company was made in Calcutta, that being the place where the proposal as it is described in the

insurance policy was in fact received by the Company and the place where it was decided to accept the proposal and the place from which the

acceptance was sent from by means of the post to Madras. It is argued that, the proposal being received in Calcutta and being there accepted, the

contract was made in Calcutta. Two cases have been referred to, one an English decision and another a decision of this High Court. The former is

Clarke Brothers v. Knowles (1918) 1 K.B. 128, a decision of the Divisional Court in England in respect of a matter arising in the County Court. It

was there held that where a contract is made by offer and acceptance sent through the post between parties residing in different County Court

districts, the posting of the offer is not part of the cause of action within the meaning of Section 74 of the County Courts Act, 1888. When the

judgment is examined, it is clear that it was held that an offer made through the post is not made in the place where the offer is made but is made in

the place where the offer is received. So that, applying that case, the offer here was made not in Madras but in Calcutta. The other case is

Kamisetti Subbiah v. Katha Venkatasawmy ILR (1903) 27 Mad. 355, where it was held that under the Indian Contract Act where the proposal

and acceptance are made by letters, the contract is made at the time when and at the place where the letter of acceptance is posted. The letter of

acceptance in this case was posted in Calcutta. It is argued, however, on behalf of the respondent, that the intervention of the Madras local agent

makes all the difference and that the cases to which reference has been made are of no application here because those cases deal with the cases of

parties who were directly corresponding with one another from different places, whereas in this case the offer, i.e., the proposal, was given to the

agent in Madras and by him sent to Calcutta and the acceptance of the offer by the Company in Calcutta was communicated by the Madras agent

to the assured in Madras. It is boldly argued that the agent in Madras is the company. That of course is far too sweeping a contention. The agent in

Madras is the agent merely for getting business for the Insurance Company and carrying out the instructions of the"" Insurance Company as regards

the medical examination and details of that description and also in some cases he is the man who is authorised by the Company to receive the

premia in respect of policies of insurance and to give the Company''s receipts. But it is obvious - and there is no dispute about the matter - that the

agent in Madras is not authorised to accept proposals; that he has no authority to do so. It is only the Company, its head office by means of its

directors, that has the authority to accept or reject proposals made by persons seeking to effect insurances. For the purpose of the proposal and

the acceptance, in my opinion, the agent was merely a post office. It was his duty upon receiving the proposal signed by the assured merely to send

it on to Calcutta there to be dealt with by the Company and again when the proposal was accepted, it was his duty merely to communicate the

acceptance of the proposal to the assured. In my opinion this is a very clear case; and the policy of insurance, in my view, was clearly effected in

Calcutta and not in Madras. That being so, this appeal must be allowed and the decree of the trial Court set aside. The effect of this decision is that

the widow of the assured will be able to get the insurance money when she has taken out letters of administration and the money will not be paid to

the Official Trustee of Madras or the Official Trustee of Bengal. The order will also be varied where it makes the policy money payable with

interest at 6 per cent, per annum from the date of death till date of payment. No order as to costs.

Bardswell, J.

I agree.