The Peoples Insurance Co. Ltd. v. Benoy Bhusan Bhowmik And Ors. Opposite Party.

1. This rule is directed against an appellate order of J. De, Esq., District Judge, Dacca, dated 2lst August 1942, made in Miscellaneous Appeal No. 158 of 1942 by which an order of the Subordinate Judge, Fourth Court, of that place returning a plaint under Order 7, Rule 10, Civil P.C., was reversed. The facts material for our present purposes may be shortly stated as follows: The defendant petitioner is an insurance company having its registered office at 1, Mission Road, Lahore. It has also a branch office at Bangla Bazar in the town of Dacca. One Bidhu Bhusan Bhowmik, who had his native village at Harina in the district of Dacca insured his life with the defendant company for a sum of Rs. 2000 and the company granted a policy bearing No. 10950 dated 2nd February 1937. After paying a certain number of premia Bidhu Bhusan Bhowmik died at his native village on 16th September 1938, and thereafter a suit was instituted by the plaintiffs opposite party, who are the heirs and legal representatives of Bidhu Bhusan Bhowmik in the Court of the Fourth Subordinate Judge at Dacca, being money suit No. 18 of 1941, against the petitioner company for recovery of the money due on the above policy of Bidhu Bhusan Bhowmik. The defendant company who resisted the suit contended inter alia that the Court of the Fourth Subordinate Judge at Dacca had no territorial jurisdiction to try the suit. This issue on the question of jurisdiction was heard as a preliminary issue by the trial Judge and by his judgment dated 30th May 1942, he came to the conclusion that the suit was triable only at Lahore, as the registered office of the company was situated at that place and no part of the cause of action arose outside it. The result was that the plaint was returned to be presented to the proper Court. The plaintiffs filed an appeal against that order, and the District Judge of Dacca, who heard the appeal, reversed the decision of the trial Judge and held that the suit was entertain-able by the Dacca Court. It is the propriety of this order that has been challenged before of us in this rule.

2. Mr. Bose, who appeared in support of the rule, has contended before us that the Dacca Court had no jurisdiction to entertain the suit. It has been pointed out, in the first place, that the contract for insurance was completed outside the jurisdiction of the Dacca Court at the registered head office of the company at Lahore where the offer made by the assured was accepted. In the second place, it is said that under the express terms of the contract between the defendant company and the assured the money was payable on the death of the latter at the registered office of the company and nowhere else. The third thing said is that the so-called branch office at Dacca is merely an agency department of the company and its only function is to collect the premia and remit the same to the head office. Mr. Chakrabarty, who appeared for the plaintiffs opposite party has taken up the position that the District Judge was right in holding that as the assured died within the jurisdiction of the Dacca Court, a part of the cause of action relating to the claim of the policy money did arise within the jurisdiction of that Court, which is competent to entertain the suit under the provision of Clause (c) of Section 20, Civil P.C. It is further urged that as the company had a branch office at Dacca the case would come within the purview of Expln. 2 to Section 20, Civil P.C.

3. Section 20, Civil P.C., enacts the rule for determining the forum in all personal actions, and under this section a Court would have local jurisdiction to try a suit either, if the cause of action has arisen wholly or in part within its territorial limits, or if the defendant resides, or carries on business, or personally works for gain within the same. The contention of Mr. Bose is that the death of the assured does not constitute any part of the cause of action, upon which a suit for money due on a life insurance policy can be based, and hence the place where the assured died has no relevancy whatsoever in determining the forum of such suit. He relies very strongly upon a decision of the Rangoon High Court, which is to be found in Jupiter General Insurance Co. Ltd. v. Abdul Aziz ('24) 11 A.I.R. 1924 Rang. 2. The other branch of Mr. Bose's contention relating to this point is that when a suit is based upon a contract the cause of action could arise either at the place where the contract was made or where it was to be performed, and it might also arise at the place where in performance of the contract, any money to which the suit relates, was expressly or impliedly payable. His argument is this that the suit cannot be instituted in any other place, and this is clear from Explanation 3 attached to section 17 of the old code which corresponds to section 20 of the present code. It is true that the explanation has been dropped in the present Code but the law, it is said, remains the same. We have to examine both the branches of this contention. The expression "cause of action" has not been defined in the Civil Procedure Code, but the meaning given to it by Lord Esher in the well-known case in Read v. Brown (1888) 22 Q.B.D. 128 at p. 131, is generally adopted by Indian Courts. The passage in Lord Esher's judgment where the expression "cause of action" has been defined runs as follows:

It has been defined in Cooke v. Gill (1873) 8 C.P. 107 to be this : every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court. It does not comprise every piece of evidence which is necessary to prove each fact, but every fact which is necessary to be proved.

4. In other words it means all the congeries of facts which it is necessary for the plaintiff to establish before he can ask the Court to grant the relief which he claims in the suit. vide Costello J., in Samarendranath Mitra v. Pyareecharan Laha .

5. In the words of Lord Watson the cause of action has no relation to the defence which is set up by the defendant:

It refers entirely to the grounds set forth in the plaint as the cause of action, or, in other words, to the media upon which the plaintiff asks the Court to arrive at a conclusion in his favour.

6. There are numerous cases decided by different High Courts in India, where substantially the same definition has been adopted. We can refer in this connexion to the following passage in the judgment of Sir Geroge Rankin C.J., in Engineering Supplies Ltd. v. Dhandbania & Co . "The only definition that will work," thus observed the learned Chief Justice, if it has to be applied to cases of all kinds, is the entire set of facts that gives rise to an enforceable claim, or, in the words of Fry L.J. 'everything which if not proved gives the defendant an immediate right to judgment,' every fact which is material to be proved to entitle the plaintiff to succeed, every fact which the defendant could have a right to traverse.

7. Now, in the case of a life insurance policy, the claimant must prove the death of the assured before he can enforce his claim against an insurance company. The death of the assured is thus a material part of the cause of action; the plaintiff is bound to prove the fact if traversed, and if not proved the defendant will have an immediate right to judgment. A contract of insurance is a contingent contract, and the right to recover money payable under it depends upon the happening of a particular event. It is the happening of that event and not merely the failure of the insurance company to pay the money which gives rise to the cause of action. There is no decision exactly on this point so far as this Court is concerned, but the point did come up for consideration before a Division Bench of this Court in Bengal Provident and Insurance Co. Ltd. v. Kamini Kumar ('19) 6 A.I.R. 1919 Cal. 1014. There the plaintiff sued the defendant insurance company in the Court of Feni upon two policies of insurance issued by them to his deceased father. The company had its head office in Calcutta where the proposal of the assured was accepted. The assured however died within the local limits of the Court at Feni in the district of Noakhali. It was held by both the Courts below that the death of the assured being a part of the cause of action, the Court at e Feni had jurisdiction to try the suit. Against this decision, there was a rule obtained from this Court which was heard by a Division Bench consisting of Richardson and Beachcroft JJ. Richardson J. definitely expressed his opinion that the death of the assured did constitute a part of the cause of action and consequently the plaintiff was competent to institute the suit in the Court at Feni under Section 20, Clause (c), Civil P.C. The point however was not finally decided in this case as it was held by both the learned Judges that Section 21, Civil P.C., stood in the way of the defendants' challenging the trial as being without jurisdiction. In our opinion, the opinion of Richardson J., is perfectly sound even though the observation cannot rank as more than obiter. This view is supported by the decision of the English Courts in Cailland v. Champon 101 E.R. 933 and though the case is very old it does not appear to have been dissented from in any subsequent decision. The same view was taken by the Madras High Court in Vishvendra Tirtha Swamier v. National Insurance Co. Ltd., Calcutta ('18) 5 A.I.R. 1918 Mad. 635 and by Baker J., of the Bombay High Court in Light of Asia Insurance Co. Ltd. v. Bai Chanchal ('32) 19 A.I.R. Bom. 392.

8. The only decided case which lends some support to the contention of Mr. Bose is that of the Rangoon High Court in Jupiter General Insurance Co. Ltd. v. Abdul Aziz ('24) 11 A.I.R. 1924 Rang. 2. There it was held that in a suit for recovery of money due under a fire insurance policy the cause of action does not include the loss or damage of the property insured, and consequently the place where the loss occurred could not determine the forum of such suit. It was said that the real cause of action was the failure on the part of the insurance company to pay the money due under the contract, and the loss or damage was merely a cause of the cause and not the proximate cause. The learned Judges in course of their judgment observed that the expression "cause of action" as used in Section 20, Clause (c), Civil P.C., should not be taken to have the same meaning as it was given to it in Read v. Brown (1888) 22 Q.B.D. 128 and the several other cases both English and Indian which followed it. It was further said that when the suit is one on a contract the cause of action could only include the making of the contract and the performance of the contract and the payment of money under the contract and nothing else; in other words, the expression "cause of action" occurring in Section 20(c), Civil P.C., when applied to suits based on contract would include those facts only which were specified in Expln. 3 attached to section 17 of the old code, which has been omitted from the present Code of 1908. With all respect to the learned Judges who decided the case it seems to us that the view taken is not sound and cannot be accepted. In the first place the expression "cause of action" has always been interpreted in this Court in the light of Lord Esher's dictum in Read v. Brown (1888) 22 Q.B.D. 128 and as Sir George Rankin observed in Engineering Supplies Ltd. v. Dhandbania & Co , this is the only definition that will work if it is to be applied to cases of all kinds. It does not seem to us that the learned Judges of the Rangoon High 'Court were right in saying that the cause of action connotes different things in different parts of the Code. We cannot also agree with the view that the cause of action in suits for money due on a contract of insurance is the failure on the part of the insurance company to pay the money. The refusal of the insurer to pay the money may be a part of the cause of action, but the death of the assured is also a material part which gives occasion for and forms the foundation of the suit. The other matter upon which stress was laid by the Rangoon High Court is that as in Expln. 3 to Section 17 of the Code of 1882 "cause of action" in relation to suits on contract was exhaustively defined, the same meaning should be attached to it in Section 20(c) of the present Code of Civil Procedure even though the explanation occurring in the old Code has now been omitted. This, as we have already said, is the second part of Mr. Bose's contention and it is necessary to examine this proposition carefully. Section 17, Civil P.C. of 1882 as it originally stood, referred to the place; where the cause of action arose. It was not clear whether it meant the entire cause of action or a part of it. Act 7 of 1888 added an explanation, namely Expln, 3 to the section which ran as follows:

In suits arising out of contract, the cause of action arises within the meaning of this section at any of the following places, namely : (1) The place where the contract was made; (2) the place where the contract was to be performed or performance thereof completed; (3) the place where in the performance of the contract, any money to which the suit relates was expressly or impliedly payable.

9. This explanation was added for the purpose of making it clear that suits arising out of contract could be instituted in the Court within the local limits of which the cause of action arises either wholly or in part. Still, there was doubt as to whether this principle was applicable to all other suits which were not based on contract, and it was held in several cases that the introduction of the explanation did not effect any change in the law and that the cause of action did not mean the entire cause of action, vide Bankey Behari v. Pokhe Ram ('02) 25 All. 48. In Section 20 of the present Civil Procedure Code, the words "wholly or in part" have been added in Clause (e) to make it plain that all suits may be instituted where the cause of action arises either wholly or in part, and Expln. 3 of the old Code has been dropped as it is no longer necessary. We do not think that Expln. 3 to Section 17, Civil P.C., 1882, cuts down or restricts in any way the scope of Section 20(c) of the present Civil Procedure Code. That explanation is still good law in the sense that suits arising out of contract could still be instituted in the Court having local jurisdiction over any of the places specified in the explanation; but the explanation after it is repealed cannot be regarded as exhaustively laying down all the possible for in regard to suits based on contract. Speaking for myself I agree entirely with what was said by Richardson J., in Bengal Provident and Insurance Co. Ltd. v. Kamini Kumar ('19) 6 A.I.R. 1919 Cal. 1014 that it is not "justifiable to interpret the language of the Code now in force by reading into it a repealed explanation from the repealed Code." The proper way of interpreting a statute which codifies the law on a particular subject was thus stated by Lord Herschell in the well known case in Bank of England v. Vagliano Brothers (1891) 1891 A.C. 107 at pages 144 and 145:

I think the proper course is in the first instance to examine the language of the statute and to ask what is its natural meaning, uninfluenced by any consideration derived from the previous state of the law, and not to start with inquiring how the law previously stood, and then, assuming that it was probably intended to" leave it unaltered, to see if the words of the enactment will bear an interpretation in conformity with this view.

10. Our conclusion, therefore, is that the view taken by the Court below is right and the Court of the 4th Subordinate Judge at Dacca had jurisdiction to entertain the suit. We agree further with Mr. Chakravorty, that as the cause of action in this case arose within the jurisdiction of the Dacca Court and as the company has a branch office in that place the suit could be instituted at Dacca under Expln. 2 to Section 20, Civil P.C. Mr. Bose for the petitioner argues that the company cannot be said to carry on its business at Dacca as the only function of the branch office established there is to collect the premia and remit them to the head office. It has no jurisdiction to accept proposals. But the language of the explanation is perfectly clear and once it is established that a corporation has got a branch office at any place it shall be deemed in the eye of law to carry on its business at that place irrespective of the nature of the work that is actually carried on there. As the Privy Council observed in Commissioner of Income-tax, Bombey Presidency v. Bombey Turst Corporation Ltd. :

When a person is 'deemed to be' something, the only meaning possible is that whereas he is not in reality that something the Act of Parliament requires him to be treated as if he were.

11. The result, therefore, is that we discharge the rule with costs; hearing fee being assessed at three gold mohurs.

Blank, J.

12. I agree.