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Minor S. Venkatasubr... v. The United Planters ...
Factual and Procedural Background
This judgment concerns two appeals preferred against an order of the learned Subordinate Judge of Coimbatore passed on E.P.R No. 349 of 1935 in O.S No. 261 of 1934.
O.S. No. 261 of 1934 was a suit brought by the United Planters' Association of South India against a minor, S. Venkatasubramania Sarma, represented by his guardian. The suit alleged that the minor's father, Sundareswara Sarma, who had been employed as an accountant by the Association, had misappropriated Rs. 7,500 of the Association's money. A decree was entered in favour of the Association against the separate assets of the deceased Sundareswara Sarma, if any, in the hands of the minor defendant.
The Association obtained an attachment before judgment of three items said to be in the hands of the minor: (1) a sum described in one place as about Rs. 500 representing the deceased's contributions to the Association's Provident Fund (and elsewhere in the judgment referred to as Rs. 5,000); (2) an insurance policy for Rs. 1,000 (Policy No. 123164); and (3) an insurance policy for Rs. 4,000 (Policy No. 353009). Copies of the two policies were filed as Exhibits I and II, and a pamphlet of the insurance company was filed as Ex. III.
The learned Subordinate Judge held that the Provident Fund contributions (referred to in the judgment as Rs. 5,000) could not be proceeded against, and similarly held that the amount due under Policy No. 353009 (Rs. 4,000) could not be proceeded against; he held, however, that the amount covered by Policy No. 123164 (Rs. 1,000) could be proceeded against, stating that that had been fairly conceded on behalf of the defendant.
Two appeals followed: A.A.O No. 16 (in which Mr. Ramaswami Aiyangar appears for the appellant) and A.A.O No. 56 (filed by the Association, challenging the decision that the decree-holder could not proceed against the Rs. 4,000 policy and the Provident Fund amount). The present judgment considers these appeals on their merits.
Legal Issues Presented
- Whether the deceased Sundareswara Sarma's contributions to the Provident Fund (described in the judgment both as "about Rs. 500" and as "Rs. 5,000") were liable to attachment to satisfy the Association's decree.
- Whether the proceeds of the two life insurance policies (Policy No. 123164 for Rs. 1,000 and Policy No. 353009 for Rs. 4,000) were liable to be applied to the decree, or whether they were protected from the husband's creditors under Section 6 of the Married Women's Property Act because the policy was "expressed on the face of it" to be for the benefit of wife or wife and children.
- Whether, for the purposes of Section 6 of the Married Women's Property Act, the expression "policy of insurance" should be taken to include the insurer's proposal form and the company's prospectus (i.e., whether extrinsic documents can supply the necessary "expression on the face of it").
- As a factual/procedural question noted by the court: whether a concession made in the lower court by the defendant's vakil (that the Rs. 1,000 sum could be proceeded against) was authorized by the guardian and what weight should be given to that concession.
Arguments of the Parties
Arguments reported for Mr. Ramaswami Aiyangar (appearing for the appellant in A.A.O No. 16)
- He submitted that the guardian of the minor did not give the vakil in the lower court authority to make the concession that the Rs. 1,000 policy could be proceeded against.
- He contended that the term "policy of insurance" in Section 6 of the Married Women's Property Act should be interpreted to include not only the policy document itself but also the proposal filled in by the insurer and, if necessary, the company's prospectus; he relied on the decision in Oriental Government Security Life Assurance Company Ltd. v. Narasimhachari for that proposition.
- He sought to have copies of the insurer's proposal forms admitted in evidence to show the intention behind the policies, but the court refused to admit them on the ground that the requirements of Order 41, Rule 27 of the Civil Procedure Code were not satisfied.
Arguments reported for the Association (as recorded in the opinion)
- The Association sought to assert that the deceased had been dismissed from the Association's service before he died (an argument the learned Subordinate Judge refused to allow to be raised at the stage he did).
- The Association pursued its appeal (A.A.O No. 56) against the finding that it could not proceed against the Provident Fund amount and the Rs. 4,000 policy.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Abhiramavalli Ammal v. The Official Trustee of Madras | Construction of a life insurance policy in favour of the wife where the policy on its face provided that amount was payable "to the assured or his wife if he predeceases her." | The court treated this decision as supporting the proposition that, where the policy itself expressly names the wife as beneficiary, a trust under Section 6 may arise. Because the words indicating benefit to the wife appeared on the face of that policy, the court considered that case distinguishable and declined to go further than the construction adopted by Madhavan Nair J. in that case. |
| Oriental Government Security Life Assurance Company Ltd. v. Narasimhachari | Authority for treating, for certain disputes between insurer and insured, the proposal or prospectus as relevant and, in some contexts, as part of the policy document to be construed. | The court held that this authority had no bearing upon the interpretation of Section 6 of the Married Women's Property Act. It observed that although the proposal/prospectus may be looked at for disputes between insurer and insured, Section 6 requires that the policy itself be "expressed on the face of it" to be for the benefit of wife or children; thus Oriental v. Narasimhachari did not support extending "policy" to include extrinsic documents for the purpose of S.6. |
| Krishnamurthy v. Anjayya (decision of Venkatasubba Rao J.) | Support for the proposition that, under Section 6, for a trust to arise it must appear on the face of the policy document that it was effected for the benefit of the wife or wife and children. | The court cited this decision as supportive of the conclusion that the statutory requirement of an expression "on the face of the document" is strict: a trust under S.6 cannot be presumed unless the policy itself so expresses the beneficiary interest. |
Court's Reasoning and Analysis
The court proceeded in two principal strands: (A) treatment of the Provident Fund contributions, and (B) treatment of the two life insurance policies.
A. Provident Fund Contributions
The court agreed with the learned Subordinate Judge that the Provident Fund contributions could not be proceeded against. It noted that the learned Subordinate Judge refused to allow the Association to raise, belatedly, the point that the deceased had been dismissed before he died; the trial record and the judgment in the suit recited that the deceased "was employed under the Association as an accountant from 1927–28 till his death in 1934," and the court followed the Subordinate Judge in declining to permit the Association to argue that dismissal had occurred earlier. On the merits, the court held that the rules of the Provident Fund were such that Sundareswara Sarma's contributions were not liable to attachment to defray his debts any more than contributions of the Association itself; indeed, if the deceased died in service, it would not be possible to maintain that his contributions were liable to attachment.
B. Life Insurance Policies
The court observed that both policies stood or fell together: "there is no difference between the two. Both of them are liable for the debts of Sundareswara Sarma, or neither." It noted that the learned Subordinate Judge appeared to have been influenced by a concession made in the lower court that the Rs. 1,000 policy could be proceeded against.
The central legal question for the policies turned on Section 6 of the Married Women's Property Act, which the court quoted in full. The court emphasized that, to be saved from the husband's creditors under Section 6, a policy must fall strictly within the terms of that provision — in particular, the policy must be "expressed on the face of it" to be for the benefit of the wife or wife and children.
The court rejected the contention that "policy" for the purposes of S.6 should be read to include the proposal form and the company's prospectus. While accepting that, in some disputes between insurer and insured, it may be necessary to look at a proposal or prospectus (and that in Oriental Government Security Life Assurance Co. Ltd. v. Narasimhachari the prospectus was construed in certain contexts as though part of the policy), the court held that Section 6's language is clear and unambiguous: the expression "policy of insurance" must be taken in its ordinary meaning and the necessary expression of benefit must appear on the face of the policy itself. The court endorsed the reasoning in Krishnamurthy v. Anjayya to the effect that a trust under S.6 must appear on the face of the document.
Examination of the policies showed that neither policy contained any declaration on its face that it was for the benefit of the wife or the wife and children. The "to whom payable" column of Ex. II named "The proposer's assigns or his proving executors or administrators, or other legal representatives ..." — but did not indicate an expressed benefit to wife or children. The court therefore concluded that the policies did not satisfy the requirement of S.6.
The court also refused the appellant's request to admit the insurer's proposal forms into evidence because the requirements of Order 41, Rule 27 of the Civil Procedure Code were not complied with; there was no allegation that the proposals had been shut out by the lower court and the court found them unnecessary to decide the appeals.
Holding and Implications
Holding:
- A.A.O. No. 16 of 1936 is dismissed with costs.
- A.A.O. No. 56 of 1936 is allowed with regard to the amount of Policy No. 353009 and dismissed with regard to the amount of the Provident Fund.
- The appellant and the respondent in A.A.O No. 56 of 1936 will pay and receive costs proportionate to their success.
Implications:
- Direct effect on the parties: the court upheld the Subordinate Judge's exclusion of the Provident Fund contributions from attachment and permitted the decree-holder to proceed (as a matter of the appeal's disposition) in respect of the amount represented by Policy No. 353009. The appeal relating to the other policy (and the concession concerning the Rs. 1,000 policy in the lower court) was addressed in the judgment and A.A.O No. 16 was dismissed.
- Legal principle reaffirmed: for the specific protection under Section 6 of the Married Women's Property Act to apply, the policy itself must expressly state on its face that it is for the benefit of the wife or wife and children. Extrinsic documents (proposal forms or prospectuses) cannot be read into the policy to satisfy the "on the face of it" requirement of S.6 for the purpose of defeating creditors, at least on the facts and procedural posture presented in this case.
- No broader precedent beyond this interpretation of S.6 is asserted by the court; the decision applies the statutory text and earlier authorities to the facts before it and resolves the appeals accordingly.
Orders accordingly. (Signed: Burn, J.)
JUDGMENT
(Delivered by Burn, J.)
These two appeals are preferred against the order of the learned Subordinate Judge of Coimbatore passed on E.P.R No. 349 of 1935 in O.S No. 261 of 1934. O.S No. 261 was a suit filed by the United Planters' Association of South India against a minor, S. Venkatasubramania Sarma, by his guardian. The suit was based upon the allegation that the father of the minor, Sundareswara Sarma, who had been employed as an accountant by the Association had misappropriated Rs. 7,500 of the Association's money. A decree was passed in favour of the Association against the separate assets of the deceased Sundareswara Sarma if any in the hands of the minor defendant. The Association got an attachment before judgment of three sums, viz., (1) a sum of about Rs. 500 representing the contributions of Sundareswara Sarma to the Association's Provident Fund; (2) an insurance policy of Rs. 1,000 and (3) an insurance policy of Rs. 4,000. Both the policies are issued by the Oriental Government Security Life Assurance Company Ltd., and copies of the policies were filed as Exs. I and II. The learned Subordinate Judge held that the amount of Rs. 5,000 representing Sundareswara Sarma's contributions to the Provident Fund could not be proceeded against and he came to the same decision with regard to the amount of Rs. 4,000 due under Policy No. 353009, but he held that the amount of Rs. 1,000 covered by Policy No. 123164 could be proceeded against. The learned Subordinate Judge said in his judgment that it had been fairly conceded on behalf of the defendant that the sum of Rs. 1,000 could be proceeded against. Mr. Ramaswami Aiyangar who appears for the appellant in A.A.O No. 16, says that the guardian of the minor defendant did not give the Vakil in the lower Court any authority to make any such concession. We must take the learned Judge's observation as representing the fact that the Vakil, whether with or without authority, did make that concession, but it is not necessary to embark upon a discussion of whether the Vakil had authority to make such a concession since we propose to consider that appeal also on its merits. Appeal. No. 56 is filed by the Association from the decision of the learned Judge holding that the decree-holder was not entitled to proceed against the amount of the policy for Rs. 4,000 and the amount in the Provindent Fund.
With regarded to the amount in the Provident Fund we agree with the learned Subordinate Judge. An attempt was made to argue that the deceased Sundareswara Sarma has been dismissed from the Association's service before he died. The learned Subordinate Judge refused to allow that point to be raised before him. He said that if this were the fact, it ought to have been stated when the decree-holder first sought to attach the property. He says in paragraph 7 that it transpired at the trial that the deceased died while he was still in the service of the Association. This we are told is incorrect, but we note that the judgment in the suit itself begins with a recital that the Association sued to recover a certain sum of money from the son of Sundareswara Sarma, “who was employed under the Association as an accountant from 1927-28 till his death in 1934.” We therefore follow the learned Subordinate Judge in declining to allow it to be argued on behalf of the Association that Sundareswara Sarma was dismissed before he died. This being so, we are of opinion that the rules of the Provident Fund are such that Sundareswara Sarma's contributions to the Provident Fund are not liable to attachment to defray his debts any more than the contributions of the Association itself. In fact if it be taken that Sundareswara Sarma died in service, it is not really possible to maintain that his contributions were liable to attachment.
The real contest is with regard to the two policies of insurance. We are of opinion that there is no difference between the two. Both of them are liable for the debts of Sundareswara Sarma, or neither. The learned Subordinate Judge seems to have been influenced by the concession already referred to when he held that the policy for Rs. 1,000 could be proceeded against. With regard to the policy for Rs. 4,000 he has referred to a pamphlet Ex. III issued by the Oriental Government Security Life Assurance Company Ltd. In that pamphlet the policy in the form Ex. II is advertised as providing the most practical form of protection obtainable for the wife and family of the assured. The policy is called a perfect protection policy. The learned Subordinate Judge after reading the provisions comes to the conclusion that the policy.
“is more or less on a line with Life Assurance Policies covered by the Married Women's Property Act and that the policy is covered by the ruling in Abhiramavalli Ammal v. The Official Trustee of Madras”.
S. 6 of the Married Women's Property Act is quite definite. It runs as follows:
“A policy of insurance effected by any married man on his own life, and expressed on the face of it to be for the benefit of his wife, or of his wife and children, or any of them, shall enure and be deemed to be a trust for the benefit of his wife or of his wife and children, or any of them, according to the interest so expressed, and shall not, so long as any object of the trust remains, be subject to the control of the husband, or to his creditors, or form part of his estate.”
If the amounts of these policies are to be saved for the minor defendant in this case, it must be because they come strictly within the terms of S. 6 of the Married Women's Property Act. It will not do to say, as the learned Subordinate Judge says, that these policies are “more or less on a line with Life Assurance Policies covered by the Married Women's Property Act.”
Now it cannot be disputed that on the face of these policies themselves there is no expression that they are for the benefit of the wife or of the wife and children of the insurer. Mr. Ramaswamy Aiyangar for the appellant in A.A.O No. 16, realising this, wishes to contend that the policy does not mean merely the policy as issued by the Company but must be taken as including the proposal filled in by the insurer and also if necessary any prospectus issued by the Company. He relies upon the decision in Oriental Government Security Life Assurance Company Ltd. v. Narasimhachari. We are of opinion that this case has no bearing upon S. 6 of the Married Women's Property Act. Although for certain purposes in cases of dispute between the insurer and the insured it may be necessary to look into the proposal or the prospectus or even, as stated in Oriental Government Security Life Assurance Company Ltd. v. Narasimhachari, to construe the prospectus as though it were part of the policy, we think the terms of S. 6 of the Married Women's Property Act are clear and unambiguous and that the expression ‘policy of insurance’ in that section is to be taken in the ordinary meaning of those words. The provision was passed in order to create a trust in favour of wife or wife and children. For this purpose it is enacted that the policy which is to create such a trust must be ‘expressed on the face of it’ to be for the benefit of the insurer's wife or wife and children. This we think is clearly intended as inter alia a measure of protection for persons who might be induced to take an assignment of the policy. If there is an expression on the face of the policy that the policy is for the benefit of the insurer's wife or wife and children, the prospective assignee will be put on his guard. This would certainly not be the case if the term ‘policy of insurance’ were interpreted to mean the proposal as well as the Company's prospectus. This view is supported by the decision of Venkatasubba Rao J. reported in Krishnamurthy v. Anjayya. In that case the amount of the policy was expressed to be payable to the person or persons legally entitled thereto.” In the present case, in the column “to whom payable” in Ex. II, we find the words “The proposer's assigns or his proving executors or administrators, or other legal representatives who shall take out representation from any British Court to his estate or limited to the moneys payable under this Policy”. There is nothing on the face of either of these policies to indicate that the policies were effected for the benefit of the insurer's wife, or wife and children, or any of them. Mr. Ramaswamy Aiyangar wishes us to admit in evidence copies of the proposals made by the insurer in pursuance of which these policies were issued. We are refusing to admit those copies since we find that the requirements of O. 41, R. 27 Civil Procedure Code, are not fulfilled. There is no allegation that they were shut out by the lower Court and we do not find them necessary in order to enable us to pronounce judgment. We think it is right to say, as Venkatasubba Rao J. said in the case already preferred to, that under S. 6 of the Married Women's Property Act
“for a trust to arise it must appear on the face of the document that the policy was effected for the benefit of the wife, or the wife and children, or any of them.”
We have been referred to the case decided in Abhiramavalli Ammal v. The Official Trustee of Madras, in which Madhavan Nair J. construed in favour of the wife a life insurance policy in which it appeared that the amount was payable “to the assured or his wife if he predeceases her.” Since those words did appear on the face of the policy in that case we do not think that it is necessary to discuss the judgment of Madhavan Nair J. but we are quite clear that we are not prepared to go even further than he went. It would be necessary to go a great deal further in this case in order to accept the contentions of Mr. Ramaswami Aiyangar, because neither of the policies in this case mentions the wife or the children of the insurer.
It follows that A.A.O No. 16 of 1936 is dismissed with costs, and A.A.O No. 56 of 1936 is allowed with regard to the amount of the Policy No. 353009 and dismissed with regard to the amount of the Provident Fund. The appellant and the respondent in A.A.O No. 56 of 1936 will pay and receive costs proportionate to their success.
Orders accordingly.
N.R.R
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