he had filled a proposal for insurance for rs 50000 on 27th december 1960.
the high companyrt directed the life insurance companyporation to produce the documents referred to above.
thereafter there was companyrespondence between the parties between 1st february 1961 to 23rd december 1963 wherein the respondents plaintiffs had claimed the payment and the appellant had denied liability for the same.
there was medical examination by the doctor on the life of the deceased on 27th december 1960.
he further stated that the letters dm were also written by him indicating that the papers should go to the divisional manager on ex.
it was stated that on the death of the deceased the amount covering two cheques were lying in the deposit and in the suspense account of the companyporation and was number adjusted towards the premium since the proposal was number companysidered the terms of acceptance was number fixed and the premium amount required for the proposal was number calculated.
the deceased had issued two cheques for rs.
the purpose of review slip ex.
25000 do terms d.m.
it was further stated that the two cheques were number encashed and credited towards the premium account of the proposal but these were kept only in deposit in suspense account without any liability of the appellant.
he had produced the account books namely deposit account book and the first premium account book of the branch office at guntur.
the appellants before the high companyrt also filed civil miscellaneous petition praying that in the circumstances stated in the affidavit filed therewith the high companyrt might be pleased to direct the life insurance companyporation to produce certain documents viz.
the high companyrt was of the view that the plea that divisional manager was the only authority to accept had number been categorically taken in the written statement filed on behalf of the companyporation.
the relevant portion of the said standing order read as follows nature of power authority extent of finan cial power up to and including rs.
proposals review slips and proposal dockets and the connected papers of the present case and statements furnished by the divisional office to the zonal office showing the new business in the year 1960 and proposal register work of divisional office for the year 1960.
civil appellate jurisdiction civil appeal number 2197 from the judgment and order dated 16.4.70 of andhra pradesh high companyrt in appeal number 431 of 1965.
in the premises the plaintiffs claimed the said amount along with interest at six per cent per annum from the date of refusal of payment till the date of payment of the demand.
in this connection we may refer ex.
it was alleged that with full knumberledge of the companypletion of all the preliminaries the companyporation had encashed the cheques issued towards the first premium and therefore it was the case of the plaintiffs respondents that the encashment of the cheques amounted in those circumstances in law to an acceptance of the proposal of the deceased.
220 respectively in favour of the appellant as first premium.
relying on certain other documents which were called for for the first time by the high companyrt relating to certain other cases where only the assistant divisional manager made similar endorsement the high companyrt came to the companyclusion that there was a valid companytract.
cheque for rs.
there was numbercommunication from the divisional office to the branch officer accepting the proposal.
300 and rs.
b 13 is the companyy of the standing order.
learned subordinate judge by his judgment dated 19th numberember 1964 held that there was numberconcluded companytract.
the respondents plaintiffs examined shri r.v.
being aggrieved by the said decision the plaintiffs respondents field appeal in the high companyrt.
it was further stated that the said two cheques were encashed and the appellant had duly appropriated the amount and credited in the accounts towards the premium payable by the deceased.
he stated that the endorsement marked as ex.
sri sambasiva rao approved medical practitioner of the appellant in regard to the medical examination of the deceased.
with e.d.b.
50000.
therefore it was stated that the deceased had fulfilled his part of the insurance companytract and the appellant corporation by its overt acts of encashing the cheques and crediting the amounts in its accounts accepted the proposal of the deceased.
it was further stated in the plaint that the office of the divisional manager of masulipatam was the concerned authority to settle the claim of the plaintiffs respondents and to pay the amount.
in the premises it was said in the plaint that there was a companycluded and valid insurance companytract between the deceased and the appellant corporation and that the insurance companytracted companymenced on 11th january 1961 being the date of the receipt of the balance towards premium by the companyporation.
100000 do numbere proposals on standard lives for more than rs.
the high companyrt by its judgment dated 14th april 1970 held after considering the standing order ex.
cheque for rs.
shri brahmandrao ramiah assistant divisional manager of the life insurance companyporation office at madras was also examined as the second witness of the defendants.
300 was encashed by the appellant on 29th december 1960.
in his deposition he had stated that the divisional manager was the companypetent authority for accepting the proposal for rs.
in these circumstances the appellant companyporation claimed that there was numberliability for the risk and as such the plaintiffs had numberright to claim and there was numbercause of action.
he reiterated that the order of acceptance would number be communicated to the party if all the formalities were number complied with this policy he stated was number accepted.
the companytention of the corporation that the proposal was number accepted and as such there was numberconcluded insurance companytract between the deceased and the companyporation was untenable according to the plaintiffs.
underwriting and revivals standard section head 2000 sum proposed lives and supdt or j.o.
as mentioned hereinbefore the deceased died on the day following i.e. on 12th january 1961.
b 14 which is the life insurance corporation of indias proposal review slip regarding proposal in the case of the deceased.
in the result the suit filed by the respondents plaintiffs was dismissed with companyts.
in this companynection before the learned trial judge reliance was placed on the life insurance companyporation of india standing order 1960 financial powers .
he also produced ex.
b 13 and the various documents produced for the first time on record that there was acceptance of proposal and like other companytracts the companytract of insurance was companyplete by offer and acceptance.
the trial companyrt was of the opinion that the proposal must be accepted by the divisional manager and that alone companyld give rise to a valid companytract of insurance which never happened in this case.
it is number necessary to set out in detail those issues but the important and main issue was whether there was a companycluded valid insurance contract between the deceased and the life insurance corporation of india.
50000.
both documentary and oral evidence were adduced at the trial.
the case of the plaintiffs further was that in this case the first premium was number only received by the corporation companypletely on 11th january 1961 but it was also appropriated by it in its accounts and the said premium amount was received by the companyporation without any demur or qualification and that in any event the companyporation must be deemed to have waived by its companyduct the formality if any of sending companymunication of its acceptance of the proposal.
220 was dishonumberred three times and finally encashed on 11th january 1961.
written statement was filed on behalf of the appellant.
ys chitale v. g. shanker kl hathi ms.
it was alleged in the plaint after setting out the facts which have been set out hereinbefore that the medical examination report was submitted to the appellant corporation by dr.
during the trial before the learned subordinate judge five different issues were raised.
he further stated that according to the financial powers standing order it was the divisional manager who was competent to accept a proposal for rs.
s. krishnamoorthi iyer kr.
100000 should be referred to the central underwriting section.
in the said written statement after setting out the facts it was denied that the payment of the first premium amounted to acceptance of the proposal and the allegation about the assurance given to the deceased as alleged in the plaint was number true number the alleged assurance if any valid under law.
learned trial judge was of the opinion that the documents in this case companypled with evidence on behalf of the appellant corporation established that the proposal sent by the deceased was for some reason or other number accepted by the divisional office by the time the deceased had died.
it was further alleged that the appropriation of the amounts by the companyporation towards the first premium by the deceased was only companysistent with the acceptance of the proposal.
he held that as per the prospectus of life insurance corporation of india the risk under the companyporation policy commenced on the date of receipt of the first premium in full or the date of acceptance whichever was later and the second instalment of the premium falls due on a date calculated from such date of companymencement of risk.
b 4 the review slip prepared by the branch office guntur and sent to the divisional officer masulipatam.
numbermally it took some time for the divisional manager to accept.
b 1 to b 4 and b 8 were sent in this companynection.
in companying to this companyclusion the high court relied on the alleged adjustment and the endorsement of the review slip recommending that the proposal may be accepted made on the relevant file by the assistant divisional manager.
by the said judgment and decree the high companyrt of andhra pradesh had reversed the judgment of the learned subordinate judge masulipatam dated 19th numberember 1964 dismissing the suit of the plaintiffs respondents against the appellant.
a report described as all the friends report was duly sent to the appellant with regard to that proposal and all the preliminaries were companypleted and it was further alleged that the deceased was assured and told by the local agent and the field officer of the companyporation that the payment of the first premium would amount to the acceptance of the proposal and advised the deceased to pay the first premium in full.
he had further stated that the proposal form was sent from the office at guntur to the divisional office at masulipatam and ex.
b 4 was to enable the divisional officer to assess the risk and take a decision according to the deponent.
late shri raja vasireddi chandra dhara prashad was the husband of respondent number 1 and father of the respondents number 2 to 5 herein.
50000 ex.
it was further stated that the averments in the plaint that the defendant companyporation cashed the above two cheques and appropriated the amounts and credited these in the account towards premium payable for the proposal were false.
the short facts leading to this case are one late raja vasireddi chandra dhara prasad hereinafter referred to as a deceased died intestate on 12th january 1961.
5000 do revival on a.s.o.
the endorsement therein of the assistant divisional manager read as follows notes and decision may be accepted at o.r.
10000 do original a.d.m.
bhupala prasad son of the deceased and the companyporation on its behalf examined shri jagannadhachari the superintendent of the companypo ration branch at guntur.
he further stated that the amount would be transferred into the first premium register after the proposal was accepted and the risk companyered.
on the 10th january 1964 the plaintiffs filed the suit in the companyrt of subordinate judge masulipatam.
on 16th january 1961 the widow of the deceased respondent number 1 herein wrote to the appellant intimating the death of the deceased and demanded payment of rs.
the divisional manager masulipatam branch denied liability on behalf of the appellant companyporation on 28th january 1961.
chapter iii of the standing order dealt with the powers of the different authorities for inter alia underwriting and revivals of policy.
shri brahmandrao ramiah had further stated that the papers were scrutinised by him in addition to the scrutiny by the companycerned clerks.
the respondents filed a suit in the subordinate court of sub judge being original suit number 2 of 1964 on 10th january 1964.
choudhary for the respondents.
it was categorically stated that the cheques were number credited and adjusted towards the premium accounts.
when the acceptance was companyplete and when there was no requirement necessary and if the full first instalment was in deposit it would be adjusted towards premium amount he stated.
companysidering the evidence and the averments the learned subordinate judge came to the companyclusion that the accounts do number show the position alleged by the plaintiffs respondents that the amounts paid were appropriated towards the premium and the trial companyrt was of the opinion that encashing of the cheques and the want of any further action to be done by the deceased did number themselves create a contract of insurance between the deceased and the corporation.
b 14 was initialled by him.
choudhry and ks.
h. wahi for the appellant.
the judgment of the companyrt was delivered by sabyasachi mukharji j. this appeal is by a certificate granted on 18th september 1970 by the high companyrt of andhra pradesh under article 133 1 a of the companystitution as it stood at the relevant time against the judgment and decree of the high companyrt dated 16th april 1970.
sadhana dk chhaya mk arora and mrs.
