1. ' This is a suit filed by the plaintiffs for recovery of Rs,11,87,500.
2. ' The case of the plaintiff briefly is that deceased Syed Jamilur Rehman had insured his life in the sum of Rs,500,000 and in the additional like sum if the death occurred due to accident (accident double indemnity), and that the insured died in a road accident on 24th December, 1982. The details as given in the plaint show that Mst. Sarwat Begum an agent of the defendants had approached the deceased to take out the said insurance policy and accordingly the deceased filled in life insurance proposal form for a key man insurance policy in the sum of Rs,500,000 with accident cover as aforesaid. The said proposal accompanied related medical examination reports etc. was submitted by the said agent to the defendants, who informed her of acceptance of the proposal, whereupon the said agent Mst. Sarwat Begum asked for and was paid the premium amount of Rs,6,057 on 21-12-1982 through a cheque which had been encashed and the amount retained by the defendants by way of premium and a receipt had also been issued in this behalf.
3. Consequently, on the death of the insured the heirs advanced their claim but the defendants avoided to pay the same and, therefore, the suit has been filed.
4. ' The defendants filed their written statement wherein they did not deny the facts regarding the death of the insured on 24th December, 1982. However, the case of the defendants is that no life insurance contract had been struck but there was merely a proposal submitted by the deceased.
5. This proposal is said to have been solicited and procured for consideration by a licensed insurance agent of the defendants Mst. Sarwat Begum, who submitted the same to the defendant's new business department on 24-11-1982 for consideration alongwith the electrocardiogram, radiological report, urine examination report and personal health and medical examination conditional reports, all dated 22-11-1982. The case of the defendants further is that they on the advice of Chief Medical Advisor had called for additional medical reports; and that the proposal of the deceased was not finally accepted but was deferred for consideration by two weeks on 21-12- 1982. With regard to payment of premium, it is the case of the defendants that the payment was received provisionally and the receipt issued was itself a provisional one and, therefore, no final contract had been arrived at and thus the defendants were not liable to pay the claim as the deceased died on account of an accidental death before the said period of two weeks expired.
6. ' On these pleadings of the parties, the following issues were framed:
(i) Whether there existed a contract of insurance between the late Jamilur Rehman and the defendants at the time of death of the former? If so, what were the terms?
(ii) To what relief, if any, the plaintiffs are entitled to?
7. ' The plaintiffs have examined Mrs. Zakia Jamilur Rehman, the widow of the deceased and one Muhammad Wasiuddin, an employee of the plaintiffs' firm. The widow of the deceased had also produced a number of documents. The defendants have examined Rashid Ahmed Khan, the Manager of the new business department of the defendants, who has produced a number of documents. The defendants have also examined Dr. Khalid Ahmed Khalil, a Cardiologist attached with the defendants in advisory capacity from medical point of view.
8. ISSUE NO,1: As far as the facts pertaining to this issue are concerned, the factum of death of the deceased on 24th December, 1982 in an accident is not denied. It is also not denied by the defendants that Mst.
9. Sarwat Begum was an authorised agent of the defendants. The defendants in their evidence have produced a letter of appointment of Mst. Sarwat Begum as Sales Representative giving her Code number as 5135753 (Exh.7/15). It is also admitted that proposal was given by the deceased and that on the basis of this proposal he was medically examined and he had paid a sum of Rs,6,057 by way of premium through a cheque which cheque was encashed and the amount was retained by the defendants. Photostat copy of the cheque has been produced as Exh.7/24 while carbon copy of the receipt has been produced as Exh.7/10. There is nothing on the record to suggest that the defendants had at any time informed the plaintiff that his proposal was not accepted or that the amount of premium was received provisionally. Much emphasis has been placed on the letter, dated Ist January, 1983 which has been produced as Exh.5/9. With regard to this letter it has been pointed out by the learned counsel for the plaintiff that this letter was delivered to the employee of the plaintiff on 5th January, 1983 when the said employee had gone there to deliver the letter from the plaintiff to the defendant informing them of the death of the insured late Jamilur Rehman and it was then that the defendants in order to avoid their liability fabricated this letter in a previous date and delivered the same to the plaintiffs' employee. It may be pertinent to refer to the deposition of Muhammad Wasiuddin (Exh.6) who has specifically stated in his cross-examination that when he had gone to the office of the defendants on 5th January, 1983 to deliver the letter from the plaintiffs (Exh.5/8) and that he had waited there for Mst. Sarwat Begum, who came after ten minutes and asked him to wait and that after about one hour's time Mst. Sarwat Begum came there and handed over this letter Exh.5/9. Even otherwise, the case of the plaintiffs that Mst. Sarwat Begum the agent of the defendants had informed the deceased that his proposal for life insurance was accepted and charged from him the first premium goes unrebutted inasmuch as this Mst.
10. Sarwat Begum has not been examined by the defendants to deny this fact. The defendants' witness Rashid Ahmed Khan in his cross-examination has admitted that Mst. Sarwat Begum is the lict.nsed agent of the defendants but yet no explanation has been advanced as to why she has not been put into witness-box. Obvious inference from keeping her back from witness-box is that if she had appeared in the witness-box and submitted to cross-examination her evidence would have gone against the defendants, as laid down in Article 129(g) of the Qanun-e-Shahadat, 1984.
11. In view of above discussion, I am inclined to hold that the proposal of the deceased stood accepted and premium was charged from him which was retained by the defendants. As regards the authority of the agent, there is no dispute. However, a reliance may be placed on the case of Montreal Assurance v. MacGillivray (1859) 13 Moore P.C.
87. It may be observed that most insurance business is transacted through agents and a principal is bound not only to the extent of the actual authority which he has given to his agent but to the extent of the apparent authority which he has permitted his agent to assume in acting with third person. In the present case, it may further be observed that before the issuance of policy, the death of the insured had taken place after payment of the first premium. In such circumstances it would be presumed that the insurers are liable. A reference to para. 3 on page 66 of General Principles of Insurance Law by Ivamy provides:--- "3. By acceptance of the Premium.---Where no policy has been issued to the proposer before the loss, the receipt of the premium and its retention by the insurers, though by no means conclusive, may raise the presumption, in the absence of any circumstances leading to a contrary conclusion, that the insurers have definitely accepted his proposal. In such a case they are not entitled to refuse to issue a policy to him, and they are, therefore, liable to him in the event of a loss."
12. A further reference may also be made to the case of Seho Shankdar Ratanlaiji Khamele v. Life Insurance Corporation of India, Bombay AIR 1971 Born.
304. In the above case a Division Bench of Nagpur High Court has held that a contract of insurance becomes effective from the date of acceptance of the proposal from which the risk on the life of the proposer is covered.
13. In view of above discussion, it can safely be held that in the present case the effective date was the date on which the proposal and the premium was accepted by the defendants and thus they would be liable for the risk covered. The learned counsel for the plaintiffs had very fairly conceded that the proposal produced in evidence shows that there is no provision in it for double indemnity and, therefore, he prays that his claim be reduced to one-half of the amount in suit i.e. Rs,593,750 ' The suit of the plaintiffs is accordingly decreed in the sum of Rs,593,750 with interest at 15% per annum from the date of the institution of suit till payment. However, there will be no order as to costs.