SOHRABJI DHUNJIBHOY MEDORA Vs. ORIENTAL GOVERNMENT SECURITY LIFE ASSURANCE COMPANY LIMITED

JUDGEMENT

(1.) THIS is an appeal from a decree dated November 18, 1943, made by the High Court of Judicature at Bombay in its appellate jurisdiction affirming a decree dated April 14, 1943, of the same Court passed in its ordinary original civil jurisdiction. In the suit the appellants ,who were plaintiffs claimed damages against the respondents for breach of contract. Both Courts in India held that the contract between the parties was terminable by the respondent on reasonable notice and that in the circumstances of the case two years' notice was a reasonable notice and. accordingly that the notice of 3, 1/2 months by which the respondents had purported to terminate the agreement was not reasonable; and damages were awarded to the plaintiffs on that basis. On a counter-claim judgment was given for the respondents.

(2.) BEFORE their Lordships' Board the appellants have raised five questions : (1) Whether the contract under which the appellants were employed as agents for the respondents was terminating by the respondents on giving reasonable notice. The appellants maintain that it was not so terminable. (2) If the said contract was terminable by reasonable notice, whether two years was a reasonable notice, the appellants maintaining that the notice should be a three years' notice. (3) Whether under the terms of the said contract the appellants were entitled to commission on renewal premiums on life policies effected through their agency after the termination of their appointment. (4) Whether the appellants were entitled to commission on renewal premiums under the provisions of the Indian Insurance Act (IV of 1938) after the termination of their appointment. (5) Whether the appellants were entitled to retain and cash a cheque for; Rs. 75,000 sent to them by the respondents with a request that they should sign and return a certain form of receipt, although they did not sign or return the said form of receipt.

(3.) IN the year 1892 the respondents who were then, and still are, a company registered in Bombay under the INdian Companies Act carrying on business of life insurance, were mended to appoint one D, J. Medora, the father, of the present appellants, who carried on business in the name of D. J. Medora & Co. as agent of the respondents for the district of Gujarat. There is no dispute about the area covered by the agency from time to time, but it may be noticed that such area was subsequently extended to embrace Kathiawar and Cutch, so that the area was extensive and could only be worked by the employment of a large number of sub-agents and canvassers. After considerable correspondence terms were agreed, and the only terms which are in question in this appeal are as to the duration of the agency, and the right to commission on renewal premiums after the termination of the agency. On these two points two letters comprised in the 1892 series are material. On July 6, 1892, D. J, Medora wrote to the respondents agreeing to accept the agency, though regretting that the terms were not more generous, but stating that his acceptance was subject to a clear understanding on two points, the second of which was (2) that the premium of persons assured through' my agency should be always subject to my commission so long as they remained within the province of Gujarat whether the premium be remitted through my offices or direct. The manager of the respondents replied to that Better on July 9 in the following terms so far as material:- With reference to the two conditions you now mention I see from our letter of the 18th ultimo that the first has been already disposed of. As the second goes further than was contemplated in ours of the 28th ultimo I would add that we have no objection to agree to it as now put. . I accordingly have pleasure in formally appointing you Chief Agent for Gujerat. The Agency would stand in the name of D. J. Medora & Co. but as already explained you alone would be our recognised agents and would be solely responsible. On your retiring or otherwise discontinuing the work the agency would cease and your partner would have absolutely no claim thereunder.