Report No. 66
8.44. Point (f)-Whether contingent provision permissible.-
Another question that has arisen is whether there can be a contingent provision for the benefit of the wife and children under section 6. On this question there is a conflict of views. A Nagpur case1 and an earlier Bombay case2 take a narrow view on the question, namely, that section 6 does not apply if the benefit is contingent. The contrary view has been taken by the Calcutta3 and Madras4 High Courts, and also in a later Bombay case,5 namely, that section 6 applies even if the benefit is made contingent-as, for instance, upon the death of the husband before the wife. The earlier Bombay case was not cited before the High Court in the later case.
1. Rabibai v. Ratanlal, AIR 1938 Nag 321.
2. Dinbai v. Bamansha, AIR 1934 Born 296 (299).
3. Ashalata Dasi (in re:), AIR 1940 Cal 217, para. 8.45, infra.
4. (a) Abhiram Valli v. Official Trustee, AIR 1932 Mad 220, see para. 8.30.
(b) Bengal Insurance Co. v. Velayamzval, AIR 1937 Mad 571 (574) [Follows Fleetwood's Policy, (1926) 1 Ch 48];
(c) Krishnan Chettiar v. Velayee Animal, AIR 1938 Mad 604 (607).
5. M.A. Rodrigues v. B.R. Baliga, AIR 1967 Born 465.
8.45. In the Calcutta case1, it was observed that all life policies, by their very nature, operate upon a contingency. In endowment policies, two contingencies are involved, life of the assured at a certain point of time, or death before that time. "An endowment policy is wholly a contract of life insurance; a double contract of life insurance, the event in one case being death and the event in the other case being life." An English2 case was relied on, for this conclusion. The policy was held to be "on the life of the husband", and for the benefit of the wife, it being regarded as immaterial that it was an endowment policy. A Madras case,3 takes an intermediate view, holding that until the event happens, the husband can assign the policy. This interpretation, with respect, may defeat the section in many cases. On this particular point, we prefer the view taken in a later Madras case,4 namely, that a trust is impressed from the very beginning.
1. Ashalata Dassi (in re:), AIR 1940 Cal 217 (218), para. 8.44, supra.
2. Gould v. Gurtis, (1913) 3 KB 84 (95, 97).
3. Lalithambal v. Guardian Ins. Co., AIR 1937 Mad 645 (647).
4. Kannavalal v. Subbarayya, AIR 1938 Mad 413.