INDO UNION ASSURANCE CO LIMITED Vs. TSRINIVASAN

JUDGEMENT

(1.) The appellant is a limited liability company which was formed to carry on business in life insurance. Its business was not a prosperous one and at the end of 1943 it was taken over by the Prithvi Insurance Company Limited, since when its business has been run as a " closed one " which means that new policies are not being issued.

(2.) On the 4 August 1941, the appellant engaged the respondent to act as its " Field Superintendent " for a period of ten years. This merely meant that he was to canvass for policies on behalf of the appellant with the right to appoint persons to assist him but to be remunerated by him out of his own pocket. His own remuneration was to be a commission of 75 per cent. on the first year's premium income and 10 per cent, on premiums paid by way of renewal. Should the business introduced by him in any one year fall short of Rs. 2,00,000, the rates of commission on Rs. 1,50,000 were to be 70 per cent, and 83/4 per cent, respectively. If the business did not amount to more than Rs. 1,00,000, the rates of commission were to be 65 per cent. and 71/2 per cent. respectively. In addition to the commission the respondent was to be given a " consolidated allowance " of Rs. 75 per mensem, payable in advance on the first of each month. This allowance was not by way of salary. According to the respondent's evidence it was paid to him for expenses incurred for meeting agents, treating them and going about. It was anticipated that his monthly expenses in this connection would be Rs. 75. The contract further provided that he should be paid on the first of each month Rs. 100 as an advance against the commission earned by him. The respondent was left to conduct his canvassing as he chose. He admits that in this respect the company had no control over him.

(3.) The respondent appointed several persons as his sub-agents, but they introduced very little new business to the plaintiff. Including the respondent's own efforts only seventeen policies were secured, aggregating Rs. 26,000. The respondent was entitled by way of commission to the sum of Rs. 369-5-0. By the 30 November, 1941 he had drawn Rs. 536-8- 0 as commission in advance. The appellant's general manager was one K.S. Ramamurthi with whom the respondent was on very friendly terms until the beginning of December, 1941, when they fell out. On the 1 December, 1941 the general manager sent a statement of account to the respondent showing that he was indebted to the company in the sum of Rs. 1,217-15-0 after allowing for the commission due to him. In this statement the respondent was debited with advances which the company had paid to his sub-agents and to one N.S. Mani who had not been engaged by him. The respondent protested, but the general manager maintained that the advances had been paid with the respondent's consent. It is said that the respondent never put his foot inside the appellant's office after the middle of December, 1941 and that no business was done by him or by his sub-agents beyond the business to which reference has already been made. It should be mentioned that most of those policies lapsed in 1942.