JUDGMENT

SABYASACHI MUKHARJI, J.:— This appeal is by a certificate granted on 18th September, 1970 by the High Court of Andhra Pradesh under Article 133 (1) (a) of the Constitution as it stood at the relevant time against the judgment and decree of the High Court dated 16th April, 1970. By the said judgment and decree, the High Court of Andhra Pradesh had reversed the judgment of the learned Subordinate Judge, Masulipatam dated 19th November, 1964 dismissing the suit of the plaintiffs-respondents against the appellant. Late Shri Raja Vasireddi Chandra Dhara Prasad was the husband of respondent No. 1 and father of the respondents Nos. 2 to 5 herein. The respondents filed a suit in the Subordinate Court of Sub-judge being Original Suit No. 2 of 1964 on 10th January, 1964. The short facts leading to this case are :

One late Raja Basireddi Chandra Dhara Prasad (hereinafter referred to as deceased) died intestate on 12th January, 1961. He had filled a proposal for insurance for Rs. 50,000/- on 27th December, 1960. There was medical examination by the doctor of the life of the deceased on 27th December, 1960. The deceased had issued two cheques for Rs. 300/- and Rs. 220/- respectively in favour of the appellant as first premium. Cheque for Rs. 300/- was encashed by the appellant on 29th December, 1960. Cheque for Rs. 220/- was dishonoured three times and finally encashed on 11th January, 1961. As mentioned hereinbefore, the deceased died on the day following i.e. on l2th January, 1961. On 16th January, 1961, the widow of the deceased, respondent No. 1 herein, wrote to the appellant intimating the death of the deceased and demanded payment of Rs. 50,000/-. The Divisional Manager, Masulipatam Branch, denied liability on behalf of the appellant Corporation on 28th January, 1961. Thereafter there was correspondence between the parties between 1st February, 1961 to 23rd December, 1963 wherein the respondent plaintiffs had claimed the payment and the appellant had denied liability for the same.

2. On the 10th January, 1964, the plaintiffs filed the suit in the court of Subordinate Judge, Masulipatam. 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. Sri C. Sambasiva Rao, Approved Medical Practitioner of the appellant in regard to the medical examination of the deceased. A report described as "All the Friends report" was duly sent to the appellant with regard to that proposal; and all the preliminaries were completed and it was further alleged that the deceased was assured and told by the local agent and the Field Officer of the Corporation 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. 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. Therefore, it was stated that the deceased had fulfilled his part of the insurance contract 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. In the premises it was said in the plaint that there was a concluded and valid insurance contract between the deceased and the appellant-Corporation and that the insurance contract commenced on 11th January, 1961 being the date of the receipt of the balance towards premium by the Corporation. 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. The contention of the Corporation that the proposal was not accepted and as such there was no concluded insurance contract between the deceased and the Corporation, was untenable, according to the plaintiffs. It was alleged that