Compliance with the rule requiring payment of insurance premium in advance can be deemed if the money order was despatched on or before the due date, following the previously accepted method of payment.

1. The Plaintiff is the appellant. He was the nominee under an insurance policy issued by the Kerala Gilt Edged Security Life Assurance Company Limited, Quilon. The life mentioned in the policy was that of his sister-in-law. The facts appearing from the records show that for 67 months subsequent to the insurance, the amount of Re. 1/- per month payable by the insured was paid. The 67th month was in June 1936. After paying the amount due for this instalment, the lady on whose life the insurance was effected, died. When the plaintiff in his capacity as the nominee mentioned in the policy approached the company for payment of the money alleged to be due under the policy, the company pleaded that there was default committed in payment of the subscription due at the 62nd instalment. When there is such a default, it is open to the party concerned to get over the consequence of forfeiture of all claims by applying for reinstatement. Such a step was taken in the present case although on behalf of the policy holder or nominee it was not admitted that there was such default. As a matter of fact such an application for reinstatement was put in and it was four months after its date that the party died. According to one of the rules of the Company, if death takes place before the expiry of six months from the date of re-instatement, the party will not be entitled to the benefit of the insurance and that was the contention urged on behalf of the company when the plaintiff put forward his claim.

2. Both the courts below have upheld the contentions of the company and have dismissed the suit. It is contended on behalf of the plaintiff that the alleged default in question was due to the fact that the sum of Re. 1/- payable for the month of January, although it was sent by Anchal Money Order prior to the 31st of January, was received by the Company only on 31.1.1936. According to the evidence in the case the place from where the money order was sent was in the vicinity of Sherthallai and the payee was in the vicinity of Quilon and it takes 2 or 3 days for Anchal money orders to reach their destination between these two points. The contention of the Company is that the payment should have been made by the 30th of January, because there is a period of grace of 15 days within which money could be paid and if the payment is not made within 15 days, there is another period of 15 days within which the money may be paid with a penalty of six pies in the rupee. Since subscriptions are according to R. 21 payable in advance it was taken for granted that the payment in the present case should have been made by 30th of January. As a matter of fact the money order reached the company only on 31 of January.

3. Mr. Varadaraja Iyengar the learned counsel for the appellant in this Second Appeal places reliance upon the decision of the Madras High Court reported in AIR 1947 Mad. 122. That was a case in which insurance premium had to be paid by a certain date. The evidence showed that the amount was transmitted by money order prior to that date, but it reached its destination only after the expiry of that date. In spite of these circumstances. It was held that the payment was in time because the money order was despatched before the due date.

4. The question is discussed in detail in the judgment of the learned judge and what is pointed out therein is that from the previous conduct of the parties, it is evident that sending premium by money order was one of the approved or sanctioned methods of payment and if that is the position, then the obligation of the party who is to make the payment shall be deemed to have been discharged if the money order was sent on or before the relevant date. There is no doubt it was open to the sender of the money order to recall the amount or to prevent the money being paid over to the addressee. But so long as that has not been done it must be presumed that the obligation imposed upon the person who is to make the payment w