LexTHE VANGUARD FIRE AND GENERAL INSURANCE CO. LTD., MADRAS versus M/S. FRASER AND ROSS AND ANOTHER.
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" \ ~t 3 S.C.R. SUPREME COURT REPORTS 857 decision is well founded. The propositions in question r96o treated an alienation made for the payment of the Luhar Amritlal father:'s antecedent debt on the same footing as an Nagji alienation made in execution of a decree passed against v. him and in both cases the principle enunciated is that Doshi Jayantilal in order to succeed in their challenge the sons must Je~alal prove the immoral character of the antecedent debtcajendragadkar J. and the knowledge of the alienee. Having regard to the broad language used in stating the two proposi- tions, we do not think that a valid distinction could be made between a mortgage and a sale particularly after the decision of the Privy Council in the case of Brij Narain (1). That is the view taken by the Nagpur High Court in Udmiram Koroodimal and Anr. v. Balramdas Tularam & Ors. (2 ). In the result the appeal fails, but in the circum- stances of this case there will be no order as to costs. Appeal dismissed. THE VANGUARD FIRE AND GENERAL INSURANCE CO. LTD., MADRAS v. M/S. FRASER AND ROSS AND ANOTHER. (P. B. GAJENDRAGADKAR, K. N. W ANCHOO and K. c. DAS GUPTA, JJ.) Ins1Jrance-Company closing insurance business-Government's order directing investigation of company's affairs-Legality- " Insurer", meaning of-Insurer's liability after closing of business --Extent-" Liabilities not satisfied and not otherwise provided for" - General Clauses Act, I897 (IO of I897), s. I3-Insurance Act, I938 (4 of I938), SS. 2(9), 2D, 7, 9, 33· The appellant company had been carrying on various classes of insurance business other than life insurance after its incorpora- tion in 1941, but in 1956 the shareholders of the company passed a resolution by which all its insurance business was to be closed. Accordingly, on application made by the company to the Con- troller of Insurance, the certificate granted to it for carrying on insurance business was cancelled with effect from July l, 1957· In the meantime, complaints against the company were being received by the Government of India, who, thereupon, passed an order on July 17, 1957, under s. 33 of the Insurance Act, 1938, directing the Controller of Insurance to investigate the affairs of the company and to submit a report. The company challenged (1) '1923) L.R. 51 I.A. 129. \2) I.L.R. [1955] Nag. 744· May 4. \ Van guard Fire & General Insurance Co. Ltd. v. Fraser & Ross 858 SUPREME COURT REPORTS [1960) the legality of the order on the grounds, ( r) that as all its insurance business had been closed the Central Government had no jurisdic- tion to pass an order under s. 33 of the Act, which only enables the investigation of the affairs of an insurer who, as defined in s. 2(9), is one who is actually carrying on the business of insurance, (2) that such an order could not be sustained under s. 2D of the Act as that section was applicable only to those cases where an insurer was carrying on different classes of insurance \\ business and had closed some of them but not all of them, (3) that even if such order could be passed under s. 33 read with s. 2D it could not be done in the present case as the company's liabilities did not remain unsatisfied or not otherwise provided for, and (4) that, in any case, the order in question was invalid because it did not show on the face of it that the Central Government was prima facie satisfied that the liabilities had remained unsatisfied or not otherwise provided for : Held, (r) that the word "insurer" in s. 33 of the Insurance Act, 1938, refers not only to a person who is actually carrying on . the business of insurance but also to one who has subsequently closed it. (2) that in s. 2D of the Act an "insurer" means a person who was carrying on the business of insurance but has closed it. (3) that the word " class " in s. 2D though used in the singular includes the plural also and the section is applicable to the case where an insurer who was carrying on different classes of insurance business closes all of them. (4) that the expression " not otherwise provided for" in s. 2D refers to liabilities in the nature of claims against the insurer whether the insurer admits them or not and whether a decree has been finally passed in respect of them or not. (5) that under s. 2D the satisfaction or "provision other- wise" for the liabilities of insurance business which is closed, does not refer to the
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