Life Insurance Company: Case Of The United India Life Assurance Company

1162 Words5 Pages

Case Comment: Facts of the case: A company, by the name United India Life Assurance Company, on July 15, 1955, had held an Extraordinary General meeting of the shareholders. Out of many other resolutions, one of them was that a donation of Rupees 2 lakhs be made out of the Share Holders Dividend Account, to a trust by the name M. Chidambaram Chettiyar Memorial Trust, that was proposed to be formed with the object of promoting business as well as technical knowledge, including knowledge in insurance. The directors were authorised to pay the amount to the trustees of the trust, to be formed in future. Later on July 1st 1956, the Life Insurance Corporation Act, was brought into force, and according to section 7, all the assets and liabilities of pertaining to the ‘controlled business’ of all insurers, were to be transferred and vested in The Life insurance Corporation of India. September 1st, 1956 was made as the appointed day and all the liabilities and assets of the insurers and the company itself stood transferred and vested in the Life Insurance Corporation. Hence the Company was now called upon to refund the amount of 2 lakhs given by the company to the trust, which was created by the company itself. The Life Insurance corporation alleged that it was beyond the powers of the company to create a trust and making a donation to such a trust was not in the interests of the company’s business. Whereas the company submitted that the directors of the company were authorised

More about Life Insurance Company: Case Of The United India Life Assurance Company

Open Document