Sukumaran, J.
1. This appeal presents a virgin question in insurance law : the scope and implications of a term in a proposal for the policy. The court below decreed the plaintiff's suit. The Life Insurance Corporation felt aggrieved by it. It challenges the conclusion and subsidiary findings as contained in the judgment adverse to it.
2. The factual background has to be furnished first before we discuss the nice and enticing question of law.
3. Yogimadathil House in Tellicherry was an expansive family. Khadija of that house had six sons and four daughters. Adbul Kader was one among them. The constrictions of his country side could not easily solve the problems of his poverty. Like many others, he migrated to Bombay (described by that constitutional architect, Montague, as 'one of the wonders of the world'). It was only a pavement shop near Flora Fountain in 1959. The trade was brisk. The profit was sizable. The prosperity was impressive. That attracted the younger brother, Androo, to his brother's business place. He was there in 1963. There is indication about the craze among the people for foreign goods growing strong in almost geometric proportions. That was a good enough time for persons to deal in and make phenomenal profits from foreign goods. Phenomenal profits have an intoxicating effect. The greater the inflow, the more insatiable the thirst. Law is violated. Officials were corrupted and the nation's economy thwarted by systematic smuggling activities. That Androo made substantial progress in his finances and his business activities is evident from the fact that he became an assessee to income-tax in 1968. He was a partner of firms along with his brother, Aboobacker, and others. His income was on the increase as days went by. Assessments to tax and payment of the tax demanded continued throughout. There is evidence in the case about the violations of law--particularly those relating to the import of goods into the country--by Androo. The Customs and Central Excise Department by an adjudication made against him on May 20, 1974, imposed a penalty of Rs. 50,000. The period was noted for vigorous action on various fronts. On August 7,1975, Kader was arrested for offences under the laws relating to import control and foreign exchange. He died while in custody; Sensational events followed his demise. The case is not concerned with them. The certainty of his death has, however, a close bearing on a claim for insurance money. Kader had submitted his proposals for insurance on March 29, 1974 (exhibit B-19). That was followed by a confidential report, exhibit B-20 regarding his financial status and personal habits prepared by DW-4. The life insurance policy exhibit B-21, dated July 21, 1974, was issued on July 31, 1974.
4. The plaintiff demanded money under the policy. The defendant refused payment. That has led to the suit. The substantial stand of the defence, as noted earlier, centres round question No. 10 in the proposal form and answer given by the proposer, Kader. It is useful to extract the exact words of the question and of the answer. The question and answer read :
'Have you any prospect or intention of engaging in aviation or of entering naval or military serviceor taking up any other hazardous occupation or pursuit If so, give details. No'
5. According to the Life Insurance Corporation, the insured had been engaged in unceasing smuggling activities. Smuggling activities come within a hazardous occupation. When the insured had active involvement and a desire to have continued involvement in smuggling activities, the suppression of that information in the answer to query No. 10, was a wanton violation of good faith, and, consequently, the insurer is entitled to repudiate the claim. Such was the defence.
6. The repudiation by the defendant Corporation was made only on December 21, 1976, more than two years after the issue of the insurance policy which took place on July 31, 1974. Section 45 of the Act imposes on an insurer disabilities of a serious character in relation to the defences possible in actions based on the policy. In a sense, it deprives the insurer of a defence based on grounds such as inaccuracy or falsehood in the statement of proposal for insurance or any report of medical officer, or referee, or friend of the insurer or any other document relating to the issue of the policy, there is, however, a proviso engrafted to that provision. If the insurer could show that the statement (in the proposal) was on a material matter or that the insured had suppressed facts which were material to be disclosed and if it was fraudulently made by the policyholder, it would carve out an exceptional situation. Whether the rigorous requirements of the exceptional Clause are attracted to the case, would be the directly relevant question.
7. Before considering the narrower question as indicated above, we shall consider even the larger question whether the answer to question No. 10 was incorrect.
8. In the first place, it has to be noticed that the question postulates a query in relation to future actions in the contemplation of the insured. There are no materials which would indicate that the insured had, even at that time, an idea to engage himself in smuggling activities. The only item of evidence which would indicate any infringement of law connected with import is exhibit X-15, dated May 20, 1974. That is passed nearly two months after the proposal for the insurance. That order itself would not posit such a string of continuous acts, or series of connected activities sufficient to crystallise into a concept of smuggling activities. It is not a single violation of a provision of the Import Control Order that constitutes a smuggling avocation for a person. Much more than that is necessary. No such materials are available in the present case.
9. The context in which the words 'hazardous occupation' occurs in question No. 10 has also to be noticed. It is preceded by words indicating a class of hazardous occupations such as aviation, naval or military service. Carrying on of a trade would not answer the description of a hazardous occupation, even if the trader is committing offences against various laws including fiscal laws like the Sales Tax Act, Essential Commodities Act and the like. He may have to pay the penalty, when caught by the guardians of law. The trade itself is not of a hazardous character on that count. It is the manner in which the trade is carried on that exposes one to difficult experiences. On the other hand, an activity in aviation has its countless hazards. Even from the historical point of view of the scientific attempts at flying high, there had been many thousand risks faced by early adventurers. With all that mastery of the air and the atmosphere man could make, aviation has its unanticipated hazards. The most sophisticated computerisation or the perfection of automatic operation have not been able to totally eliminate the risks in the heights. That is the case with the expanseless sea, not only in the unchartered waters but also in familiar trade routes. Collisions occur even when ships are mastered by able mariners and propelled by faultless machines. A trading activity would not come within the nature of avocations associated with aviation or marine adventures. For this reason too, the insured could not be found fault with for answering the question in the manner done by him.
10 .Yet another essential ingredient of the question is the intention of 'engaging in aviation, etc.' The term 'engaged in' has an emphatic element of regularity and system. A casual activity would not constitute an engagement. It has been so held by judicial decisions. A classic one was rendered by the Australian court. The following passage discloses the thrust placed by the court on that term :
'. . . the word may exclude mere casual or intermittent employment and rather connotes such a degree of employment as occupies the wholeor at least a substantial part of the person's time' (see O'Bryan J. in Buntine v. Hume [1943] VLR 123 at 128).
11. It is unnecessary to survey other decisions which have interpreted the term. The Supreme Court of India has pronounced on that question. It observed:
'The words 'engaging in any business' mean a continuity of transactions and not a single casual or solitary transaction ...' (see Remington Rand of India Ltd. v. Tahir Ali Saifi [1975] 48 FJR 60, 62 ; AIR 1975 SC 1896.
12. Viewed from any angle, the answer cannot be characterised as incorrect, much less fraudulently made and with the knowledge that the statement was false. As noted earlier, the lapse of two years' time from the issue of the policy drastically reduces the area of defence available for the insurer. The reduced area is delineated in the various decisions, some of which are Life Insurance Corporation of India v. Janaki Ammal [1968] 38 Comp Cas 278 (Mad) and Life Insurance Corporation of India v. Bhogadi Chandravathamma [1971] 41 Comp Cas 814 (AP). Having regard to the facts, evidence and circumstances adverted to above, the defendant life Insurance Corporation has not succeeded in making good its defence.
13. In the light of the conclusions reached above, it is unnecessary to advert to the other contentions which have been discussed at length by the court below. The absence of a specific denial as regards the allegations contained in paragraph 6 of the plaint is one of the aspects emphasised by the' court below. We are inclined to agree with that view. It is obligatory for a party to a litigation to be clear and pointed in relation to its stand. Vague, general or evasive answers would not be adequate to meet a point or specific allegation of facts made by the plaintiff. The transparently frank evidence of the widow of the deceased, does not in any way snap her connection with the plaint and the allegations therein. Certain documents were relied on to show that the customs authorities had imposed penalties on the deceased for alleged violation of the provisions of the Customs Act and other allied enactments. No reliance can be placed on those orders, as they had been passed in violation of the principles of natural justice. Moreover, revisions were pending against those orders. Similarly, the statement, exhibit X-14, does not appear to us to be a voluntary one having regard to the facts disclosed. He had been arrested on August 7, 1975, and while in custody died on August 31, 1975. He had been remanded by the Magistrate on August 20, 1975. On the very same day on which his statement was alleged to have been recorded, he had died. The lower court has noted that the signature in exhibit X-14 'is glaringly different and distinct' from the signature in exhibit B-19. The person who proved exhibit X-14 had no direct knowledge about it. The court below has not chosen to place any reliance on that document We fully agree with that finding.
14. For the reasons mentioned above, we affirm the decree passed by the court below. The appeal is accordingly dismissed with costs.
15. There is a disturbing aspect noticed in paragraph 8 of the judgment of the court below. That is about the evidence of PW-1 to the effect that her father and the agent of the Life Insurance Corporation talked and decided as to what facts should be deposed to and that the agent is a close friend of her husband.
16. If true, it would mean that an officer of the Life Insurance Corporation was actively betraying the organisation under which he was serving, and dishonestly assisting the opposite party. We direct that this matter shall be enquired into by the appellant and a report thereon should be submitted to this court. Statutory authorities like the Life Insurance Corporation cannot be indifferent in relation to the conduct of its servants. Public interest will be at stake, if large scale collusion with the opposite party is freely permitted by the authorities. If the authorities have not chosen to look into such matters, the court has a duty to do so, if need be by invoking Article 226 of the Constitution. This is the basis and reason for the above direction. We have to modulate our further action in the light of the report to be submitted by the appellant corporation. We direct that the report shall be filed within a period of three months from today. A copy of the judgment will be forwarded to the Ministry of Finance, Government of India, New Delhi.