Statutory incorporated meaning of life insurance fund governed the dispute, excluding a notional assets-minus-liabilities surplus.

The expression "life insurance fund" in paragraph 4(d) of Part B of the First Schedule to the Life Insurance Corporation Act, 1956 is to be read with the statutory meaning given in the Insurance Act, 1938 unless the context otherwise requires. That meaning treats the fund as the separate life insurance revenue fund, not the difference between total assets and liabilities. Provisions concerning investment of assets, valuation, and surplus did not displace that interpretation, and clause (d) was directed to past surplus shown by the statutory valuation balance sheet rather than a notional aggregate surplus. The construction avoided inconsistency with the 1956 Act and unsupported commercial anomalies.

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Issues: Whether the expression "life insurance fund" in paragraph 4(d) of Part B of the First Schedule to the Life Insurance Corporation Act, 1956 carries the special meaning assigned to it in the Insurance Act, 1938, or whether it means the difference between the total assets and liabilities of the insurer.

Analysis: Section 2(10) of the Life Insurance Corporation Act, 1956 directs that words and expressions used in the Act but not defined therein and defined in the Insurance Act, 1938 shall bear the meanings assigned in that Act unless the context otherwise requires. The expression "life insurance fund" is given a specific meaning in section 10(2) of the Insurance Act, 1938, read with section 10(3), section 11(c) and the relevant forms in the Third Schedule, where it denotes the separate fund constituted from receipts of life insurance business and is distinct from the insurer's other assets. The provisions relied on by the appellant, including sections 27(1), 27(6), 56(2), 58(3) and regulation 7, did not alter that meaning. The Court held that section 27 only requires assets to be kept invested as a security for policyholders when there is a deficit, but those assets do not automatically become part of the life insurance fund unless brought into the revenue account. The scheme of paragraph 4 of the First Schedule, read with section 49(1) of the Insurance Act, 1938, showed that clause (d) was intended to deal with past surplus as determined under the statutory valuation balance sheet and not with a notional surplus computed by aggregating all assets and liabilities. A contrary construction would create inconsistency with section 35 of the Life Insurance Corporation Act, 1956 and lead to commercially anomalous results.

Conclusion: The expression "life insurance fund" in paragraph 4(d) of Part B of the First Schedule to the Life Insurance Corporation Act, 1956 has the same meaning as in section 10(2) of the Insurance Act, 1938. On that construction, no liability arose under clause (d), and the appeal failed.

Ratio Decidendi: Where a later statute incorporates an expression from an earlier statute, the incorporated expression must bear the statutory meaning assigned in the earlier Act unless the context clearly requires a different meaning.

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