P L D 1959 (W (PLP)

Issue No.17.‑Whether the plaintiffs have any cause. of action against the defendant‑company ? The last mentioned three issues were not pressed as preliminary issues by the learned counsel for the defendants on the ground that they involved the determination of facts before the liability of the defendants could be determined with regard to them. These issues are, therefore, left over to be tried after the evidence of the parties, if issue No. 1 is decided in favour of the Plaintiffs. The objection of the defendants on the basis of which the first issue was framed is that the plaintiffs have brought these five suits in their own 'name without having the right to do so. This objection does not apply to Suit No. 558 of 1954, in which the insured, namely, Tyab Abdullah & Co., has been impleaded as plaintiff No,

2. Mr. Fazlur Rahman, for the defendants conceded this and the issue is, therefore, decided against the defendants in so far as that suit is concerned. In the other four suits, the plaintiffs are described as subrogees and assignees of the insured persons. The cause of action is stated in the plaints to be the payments made by the plaintiffs to the insured persons and that as a result of the payments the plaintiffs "in law acquired all their (insured persons') rights and interests in the said parcels (goods). . . and thus the plaintiffs stand subrogated and assigned to all their (insured persons') rights, interests and remedies in respect of the said parcels (goods)." The above averments have been made in paragraph 9 of the four plaints though there is a slight variation in the language used in the four plaints. It is, however, clear that the plaintiffs have treated the effect of the payments to be "assignment" as well as "subrogation" of all the rights and interests of the insured persons in favour of the plaintiffs. The learned counsel for the defendants has contended that there is no allegation of assignment by endorsement or by a separated deed without which there can be no assignment and that the concept of "subrogation" does not include in it the right of the insurers to sue in their own name. Mr. Irshad Ali Lari for the Plaintiffs contended that sub rogation meant that the insurers took the place of the insured persons and became entitled to exercise all the rights and avail of all the remedies of the insured persons to the extent and for the purpose of recovering the amounts paid by them to the insured persons. In support of his contention that no formal assignment was needed he relied on section 135‑A of the Transfer of Property Act, which is as follows :‑ " 135‑A. (1) Where a policy of marine insurance has been assigned so as to pass the beneficial interest therein, the assignee of the policy is entitled to sue thereof in his own name ; and the defendant is entitled to make any defence arising out of the contract which he would have been entitled to make if the action had been brought in the name of the person by or on behalf of whom the policy was effected. (2) Where the insurer pays for a total loss, either of the whole, or, in the case of goods, of any apportion able part, of the subject‑matter insured, "he thereupon becomes entitled to take over the interest of the insured person in whatever may remain of the subject‑matter so paid for, and he is thereby subrogated to all the rights and remedies of the insured person in and in respect of that subject‑matter as from the time of the casualty causing the loss. (3) Where the insurer pays for a partial loss, he acquires no title to the subject‑matter insured, or such part of it as may remain, but he is thereupon subrogated to all rights and remedies of the insured person as from the time of the casualty causing the loss, ‑in so far as the insured person has been indemnified by such payment for the loss. (4) Nothing in clause (e) of section 6 shall affect the provisions of this section." . The contention of Mr. Lari based on the above section can be disposed of without much discussion because the section applies to marine insurance and may be applied to the insurance of carriage of goods by land but cannot be said to apply to carriage A of goods by air. It has been applied to insurance of carriage of goods by land in view of the definition of "Marine Insurance Business" contained in section 2 (13‑A) of the Insurance Act, which is as follows :‑ "(13‑A) `Marine insurance business' means the business of effecting contracts of insurance upon vessels of any description including cargoes, freights and other interests, which may be legally insured, in or in relation to such vessels, cargoes and freights, goods, wares, merchandise, and property of whatever description insured for any transit by land or water, or both, and whether or not including warehouse risks or similar risks in addition to or as incidental to such transit, and includes any other risk customarily included among the risks insured against in marine insurance policies." There is nothing in this definition to warrant the extension of the law relating to marine insurance to insurance of transit by air. If section 135‑A of the Transfer of Property Act doss not apply to these suits then there is no statutory law, and none was suggested by the learned counsel, to enable the plaintiffs to sue the defendants for the recovery of damages as the substitute of the insured persons. The observations contained in Queenslandi Insurance Company Limited v. British India Steam Navigation Company Limited (P L D 1958 Kar. 389) and Indian T. & G.

1. Company v. Union of India (A I R 1957 Cal. 193), and the judgment of Mukherjec, J. dated 26th February 1958, in Civil Rule No. 3020 of 1955 and Civil Rule No. 954 of 1956, Alliance Assurance Company Limited v. The Union of India Civil Rule No. 3020 of 1955 and Civil Rule No. 954 of 1956 which has been published in Circular No. M. S. C. 37 dated 3rd July 1957 issued by the Insurance Association of India, are all irrelevant to the present suits in so far as they contain discussion on section 135‑A of the Transfer of Property Act. The plaintiffs have, therefore, to make the best use of the doctrine of subrogation alone. This doctrine "in its widest sense includes all those means by which the loss incurred by the insurer in honoring the indemnity contained in the insurance policy is diminished or extinguished". Since the insurer indemnifies the insured person he should in equity be compensated for the loss incurred by him. On other hand the insured person should not get more than the indemnity claimable by him. Taking the example of carriage of goods by air, if the insured person gets from an Insurance Company the value of the goods lost in transit and afterwards the goods are found intact or are salvaged and delivered to the insured person then they should go the insurer, otherwise the insured person would make profit of a doubtful character by insuring his goods. It was on the basis of this principle that Brett and Boven, L. JJ., decided in Castellain v. Preston ((1883), 11 Q B D 380 (C A)), that the defendants who had received money due to fire from the Insurance Company under an insurance policy, had to pay the money which they subsequently received by selling at full value the property which was damaged by fire. It was in this sense that the right acquired under the doctrine has sometimes been stated to be a right of the insurer after satisfying a claim made under an insurance policy to stand in the place of the insured person as to the goods, salvage and restoration in proportion to what they paid. This is a right of the insurer against the person and therefore, as pointed out by Welford and Otter‑Barry in their book "The Law relating to Fire Insurance" "the mere fact of subrogatoin does not entitle them (insurers) to enforce such rights in their own names. To enable them to do so, it is necessary either that a statute should confer upon them right of acting, or that the assured should make a formal assignment to them of his rights of action in respect of the subject‑matter. Where however the right of action is not directly connected with the loss but only arises after the loss out of the ownership of his subject matter, the insurer, if they have taken over the salvage, may enforce it in their own names, since it is their own right as owners of a salvage, and not a merely derivative right depending upon the assured's right of property." English Courts and writers are unanimously of this view and this is undoubtedly the English doctrine of subrogation but Mukherjee, J. appears to have enlarged the scope of the doctrine for India in his judgment referred to above. I reproduce his arguments at length in order to represent his point of view fully. "The Law Courts in England have come to adopt this peculiar form of procedure because the right of action of the insured is considered to be a personal right, which is not capable of being transferred to be (.sic) the insurer merely by legal subrogation." And "There is, however, no reason why the above peculiar form of English procedure should be engrafted on the procedure prevailing in our law Courts. The word `subrogation' has not been defined in the Transfer of Property Act but it means sub stitution. If an insurer is subrogated to all the rights and remedies available to the insured, there is no reason why he should be deprived the right of enforcing such rights and remedies by a suit. Section 92 of the Transfer of Property Act confers a right of subrogation on the redeemer of a mortgage under certain circumstances. There is no doubt that in our law Courts such a subrogee can enforce his right by a suit without using the name of the mortgagee whose mortgage he has redeemed. A subrogee under section 135‑A (2) of the Transfer of Property Act should not be placed in a more disadvantgeous position than a subrogee under section 92 of the same act. If any doubt still remains about the right of suit of an insurer under section 135A (2) of the Transfer of Property Act, it is dispelled by subsection. (4) which lays down that nothing in clause (e) of section 6 shall affect the provisions of sub section 135A, clause (e) of S. 6 of the Transfer of Property Act provides that a mere right to sue which includes a personal right of action cannot be' transferred. By removing this bar, sub section (4) of section 135A of the Transfer of Property Act makes a deliberate departure from the English rule of procedure which lays down that an insurer who pays for a total loss cannot sue independently in his own name. Subsection (2) of section 135A is based on equitable principles of reimbursement which is contained is section 69 of the Indian Contract Act which runs in the following terms: "

69. A person who is interested in the payment of money which another is bound by law to pay, and who therefore pays it, is entitled to be reimbursed by the other." In the case of loss of insured goods the primary liability is the liability of the carrier. The insurer steps into the shoes of the insured by paying for a total loss. If a subrogee insurer is deprived of an independent right of action his rights and remedies would be rendered useless in many cases. For instance, if the holder of a marine insurance dies without any heir or leaves the country or becomes untraced, or if being a company it ceases to exist, then the remedies of the insurer would become completely useless because it would not be possible for the insurer to sue in such cases in the name of the insured. It seems to me that our legislature has considered these contin gencies and deliberately given a right of suit to the subrogee by enacting subsection (4) of section 135A of the Transfer of Property Act and making clause (e) of section 6 of the same "Act inapplicable to all the remaining subsections of section 135A." The learned Judge appears to begin with the premises that in England an insurer could not bring an action in his own name merely because of the peculiar procedure adopted by the Courts there, though he has given the reason for adopting it to be that the right of action of the insured is considered to be a personal right, and without coming to the conclusion that the right of the insurer is not a personal right‑or, that Indian procedure permits that personal right be enforced differently, has drawn on the analogy of section 92, and section 135A of the Transfer of Property Act and section 69 of Contract Act. With deep respect, I may state that the analogy of statutory provisions for coming to the general conclusion that there is no reason why the peculiar procedure of England should be engrafted on the procedure prevailing in Indian Courts, may by justifiable only with reference to the particular provisions of law to which he made reference, without having a general application to the doctrine of subrogation recognised otherwise. Section 69 of the Contract Act, which is a general provision of the Contract Act is not relevant to the dis cussion on subrogation because an insurer, for example who insures the transit of goods by air, land or sea, does not pay for the loss‑suffered by the insured person on the ground that he is interested in the payment of the money which the carrier was bound by law to pay, but to honour his own commitment only. His interest as a subrogee in the payment due from the carrier arises to the insured person after he fulfils his own obligation and therefore section 69 does not apply to him. Section 69 of the Contract Act is wider of application than the corresponding English rule of law, but that must remain a separate differentiation so long as the section cannot in terms be employed for the benefit of subrogees. I, therefore, cannot agree with the learned counsel for the plaintiffs that either the doctrine oh subrogation, as it is known and recognised, or any provision of law enables the plaintiffs by them‑selves to sue the defendants for damages recoverable from the latter by the insured persons. Better protection and advancement o1' insurance business and the business of carriage of goods by air is 'not a problem which can be solved by the Courts. The problem does exist but in view of the law as I see it, I cannot decree the four suits. Counsel for the plaintiffs made an oral request for permission to amend the plaints by adding or substituting the names of the insured persons as plaintiffs. The 4pplication is very delayed in view of the long time since the loss was suffered as well as the, dates of the institution of the suits. The right of the insured, to sue was extinguished long ago under Rule 29 of the First Schedule to Carriage by Air Act, 1934. In these circumstances I cannot allow the plaints to be amended. I accordingly dismiss Suits No. 503 of 1954, 557 of 1954, 559 of 1954 and 154 of 1955 with half costs. A. H. Suits dismissed