P L D 1988 Karachi 300 (PLP)

The Civil Revision Application under section 115 of the Code of Civil Procedure is filed by the petitioner to challenge the two concurrent judgments of the Courts below. The following facts which are not disputed may be stated here as they are necessary for the disposal of Revision Application. The petitioner which is an Insurance Company instituted a suit for recovery of a sum of Rs.35,258 against the respondent on the basis of a Letter of subrogation issued in their favour by the insured Messrs Pak Leather Crafts (for the sake of convenience I will hereinafter refer Messrs Pak Leather Crafts as 'the insured' only). The insured hand sent a consignment ' of leather goods through respondent for delivery at Birmingham, England, to Messrs Alpha Trading Company vide Airway Bill No.214‑272‑58125. This consignment was insured with the petitioner under a Marine Insurance Policy for the sum of Rs.35,

258. The Airway Bill issued by the respondent disclosed the name of Shipper/consignor as Pak Leather Crafts, consignee‑as Barclays Bank Ltd., conventary and, the notify party as Messrs Alpha Trading Corporation of' Coventry. The documents relating to the above consignment including the Airway Bill were sent by the insured through Barclays Bank of Coventry. However, when the above documents were presented to Messrs Alpha Trading Corporation they refused to retire the same as the consignment was not traceable. Accordingly, at the instance of the insured the document were returned to them. The insured thereupon lodged a claim under the Marine Policy with the petitioner. The petitioner settled the claim of insured by making payment of Rs.35,258 and obtained a Letter of Subrogation in their favour. The petitioner, on the basis of Letter of Subrogation lodged their claim with the respondent who failed to settle the same. Consequently the petitioner instituted Suit No.3036 of 1979 before the Court of 3rd Senior Civil Judge, Karachi, for recovery of the sum of Rs.35,258 on the basis of Letter of Subrogation. The learned trial Court though found in favour of the petitioner on merits, but dismissed the suit as not maintainable relying on the decision of this Court in the case of P. I. A. Corporation v. Shaikh Muhammad Younus P L D 1976 Kar. 1984. The first Appellate Court also concurred with the decision of the trial Court. Mr. Imtiaz Lari, the learned counsel for the petitioner contended before me that the decision in the case of P.I.A. Corporation v. Shaikh Muhammad Younus has been wrongly applied by the Courts below. It is contended by the learned counsel that in the present case the suit was instituted by the petitioner on the basis of a statutory right available to them under section 135‑A of the Transfer of Property Act while in the case of P.I.A. v. Muhammad Younus, the suit against the air carrier was held not maintainable by the plaintiff in that case as he was admittedly found to be not a consignee of the lost consignment. It is accordingly contended by Mr. Amtiaz Lari that the rule laid down in P.L.A. v. Muhammad Younus was not applicable in the present case. The learned counsel for the respondent on the other hand supported the judgments and decrees of the Courts below and contended that the suit was rightly held as not maintainable by the Courts below, in view of the decision of this Court in the case of P.I.A. v. Muhammad Younus. After hearing the learned counsel for the parties at length I am of the view that the suit instituted by the petitioner was not only 'maintainable but they were also entitled to a decree against the respondent. It, is true that it, the case of 'P.I.A. v. Muhammad Younus it was held that in view of Rule 13 of Schedule 1 to the Carriage by Air Act 1934 for the sake of convenience I will hereinafter refer Carriage by Air Act 1934 as 'the Act' only a person other than a consignee was not entitled to sue the carrier for loss of the consignment but in that case the Court aid nut consider the maintainability of suit by a Subrogee in view of section 135‑A of the Transfer of Property Act. The question which, therefore requires examination in the present case is that whether the petitioner as a Subrogee could maintain the suit against respondent in view of the provisions of section 135‑A of the Transfer of Property Act. The right of a insurer to sue on the basis of Subrogation in view of section 135‑A of Transfer of, Property Act came up for consideration before the Supreme Court in the case of East and West Steamship Co. v. Queensland Insurance Company Ltd. P L D 1963 SC 663 and the majority view in that case was that an Insurance Company could sue in its own name on the basis of subrogation in view of the provision of section 135‑A of the Transfer of Property Act. The objection of the learned counsel for the respondent however, is that the principle contained in section 135‑A of the Transfer of Property Act could not be extended to the present ca‑se as it only applied to Marine Policies which covered carriage of goods by land or sea 'while in the present case the consignment was carried through air which is governed under the Act. In support of his contention that section 135‑A of the Transfer of Property Act did not apply to carriage of goods by air, the learned counsel referred to the case of Queensland Insurance Company Ltd. v. P.I.A. P L D 1959 (W.P.) Kar.

275. The above legal position may have been true before 23‑3‑1958, when Insurance Act 1938 was amended by Act XXVII of 1958 and clause (13‑A) was added after clause (13) in section 2 which defined Marine insurance Business 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, water or air, or by any combination thereof and whether or not including wharehouse risks or similar risks in addition or as incidental to such transit, and includes any other risks customarily included among the risks insured against in marine insurance policies. After introduction of above clause (13‑A) in' section 2 of Insurance Act 1938, a marine insurance policy also covered carriage of goods by air and, therefore, the equitable‑ principles contain in section 135‑A of Transfer of Property Act is also applicable to a case of marine insurance policy which covered the risk of carriage of goods by air. I am, therefore, quite clear in my mind that if the insured had the right under the law to sue the respondent for loss Of consignment, the same right was available to petitioner on subrogation in view of section 135‑A of the Transfer of Property Act. It now remains to be seen whether the insured could maintain a suit against the respondent for damages for loss of consignment under the Act. The liability of a carrier under the Act arises under Rule 18 of the First Schedule to the Act which is as follows:‑ "18.‑(1) The carrier is liable for damage sustained in the event of the destruction or loss of, or of damage too, any registered luggage or any goods, if the occurrence which caused the damage so sustained took place during the carriage by air. The carriage by air within the meaning of the preceding paragraph comprises the period during which the luggage or goods are in charge of the carrier, , whether in an aerodrome or on board an aircraft, or, in the case of a landing outside an aerodrome, in any place, whatsoever. (3) The period of the carriage by air does not extend to any carriage by land, by sea of by river performed outside an aerodrome. If, however, such a carriage takes place in the performance of a contract for carriage ' by, air, for the purpose of loading, delivery or transhipment,, any damage is presumed, subject to proof to the contrary, to have been the result of an event, which took place during the carriage by air. It is held in the case of P. I. A. v. Muhammad Younus that a consignee of a lost consignment has right Ito sue the carrier under Rule 13 of the Schedule I to the Act. By virtue of Rule 14 ibid the consignor and consignee can respectively enforce all rights given to them by Rules 12 and 13 ibid. From the evidence on record it is established that Messrs Pak Leather Crafts (insured) was the consignor of the lost consignment. It is, therefore, quite clear that insured who was the consignor of the lost consignment was, entitled to sue the respondent for recovery of damages for the disputed consignment The same right, therefore, was also available to petitioner by virtue of subrogation under section 135‑A of Transfer of Property Act. It may be, mentioned here that clause (13‑A) of section 2‑of the Insurance Act was also referred by the learned Single Judge in the case of Queensland Insurance Company v. Pakistan International Airlines and, it was held that in spite, , of this amendment the marine insurance did not extend to carriage by air, but with utmost respect I may point out here that this view was based on mistaken reproduction of clause (13‑A) of section 2 of the Insurance Act which is clearly borne out, from the following passage at pages, 278‑279 of the report:‑ The contention of Mr. Lari based on the above section, can be disposed of without much discussion because the I 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 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 and 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 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 of transit by air. If section 135‑A of the Transfer of Property Act does 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 Queenland Insurance Company Limited v. British India Steam Navigation Company Limited P L D 1958 Kar. 389 and Indian T & G I Company v. Union of India A I R 1957 Cal. 193, and the judgment of Mukherjee, J. dated 26th February, 1958 in Civil Rule No.3020 of 1955 and Civil Rule No.954 of 1956, Alliance Assurance Company Ltd. ,,, The Union of India Civil Rule N0.3020 of 1955 and Civil Rule No.954 of 1956 which hat~, 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 correct definition of 'Marine Insurance Business' as given in clause (13‑A) of section 2 which is printed in the Pakistan Code Volume IX at pages 418‑419 and in the Insurance (Amendment Act) XXVII of 1958 printed at page 336 of Volume V P L D 1958 is that which I have reproduced earlier in this judgment. It is thus, quite clear that in Queensland Insurance Company's case while reproducing the newly‑added clause (13‑A) of section 2 of Insurance Act the words "or by air" after the words "land, water" and the expression immediately following it "or by any combination thereof" were apparently omitted through some mistake and in their place the expression "land or water or both" was mentioned and on that basis the learned Single Judge held that there was nothing in clause (13‑A) of section 2 of the Act to warrant extension of law relating to marine insurance to transit by air. With utmost respect I am unable to agree with the above view. As a result of above discussion I allow this Revision Application, set aside the judgments and decrees of Courts below and decree the suit for the petitioner with costs throughout. M . Y.H./N‑71/K Suit decreed.