P L D 1961 (W (PLP)

WAHIDUDDIN AHMAD, J.‑--This is an appeal of the defendant/ appellant against an ex parte Judgment of S. Moazzam Ali, II Sub‑Judge, 1st Class, Karachi, in suit No. 649 of 1956 dated 12th February 1957 granting the plaintiff/respondent a decree in the sum of Rs. 8,070‑5‑

0. The respondent Messrs Queensland Insurance Company covered 25 packages of cotton piece-goods, belonging to one Sulleman Ismail & Co. of Karachi, shipped from Karachi‑to Chittagong on the appellant's ship "Fakirjee Cowasjee" under Bill of Lading No. 51 dated 2nd January 1953, under a Marine Insurance Policy No. 123‑M/59349. The appellants delivered the above‑mentioned cargo at Chittagong on or about 30th January 1953 but it was found that 2 out of 25 packages landed by them were empty. Messrs Sulleman Ismail & Co. claimed Rs. 8,070‑5‑0 as compensation for the short‑landed goods but the appellant company repudiated their liability. The respondent company, as insurers, accepted their contractual liability and on 23rd April 1953 paid to the assured the loss suffered by them. Eventually the respondent company claimed to be subrogated to all rights, title and interest of the insured person, and on 15th January 1954 filed suit No. 429 of 1954 in the Chief Court of Sind at Karachi against the appellant shipping company for the recovery of the said amount as subrogee. This suit was later on transferred to the District Court and the learned Subordinate Judge passed an ex parte decree against the appellants in the sum of Rs. 8,0 7 0‑5‑

0. The appellants have challenged this ex parte decree in this appeal and their main defence is that the respondents company as subrogees were not competent to file a suit in their own name and it should not have been" decreed. The appeal was filed in this Court on 10th September 1957. At the time of the hearing of the appeal a preliminary objection was raised on behalf of the respondents that the appeal was time‑barred. The appellants claimed protection under section 12 (2) of the Limitation Act in computing the period of limitation and con tended that the time requisite for obtaining copy of the decree should be excluded. The respondents on the other hand con tended that the appeal was beyond time as the application for the copy of the decree was made after the preparation of the decree and section 12 of the Limitation Act has no application. A Division Bench consisting of Inamullah and Sajjad Jan, JJ. referred this question, in view of divergence of opinion, to a Full Bench. The Full Bench by an order dated 13th June 1960 (P L D 1960 Kar. 840‑Ed.) allowed the preliminary objection and held that the appellant was not entitled to the exclusion of A the time taken for obtaining the decree of the learned subordinate Court. The matter has again come up before the Division Bench and the appellants have made an application under section 5 of the limitation Act for condonation of the delay in filing the appeal amongst others on the ground that according to the practice prevailing in the then Chief Court of Sind the interval between the date of the judgment and the signing of the decree was not counted at all for computing the period of limitation and being misled by this practice the appeal was not filed in time. We have made the necessary inquiries from the office and it appears to us that in the former Chief Court of Sind after the decision in Tulsidas Pohumal v. Parasram R. Thadani (A I R 1948 Sind 18) the practice of not counting the period between the date of the judgment and preparation of decree for computing the period had developed. This practice can also be gathered from an unpublished decision in Ismail Abdul Sattar and Brothers v. Haji E. Dossa and Sons (First Appeal No. 50 of 1955), a Bench decision, and from a published judgment of Kaikaus and Munshi, JJ. in Dada Limited v. Pakistan (P L D 1959 Kar. 264). This practice was also referred in the Full Bench Judgment. Sajjad Ahmad Jan, J. in this respect observed as under: "This last mentioned judgment will need a separate dis cussion, but there is no doubt that the Oudh Chief Court cases, the Sind Chief Court judgment and the unpublished judgment in' First Appeal No. 50 of 1955 referred to above do categorically lay down the view in one form or another that where a decree or order is to be drawn without reference to the parties, the party appealing is entitled to the exclusion of the time between the date of the judgment , and the date on which the decree is signed." This practice was also referred by Kaikaus, J. in‑ Dada Limited v. Pakistan. Kaikaus, J. in this connection observed as under "Prima facie this contention would not seem to have much force because it should be the duty of the party to apply to the Court for the preparation of the decree sheet, but it appears that in the Chief Court of Sind decrees were being prepared a long time after judgment was delivered and con sidering the special circumstances a rule was evolved that if the party applied for a copy of the decree at any time before the decree was prepared then the time between the date of the judgment and the date of the decree was also to be regarded as time required for obtaining the copy of the decree." It has also come to our notice that the decision in. A I R 1948 Sind 18 was also brought to the notice of the Subordinate Courts and the time between the date of the judgment and preparation of decree was also excluded by them for com puting the period of limitation for appeal. It is thus obvious that this practice was also followed in the Subordinate Court and continued till a contrary view was expressed by the Full Bench in this appeal. The question arises whether the appellant is entitled to take any advantage for condoning the delay in filing the appeal beyond time. Mr. Dorab Patel in this connection has drawn our attention to the Explanation of section 5 of the Limitation Act. 11 reads as under: "The fact that the appellant or applicant was misled by any order, practice or judgment of the High Court in ascertaining or computing the prescribed period of Limita tion may be sufficient cause within the meaning of this section." Ordinarily any appeal filed beyond limitation must be dismisses but under section 5 of the Limitation Act the Court is giver a discretion to condone the delay and extend the period of limitation if a party satisfies it that there was sufficient cause for not preparing the appeal in time. Now the explanation provides that if the appellant was misled by any practice of the High Court in ascertaining or computing the prescribed period of limitation; this will be considered as, sufficient cause within the meaning of section 5 of the Limitation Act. It appears to me that the explanation of section 5 fully applies to the appellants' case, In Gulab Chand v. Abbas Ali (A I R 1917 Patna 239) delay in presenting appeal on account of conflicting decision of the High Courts was considered as sufficient cause. This view was also taken in Rajani Kanta Kayal and others v. Bistoo Moni Dassi (A I R 1927 Cal. 718). In my opinion also the appellant in this case was also misled by conflicting decision in this Court and the practice that had deve loped. I also consider this as sufficient cause to condone the delay and extend the time of appeal. On this view the appeal is within time. On merits the question for determination is whether the respondents were entitled to maintain the suit as insurers in their own name after satisfying the claim of the insured against the appellant company for causing loss to the goods covered under the insurance policy. The learned Subordinate Judge accepted the respondents as assignees of the insured but it is admitted at the Bar that no assignment deed exists in this case. Therefore the question shall have to be determined according to the general law applicable to such cases. At the Bar it was conceded that section 135‑A of the Transfer of Property Act applies to this case. It reads as under: "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 thereon 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 apportionable 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 tire 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 provi sions of this section." The first part of section 135‑A of the Transfer of Property Act deals with a case in which the policy of marine insurance is assigned and need not detain me. The second part deals with the total loss of property covered by a marine insurance policy and is not relevant to the present case. The third part deals with the partial loss of property covered under a marine insurance policy and applies to the present case. It provides that 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. Part 4 provides that nothing in clause (e) of section 8 shall affect the provisions of this section. On the plain language of sub‑clause (3) of section 135‑A, an insurer is entitled to be subrogated to all the rights and remedies of the inured person from the time of the loss on payment of compensation to him. There is little doubt that the rights and remedies of the insured person include the right to bring an action against the person who caused the wrongful loss, but Mr: Dorab Patel, the learned counsel for the appellants, contended that the right of subrogation recognised under section 135‑A subsections (2) and (3) have a peculiar notion and cannot be extended any further than that recognised under the Common Law of England: The learned Counsel argued that the doctrine of subrogation in respect of insurance cases is derived from the English Common Law and under it an insurer is not entitled to bring an action in his own name. In this connection he invited my attention to The London Assurance Company v. Sainsbury and another ((1873) 3 Dougl. 245, 254, 99 E R 636); King v. Victoria Insurance Co., Ltd. ((1896) A C 250); Simpson and others v. Thomson and others (38 L T 1: (1878) 3 A C 279) and John Edwards and Co. v. Motor Union Insurance Co. Ltd. ((1922) 2 K B D 249). The burden of these decisions is that the right of subrogation rests on the ground that the insurer's contract is in the nature of a contract of indemnity and upon paying the insured, which is primarily the liability of third parties, he is entitled to be proportionately subrogated to the right of action of the assured against them. But the mere fact of subrogation does not empower the insurer to enforce such rights in his own name. This can only be 'done in those cases where a statute confers such right on them or the assured has made a formal assignment to them of his right of action in respect of the subject‑matter. In the first case the question before me was directly involved but the opinion was evenly divided. It was held that the insurer was not entitled to bring a suit in their own name on indemnifying the insured person. In 1896 A C 250 their Lord ships of the Privy Council observed that in English Law an insured person cannot bring a suit in his own name in order to establish his right on the principle of subrogation but allowed the claim on the ground that the insured person had assigned his right to the insurer and they were entitled to sue as assignee. In 38 L T I Lord Cairns, was considering a case where the ship insured with the insurers was damaged by another ship belong ing to the insured person. The question arose whether the insurance company could claim to be reimbursed from the insured person. The original Court's view was that the insurers were entitled to do so but Lord Cairns disagreed with this view and observed as under: "The view of the Lord President, therefore, appears to be that, after payment by the underwriters as on a total loss, there is effected, by some independent operation of law, a transfer of whatever, if anything, can be recovered in specie of the thing insured, and that there is also created by a similar operation of law, and by reason of the transfer of the thing insured, an independent right in the underwriters to maintain in their own name, and without reference to the person insured, an action for the damage to the thing insured, which was the cause of loss. Speaking with great respect for the Lord President and the other learned Judges who followed his opinion, I feel bound to say I am not aware of any authority for the view of the case thus taken by him." Later on Lord Cairns observed: "No foundation for the right of underwriters except the well known principle of law that where one person has agreed to indemnify another he will, on making good the indemnity, be entitled to succeed to all the ways and means by which the person indemnified might have protected himself against or reimbursed himself for the loss. It is on this principle that the underwriters of a ship that has been lost are entitled to the ship in specie that they can find and recover it; and it is on the same principle that they can assert any right which the owner of the ship might have asserted against a wrong doer for damage for the act which has caused the loss. But this right of action for damages they must assert, not in their own name, but in the name of the person insured and if the person insured be the person who has caused the damage, I am unable to see how the right can be asserted at all." Mr. Dorab Patel then referred' me to certain decisions of this Court where also it was held that the insurer on paying the claim of the insured person is not entitled to sue in his own name the party who caused loss to the goods covered by the insurance. There are on this question three single Judge judgments of this Court, namely Queensland Insurance Co., Ltd. v. British India Steam Navigation Co., Ltd. (P L D 1958 Kar. 389); Queensland Insurance Co., Ltd. v. Pakistan International Air Lines (P L D 1959 Kar. 275) and Co‑operative Insurance Society of Pak. Ltd. v. Federation of Pakistan (P L D 1960 Lah. 332). The first case is directly on the point involved before us and the other two cases are not in respect of Marine Insurance Policy but contain some weighty observations which require consideration. The learned Counsel further invited my attention to a decision of the Indian Courts reported in Indian Trade and General Insurance Co. Ltd. v. Union of India (A I R 1957 Cal. 190). In that case it was held that under a marine insurance policy the insurer cannot assert a right of subrogation in his own name. On the other hand. Mr. Lari, the learned Counsel for the respondents, invited my attention to the case of Alliance Assurance Co. Ltd. v. The Union of India (62 C W N 539): In that case. Mukherjee, J. declined to follow the common law practice of England that an insurer cannot bring a suit in his own name after indemnifying the insured person. This being the state of law the question involved has received my anxious consideration and this has also delayed the judgment. The simple question is whether the common law practice that an insurer cannot file a suit in his own name on the doctrine of subrogation should be engrafted in Pakistan or not. In order to appreciate the controversy I would like to refer to certain basic authorities or the source from which the conception pressed before me arose. This question first arose in London Assurance Co. v. Sainsbury. In that case the insured person originally brought a suit against the "Hundred" for compensat ing him for the loss caused to his house by fire. The jury awarded compensation to him after deducting the amount received by him from the insurers. This led the insurers, the London Assurance Company, to file a fresh claim against the "Hundred" for reimbursement of the amount paid by them to the insured person. The validity of the claim was accepted by all the learned Judges who heard the case but it was negatived on the ground that they could not bring a suit in their own name and should have filed it in the name of the insured person. The opinion on this question was, however, divided. Asburst and Willes. JJ. were of the opinion that the insurers could maintain the suit in their own name but Buller, J. and Lord Mansfield expressed a contrary view. The main argument before the Court whether an insurer having paid the loss incurred was entitled to recover it under the Statute I G. 1, st. 2, c. 5 in their own name. It was urged that before the Statute, the insurer could not sue a trespasser and the Act has not made any difference. It will be useful to reproduce here certain portions of the judgment in order to show on what basis the claim of the insurer was disallowed. Buller, J. disallowed this claim on two grounds, firstly, that the Court ought to prevent multiplicity of the civil suit and secondly that a right of action cannot be transferred. His Lordship in this connection observed: "A right of action cannot be transferred Can the insurer bring an action immediately on the loss occurring? If he can, it must be a vested interest; if not, he‑cannot, by payment subsequent, which is his own act, entitle himself." Lord Mansfield observed at page 640 as under: "My leaning is strongly in favour of the plaintiffs, if the case will bear me out; for otherwise they must lose a sum of money for want of a remedy, and from the mistake of a jury in finding against the direction of the Judge. If, by law, either Langdale or the plaintiffs might sue, I have no doubt that it may be shown from what passed at the trial, that the sum sought to be recovered was not included in the damages, otherwise the plaintiffs might recover against Langdale, and show the verdict as conclusive evidence. I agree that the plea and replication are immaterial, and that the question is, whether this action could have been maintained in the name of the plaintiff against the rioters if the statute had never been made? Langdale is the sole owner. The relation of the plaintiffs is by the insurance, which is a contract of indemnity. It follows that in respect of salvage the insurer, stands, in the place of the insured, and vice versa as to damage. I take it to be a maxim, that as against the person sued the action cannot be transferred. As between the parties themselves, the law has long supported it for the benefit of commerce; but the assignee must sue in the name of the assignor; by which the defence is not varied. There is no instance of an action in the name of an insurer, while numberless actions have been brought by owners of ships for damage done by other ships, where many of them must have been insured. The case of a Sheriff who has paid the whole debt is very strong, for he stands in the place of the debtor, by act of law yet he must sue in the name of the plaintiff. If the insurer could sue in his own name, no release by the insured would bar, nor would a verdict by him be a bar. It is impossible that the insured should transfer, and yet retain his right of action. Trustee and cestui gue trust cannot both have a right of action. It is a great hardship, for which I cannot find a remedy; but it is better that the general rule of law should prevail, that as against the person sued the right of action cannot be transferred, nor the defence varied. As we are equally divided, in order to expedite the bringing of a writ of error, let there be judgment for the defendant." On the other hand, Ashurst, J. took a different view and observed as under: "Although a right of action cannot be transferred, yet two persons may have a right of action for the same injury, diverso intuitu. On an agreement to build a house, which is destroyed before it is finished, I think the "Hundred" would be liable to each party interested in proportion to his loss in separate actions. It is argued; that on payment the insured becomes a trustee, but he is not so until he brings his action, unless he stipulates to bring an action. It is not necessary that the injury and action should arise immediately on the act done. It arises from the subsequent act. Can the owner after being paid by the insured, recover against the trespasser? Certainly he can. So he may against the "Hundred;" and when he recovers he is a trustee for the insurer. But the insurer may also bring an action in his own name, because when he has paid he is demnified. It has been said that the insurer has no remedy but in the name of another, who may release, and who only can he compelled in equity. That is so new a case that I cannot conceive that the law meant it here. The great difficulty is, that both the parties may bring actions at the same time, but there may be relief by audtta querela. A fact is admitted by the demurrer which ought to stop the defendants' mouth.. I see no objection to the averment, as the jury have told their reasons. I think that judgment should be for the plaintiff." Willes, J. expressed the following view: "It is admitted on all hands that the plaintiffs have received damnum can injuria. I admit that a man cannot transfer his right to a cause in action; but if the insurer had an original right, he may elect to sue in has own name or in that of the insured. It is admitted that the verdict in Langdale v. Kenett was wrong; but the defendants could not move for a new trial in that cause, to which they were not parties. I do not feel the difference made between the injury at the time and on payment. They became liable immediately. This is not like a wager; it is an insurance on the house, and gives an interest in it. A mortgagee might maintain an action under this statute. An insurer could not bring trespass for running down a ship, for want of possession, but perhaps he might maintain an action on the case. I think an action by the insured, as trustee, would be a bar to an action by the insurer. So a collusive release might be got over. I think judgment should be for the plaintiffs." It is therefore clear that even in this old decision the view on the question' of practice at common law was divided. But one fact is obvious that the plaintiff's claim was disallowed mainly on the ground that the general rule of law should prevail that as against the person sued the right of action cannot be `transferred nor the defence varied. In England this hardship was remedied by enacting Riot Damages Act, 1886 (49 and 50 Vict. c. 38) and it was provided that the person by whom the insured is paid is entitled for compensation under the act in respect of such payment or equipment. However this procedure of English Common Law was not followed in Courts of Equity and Admiralty and an insurer was allowed to sue in his own name. In Randal v. Cockran (1 Ves. Sen 99; 27 E R 916) the insurers' claim to part of the prizes on the principles of subrogation was allowed. The decision of the Court was as under:‑ "The King having granted general letters of reprisal on the Spaniards for the benefit of his subjects, in consideration of the losses they sustained by unjust captures; the commissioners would not suffer the insurers to make claim to part of the prizes, but the owners only, although they were already satisfied for their loss by the insurers: who thereupon brought the present bill. Lord Chancellor was of opinion, that the plaintiffs had the plainest equity that could be. The person originally sustaining the loss was the owner: but after satisfaction made to him, the insurer. No doubt, but from that time, as to the goods themselves if restored in specie, or compensation made for them, the assured stands as a trustee for the insurer, in proportion for what be paid; although the commissioners did right in avoiding being entangled in accounts, and in adjusting the proportion between them. Their commission was limited in time: they see who was owner; nor was it material to them, to whom he assigned his interest, as it was in effect after satis faction made." In MacGillivray's Insurance Law (4th Edition) at para. 1686 it is stated as under: "The legal right to compensation remains in the assured, and, therefore, unless there has been an express assignment of the legal right, actions at law brought for the benefit of the insurer are brought in the name of the assured. In Courts of Equity or of Admiralty the insurer has always been allowed to sue in his own name." The American decisions, namely, St. Lous, Iron Mountain and Southern Railway Co. v. Commercial Union Insurance Co. ((1890) 139 U S, S C 223) and The Liverpool and Great Western Steam Co. v. The Phenix Insurance Co. ((1888) 129 U S, S C 397‑‑464) have also in the same terms referred to the practice in equity Courts. The observation of Gray, J. in (1890) 139 U S, S C 223 leaves no doubt that in a Court of Equity the insurer was allowed to enforce this right in his own right. He observed as under: "In fire insurance, as in marine insurance, the insurer, upon paying to the assured the amount of a loss of the property insured, is doubtless subrogated in a corresponding amount to the assured's right of action against any other person responsible for the loss. But the right of the insurer against such other person does not rest upon any relation of contract or of privity between them. It arises out of the nature of the contract of insurance as .a contract of indemnity, and is derived from the assured alone, and can be enforced in his right only. By the strict rules of the common law, it must be asserted in the name of the assured; in a Court of equity or of admiralty, or under some state codes, it may be asserted by the insurer in his own name; but in any form of remedy the insurer can take nothing by subrogation but the rights of the assured; and if the assured has no right of action, none passes to the insurer." The same legal position is exposed in (1888) 129 U S, S C R

397. The American Reports clearly show that under the English system two different procedures are followed in this respect in common law Courts and in the Courts of admiralty or equity. In the former the insurer was not entitled to bring an action in his own name but in the latter Courts it could be brought in his name. It is therefore perfectly clear that the English practice recognised in the above‑mentioned English decisions is strictly applicable to common law cases and not to cases brought before the equity Courts. Fortunately the Civil Courts in this country exercise E both common law and equity jurisdiction. It is therefore difficult to appreciate how this strict practice of common law can be applied to such cases on grounds of equity, justice and good conscience. I will now proceed to examine the three single Judge judgments referred to in the earlier part of the judgment. Constantine, J. applied this principle of strict common law in Queensland Insurance Co., Ltd. v. British India Steam Navigation Co., Ltd. (P L D 1958 Kar. 389) on the ground of equity, justice and good conscience and observed as under: "Pausing here, it appears to me that in this High Court at Karachi I am governed by the rules of justice, equity and good conscience. In a matter in which the statutory law is silent, the rules applicable are those of English law, unless they are inapplicable to the conditions in this country." He also observed that‑ "Section 135‑A is silent upon the point whether the person granted the right of subrogation may sue in his own name," and held‑ "That neither section 135‑A of the Transfer of Property Act, nor any other provision of law, empowers a person subrogated under that section to sue in his own name by mere virtue of his subrogation." With respect I am unable to agree with this view. I have already referred to the state of law in England. If in English Courts an insurer could sue in his own name in Courts of equity, I see no reason why it cannot be done in the Civil P Courts in this country. This rule of equity is recognised in section 69 of the Contract Act. The only difference is that the right of reimbursement under it is personal while right of subrogation affects property also. The right of subrogation is invoked both in insurance and mortgage cases. At first this English equitable doctrine was applied to Indian Mortgage cases by their Lordships of the Privy Council in Gokul Das v. Puran Mal (11 I A 126). Later, on the enactment of the Transfer of Property Act, it was confined only to the cases covered by section 92 of the Transfer of Property Act. A useful discussion in this respect will be found in Lala Man Mohan Das v. Janki Prasad and others (A I R 1945 P C 23). But if I may say so with respect section 91 of the Transfer of Property Act has nothing to do with subrogation. It only gives right to certain persons to use for redemption. Section 92 of the Transfer of Property Act is a self‑contained provision and provides that any of the persons referred to in section 91 (other than the mortgagor) and any co‑mortgagor shall, on redeeming property subject to the mortgage, have, so far as regards redemption, foreclosure or sale of such property, the same rights as the mortgagee whose mortgage he redeems may have against the mortgagor or any other mortgagee, and this right is called G the right of subrogation and a person acquiring the same is said to be subrogated to the rights of the mortgagee whose mortgage he redeems. It will be noticed that section 92 does not specifically empower such persons the right to sue in their own name but in this country their right to do so is fully recognised. In my opinion the right to sue is not derived from section 91 and is inherent in section 92, Transfer of Property Act. If these persons can enforce the right of subrogation in their own name under section 92, Transfer of Property Act, I don't see any reason why an insurer under section 135‑A should be prevented from doing so, particularly when he has been conferred with all the rights and remedies of the insured persons. In 62 C W N 529, Calcutta case, it was observed that subsection (4) of section 135‑A made a deliberate departure from the English practice. But Constantine, J. distinguished it on the ground that section 6 (e), Transfer of property Act refers to transfer inter vivos and not to transfer by operation of law and was only applicable to sub‑clause (1) of section 135‑A, Transfer of Property Act. It however, appears to me that. a reference to the basic English decision makes it clear that the view, taken in them was primarily based on the notion‑that "a right of action cannot be transferred" or to put it in the words of Lord Mansfield "I take it to be a maxim, that as against the person sued the action cannot be transferred." This maxim was recognised in section 6 (e) of the Transfer of Property Act which provides as under:-- "(e) A mere right to sue cannot be transferred." With great respect I venture to suggest that the Legislature wanted to remove this bar and for this reason clause (4) was H embodied in section 135‑A, Transfer of Property Act. Apparently section 6 of the Transfer of Property Act enunciates and declares the general principle that all kinds of property is transferable but specifies certain things; which being not property, are not transferable. Its underlying principle is to repress speculative gambling in litigation. In my opinion this particular provision lays down in general terms the property over which a person has disposing power and cannot be confined to transfer inter vivos alone. In insolvency cases, on the basis of this very provision in number of cases it has been held that a right to sue does not vest in the Official Receiver (See A I R 1937 All. 317). In Chackalingam Chetty v. Seethai Ache and others (A I R 1927 P C 252) the Privy Council even condemned the practice of the Official Assignee for selling land which was in the possession of a person who claimed to have purchased from the insolvent, as being in substance the sale of a right to litigation. These are cases of transfer by operation of law. It also appears to me that the right of an insurer to subrogate himself has now become an implied term of the insurance policy and as section 6 (e) was likely to hit it, it was essential to amend it by incorporating subsection (4). This view is also fortified by the following state ment of objects and reasons of the proposed bill in the Gazette of India Part V, dated 19‑2‑1944 "The need for the enactment of provisions corresponding to section 79 of the Marine Insurance Act and for amending section 6 (e) of the Transfer of Property Act has also been represented to Government. On consideration of the opinions expressed by the Provincial Governments, High Courts and leading commercial bodies, Government has now reached the conclusion that this is desirable." Thus the only explanation for incorporating this subsection was to remove the effect of the English Common Law notion that a mere right to sue was incapable of transfer adopted in section 6 (e). At any rate this subsection gives a clear clue to the intention of the Legislature that it should no longer prevail in respect of matters covered by the section as a whole. I am clearly of the view that the result of incorporating insurer's right of subroga tion in sub‑clauses (2) and (3) is to abrogate all the incidents attached to it under the English Common Law and the fact that subsection (4) was added to it leaves no room for doubt that there was deliberate departure in this respect from the peculiar notion of English common law procedure. In the second decision of this Court, Queensland Insurance Co. Ltd. v. Pakistan International Airlines (P L D 1959 Kar. 275), the matter was not considered from the point of view of section 135‑A of the Transfer of Property Act, and it is not possible for me to say what view my brother Qadeeruddin, J. would have taken in the light of the history of the English and American case law discussed above. But Qadeeruddin, J. was conscious of section 135‑A, Transfer of Property Act, and disposed of the Insurance Company's plea under section 135‑A, Transfer of Property Act on the short ground that it did not apply to insurance of transit by air. He observed at page 278 thus: "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 Queensland 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 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." Therefore he proceeded to consider the case before him purely from the point of the doctrine of subrogation alone. The case before Farooqi, J. in The Co‑operative Insurance Society of Pakistan Ltd. Lahore v. Federation of Pakistan (P L D 1960 Lah. 332) was that of carriage of goods by land. It was taken for granted that section 135‑A of the Transfer of Property Act applied to the case before 'him. My brother considered the effect of sub‑clause (2) of section 135‑A. Transfer of Property Act and observed as under: "The words of subsection (2) of section 135‑A viz. `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', did, I must confess, trouble me for a while, because it appeared to me that if the insurer was subrogated to all the rights and remedies, the bar that he could not bring an action in his own name might appear to be artificial. But after anxious consideration I have come to the same conclusion as Constantine, J. in the case referred to above, particularly in view of the fact that in the provisions of the Transfer of Property Act such as section 130 (2), section 135‑A (1), the right to bring an action has been expressly provided. Even section 91 of the Transfer of Property Act expressly states about the right to institute a suit for redemption. It there fore does appear that wherever the Legislature had intended to confer a right of action upon a person, such as a person in the position of a subrogee or assignee, it has expressly stated it. Upon this finding I must hold that the present suit, which was brought by the Insurance Society in its own name must be held to be bad." Thus Farooqi, J. based his decision firstly, on the view taken by Constantine, J. and secondly, on the ground that wherever the Legislature had intended to confer a right of action upon a person, such as a person in the position of a subrogee or assignee, it has expressly stated it, I have already ventured to express my view on the observations of Constantine, J. As far as the second ground is concerned, I have examined this position very carefully. With respect I will point out that in the Transfer of Property Act the Legislature has not conferred specifically any right of action on .a subrogee. But it appears to me that the reason behind recognising the power of the asignee to sue is not because he could not sue in his own name but because the Legislature wanted to make it certain that the assignor will have no longer anything to do with the recovery of the actionable claim. It will be noticed that the affect of section 130 (1), Transfer of Property Act is that on the execution of the transfer of actionable claim all the rights and remedies of the transferor vest in the transferee and the transferee alone is entitled to enforce the remedy, there being no interest in the transferor. Similarly in section 135‑A, Transfer of Property Act, not only the Legislature recognised the right of the assignee to sue in his own name but it further provided that 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. That seems to me to be the reason because in this country the practice has always been in favour of the assignee to sue in his own name without impleading the assignor. See the Law of Transfer by Sir S. H. Gourf Vol. II at page 1x48, 7th Edition). While I was in the midst of this judgment Mr. Dorab Patel brought to my notice in chamber a Division Bench decision of the Dacca High Court in Trans Oceanic Steamship Co. Ltd. v. Ishak Haji Shakoor Haji Jamal Co. (P L D 1960 Dacca 885). In that case the point raised was entirely different. It was urged before their Lord ships of the Dacca High Court that the right of an insured person to sue is extinguished the moment an insurer has compensated but this contention was repelled. I am in full agreement with the view of their Lordships on this point but with great respect I am unable to share their general view on section 135‑A firstly because they are in the nature of obiter and secondly it is mainly based on the view taken in this Court in the above‑mentioned three cases, it is not possible for me to say what view Hamoodur Rehman, J., Constantine, J. and Farooqi, J. would have taken if the case had been presented in the light of the above discussion. But I am glad to find that Hamoodur Rehman, J. did notice the practice followed in Equity Courts on the point under consideration but rejected the plea as it did not fit in even on the practice followed in those Courts. He observed "There are some observations in McGillivray on Insurance Law to the effect that in the Courts of Equity and Admiralty in England the insurer has also been permitted to sue in his own name. But the learned author is also clearly of the view that the insured's right to sue is not extinguished by reason of this subrogation. Even if this principle be adopted, the suit by the insured cannot be said to be non- maintainable." I have already discussed all the aspects of the question involved and the two diametrically opposite views expressed in 62 C W N 539 and A I R 1957 Cal. 190 need not detain me. I am however in respectful agreement with the view of Mukerji, J. expressed in 62 C W N

539. It also appears to me that there is no justification to engraft the peculiar English procedure of strict common law in this country because it is not possible in this country to compel the insured through a speedy remedy in a Court of equity to lend his name to sue and the very notion on which this English practice is based was got rid of by sub‑clause (4) of section 135‑A, Transfer of Property Act. The fact that in England an insured person could be compelled in a Court of equity to lend his name is evident from Lord Hobhouse's observation in King v. Victoria Insurance Co., Ltd. (1) at page

255. His Lordship observed: "Their Lordships have no doubt that if, after receiving payment from the plaintiffs, the bank had got damages from the Government, a Court of Equity would have treated them as trustees for the plaintiffs to the extent of the payment, and that if it had been necessary to use the name of the bank a Court of Equity would have compelled the bank to permit it on the usual terms. Mr. Cohen says that no instance is to be found in the reports where the Court of Chancery has bound a defendant to give his name to be used in an action of tort. Nevertheless it cannot be doubted that insurers often have used the names of the insured to recover damages in tort, and have not heeded whether the payment made on their contracts of indemnity did or did not fall within their strict terms. If the reports are silent, the more probable explanation is that the kind of defence raised in the present case has not commended itself to lawyers." Mr. Dorab Patel was unable to point out that the insurer could in the same way compel the insured to lend his name under the procedural law of this country and it is quite clear to me that in such circumstances the statutory recognition of the insures's right of subrogation will depend on the sweet will of the insured and remains ineffective. I have also no doubt in my mind that the English practice sought to be applied in this country is neither equitable nor suitable to the conditions and legal system of this country. Lord Blackburn's observation in 3 A C 279 makes it perfectly clear that this is not followed under other systems of jurisprudence. His Lordship observed at page 293 as under "In England, the action must be in the name of the ship -owner, not of the under‑writers. I think this material, as showing that it is the personal right of action of the ship owner, the benefit of which is transferred to the under‑writers. In other systems of jurisprudence, or it may be in our own as altered hereafter, the assignee of such a right may be able to sue in his own name. The important question will still remain: Is it a transfer of aright of action, which cannot be transferred unless it already exists: or a fresh right created? The whole reasoning of the Court below is applicable to the case of a total loss, and of a total loss only. It would not be applicable to the case of a partial loss of 99 percent or even more. I think, however, the reason of the law is not more applicable to those who have indemnified for a total loss than to those who have indemnified for a partial one." At this stage I may again mention that in other systems of jurisprudence the insurer in such cases can sue in his own name. I have already referred to the practice followed in American Courts. In Canada this right was recognised by their Lordships of the Privy Council in Quebec Fire Assurance Co. v. Augistin St. Louis and John Molson (7 Moore 286: 13 E R 891) under the French system of law. In that case their Lordships held: "In an action brought upon the noterial Acts, that though the declaration was not strictly in form, yet it was substantially good; for the plaintiffs the appellants could not be held to sue as assurers, (in which character they had no title;) but as being subrogated to the debt due to the fabric of the church by the defendants (the respondents), by reason of the payment made on their behalf in respect of the damage occasioned by them." I am therefore unable to find out any valid reason to follow the much debated English peculiar procedure in Pakistan on the ground of justice, equity and good conscience. In conclusion I will therefore hold that on the statutory recognition of an insurer's right of subrogation the peculiar English procedure of strict common law can no longer be applied in this country. In my opinion on the plain language of section 135‑A (2) and (3) an insurer in the absence of any statutory bar is entitled to enforce the right of an insured person in his own name and there is no justification to place him in a disadvantageous position on the basis of an artificial barrier recog nised in English Law, which is no longer the source or basis of his claim. The appellant's plea is in the nature of highly artificial defence and must be rejected. No other point is urged on behalf of the appellant. Accordingly the appeal is dismissed but the parties will bear their own costs. INAMULLAH, J.‑

I agree. A. H. Appeal dismissed.