JUDGMENT
U.L. Bhat, J.
1. Second defendant, a concern engaged in the sale of latex and other rubber products, on 1-10-1981 booked 45 drums of rubber latex valued for Rs. 1, 17, 618.75 for carriage from Kottayam to Bombay, in pursuance of a contract between the second defendant and third defendant for supply of goods to the third defendant Goods were properly packed and entrusted in a good condition to the first defendant and had been insured with the plaintiff for Rs. 1, 17, 700/-, Goods were not delivered. First defendant gave non-delivery certificate to second defendant who preferred a claim with the first defendant. But the first defendant declined to settle the claim. Second defendant preferred a claim with the plaintiff who after making due enquiry and on satisfaction that there was non delivery and loss of consignment paid the sum assured to the second defendant. There upon second defendant gave a receipt Ext. A11 and letter of subrogation Ext. A12 in favour of the plaintiff. Plaintiff brought the suit seeking decree against first defendant but impleading also defendants 2 and 3. First defendant contended, inter alia, that there was no negligence on the part of the first defendant and therefore first defendant was not liable, that no claim had been preferred as required under Section 10 of the Carrier’s Act and that the plaintiff had no independent right to file the suit. The trial Court upheld the last contention of the first defendant namely, that the insurer alone could not sue and accordingly dismissed the suit with costs while over-ruling the other contentions raised by the first defendant. Plaintiff being aggrieved by the dismissal of the suit has filed this appeal.
2. There is no dispute that the point arising for consideration is dealt with by Section 79(2) of the Marine Insurance Act, 1963 (for short the Act’). We notice that before the enactment of the Act, Section 135-A of the Transfer of Property Act dealt with law on this point. Section 52 and sub-sections (1) and (2) of Section 79 of the Act are pari materia with sub sections (1) and (3) of Section 135-A of the Transfer of Property Act.
3. Section 52 of the Act deals with when and how a policy is assignable. A policy may be transferred by assignment unless it contains terms expressly prohibiting assignment and it may be assigned either before or after loss. Where a policy has been assigned so as to pass the beneficial interest in such policy, the assignee of the policy is entitled to sue thereon in his own name. Admittedly there has been no assignment of the policy by the second defendant to the plaintiff in this case and therefore plaintiff cannot claim entitlement to sue in its own name by virtue of Section 52 of the Act.
4. Section 79 of the Act deals with right of subrogation. Subsection (1) deals with case of total loss, either of the whole, or in the case of goods of any apportion able part, of the subject-matter insured. Where the insurer pays for total loss, be thereupon becomes entitled to take over the interest of the assured in whatever may remain of the subject-matter so paid for, and he is thereby subrogated to all the rights and remedies of the assured in and in respect of that subject-matter as from the time of the casualty causing the loss. Sub-section (2) deals with cases 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 assured in and in respect of the subject-matter insured as from the time of casualty causing the loss, in so far as the assured has been indemnified, by such payment for the loss.
5. Learned Counsel for the appellant relying on three decisions of the Calcutta High Court in Union of India v. Great American Insurance Co. Ltd. , Union of India v. Gangabishan Banshilal and National Insurance Co. Ltd. v. Scindia Steam Navigation Co. Ltd., has argued that in a case governed by Section 79(1) insurer acquires title to the subject-matter insured and therefore is entitled to sue in its own name. We find that a Division Bench of this Court has taken a contrary view in Asiatic Govt. Security Fire & General Insurance Co. Ltd. v. Scindia Steam Navigation Co. Ltd. (1965) KLT178. The Division Bench considered the provisions of Section 135-A (3) of the Transfer of Property Act which are in part materia with the provisions contained in Section 79 (2) of the Act. The Division Bench held that in such a case, the insurer is not entitled to sue in its own name, relying on the observations of Diplock, J. in Yorkshire Insurance Co. Ltd. v. Nisbet Shipping Co. Ltd. 1962-2 Q.B. 330 that subrogation confers no rights and imposes no liabilities upon third parties who are strangers to the contract and vests in the insurer who had paid a-loss no direct rights or remedies against anyone other than the assured and he cannot sue such parties in his own name. The Division Bench also relied on the meaning ascribed to the word ‘subrogation’ by the Privy Council in King v. Victoria Insurance Company Ltd. 1896 A.C. 250 to the effect that
Subrogation by act of law would not give the insurer a right to sue in a Court of law in his own name.
The Division Bench relied on the decision of the Calcutta High Court in Indian Trade and General Insurance Company Ltd. v. Union of India AIR 1657 Calcutta 190 and Textiles and Yam (P) Ltd. v. Indian National Steamship Co. Ltd. . The Division Bench did not follow yet another decision of the Calcutta High Court in Alliance Insurance Co. Ltd. v. Union of India 1957-58:62 C.W.N. 539 and the decision in Union of India v. Bihar Fire andGeneral Insurance Ltd. ., both being cases, under Sub-section (2) of Section 135-A. No doubt the three Calcutta decisions relied on by learned Counsel for the appellant are in consonance with the last two decisions referred to at above which arose under Section 135-A Sub-section (2).
6. Learned Counsel for the appellant argued that in regard to the right of the insurer to maintain a suit on its own, cases coming under Section 135-A (2) of the T.P. Act stand on a different footing from cases coming under Section 135-A (3) it is argued that Section 135-A (3) T.P. Act did not permit the subrogaee to do in his own name Section 135-A (3) permitted such action and the same distinction must be maintained between cases governed by sub-sections (1) and (2) of the Marine Insurance Act. We find that a contrary view has been taken in. the decision of the Supreme Court in Union of India v. Sri Sarada Mills Ltd. AIR 1973 SC 281. In that case suit was filed by the consignor who consigned goods through the Railways. Bulk of the goods was burnt and there was damage to the rest, Goods had been insured and suit was filed after the insurance company made good the loss to the plaintiff-consignor. It was contended that by virtue of the principle of subrogation contained in Section 135-A of the Transfer of Property Act, the right to see had vested in the insurer and the consignor-insured could not sue. All the three judges who decided the case agreed that in the case of mere subrogation dealt with by Section 135-A of the Transfer of Property Act the Provisions does not confer any independent right on the insurer to sue in its own name and without reference to the insured as it is not one of those rights which are incident to the property insured. The judgment shows that bulk of the goods had been totally destroyed. It was obviously a case which attracted the provisions of Section 135-A (2) of the T.P. Act which are identical to the provisions in Section 79 (1) of the Marine Insurance Act. Therefore the distinction now sought to be drawn between cases governed by Sub-section (1) of Section 79 and cases governed by Sub-section (2) of Section 79 cannot be accepted. The view taken by the Division Bench of this Court is supported by the Supreme Court. We therefore agree with the view taken by the trial Court that in a case like the present one insurer cannot sue in its own name.
7. Learned Counsel for the appellant alternatively contends that since the insurer has been impleaded as second defendant in the case, Court should not have dismissed the suit but should have worked out the remedies as between the parties in an appropriate manner so as to subserve the cause of justice. In Union of India v. Sri Sarada Mills Ltd. though all the three judges who constituted the Bench were unanimous in holding that right of subrogation did not confer on the insurer an independent right to sue, there was difference of opinion on the question whether the insurer in that case should be given a decree on the basis that there was an assignment of the policy. The majority judgment held that the suit was not based on an assignment and therefore question of granting relief on the basis of assignment did not arise. Mathew, J. in a separate judgment however held that there was an assignment of the policy in favour of the insurer and therefore the suit was not maintainable. The majority judgment as we have indicated, held that the suit was not based on an alleged assignment and therefore plaintiff should be non-suited on that ground. It is significant to note that in that case the insured brought the suit against the Railways but care was not taken to implead the insurer as a defendant. The majority judgment observed as follows in paragraph 21 of the judgment.
The defence of the Railway Administration was that the mill realised from the insurance company the damages and “as such the plaintiff (meaning thereby the respondent mill) has no right to claim any sum in this section”. If the specific plea of assignment had been taken in the written statement the respondent mill would have impleaded the insurance company. The Court could have in those circumstances been in a position to afford full and complete relief to the parties.
(emphasis supplied)
8. The above observations furnish a clue as to what Courts should do in cases where either the insurer or the insured sues without independent right of suit and the person who has a right to sue (the insured or the insurer as the case may be) is on the party array as a defendant. The majority judgment of the Supreme Court indicates that if a specific plea of assignment had been taken in the written statement, the plaintiff (insured) would have impleaded the insurer and then the Court could have afforded full and complete relief to the parties. In other words, when all the parties including the party entitled to recover damages are in the party array, the Court will be reluctant to take a hyper-technical view and dismiss the suit only because insured (in the case dealt by the Supreme Court, the insurer) is, instead of being made co-plaintiff made a defendant. Ordinarily the insurer takes care to implead the insured also as a co-plaintiff after taking the precaution of obtaining a power-of-attorney from the insured. Plaintiff in this case has obtained a power-of-attorney from the insured but for some inexplicable reason did not implead the insured as second plaintiff but impleaded him as only defendant Having regard to the above observations of the Supreme Court, we do not think that the present suit should have been dismissed. The Court should have afforded full and complete relief to the parties.
9. Technically the Court can give a decree in favour of the second defendant against first defendant, and direct second defendant to pay over the money collected to the plaintiff. In other words, decree would contain two reliefs, one granted in favour of the second defendant against first defendant and the other granted in favour of plaintiff against the second defendant. This certainly would lead to complications in as much as the second defendant would be required to levy execution against first defendant and the plaintiff would be required to levy execution against first defendant. Having regard to the peculiar circumstances of the case, we are of opinion that Civil Court would, with a view to prevent further complications and advance the cause of justice grants decree in favour of the plaintiff against first defendant and that is what we propose to do.
10. If only plaintiff had taken the precaution of impleading the insured as a co-plaintiff instead of as second defendant, first defendant could not have raised this plea and possibly this litigation would not have reached this stage. These circumstances justify denial of costs to the plaintiff.
11. In the result, we set aside the decree and judgment of the trial Court and grant a decree to the plaintiff for recovery from the first defendant of the amount of Rs. 1, 19, 764.75 with interest thereon at 12% per annum from the date of plaint till recovery. Parties shall bear costs throughout The appeal is thus allowed.