PATEL ROADWAY LTD. vs CRESCENT AGENCIES

THIS is an appeal against the order of the Consumer Disputes Redressal Forum, Madurai dated 5.7.94 in Opposite Party 453/93. The Opposite Parties 1 & 2 are the appellants.

THE 1st complainant entrusted to Opposite Parties 1 & 2 M/s. Patel Roadways at Bodinayakanur 6 bags of Cardomon on 31.12.92 tobe transported and delivered to the third Opposite Party at Delhi. THE 1st complainant had insured me consignment with the 2nd complainant insurer. THE carrier delivered to the consignee only 5 bags out of 6. THEre was short delivery of one bag costing Rs. 30,000/-. THE 1st complainant preferred a claim against the 2nd complainant insurer who settled the claim by payment of the insurance amount of Rs. 30,000/- and the 1st complainant executed a Letter of Subrogation and a Special Power of Attorney in favour of the 2nd complainant. Both of them have joined together and filed this claim against the Opposite Parties 1 & 2, Public Carrier for recovery of the sum of Rs. 30,000/- being the value of the short delivered bag with interest. The Opposite Parties 1 & 2 admitted the short delivery of the bag but disputed the value thereof. The 2nd complainant is not the person who hired the services of the Opposite Parties 1 & 2 and is not a consumer. The claim filed by the 2nd complainant is not maintainable. As the 1st complainant has received the sum of Rs. 30,000/- from the 2nd complainant, insurer, it is not entitled to make this claim.

The 3rd Opposite Party was only a formal party and it did not enter appearance.

THE District Forum held that there was deficiency in service and directed me Opposite Parties 1 & 2 to pay to the complainant a sum of Rs. 30,000/- with interest thereon at 12% from 7.9.93 till payment and costs of Rs. 250/-. THE complaint was dismissed as against the 3rd Opposite Party. Aggrieved by this order. Opposite Parties 1 & 2 have preferred this appeal. There is no dispute that the appellants/ Opposite Parties 1 & 2, carriers have failed to delivery one out of 6 Cordomom bags. Its value at Rs. 30,000/- as claimed by the complainants is also not challenged before us. The only point urged before us is that the 2nd complainant insurer which has settled the claim of the 1st complainant/consignor and has taken a letter of subrogation from the 1st complainant is not a consumer within the meaning of the Consumer Protection Act and the complaint filed by the 2nd complainant is not maintainable. It is further contended that as the 1st complainant has received the policy amount from the 2nd Opposite Party it is not entitled to claim the amount again from the Opposite Parties 1 & 2. Opposite Parties 1 & 2 who are the carriers are not therefore liable for the short delivery.

IN M/s. Green Transport Company v. New INdia Assurance Company, II (1992) CPJ 349 (NC), the National Commission has held that the Subrogee, INsurance Company is not a consumer within the meaning of Consumer Protection Act. The Commission observed as follows: "The fact that the INsurance Company had acquired rights of subrogation or a transfer of the right of action which M/s. Seth Brothers had, had against the Transporter/ or that it had been granted a special power of attorney would not in any way improve the position of the INsurance Company so far as proceedings under the Consumer Protection Act are concerned. It may be that they have right to institute a suit against the transporter by virtue of subrogation, Deed of transfer or special power of attorney. Those documents will not however clothe the INsurance Company with legal status and character of "Consumer" so as to entitle it to invoke the special jurisdiction and maintain the complaint before the Redressal Forum constituted under the Act."

This decision of the National Commission is binding on us. But, we must respectfully express our dis-agreement with the aforesaid view of the National Commission. "Subrogation" is substitution of one person or thing for another. In other words, the subrogee steps into the shoes of the person whose rights are subrogated to him. As pointed out in Ramanatha lyer''s Law Lexicon, "the doctrine in one of (sic.) and benevolence and like contribution and other similar equitable rights, was adopted from the civil law and its base is the doing of complete, essential and perfect justice between all the parties without regard to form and its object is the prevention of injustice". This doctrine of subrogation has been statutorily recognised in Section 79(1) of the Marine Insurance Act of 1963 which governs inland transport of goods by road and rail as well. Section 79(1) of the Marine Insurance Act of 1963 runs as follows: "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 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."

(Emphasis supplied) Under Section 79(1) of the Marine Insurance Act, the insurer is subrogated not only to the rights but also to the remedies of the assured. The assured/consignor is, as a consumer, entitled to file the claim against the carrier under the Consumer Protection Act. Under Section 79(1) of the Marine Insurance Act that remedy available to the consignor/insured is statutorily subrogated to the insured who pays the money to the assured. The provisions of the Consumer Protection Act are in addition to not in derogation of the provisions of any other law for the time being in force. To deny the benefit of the Consumer Protection Act to the insurer who is sub-rogated to not only the rights but also to the remedies available to the insured would be in derogation of the provisions of Section 79(1) of the Marine Insurance Act of 1963. The National Commission has not considered this aspect of the matter. Be that as it may, in the case before the National Commission, the insurer alone filed Ac complaint based on the letter of subrogation and the power of attorney to executed by the assured. But in the case on hand before us, the consignor /insured is also a party and it is the 1st complainant. The right of the consignor to proceed against the carrier under the Consumer Protection Act cannot be disputed. The complaint filed by the 1st complainant is therefore., perfectly maintainable. Of course, the amount realised by it will have to be paid by it to the insurer.

IN the result, the appeal fails and is dismissed subject to this modification in the order of the District Forum that the Opposite Parties 1 & 2 shall pay to the 1st complainant instead of the complainants 1 & 2, the sum of Rs. 30,000/- and costs of Rs. 250/-. There will be no order at to costs in this appeal. Appeal dismissed without costs.