THAKKAR BALDEVBHAI KESHAVLAL vs MOHANBHAI S PATEL

-PETITIONER was the opposite party before the District Forum where the respondents had filed a complaint alleging deficiency in service on the part of the petitioner.

UNDISPUTED facts of the case are that the services of the petitioner were hired for transportation of RBD Palmoline Oil on 25. 8. 1997 for transportation of oil from Kandla to Pathankot in a ''lorry-tanker'' belonging to the petitioner. This tanker met with an accident on 27. 8. 1997. Since the goods were under cover of Insurance with the first respondent-Insurance Company, the matter was reported to the insurer who appointed a surveyor and after following due procedure settled the claim at Rs. 2,08,696 after obtaining a letter of ''subrogation'' and ''assignment''. The matter was also taken up with the petitioner but since the claim was not settled by the petitioner, a complaint was filed before the District Forum, who after hearing the parties, dismissed the complaint. An appeal filed by the respondents before the State Commission was allowed and the petitioner was directed to pay Rs. 2,08,896, i. e. , the amount of settlement between the first and second respondents along with interest @ 18% p. a. from 15. 9. 98 till payment along with cost of Rs. 5,000. Aggrieved by this order this revision petition has been filed before us. We heard the learned Counsel for both the parties and after perusing the material on record we find that there is no disputing the fact that complaint has been filed jointly by the insurers and the original consignor namely, New India Assurance Co. and M/s. Pioneer Agro Extracts Ltd. It is also not in dispute that the amount of Rs. 2,08,896 has already been paid by the first respondent to the second respondent after obtaining letter of ''subrogation'' and ''assignment''. After hearing the parties and perusal of material on record we are of the view that this case is squarely covered by the judgment of the Hon''ble Supreme Court in the case of Oberai Forwarding Agency v. New India Assurance Company, I (2000) CPJ 7 (SC)=ii (2000) SLT 86=2000 (2) SCC 407. There is no disputing the fact that the payment was made by the Insurance Company to the consignee after executing the letter of ''subrogation'' and ''assignment'' by the consignor in favour of the insurer. The Hon''ble Supreme Court had occasion to go into the whole question of ''subrogation'' and ''assignment'' in the cited judgment and their observations in this regard are as follows : ''''18. The distinction between subrogation and assignment is explained in the standard text book on ''insurance Law'' by Mcgillivrary and Parkington (Seventh Edition)-''1131. Difference between subrogation and assignment-Both subrogation and assignment permit one party to enjoy the rights of another, but it is well established that subrogation is not a species of assignment. Right of subrogation vests by operation of law rather than as the product of express agreement. Whereas rights of subrogation can be enjoyed by the insurer as soon as payment is made, an assignment requires the agreement that the rights of the assured be assigned to the insurer. The insurer cannot require the assured to assign to him his rights against third parties, as a condition of payment unless there is a special clause in the policy obliging the assured to do so. This distinction is of some importance, since in certain circumstances an insurer might prefer to take an assignment of an assured''s right rather than rely upon his rights of subrogation. If, for example, there was any prospect of the insured being able to recover more than his actual loss from a third party, an insurer, who had taken an assignment of the assured''s rights, would be able to recover the extra money for himself whereas an insurer who was confined to rights of subrogation would have to allow the assured to retain the excess. 1132. Another distinction lies in the procedure of enforcing the rights acquired by virtue of the two doctrines. An insurer exercising rights of subrogation against third parties must do so in the name of the assured. An insurer who has taken a legal assignment of his assured''s right under statute should proceed in his own name. . . . . ''

With the distinction between subrogation and assignment in view, let us examine the letter of subrogation executed by the second respondent in favour of the first respondent. Its operative portion may be broken up into two, namely, (i) ''we hereby assign, transfer and abandon to you all our rights against the Railway Administration, road transport carriers or other persons whatsoever, caused or arising by reason of the said damage or loss and grant you full power to take and use all lawful ways and means in your own name and otherwise at your risk and expense to recover the claim for the said damage or loss, and (ii) we hereby subrogate to you the same rights as we have in consequence of or arising from the said loss or damage''.

By the first clause the second respondent assigned and transferred to the first respondent all its rights arising by reasons of the loss of the consignment. It granted the first respondent full power to take lawful means to recover the claim for the loss, and to do so in its own name. If it were a mere subrogation, first, the word ''assigned'' would not be used. Secondly, there would not be a transfer of all the second respondent''s right in respect of the loss but the transfer would be limited to the recovery of the amount paid by the first respondent to the second respondent. Thirdly, the first respondent would not be entitled to take steps to recover the loss in its own name; the steps for recovery would have to be taken in the name of the second respondent. Thus, by the first clause there was an assignment in favour of the first respondent.

Now, as is clear, the loss of the consignment had already occurred. All that was assigned and transferred by the second respondent to the first respondent was the right to recover compensation for the loss. There was no question of the first respondent being a beneficiary of the service that the second respondent had hired from the appellant. That service, namely, the transportation of the consignment, had already been availed of by the second respondent, and in the course of it the consignment had been lost. The first respondent, therefore, was not a ''consumer'' within the meaning of the Consumer Protection Act, and was, therefore, not entitled to maintain the complaint.

By reason of the transfer and assignment of all the rights of the second respondent in the first respondent''s favour, the second respondent retained no right to recover compensation for the loss of the consignment. The addition of the second respondent to the complainant as a co-complainant did not, therefore, make the complaint maintainable. "

(Emphasis supplied)

In view of above, we find that this case is squarely covered by the judgment of Hon''ble Supreme Court in view of which we cannot sustain the order passed by the State Commission which is set aside for the simple reason that the complainant could not fall within the definition of ''consumer'' and complaint filed by them is not maintainable. However, the respondents shall be free to seek remedy before any appropriate Forum, if so advised under appropriate law for which the time spent before the Consumer Fora can be sought to be exempted under Section 14 of the Limitation Act in the light of the judgment of the Hon''ble Supreme Court in the case of Laxmi Engineering Works v. P. S. G. Industrial Institute, II (1995) CPJ 1 (SC)= (1995) 3 SCC 583. Revision Petition allowed.