TRANSPORT CORPORATION OF INDIA LTD. vs ALUMINIUM EXTRUSION CENTRE

APPELLANT was the opposite party before the State Commission, where the respondent/ complainant, Aluminium Extrusion Centre & Anr., had filed a complaint alleging deficiency in service on the part of the appellant, Transport Corporation of India Ltd. (TCIL).

UNDISPUTED facts of the case are that the complainant/respondent No. 1 with a view to transport the consignment of aluminium from Korba to Bombay, hired the services of the appellant, TCIL. The goods were never delivered to the consignee as the goods allegedly were stolen enroute. Since the goods were not delivered and the appellant was not settling the claim, a complaint was filed before the State Commission, who after hearing the parties, allowed the complaint and directed the payment of Rs. 8,09,089 to the second respondent within a period of 8 weeks failing which it was to carry interest @ 18% p.a. Feeling aggrieved by this order, the appeal has been filed. Since the respondent complainant''s Counsel remained absent despite notice they are proceeded ex parte and we go on to pass the order based on the material on record as also the arguments advanced by the learned Counsel for the appellant.

LEARNED Counsel for the appellant argued that the whole question of ''insurance matters'' falling within the definition of ''service'' is within the purview of the Consumer Forums / Consumer Protection Act, has been challenged before the Hon''ble Supreme Court in the case of XPS Cargo Services and Anr. v. Morepen Laboratories Ltd., Special Leave to Appeal (Civil) No. (s) 4333/2005. We have very carefully gone through this and find firstly there is no stay granted by the Hon''ble Supreme Court and secondly this order relates to the question of ''jurisdiction'' of the Consumer Forums after the amendment of the Consumer Protection Act effective 15.3.2003, in view of amendment in Section 2(l)(d)(ii) on the point of ousting the jurisdiction of Consumer Forums in matters relating to services hired for commercial purposes. The effect of this amendment would be in prospective relating to entertaining of the complaints. This shall have no application in cases in which final orders have been passed at any level of Consumer Forums Hierarchy.

THE other main plea taken by the learned Counsel for appellant both in oral arguments as also in the memorandum of appeal, filed before us is that the complainant is not a ''consumer'' and cannot filed a complaint under the Consumer Protection Act, especially when they have obtained the claimed amount from Insurance Company and a letter of subrogation and Special Power of Attorney has been executed by the first respondent in favour of the second respondent. He has also tried to draw our attention to Section 2(l)(d) of the Consumer Protection Act. It was also his plea that Insurance Company by purchasing the right of the consignor and consignee, cannot acquire the right of interest to become a complainant before a Consumer Forum. As rightly held by the State Commission, complaint was filed by Aluminium Extrusion Centre, while associating the National Insurance Company as complainant No. 2. As per the complaint filed before the State Commission, the business of Aluminium Extrusion Centre has been taken over by M/s. Anish Metals Pvt. Ltd. but undoubtedly, the services of the appellant was hired by Aluminium Extrusion for transporting the goods from Korba to Mumbai for a consideration, in view of which and as per provisions of Section (2)(d)(ii) of CPA, the complainant shall be deemed to be a consumer, this objection is not maintainable.

ON the question of making the Insurance Company as complainant No. 2, and its locus to file a complaint, we find that in the present case a letter of ''Subrogation'' and ''Special Power of Attorney'' has been executed in favour of the insurers, National Insurance Company, the relevant clause of which reads as follows : "We hereby assign, transfer and abandon to you all our actionable rights, title and interest in and to the said goods and proceeds thereof (to the extent provided by law), and all rights and remedies against Railways Administration and/or Sea Carriers and/or agents or Sea Carriers and/or Port Authorities and/or Customs Authorities and/or any Carriers and/or person or persons whosoever is liable in respect thereof. And we hereby subrogate to you the rights and remedies that we have in consequence of or arising from loss/ damages to the undermentioned goods and we further hereby grant to you full power to take and use all lawful ways and means to demand, recover and to receive the said loss/ damage customs penalty or refund of customs duty and all and every debt from whom it may concern."

(Emphasis supplied)

THE Hon''ble Supreme Court had occasion to go into this question in the case of Oberai Forwarding Agency v. New India Assurance Co. Ltd., II (2000) SLT 86=1 (2000) CPJ 7 (SC), Civil Appeal No. 13387 of 1996, extracting from the Insurance Law by Mac Gillivray and Parkington (Seventh Edition), in which distinction between Subrogation and assignment has been explained which reads as under : "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. Rights of subrogation vest 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 and 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 rights 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."

While going through the case before the Hon''ble Supreme Court, we find two salient features on which the Hon''ble Supreme Court relied, to dismiss the complaint in that case. They were that the 3rd party, viz., the Insurance Company would not be entitled to take steps to recover the loss in its own name and secondly in the case before the Hon''ble Supreme Court the wording of subrogation was in following terms: "We hereby subrogate to you the same rights as we have in consequence of order arising from the said loss or damage." (Emphasis supplied)

THE Hon''ble Supreme Court while discussing the word "subrogate" laid emphasis on the word "same rights". A distinction needs to be drawn in the case before us. Firstly, this is not the third party but the hirer of the service M/s. Aluminium Extrusion Centre who had filed a complaint before the State Commission and secondly the word "same rights" does not appear in the letter of subrogation in the case before us. The wording used is "We hereby subrogate to you the rights and remedies.." The words "same rights" does not figure in the letter of subrogation and now if we also see the "Special Power of Attorney", we are of the view that the second respondent in this case enjoy the rights, both being assignee and subrogee as clearly brought out in the terms of the letter of subrogation reproduced earlier. Law Lexicon, 1989, Vol. 2 (L-Z), defines v subrogation and assignment'' in following terms: "Subrogation and Assignment� Subrogation and its effect are not to be mixed up with those of a transfer or an assignment by the assured of his rights and remedies to the insurer. An assignment or a transfer implies something more than subrogation and vests in the insurer the assured''s interest, rights and remedies and substance of the insurances. In such a case, therefore, the insurer, by virtue of the transfer or assignment in his favour, will be in a position to maintain a suit in his own name against third parties."

(Emphasis supplied)

AS per definition of subrogation in Stroud''s Judicial Dictionary (V Edition)/''...properly speaking (it) is but a fictitious cession made to one who has right to offer payment; it is not a true cession nor sale of debt..." In the conspectus of the definition given in Law Lexicon and the Stroud Dictionary and also as defined in ''Insurance Law'' by Me. Gillivary and Parkington, we are quite clear that keeping in view the facts and circumstances of this case, the complainant Aluminium Extrusion Centre was competent and within its right to file a complaint under the Consumer Protection Act, 1986. There is no disputing the fact that the goods was not delivered for whatever reason, which is a clear case of deficiency in service on the part of the appellant. If the goods were stolen, lost, etc. that does not absolve him from his liability. In this case, the goods were insured and the requisite claimed amount has been settled between first and second respondents but that does not mean that the appellant will get away freely for his deficiency. Amount so awarded shall go to the insurer in full or part as per the terms of letter of Subrogation/Special Power of Attorney. The service rendered by the appellant to the first complainant/respondent, was deficient and as discussed earlier, both the respondents/ complainants were within the rights to file complaint within the meaning of service as defined in Section 2 of the Consumer Protection Act.

IN view of the above mentioned circumstances, we see no merit in the appeal calling for our interference in the order passed by the State Commission, hence dismissed.

NO order as to costs.