TMI Blog2000 (2) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... namely, whether the first respondent insurance company was subrogated to the rights of the second respondent consignor in respect of the lost consignment or whether it was the assignee of the rights of the second respondent in respect thereof; and, if the latter, whether it was a consumer within the meaning of the Consumer Protection Act, 1986, entitled to maintain a complaint thereunder. The second respondent, through its agent, hired two trucks from M/s. Bhasin Goods Carriers of Bareilly to transport broken rice to Barpeta, Assam. According to the appellant, it was asked by M/s. Bhasin Goods Carriers and the second respondents agent only to settle the freight for the consignment, which it did. The trucks loaded with the consignment did not reach their destination and the consignment was lost. The second respondent made a claim for the value of the consignment upon the first respondent, who had insured it, in the sum of Rs.93,925.55. The claim was settled by the first respondent in the sum of Rs.64,137/- , and that sum was paid to the second respondent. Consequent upon the claim being settled, the second respondent executed in favour of the first respondent, a Letter of Subr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o pay to the respondents the sum of Rs.98,924.55 and interest. The appellant preferred an appeal before the State Forum. The appeal was dismissed, but the amount of compensation was reduced to Rs.69,137/-. Against the order of the State Commission, a Revision Petition was filed before the National Consumer Dispute Redressal Commission. The same was dismissed and the appellant was directed to pay to the respondents the sum of Rs.98,924.55 as compensation. The appellant impugns the order of the National Consumer Disputes Redressal Commission by special leave. Learned counsel for the appellant submitted that the document quoted above, though styled Letter of Subrogation, was an assignment by the second respondent of its rights to the first respondent. Upon such assignment, the assignor second respondent had no right left. And the assignee first respondent was not a consumer. For the first respondent, on the other hand, it was submitted that the document was indeed a letter of subrogation and that, therefore, the first respondent and the second respondent were entitled to maintain the complaint. Our attention was drawn by learned counsel for the appellant to the judgments of this C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... negligence. Such a right of the insurer is, of course, conditional upon his having already indemnified the assured. In other words, arising out of the nature of a contract of indemnity, the insurer, when he has indemnified the assured, is subrogated to his rights and remedies against third parties who have occasioned the loss. This right of the insurer to subrogation or to get into the shoes of the assured as it were, need not necessarily flow from the terms of the motor insurance policy, but is inherent in and springs from the principles of indemnity. This is as a matter of law relating to indemnity, and the basis of the right is justice, equity and good conscience, namely, the indemnifier should be in a position to reduce the extent of his liability within limits. (5) Where, therefore, an insurer is subrogated to the rights and remedies of the assured, the former is to be more or less in the same position as the assured in respect of third parties and his claims against them founded on tortious liability in cases of motor accidents. But it should be noted that the fact that an insurer is subrogated to the rights and remedies of the assured does not ipso jure enable him to sue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the Railways for the recovery of damages. The case of United India Fire and General Insurance Co. Ltd. (ibid) related to a document in its favour which recited that it had paid to the consignor compensation for the loss of the consigned goods and the consignor hereby assigned and transferred to you all our rights title and interest in respect of the said goods and all rights and claims against any person or persons in respect thereof. The Andhra Pradesh High Court held that the appellant insurance company had been assigned the right, title and interest of the consignor and the suit by it for recovery of damages was maintainable, though the consignor was not impleaded as a co-plaintiff. In New India Assurance Co. Ltd. vs. G.N. Sainani (ibid) this Court was examining a complaint filed by the appellant insurance company under the Consumer Protection Act. The question that arose was whether the assignee could be said to be a beneficiary so as to be able to make the complaint. What had been assigned was found to be the amount of the loss that was suffered by the assured on account of short landing of the concerned goods, meaning thereby that what had been assigned was the righ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t must do so in the name of the assured. The distinction between subrogation and assignment is explained in the standard text book on Insurance Law by MacGillivray 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. 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 an 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 assureds 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 insu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to the quantum paid by the first respondent to the second respondent but encompassed all the compensation for the loss. Even by the second clause, therefore, there was an assignment in favour of the first respondent. Learned counsel for the first respondent submitted that the Letter of Subrogation and the Special Power of Attorney should be read together and, so read, it would be seen that the first respondent was not an assignee of the second respondents rights but was merely subrogated to them. The terms of the Letter of Subrogation are clear. They cannot be read differently in the light of another, though contemporaneous, document. 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, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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