M/S. Gati Ltd. vs The Oriental Insurance Co. Ltd. & ...
2011 Latest Caselaw 6084 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI


+                  RSA 196/2011

                   Judgment delivered on: 13th December, 2011



M/s Gati Ltd.                                     ..... Appellant
                             Through     Mr. Shankar Kumar Jha, Adv.

                   versus



The Oriental Insurance Co. Ltd. & Anr.             ..... Respondent
                             Through     Nemo.

CORAM:
HON'BLE MR. JUSTICE KAILASH GAMBHIR:


KAILASH GAMBHIR, J. (Oral)

*

1. By this appeal filed under Section 100 Read with Order

XLII of the Code of Civil Procedure, 1908, the appellant seeks to

challenge the order dated 27.5.2011 passed by the first

Appellate Court and order dated 15.5.2010 passed by the Civil

Judge while decreeing the recovery suit filed by the respondent

no.1 insurance company.

2. Assailing the said orders, the only argument advanced by

the learned counsel for the appellant is that both the Courts

below have not followed the ratio of the judgment of the

Constitution Bench of the Supreme Court in the case of

Economic Transport Organization vs Charan Spinning Mills (P)

Ltd. & Anr. (2010)4 SCC114 and, therefore, the findings given

by both the Courts below are illegal and perverse.

3. The sum and substance of the contention raised by counsel

for the appellant is that by virtue of letter of subrogation, the

insurer cannot file a suit in its own name as in terms of the law

laid down by the Apex Court in the said judgment such a suit

based on subrogation can be filed by the insurer either through

a Power of Attorney duly executed in its favour by the assured or

by impleading the assured as co-plaintiff. Counsel laid emphasis

on para 15.3 of the said judgment of the Apex Court to fortify his

said submission. Inviting attention of this Court to the plaint

from the Trial Court records, the counsel pointed out that in the

plaint although the assured was impleaded as plaintiff No. 2, but

the plaint was not signed by the said plaintiff No.2 and,

therefore, the filing of the suit by the insurance company

respondent No. 1 herein does not satisfy the requirement of the

law laid down by the Hon'ble Apex court in the said judgment.

Counsel also submits that the respondent no.1 insurance

company had also not placed on record Power of Attorney

executed in its favour by the assured, co-plaintiff No. 2 in the

main suit.

4. I have heard learned counsel for the appellant at

considerable length and given my thoughtful consideration to

the arguments advanced by him.

5. The sole contention raised by learned counsel for the

appellant is that both the Courts below have not followed the

ratio of the judgment given by the Constitution Bench of the

Supreme Court in the case of Economic Transport Organization

(supra) as neither any Power of Attorney was executed by the

assured in favour of the insurer, the respondent herein, nor the

assured, as co-plaintiff No.2, had signed and verified the suit

along with the main plaintiff, the insurer.

7. The judgment of the Apex Court in the case of Economic

Transport Organisation ( supra) has explained the three kinds of

subrogation i.e subrogation by equitable assignment,

subrogation by contract and subrogation-cum-assignment. For

the purposes of the case at hand, the third type of subrogation

i.e subrogation-cum-assignment is relevant. The letter of

subrogation proved on record as Ex.PW1/3 gives the right to the

respondent no.1 to recover the amount from the appellant

herein. For better appreciation, the said letter is reproduced as

under:

Letter of Subrogation

The Oriental Insurance Company Ltd., 1/20, Asaf Ali Road, New Delhi.

Dear Sir, In consideration of your paying us the sum of Rs. (Rupees_________________________________________ in full and final settlement of our claim No. __________________ arising under open cover note No.7............. under G.R.No.............. in connection with the damage quantity. We hereby declare that you, the Insurance of the damage quantity have become subrogated to all our rights, titles, interest and remedies in respect of this subject matter insured in accordance with the law governing the contract of Insurance and also under the General Law. We also hereby assign and transfer to you our rights to recover and to take possession of the damage quantity from the shipping company/transporter/warehouse incharge. Further, we hereby authorise you and grant you full power to pursue one investigation regarding the damage of the imported goods and also

to do any other act/acts necessary in pursuance of and for the recovery of damage quantity.

We also authorize you to take our name and use by lawful ways and means your name and otherwise at your risk and expenses to recover the damages, against the person/persons concerned involved in the damages of the imported goods.

We also authorize you to transfer it in any manner whatsoever at your will and pleasure as your own property.

We also undertake and agree to make, execute at your expenses all such deeds and documents and render such assistance as you may reasonably require for the purpose of carrying out this agreement. In witness whereof we have set our hands on the 16 th day of March, 2000.

WITNESSES.

Yours faithfully,

1.

2.

In paragraph 29 of the judgment in Economic Transport case, it

was held that in all three types of subrogation, the insurer can

sue the wrongdoer in the name of the assured, meaning thereby

that either the assured has joined as a co-plaintiff or

alternatively the insurer can obtain a special Power of Attorney

from the assured and then to sue the wrongdoer in the name of

the assured as his attorney. Paragraph 35(iv) and (v) are

relevant for present case and are reproduced as under:

"(iv) A subrogation enables the insurer to exercise the rights of the assured against third parties in the name of the assured. Consequently, any plaint, complaint or petition for recovery of compensation can be filed in the name of the

assured, or by the assured represented by the insurer as subrogee-cum-attorney, or by the assured and the insurer as co-plaintiffs or co-complainants.

(v) Where the assured executed a subrogation-cum- assignment in favour of the insurer (as contrasted from a subrogation), the assured is left with no right or interest. Consequently, the assured will no longer be entitled to sue the wrongdoer on its own account and for its own benefit. But as the instrument is a subrogation-cum-assignment, and not a mere assignment, the insurer has the choice of suing in its own name, or in the name of the assured, if the instrument so provides. The insurer becomes entitled to the entire amount recovered from the wrongdoer, that is, not only the amount that the insurer had paid to the assured, but also any amount received in excess of what was paid by it to the assured, if the instrument so provides."

Whether the letter executed is a subrogation simpliciter or a

subrogation-cum assignment is only relevant for the dispute

between the insurer and assured and does not in any manner

effect the maintainability of the suit in question. In the facts of

the case at hand, the insurer and the assured joined as co-

plaintiffs to institute the suit against the appellant and the only

question that remains to be decided is that will the omission of

the co-plaintiff to sign the plaint amount to making the suit not

maintainable? It is a settled legal position that for filing a suit,

the plaint may not be signed by all the co-plaintiffs and the same

can be maintained even if the plaint has been signed and verified

by one of the co-plaintiffs. There is no rule providing that a

person named as a co-plaintiff is not to be treated as a plaintiff

unless he signs and verifies the plaint which was held by the

Privy Council in Mohini Mohun Das and Ors.

Vs.Bungsi Buddan Saha Das and Ors.(1890) ILR 17P.C. 580 and

is the established since then. This court in the case of

Vaidyaratnam P.S. Varier's Arya Vaidyasala Kottakkal Vs.K.C.

Vijaikumar ILR1990Delhi124 held the same in the following

words:

"It is settled principle of law that where several persons institute a suit, it is not necessary that all should sign the plaint, It is sufficient that one of them signs the plaint with the other plaintiffs' knowledge and authority. There is no rule providing that a person named as co- plaintiff not to be treated as plaintiff unless he signs and verifies the plaint. In the face of the settled proposition of law I have no hesitation to hold that the plaint has been signed, verified and instituted by a duly authorized person."

Hence, it is manifest from the foregoing that the co-plaintiff not

signing the plaint will not go to the root of the matter so as to

vitiate the whole purpose of the suit. Therefore, the impugned

orders does not in any manner transgress or dispute the legal

position settled by the Economic Transport Organisation

Case(supra) as the plaint would be taken to be validly presented

by both the plaintiffs as the assurer had the knowledge of the

suit being instituted. It is also evident that the plaintiff has not

disputed the fact that the assured has properly and validly

executed the letter of subrogation, which was duly proved on

record Exhibit PW1/3 and in the face of the above, the appellant

thus cannot re-agitate the question of law correctly answered by

the courts below.

8. In the light of the above, this court does not find merit in

the present Regular Second Appeal and the same is hereby

dismissed.

DECEMBER 13,2011                     KAILASH GAMBHIR, J.