Calcutta High Court
National Insurance Company Ltd. And ... vs Scindia Steam Navigation Company Ltd. on 26 June, 1987
Equivalent citations: II(1988)ACC200, AIR1988CAL168, [1989]65COMPCAS55(CAL), 92CWN205, AIR 1988 CALCUTTA 168, (1988) 92 CAL WN 205 (1988) 2 ACC 200, (1988) 2 ACC 200
ORDER Prabir Kumar Majumdar, J.
1. This is an application for an order that the plaint in the suit, being Suit No. 882 of 1982 be rejected and/or taken off the file; and dismissal of the suit and for other reliefs.
2. The petitioner's case is that the plaint in the suit be rejected on the ground that the suit is barred by the laws of limitation. The petitioner is the defendant 1 in the suit. The plaintiff 1 is National Insurance Company Ltd. and the plaintiff 2 is Shalimar Paints Ltd. The plaintiffs instituted the suit against the defendants for a decree for Rs. 1,63.999.72, interest and further interest and other reliefs. The averments in the plaint are that the plaintiff 1 was an Insurer in respect of a vessel called "M.L. KIT" belonging to the plaintiff 2 under a Marine Hull Insurance Policy being policy No. 310/410 0089B(e). In or about July, 1979 the said 'M.L.KTI" was lying at anchor at the Jetty of the plaintiff 2 on the river Hooghly, another vessel named "M.V. Jalamatsya" owned by the first defendant, the petitioner herein, whilst turning in the river Hooghly perilously came to the said "M.L.KIT", as a result the said "M.L.KIT" started sinkingand ultimately sank. It caused loss and damages to the owner of the said vessel the plaintiff 2. As the said vessel was insured with the plaintiff 1. the plaintiff 2 made a claim to the plaintiff 1 on account of the said loss and the plaintiff I paid to the plaintiff 2 a sum of Rs. 1.45,000.88 in or about March, 1980. The plaintiff 2 upon such payment issued a letter of subrogation dated 30th March, 1980 in favour of the plaintiff 1 which made claims against the defendants and filed the present suit against the defendant.
the petitioner herein, claiming damages and other reliefs.
3. The petitioner in this application alleges that on the date of the filing of the suit the alleged claim of the plaintiff 2 for the alleged loss caused to the plaintiff 2 as a result of the said collusion was clearly barred by the laws of limitation as appearing from the plaint in the suit. It is further alleged by the petitioner that the plaint discloses no cause of action in favour of the plaintiff 1 inasmuch as mere subrogation without assignment cannot vest the alleged cause of action of the plaintiff 2in the plaintiff 1. The petitioner further alleges that no assignment has been pleaded by the plaintiffs in the plaint and in any event, if there was any assignment the effect of such assignment was to put the plaintiff 1 as the assignee in the same position of the plaintiff 2 and as such on the date of filing of the suit the alleged cause of action of the plaintiff 2 had become barred by limitation and similarly, the claim of the plaintiff 1 taking over the rights and remethes of the plaintiff No. 2 is also barred by limitation.
4. The plaintiff 1, National Insurance Company Ltd., however, contends that by reason of the provisions contained in Section 10 of the General Insurance (Emergency Provisions) Act. 1971 no part of the plaintiff's claim is barred by the limitation, or, in any' event, the plaintiff 1 is a Government Company wholly owned by the Central Government and as such the suit is not barred by limitation under Section 3 of the Limitation (West Bengal) Amendments Act. 1977.
5. Mr. A. Roy M ukherjee with Mr. Sun rid Roy Chowdhury appearing for the petitioner, submits that for the purpose of disposal of this application the Court has to go by the averments pleaded in the plaint and for the purpose of this application these averments contained in the plaint should be taken as true. Mr. Roy Mukherjee submits that this is a suit for wrongfully injuring any specific movable property and the relevant article of limitation in respect of this suit is Article 91(b) of the Limitation Act, 1963 and the time prescribed is three years from the date when the property is wrongfully injured. Mr. Roy Mukherjee submits that the collusion took place on 17th July, 1979 resulting in the alleged loss and damages to the plaintiff No. 2. The plaintiffs filed the suit on 24th November, 1982 and this suit is, therefore, filed beyond the time prescribed by the laws of limitation. Mr. Roy Mukherjee has also submitted that it is pleaded in paragraph 13 of the plaint that in pursuance of the said Policy of Insurance the plaintiff No. 2 made a claim for the said a mount of Rs. 1,58,484.44P. by way of loss or damages suffered by the said "M.L.KIT". It is pleaded in paragraph 14 that in or about 14th March, 1980 the plaintiff I paid to the plaintiff 2 a sum of Rs. l,45,000.88 p. in full satisfaction of plaintiff 2's claim under the said policy. It is pleaded in paragraph 15 of the plaint that by reason of the aforesaid claim under the said policy and also upon payment of the said sum of Rs. 1,45.883.83p., the plaintiff 1 has been subrogated to all the rights and remethes of the plaintiff 2 in consequence of or arising from the loss of and/or damage to the said "M.L.KIT". Mr. Roy Mykherjee has also drawn my attention to paragraph 21 of the plaint which pleads that by reason of the provisions contained under Section 10 of the General Insurance (Emergency Provisions) Act, 1971 no part of the plaintiff's claim is barred by limitation and the plaintiff 1 is a Government Company wholly owned by the Central Government and as such the suit is not barred by limitation also under Section 3 of the Limitation (West Bengal) Amendment Act. 1977.
6. Mr. Roy Mukherjee has submitted that this suit is filed by the plaintiff 1, an Insurance Company and the plaintiff 2, the owner of the vessel which has allegedly lost the vessel by reason of the alleged collusion. It is submitted by Mr. Roy Mukherjee that the plaintiff 1 is claiming rights as well as remethes of the plaintiff No. 2 by reason of the subrogation as pleaded in paragraph 15 of the plaint. He submits that it is specifically pleaded in paragraph 15 that the plaintiff 1 has been subrogated to all the rights and remethes of the plaintiff 2 in consequence of and/or arising from the loss or damage to the said "M.L.KIT". It is submitted by Mr. Roy ^Mukherjee that by virtue of the said subrogation the plaintiff 1 had been subrogated to whatever rights and remethes the plaintiff No. 2 had. He submits that it would therefore, appear that whatever cause of action the plaintiff 2 had against the defendant 1 isbeing enforced in this suit by the plaintiff 1 together with plaintiff 2. Mr. Roy Mukherjee has argued that the cause of action which the plaintiff 2 had and which is being enforced by the plaintiff 1 in this suit along with the plaintiff 2, is barred by the laws of limitation inasmuch as the suit had not been filed within the period prescribed by law of limitation namely, under Article 91 (b) of the Limitation Act, 1963.
7. Mr. Roy Mukherjee has referred to Section 79 of the Marine Insurance Act, 1963. Section 79 of the Marine Insurance Act, 1963 provides that where the Insurer pays for a total loss either of the whole, or in 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 surrogated to all the rights and remethes of the assured in respect of that subject-matter as from the time of casualty causing the loss. According to Mr. Roy Mukherjee under the provisions of the said Section 79, the plaintiff No. 1 being the insurer becomes entitled to take over the interest of the assured being the plaintiff 2 in whatsoever may remain of the subject-matter so paid (or and the plaintiff 1 being the Insurer is thereby subrogated to all the the rights and remethes of the assured namely, the plaintiff 2. Mr. Roy Mukherjee contends that had there been no subrogation as contemplated in Section 79 of Marine Insurance Act, 1963 the plaintiff 1 could not have maintained the suit. If the present suit is taken as a suit by the plaintiff 2 then the suit is clearly barred by the Laws of Limitation because the alleged collusion resulting in injury took place on 17th July, 1979 and the suit is filed beyond three years from 17th July, 1979. It is submitted by Mr. Roy Mukherjee that the plaintiff 1 claiming the rights and remethes of the plaintiff. 2 by virtue of subrogation cannot claim any better rights or remethes which the respondent No. 2 had not possessed. By reason of the subrogation the plaintiff No. 1 is enforcing the rights and remethes of the plaintiff 2 and if any such right or remedy is barred by law, as in this case this is barred by laws of limitation, then such right cannot be enforced by the plaintiff 1 by claiming special law of limitation available to the plain tiff 1 by any other law or by virtue of the said Amendment Act, 1977. It is, further, submitted by Mr. Roy Mukherjee that by reason of such subrogation the plaintiff 1 cannot claim any independent right or remedy. In this suit the plaintiff No. 1 has no cause of action against the defendants but the plaintiff No. 1 is really enforcing the cause of action which the plaintiff 2 might have against the defendants, by reason of the said subrogation. Therefore, according to Mr. Roy Mukherjee the suit is clearly barred. As it is barred against the plaintiff 2, the suit is also similarly barred against the plaintiff 1 who claims only the rights and remethes of the plaintiff 2.
8. Mr. Suhrit Deb, the learned Counsel appearing for the Insurance Company, the plaintiff 1 submitts that the said subrogation as pleaded in paragraph 15 of the plaint is also subrogation together with assignment. He submits that the letter of subrogation is assessed to the plaint and that being annexed should be regarded as part of the plaint. Mr. Deb has referred to the letter of subrogation which is Annexure 'B' to the plaint, Mr. Deb submits that it is provided in the said letter of subrogation that in consideration of the plaintiff 1's paying to plaintiff 2 a sum of Rs. 1.45,888.93 in respect of loss or damages to the vessel insured under the policy mentioned in the plaint, the plaintiff 2 assigned to the Insurer and abandoned to the Insurer all their actionable right, title and interest in and to the said goods or proceeds thereof to the extent provided by law and all rights and remethes against the carriers or other authorities or persons whoever is or are liable in respect thereof. Mr. Deb submits that it is further provided in the said letter of subrogation that the plaintiff 2 subrogates the insurer the plaintiff 1 to the same rights and remethes the plaintiff 2 had inconsequence of or arising from loss or damages to the vessel mentioned above and the said letter further provides that the plaintiff 2 authorises the plaintiff 1 to use its name in any action or proceeding the Insurer, the plaintiff 1 may 'initiate either in its own name or in the name of the plaintiff 2 in relation to any of the matter assigned, transferred to and/or obtained by the Insurer i.e. the plaintiff 1.
9. Therefore, according to Mr. Deb the said letter of subrogation is not merely a subrogation within the meaning of Section 79 of the Marine Insurance Act, 1963. It is an assignment as well and by virtue of that assignment the plaintiff 1 acquires an Independent right to enforce and by virtue of the said letter of subrogation which may also be considered asassignment as well the plaintiff 1 has become entitled even in its own name to sue the defendants to enforce the right so acquired by the plaintiff 1 by virtue of the Said letter of subrogation which, according to Mr. Deb, should be treated as subrogation as well as the assignment. He also submits that by virtue of the said amendment to the Limitation Act the plaintiff being wholly a Government Undertaking, which fact is not disputed, is entitled to enforce its independent right acquired by virtue of the said subrogation and/or assignment within a special period of limitation namely, 30 years under Article 112 of the Limitation Act, 1963. Mr. Deb strongly disputes the contention of the learned Counsel appearing for the petitioner that the cause of action as made out in the plaint is the cause of action of the plaintiff 2 enforced by the plaintiff 1 together with plaintiff 2. He submits that by virtue of the said subrogation the plaintiff 1 has acquired a right of its own and is enforcing such right by this suit against the defendant 1 and others within the prescribed period as provided by the said Article 112 of the Limitation Act, 1963. Mr. Deb submits that it may be true that by virtue of the said subrogation the plaintiff 1 acquires the rights and remethes of the plaintiff 2, but it is an assignment as well which could be inferred from the said letter of subrogation although not pleaded specifically in the plaint. The plaintiff 1 acquires the right from the plaintiff 2 which could be claimed by the plaintiff 1 as its own. Therefore, according to Mr. Deb the right, so acquired by reason of the said subrogation should be treated as a right of the plaintiff 1 and if the claim is enforced by reason of the said subrogation within the prescribed period of limitation as available to the plaintiff 1 then the suit cannot be held to be barred against the plaintiff 1. Mr. Deb has also submitted that by virtue of Section 10 of the General Insurance (Emergency Provisions) Act, 1971 the plaintiff's claim is also not barred by limitation.
10. Regarding the absence of pleadings as to the assignment in the plaint Mr. Deb , submits that the annexures to the plaint should be treated as part of the plaint and it would appearclearly from the letter of subrogation that there had also been an assignment in favour of the plaintiff 1. Mr. Deb also submits that if it is assumed that there is no averment as to the assignment in the pleadings then instead of deciding the suit at this stage Mr. Deb's client should be given an opportunity to amend the plaint. In support of such contention Mr. Deb has referred to a decision ,
11. The question raised in this application is whether the plaint should be rejected at this stage on the ground that the suit has been barred by limitation or that the plaint does not disclose any cause of action. It has been contended by the learned Counsel on behalf of the petitioner that the plaintiff 2 should enforce the rights, if any, against the petitioner within the period of limitation prescribed and admittedly it is three years. Such rights as sought to be enforced by the plaintiff and/or by the plaintiff 1 has become barred by law of limitation.
12. The question that has to be considered in this application is as to what is the nature of the right of the plaintiff 1 as a result of subrogation and whether the plaintiff 1 cani enforce the right alleged to have been acquired by reason of such subrogation within the period of 30 years as prescribed by Article 112 of Limitation Act, 1963. It has been argued by the learned Counsel appearing for the plaintiff 1, the Insurance Company that the right so acquired by the plaintiff 1 by reason of the said subrogation is an independent right and by this suit the plaintiff 1 can enforce such right. It is also argued by the learned Counsel appearing for the plaintiff 1 that by virtue of said West Bengal Amendment to the Limitation Act, 1963, the plaintiff being a public undertaking can also take benefit of Article 112 of Limitation Act and institute the suit for enforcement of the said acquired right within the period of 30 years. Further, by reason of the said deed of subrogation being Annexure "A" to the plaint the plaintiff 1 has acquired such rights and remethes as were available to the plaintiff 2. I am of the view that by reason of such subrogation the plaintiff 1 cannot claim a better or higher rights or remethes than what were available to the plaintiff 2. By reason of subrogation the plaintiff 1 steps into shoes of the plaintiff 2 and as such acquires the right and remethes the plaintiff 2 had against the petitioner. Therefore in my view, the plaintiff 1 cannot contend that the rights so acquired is an independent right of the plaintiff 1 and the plaintiff 1 can enforce such independent right within the period of limitation as available to the plaintiff 1 under Article 112 of the Limitation Act. 1963 as amended by Section 3 of the Limitation (West Bengal Amendment Act. 1977.
13. In the case of Union of India v Great American Insurance Company, , it has been observed by a Division Bench of this Court, that essence of subrogation is substitution. The insurer becomes entitled to all rights and remethes of the insured person in respect of the lost goods, for which he had made the payment or indemnified the insured. It has been further observed that by reason of such acquisition of right the insurer was entitled to enforce them in the same manner as the insured person. Under Section 79 of the Marine Insurance Act, by reason of subrogation the insurerwouldbecome entitled to take over the interest of the assured and the insurer is subrogated to all the rightsand remethes of the assured. In Section 52 of the Marine Insurance Ad, 1963 a marine policy may be transferred by assignment unless it contains the terms expressly prohibiting assignment, and on assignment of Marine policy the beneficial interest of such policy is transferred to the assignee of the policy who upon such assignment is entitled to sue thereon in his own name, and the defendant is entitled to make any defence arising out of the contract which he would have been entitled to make if the suit had been brought in the name of the person by or on behalf of whom the policy was effected. In my view, under Section 52 of the Marine Insurance Act, 1963 assignment of Marine Insurance in favour of the insurer who issued the policy, is not contemplated. Therefore, in my view, the only relevant section of the Marine Insurance Act, 1963 applicable' to the instant case is Section 79 which speaks of right of subrogation. Therefore, I think on the general principle of subrogation or the subrogation as contemplated in Section 79 of the Marine Insurance Act, 1963 the insurer can have only the rights and remethes of the assured and cannot claim any higher or better right which the assured did not have.
14. Therefore, in my view, as the alleged cause of action of the plaintiff 2 against the petitioner was barred by law of limitation (Article 91 of the Limitation Act, 1963) the plaintiff 1 being the insurer cannot enforce such right within a larger period of limitation. The effect of subrogation as indicated above in my opinion, is that the subrogee steps into the shpes of the person whose rights have been acquired by reason of such subrogation. Therefore, the subrogee can claim the right or the remedy including the enforcement of right of the person whose right is acquired.
15. It has been contended by the learned Counsel appearing for the plaintiff 1 that the plaintiff 1 should have been given an opportunity of amending the plaint by incorporating an averment on assignment. According to the learned Counsel appearing for the plaintiff I the deed of subrogation being Annexurc 'A' to the plaint also contemplates the assignment. Assuming that it is a case of assignment, although as indicated before that the Marine Policy cannot be assigned in favour of the Insurance Company which has issued the insurance policy, the transferee that is, the Insurance Company, if such assignment is possible in favour of the Insurance Company, such a Company is only entitled to maintain an action on the policy in the assured's name and the assignee is subject to all the pleas of defence that can be raised against the assignor. Therefore, even if it is an assignment the plaintiff No. 1 cannot claim any better rights or better remethes than the assignor, the plaintiff No. 2. Therefore,in my view, be it a subrogation or assignment, the position would remain the same that is, the plaintiff 1 acquires the rights and remethes which the plaintiff 2 possesses and the plaintiff's suit enforcing the said acquired right of the plaintiff 2 is subject to all the defence including the point of limitation* that can be raised by the petitioner in this suit. On the face of the plaint it is apparent that the cause of action as can be claimed by the plaintiff 2 and enforced by the plaintiff 1 is barred by law of limitation. Therefore, it is my opinion that this suit is liable to be dismissed on the ground of limitation. I do not accept the contention of the learned Counsel appearing for the plaintiff 1 that by virtue of said subrogation and/or assignment if called as such, the plaintiff 1 has any better right or an independent right which can be enforced by the plaintiff 1 in the manner the plaintiff 1 would have enforced its own right. I am also of the view that the plaintiff 1 cannot take advantage of Article 112 of the Limitation Act asamended by West Bengal Amendment Act, 1977 inasmuch as this suit is not for the enforcement of the plaintiff is own right or any independent right. This is a suit for enforcement of the rights of the plaintiff 2 by the plaintiff 1 as acquired by the said deed and/or letter of subrogation.
16. For the reasons aforesaid the petitioner's application should succeed. I hold that this suit has become clearly barred by the laws of limitation and as such the plaint in the present suit is liable to be rejected and/or taken off the file. There will be an order in terms of prayers (a) and (b) of the Notice of Motion.
17. There will be no order as to costs.