Insurer of goods subrogated to rights of owner of goods can claim damages from carrier for loss of goods.

Mr. Justice R.N. Mittal, President. — Briefly, the facts of the case are that M/s Seth Brothers (Perfumers) Pvt. Ltd., Tilak Bazar, Delhi imported from Singapore Patchouli Oil. The Oil was filled in three drums of 200 kilograms each. It was received in India from Singapore at Bombay. The consignment was booked by M/s Seth Brothers with the respondent for transportation from Bombay to Delhi vide goods receipt No. 44352 dated 26th March, 1988. The consignment was insured by M/s Seth Brothers with the complainant.

2. It is alleged that due to careless and negligent handling of the consignment by the respondent and their employees one drum developed cracks at the bottom during transit and the oil leaked out. M/s Seth Brothers lodged their claim with the respondent, but they failed to settle the same. The complainant settled the claim of M/s Seth Brothers and paid an amount of Rs. 1,74,255/- to them. They assigned/transferred their rights to claim the amount from the respondent in favour of the complainant by executing letter of subrogation and power of attorney in their favour. Consequently, the respondent, it is pleaded, is liable to pay the following amounts to the complainant.

1. Cost of 200 kg of Patchouli oil including customer and auxiliary duty Rs. 1,73,505/-

2. Survey fee Rs. 850/-

Total Rs. 1,74,355/-

Less salvage value of empty drum Rs. 100/-

Balance Rs. 1,74,255/-

3. The complaint has been contested by the respondent. They have pleaded that the complainant does not fall within the definition of word ‘consumer’ as given in the Consumer Protection Act, that the goods were booked by them at the owners risk and therefore, they are not liable to pay any amount and that the complainant does not disclose the cause of action against them.

4. The first question that arises for determination is whether the complainant is a ‘consumer’. The complainant was the insurer of the goods. Mr. Naresh Kapoor who had been working with M/s Seth Brothers, the insured, stated that in consideration of payment of the claim by the complainant M/s Seth Brothers executed a special power of attorney and a letter of subrogation in favour of the complainant and thereby assigned, transferred and subrogated all their rights against the defendant and authorised them (complainant) to recover the amount in dispute from the defendant. The letter of subrogation and the special power of attorney have been placed on the record by the complainant. From the afoesaid statement and document it is evident that the insured transferred all their rights to cover damages from the defendants in favour of the complaint. Thus the complaint was subrogated to the rights of M/s Seth Brothers. The word ‘subrogate’, as defined in the Oxford English Dictionary, Third Edition, means “To put Ca-person, in the place of, or substitute (him) for another in respect of a right or claim.” In view of the letter of subrogation; the complainant was substituted in place of M/s Seth Brothers in respect of their rights and claim against the defendant. It cannot be disputed that M/s Seth Brothers was a consumer as defined in the Act. Consequently, in our view the complainant also becomes a consumer. We hold accordingly.

5. The second question that arises for determination is, whether the complainant has cause of action against the defendant. As already mentioned the complainant has been subrogated to the rights of the owner of the goods. Thus they have cause of action to claim the damages for the loss of goods from the defendant.

6. The last question that arises for determination is, whether the respondent is liable to pay the damages suffered by M/s Seth Brothers. An affidavit has been filed by Shri Madan Lal Rajora, a Senior Assistant with the complainant stating that the Insurance Company had received the claim for complete leakage of the contents of the Oil from one drum while the consignment was in the custody of the defendant. They got the claim verified from their surveyor M/s J.B. Bodha