UNITED INDIA INSURANCE CO. LTD.versusLEISURE WEAR EXPORTS LTD.

                        [2016) 4 S.C.R. 799


             UNITED INDIA INSURANCE CO. LTD.                             A
                                 v.
                LEISURE WEAR EXPORTS LTD.
                  (Civil Appeal No. 1004 of2006)
                           JUNE 29, 2016                                 B

[ABHAY MANOHAR SAPRE AND ASHOK BHUSHAN, JJ.]
      Marine Insurance Act, 1963 - ss. 17 and 52 - Issuance of
Open Marine Policy (Cargo) - To the consignor - Loss occurred to
the consignee during subsistence of the policy - Consignee
                                                                         c
authorised the consignor to file claim for the loss - Complaints
filed by the consignor-insured before State Consumer Commission
making claims for the loss, in terms ofthe Po/icy - Insurer challenged
maintainability of the complaint on the ground that the insured lost
its locus to file the complaint having assigned the policy in favour
of the consignee - State Commission as well as the National              D
Consumer Commission in appeal, held that the complaint was
maintainable and hence the insured was entitled to compensation -
On appeal, held: There is nothing to show that the consignor-insured
assigned the contract of insurance policy in favour of the consignee
- Even if it is assumed that the rights under the Policy were assigned
                                                                         E
to the consignee yet in the light of authorisation by the consignee
in favour of the consignor-insured to raise claim for the loss, the
insured had locus to file the complaint-Also in view ofthe provisions
u!ss.17 and 52, rights of the insured under the Policy continued to
remain with it - Thus, the comp(aint was maintainable - Consumer
Protection Act, 1986.                                                    F
     Dismissing the appeals, the Court
     HELD:l. Section 17 of Marine Insurance Act, 1963 deals
with "assignment of interest''. It provides that where the assured
assigns or otherwise parts with his interest in the subject-matter
insured, he (insured) does not thereby transfer to the assignee          G
his rights under the contract of insurance unless there is an
express or implied agreement with the assignee to that effect.
This Section, however, does not affect transmission of interest
by operation of law. Thus, in terms of Section 17, even after
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                                 799
800            SUPREME COURT REPORTS                      [2016] 4 S.C.R.


A     making an assignment by the insured of their contract ofinsurance
      policy, the rights of insured under the contract of insurance policy
      are not assigned in favour of assignee by the deed of assignment
      but they are continued to remain with the insured. [Paras 23 and
      26] (806-C, G-H]
B          2. Sub-Section (2) of Section 52 of the Insurance Act provides
      that once the assignment is made then the assignee is entitled to
      sue in his name whereas the insurer/defendant is also entitled to
      raise all such defences against the assignee, which are available
      to him against the original insured i.e. assigner. [Para 22] [806-
      A-B)
c
           3. In the present case, there is no express agreement
      between the respondent (insured) and the consignee agreeing
      to transfer insured's rights under the contract of insurance in
      favour of the consignee. Under these circumstances, by virtue of
      Section 17, the respondent is legally entitled to retain, enjoy and
D     exercise all those rights, which are available to them under the
      contract of insurance, which they have entered into with the
      appellant-Insurance Company despite making the assignment of
      their policy in favour of the assignee. There is nothing to show
      that the respondent (insured) assigned the contract of insurance
E     policy in favour of their consignee. Even assuming that the
      respondent (illsured) assigned the contract of insurance policy
      in favour of their consignee, yet the assignment so made did not
      have any adverse effect on the rights of the insured under the
      contract of insurance policy as the rights continued to remain
      with them by virtue of Section 17 of the Insurance Act. [Paras 25,
      27) [806-E, H; 807-A-B)
           4. Even if it is accepted that the respondent had assigned
      their rights under the contract of Insurance policy in 'favour of
      their consignee by way of endorsement as contended by the
      appellant, yet in the light of authorization letter dated 04.07.1997
G     duly issued by the consignee in favour of the respondent
      authorizing the respondent to file a complaint petition before the
      Consumer forum for recovery of the compensation, the
      respondent was entitled and had the locus to file a complaint
      against the appellant. [Para 30) [807-F]
H          5. The respondent was, therefore, legally entitled and had
  UNITED INDIA INSURANCE CO. LTD. v. LEISURE WEAR                        801
                   EXPORTS LTD.

the locus to file a complaint against the appellant on the strength       A
of contract of insurance policy for enforcement of their all
contractual rights available to them under the insurance policy
for claiming compensation for the loss caused from the appellant
and the complaint so filed by the respondent could not be
dismissed as not maintainable on the ground of locus. It was saved
                                                                          B
by Section 17 of the Act and by the authorization letter dated
04.07.1997, issued by the consignee in respondent's favour. [Para
28, 31] [807-B-C, H; 808-A]
      New India Assurance Co. Ltd. v. GN. Sainani 1997 (1)
      Suppl. SCR 750 : 1997 (6) SCC 383 and Oberai
      Forwarding Agency v. New India Assurance Co. Ltd. &                 c
      Anr. 2000 (1) SCR 554 : 2000 _(2) sec 407 -
      distinguished.
                       Case Law Reference
   1997 (1) Suppl. SCR 750          distinguished      Para34             D
   2900 (1) SCR 554                 distinguished      Para 34
     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1004 of
2006.                     .
    From the Judgment and Order dated 05.07.2004 in FA No. 30 of
                                                                          E
2000 and FA No. 31 of 2000 passed by the Ld. National Consumer
Disputes Commission, New Delhi
                               WITH
     C.A. No. 1016 of2006.
    Vishnu Mehra, Ms. Sakshi Mittal, B. K. Satija, Advs. for the          F
Appellant.
    Ashwani Kumar, Ms. Iti Sharma, Puneet Sharma, Rahul Bhatia,
Advs. for the Respondent.
     The Judgment of the Court was delivered by                           G
      ABHAY MANOHAR SAPRE, J. I. These appeals are filed
by the United India Insurance Company Ltd. against the common final
judgment dated 05.07 .2004 of the National Consumer Disputes Redressal
Commission, New Delhi in First Appeal Nos. 30-33 of2000 by which
the National Consumer Disputes Redressal Commission dismissed their
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802            SUPREME COURT REPORTS                           {2016] 4 S.C.R.



A     appeals and upheld the order of the State Consumer Commission.
           2. These appeals involve a short point. However, to appreciate the
      point, few facts need mention infra.
           3. The appellant - United India Insurance Company Ltd. is the
      non-applicant whereas the respondent - Leisure Wear Exports Ltd. is
B     the complainant in the complaint filed before the State Consumer
      Commission, Punjab out of which these appeals arise.
           4. The respondent/complainant is engaged in the business of sale
      of various kinds of hosiery goods and ready-made garments at Ludhiana.
      They also import and export the goods in which they trade. On I 3 .06.1996,
c     the respondent obtained from the appellant one Open Marine Policy
      (Cargo) bearing No. 201002-21-99-042-96. The respondent also paid
      necessary premium. The policy covered the risk of all kinds of hosiery
      goods and ready-made garments kept in wooden and cardboard cases
      sent from any part oflndia to any friendly country in the world. The
D     policy covered the risk under Institute Cargo Clause 'A', Inland Transit
      Claqse 'A' and risk of war, SRCC, Riots, Strike valid for "Warehouse to
      warehouse at final destination". The insurance covered the risk of the
      insured goods to the extent of Rs. 2 crores. It was subject to terms and
      conditions as were mutually agreed upon. The policy was for the period
      from 13.06.1996to 12.06.1997. ·
E
           5. The respondent received one order from one party-Mis Magna
      Overseas, Moscow for supply of hosiery goods and ready-made garments
      to them at Moscow. The respondent accordingly dispatched 320
      cardboard cartons in two separate consignments - one was under cover
      note No~'LDR0/26948 dated 20.06.1996 worth Rs.49,63,200/- and
 F    another was under cover note No. LDR0/28051 dated 28.06.1996 worth
      Rs.31,68,000/. The respondent duly notified these transactions to the
      appellant(insurer). The export was to be made from Ex. Ludhiana to
      Moscow.
           6. The consignments reached Mumbai Port and from there, it was
 G    loaded in the ship for its final destination-Moscow. The consignments
      landed at port Odessa in Ukraine and from there, the consignment was
      moved by road to Moscow. When the delivery was taken at Moscow, it
      was found short of 142 and 139 cartons respectively.
           7. The matter was then reported to the Insurance Company who,
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   UNITED INDIA INSURANCE CO. LTD. v. LEISURE WEAR                               803
       EXPORTS LTD. [ABHAY MANOHAR SAPRE, J.)

in tum, appointed Mis Ingostarkh Insurance Company Ltd., Moscow as               A
the surveyors to investigate into the matter and assess the loss. The
surveyors confirmed the short delivery of the cartons. In terms of policy,
the claim forthe loss sustained by the consignee was· lodged with Mis
Ingostrakh Insurance Company in the first instance. They did not settle
it and hence the consignee authorized the respondent to file the claim
                                                                                  B
against the appellant for recovery of the loss sustained by them due to
loss of their goods.
      8. The respondent then filed two separate complaint petitions under
the Consumer Protection Act before the State Consumer Commission,
Punjab against the appellant (Insurance Company) on the strength of
the policy issued by the appellant in their favour claiming compensation          c
for the loss of their goods while in· transit and which were duly insured
by the respondent under the policy dated 13.06.1996. In substance, the
case of the respondent in their complaint was that since the goods, which
were lost, were admittedly got insured by the respondent with the appellant
and, therefore, the respondent are entitled to claim compensation for the         D
loss sustained by them from the appellant on the strength of the policy
which covered such loss. It was alleged that the policy was admittedly
in force when the loss occurred and hence the appellant cannot deny
their liability to compensate the respondent for the loss caused to the
goods of the respondent.
                                                                                  E
      '9. The appellant filed their written statement and admitted the factum
 of issuance of policy in respondent's favour so also the factum ofthe
 loss of goods sustained by the respondent while the goods were in transit.
-Their main objSlction was that the respondent had no right to file the
 complaint and claim compensation from the appellant on the strength of
 policy in question. It was alleged that since the respondent had already         F
 assigned the policy in question in favour of their consignee, i.e., Mis
                                        0

 Magna Overseas to whom the goods were sent by them and, therefore,
 it was for the consignee/assignee to file the complaint for realization of
 the loss amount from the appellant (insurer) on the strength of the
 assignment of the policy. It was, therefore, alleged that once the               G
 respondent made the assignment offlre policy in favour of the consignee
 then in such event, they lost all their rights and interest in the policy qua
 the insurer and hence had no locus to file the·complaint against the
 appellant. The complaint was, therefore, liable to be dismissed on this
 ground alone. Parties filed their evidence.
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804             SUPREME COURT REPORTS                            [2016) 4 S.C.R.



A           10. The State Consumer forum vide order dated 31.12.1999 allowed
      both the complaints and awarded Rs.19,90,000/- in all to the complainant/
      re.spondent by way of compensation in each complaint. The compensation
      awarded to the respondent comprises of the reported value of the loss
      of the goods, 10% towards moral loss, 15% towards loss of earning and
      interest at the rate of 12% payable from 07.11.1996 till realization.
B
            11. Felt aggrieved, the appellant filed the appeals before the National
      Consumer Disputes Redressal Commission, New Delhi out of which
      this appeal arises.
          12. By impugned order, the National Consumer Disputes Redressal
c     Commission dismissed the appeals and upheld the order of the State
      Consumer Commission.
          13. Felt aggrieved, the Insurance Company has filed these appeals
      by way of special leave before this Court.
           14. Heard Mr. Vishnu Mehra, learned counsel for the appellant
D     and Mr. Ashwani Kumar, learned counsel for the respondent.
            15. Learned counsel for the appellant reiterated the submissions
      here, which they had urged before the two forums unsuccessfully. The
      submission was that both the forums erred in entertaining the complaint
      filed bythe respondent, which deserved dismissal at the threshold.
 E
            16. According to learned counsel, since the respondent assigned
      the policy in question in favour of consignee (MIS Magna Overseas),
      they (respondent) ceased to have any subsisting interest in the policy,
      which they could enforce against the appellant. Learned counsel urged
      that in these circumstances, a right to file the complaint on the strength
 F    of policy and to seek its enforcement against the appellant was with the
      consignee and not with the respondent. It was, therefore, urged that the
      respondent had no locus to file the complaint against the appellant and
      seek enforcement of the terms of the policy for realization of any claim
      arising out of the policy.
 G          17. In reply, learned counsel for the respondent supported the.
      reasoning and the conclusion arrived at by the National Consumer
      Redressal Commission and contended. that it does not call for any
      interference and deserves to be upheld.
            18. Having heard the learned counsel for the parties and on perusal
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  UNITED INDIA INSURANCE CO. LTD. v. LEISURE WEAR                           805
      EXPORTS LTD. [ABHAY MANOHAR SAPRE, J.]

of the record of the case, we find no merit in the appeal.                  A
     19. The short question which arises for consideration in this appeal
is whether the complaint petition filed by the respondent under the
Consumer Protection Act against the appel Iant (Insurer) was maintainable
or not or in other words whether the respondent had the locus to file the
complaint on the strength of contract oflnsurance Policy in question for     B
claiming compensation for the loss sustained in the transaction?
     20. Sections 17 and 52 of the Marine Insurance Act, 1963
(hereinafter referred to as "the Act") are relevant for deciding the
abovesaid question. They read as under :
      "Section 17. Assignment of interest.-Where the assured                 c
      assigns or otherwise parts with his interest in the subject-
      matter insured, he does not thereby transfer to the assignee
      his rights under the contract of insurance, unless there be
      an express or implied agreement with the assignee to that
      effect.                                                                D
       But the provisions of this section do not affect transmission
       of interest by operation of law.
       "Section 52. When and how policy is assignable.-_
       (1) A marine policy may be transferred by assignment unless
                                                                             E
       it contains terms expressly prohibiting assignment. It may
       be assigned either before or after loss.
       (2) Where a marine policy has been assigned so as to pass
       the beneficial interest in such policy, the assignee of the
       policy is entitled to sue thereon in his own name; and the
                                                                             F
       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.
       (3) A marine policy may be assigned by endorsement thereon
                                                                             G
       or in other customary manner."
     21. Section 52 provides as to when and how the marine policy may
be transferred. It says that a marine policy may be transferred by
assignment unless it contains express terms, which prohibits any
assignment of the policy. It also provides that such 1;1ssignment can be
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806            SUPREME COURT REPORTS                           [2016] 4 S.C.R.


A     made before or after the loss has occasioned.
           22. Sub-Section(2)ofSection 52 provides that once the· assignment
      is made then the assignee is entitled to sue in his name whereas the
      insurer/defendant is ltlso entitled to raise all such defences against the
      assignee, which are available to him against the original insured i.e.
B     assigner.
           23. Section 17 deals with "assignment of interest". It provides
      that where the assured assigns or otherwise parts with his interest in the
      subject-matter insured, he (insured) does not thereby transfer to the
      assignee his rights under the contract of insurance unless there is an
c     express or implied agreement with the assignee to that effect. This
      Section, however, does not affect transmission of interest by operation
      of law.
            24. When we examine the undisputed facts of the case in the light
      of aforementioned two provisions, then in our considered opinion, Section
D     17 has full application to the facts of the case. In fact, it is a complete
      answer to the submission urged by the learned counsel for the appellant.
            25. It is not in dispute that there is no express agreement between
      the respondent (insured) and M/s Magna Overseas (consignee) agreeing
      to transfer insured's rights under the contract of insurance in favour of
E     MIS Magna Overseas (consignee). Under these circumstances, by virtue
      of Section 17, the respondent is legally entitled to retain, enjoy and
      exercise all those rights, which are available to them under the contract
      of insurance, which they have entered into with the appellant despite
      making the assignment of their policy in favour of the assignee.

F
            26. Section 17, in terms, recognizes and permits the insured to make
      assignment of their contract of insurance policy in favour ofan assignee ·
      and at the same time allows the insured even after making an assignment
      to retain all those rights which are available to them under the contract
      of insurance with the Insurer (appellant). In other words, in terms of
      Section 17, even after making an assignment by the insured of their
G     contract of insurance policy, the rights of insured under the contract of
      insurance policy are not assigned in favour of assignee by the deed of
      assignment but they are continued to remain with the insured.
            27. We are, therefore, of the considered view that firstly, we do
      not find that the respondent (insured) assigned the contract ofinsurance
H
  UNITED INDIA INSURANCE CO. LTD. v. LEISURE WEAR                              807
      EXPORTS LTD. {ABHAY MANOHAR SAPRE, J.]

policy in favour oftheir consignee as contended by the appellant. Secondly,    A
even assuming that the respondent (insured) assigned the contract of
insurance policy in favour of their consignee, yet the assignment so made
did not have any adverse effect on the rights of the insured under the
contract of insurance pol icy as the rights con~inued to remain with them
by virtue of Section I 7 of the Act.
                                                                               B
      28. The respondent was, therefore, legally entitled and had the locus
to file a complaint against the appellant on the strength of contract of
insurance policy for enforcement of their all contractual rights available
to them under the insurance policy for claiming compensation for the
loss caused from the appellant and the complaint so filed by the respondent
could not be dismissed as not maintainable on the ground of locus. It           c
was thus rightly held as maintainable.
     29. This takes us to the next argument of learned counsel for the
appellant. It was his submission that there was implied agreement
between the respondent and the consignee whereby the respondent had
transferred all their rights in favour of the consignee and, therefore, the     D
respondent had no locus to file a compl!!.int for enforcement of those
rights, which were no longer with them. In support of his submission,
learned counsel referred to letters dated 30.06.1997, 08.07.1997,
04.07.1997 and some Paras from the pleadings. We find no merit in this
submission.                                                                     E
     30. In our considered opinion, even if we accept, for the sake of
argument, that the respondent had assigned their rights under the contract
oflnsurance policy in favour of their consignee by way of endorsement
as contended by the appellant, yet in the Iight of authori~tion letter dated
04.07.1997 duly issued by the consignee in favour of the respondent             F
authorizing the respondent to file a complaint petition before the Consumer
forum for recovery of the compensation, the respondent was entitled
and had the locus to file a complaint against the appellant for realization
of compensation amount towards the loss sustained due to short delivery
of the goods on the strength of the authorization letter for enforcement
of contract of insurance policy.                                                G

      31. In view of foregoing discussion, we are of the considered opinion
that in any event, the complaint filed by the respondent (insured) was
maintainable and that the respondent had the locus to file the complaint
against the appellant. It was, in our view, saved by Section 17 of the Act
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808             SUPREME COURT REPORTS                           [2016] 4 S.C.R.



A     and by the authorization letter dated 04.07 .1997, issued by the consignee
      in respondent's favour.
            32. Both the Authorities, i.e., State forum and National forum (as
      the first appellate authority) were, therefore, justified in overruling the
      objection of the appellant and were justified in ,holding that the complaint
B     filed by the respondent was maintainable and the respondent was legally
      competent to file such complaint.
           33. Learned counsel for the appellant then by referring to Section
      79 of the Act contended that the complaint filed by the respondent was
      not maintainable. We find absolutely no merit in this submission. In our
c     view, Section 79 which deals with sabrogation does not apply to the case
      at hand but it is Section 17 read with Section 52 which governs the case
      in question.
          34. Learned counsel for the appellant then placed reliance on the
    decisions reported in New India Assurance Co. Ltd. vs. GN. Sainani,
D 1997 (6) SCC 383 and Oberai Forwarding Agency vs. New India
    Assurance Co. Ltd. & Anr. [2000(2) SCC 407]. We have perused
    these decisions and find that these are distinguishable on facts. In the
    latter decision, the question of locus was not expressly examined in the
    context of Section 17 but was examined in the context of Section 79 of
  · the Act on different set of facts. Likewise, in the former case, the facts
E were different and again Section 17 of the Act did not fall for
    consideration. In any event, in the light of findings which we have
    recorded on the facts· of this case against the appellant, the case law
    relied upon by the appellant is ofno help to them.
           35. So far as the findings relating to the merits of the case are
 F    concerned, learned counsel for the appellant did not challenge any of the
      findings in this appeal and in our opinion rightly. We, therefore, need not
      go into any of them.
          36. In the light of aforesaid discussion, we find no merit in these
      appeals which fail and are hereby dismissed.
 G    Kalpana K. Tripathy                                       Appeals dismissed.




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