UNITED INDIA INSURANCE CO. LTD. versus LEISURE WEAR EXPORTS LTD.

Citation: [2016] 4 S.C.R. 799 · Decided: 29-06-2016 · Supreme Court of India · Bench: ABHAY MANOHAR SAPRE · Disposal: Dismissed

Judgment (excerpt)

[2016) 4 S.C.R. 799 
UNITED INDIA INSURANCE CO. LTD. 
v. 
LEISURE WEAR EXPORTS LTD. 
(Civil Appeal No. 1004 of2006) 
JUNE 29, 2016 
[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 
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 of the 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 
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 
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 of the 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. 
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 
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 
799 
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B 
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D 
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800 
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D 
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H 
SUPREME COURT REPORTS 
[2016] 4 S.C.R. 
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] 
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) 
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 
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 
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 
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] 
5. The respondent was, therefore, legally entitled and had 
UNITED INDIA INSURANCE CO. LTD. v. LEISURE WEAR 
EXPORTS LTD. 
the locus to file a complaint against the app

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