1. ' SAEEDUZZAMAN SIDDIQUI, J.--The above appeal under section 3 of the Law Reforms (Amendment)
2. Act VIII of 1972 is directed against the judgment and decree dated 31-3-1977 passed in Suit No,179 of 1970, instituted by respondent No,1 against the appellants and respondent No,2. The facts of the case are as follow:- ' Respondent No,2 in June, 1969, imported a consignment of 43 skids and 92 boxes of steel strips from Philadelphia, U.SA. This consignment arrived at Karachi on board the ship "s.s. 'Thunder Bird" which was owned by appellant No,1. On discharge of the goods at Karachi Port it transpired that 10 skids were short landed. Respondent No,2 accordingly lodged claim with the appellants and respondent No,1. For the last consignment. The appellants and respondent No,1 however, failed to pay the claim of Respondent No,2, whereupon respondent No,2 filed Suit No,195 of 1965 against the appellants and respondent No,1 claiming a sum of Rs, 30,839 being the value of short landed 10 skids. The suit was decreed against the appellants and respondent No,1 jointly and severally!, Respondent No,2, however, recovered the decretal amount from respondent No,1 only. Upon recovery of the decretal amount of Suit No,195 of 1965 from it, Respondent No,1 filed Suit No,179 of 1970 against the appellants and Respondent No,2, claiming a sum of Rs,40,306.50 on the ground that appellants were primarily liable for the claim in Suit No,195 of 1965 and as respondent No,1 was made to pay the same, it was entitled to recover the amount from the appellants. The suit was resisted by the appellants and on the basis of the pleadings of the parties, following issues were framed:--
(1) Were defendants Nos.1 and 2 primarily liable to pay the amount decreed against them and the plaintiffs jointly and severally in Suit No,195 of 1965?
(2) What amount was paid by plaintiffs in satisfaction of decree in Suit No,195 of 1965 and are they entitled to be reimbursed by defendants Nos.1 and 2?
(3) Is the suit barred by limitation?
(4) Is the suit barred by res judicata on account of decision of plaintiff's application in suit No,195 of 1965?
(5) Is the suit maintainable, in view of the third party proceedings?
(6) To what relief, if any, are the plaintiffs entitled?
3. ' On issue No,1, the learned Judge in Chamber held the appellants primarily liable for the claim for loss of goods. Under issue No,2, the learned Judge held that to the extent of Rs,36,283.50 which respondent No,1 had paid to Respondent No,2, in discharge of the liability of carriers (appellants), it was entitled to be reimbursed by the appellants. Under issue No,3, the suit was held within time.
4. Issue No,4 was decided in the negative. Under issue No,5, the suit was held maintainable and accordingly the suit was decreed against the appellants in the sum of Rs,36,283.50 with proportionate costs. The appellants (defendants Nos. 1 and 2 in the Suit) have challenged the above judgment and decree.
5. ' Mr. Mustafa Lakhani, the learned counsel for the appellants has raised the following contentions in support of the above appeal:-
1. That respondent No,1 was bound by law to pay the amount decreed in Suit No,195 of 1965, being a co-defendant in the suit and as such the payment made by it could not be considered as a payment by a person who is interested in the payment of money which another is bound by law to pay and as such principle contained under section 69 of the Contract Act would not apply in the present case.
2. That the right of respondent No,1 to file a Suit against the appellants if any rested solely under section 135-A of the Transfer of Property Act and as such the suit filed by respondent No,1 against the appellants was hopelessly time-barred.
3. That the application of the respondent No,1 under section 135-A of the Transfer of Property Act filed in the earlier suit having been dismissed by that Court, the subsequent Suit No,179 of 1970 instituted by respondent No,1 against the appellants was not maintainable.
6. ' After hearing the learned Counsel for the parties at length we are of the view that no interference is called for with the judgment and decree of the learned Judge in Chamber.
7. ' The main contention of the learned Counsel for the appellants before us is that section 69 of the Contract Act was not applicable in the present case. Section 69 of the Contract Act reads as follows:-- "Reimbursement of person paying money due by another in payment of which he is interested: A person who is interested in the payment of money which another is bound by law to pay, and who therefore pays it, is entitled to be reimbursed by the other."
8. To attract the application of above Law, firstly, there should be a person who is bound by law to make certain payment; secondly, there should be another person who is interested in making such payment, and thirdly the last mentioned person should make the payment (See Eastern Mortgage & Agency Co.Ltd. v. Muhammad Fazal Karim, AIR 1926 Cal 385). The above section has in fact embodied the equitable principle of English Law of unjust enrichment which states that when a person makes payment of money being interested in such payment, which another person is bound to make under the law, the former acquires a right of indemnity for reimbursement against the latter. There need not be any private of contract in such a case between the person making the payment of money and the person on whose behalf payment is made. A fictional implied request in such a case, by the person on whose behalf the payment is made, to the person who makes the payment, may be imported. The question, however, which requires consideration in the, present case is that under what circumstances, a person can be treated as 'interested in the payment of money' within the scope of section 69 of the Contract Act. In the case of Jaganath Prashad v.
9. Chunni Lal AIR 1940 Allahabad 416, it was held that the word "interested in payment of money" under section 69 of the Contract Act, may include the apprehension of any kind of loss or inconvenience or at any rate any detriment capable of being assessed in money. In the case of Mst. Munni Bilei v. Triloki Nath AIR 1932 Allahabad 332 it was held that the words "a person who is interested" do not mean that the person who makes payment must prove that he had such an interest as would stand the test of a judicial trial. All that is necessary for a person making the payment to recover is that he should really and honestly believe that he must make the payment in his own interest. In Chunnumal v. Mool Chand AIR 1928 P.C. 98 their Lordships of Privy Council held that a payment made under compulsion, which another person under the Law was bound to make, could be recouped by the person making the payment from the person who was bound under the law to make such payment under section 69 of the Contract Act. Pollock, J. In the case of Balwantrao v. Tulsa Pandharinath AIR 1937 Nag. 225 while comparing the English doctrine of Law on the subject with the provisions of section 69 of Indian Contract Act quoted from the Pollock and Mulla's Contract Act (6th Edition) as follows:-- "In England the law has been stated at page 384 of Edn.6 of Pollock and Mulla's Contract Act as follows:-- 'Where plaintiff has been compelled by law to pay, or, being compelled by law, has paid money which the defendant was ultimately liable to pay, so that the latter obtains the benefit of the payment by the discharge of his liability, under such circumstances the defendant is held indebted to the plaintiff in the amount.' `The learned authors of that work, state at page 383 that this section lays down a wider rule than appears to be supported by any English authority. There seems to be no reason why a person legally bound to make certain payment should be held to be not a person who is interested in payment.'
10. ' In the case of Govindram Gordhandas Seksaria and another v. State of Gondal AIR 1950 P.C. 99 their Lordships of the Privy Council while examining the scope of the expression "a person who is interested in payment of money" used in section 69 of the Contract Act observed as follows:-- "It is no doubt true that there have been decisions which have tested whether a person was interested in a payment by ascertaining whether he had such a proprietary interest. It may be a good test in appropriate circumstances. But it would be a sad fallacy to deduce from the circumstances that a person may be interested in a payment because he has an interest in the property to which it relates the conclusion that no one who has not an interest in a property can be interested in a payment made in respect of that property. In truth, section 69, invites no such judicial limitation. The section is part of a Chapter of the Contract Act devoted to 'Quasi-Contract'.
11. The phrase itself is no doubt taken from a familiar branch of the English Common Law, although there is no reason to suppose that the Indian Contract Act was intended to do no more than to reproduce in compendious phrases the precise doctrines of the English Law of contract. But the general purport of the section is reasonably clear: to afford to a person who pays money in furtherance of some existing interest an indemnity in respect of the payment against any other person who, rather than he, could have been made liable at law to make the payment."
12. ' We will now examine the facts of the present case in the light of the above discussion. Suit No,195 of 1965 was filed by respondent No,2 against the appellants and respondent No,1 to recover compensation for loss of the consignment. The claim in the above suit was made against the appellants as carriers of the goods while respondent No,1 was sued on the basis of marine policy issued by them. The suit was decreed against the appellants and respondent No,1, jointly and severally. It cannot be disputed that the primary liability for compensation for loss of consignment under the Law was that of the appellants. Respondent No,1 was compelled to pay the amount of decree in Suit No,195 of 1965 as a result of execution of decree which resulted in the discharge of the liability of appellants as carriers of the goods. In these circumstances the provisions of section 69 of the Contract Act were fully attracted in the case.
13. The next contention of the learned Counsel for the appellants is that apart from the right conferred by section 135-A of the Transfer of Property Act, respondent No,1 had no other legal right to sue the appellants. The contention of the learned Counsel has not impressed us at all. Section 135-A is only a statutory recognition of an insurer's right of subrogation and was intended to do away with the incidence of English Common Law practice which prevented in insurer to bring an action in his own name on the doctrine of subrogation. It is well-settled now that after incorporation of section 135-A of Transfer of Property Act, an insurer on the basis of subrogation can bring all these actions in his own which an insured is entitled to file. See East & West Steamship Company v. Queensland Insurance Co.,Ltd., PLD 1961 (W.P.), Karachi 317. There is, however, no warrant in the language of section 135-A of the Transfer of Property Act, to conclude that after incorporation of section 135-A the insurer has only those rights and remedies which are available to it under this section. As stated earlier, section 135-A ibid is only a statutory recognition of the right of subrogation of an insurer but it neither abridged nor destroyed any other legal or equitable right of insurer which is available to it under the Law. The learned Judge in Chamber dealt with the above contention of the learned Counsel for the appellants in the impugned judgment under issue No,1 in the Suit as follows:-- "Mr. Mustafa Lakhani for the contesting defendants then submitted that the plaintiffs can claim under the policy of insurance only when they obtained assignment of rights under the policy as provided by section 135-A, Transfer of Property Act. I find no force in the submission. A marine policy can be assigned under section 130-A Transfer of Property Act and section 135-A deals with the rights arising in consequence of such assignment of rights under the policy of marine insurance.
14. The cause of action in this suit is not based on the rights under the policy of insurance by subrogation but the right of indemnity that an indemnifier has on payment against the wrongdoer.
15. A contract of insurance is obviously a contract of indemnity. Section 125 of the Contract Act deals with the rights of the promise in a contract of indemnity. There is no express provision in the Act, for the rights of a promisor in such a contract. Pollock and Mulla in their Treatise on the Law of Contract (8th Edn.,) say that the absence, however, of such a provision does not take away the rights which such a promisor has according to English Law and which are analogous to the rights of a surety declared in section 141. I would add that equity requires that the indemnifier should have the rights of a surety upon payment, namely the rights which the creditors had against the principal debtor or the wrong-doer. Be that as it may, on a plain reading of subsection (2) of section 135-A, Transfer of Property I Act, it appears that upon payment for loss of goods the insurer is by operation of law, thereby subrogated to all the rights."
16. ' We are in agreement with the above conclusion of the learned Judge in Chamber.
17. ' The next contention of the learned Counsel for the appellants is that the suit instituted by respondent No,1 was time-barred. It was not disputed before the learned Judge in Chamber as well as it is conceded before us that the suit filed by respondent No,1 would be time-barred only if it is held that it was governed by section 135-A of the Transfer of Property Act or otherwise it was within time if it is treated as covered by section 69 of the Contract Act. In view of our conclusion that the Suit filed by Respondent No,1 was covered under section 69 of the Contract Act, we hold that the suit was filed within time.
18. ' The last contention of the learned Counsel for the appellants is that the application of respondent No,1 under section 135-A of Transfer of Property Act, having been dismissed earlier in Suit No,195 of 1965, the subsequent suit was barred by res judicata. The contention was repelled by the learned Judge in Chamber on the ground that firstly, the proceedings under section 135-A in the previous suit were not a suit and, secondly, the application 'was not decided on merit. We agree with the reasoning of learned Judge in Chamber.
19. ' No other point was raised. The appeal is accordingly dismissed, but we will make no order as to the costs.