1. 'Defendant No, 3 Messrs Pakistan Industrial Chains Company were the consignees of a consignment of goods consisting of 43 skids and 92 boxes of steel strips which was shipped at Philadelphia, U. S. A. On board s. s. Thunder Bird. The aforesaid consignment was insured with the plaintiffs to New Jubilee Insurance Company Ltd. Under a policy of Marine Insurance dated 20-7- 1963 for a sum of Rs, 2,06,433. The defendant No, 1 Messrs American Orient Lines, Inc. Were the owners of the vessel carrying the consignment and defendant No, 2 Maritime Agencies Ltd. Was the local agent of the carriers at Karachi. It seems that the vessel arrived at the port of Karachi on or about 29-7-1964 and landed the said consignment short by 16 skids and 4 boxes out of which 6 skids and 4 boxes were later delivered by defendants 1 and 2 to defendant No, 3, with the result that the remaining 10 skids remained short landed.
2. ' Defendant No, 3, thereupon, on 16.8-65 filed Suit No, 195/65 claiming Rs, 33,923 by way of damages and other charges, and impleading defendants and 2 herein and the present plaintiff as the defendants. This suit was decreed against all the defendants jointly and severally on 25.5.67.
3. Thereafter the defendant No, 3, being the decree holder took out execution of the decree against the present plaintiff as a result whereof, the plaintiff paid a total sum of Rs, 40396.50 on 1.3-1968 towards the decrial amount and costs, of the suit.
4. ' On 9-3-1970 the plaintiffs brought the present suit for recovery of the amount by way of reimbursement seeking a decree against defendants jointly and severally. As against defendants 1 and 2 the claim of the plaintiffs is founded upon the right of reimbursement as these defendants, according to the plaintiffs were principally liable for the payment under the decree. As against the defendant No, 3 it is the case of the plaintiffs that under the terms and conditions of the policy of insurance, the defendant No, 3 was bound to Exercised and preserve their rights of recovery against the defendants 1 and 2 for the benefit of the plaintiffs but the said defendant committed breach of contract by purporting to abandon their right to execute the said decree against the defendants 1 and 2.
5. ' Defendants 1 and 2 have resisted this suit and have apart from the legal pleas, denied their liability on facts. Their plea is that defendant No, I was only the time charter of the vessel in question and defendant 2 were the agents of defendant No, 1, consequently the owners of the vessel who were in New York, U. S. A would be principally liable. These defendants also contended that the liability of the plaintiffs was alternative and further submitted that the decree having been already executed against the plaintiffs, the plaintiffs are no longer entitled to recover any sum under the said decree or otherwise. On the legal plane the said defendants pleaded that the suit was barred by res judicata inasmuch as the plaintiff's application for the same relief in the previous suit was dismissed. The defendant No, 3 also filed their written statement resisting the suit, but it is not necessary to state their defense in view of the fact that the plaintiffs do not press their claim against defendant No,
3. By order dated 16-3-76 the defendant No, 3 were treated and continued as pro forma defendant in the suit.
6. ' On the pleading of the parties the Court framed the following issues "(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, 195/63 ?
(2) What amount was paid by plaintiffs in satisfaction of decree in Suit No, 195/63 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?
7. ' The parties did not lead any oral evidence but the record and pro. Ceding's of the previous suit bearing No, 195 of 1965 and execution record of that suit, were with consent of parties, treated as evidence in this suit.
8. ' It would be convenient now to take up the consideration of issues separately.
9. ' Issue No, 1.-This is the principal issue between the parties. It was contended on behalf of the plaintiffs that in the circumstances of this case the contesting defendants, being primarily responsible for the loss of the goods under the contract of carriage to the consignee, the payment made therefore by the plaintiffs as insurers entitled them to reimbursement. In this behalf the provisions of section 69 of the Contract Act were invoked which provides as follows : "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."
10. ' As against this it was contended on behalf of the contesting defendants that the benefit of section 69 can be availed of only by one who is merely "interested" in the payment and not by one who is himself under a legal liability to pay the amount. It was urged that the plaintiffs are seeking reimbursement for the payment of the decrial amount for which they were legally liable under the previous decree jointly and severally with the defendants. Reliance in this behalf was placed on a Madras High Court decision reported as lagapadraju v. Sad, usannama Arad (1). But this decision was overruled in a recent case by that High Court in a case reported as Thirumal A.Cubbu v. Smt.
11. Rojammal (2). In this case the learned Judges followed the Privy Council in Govinlram Gordhanaas Seksaria v. State of Gondal (3) where their Lordships said "the general purpose 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." As early as 192t in ()Med Singh v. Binardal (4) it was held that in section 69 of the Contract Act the words "interested in the payment of money" do not exclude the case of a person who, in addition to being so interested, is also legally bound to make the payment. This was a case where the plaintiff sought reimbursement for the payment made by him under a decree obtained against him for which the defendant was ultimately liable. It was similarly held by the Nagpur High Court in Vistram v. Panalal (5) and in Mula Bai v. Balakdas (6).
12. See also 190 I C 594 and AIR 1938 Nag.
458. Learned counsel for the contesting defendants relied upon some older decisions of the Nagpur and Calcutta High Courts but it is not necessary to burden this judgment with the discussion of the view held therein, as the later view of the Nagpur High Court is fully reflected in the decisions cited above and the Calcutta case pertained to a claim for contribution under section 70 of the Contract Act in which, if I might say so with respect, bad observations were made as to the construction of the language of section 69.
13. Upon a bare reading of section 69 of the Contract Act it seems apparent that the main condition necessary to entitle a person to its benefit is that he should be 'interested' in the payment and if he is further enjoined by law or decree of Court to make the payment for which another is liable under the law, he would nevertheless be interested in the payment if the primary liability is ultimately of that other person and in any case the divergence of judicial opinion if any seems to have been set at rest by the Privy Council in the case of Gorman referred to above. In the previous suit the judgment whereof
(1) AIR 1916 Mad. 980 (2) AIR 1961 Mad. 170
(3) AIR 1950 P C 99 (4) 62 I C 881
(5) 169 I C 298 (6) 1 L R 1939 Nag. 246 ' is reported as Pakistan Industrial Chains Company v. American Oriental Lines Inc., New York (1), Defendant No, I admitted their liability and a finding was given by the Court that defendant No, 2 were liable for the short delivery of the goods of the consignee. This decision was not challenged in appeal. Thus there can be no dispute that the first two defendants being the carriers and their agents were primarily liable for the loss of goods. Noorul Arfin, J. (as he then was) expressed the view, in this case, that the present plaintiff can obtain a decree against the first two defendants either by a separate suit or by taking third party proceedings in the suit filed by the consignee under the rules of the Court. In the unreported judgment in Suit No, 316 of 1969 Messrs Brlghtway Traders v. Messrs Cresent Skipping Lines Ltd. In this Court, Mushtak All Kazi, J. Held in similar circumstances that the insurer can claim reimbursement from the Shipping Company for the loss of goods as they are primarily liable. Mr. Mustafa Lae hani 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, Transer 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. The cause of action in this suit is not based on the rights under the policy of insurance by subrogation but the sight orrdemity that an indemnifier has on payment against the wrongdoer. An indemnity of insurance is obviously a contract of indemnity. Section 125 of the Contract Act deals with the rights of the promises in a a contract of indemnity. There is no express provision in the Act for the rights of a promisor in such a contract.
14. Pollock and Mulla in their Treatise on the Law of Contract (8th Edition) 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. 1 would add that equity requires that the indemnifier should have the rights of a surety upon payment, namely, the rights which the creditor 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 Act, it appears that upon payment for loss of goods, the insurer is by operation of law, thereby subrogated to all the rights and remedies of the insured person, without even the assignment of the policy of insurance But if I am wrong in taking the view that the insurer is subrogated to the rights of the insured even if the payment is not voluntary, there is nothing in section 135-A which restricts the rights of the insurer only to remedies by subrogation contained in the section. To hold so would lead to the irrational result that in all cases the insurer must of necessity accept the claim under the policy or loose all rights of reimbursement of the loss if the insurer resists the claim and the suit of the insured is decreed. Such intention could not be attributed to the framers of the section and in any case the language of the provision does not expressly lead to such a result. I am therefore inclined to hold that even in absence of assignment of the policy the plaintiffs' claim is well founded in law.
15. ' In this view of the matter I have no difficulty in holding that defendants 1 and 2 were primarily liable for the claim for the loss of goods and the finding on Issue No, 1 is, therefore, in the affirmative.
(I) PLD 1968 Kar. 89 ' Issue No 2.-The second part of this issue relates to the right of the plaintiffs to be reimbursed by defendants 1 and 2 for the amount paid by them towards the satisfaction of the decree in the previous suit. The discussion under Issue No, 1 sufficiently deals with the right of the plaintiffs to reimbursement. As far as the first part or this issue is concerned, learned counsel for the plaintiffs has filed a statement saying that out of the total amount of Rs, 40,830.50 realized from the plaintiffs in execution of the decree in the previous suit. The carriers' liability under the decree was Rs, 30,830.50. In addition to that was the proportion of the cost of the suit amounting to Rs, 1,830 and out of the interest on the principal amount of decree the proportionate share of the carrier was Rs, 3,623 making up the total of Rs, 36,283.50 which is claimed to be the liability of the carriers. The total amount paid by the plaintiffs for and on behalf of the defendants 1 and 2 would therefore, be Rs, 36,283.50, to which extent this plaintiff. Are entitled to be reimbursed.
16. ' Issue No, 3.-Learned counsel for the defendants conceded that it section 69 of the Contract Act is applicable in this case then the suit is within time under Article 61 of the Limitation Act but if the claim is based on subrogation of rights on behalf of the consignee, then under Article 31 the limitation would be one year from the date when the goods ought to be delivered and accordingly the suit would be barred. In the view that I have-taken Article 61 is applicable to this case and the limitation for the suit would therefore, commence from the date of the payment which was made on 1-3-1968. The suit having been filed on 9-3-1970 is well within the period of limitation. This issue is accordingly answered in the negative.
17. ' Issue No, 4.-It was contended on behalf of the defendants that the present suit is barred by res judicata in view of the fact that plaintiffs' application under section 135-A, Transfer of Property Act for executing the decree against defendants Nos. 1 and 2 in the previous suit was dismissed. The facts relevant in this connection are that after the payment of the decrial amount by the plaintiff in the previous suit, by application dated 29-11-1968 (C. M. A. No, 5033/68) they sought permission of the Court to execute the decree against defendants Nos. 1 and 2 on the plea that the plaintiffs stood substituted for the decree-holder in that suit after the payment of the decrial amount. Their request was however refused by order dated 13-10-1969 whereby the application was dismissed as not maintainable on the ground that in absence of third party proceedings, no such prayer was tenable. Mr. Mustafa for the contesting defendants conceded that section 11, C. P. C. Is not in terms applicable to this case but he sought to support his contention by invoking the general principles of res judicata. However, I am unable to accept the contention for the simple reason that the previous proceeding was not a suit and in any case the decision on merits was given by the Court but the application was dismissed as not maintainable. The principles of res judicata, even if applicable in such circumstances would bar the re-hearing of an issue only when there has been a decision on the merits in the previous proceeding. The finding on this issue is in the negative.
18. ' Issue No, .5.-The submission of Mr. Mustafa in connection with this issue was that the suit is barred as the present plaintiffs being defendants in the previous suit had failed to take out third party proceedings under rule 176 of the Sind Chief Court Rules (0. S.) as applicable on the Original Side of this Court. A bare reading of the Rule however, shows that it is no obligatory upon a defendant to invoke the aid of the rule and set up a canal for indemnity against the co-defendants. The rule only provides for a! Procedure for adjudication of such a claim in case one co-defendant seeks an alternate decree against another co-defendant. The right to obtain an alternate decree by one co- defendant against the other cannot be construed to be the creature of the rule in question but is available to the defendant dependently under law or equity as hold in Muhammad lqbal v. M. A.
19. Shirazee (1). In fact the language of rule presupposes the existence of such a right. If therefore, the right to indemnity already exists as between th co-defendants, it is reasonable to infer that the right to action also exists Irrespective of rule in question. I am therefore, inclined to think tha D Rule 176 merely provides a convenient procedure on the Original Side o this Court for adjudication of a claim for indemnity inter se the defendants at the option of any co-defendant. But the rule cannot be stretched any further than that to hold that upon failure of the concerned co-defendant t set up a claim in virtue of the right granted under the rule would bar separate suit based upon such claim.
20. No other provision of the rules or law has been pointed out expressly to bar such a suit, It would be consistent with the recognized rules of the interpretation to strictly construe the provisions o any law or statutory rule which has the effect of taking away a remedy at law or bar the jurisdiction of the Court. In absence of any express provision to that effect it is not possible to hold that the present suit is barred due' to the non-compliance with the aforesaid rule. The suit is therefore, held to be maintainable.
21. ' In view of the findings and conclusions stated above I would decree this suit for a sum of Rs, 36,283.50 jointly and severally against defendants Nos. 1 and 2 with proportionate costs. The suit is dismissed as against defendant No,
3. The plaintiffs to bear the costs of defendant No, 3.
(1) PLD 1968 Kar. I