DR. RAM MANOHAR LOHIYA NATIONAL NATIONAL LAW UNIVERSITY, LUCKNOW
RESEARCH
PROJECT
RULE OF
SUBROGATION
SUBMITTED TO: DR . R ADHEYSHYAM (LAW), AS PART OF ADHEYSHYAM PRASAD , ASSISTANT P ROFESSOR (L PROPE RTY LAW II’. THE ‘WRITTEN ASSIGNMENT (PROJECT WORK )’ )’ FOR ‘ ‘PROPERTY SUBMITTED BY: NAIM ASHRAF (R OLL OLL NO. ! 76), B.A. LL.B. (HONS.) SEM. VI " #$%&!%'
ACKNOWLEDGEMENT
Though this research ro!ect i"itia##$ ca%e u as !ust o"e su&%issio" 'or the e"( o' the se%ester) I a% *er$ ha$ to su&%it that a su&sta"tia# a%ou"t o' research has go"e i"to the %a+i"g o' the sa%e. Here I shou#( ac+"o,#e(ge Dr. Ra(he$sh$a% Prasa() Assista"t Pro'essor o' La, at Dr. Ra% Ma"ohar Lohi$a -atio"a# La, "i*ersit$) Luc+"o, ,ithout ,hose gui(a"ce this research ro!ect ,ou#("/t ha*e &ee" ossie. I ,ou#( a#so a #so #i+e to tha"+ Dr. Ma(hu Li%a$e Li&rar$) Dr. Ra% Ma"ohar Lohi$a -atio"a# La, "i*ersit$) Luc+"o, ,hich ro*i(e( %e ,ith the re0uire( suort &oth i" the 'or% o' &oo+s a"( o"#i"e (ata&ase ,hich has &ee" o' i%%e"se *a#ue to this ro!ect. I" the course o' this ro!ect) I ha*e ha* e a#so a #so rero(uce( *arious arts o' uishe( a"( "o" %
uishe( researches ,hich ha*e &ee" (u#$ cite(. I ,ou#( a#so #i+e to tha"+ the authors o' the sa%e.
-a1i% Ashra' Luc+"o,) March) 2346.
CONTENTS
INTRODUCTION.........................................................................................................................
HISTORICAL PERSPECTIVE.................................................................................... ...............&
KINDS OF SUBROGATION...................................................................................................... ..
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CASE LAWS..................................................................................................................................*
SUBROGATION AND ALLIED PRINCIPLES................................................................ .......%
BIBLIOGRAPHY........................................................................................................................%+
INTRODUCTION
The Doctri"e o' su&rogatio" i" the Tra"s'er o' Proert$ Act) 4552) has &ee" #ai( (o," u"(er sectio" 2) i"serte( a'ter a" a%e"(%e"t i" the $ear 42. The #ai" tet o' the sectio" is as u"(er8 Su&rogatio"8 A"$ o' the erso"s re'erre( to i" sectio" 4 9other tha" the %ortgagor: a"( a"$ co; %ortgagor sha##) o" re(ee%i"g roert$ su&!ect to the %ortgage) ha*e) so 'ar as regar(s re(e%tio") 'orec#osure or sa#e o' such roert$) the sa%e rights as the %ortgagee ,hose %ortgage he re(ee%s %a$ ha*e agai"st the %ortgagor or a"$ other %ortgagee. The right co"'erre( &$ this sectio" is ca##e( the right o' su&rogatio") a"( a erso" ac0uiri"g the sa%e is sai( to &e su&rogate( to the rights o' the %ortgagee ,hose %ortgage he re(ee%s. A erso" ,ho has a(*a"ce( to %ortgagor %o"e$ ,ith ,hich the %ortgage has &ee" re(ee%e( sha## &e su&rogate( to the rights o' the %ortgagee ,hose %ortgage has &ee" re(ee%e() i' the %ortgagor has &$ a registere( i"stru%e"t agree( that such erso"s sha## &e so su&rogate(. -othi"g i" this sectio" sha## &e (ee%e( to co"'er a right o' su&rogatio" o" a"$ erso" u"#ess the %ortgage i" resect o' ,hich the right is c#ai%e( has &ee" re(ee%e( i" 'u##.
As (e'i"e( u"(er the >#ac+?s La, (ictio"ar$) ?Su&rogatio"? is8 the su&stitutio" o' o"e erso" i" the #ace o' a"other ,ith re'ere"ce to a #a,'u# c#ai%) (e%a"( or right) so that he ,ho is su&stitute( succee(s to the rights o' the other i" re#atio" to the (e&t or c#ai%) a"( its rights) re%e(ies) or securities.
HISTORICAL PERSPECTIVE
Su&rogatio" is a ro%a" ter%) ,hich %ea"s ?su&stitutio"?. Lor( Har(,ic+e i" his (ecisio" i" Ra"(a# =. Coc+ra" %ar+e( its i(e"ti'icatio" ,ith e0uit$) i" his oi"io" eresse() he suggeste( a ossie theoretica# &asis 'or the (octri"e a"( a !usti'icatio" 'or the ro#e o' e0uit$ i" the area o' co"tri&utio". I" a #etter to Lor( @a%es) he ha( "ote( that "e, co%%ercia# co"(itio"s) "e, %etho(s o' (ea#i"g ,ith roert$) a"( (i''ere"t 'or%s o' roert$ %a(e it "ecessar$ 'or e0uit$ to #a$ a "o*e# art i" the 'urther (e*e#o%e"t o' su&rogatio". The a&o*e case arose out o' a (ecree &$ @i"g eorge II a##o,i"g co%e"satio" to &e ai( to those that su''ere( #oses i" a ,ar ,ith Sai". So%e i"(i*i(ua#s ha( a#rea($ &ee" i"(e%"i'ie( &$ their i"surers 'or the #osses that the$ ha( su''ere() a"( the i"surers success'u##$ sought to &e su&rogate( to the rights o' their i"sure( to recei*e this co%e"satio". The 'irst E"g#ish case to a(ot the ,or( ?su&rogatio"? ,as Stri"ger =. The E"g#ish a"( Scotch Mari"e I"sura"ce Co. I" this case) the #ai"ti''s i"sure( a shi cargo ,ith the (e'e"(a"ts 'or ?ta+i"g at sea) arrests) restrai"ts) a"( (etai"%e"t o' a## @i"gs) ri"ces a"( eo#e.? The shi ,as su&se0ue"t#$ cature( &$ a "ite( States cruiser a"( ta+e" i"to -e, Or#ea"s) ,here a suit 'or its co"(e%"atio" ,as i"stitute(. The #ai"ti''s co"teste( the actio" success'u##$ a"( the cators aea#e(. The court or(ere( the #ai"ti''s to 'ur"ish securit$ agai"st costs) ,hich the$ cou#( "ot a''or(. As a resu#t) the shi ,as co"(e%"e(B the #ai"ti''s ga*e 'or%a# "otice o' a&a"(o"%e"t o' the cargo) a"( re0ueste( the i"surers a$ 'or their tota# #oss. The court) i" ho#(i"g 'or the #ai"ti'') "ote( that the #ai"ti'' as the assure( ,as 'ree to choose &et,ee" (e'e"(i"g the aea# &e'ore the A%erica" court or c#ai%i"g a #oss u"(er the o#ic$. >ecause the assure( chose the #atter) the i"surers ,ere oigate( to a$. Ho,e*er) ha*i"g ai() the i"surers ,ere e"tit#e( ?to &e
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su&rogate( to the%) a"( get ,hat the$ ca" out o' the ha"(s o' the A%erica"s 'or their o," &e"e'it.? Though) there has &ee" so%e (isagree%e"t i" E"g#ish courts a&out ,hether su&rogatio" is a" e0uitae or #ega# (octri"e. Ca"a(ia" courts ha*e treate( it as the 'or%er. The #ea(i"g case i" Ca"a(a is -atio"a#
ei"g a" e0uitae right) it arta+es o' a## the or(i"ar$ i"ci(e"ts o' such rights) o"e o' ,hich is that i" a(%i"isteri"g re#ie' the Court ,i## regar( "ot so %uch the 'or% as the su&sta"ce o' the tra"sactio". The ri%ar$ co"si(eratio" is to see that the i"sure( gets 'u## co%e"satio" 'or the roert$ (estro$e( a"( the ee"ses i"curre( i" %a+i"g goo( his #oss. The "et thi"g is to see that he ho#(s a"$ sur#us 'or the &e"e'it o' the i"sura"ce co%a"$. Whether the (octri"e is e0uitae or "ot) the Ca"a(ia" a"( E"g#ish !urisru(e"ce is agree( that su&rogate( rights (o "ot co%e 'ro% the co"tract o' i"(e%"it$ &ut arise &$ oeratio" o' the co%%o" #a, to go*er" the re#atio"shi that such a co"tract creates. At co%%o" #a,) "o su&rogate( rights arise u"ti# the i"sure( is 'u##$ i"(e%"i'ie( 'or its #oss. O"ce 'u## i"(e%"it$ is %a(e) the i"surer has the right to co%%e"ce rocee(i"gs agai"st the ,ro"g(oer i" the i"sure(?s "a%e a"( %a+e a## (ecisio"s i" the #itigatio". The i"sure( has a (ut$ to co;oerate i" the #itigatio" i" %atters such as gi*i"g e*i(e"ce at tria#. It ,as i" the case o' Lo"(o" Assura"ce Co. =. Sai"s&ur$ the ri"ci#es o' su&rogatio" estaishe( &$ e0uit$ ,ere ta+e" a"( 'orge( i"to the co%%o" #a,. Ho,e*er) the co%%o" #a, a#so assu%e( a %a!or ro#e i" 'ashio"i"g the 'uture rogress o' the ure#$ e0uitae (octri"e. The Court o' Eche0uer i" the case o' Deeri"g *. Wi"che#sea) he#( that The &asis o' ?&otto% o' co"tri&utio"? ,as sai( to &e a 'ie( ri"ci#e o' Justice) a"( is "ot 'ou"(e( i" Co"tract8
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this co"tri&utio" is co"si(ere( as 'ou"(e( i" E0uit$B Co"tract is "ot %e"tio"e(. The ri"ci#e oerates %ore c#ear#$ i" a Court o' E0uit$ tha" at La,. At La, the art$ is (ri*e" to a" Au(ita uere#a or Seire
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KINDS OF SUBROGATION
4. Lega# Su&rogatio" This +i"( o' su&rogatio" ta+es #ace &$ oeratio" o' La,) a"( is &ase( o" the ri"ci#e o' rei%&urse%e"t. Where a erso" is i"tereste( i" %a+i"g so%e a$%e"t) ,hich a"other is #ega##$ &ou"( to %a+e) tha" such erso" %ust &e rei%&urse( ,he" he %a+es the a$%e"t. Lega# or e0uitae su&rogatio" is "ot a*ai#ae to *o#u"teers) a"( is "ot a*ai#ae u"ti# 'u## co%e"satio" has &ee" ai(. It is &ase( o" e0uitae co"si(eratio"s. The 'o##o,i"g eo#e ca" c#ai% Lega# Su&rogatio" 8 a: Puis"e %ortgagee He is a su&se0ue"t %ortgagee) ,ho re(ee%s a rior %ortgageB he has a right to &e su&rogate( to the ositio" o' the rior %ortgage. &: Co;%ortgagor He is #iae o"#$ to the ete"t o' his share o' the (e&t. Whe") &esi(es re(ee%i"g his o," share) he a$s o'' the share o' the other %ortgagor a#so) he &eco%es e"tit#e( to &e su&rogate( i" #ace o' such other %ortgagor. I" the case o' @rish"a Pi##ai Ra!ase+hara" =. Pa(%a"a&ha Pi##ai the 0uestio" arose ,hether arose that ,hat ,ere the rights a"( #ia&i#ities the arties 0ua each other a"( ,hether a suit 'or the artitio" ,as %ai"tai"ae. The co urt here he#( that it ,as "ot a case o' su&rogatio" &$ agree%e"t &ut &$ the oeratio" o' #a,. Sectio" 2 (oes "ot ha*e the e''ect o' a su&stitute &eco%i"g a %ortgagee. The ro*isio" co"'ers certai" rights o" the re(ee%i"g co; %ortgagor a"( a#so ro*i(es 'or re%e(ies o' re(e%tio") 'orec#osure a"( sa#e &ei"g a*ai#ae to the su&stitutes as the$ ,ere a*ai#ae to the su&stitute(. There'ore) the suit 'or (ec#aratio") artitio" a"( reco*er$ o' ossessio" &$ "o"; re(ee%i"g co;%ortgagor ,as he#( to &e %ai"tai"ae.
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c: Suret$ The erso") ,ho sta"(s as a suret$ i" a %ortgage 'or rea$%e"t o' #oa" i" case %ortgagor 'ai#s to (o so) is a#so e"tit#e( to re(ee% the %ortgage( roert$ u"(er sectio" 4. Whe" the suret$ o' the %ortgagor re(ee%s the roert$ he is su&rogate( to the ositio" a"( rights o' the cre(itor. (: Purchaser o' e0uit$ o' re(e%tio" There ,ere certai" (ou&ts regar(i"g the urchaser o' e0uit$ o' re(e%tio" that ,hether he ca" &e su&rogate( or "ot. E0uit$ o' re(e%tio" is regar(e( as a roert$ o' the %ortgagor) ,hich he ca" se## or assig". The urchaser o' such e0uit$ &eco%es o,"er o' the roert$. The Pri*$ Cou"ci# i" the case o' Ma#ire(($ A$$are(($ =. oi @rish"a$$a he#( ?it is "o, sett#e( #a, that ,here i" I"(ia there are se*era# %ortgages o" 0 roert$) the o,"er o' the roert$ su&!ect to a %ortgage %a$) i' he a$s o'' a" ear#ier charge) treat hi%se#' as &u$i"g it a"( sta"( i" the sa%e ositio" as his *e"(or) or to ut it i" a"other ,a$) he %a$ +ee the e"cu%&ra"ce a#i*e 'or his &e"e'it a"( thus co%e i" &e'ore a #ater %ortgagee. This ru#e ,ou#( "ot a#$ i' the o,"er o' the roert$ ha( co*e"a"te( to a$ the #ater %ortgage; (e&t &ut i" this case there ,as "o such erso"a# co*e"a"t.?
2. Co"*e"tio"a# Su&rogatio" The co"*e"tio"a# Su&rogatio" ta+es #ace ,here the erso" a$i"g o'' the %ortgage; (e&t is a stra"ger a"( has "o i"terest to rotect) &ut he a(*a"ces the u"(er a" agree%e"t) that he ,ou#( &e su&rogate( to the rights a"( re%e(ies o' the %ortgagee ,ho is ai( o''. The right to su&rogatio" ca" &e c#ai%e( o"#$ i' the %ortgagor has agree( &$ registere( i"stru%e"t that he sha## &e su&rogate(.
CASE LAWS
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The 0uestio" &e'ore the court i" the case o' Isa >au!i A%i!i? =. %ar!i A&hra% A(a% ) ,as ,hether) Sectio" 2 o' the Tra"s'er o' Proert$ Act) 4552) has retrosecti*e e''ect or "otB as er >roo%'ie#() J.) the retrosecti*e e''ect shou#( &e ta+e" as a gui(e 'or (eter%i"i"g i" cases) ,here there is a co"'#ict o' authorit$) ,hat e0uitae ru#es "ot i"co"siste"t ,ith the Act shou#( &e a(ote( as *a#i( i" I"(iaB ,hereas accor(i"g to -.J. Wa(ia) J.) Sectio" 2 o' the Tra"s'er o' Proert$ Act) as a%e"(e( i" 42) has a retrosecti*e e''ect. It ,as he#( i" the case o' -arai" =. -arai" ) that ,here the %ortgagor hi%se#' re(ee%s the roert$ this (octri"e cou#("?t &e i"*o+e(. The %ortgagor ,ho (ischarges a rior (e&t is "ot e"tit#e( to &e su&rogate( to the rights a"( re%e(ies o' his cre(itor. This is &ecause &$ (ischargi"g a rior e"cu%&ra"ce create( &$ hi%se#') he is (ischargi"g his o," oigatio" to his cre(itor. I" the case o' =ish"u >a#+rish"a -ai+ =. Sha"+area ur#i"gaa Wagara#i ) the >o%&a$ High Court has oi"e( that8 Where a erso" hi%se#' re(ee%s a %ortgage) that is to sa$) a$s the %ortgage %o"e$ out o' his o," oc+et a"( "ot %ere#$ (ischarges a co"tractua# #ia&i#it$ to %a+e the a$%e"t) he is e"tit#e( to the right o' su&rogatio" u"(er the 'irst aragrah o' Sectio" 2) i' he is o"e o' the erso"s) other tha" the %ortgagor) e"u%erate( i" Sectio" 4. Where) ho,e*er) such erso" (oes "ot hi%se#' re(ee% the %ortgage) that is to sa$) (oes "ot hi%se#' a$ the %o"e$ out o' his o," oc+et i" ecess o' his co"tractua# #ia&i#it$ &ut a(*a"ces %o"e$ to a %ortgagor a"( the %o"e$ is uti#i1e( 'or a$%e"t o' a rior %ortgage) ,hether the %o"e$ is actua##$ ai( through the ha"(s o' the %ortgagor or is #e't 'or such a$%e"t i" the ha"(s o' the erso" a(*a"ci"g the %o"e$ a"( it is the" ai( to the rior %ortgagee through the ha"(s o' that erso") the #atter ac0uires the right o' su&rogatio" u"(er the thir( aragrah o' Sectio" 2) o"#$ i' the %ortgagor has &$ a registere( i"stru%e"t agree( that he sha## &e so su&rogate(. The Sure%e Court i" the case o' a"esh La# =. Joti Prasa( (iscusse( the "ature a"( ete"t o' a re(ee%i"g co;%ortgagors right to reco*er co"tri&utio" 'ro% his co;(e&tor) The court here he#( that) E0uit$ i"sists o" the u#ti%ate a$%e"t o' a (e&t &$ o"e ,ho i" !ustice a"( goo( co"scie"ce is &ou"( to a$ it) a"( it is ,e## recog"i1e( that ,here there are se*era# !oi"t (e&tors) the erso" %%
%a+i"g the a$%e"t is the ri"cia# (e&tor as regar(s the art o' the #ia&i#it$) he is (ischarge( a"( a suret$ i" resect o' the shares o' the rest o' the (e&tors. Such &ei"g the #ega# ositio" as a%o"g the co;%ortgagors) i' o"e o' the% re(ee%s a %ortgage o*er the roert$ ,hich &e#o"gs !oi"t#$ to hi%se#' a"( the rest) e0uit$ co"'ers o" hi% a right to rei%&urse hi%se#' 'or the a%ou"t se"t i" ecess &$ hi% i" the %atter o' re(e%tio"B he ca" ca## uo" the co;%ortgagors to co"tri&ute to,ar(s the ecess ,hich he has ai( o*er his o," share... ,hi#e it ca" &e rea(i#$ co"ce(e( that the !oi"t (e&tor ,ho #a$s u a"( (ischarges the %ortgage sta"(s i" the shoes o' the %ortgagee... he ,i## &e su&rogate( to the rights o' the %ortgage o"#$ to the ete"t "ecessar$ 'or his o," e0uitae rotectio"... so 'ar as it is "ecessar$ to e"'orce his e0uit$ o' rei%&urse%e"t?.... It is as regar(s the ecess o' the a$%e"t o*er Ms o," share that the right ca" &e sai( to? eist.... The re(ee%i"g co;%ortgagor &ei"g o"#$ a suret$ 'or the other co;%ortgagors) his right) strict#$ sea+i"g is a right o' rei%&urse%e"t or co"tri&utio". The a&o*e %e"tio"e( !u(g%e"t has &ee" uhe#( ti%e a"( agai" &$ the Sure%e Court itse#' a"( *arious High courts. The sa%e *ie, ,as uhe#( &$ the Sure%e Court i" the case o' =a##ia%%a Cha%a+a Pi##ai =. Si*atha"u Pi##ai a"( Ors. ) ,here it ,as he#( that the rights create( i" 'a*or o' a re(ee%i"g co; %ortgagor as a resu#t o' (ischarge o' (e&t are ?so 'ar as regar(s re(e%tio") 'orec#osure or sa#e o' such roert$) the sa%e rights as the %ortgagee ,hose %ortgage he re(ee%s?.
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Whe" the scoe sectio" 2 o' the Tra"s'er o' Proert$ act a"( the ete"t o' rights a"( o,ers o' su&rogee) ca%e i"to co"si(eratio" &e'ore the court i" the case o' @rish"a Pi##ai Ra!ase+hara" -air =. Pa(%a"a&ha Pi##ai ) the court su%%ari1e( the ri"ci#es #ai( (o," i" the case o' a"eshi La# as u"(er8 Ha*i"g ea%i"e( the issue 'ro% a##;ossie a"g#es a"( h a*i"g re'erre( to Sir Rash&ehar$ hose o" La, o' Mortgage i" I"(ia) Harris o" Su&rogatio") She#(o" o" Su&rogatio") Po%ero$ o" E0uit$ Jurisru(e"ce a"( a 'e, E"g#ish a"( I"(ia" authorities a*ai#ae o" the oi"t) ,hat Their Lor(shis co"c#usio" i" a"eshi La# case %a$ &e su%%e( u as u"(er8 4. Whe" the co;(e&tor or co;%ortgagor a$s %ore tha" his share to the cre(itor 'or the urose o' re(ee%i"g a %ortgage) the re(ee%i"g %ortgagor is ri"cia# (e&tor to the ete"t o' his share o' the (e&t a"( a suret$ to the ete"t o' the share i" the (e&t o' other co;%ortgagors. The re(ee%i"g co;%ortgagor &ei"g o"#$ a suret$ 'or the other co;%ortgagors) his right is) strict#$ sea+i"g) a right o' rei%&urse%e"t or co"tri&utio". 2. The su&stitutio" o' the re(ee%i"g co;%ortgagor i" #ace o' the %ortgagee (oes "ot recise#$ #ace the "e, cre(itor 9i.e. the re(ee%i"g co;%ortgagor: i" #ace o' the origi"a# %ortgagee 'or a## uroses. I') there'ore) o"e o' the se*era# %ortgagors satis'ies the e"tire %ortgage (e&t) though uo" re(e%tio" he is su&rogate( to the rights a"( re%e(ies o' the cre(itor) the ri"ci#e has to &e so a(%i"istere( as to attai" the e"(s o' su&sta"tia# !ustice regar(#ess o' 'or%B i" other ,or(s) the 'ictitious cessio" i" 'a*or o' the erso" ,ho e''ects the re(e%tio") oerates o"#$ to the ete"t to ,hich it is "ecessar$ to a#$ it 'or his i"(e%"it$ a"( rotectio". G. The (octri"e o' su&rogatio" %ust &e a#ie( a#o"g ,ith other ru#es o' e0uit$ so that the erso" ,ho (ischarges the %ortgage is a%#$ rotecte( a"( at the sa%e ti%e there is "o i"!ustice (o"e to the other !oi"t (e&tors. He ,ho see+s e0uit$ %ust (o e0uit$. . There is a (isti"ctio" &et,ee" a thir( art$ ,ho c#ai%s su&rogatio" a"( a co;%ortgagor ,ho c#ai%s the right. The co;%ortgagors sta"( i" a 'i(uciar$ re#atio"shi 0ua each other. The re(ee%i"g co;%ortgagor ca" o"#$ c#ai% the rice) ,hich he has actua##$ ai( together ,ith i"ci(e"ta# ee"ses. Strict#$ sea+i"g) there'ore) ,he" o"e o' se*era# %ortgagors re(ee%s a %ortgage) he is e"tit#e( to &e treate( as a" assig"ee o" the securit$) ,hich he %a$ e"'orce i" the %
usua# ,a$ 'or the urose o' rei%&ursi"g hi%se#'. The su&rogatio" to the rights o' the %ortgagee &$ the re(ee%i"g co;%ortgagor is co"'i"e( o"#$ to the ete"t "ecessar$ 'or his o," e0uitae rotectio". The re(ee%i"g co;%ortgagor ca") !ust as the suret$ ,ou#() as+ to i"(e%"i'$ 'or his #oss a"( he ca" i"*o+e the (octri"e o' su&rogatio" as a" ai( to the right o' co"tri&utio".
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share o' the #ai"ti''. The &ar co"tai"e( i" Sectio" 2 o' the Tra"s'er o' Proert$ Act is that a right o' su&rogatio" ,ou#( "ot &e a*ai#ae to a"$ erso" u"#ess the %ortgage i" resect o' ,hich the right is c#ai%e( has &ee" re(ee%e( i" 'u##. I" the case o' Mahes,ara(hatha" -a%&u(iri =. -ara$a"a" -a%&u(iri a"( others) @era#a High Court has 'urther he#( that8 Whe" a %ortgagor re(ee%s a %ortgage ,hat hae"s is the eti"ctio" o' the %ortgage right &$ its satis'actio") a"( the 0uestio" o' re(e%tio" arta+i"g the "ature o' a" assig"%e"t) thus +eei"g the %ortgage right a#i*e) ca" arise o"#$ i" cases ,here the re(e%tio" gi*es the erso" re(ee%i"g the right o' su&rogatio" to the rights o' the %ortgagee ,hose %ortgage he re(ee%s Sectio" 2 %a+es it c#ear that the %ortgagor has "o such right a"( it is c#ear that ,he" a %ortgagor re(ee%s a %ortgage the %ortgage is eti"guishe( a"( is i" "o se"se +et a#i*e e*e" i' there &e so%e i"ter*e"i"g i"terest #i+e a uis"e %ortgage. I" the case o' Tha%attoor Che#a%a""a a"( A"r.=. Tha%attoor @uru%&i++at Pare Ma"a++a# Para%es,ara" a"( Ors. the 0uestio" that arose &e'ore the @era#a High Court ,as) ,hether erso" re(ee%i"g has right o' su&rogatio" i" resect o' re(ee%e( su&;%ortgage) The court here he#( that) ,here erso" re(ee%i"g is a %ortgagor "o such right o' su&rogatio" arises) 'urther) there is "o 0uestio" o' %ortgagor ho#(i"g re(ee%e( su&;%ortgage as searate right. A((itio"a##$) i" the case o' Ragha*e"(rachar$a Aachar$a @atti =. =a%a" Shri"i,as Desha"(e the >o%&a$ High court (re, a"a#og$ &et,ee" su&rogatio" a"( su&stitutio") as u"(er8 Su&rogatio" %ea"s "either %ore "or #ess tha" su&stitutio". A erso" ,ho is su&rogate( to the status o' a %ortgagee has a## the rights o' a %ortgagee) "ot %ere#$ so%e o' the rights) a"( those rights %ust i"c#u(e rights i" co""ectio" ,ith the articu#ar %ortgage &$ re(ee%i"g ,hich he gets the &e"e'it o' Sectio" 2 o' the Tra"s'er o' Proert$ Act. O"e o' the i%#icatio"s o' the (octri"e o' su&rogatio" is that the su&rogee +ees the %ortgage a#i*e 'or his o," &e"e'it. The %ortgage that is ai( o'' is "ot eti"guishe( &ut is treate( as assig"e( to the su&rogee.
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SUBROGATION AND ALLIED PRINCIPLES
S-/0123405 256 A774158953
It ,as he#( i" the case o' u!rath A"(hra Roa( Carriers Tra"sort Co"tractors =. "ite( I"(ia I"sura"ce Co. Lt(.) a" assig"%e"t or tra"s'er ca" ta+e #ace o"#$ ,ith seci'ic acts o' arties. The assig"ee or tra"s'eree ac0uires a## the rights i" the roert$. A tra"s'er oerates as a tra"s'er o' the tota#it$ o' the rights. Si%i#ar ri"ci#e has &ee" #ai( (o," &$ the A%erica" courts i" the case o' Wester" Cas. F Sur. Co. =. >o,#i"g a"( Hosita# Ser*. Cor.=. Pe""s$#*a"ia I"s. Co. Whereas Su&rogatio" is the e''ect o' the situatio" ,here a %ortgage is re(ee%e( &$ a erso" other tha" the %ortgagor) a"( he su&rogate( o"#$ to the rights o' the %ortgagor a"( "o %ore. Whi#e su&rogatio" is "ot a" assig"%e"t) i" a &roa( se"se su&rogatio" %a$ &e co"si(ere( as assig"i"g a cause o' actio" &$ oeratio" o' #a, a"( t$ica# co"tractua# su&rogatio" ro*isio"s %a$ use assig"%e"t #a"guage.
Tech"ica##$ sea+i"g) ?co"tri&utio"? a"( ?i"(e%"it$? are %utua##$ ec#usi*e re%e(ies &ut are o'te" asserte( as a#ter"ati*e causes o' actio" i" the sa%e #a,suit. ?I"(e%"it$? shi'ti"g #ess tha" co%#ete #ia&i#it$ is rea##$ co"tri&utio" a"( ?co"tri&utio"? shi'ti"g a## #ia&i#it$ is actua##$ i"(e%"it$. A((itio"a##$) Co"tri&utio" a"( i"(e%"it$ actio"s so%eti%es aear to see+ the sa%e re#ie' as su&rogatio" a##o,s a"( are o'te" asserte( as a#ter"ati*e theories to su&rogatio" reco*er$. The (isti"ctio" &et,ee" co"tri&utio"i"(e%"it$ a"( su&rogatio" #ies i" the erso" c#ai%i"g the right a"( the erso" ,hose (e&t is ai( is &ecause co"tri&utio" a"( i"(e%"it$ re0uire a co%%o" #ia&i#it$ ,ith the o"e agai"st ,ho% co"tri&utio" a"( i"(e%"it$ are sought.
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CONCLUSION
Cou"tries ,hich ha*e i"herite( the co%%o" #a, s$ste% ,i## t$ica##$ ha*e a (octri"e o' su&rogatio") though its (octri"a# &asis %a$ &e ratio"a#ise( (i''ere"t#$ (ee"(i"g uo" the ete"t to ,hich E0uit$ re%ai"s a (isti"ct &o($ o' #a, i" that !uris(ictio". E"g#ish courts ha*e "o, accete( that the co"cet o' u"!ust e"rich%e"t has a ro#e to #a$ i" su&rogatio". I" co"trast) this aroach has &ee" stri(e"t#$ re!ecte( &$ the High Court o' Austra#ia) ,here the (octri"a# &asis o' su&rogatio" is sai( to #ie i" the re*e"tio" o' u"co"scio"ae resu#ts8 'or ea%#e) the (ischarge o' a (e&tor or o"e art$ getti"g (oue reco*er$. Sure%e Court o' I"(ia he#( that i" the case o' su&rogatio") Rights o' Su&rogatio" *ests &$ oeratio" o' #a, rather tha" as the ro(uct o' eress agree%e"t. Right o' Su&rogatio" ca" &e e"!o$e( &$ the i"surer as soo" as a$%e"t is %a(e) ,hereas a" assig"%e"t re0uires a" agree%e"t that the rights o' the assure( &e assig"e( to the i"surer. I" the case o' su&rogatio") the assig"ee ca" reco*er ,hate*er a%ou"t has &ee" ai( &$ hi% to the i"surer ,hereas i" the case o' assig"%e"t) he ca" reco*er %ore tha" the actua# #oss 'ro% the i"surerthir( art$. Thus Sure%e Court o' I"(ia ca%e to the co"c#usio" that the #etter st$#e( as Ksu&rogatio"K ,as i" 'act assig"%e"t o' the rights &$ the i"sure( a"() there'ore) the i"surer ,as "ot a ?co"su%er? ,ithi" the %ea"i"g o' the Co"su%er Protectio" Act) 456 a"() there'ore) "ot e"tit#e( to %ai"tai" the co%#ai"t. Where su&rogatio" is a*ai#ae) the su&rogate( art$ is e"tit#e( to sta"( i" the shoes o' a"other a"( e"'orce that other art$?s rights. I' the e0uit$ is estaishe() the court %a$ e''ect the su&rogatio" re%e($ &$ ,a$ o' e0uitae #ie") charge) or a co"structi*e trust ,ith a #ia&i#it$ to accou"t. Crucia##$) the c#ai%a"t?s rights are ,ho##$ (eri*ati*eB he"ce the c#ai%a"t has "o higher rights tha" the erso" to ,ho% he or she is su&rogate(.
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BIBLIOGRAPHY
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