2016 (8) TMI 1566 - HC - Indian Laws

Suit for claiming amount alongwith interest from the date of the suit till payment - allegation is that defendant committed a breach of an understanding with the original plaintiff thereby causing loss to the plaintiff to the extent of the amount claimed - Whether the plaintiff proves that the right of defendant No. 1 in the insurance policy, under which the security given by the plaintiff to defendant No. 1 were insured with the New India Assurance Company Limited, stood vested and/or subrogated in favour of the original plaintiff and the amounts payable, if any, under the insurance policy by the Insurance Company is payable to the original plaintiff? - HELD THAT - When parties agree to a set of things then merely marking on the document without prejudice would be of no consequence. However, if the material indicates that the negotiations are still in progress and there is no finality on what was contained in the document marked without prejudice , then the document marked without prejudice cannot be considered without the consent of both the parties. - the meaning of without prejudice is if the terms proposed in the letter are not accepted, the position of the writer of the letter does not get prejudiced or if the terms are accepted, the complete contract is established. This means that when the plaintiff wrote letter dated 16.4.2003 and later, he wanted to safeguard his position. The defendant, from the correspondence at Exh. P-7 to P-12, does not appear to have accepted the proposal of the plaintiff and therefore, in my view, there is no binding agreement between the plaintiff and the defendant that the defendant will prosecute the suit against the insurance company. The answer to issue No. 1 therefore, is in the negative. Whether the defendant No. 1 proves that one time settlement entered into between the original plaintiff and defendant No. 1 was comprehensive and no amount is due or payable by defendant No. 1 to the plaintiff? - HELD THAT - The counsel for the plaintiff agreed that the OTS with the defendant was a comprehensive settlement and the agreement to continue to sue insurance company as alleged by the plaintiff came up only after the one time settlement was entered into. In view thereof and considering the correspondence which are part of Exhibit P-6, Exhibit P-7 and Exhibit P-12, the answer to issue, should be in the affirmative. Whether the plaintiff proves that, the plaintiff is entitled to a decree in the sum of ₹ 6,55,70,725.95 together with interest thereon at 15% per annum from the date of filing of the suit until payment and/or realization? - HELD THAT - The issue is also answered in the negative. The suit is dismissed.

Summary

Issues Involved:
1. Subrogation of insurance policy rights.
2. Comprehensive settlement of one-time settlement (OTS).
3. Entitlement to the claimed amount with interest.
4. Final decree and order.

Issue-wise Detailed Analysis:

1. Subrogation of Insurance Policy Rights:
The plaintiff claimed that the rights of the defendant in the insurance policy were subrogated to him after paying the OTS amount. However, the court found no evidence to support this claim. The plaintiff's assertion was based on a letter dated 16.04.2003 (Exhibit P-7), which was merely a suggestion and not an agreement. The court emphasized that the correspondence, including letters marked "without prejudice," did not establish a binding agreement. The court cited the meaning of "without prejudice" from case law, stating that such correspondence cannot be considered as evidence of a concluded agreement unless both parties consent. Consequently, the court concluded that there was no binding agreement that the defendant would prosecute the suit against the insurance company on behalf of the plaintiff. Therefore, the court answered this issue in the negative.

2. Comprehensive Settlement of One-Time Settlement (OTS):
The defendant argued that the OTS was a comprehensive settlement and no amount was due to the plaintiff. The plaintiff's counsel conceded that the alleged agreement to continue the suit against the insurance company arose after the OTS. The court examined the correspondence and found that the OTS was indeed a comprehensive settlement. Thus, the court answered this issue in the affirmative.

3. Entitlement to the Claimed Amount with Interest:
Given the findings on the first two issues, the court determined that the plaintiff was not entitled to the claimed amount of ?6,55,70,725.95 with interest. The court noted that the plaintiff had been claiming interest upon interest to inflate the total claim. As the subrogation rights were not proven and the OTS was comprehensive, the court answered this issue in the negative.

4. Final Decree and Order:
Based on the findings, the court dismissed the suit with no order as to costs. The plaintiff failed to prove the subrogation of rights and entitlement to the claimed amount, and the OTS was found to be comprehensive, covering all claims.

Conclusion:
The court dismissed the suit, concluding that there was no subrogation of insurance policy rights to the plaintiff, the OTS was comprehensive, and the plaintiff was not entitled to the claimed amount with interest. The suit was dismissed with no order as to costs.