Subrogation - Indian Laws - General

Term `subrogation The term `subrogation in the context of insurance, has been defined in Black s Law Dictionary thus : The principle under which an insurer that has paid a loss under an insurance policy is entitled to all the rights and remedies belonging to the insured against a third party with respect to any loss covered by the policy. Black s Law Dictionary also extracts two general definitions of `subrogation . The first is from Dan B. Dobb s Law of Contract (2nd Edn. - # 4.3 at 404) which reads thus : Subrogation simply means substitution of one person for another; that is, one person is allowed to stand in the shoes of another and assert that person s rights against the defendant. Factually, the case arises because, for some justifiable reason, the subrogation plaintiff has paid a debt owed by the defendant. The second is from Laurence P. Simpson s Handbook on Law of Suretyship (1950 Edn. Page 205) which reads thus : Subrogation is equitable assignment. The right comes into existence when the surety becomes obligated, and this is important as affecting priorities, but such right of subrogation does not become a cause of action until the debt is duly paid. Subrogation entitles the surety to use any remedy against the principal which the creditor could have used, and in general to enjoy the benefit of any advantage that the creditor had, such as a mortgage, lien, power to confess judgment, to follow trust funds, to proceed against a third person who has promised either the principal or the creditor to pay the debt. ECONOMIC TRANSPORT ORGANIZATION VERSUS M/S. CHARAN SPINNING MILLS (P) LTD. ANOTHER - 2010 (2) TMI 1264 - SUPREME COURT