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Volume 2 Issue 6| April 2022 ISSN: 2582-6433

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 EDITORIAL TEAM

EDITORS

Megha Middha
Megha Middha, Assistant Professor of Law in Mody University of Science and
Technology, Lakshmangarh, Sikar

Megha Middha, is working as an Assistant Professor of Law in Mody University

of Science and Technology, Lakshmangarh, Sikar (Rajasthan). She has an
experience in the teaching of almost 3 years. She has completed her graduation in
BBA LL.B (H) from Amity University, Rajasthan (Gold Medalist) and did her
post-graduation (LL.M in Business Laws) from NLSIU, Bengaluru. Currently, she
is enrolled in a Ph.D. course in the Department of Law at Mohanlal Sukhadia
University, Udaipur (Rajasthan). She wishes to excel in academics and research
and contribute as much as she can to society. Through her interactions with the
students, she tries to inculcate a sense of deep thinking power in her students and
enlighten and guide them to the fact how they can bring a change to the society

Dr. Samrat Datta

Dr. Samrat Datta Seedling School of Law and Governance, Jaipur
National University, Jaipur. Dr. Samrat Datta is currently associated
with Seedling School of Law and Governance, Jaipur National
University, Jaipur. Dr. Datta has completed his graduation i.e.,
B.A.LL.B. from Law College Dehradun, Hemvati Nandan Bahuguna
Garhwal University, Srinagar, Uttarakhand. He is an alumnus of KIIT
University, Bhubaneswar where he pursued his post-graduation
(LL.M.) in Criminal Law and subsequently completed his Ph.D. in
Police Law and Information Technology from the Pacific Academy of
Higher Education and Research University, Udaipur in 2020. His
area of interest and research is Criminal and Police Law. Dr. Datta
has a teaching experience of 7 years in various law schools across
North India and has held administrative positions like Academic
Coordinator, Centre Superintendent for Examinations, Deputy
Controller of Examinations, Member of the Proctorial Board

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 Dr. Namita Jain
Head & Associate Professor

School of Law, JECRC University, Jaipur Ph.D. (Commercial Law) LL.M., UGC -NET
Post Graduation Diploma in Taxation law and Practice, Bachelor of Commerce.

Teaching Experience: 12 years, AWARDS AND RECOGNITION of Dr. Namita Jain are
- ICF Global Excellence Award 2020 in the category of educationalist by I Can
Foundation, India.India Women Empowerment Award in the category of “Emerging
Excellence in Academics by Prime Time & Utkrisht Bharat Foundation, New
Delhi.(2020). Conferred in FL Book of Top 21 Record Holders in the category of
education by Fashion Lifestyle Magazine, New Delhi. (2020).Certificate of Appreciation
for organizing and managing the Professional Development Training Program on IPR
in Collaboration with Trade Innovations Services, Jaipur on March 14th, 2019

Mrs.S.Kalpana
Assistant professor of Law

Mrs.S.Kalpana, presently Assistant professor of Law, VelTech Rangarajan Dr. Sagunthala R &
D Institute of Science and Technology, Avadi.Formerly Assistant professor of Law,Vels
University in the year 2019 to 2020, Worked as Guest Faculty, Chennai Dr.Ambedkar Law
College, Pudupakkam. Published one book. Published 8Articles in various reputed Law
Journals. Conducted 1Moot court competition and participated in nearly 80 National and
International seminars and webinars conducted on various subjects of Law. Did ML in Criminal
Law and Criminal Justice Administration.10 paper presentations in various National and
International seminars. Attended more than 10 FDP programs. Ph.D. in Law pursuing.

Avinash Kumar
Avinash Kumar has completed his Ph.D. in International Investment Law from the
Dept. of Law & Governance, Central University of South Bihar. His research work
is on “International Investment Agreement and State's right to regulate Foreign
Investment." He qualified UGC-NET and has been selected for the prestigious
ICSSR Doctoral Fellowship.He is an alumnus of the Faculty of Law, University of
Delhi. Formerly he has been elected as Students Union President of Law Centre-1,
University of Delhi.Moreover, he completed his LL.M. from the University of Delhi
(2014-16), dissertation on "Cross-border Merger & Acquisition"; LL.B. from the
University of Delhi (2011-14), and B.A. (Hons.) from Maharaja Agrasen College,
University of Delhi. He has also obtained P.G. Diploma in IPR from the Indian
Society of International Law, New Delhi.He has qualified UGC – NET examination
and has been awarded ICSSR – Doctoral Fellowship. He has published six-plus
articles and presented 9 plus papers in national and international
seminars/conferences. He participated in several workshops on research
methodology and teaching and learning.

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 ABOUT US
INTERNATIONAL JOURNAL FOR LEGAL RESEARCH & ANLAYSIS ISSN
2582-6433 is an Online Journal is Monthly, Peer Review, Academic Journal,
Published online, that seeks to provide an interactive platform for the publication of
Short Articles, Long Articles, Book Review, Case Comments, Research Papers,
Essay in the field of Law & Multidisciplinary issue. Our aim is to upgrade the level
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INTERNATIONAL JOURNAL FOR LEGAL RESEARCH & ANALYSIS ISSN
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original, unpublished and is in consonance with the submission guidelines.

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DOCTRINE OF SUBROGATION: EVOLUTION AND
APLICATION IN THE CONTRACT OF INSURANCE
IN INDIA
Authored By- Amala I. M
Government Law College, Ernakulam.

Abstract
The term subrogation literally means ‘to substitute one person in the place of another’. This is an
equitable doctrine as it is recognised by the equity courts based on the principle of justice, equity
and good conscience. This Article mainly deals with two parts. The first part deals with the
historical evolution of the equitable doctrine of subrogation under the chancellorship of Lord
Hardwicke and its acceptance in common law courts. The second part is regarding the statutory
recognition of this doctrine in India and its application in the contract of indemnity insurance. The
right of subrogation is mainly recognised in debtor-creditor relationship and the contract of
insurance whereby the rights are transferred from the principal obligor to the subrogee, on payment
of the loss suffered or discharge of the debts, as the case may be. The rights of subrogation is
applicable to all indemnity insurance but, it does not allow the insured to gain from the loss caused.
Key words: Subrogation, Hardwicke, Equity, Randal, Indemnity insurance

Page | 4
 Introduction

This topic is a study on the historical evolution of the equitable doctrine of subrogation in the court
of equity, its application in the common law courts, the French influence on the doctrine and the
contemporary changes in the equitable doctrine through statutory recognitions namely, in the area
of insurance.
Equity is the system of justice which was administered by the High Court of Chancery set up with
the chancellors. Equity Courts has been adopted as a result of the inadequacies in common law
courts. The equity courts decide cases based on the principle of equity, justice and good conscience
and thereby developed new remedies to compensate the plaintiff.
The equitable doctrine of subrogation is one such remedy that was evolved in the High Court of
Chancery in England.

Doctrine Of Subrogation
Subrogation is a Roman word which means to put one person in the place of another or to substitute
someone for another with regard to a legal right or claim. The theoretical justification for the
equitable doctrine of subrogation was evolved under the chancellorship of Lord Hardwicke in the
case Randal v. Cockran1 decided in the High Court of Chancery. Thus, Hardwicke is recognized as
the founder of this doctrine. The word subrogation was taken from the French law and its origin is
traced back to the Roman civil doctrine ‘cessio actionum’. Rights of subrogation can arise in two
different ways2- either ipso jure i.e., by operation of law, or by express agreement as a part of the
contract. Contract of insurance is the common domain wherein the rights of subrogation are
applied. Subrogation as a matter of law is an equitable doctrine and brings in a broader term ‘unjust
enrichment’. The doctrine of subrogation is most relevant in the contract of insurance and sureties.
In each case, the basic theory is that where one person makes a payment on an obligation which, in
law, is the primary responsibility of another party, the person making the payment is subrogated to
the claims of the person to whom they made the payment which are now actionable against the
primary obligor.

1
1 Ves. Sen. 98, 27 Eng. Rep. 916 (1748)
2
M. L. Marasinghe, An Historical Introduction To The Doctrine Of Subrogation: The Early History Of The Doctrine
II, 10 ValpoScholar 275, 298 (1976), https://scholar.valpo.edu/vulr/vol10/iss2/4
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 History Of The Doctrine
The historical evolution of subrogation was examined under the chancellorship of Lord Hardwicke
in the decision of Randal v. Cockran in the first half of the eighteenth century. This landmark case
has marked the recognition of the doctrine with equity. Hardwicke in this case has suggested a
theoretical basis to the doctrine and justified the role of equity in the area of contribution. Randal
V. Cockran was preferred for appeal in the High Court of Chancery from the Court of Boston and
decided on 17 June 1748. The case arose out of a decree by King George II allowing compensation
to be paid to those affected during war with Spain. The facts of the case is that A ship which was
insured from London to Carolina was taken by a Spaniard, and later on it was retaken by an English
Privateer to Boston during the wartime. The ship was condemned and sold as no person was ready
to give security for the ship. The recaptors took their moiety from the sale proceeds and the residue
remained in the Court of Admiralty at Boston. The respondent insurer brought an action at law on
insurance policy for its recovery. Subsequently plaintiff filed an injunction that the defendant ought
to have recovered not more than the share of their loss. The court refused the injunction on the
ground that defendant had offered to rescue the disabled ship from loss and hence entitled to
recover the whole money insured. An insurer who has fully indemnified an insured against a loss
covered by a contract of insurance, may enforce in the insurer’s own name, any right of recourse
available to the insured. 3

Acceptance Of Randal In Common Law Courts

The basis advanced by Lord Hardwicke in Randal was readily accepted by common law courts.
Several cases illustrate the application of the equitable doctrine of subrogation in the common law
courts. In Mason v. Sainsbury4, the insured claimed for compensation against the insurance
company and local district administrative authority as his house was wrecked by the civil rioters.
The insurers paid their claim and were held entitled to recover from the district authority in the
name of the insured. Here, Lord Mansfield stated that “Every day the insurer is put in the place of
the assured5... The insurer uses the name of the insured”. The two facets discussed by the court
includes - Firstly, the insured cannot make a profit from the loss caused i.e., the principle of
indemnity does not allow the insured to be placed in a better position than the loss occurred.
Secondly, the insurer, having contributed to his claim will step into the shoes of the insured,

3
SWARB, https://swarb.co.uk/randal-v-cockran-17-jun-1948 (01/06/2022)
4
3 Doug. 61, 64, 99 Eng. Rep. 538, 540 (1782)
5
M. L. Marasinghe, An Historical Introduction To The Doctrine Of Subrogation: The Early History Of The Doctrine I,
10 ValpoScholar 275, 298 (1975), https://scholar.valpo.edu/vulr/vol10/iss2/4

Page | 6
thereby securing all the rights and remedies that were available to the assured.
In London Assurance Co. V. Sainsbury,6 the insurer having paid the assured as a result of the loss
sustained by civil rioters gave the insurer the right to recover the same from the third party, the
municipality. In addition to the prior recovery, he assured also claimed from the municipality. Lord
Mansfield, in the instant case stressed on the ipso jure transference of rights from the payee to the
payor. Buller, J. Stated the three aspects7, (1) the trust concept entitles the insurer to sue against the
tortfeasor of the insured after having paid the claim in accordance with the policy, (2) the insurer
step into the shoes of the assured, (3) the process of subrogation occurs by ipso jure transference of
rights.
In Lawson v. Wright,8 the plaintiff who was the executor of a surety paid the entire debt and
claimed for contribution from the co-surety. The court permitted he claim by justifying the role of
equity in the area of contribution and stated that he has “a right to call on another for contribution
in cases of this nature...[since] the origin of the court of equity.
By the end of the eighteenth century, both the common law courts and equity courts recognized the
application of this equitable doctrine. The developed doctrine hence provides that a person who had
paid a third party in discharge of the debts of the principal obligor, secured from that third party a
right to sue the principal obligor, for a contribution or for an indemnity. When the claim is made
among the joint sureties, and the claim is limited to a proportionate payment, it is in the nature of
‘contribution’. However, when the claim is for the recovery of the entire amount of loss, it would
be in the nature of ‘indemnity’ as in the case of contract of insurance.
Subsequently, by the beginning of the nineteenth century, the constituents of subrogation were
comprehensible as:
(1) The person having paid the third party on behalf of the principal obligor secures the right to
claim a contribution or an indemnity, as the case may be.
(2) The acquisition of the so-called right is obtained ipso jure and not under any express
agreement.
(3) It was accepted by both common law courts and equity courts that the right so acquired
against the principal obligor is an operation of equity and not of common law.

6
3 Doug. 245, 99 Eng. Rep. 636 (1783)
7
M. L. Marasinghe, An Historical Introduction To The Doctrine Of Subrogation: The Early History Of The Doctrine I,
10 ValpoScholar 275, 298 (1975), https://scholar.valpo.edu/vulr/vol10/iss2/4
8
1 Cox. 275, 29 Eng. Rep. 1164 (1786)
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 French Influence On Hardwicke’s Doctrine
By the middle of the nineteenth century the concept laid down in Randal received wide acceptance
both in common law courts and in equity courts. The English courts looked into other domains
where a similar equitable doctrine was followed to name the English concept of Hardwicke. After
1850, the English courts recognised a similar equitable remedy in the French law which was
labelled ‘subrogation. The French remedy was traced back from the Roman civil doctrine of ‘cessio
actionum’9. However, the English doctrine of subrogation and the Roman doctrine of cessio
actionum displays several similarities and differences. The most obvious similarity between the two
doctrines are that both of them deal with the transference of rights from one person to another
whereas the main difference between the two is in the mode of its transference. Subrogation relates
to the ipso jure transference of rights by the parties without any express agreement whereas, cessio
actionum is an enforcement of a simple contract wherein rights are transferred through express
agreements.
Quebec Fire Insurance Company v. Augustin St. Louis and John Molson10 appears to be the first
case where the French concept of Subrogation was used. This case was preferred on appeal from
the Court of Appeals of the Province of Lower Canada to the Privy Council. In the instant case, the
respondent’s servants were held negligent for causing fire which partially destroyed a parish
church. In consideration of the claim satisfied by the insurance company, the priest and the
Marguilliers-in-charge of the church transferred their right to sue the respondants by means of a
notarial instrument to the appellants for recovering their amount. On account of this notarial
instrument, the insurers sued against the original tortfeasors. The Court of Appeal of Lower Canada
reversed the judgement of the Court of Queen’s Bench on the ground that the rights of the insured
has not been subrogated to insurer and held that the suit is not maintainable as the insurers has tried
to enforce the rights derived from the assured. On appeal to the Privy Council, it was held that the
notorial instrument entitles the insurer the right which the assured had against the respondents.
In succeeding years, the word ‘subrogation’ and the theory evolved in Randal combined into the
doctrine of subrogation and Lord Hardwicke became accepted as its founder.
The term ‘subrogation’ was first used in the English case, Stringer v. The English and Scotch
Marine Insurance Company11. In this case, the plaintiffs insured a ship cargo with the defendants
which was subsequently captured by a US cruiser and taken to New Orleans where a suit for its
condemnation was filed. The plaintiffs succeeded the action and the captors appealed. On appeal,

9
Fred Wells Hargreaves, Subrogation Of Insurers (Cornell Law Library) 1, 22 (1891), scholarship.law.cornell.edu.
10
7 Moo. P.C. 286, 13 Eng. Rep. 891 (1851)
11
L.R. 4 Q.B. 676 (1868-69)
Page | 8
the court ordered the plaintiff to furnish security against costs which they could not afford, for
which the ship was condemned. As a result, the plaintiff subsequently gave a formal notice of
abandonment of the cargo and requested the insurers to pay for the entire loss. Having paid the
entire loss, the insurers were entitled to be subrogated in the position of the plaintiffs i.e., the
insured and to recover the ship cargo.
The meaning of subrogation became more clarified in Darrell v. Tibbitts12. Forbes owned a house
and leased the same wherein he placed the duty upon the lessee to make repairs in the event of any
explosion. An explosion occurred, due to the negligence of an employee of the Brighton
Corporation. The lessee made the repairs and subsequently recovered the loss from the corporation.
The house was then sold by Forbes to Tibbitts with the benefit of the insurance policy. The insurer,
without knowledge of the payment made to the first lessee by the Brighton Corporation, paid the
new owner in conformity with the policy. Subsequently, the insurers became aware of the first
payment and sought to recover their amount. Lord Justice Brett clearly stated the doctrine of
subrogation as it applied to insurance:13
“Where something is insured against loss either in a marine or a fire policy, after the
reimbursement by the insurer to the assured for the loss, the insurers are put into the
place of the assured and secure every rights and claims which the insured previously
had.”
The application of subrogation in the principle of indeminity was recognised by Lord Justice Brett
in Castellain v. Preston14. The vendor was in the process of selling his house which was insured
against fire. After the execution of sale and payment of purchase consideration, the house got
destroyed by fire before it was actually transferred to the vendee. Without the knowledge of the
sale, the insurer reimbursed the loss amount in conformity with the policy. After the fact of sale
was known, the insurer sued the vendor for recovery of their amount. The Court, in Castellain,
refused the action filed by the insurer on the ground that the insurance company was claiming a
right to be subrogated to a contract between the assured and third party that was not in existence at
the time of maturity of the insurance policy. This decision of the Lower Court was reversed by the
Court of Appeals, stated that fundamental principle of the contract of insurance in marine and fire
policy is the principle of indemnity whereby the insured shall be fully indemnified for the loss
against policy but not more than the loss.

12
5 Q.B.D. 560 (1880)
13
IMITHAL. BABIKER AHMED, SOME ASPECTS OF THE DOCTRINE OF SUBROGATION IN INSURANCE
LAW 72, (core.ac.uk 2006)
14
8 Q.B.D. 613 (1881-82)
Page | 9
 Application Of Subrogation In Insurance Law In India
New openings in the field of commerce and the increasing demand of markets has greatly
influenced the development of the doctrine of subrogation. The right of subrogation arises under
tort, contract, and other statutes which create a liability to make compensation arising out of a
breach thereof. The types of subrogation are mainly divided into - Indemnity insurance’s
subrogation rights, Surety’s subrogation rights, Subrogation rights of the business creditors,
Lender’s subrogation rights, Banker’s subrogation rights, and Trustee’s subrogation rights. 15

Application Of Subrogation In Contract Of Insurance

Insurance is a contract of indemnity whereby, the insurer in return for the premium paid by the
insured for any unforeseen risk, indemnifies the insured for any financial loss to the subject matter
so insured. The fundamental principle in the contract of indemnity states that in case of loss, the
insured shall be indemnified to the extent of the loss sustained and cannot make profit from the
loss. There are two categories of insurance which may be termed as ‘indemnity insurance’ and
‘contingency insurance’. The indemnity insurance is an indemnity against loss as in the case of fire
policy and marine policy. Contingency insurance is concerned with the payment upon a contingent
event and not a matter of indemnity as in the case of life policy or personal injury policy. The
doctrine of subrogation is applicable to all indemnity insurance.
The contract of indemnity provided under section 124 of Indian Contract Act, 1872 is a
fundamental element to the equitable doctrine of subrogation whereby, the insurer having satisfied
the claim of the insured pursuant to the insurance policy is subrogated in the position of the insured
and thereby derive the rights of the insured to sue the third party or the original tortfeasor. 16
Insurance law is law relating to insurance policies and claims. The principal legislation regulating
insurance in India is the Insurance Act, 1938.17 The right of subrogation is statutorily recognised
under Section 79 of the Marine Insurance Act, 1963. The section provides that: 18
“If the insurer pays for a total loss of the subject- matter insured, he secures all the rights of
the assured in the subject matter and is subrogated to the position of the assured. Whereas, if
the insurer satisfies only a partial loss, he acquires no title to the subject matter insured but
he is subrogated to all rights and remedies of the assured and in respect of the subject matter
so far as the assured has been indemnified.”

15
Nishi Bhandari, Doctrine of Subrogation and its uses in Contract of Guarantee, 3 (IJARND) 29, 30 (2018)
www.ijarnd.com.
16
Praveen Nagree-Mahtani, Insurance Law & Regulations In India p.1, 25 (2002) www.nishithdesai.com
17
C. A Rajkumar S. Adukia, Insurance Laws of India p.1, 13 (www.caaa.in)
18
Marine Insurance Act, 1963, No. 11, Acts of Parliament, 1963 (India).
Page | 10
A few Indian cases to illustrate the decisions on insurance law are mentioned. Economic Transport
Organization v. Charan Spinning Mills19, The `Assured’ is a manufacturer of the cotton yarn
insured from the National Insurance Co. Ltd, covering transit risks in cotton yarn sent by it to
various consignees through rail or road against theft, pilferage, non-delivery and/or damage. The
appellant, a `carrier' for transportation and delivery to a consignee at Calcutta was entrusted a
consignment of hosiery cotton yarn of the value of Rs.7, 70,948/- to. The vehicle carrying the said
consignment met with an accident and the goods were completely damaged. On the assessment of
the damage, the insurer settled the claim of the first respondent for Rs.447, 436/-. On satisfying the
claim, the assured issued a Letter of Subrogation-cum-Special Power of Attorney in favour of the
insurance company. Thereafter, the insurer and the insured filed a complaint under the Consumer
Protection Act, 1986 against the appellant before the District Consumer Disputes Redressal
Commission, Dindigul, claiming compensation of Rs.447,436/- with interest at 12% per annum, for
deficiency in service, as the damage to the consignment was due to the negligence on the part of the
appellant and its servants. The District Forum directed the appellant to pay Rs.447, 436/- with
interest at the rate of 12% per annum from the date of accident till date of payment to the Insurer,
on the basis of the subrogation.

The principles relating to subrogation subsequently encapsuled in this case are:20

(i) Equitable right of subrogation confers rights of the assured against the original
tortfeasor in favour of the insurer on payment of entire loss.
(ii) Subrogation entitles the insurer to sue the wrongdoer for the amount paid to the assured
for the loss.
(iii) Where a letter of subrogation is issued by the insured, the rights of assured in favour of
the insurer will be governed by the letter of subrogation.
(iv) On satisfaction of claim by the insurer, subrogation enables the insurer to sue the
wrongdoer in the name of the assured.

In United India Insurance Co. Ltd. V. Levis Strauss (India) Pvt. Ltd21., the Supreme Court held that
where there is an overlapping in insurance policies, the insured is fully indemnified by one insurer,
and the second insurer is not liable for the claim. The court referred to Castellain v. Preston and
held that the insured can be indemnified only to the extent of loss and no double indemnity is

19
JT 2010 (2) SC 271, 2010 (2) SCALE 427, (2010) 4 SCC 114, 2010 (2) UJ 1004 (SC)
20
INDIANKANOON, https://indiankanoon.org (01/06/2022)
21
33 (1833) 11 QBD 380. 26.
Page | 11
allowed.
New India Assurance Co. Ltd. & M/s Ahuja Radios v. M/s Harsh Transport Pvt. Ltd 22., the
defendant, a common carrier was entrusted by Ahuja Radios to dispatch their duly packed goods
from Delhi to Bhopal. The vehicle transporting these goods were hijacked by thieves and the
materials were stolen. The insurer on settling the claim of loss suffered by the plaintiff sued the
defendant’s company to reimburse their amount. It was held by the Delhi District Court that the
insurance co. is entitled to recover the damages indemnified in favour of the plaintiff.
In all these cases the Indian Courts commonly points out the rights of insurer to sue the wrongdoer
in the place of assured on settling their claim of loss. The binding nature of subrogation in all
indemnity insurance policies and its effect on the insurer to sue the original tortfeasor in the name
of the assured is clearly recognised. Though there are two main categories of insurance termed as
life insurance and general insurance, the doctrine of subrogation is applicable to those contracts of
insurance which has an element of indemnity inherent in it23. Hence, the primary feature of
subrogation in the contract of insurance is to subrogate insurer in the position of the assured.

22
AIR 1997 P H 257, (1997) 116 PLR 339.
23
INDIANKANOON, https://indiankanoon.org (01/06/2022)
Page | 12
 Conclusion

The historical evolution of the doctrine of subrogation traced back from the Roman Civil law and
its French influence from the French doctrine cessio actionum has revealed a major similarity and
difference between the both. The similarity between these two doctrines are that, both of them deal
with the transference of rights from one person to another. And, the major difference to be noted is
that subrogation is the transference of rights ipso jure whereas, in cessio actionum an express
agreement must always precede the payment for transferring rights. In other words, subrogation is
the application of equity and cessio actionum is the enforcement of contract where, both of them
deals with tranferance of rights. Also, the theoretical justification to the equitable doctrine of
subrogation is clearly laid down by Lord Hardwicke in Randal v. Cockran which was then
commonly accepted by common law courts and equity courts.
While discussing the contemporary change in the equitable doctrine of subrogation, it can be well
established that this doctrine which evolved from the principle of Justice, equity and good
conscience in the equity courts was subsequently added to Indian statutes. The right of subrogation
is now statutorily recognised under Section 79 of Marine Insurance Act and Section 92 of Property
law. The application of subrogation is recognised in various domains of law. Contract of indemnity
insurance is one such domains where the doctrine of subrogation is applied.
The final part of the Article which examines the right of subrogation in the contract of insurance
through Indian case laws points out the significance and application of the doctrine in the contract
of insurance. For the application of subrogation in insurance, the principle of indemnity should be
an inherent element in the contract. The contract of indemnity is a contract whereby one party
promises to indemnify loss caused to the other. Thus, all contracts of indemnity insurance such as
fire policy and marine policy are a promise by the insurance company to indemnify the
policyholder to the extent of loss caused. On payment of the claim made by the assured, the insurer
step into the shoes of the assured i.e., the insurer secures the right to sue the third party in the name
of the assured for the loss thereby subrogating the insurer in the position of the assured.

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