Good article on subrogation( Transfer of property Act)

S 92 OF TRANSFER OF PROPERTY ACT -SUBROGATION

Subrogation is a Roman term meaning “substitution”. It is the right of person to stand in the place of a creditor. When a mortgagee transfers his mortgage debt, his assignee becomes vested with all his rights that is his assignee is substituted or subrogated in the place of mortgagee. In order to be entitled to subrogation, a person must pay off the entire amount of a prior mortgage, because subrogation takes place by redemption,and unless there is redemption, there can be no subrogation. Partial payment of mortgage-debt can not give rise to a claim for a partial subrogation.

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Difference between subrogation U/S 92 and S 135A the Transfer of Property Act, 1882

The difference between subrogation under Section 92 of the Transfer of Property Act, 1882, and Section 135A of the Act is that under Section 92 the subrogation results in the extinction of the original mortgagee's rights and, therefore, the original mortgagee has no more rights under the mortgage, whereas a subrogee under Section 135A acquires rights only to the extent of his payment which may be less than the rights of the assured himself. Another distinction is that the person who redeems under Section 91 is an interested person or a surety or a creditor and under that section that subrogee would get the rights conferred under Section 69 of the Indian Contract Act, 1872, because it would be a payment made by a person interested; but in the case of subrogation under Section 185A the insurer pays under his own contract of insurance and he is not interested in discharging the liability of the wrongdoer or the tortfeasor. The third distinction is that Section 92 confers on the person redeeming rights of the mortgagee "against the mortgagor or any other person". It is these words that confer the right to sue. There are no such words in Section 135A(2) and (3) as "against the wrongdoer or tort-feasor."

Bombay High Court

Oriental Fire & General Insurance ... vs American President Lines Ltd. And ... on 12 February, 1968

Equivalent citations: (1968) 70 BOMLR 487, 1968 38 CompCas 294 Bom,1970MhLJ156

Bench: Chitale, J Nain

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