Sharma insured his goods in a warehouse against fire with XYZ Insurance Company. The goods were burnt and he recovered the full value of ₹ 10,00,000 from the insurance company. Subsequently he also sued the warehouse and

According to the doctrine of subrogation in a contract of indemnity, an insured cannot be allowed to make any profit from an insurance claim. He cannot take benefit of an insurance policy as well as any other alternative remedies. On the basis of the above principle, Mr. Sharma ought to return a sum of ₹ 10,00,000 to the insurance company. No, Sharma cannot retain the entire sum of ₹ 10,00,000 that he recovered from the warehouse after already receiving ₹ 10,00,000 from the insurance company. The principle of subrogation allows the insurer, after indemnifying the insured for their loss, to step into the shoes of the insured and recover the compensation from any third party responsible for the loss. The insured is not allowed to profit from the insurance contract, as insurance is meant to compensate for the actual loss suffered, not to enrich the insured.