Mohammed Saleh Behbehani & Company v. Bhoja Trader
1981-05-18
CHANDAN KUMAR BANERJEE, RAMENDRA MOHAN DATTA
body1981
DigiLaw.ai
JUDGMENT Datta, J.: In this interlocutory application the appellant is asking for stay of the operation of the order of D. K. Sen, J. passed on May 4, 1981. After delivering his judgment the learned Judge ordered that the vessel would be released on furnishing security to the extent of United State Dollars 4450 in equivalent India rupee at the current exchange rate. It was directed that the security might be given in cask or by a Bank Guarantee within a week from the said date. The Registrar was to issue the instrument of release and the Marshal was to release the vessel on a signed copy of the minutes. The plaintiff was directed to pay the cost, expenses and remuneration of the Marshal. 2. Prior to that on April 25, 1981 on the application of the plaintiff appellant the learned Judge made an order for arrest of the vessel as follows ;- "There will be an order in terms of prayers (a) and (b) of the affidavit. The Registrar, Origenal Side, is directed to issue the Writ of Arrest expeditiously. It is made clear that the defendants will be entitled to apply for release of the vessel on furnishing security. The plaintiff is directed to deposit with the Marshal Rs. 1,000/- at the first instance on account of Marshal's costs and charges. It is made clear that the vessel is to be arrested on the signed copy of the minutes. The Registrar, the Marshal and all parties to action a signed copy of the minutes subject to the usual undertaking." Pursuant to the said order the said vessel M. V. "NOTIS" also known as “Bhoja Trader" lying at K.P. Docks was arrested by the Marshal. The said arrest is still continuing. On April 27, 1981 on behalf of Intra Co. Ltd. a foreign company of British, West Indies, the matter was mentioned before the learned Judge praying for release of vessel. The matter was directed to appear marked as to be mentioned on April, 28 1981. On the said date an affidavit was filed on behalf of Intra Co. Ltd. in opposition to the said original application for arrest. It stated therein that the said vessel has since been acquired by purchaser Intra Co. Ltd. On April 16, 1981 from the previous owners of M.V. "NOTIS" and the name thereof was changed to M. V. "BHOJA TRADER".
Ltd. in opposition to the said original application for arrest. It stated therein that the said vessel has since been acquired by purchaser Intra Co. Ltd. On April 16, 1981 from the previous owners of M.V. "NOTIS" and the name thereof was changed to M. V. "BHOJA TRADER". It was also stated that the said vessel was delivered to Intra Co. Ltd. On April 16, 1981 at Calcutta by singing a "Protocol of delivery". The said vessel was said to be registered in the Republic of Panama on April 21, 1981 in the said name of “BHOJA TRADER". In the application before us a provisional certificate of registration has been relied on. 3. According to the plaintiff appellant on January 19, 1981 a charter-party agreement was entered into by and between them and the owners of the vessel M. V. "NOTIS" whereunder the vessel sailed from Korea to the Port of Calcutta and thereafter it was due to sail from the Port of Calcutta to Kuwait. According to the plaintiff appellant there were breaches of charter-party committed by the said vessel and in respect thereto the owners were asked to remedy the said breaches. As such breaches were not remedied the plaintiff appellant on April 13, 1981 at Calcutta issued notice to the respondent terminating the said charter-party. On April 24, 1981 having come to know that the vessel sought to change hands the plaintiff appellant rushed to Court by moving the said application on April 25, 1981 at the residence of the learned Judge by a Special Appointment. On April 30, 1981 an affidavit was filed on behalf of the plaintiff appellant in the said proceeding before the learned Judge of the Court below and thereafter the matter was heard and on May 4, 1981 the judgment and order was passed by the Court below. On the very same day i.e. on May 4, 1981 the appeal was preferred and the application was moved for an ad interim order. The Appeal Court made an order on May 4, 1981 granting an ad interim order for stay of the operation of the order of the Court below and directing the appellant to deposit a sum of Rs. 10,000/- with its advocate on record by way of security for costs and a further sum of Rs. 1,000/- with the Marshal for the expenses for further maintenance of the vessel. 4.
10,000/- with its advocate on record by way of security for costs and a further sum of Rs. 1,000/- with the Marshal for the expenses for further maintenance of the vessel. 4. On behalf of the appellant it is contended that the learned Judge was wrong in allowing the order of arrest to be reopened by allowing an affidavit to be filed therein. It is submitted that once the order for arrest was made the application was finally disposed of. The application for release of the vessel could only have been moved separately after full security had been furnished to cover the amount claimed in the plaint The learned Judge while making the order for arrest directed that in case the defendant respondents would apply for release of the vessel they would do so on furnishing security, meaning thereby full security, to cover the entire claim in the plaint. That being so, the defendant respondent could not apply for release without furnishing security as aforesaid. This Court in its Admiralty Jurisdiction has framed rules which are set out in Appendix 5 of the said rules of the High Court at Calcutta (1914), Original Side. Our attention has been drawn to Rules 3, 4, 5, 6, 12, 17, 18, 19, 20 and 24 of the said Admiralty Rules of this Court. 5. Although in many cases an application for issue of the Instrument of release is made separately our attention has been drawn to several reported decision wherein the matter was dealt with in the same application. That being so, in this interlocutory application, without anything more, we would not finally decide the question but from the prima facie point of view we are inclined to hold that in the facts and circumstances of this case the procedure adopted by the learned Judge does not call for any interference with his order on this point as raised herein this application. 6. The next point urged before us is that Clause 26 of the Charter of 1774, whereby the Admiralty Jurisdiction was vested in the then Supreme Court of Judicature at Fort William in Bengal, is still in force and the same still governs the Admiralty Jurisdiction of this Court by virtue of the preservation thereof by the subsequent Letters Patents and the Government of India Acts and ultimately by the Constitution of India.
The language of the said Clause 26 of the Charter of 1774 is so wide that prima facie it appears that the causes mentioned therein would cover the case of a claim for damages arising out of the breach of the charter-party so as to enable the plaintiff appellant to proceed in rem in the Admiralty Jurisdiction and to have the order for arrest of the vessel. Clause 26 of the Charter of 1774 reads as follows ;- "And it is our further will and pleasure, and lie do hereby grant order in, establish, and appoint that the said Supreme Court of Judicature, at Fort William in Bengal, shall be a Court of Admiralty; in and for the said provinces, countries, or districts of Bengal, Bihar and Orissa and all other territories and islands adjacent thereunto, and which now are, or ought to be, dependent thereupon, and we do hereby commit and grant to the said Supreme Court of Judicature, at Fort William in Bengal, full power and authority to take congnizance of hear examine try and determine all Causes, Civil and maritime, and all pleas of contracts, debts, exchanges, policies of assurance, accounts charter-parties agreements, loading of ships, and whatsoever relate to freight, or money due for ships hired and let out, transport-money, maritime usury or bottomry or to extortions, trespasses, injuries, complaints, damands, and matters, Civil and maritime of ships and vessel employed or used within the jurisdiction aforesaid, or between others contracted done, had, or commenced, in upon or by the sea, or public rivers, or ports, creeks, harvours, and places over flown, within the ebbing, and flowing of the said and high-water mark, within, about and throughout the said three 'provinces', countries or districts of Bengal, Bihar and Orissa and all the said territories or islands adjacent thereunto, and dependent thereupon, the cognizance whereof both belong to the jurisdiction of the Admiralty as, the same G used and exercised in that part, of Great Britain ,called England, together with all the singular, their incidents, emergents, and dependencies annexed and connected causes whatsoever, and to proceed summarily therein with all possible despatch, according to the course of our Admiralty of that part of Great Britain called England, without the strict formalities of law, considering only the through of the fact, and the equity of the case." 7.
It is contended that the said clause should be interpreted and be read as vesting the Admiralty Jurisdiction on the Supreme Court of Judicature at Fort William in Bengal in respect of all matters enumerated therein including those relating to charter-party agreement and all matters and contracts relating to freight or money due for ships hired and let out and matters Civil and maritime whatsoever between merchants, owner and proprietors of ships and vessels employed or used within the jurisdiction of the then Supreme Court. It is contended further that the expression "the cognizance whereof both belong 'to the' jurisdiction of the admiralty, as the same is used and exercised in that part, of Great Britain, called, "England" related to the procedural matter in respect of the exercise of such jurisdiction which was vested in recpect of matters enumerated therein. In that sense that jurisdiction of the Admiralty Court of the Supreme Court of judicature at Fort William in Bengal might have been much wider than that of the High Court of Admiralty in England but nevertheless such were the powers vested by the said charter and it should be interpreted in that manner. 8. Admittedly in 1774 actions on charter-party would not be brought on the Admiralty Jurisdiction of the Admiralty Court in England. The Admiralty Court got its jurisdiction to try such claims arising out of damages for breach of charter-party not earlier than in 1920. 9. In our opinion the above contentions raised on behalf of the plaintiff appellant herein are not, acceptable. We have considered the several decisions placed before us and it appears therefrom that the learned Judge have interpreted the said clause of the said charter to mean, that the jurisdiction of the Admiralty Court as conferred by the said Clause 26 of the charter was to be exercised to the same extent as it used to be exercised by the Admiralty Court in England. It follows, therefore, that although the matters or causes enumerated in the said clauses were wider in amplitude still the same could not be exercised beyond what could be exercised by the Admiralty Court in England. 10. Our attention has also been drawn to the provisions of Colonial Courts of Admiralty Act, 1890, (53 & 54 Viet.
It follows, therefore, that although the matters or causes enumerated in the said clauses were wider in amplitude still the same could not be exercised beyond what could be exercised by the Admiralty Court in England. 10. Our attention has also been drawn to the provisions of Colonial Courts of Admiralty Act, 1890, (53 & 54 Viet. C. 27) and the declaration made to make, some of the courts in India Colonial Courts of Admiralty, by enacting Colonial Courts of Admiralty (India) Act 1981. The, combined effect of the said two statutes was that this High Court, exercising Admiralty Jurisdiction became a Colonial Court of Admiralty. The said two statutes are still in force and the Admiralty Jurisdiction of the present. High Court was preserved and continued by the relevant provisions of the Government of India Act, 1919 and the Government of India Act, 1935 and subsequently by the Constitution of India. That being the position, we have to consider the provisions of sub-section (2) of section 2 of the Colonial Court of Admiralty Act, 1890 (53 & 54 Viet., C. 27) which runs as' follows: - "(2) The jurisdiction of a Colonial Court of Admiralty shall, subject to the provisions of this Act, be over the like places, persons, matters, and things, as the Admiralty Jurisdiction of the High Court in England, whether existing by virtue of any statute or otherwise, and the Colonial Court of Admiralty may exercise such jurisdiction in like manner and to as full an extent as the High Court in England, and shall have the same regard as that Court to international "law and the comity of nations." 11. The above provision make it abundantly clear that the Colonial Court of Admiralty would exercise such Admiralty Jurisdiction over matter sand things as was exercised by the Admiralty Jurisdiction of the High Court in England, whether existing by virtue of a statute or otherwise, and could not exercised any power beyond what could be exercised by the Admiralty Jurisdiction of the High Court in England. The above provisions seems abundantly to suggest that the true construction of Clause 26 of the Charter of 1774 is also that it vested the Supreme Court of Judicature at Fort William in Bengal with limited jurisdiction even though the causes mentioned therein were of very wide amplitude in the opening part of the said Clause 26.
The above provisions seems abundantly to suggest that the true construction of Clause 26 of the Charter of 1774 is also that it vested the Supreme Court of Judicature at Fort William in Bengal with limited jurisdiction even though the causes mentioned therein were of very wide amplitude in the opening part of the said Clause 26. If the interpretation which has been canvassed on behalf of the appellant with regard to the latter put of Clause 26 is accepted, then the same would definitely be in conflict with the jurisdiction vested by the said two statutes of 1890 and 1891, which had conferred Admiralty' Jurisdiction on the High. Court of Judicature at. Fort William in Bengal. But such jurisdiction has not been expended or modified any further beyond what was done by the said Acts of 1890 and 1891. However, undignified it might seem today, the fact remains that this Court and the High Courts at Madras, Bombay and others vested with Admiralty Jurisdiction still function as Colonial Courts of Admiralty, as declared to be so by the said Act of 1891, even after 31 years of independence and it is unfortunate that this fact untill now has practically gone unnoticed by the Legislature of our country, even though from time to time this has been sought to be noted in some judgments of different courts in India. The result, therefore, is that the scope of the Admiralty Jurisdiction of this Court would be determined by the law in England as the same existed and used to be administered upto 1890 by the Admiralty Court of England. The effect of sub-section (2) of section 2 of the Colonial Courts of Admiralty Act, 1890 came to be, considered by the judicial committee of the Privy Council in the case of (1) Yuri Maru v. The Woron, reported in LR 1927 AC 906 at page 909 of the said report it was observed : "The jurisdiction in Admiralty of the High Court of Justice in England did not extend to claims upon charter-parties at the time when the Colonial Courts of Admiralty Act 1890, became law.
Jurisdiction over such claims was given in the first instance by the Administration of Justice Act, 1920, section 5, in terms which have no apparent reference to courts out of England, since a proviso in the section limits the costs of actions recoverable thereunder in certain events by the amount of being brought in a country court". The Judicial Committee at the bottom of page 915 observed:" On the whole, the true intent of the Act appears to their Lordships to have been to define as maximum of jurisdictional authority for the Courts to be set up thereunder, the Admiralty Jurisdiction of the High Court in England as it existed at the time when the Act passed. What shall from time to time be added or excluded is left for independent legislative determination". 12. That was also an action instituted in the Admiralty Jurisdiction in a claim for damages for breach of charter-party where the ship had been arrested within the jurisdictional limits of the Court. The Judical Committee upheld the decision of the Exchequer Court of Canada, reversing the decision of the local Judge (Martin, J.) of the British Columbia, Admiralty District, who held that the Admiralty Court had jurisdiction. 13. It is further to be noted that the Admiralty Rules of this Court which came into force on 16th December, 1911 were framed under the Colonial Courts of Admiralty Act, 1890 and the same being followed in exercising the Admiralty Jurisdiction of this Court ever since. There is no reference to the Chatter of 1774 in those rules (See Ormond's Rules of the Calcutta High Court 1914, Original Side, Fourth Edition, pages 789 and 790) Several decisions have been placed before us where from it would appear that Clause 26 of the Charter of 1774 has been interpretated to mean that in respect of exercising Admiralty Jurisdiction, the substantive be the same as existed and used to be exercised by the Admiralty Court in England upto 1890 (2) Jayaswal Shiping Company v. Owners & Parties interested in Steamship “S. S. Leelavati" 58 CWN 468, (3) Rungta Sons Pvt. Ltd. & Another v. the Owners & parties interested in S. S. Edison Mariner & Another, 66 C WN, P 1083, (4) Kamalkar Mahadev Bhagat v. Scindia Steam Navigation Co. Ltd., Bombay AIR 1961 Bombay P. 186, (5) National Co.
Ltd., Bombay AIR 1961 Bombay P. 186, (5) National Co. Ltd. v. Asia Mariner M. S. The Owners & "Parties interested in 72 CWN P. 635. (6) The Telena (1901) 29 ILR Cal 402). In the last mentioned case, viz. The Telena Harington, J. proceeded on the basis that the Admiralty Jurisdiction was conferred on this Court by the said Colonial Courts of Admiralty Act, 1890 (53 & 54 Viet. C. 27) (See also (7) Bengal Assam Steamship Co. Ltd. v. Owners & Parties interested in S. S. "Shanku Maru" reported in AIR 1937, Calcutta Page 122 where Pankridge, J. while interpreting Clause 26 of the Charter of 1774 took the view that the Admiralty Jurisdiction of the Supreme Court was defined by the said Clause 26 of the Charter which conferred upon the Supreme Court the jurisdiction in Admiralty "As the same is used and exercised in that part of Great Britain, called England". 14. The result, therefore, is that the scope of the Admiralty Jurisdiction of this Court would be determined by the Law in England as administered by the Admiralty Court in England. Taking a prime facie view of the matter it seems, however broadly worded it might have been, the framers of Clause 26 might have in mind that in the future from time to time the jurisdiction of Admiralty Court of Bengal would be extended as and when required alongwith the extension of the Admiralty Jurisdiction of the Admiralty Courts in England. This is the only way the broad language of Clause 26 can be explaind. As it is, it seems that the intention of the framers of Clause 26 was to bring about a uniformity in the administration of Admiralty Jurisdiction as existing and exercised by the High Court of Admiralty in England and the then court in Bengal created by Clause 26 of the charter. It appears that since the Supreme Court was established and was vested with Admiralty Jurisdiction by the said charter the framers therefore invested the Supreme Court with all matters which might come within the scope of an admiralty action but if could exercise such jurisdiction only in respect of such matters over which the Admiralty Court of England could exercise jurisdiction.
The claims relating to the charter-party being a matter comeing within the scope of, jurisdiction of the Admiralty Court in England not earlier that 1920 i.e. later than 1890, such a cause could not be entertained by the Admiralty Jurisdiction of this Court. 15. Mr. Sen has referred to scrutton on charter-parties, 13th Edn. page 461 and has brought it to our notice that by the Acts of 1868 and 1869, the Country Courts of England had been exercising the Admiralty Jurisdiction in respect of charter-party. In the foot note it is stated that “it gave the county Court a wider jurisdiction as to charter-parties and was enjoyed by the Admiralty Division of the High Court under the old Act of 1861; The Montrosa, (1917) page 1, but the jurisdiction of the High Court is not lay by assimilated to that of the country Court by the Act of 1920. “From the said passage in the foot note, Mr. Sen has argued that it will be clear therefrom that even the Courts of lower jurisdiction could be vested with larger powers, than what are enjoyed by the higher Courts. Likewise, it was quite possible that the framers of the Charter of 1774 could think of vesting the Supreme Court of Judicature at Fort William in Bengal with larger powers than that used to be enjoyed by the Admiralty Courts in England in 1774 and that was the reason why Clause 26 of the Charter of 1774 was framed in that wider manner. In our opinion, the colonial Courts in the same manner as was being exercised by the High Court in England. The result, therefore, is that the said passage in scrutton on chater-parties could not have any application in so far as the High Courts in India are concerned. That being so, the country Courts’ exercise of jurisdiction could not vest the Court of Admiralty in India with the cause of action in damages in charter-parties. 16. This is the prima facie view that we take of the matter and on hat basis we come to he finding that as at present advised, the order of the Court below should not be interfered with. 17. Mr.
16. This is the prima facie view that we take of the matter and on hat basis we come to he finding that as at present advised, the order of the Court below should not be interfered with. 17. Mr. Deb at one point of time in course of hearing of this application has offered to deposit U. S. Dollars 85, 000 with this Court for release of the vessel, pending disposed of this application but the parties herein wanted to have the matter decided to ascertain in the correct position regarding the jurisdiction of this Court. Mr. Sen has contended that if the said sum is deposited, the same should be held even for the benefit of his client in case his client has to file a suit in the original jurisdiction, of this Court but Mr. Deb’s clients are not agreeable to that. That being the position, we do not think that we should make any order with regard to the offer that was made by Mr. Deb on instruction from his clients in asmuch as the same was offered in a very limited way. 18. Mr. Deb has further contended that after the charter-party agreement was terminated his client became the purchaser of the vessel. That being so, his client has become the bona fide purchaser for value without notice of the charter-party and their rights can not be affected in any by the said charter-party lien as provided under Clause 18 of the charter-party agreement. We cannot accept this contention of Mr. Deb at this stage in the facts and circumstances, disclosed herein. Mr. Deb had produced before us a provisional certificate of registration of the vessel to show that his client had the title over the said vessel which was transferred in their favour. Reliance was placed by Mr. Deb on the Commercial Documents Evidence Act to show that such documents shall be presumed to be correct. In this connection Mr. Sen has referred to a passage form Benjamin on sale, 1974 Edn. Page 52, paragraph 74, where it stated:- “In a case dealing with a registered American ship in 1867, Turner, L. J. said : A ship is not like an ordinary personal chatter, it does not pass by delivery nor does possession of it prove the title to it.
Sen has referred to a passage form Benjamin on sale, 1974 Edn. Page 52, paragraph 74, where it stated:- “In a case dealing with a registered American ship in 1867, Turner, L. J. said : A ship is not like an ordinary personal chatter, it does not pass by delivery nor does possession of it prove the title to it. There is no market event for ships, in the case of American ships the laws of the United States provided the means of evidencing the title to them. In the case of (8) Hopper v. Gumm (1867) 2 Ch. App. 282, 290. Under the Merchant Shipping Acts, al British Shijps above a prescribed tonnage must, unless specially exempted, be registared and thereafter may be transferred only by a bill of sale in the statutory form.”. 19. Admittedly Mr. Deb’s client inspected the vessel some time in the beginning of April, 1981 when the said charter-party was subsisting Prior to that the charteres, namely, the plaintiff appellant preferred its claims on the original owner. That being so, in the normal course, Mr. Deb’s clients should have come to know that the ship was under a charter-party from the documents available on board the vessel specially when a claim had already arisen, in respect of the charter-party, which remained unsatisfied till then, there could not have been any difficulty to ascertain that the same was in favour of the said carterers with due diligence it could not also be difficult for them to come to know of the remaining voyage to be undertaken by the vessel upto Kuwait under the said charter-party. Prima facie, these facts stand against the contention of Mr. Deb on this point. 20. Mr. Deb, however, argues that there is neither any maritime lien nor any statutory lien in favour of the plaintiff appellant which could follow the ship and as such even assuming that the plaintiff appellant has a claim in respect of the charter-party agreement, the plaintiff appellant could not succeed on that basis in getting the vessel arrested. This argument appears to be possible, The maritime lien travels with the res. But the question is whether such a maritime lien had arisen, in this case. If it had, then undoubtedly it could be enforced also against the parties interested in M. V. "Bhoja Trader." i.e. Intra Co.
This argument appears to be possible, The maritime lien travels with the res. But the question is whether such a maritime lien had arisen, in this case. If it had, then undoubtedly it could be enforced also against the parties interested in M. V. "Bhoja Trader." i.e. Intra Co. Ltd. Admittedly there was no statutory lien in favour of the plaintiff appellant. Regarding the maritime lien the law in England as was administered there in Admiralty Jurisdiction did not recognise maritime lien in respect of claim for damages arising out of breach of charter-party. That being so, no action in rem could lie in the Admiralty Jurisdiction to follow the res so as to cause the arrest of the vessel and to enforce such a claim thereby. In British Shipping Laws, Vol. 14 maritime liens by Thomas at pages 12 and 13, it is said that maritime liens represent a small cluster of claims which arise either out of service rendered to maritime res or from damage done by such a res. Such claims have been enumerated under five heads, namely. (a) Damage done by a ship; (b) Salvage; (c) Seamen's Wages; (d) Master's wages and disbursements and (e) Bottomny and respondentia. 21. That being so, in our opinion the petitioner appellant's application for stay cannot succeed. There will be no further orders on this application. Costs would be cost in the appeal. In view of the fact that there are difficult points of the law of general importance, viz, as to the scope and extent of the Admiralty Jurisdiction of this Court with reference to the Charter of 1774 and the Colonial Courts of Admiralty (India) Act, 1891 and if damages for breach of a charter-party agreement would give rise to a lien which would be enforced in admiralty against the res, are involved here we think that a short stay should be granted in respect of the operation of the order passed herein as prayed for. We, therefore, grant stay of the operation of this order till 21st May, 1981. Banerji, J.: I agree.