Anil Kumar Sen v. Owners and Parties Interested in the vessel M. V. Charisma
1990-02-13
Prabir Kumar Majumdar
body1990
DigiLaw.ai
ORDER In the above two suits the plaintiffs are the decree-holders and the cause of action in the said two suits arose out of non-payment of their wages while serving as members of the Crew of the Vessels, 'Charishma N' and 'Alexandra N'. 2. The plaintiffs in the said two suits asked for an order that the Board of Trustees for the Port of Calcutta be directed to satisfy their claim out of the sale proceeds of the said two vessels and interest on the said sum as prayed for in column 10 of the tabular statement. The plaintiff/decree-holders also seek determination of priority in respect of the plaintiff/petitioners' claim over the claims of the Board of Trustees for the Port of Calcutta and the Union of India. 3. The claim of the Board of Trustees for the Port of Calcutta (hereinafter referred to as the Calcutta Port Trust) is for the port charges in respect of the two vessels while they were at the port of Calcutta. 4. The Shipping Development Fund Committee (now abolished) is a mortgagee of the said two vessels and, as such mortgagee, is claiming its rights over the said sale proceeds of the said two vessels. Since its abolition, the right, title and interest of the said Shipping Development Fund Committee have been vested in the Union of India, The Union of India is now claiming the rights over the sale proceeds of the said two vessels. 5. Now the point fur consideration in this execution proceeding is as to who out of these rival claimants, the plaintiffs, the Calcutta Port Trust and Union of India would be entitled to priority. In other words, who of them will have the first right to obtain the sale proceeds of the said two vessels in satisfaction of its claims. 6. M/s. Nilhat Shipping Co. Ltd. at the material time was the owner of the said two vessels. The said Nilhat Shipping Co. Ltd. had been wound up by an order in Company Petition No. 51 of 1985 and Official Liquidator was appointed liquidator and was directed to take possession of the assets of the said dissolved company. 7. The said Vessel M. V. 'Alexandra N' arrived at Haldia Dock Complex of Calcutta Port Trust on 18th October, 1982 and was in the Calcutta Port incurring port charges, berth hire, dock dues etc.
7. The said Vessel M. V. 'Alexandra N' arrived at Haldia Dock Complex of Calcutta Port Trust on 18th October, 1982 and was in the Calcutta Port incurring port charges, berth hire, dock dues etc. till the said vessel was sold and the possession thereof was handed over to the purchaser in terms of the order of this Court. After arrival of the said Vessel M. V. Alexandra N' in or about October 1982, the Shipping Development Fund Committee filed a suit in this Court being Admiralty Suit No. 1 of 1983 for enforcement of the mortgage created in respect of the said Vessel. In or about December 1983 the Calcutta Port Trust applied in the said suit for leave to intervene and proceed against the said vessel in accordance with the provision of s. 64(2) of the Major Port Trust Act, 1963 and to deposit the surplus after adjustment of its claim against the sale proceeds with the Registrar, Original Side of this court. 8. In or about December 1983 Joint Receivers are appointed for sale of the said vessel and later on the said order appointing Joint Receivers was varied by consent of the parties to the effect that one Captain S. Malhotra was appointed Receiver in place and stead of the said Joint Receivers. 9. In or about April, 1985 the Calcutta Port Trust applied in the said suit for direction upon the said Receiver Malhotra to sell the vessel expeditiously and of her reliefs. 10. In October, 1985 the said vessel was sold to the highest bidder for Rs. 1,46,00,000/- in favour of one Amar Steel and the said sale was confirmed by this Court. The sale proceeds of the said vessel less expenses was directed to be deposited with the Calcutta Port Trust. The plaintiffs, thereafter, made an application for some ad hoc payment and by an order of this court, the Calcutta Port Trust Authority was directed to pay on ad hoc basis a sum of Rs. 5,00,000/- to the plaintiff out of the sale proceeds. The said order was, however, made without prejudice to the rights and contention of all the parties. 11.
5,00,000/- to the plaintiff out of the sale proceeds. The said order was, however, made without prejudice to the rights and contention of all the parties. 11. On an application by the purchaser, the said vessel was directed to be handed over to the purchaser and the purchaser was directed to pay reserve mooring, hire charges and other charges as specified in the order dated 7th October, 1985 by this court. The said vessel was accordingly handed over to the purchaser by the Calcutta Port Trust. 12. On or about 24th January, 1986, the Calcutta Port Trust applied to this Court, inter alia, praying for a direction that the Port Authority was entitled to berth hire charges in respect of the said vessel upto 18th December, 1985, as also reserve moorings charges at the prescribed rates on and from 12th December, 1985 claiming priority as and by way of first charge. The Port Authority, however, also called upon the Court to determine the issue of priority in the said application and the said application is pending. It is claimed by the Calcutta Port Trust that its dues in respect of the said vessel had been to the extent of Rs. 99,97,852.31 calculated upto 11th December, 1985. 13. The other vessel M. V. "Charishma N" arrived at Haldia Dock Complex at the Calcutta Port Trust on 15th October, 1982. The members of the Crew filed a suit in this Court claiming their unpaid wages. In the said suit the Calcutta Port Trust applied fur selling the said vessel in exercise of the powers under s. 64(2) of the Major Port Trust Act, 1963. 14. The Shipping Development Fund Committee filed a suit in the Bombay High Court for enforcement of their mortgage of sale of the said vessel M. V. "Charishma N". In the said suit from time to time various orders were passed by the Bombay High Court. Finally, the said vessel was sold on 12th December, 1984 for Rs. 1.17 crores and the vessel was taken delivery of on 25th December, 1986." 15. The dues of the Calcutta Port Trust in respect of the vessel M. V. ''Charishma N" are to the extent Rs. 1,25,63,203.23 p. as on 24th November, 1986. 16.
Finally, the said vessel was sold on 12th December, 1984 for Rs. 1.17 crores and the vessel was taken delivery of on 25th December, 1986." 15. The dues of the Calcutta Port Trust in respect of the vessel M. V. ''Charishma N" are to the extent Rs. 1,25,63,203.23 p. as on 24th November, 1986. 16. The Crew members of the said two vessels from time to time obtained ad-hoc payment without prejudice to the rights and contentions of the parties including the Calcutta Port Trust. 17. The above facts as narrated are not in dispute. As I have stated earlier, the question involved in this execution proceedings is as to the priority of claims. 18. The learned Counsel appearing for the plaintiffs/petitioners in order to sustain its claim for priority has relied on Ss. 100, 138, 139 and 445 of the Merchant Shipping Act, 1958. 19. Section 100 of this Merchant Shipping Act, 1958 (hereinafter referred to as the said Act) provides that the Master of every Indian Ship, except a home tradeship of less than 200 tonnes gross, shall enter into an agreement in accordance with this Act with every seaman whom he engages in, and carries to sea as one of his crew from any port in India. 20. Section 138 of the said Act provides that seamen's right to wages and provisions shall be taken to begin either at the time at which he commences work or at the time specified in the agreement for his commencement of the work or presence on board whichever first happens. 21. Section 139 of the said Act, so for it is material for the purpose of the proceeding provides that lien of a seaman on the vessel to recover wages shall not be forfeited by any agreement and any such stipulation in any agreement, which is inconsistent with the provisions of the said Act shall, to that extent, be void. 22. Section 445 of the said Act provides for the mode by which an order passed by any Court for payment of wages or any other sums of money to the seamen can be enforced which includes levy of distress and sale of the ship and/or equipments. 23.
22. Section 445 of the said Act provides for the mode by which an order passed by any Court for payment of wages or any other sums of money to the seamen can be enforced which includes levy of distress and sale of the ship and/or equipments. 23. The learned Counsel for the plaintiffs has relied on an unreported decision of this Court delivered on 21st May, 1981 in Admiralty Suit No.1 of 1980 (Frield Krupp Gesellschafimut Beschranktu Hapling v. The Owners and Parties Interested in the Motor Vessel "CASTOS"). Admiralty Suit No.6 of 1980 (Akhtar Hussain v. The Owners and Parties Interested in the Motor Vessel "CASTOS") and Admiralty Suit No.7 of 1980 (Amiya Ghosal v. The Owners and Parties Interested in the Motor Vessel "CASTOS"). 24. Referring to the said unreported judgment, the learned Counsel for the plaintiffs has contended that the question before the Court was as to priority of claims as between the decree-holder and the crew and officers of the vessel. The question before the Court in the said decision was inter se priority of claims of (a) officers and crew for their unpaid wages and other benefits, (b) claims preferred by the decree-holders for necessary supplied and repairs made to the vessel, (c) claim of the mortgage/decree-holder and (d) claim for recovery of freight paid in advance. 25. In this case the learned Judge held that the claims preferred by the Officer and crew for their unpaid wages and other benefits as also the claim for supply of necessary to the vessel had preference over the claims preferred by the mortgagee/decree-holder and it was further held by the learned Judge that according to the law relating to admiralty, the claim of the mortgagee/decree-holder would come last. 26. The learned Counsel for the plaintiffs has relied on s. 139 of the Merchant Shipping Act 1958 to contend that a seaman shall not by any agreement forfeit his lien on the ship or be deprived of any remedy for recovery of his wages. 27. It has been submitted by the learned Counsel for the plaintiffs that from a reading of the various sections of the Merchant Shipping Act, 1958 under the heading rights of seamen in respect of the wages starting from Ss.
27. It has been submitted by the learned Counsel for the plaintiffs that from a reading of the various sections of the Merchant Shipping Act, 1958 under the heading rights of seamen in respect of the wages starting from Ss. 138 to 144, it would be clear that the Seamen's claims would have priority over all other claims and the defendant judgment debtor should be directed to satisfy their claims before the claims of the other. 28. The learned Counsel for the Calcutta Port Trust has, however, relied on s. 64 of Major Port Trust Act (hereinafter referred to as the Port Trust Act) which, according to the learned Counsel, provides an express stipulation that incase any part of the rights or charges remained unpaid after distress or arrest of the vessel has been levied under s.64(1) of the said Act, the Board may cause the vessel to be sold and with the proceeds of such sale shall satisfy such rates, charges and cost, incurred by the Port Authorities. It is contended by the learned Counsel for the Port Trust Authorities that the Port Trust Authorities have lien on the vessel until the rates and charges remaining unpaid are satisfied. It is the submission of the learned Counsel for the Port Authorities that in view of that specific right of lien as contemplated by s. 64 of the Port Trust Act, the Port Trust Authorities can claim priority over other claims. 29. Referring to the unreported decision of this Court referred to above, the learned Counsel for the Port Authorities has contended that in the said decision the priority of the claim for the Port Authority did not arise and was not considered. According to the learned Counsel for the Port Authorities, the said decision has no manner of application to the instant case. It is contended by the learned Counsel that the said decision relied upon by the plaintiffs might have some relevance relating to the priority of claim of the officers and the crew of the vessel over the claim of the mortgagee/decree-holder. 30.
It is contended by the learned Counsel that the said decision relied upon by the plaintiffs might have some relevance relating to the priority of claim of the officers and the crew of the vessel over the claim of the mortgagee/decree-holder. 30. The learned Counsel for the Port Authorities has submitted that the claim for the Port Trust Authorities is based upon the provision of the Port Trust Act and s. 59 of the said Act provides for a statutory lien for the rates payable to the Board of Trustees and it is being interpreted by the learned Counsel for the Port Authorities that such lien shall have priority over all other liens and charges except for general average and for the ship-owners lien upon the goods for freight and other charges. It is submitted by the learned Counsel for the Port Authorities that such excepted claims do not however, include the wages and other dues of the employees of the ship or of the dues of the mortgagee of the ship or its assets. It is contended by the learned Counsel for the Port Authorities that s. 61 of the said Act gives power to the Board of Trustees to sell the goods after the expiry of two months. The learned Counsel also submits that s. 63 of the Act provides for the application of sale proceeds in the order therein mentioned. Section 64 of the Act gives power to the Port Authorities to recover rates and charges from the owners of the vessel by either distrait or arrest of such vessel and by detaining the same until the amount so due to the Board is paid. 31. The learned Counsel has cited several decisions in support of the contentions made on behalf of the Port Authorities. The first of such decisions is reported in the case of Emilie Millon, (1905) 2 K. B. 817, Mersey Dock & Harbour Port v. Hay & ors.), Re: S. S. Countess reported in 1923 Appeal Cases 345, The Queen of South reported in 1968(1) All E. R. 1163. I will deal with these cases later. 32.
The first of such decisions is reported in the case of Emilie Millon, (1905) 2 K. B. 817, Mersey Dock & Harbour Port v. Hay & ors.), Re: S. S. Countess reported in 1923 Appeal Cases 345, The Queen of South reported in 1968(1) All E. R. 1163. I will deal with these cases later. 32. The argument advanced on behalf of the Union of India is that the right of Shipping Development Fund Committee has now vested in the Union of India and that under the Shipping Development Fund Committee (Abolition))Act, 1986, the claim of the Union of India is recoverable as arrears of land revenue. On the basis of this analogy, it has been argued by and on behalf of the Union of India that the Union of India has got or should have priority over all other claims. 33. As I have already indicated before, that the question involved in this execution proceeding is as to which of the claims would have priority over the others. From the narration above, it appears that in respect of the said two vessels, the plaintiff, have certain claims, the Port Authorities have certain claims and the Union of India may have certain claims. 34. The contentions of the plaintiffs, as indicated before, is that under s. 139 of the Merchant Shipping Act, 1958, the seamen have rights to recover wages and such rights cannot be forfeited by an agreement or otherwise. 35. The claim of the Calcutta Port Trust is based on s. 64 of the Port Trust Act which provides, inter alia, if the Master of any vessel in respect of which any rates of penalties are payable under this act, or under any regulations or orders made in pursuance thereof, refuses or neglects to pay the same or any part thereof on demand, the Board may distrain or arrest such vessel and detain the same until the amount so due to the Board is paid.
The section further provides that in case any part of the said rates or penalties, or of the cost of the distress or arrest remains .unpaid, the Board may cause the vessel so distrained or arrested to be sold, and with the proceeds of such sale shall satisfy such rates or penalties and costs including the cost of sale remaining unpaid, rendering the surplus, if any, to the Master of such vessel on demand. 36. It, therefore, appears that under s. 139 of the Merchant Shipping Act the seaman should not be deprived of any remedy for the recovery of his wages to which he would be entitled and any agreement contrary to such provisions of the Act shall be void. It would appear from s.64 of the Major Port Trust Act that the Board of Trustees may cause the vessel distrained or arrested to be said until the rates or penalties payable under the Act are paid. 37. Now the question is as between the Port Trust Authorities and the plaintiffs, who would have prior claim on the sale proceeds of the said two vessels. 38. In Emilie Millon's case (supra), the Mersey Docks wanted to exercise their power of detention of a vessel which was directed to be sold but not yet sold by an order of the Court The Court of Appeal held that the right of the Port conferred by statute to the harbour port could not be ignored and the sale at the instance of crew members could not be free from all lien. Colling M. R. in his speech observed: "The order made by the learned Judge of the Court seems to ignore that right so clearly given by the Act because it orders the vessel to be delivered to the purchaser free from all claims and demand against her and it purports to preserve to the port as against the fund in Court any right which their Act may give them to payment of their charges in priority to the other claimants. The Board have no such prior right or charge. The only protection which (s. 253) or the Mersy Docks Act, Consolidation Act, 1858) gave (hem is right to detain the vessel until the dock's dues are paid...............". 39.
The Board have no such prior right or charge. The only protection which (s. 253) or the Mersy Docks Act, Consolidation Act, 1858) gave (hem is right to detain the vessel until the dock's dues are paid...............". 39. It is also observed by Romar L J. in the said decision that the Port were entitled to detain the vessel whoever was the owner until the rates were paid. But the Board would have no such lien or right if the vessel had been allowed to leave the dock and in such case the Board would have been left to make a futile claim against the fund in Court. 40 In the instant case, the Calcutta Port Trust Authorities have not obtained an order of detention or arrest of the vessel or cause it to be sold. Moreover, case in the said decision, the question of priority as between the claim of the crew and the claim of the Board was not before the Court. 41. The other case Mersey Dock v. Hay & ors. (supra) also reiterated the earlier view in Emilie Millon's case. 42. In Queen of South reported in 1968 (1) All E. R. 1163, the claims of a contractor who rendered services of mooring and unmooring the vessel was before the Court. There also the question of priority was not in issue. 43. It may be said that the decisions referred to above, only sought to preserve the right of detention and to get payment before release but such lien or right cannot be claimed if the vessel is allowed to leave the dock as has been observed by Roman L.J. in Emilie Millon's case (supra). 44. The right to recover wages of the crew does not, however, depend on the distrain or detention of the vessel. The crew would have right to unpaid wages against the vessel and, if sold, against the sale proceeds of the vessel. This right is preserved and is not subject to any restriction or exception. 45. Moreover, it has been consistently held by the Supreme Court in various cases that the workmen would have top priority irrespective of the claims of others. 46. Regarding the claim of the Union of India, the Union of India's claim is as mortgagee.
This right is preserved and is not subject to any restriction or exception. 45. Moreover, it has been consistently held by the Supreme Court in various cases that the workmen would have top priority irrespective of the claims of others. 46. Regarding the claim of the Union of India, the Union of India's claim is as mortgagee. In view of the statutory protection given to the workmen as also the Port Trust Authorities I feel that the claim of the Union of India would come last. It has been argued on behalf of the Union of India that the claim is recoverable as arrears of land revenue. Even if it is so, it speaks of mode of realisation but from that it cannot be said that Union of India would have priority. 47. The question of priority of the Crew Member has been considered in the said unreported decision of this Court. It has been held therein that the claim of the mortgagee/decree holder would come last. It has also been held by this Court in the said decision that the claims of officers and crews for the unpaid wages and other benefits must have preference before the claims preferred by the mortgagee/decree-holder. 48. I respectfully agree with the views expressed by the learned Judge in the said decision unreported. 49. In the facts and circumstances of the case, I hold that the claims of the p1aintiff, would have priority over the other claims viz., that of the Calcutta Port Authorities and the Union of India. There will be order in terms of the column 10 of the Tabular Statement of both the applications for execution. Mr. Nripendra Nath Ganguly, the Secretary of Maritime Union, and also Mr. Kamalesh Saba, Advocate, are appointed Joint Receivers, without security and without remuneration, for the purpose of realisation of the amount to be paid in terms of column 10 of the Tabular Statement in each of the two applications from the Calcutta Port Trust authority and make payment to the decree-holders. In the facts and circumstances of the case, there will, however, be no order as to cost. There will, however, be stay of operation of this order until 27.2.90, as prayed for by the learned Advocate appearing for the Calcutta Port Trust.
In the facts and circumstances of the case, there will, however, be no order as to cost. There will, however, be stay of operation of this order until 27.2.90, as prayed for by the learned Advocate appearing for the Calcutta Port Trust. The Joint Receivers and all parties are directed to act on a signed copy of the minutes of the operative part of this judgment on the usual undertaking. Receivers appointed for realization of the amount for payment to the decree-holders.