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2013 DIGILAW 2003 (MAD)

Owners & Parties Interested In Vessel M. v. Anushree Fame (Ex-Royal Places) Rep. by its Master Now Berthed At Port Of Tuticorin VS Synergy Shipping Pvt Ltd. , Rep. by its Branch Manager G. R. Krishnamurthi

2013-06-13

V.RAMASUBRAMANIAN

body2013
JUDGMENT 1. M/s. Synergy Shipping Private Ltd. has filed the above suit against the owners and parties interested in the vessel MV Anushree Fame (Ex-Royal Pisces), invoking the admiralty jurisdiction of this Court, for recovery of a sum of Rs.2,73,802/-, together with interest and for the arrest and sale of the vessel for the realisation of the said amount. The claim of the plaintiff in the suit is that the plaintiff was nominated as Cargo Handling Agents for the defendant vessel, when it arrived at the Vishakapatnam Port in August 2008 and that the plaintiff rendered various services, including the supply of necessaries at that time and that the payment due for the services so rendered, was not paid by the defendant. 2. Pending suit, the plaintiff sought the arrest of the defendant vessel in A.No.4772 of 2010, on the ground that the defendant ship was berthed at the Port of Tuticorin and that if it sailed out of the territorial waters, it may be impossible to recover the dues. On 27.8.2010, this Court granted an ex parte order of arrest, while issuing notice returnable by 20.9.2010 in the said application. 3. Immediately upon being served with the warrant of arrest, the defendant moved this Court through their counsel, offering to deposit the suit claim into Court. Therefore, an order for the release of the vessel was passed on 31.8.2010. Paragraphs 9 and 10 of the said order requires reproduction, since the scope of the said order is one of the controversies now raised. Therefore, it is extracted as follows: "9. Registry is therefore directed to issue warrant of release of the defendant/vessel M.V.Anushree Fame (Ex- Royal Pisces) immediately to the learned counsel appearing for the respondent/defendant, so that they will be able to serve the same on the port authorities to enable the defendant to take the ship out of port freely. 10. Call this matter on 17.09.2010, to enable the respondent/defendant to file a counter to this application." 4. After the defendant deposited the suit claim to the credit of the above suit and after the vessel was released, the defendant came up with two applications in A.Nos.7370 and 7371 of 2010. While the prayer in the first application is for rejection of the plaint, the prayer in the next application is for refund of the amount deposited into Court. 5. While the prayer in the first application is for rejection of the plaint, the prayer in the next application is for refund of the amount deposited into Court. 5. Therefore, all the three applications were taken up together for disposal. However, it is essential that the application for rejection of plaint is dealt with first, since the fate of the other applications would depend upon the fate of this application. 6. The application for rejection of plaint is filed on the premise, (i) that even as per the plaint, the plaintiff acted as the agent of the vessel, when it was owned by a company by name M/s. SKS Logistics, Mumbai; (ii) that the vessel was sold by M/s. SKS Logistics to the present owners in September 2009; (iii) that even according to the plaintiff, a sum of Rs.19,35,000/-was settled by the previous owners in August 2008 itself, leaving a balance of Rs.1,85,002/-; (iv) that according to the plaintiff, the amount left unpaid represented the statutory charges due to the Vishakapatnam Port Trust; (v) that therefore, the plaintiff would have a maritime lien attached to the vessel; (vi) that the claim of the plaintiff in the plaint was that they had supplied necessaries, though they also claim to have paid statutory charges; (vii) that the amounts paid towards Port dues, berth charges, pilotage, etc. would not constitute a maritime lien that would attach to the vessel; (viii) that the plaintiff was aware of the sale of the vessel in September 2009; (ix) that there are only five claims, viz., (a) damage done to a ship, (b) salvage, (c) Seamen's wages, (d) Masters' wages and disbursements, and (e) bottomry, that would constitute maritime liens; (x) that the above position is recognised by the U.K. Supreme Court Act of 1981 and the International Convention on Maritime Lien and Mortgages, 1993, which would apply to admiralty proceedings in India, as held by the Supreme Court in MV Elizabeth case; (xi) that since the plaintiff does not have a maritime lien, their claim could be only as against the previous owners; (xii) that in terms of Article 3, Rule 1(a) of the International Convention on Arrest of Ships, 1999, the arrest of the ship is permissible in respect of a maritime claim, only when the person who needs the vessel at the time when the claim arose continues to be the owner at the time when the arrest was effected; and (xiii) that therefore, the suit is barred by law and the plaint is consequently liable to be rejected. 7. A careful reading of the affidavit in support of the application A.No.7370 of 2010, would go to show that the defendant seeks rejection of the plaint on the sole ground that the suit is barred by law and that there was no cause of action. Despite the fact that the suit arose on the admiralty jurisdiction of this Court, the principles on the basis of which the prayer for rejection of the plaint has to be tested, are traceable only to Order VII, Rule 11 of the Code of Civil Procedure. This is why the defendant seeks rejection of the plaint on the ground that there was no cause of action and that the suit was barred by law. Both these grounds could be traced to clauses (a) and (b) of Order VII, Rule 11. Therefore, it is necessary to see if, on a plain reading of the plaint, both these grounds are made out or not. It is needless to point out, while dealing with an application for rejection of plaint, the Court has to go only by the plaint averments and not by any defence that the defendant may be entitled to. 8. Therefore, it is necessary to see if, on a plain reading of the plaint, both these grounds are made out or not. It is needless to point out, while dealing with an application for rejection of plaint, the Court has to go only by the plaint averments and not by any defence that the defendant may be entitled to. 8. It is claimed by the plaintiff that they were appointed as Cargo Handling Agents of the defendant vessel, when it arrived at Vishakapatnam Port around August 2008, for repairs and export of cargo. In paragraph 4 of the plaint, it is claimed that the defendant engaged the plaintiff not only to attend to the berthing of the defendant vessel, but also to attend to the related Port formalities, such as supply of necessaries to the crew and supply of bunker to the vessel. The plaintiff also claims that they made requisite payment to the Vishakapatnam Port Trust for the grant of permission to berth the vessel. 9. Again in paragraph 6, it is claimed that the plaintiff rendered various services, such as supply of necessaries, bunkers, fresh water, pilotage, Port dues, customs and immigration and Port Health Officer charges. The plaintiff appears to have raised three invoices bearing Nos.003, 078 and 007 on 11.9.2008 and 12.9.2008. The amounts claimed under these three invoices were Rs.18,64,600/-, Rs.64,562/- and Rs.5,840/-respectively. Though the plaintiff has not stated in so many words, it can be inferred from the plaint that out of the total amount of Rs.19,35,002/-, the owner of the vessel cleared a major portion, leaving only a sum of Rs.1,85,002/-unpaid. This is why the suit has been filed only for recovery of Rs.1,85,002/-, together with interest. 10. It is also indirectly admitted by the plaintiff in the plaint that the vessel to which they had rendered services in 2008 was known as MV Royal Pisces and that the name had been changed to MV Anushree Fame and that it had also been sold. 11. After having described in broad and general terms the nature of the services rendered, the plaintiff has claimed in paragraph 12 of the plaint that they had a maritime claim against the vessel. 11. After having described in broad and general terms the nature of the services rendered, the plaintiff has claimed in paragraph 12 of the plaint that they had a maritime claim against the vessel. In the same paragraph, the plaintiff has stated that since they had supplied necessaries to the vessel and had also paid for the services, out of their own funds, they are entitled to a maritime lien. 12. Again in paragraph 13 of the plaint, the plaintiff first classified their claim only as a maritime claim, but towards the end of paragraph 13 of the plaint, the plaintiff has classified their claim as both a maritime claim and maritime lien. 13. It is only on account of the confusion reflected in the plaint about the nature of the plaintiff's claim that the defendant has come up with the application for rejection of plaint. It is needless to point out that the supply of necessaries to a vessel constitute a mere maritime claim and the same would not give rise to a maritime lien. This question was settled by me, after a great deal of discussion in Inter-access Marine Bunkering Ltd. v. K.M.Allauddin [ 2009 (3) CTC 611 ]. Therefore, if the claim of the plaintiff is confined only to the supply of necessaries to the vessel, it would just remain a maritime claim and not a maritime lien. 14. But, unfortunately for the defendant, the plaint proceeds on the footing as though Port charges, pilotage dues, etc. were also paid by the plaintiff. The said claim may be true or false. This is something which would unfold only in the course of trial. But, the fact remains that in paragraph 6 of the plaint, the plaintiff has claimed to have paid pilotage, port dues etc. 15. It is not known whether the amounts paid by the previous owner of the vessel towards the three invoices raised by the plaintiff, could be identified with the individual items of claim. If the total amount paid by the owner of the vessel could be related to any of the items of claim made in the three invoices, it is possible to find out which claim remained unpaid and whether that claim would constitute a maritime lien or not. 16. If the total amount paid by the owner of the vessel could be related to any of the items of claim made in the three invoices, it is possible to find out which claim remained unpaid and whether that claim would constitute a maritime lien or not. 16. There is no dispute about the fact that under Article 4 of the International Convention of Maritime Liens and Mortgages, 1993, claims for port, canal and other waterway dues and pilotage dues constitute a maritime lien. The questions (i) as to whether the plaintiff really paid pilotage fees and port dues on behalf of the owner of the vessel, (ii) as to whether the claim made by the plaintiff in respect of these specific items were paid off by the owner of the vessel, (iii) as to whether the amounts paid by the owner of the vessel towards the three invoices raised by the plaintiff were for specific items included in the invoices, and (iv) as to whether the plaintiff was entitled to and had in fact appropriated the payments towards other items, which would constitute only a maritime lien, are all questions of fact into which I cannot go at this stage. When a bare reading of the plaint discloses that the plaintiff has a combination of rights, some of which would fall under the category of maritime claim and a few fall under the category of maritime lien, it is not possible to reject the plaint at the threshold. If, even on the basis of plaint averments, I could hold that the entire claim of the plaintiff would fall under the category of maritime claim, it is possible for me to reject a plaint on the ground that the remedy of the plaintiff lies only as against the previous owner of the vessel. In other words, if the entire suit claim falls under the category of maritime claim, the only remedy open to the plaintiff is to file a suit for recovery of money against the owner of the vessel and not to invoke the admiralty jurisdiction of this Court, which is very special in character. It may be open to the plaintiff to invoke the admiralty jurisdiction, if at least the owner continues to be same person. It may be open to the plaintiff to invoke the admiralty jurisdiction, if at least the owner continues to be same person. But, when admittedly the ownership of the vessel had changed and if the entire claim would fall under the category of maritime claim, an admiralty suit would be barred by law. 17. But, that is not the case here. The plaintiff has come up with a mixture of maritime claim and maritime lien. Whether it is factually correct or not, cannot be found out now. If, after trial, it is found (i) that none of the items supplied or payments made by the plaintiff would constitute a maritime lien, or (ii) that the items that would constitute maritime lien had already been paid off, then, the suit may get dismissed. But, if these two findings can be recorded only after taking evidence, I cannot reject the plaint. Hence, A.No.7370 of 2010 for rejection of plaint is dismissed. 18. Insofar as the prayer in A.No.7371 of 2010 is concerned, it is for refund of the money already deposited by the defendant in securing the release of the vessel ordered to be arrested by this Court. This claim for refund of money is made by the defendant on the ground that the arrest secured by the plaintiff itself was on a misrepresentation of facts and that the very nature of the claim made by the plaintiff did not entitle the plaintiff to an order of arrest. 19. A preliminary objection was raised to the maintainability of this application by Mr.K.Bijai Sundar, learned counsel for the plaintiff. According to the learned counsel for the plaintiff, the defendant obtained an order for release of the vessel, by agreeing to deposit the suit claim into Court. After securing the release of the vessel, it was not open to the defendant to seek refund of the money. The admiralty suit originally initiated as an action in rem got converted into an action in personam, with the deposits so made and the consequent order of release of the vessel and hence, according to the learned counsel for the plaintiff, the refund of the amount would lead to the security for the suit claim getting discharged. But, I do not think that the deposit made by the defendant would preclude them from contesting the application for arrest and from seeking refund of the money. But, I do not think that the deposit made by the defendant would preclude them from contesting the application for arrest and from seeking refund of the money. The question of maintainability of the application is different from the question of entitlement of the defendant to withdraw the money. On the question of maintainability of the application, I do not think that there should be any difficulty. The order of arrest was passed on 27.8.2010. At that time, the vessel was berthed at the Tuticorin Port. It had contractual obligations to third parties and it was not possible at that time to argue the application, A.No.4772 of 2010 and to invite an order before the ship could sail out. Therefore, as a prudent litigant, the defendant offered to deposit the suit claim, with a view to mitigate the loss that the defendant would have been otherwise put to. In fact, arguing the application for the arrest of the vessel and getting an order from this Court on merits, would have certainly taken at least a few days time. Even if the defendant had succeeded after contesting the application after a couple of days, they would have suffered loss on account of each day's arrest and detention. The loss that could have been sustained on account of delay, even in succeeding in the application for arrest, could have been more than the suit claim itself. Therefore, prudency and expediency demanded the defendant to do something that would mitigate the loss. The deposit of the suit claim was in this background and hence, cannot be taken to be a waiver or acquiescence or even estoppel. It is well settled that waiver, acquiescence or estoppel should lead to abandonment of rights. Otherwise, they cannot be put against a party to a proceedings (Sha Mulchand & Co. Ltd vs. Jawahar Mills Ltd AIR 1953 SC 98 ). 20. The deposit of the suit claim by the defendant did not amount either to an admission of liability or to the abandonment of their right to contest the application for arrest of the vessel. The abandonment of right to contest an application for arrest cannot be made out very lightly against the person whose vessel had already been arrested and detained. Therefore, the preliminary objection to the maintainability of the application is liable to be rejected. 21. The abandonment of right to contest an application for arrest cannot be made out very lightly against the person whose vessel had already been arrested and detained. Therefore, the preliminary objection to the maintainability of the application is liable to be rejected. 21. Coming to the entitlement of the defendant to withdraw the amount already deposited by them, it is necessary for me to examine if the plaintiff had made out a case for the arrest of the vessel in the first instance. If the plaintiff had made out a case for the arrest of the vessel, the amount deposited by the defendant for the release of the vessel would be taken to be a security for the suit claim, as the suit gets converted into an action in personam. But, if the plaintiff had not made out a case for the arrest of the vessel, then the ordinary principles of Order XXXVIII, Rule 5, CPC, alone would apply, to test whether the plaintiff is entitled to a security for the suit claim. 22. A meaningful reading of the plaint as a whole, would show that the plaintiff claims to have rendered services to the vessel, part of which would give rise to a maritime claim and part of which would give rise to a maritime lien. The first invoice bearing No.003 dated 11.9.2008, filed as plaint document No.6, is for a total amount of Rs.18,64,600/-. The invoice lists several items, including (i) Port dues, pilotage, berth hire, shifting and road stead charges, (ii) water supply charges, (iii) terminal charges, (iv) bunker supply, (v) sign on charges, (vi) sign off charges, (vii) charges for Radio Officer, (viii) travel and accommodation expenditure for the crew sign off, and (ix) conveyance for the crew signed on and signed off. The invoice No.078, filed as plaint document No.7, was for agency charges, such as Agency fees, immigration and PHO and communication and conveyance. The third invoice bearing No.007 filed as plaint document No.8 is in respect of car rentals and charges for signing on new crew. The statement of accounts filed by the plaintiff as document No.11 would show that the owner of the vessel made three payments, one for a sum of Rs.15.00 lakhs on 18.8.2008, another for a sum of Rs.1.50 lakhs on 26.8.2008 and a sum of Rs.1.00 lakh on 22.8.2008. These amounts totalled to Rs.17.50 lakhs. The statement of accounts filed by the plaintiff as document No.11 would show that the owner of the vessel made three payments, one for a sum of Rs.15.00 lakhs on 18.8.2008, another for a sum of Rs.1.50 lakhs on 26.8.2008 and a sum of Rs.1.00 lakh on 22.8.2008. These amounts totalled to Rs.17.50 lakhs. Therefore, it is clear that payments were not specifically made towards any particular items. Consequently, the plaintiff was entitled to appropriate the same towards the earliest of the claims. Unless there is a contract to the contrary, the law relating to appropriation permits the plaintiff to appropriate the payments towards any claims. Once this is recognised, it is open to the plaintiff to retain the claims that may constitute maritime lien. If the claim made in the above suit is in respect of services which may fall under the category of maritime lien, the claim of the plaintiff would follow the vessel, irrespective of the change of the ownership. If it so follows the vessel, the arrest ordered by this Court was justified and the money deposited by the defendant constitutes the security furnished by the owner of the vessel for getting it released. 23. Mr.S.Raghunathan, learned counsel for the defendant relied upon Articles 1.l and 3.1.a of the International Convention on Arrest of Ships, 1999, in respect of his contention that all the claims made by the plaintiff would constitute only a maritime claim. Article 1.l relates to the supply of goods, materials, provisions, bunkers, equipments supplied or services rendered to the ship for its operation, management, observation or maintenance. Article 3.1.a states that arrest is permissible of any ship in respect of which a maritime claim is asserted, if the person who owned the ship at the time when the maritime claim arose, is liable for the claim and is the owner of the ship when the arrest is effected. But, as I have pointed out earlier, the plaintiff's claim includes claim for dues to the Port, pilotage fees etc. They constitute a maritime lien, if proved. Therefore, the Convention does not go to the rescue of the defendant. 24. But, as I have pointed out earlier, the plaintiff's claim includes claim for dues to the Port, pilotage fees etc. They constitute a maritime lien, if proved. Therefore, the Convention does not go to the rescue of the defendant. 24. Once it is found that there are a few items in the invoices raised by the plaintiff that may constitute a maritime lien, subject however to the evidence that may unfold at the time of trial, the liability of the defendant either to get arrested or to furnish security, cannot be questioned. In such circumstances, the prayer of the defendant for the refund of the amount, which has now replaced the vessel, cannot be granted. Therefore, A.No.7371 of 2010 is dismissed. 25. The amount already deposited by the defendant to the credit of the above suit, shall be kept in fixed deposit for a period of one year. The Registry is directed to convert the amount into a fixed deposit, if it had not already done, in the Indian bank, High Court branch. A.No.4772 of 2010 is disposed of on the above terms. 26. The defendant is directed to file a written statement if they have not already filed. It is open to the defendant to take recourse to the procedure prescribed under Order VIIIA CPC to rope in the previous owner of the vessel, if they deem fit and proper. The trial of the suit may be expedited.