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2014 DIGILAW 715 (KER)

Chembolaparambu General Engineers Pvt Ltd v. M. V. Kavarathi 3

2014-09-02

B.KEMAL PASHA

body2014
ORDER B. Kemal Pasha, J. I.A. No. 908 of 2014 is an application filed under S. 151 of the Code of Civil Procedure, 1908 by the plaintiff as petitioner, seeking an order of arrest of the first respondent/defendant vessel along with her hull, tackle, engine, machinery, spares, gear, apparel, paraphernalia, furniture, etc., presently within the territorial waters of India/Cochin port waters and within the jurisdiction of this Court and to direct the 3rd respondent Deputy Conservator, Cochin Port Trust to keep the vessel under safe arrest until further orders of this Court. The petitioner/plaintiff is a partnership firm engaged in the field of ship repairs and connected engineering works etc. The petitioner is represented by its Managing Partner. The first respondent are owners and parties interested in the vessel 'M.V. KAVARATHI', which is the Indian vessel represented by her Master. The 2nd respondent is the owner/Manager of the first respondent vessel. The 3rd respondent is the officer of the Cochin Port Trust, who is made party to the I.A. for a proper execution of the orders of this Court. 2. The 2nd respondent had appointed the plaintiff as one of their registered workshops for carrying out repair/engineering works of their vessels/ships at the Port of Cochin, Beypore and Mangalore for a period of two years (2007-09) vide letter dated 5.11.2007. Subsequently, a contract containing Tariff, Terms and Conditions with effect from 1.10.2007 was also entered into between the plaintiff and the 2nd respondent. The plaintiff had carried out repairs/engineering works of the first respondent vessel at the Ports of Cochin and Beypore from 5.11.2007 to 24.10.2011 as per the instructions of the ship's officers. The plaintiff had obtained the work done certificate certified by the vessel's officers for all the works done. The plaintiff had raised bills and submitted the same to the 2nd respondent for payment along with the work done certificate etc. No protest or objection has been raised as regards the bills till now. The plaintiff had carried out works to the tune of Rs. 82,87,508.45. 3. Instead of making the full payment, the 2nd respondent had made only part payment of Rs. 26,55,615/- as on 8.5.2012. Even after repeated requests, the 2nd respondent has been avoiding the payments. As on 31.3.2014, a total amount of Rs. 82,87,508.45 is due to the plaintiff from the defendant. 82,87,508.45. 3. Instead of making the full payment, the 2nd respondent had made only part payment of Rs. 26,55,615/- as on 8.5.2012. Even after repeated requests, the 2nd respondent has been avoiding the payments. As on 31.3.2014, a total amount of Rs. 82,87,508.45 is due to the plaintiff from the defendant. Even after repeated demands through notices, the 2nd respondent has not cared to settle the liability. 4. The first respondent vessel itself is liable to make payment to the plaintiff in respect of the liability created by her and her sister vessels and her owners, as the first respondent vessel has a distinct corporeal personality and can itself be liable to be sued and proceeded against for the same. The first respondent vessel is presently within the Cochin port waters/Lakshadweep waters/territorial waters of India and within the admiralty jurisdiction of this Court. The claim of the plaintiff is a maritime claim and, therefore, the plaintiff is entitled to recover the same from the first respondent vessel by invoking the admiralty jurisdiction of this Court. 5. It would be just and necessary that the first respondent vessel is arrested and detained till sufficient security is obtained for the plaint claim, as otherwise, the decree eventually obtained will only be a paper decree and will become fruitless and hence, the I.A. 6. The first respondent filed a counter affidavit by way of objections contending, inter alia, as follows:-- "The I.A. seeking arrest of the vessel 'M.V. KAVARATHI' filed under S. 151 of the Code of Civil Procedure, 1908 is not sustainable in law and it lacks bona fides. No legally valid ground has been stated by the plaintiff for seeking the arrest of the said vessel. No amount is due from the first respondent to the plaintiff and there exists no privity between the plaintiff and the owners of "M.V. KAVARATHI'. The said vessel has not been arrayed as a party in the admiralty suit or in the I.A. When me vessel has not been made a party to the proceedings, any order of arrest of the said vessel cannot be granted." 7. The vessel 'M.V. KAVARATHI' is owned by the President of India represented by me administrator of the Union Territory of Lakshadweep. The said vessel is engaged in the discharge of sovereign function of transporting people from the Lakshadweep Islands to the main land and back. The vessel 'M.V. KAVARATHI' is owned by the President of India represented by me administrator of the Union Territory of Lakshadweep. The said vessel is engaged in the discharge of sovereign function of transporting people from the Lakshadweep Islands to the main land and back. No private vessels are allowed to operate between the Islands and the main land for the transportation of passengers. It is trite and settled law that the power to arrest a vessel under admiralty jurisdiction is invoked for the limited purpose of obtaining security from a 'foreign ship' which is present within the territorial jurisdictional limits of the concerned admiralty court at the relevant time. The limited object of arrest of a ship is to obtain security from a foreign flagged vessel before it sails out from me jurisdictional limits of me concerned court. The provisions regarding the arrest of a vessel do not extend to the arrest of an Indian ship by an admiralty court of this country. 8. As the vessel regularly ferries people across the Lakshadweep islands and Kochi, the vessels visit Cochin Port on specified schedules and is, therefore, always available within the territorial jurisdiction of this court. As the vessel is owned by me President of India, any security cannot be obtained from the President of India and, therefore, the vessel is not liable to be arrested. In case of arrest, the general public who used to be ferried between the main land and the Lakshadweep islands would be put to irreparable loss and injuries, as hundreds of people always use to wait with tickets for getting them ferried. The I.A. is devoid of bona fides and is liable to be dismissed. I.A. No. 1017/2014 9. This is an I.A. filed by the first defendant in the suit under Order VII R. 11 of the Code of Civil Procedure, 1908 seeking the rejection of the plaint, almost based on the contentions taken by the first defendant in the counter affidavit filed in I.A. No. 908/2014. According to the petitioner/first defendant, there is no cause of action to invite the admiralty jurisdiction of this Court in this case and therefore, the plaintiff ought to have approached the concerned civil court, if at all the plaintiff has any claim based on a contract. According to the petitioner/first defendant, there is no cause of action to invite the admiralty jurisdiction of this Court in this case and therefore, the plaintiff ought to have approached the concerned civil court, if at all the plaintiff has any claim based on a contract. According to the petitioner/first defendant, the subject matter of the suit can, at the most, be a claim arising out of a contract which gives rise to a right in personam and in such case the admiralty jurisdiction of this Court cannot be invoked. 10. The plaintiff filed an objection contending that the provisions of Order VII R. 11 cannot be invoked in this case since the plaint clearly discloses cause of action for the suit. According to the plaintiff, all persons and things within the waters of a State fall within its jurisdiction unless specifically curtailed or regulated by rules of international law and therefore, all ships in Indian waters, irrespective of the nationality of such ships can be proceeded against by a High Court. 11. The voyages being undertaken by the concerned ship are not in discharge of any sovereign function, and the same are merely ferrying of people from island to main land and back, and the same is merely commercial in nature and therefore, it does not have any immunity from arrest. Immunity exists only if the vessel is engaged in purely governmental and non-commercial activities. 12. Heard the learned counsel Sri. Bijish B. Tom for the plaintiff, Sri S. Radhakrishnan for the 1st defendant, Sri V.M. Syam Kumar for the 2nd defendant and Sri V.B. Hari Narayan and Viju Abraham for additional 3rd defendant. 13. The learned counsel for the plaintiff has argued that being a maritime claim, the plaintiff is entitled to get the ship arrested in order to secure the plaint claim. It is further argued that the provisions relating to arrest of a ship by an Indian admiralty court cannot be construed as provisions confined to the arrest of a foreign vessel only, and not an Indian vessel. Even an Indian vessel can be placed under arrest for securing the maritime claim. Per contra, the learned counsel for respondents 1 and 2 have argued that only a foreign vessel can be arrested by an admiralty court in India and there are no provisions enabling the arrest of an Indian ship. Even an Indian vessel can be placed under arrest for securing the maritime claim. Per contra, the learned counsel for respondents 1 and 2 have argued that only a foreign vessel can be arrested by an admiralty court in India and there are no provisions enabling the arrest of an Indian ship. It is further argued that as the vessel is one being owned by the President of India, there cannot be any apprehension that the plaint claim is not secured unless the ship is arrested. It has been argued that the attempt of the plaintiff is to have coercive steps to squeeze out money prematurely from the Government of India for claims which have to be settled through a civil suit. It is also argued that the ship is not engaged in any commercial activity as it merely discharges sovereign functions. 14. As the main argument of the respondents is that an order of arrest cannot be passed in respect of an Indian ship in admiralty jurisdiction by an Indian court, and that the said power can be exercised only with regard to a foreign ship, the said argument, in short, is that the said I.A. No. 908 of 2014, as such, is not maintainable. There is no dispute to the fact that the ship in question is owned by the President of India. 15. The next argument was that the owner of the concerned ship being the President of India, there need not be any apprehension that even in case of a decree, the plaintiff would not get the amount covered by such decree recovered, and that in such a case, any arrest cannot be made for the purpose of obtaining security for the plaint amount. Order XXVII of the Code of Civil Procedure 1908 deals with suits by or against Government or Public Officers in their official capacity. When the first defendant is owners and parties interested in the vessel and the owner being the President of India, the first defendant has to be treated, in fact, as the Union of India. 16. In the case of a money decree, in order to have the stay of execution of such decree, the appellant shall furnish security for the decree amount within the meaning of sub-rule(3) of R. 1 of Order XLI of the Code. 16. In the case of a money decree, in order to have the stay of execution of such decree, the appellant shall furnish security for the decree amount within the meaning of sub-rule(3) of R. 1 of Order XLI of the Code. As per sub-rule (5) of R. 5 of Order XLI of the Code, where the appellant fails to make the deposit or furnish security as specified in sub-rule (3) of R. 1, the court shall not make an order staying the execution of the decree. As per Order XXVII R. 8A of the Code, no such security as is mentioned in Rules 5 and 6 of Order XLI shall be required from the Government. Matters being so, when the ship belongs to the President of India as the Head of Union of India, as per the provisions of the Code, any security cannot be ordered to be furnished by the President of India. 17. The argument forwarded by either sides mainly centres around the decision of the Apex Court in M.V. Elisabeth and Others Vs. Harwan Investment and Trading Pvt. Ltd., Hanoekar House, Swatontapeth, Vasco-De-Gama, Goa, . Based on the observations made by the Apex Court in paragraph 65 of M.V. Elisabeth (supra) the learned counsel for the plaintiff has argued that where statutes are silent and remedy has to be sought by recourse to basic principles, it is the duty of the court to devise procedural rules by analogy and expediency. The learned counsel for the defendants have relied on paragraph 66 of M.V. Elisabeth (supra) wherein it was held: "It is likewise within the competence of the appropriate Indian Courts to deal, in accordance with the general principles of maritime law and the applicable provisions of statutory law, with all persons and things found within their jurisdiction. The power of the court is plenary and unlimited unless it is expressly or by necessary implication curtailed. Absent such curtailment of jurisdiction, all remedies which are available to the courts to administer justice are available to a claimant against a foreign ship and its owner found within the jurisdiction of the concerned High Court. This power of the court to render justice must necessarily include the power to make interlocutory orders for arrest and attachment before judgment." (emphasis supplied) 18. The High Courts in India are superior courts of record. They have original and appellate jurisdiction. This power of the court to render justice must necessarily include the power to make interlocutory orders for arrest and attachment before judgment." (emphasis supplied) 18. The High Courts in India are superior courts of record. They have original and appellate jurisdiction. They have inherent and plenary powers, unless expressly or impliedly barred, and subject to the appellate or discretionary jurisdiction of the Apex Court, the High Courts have unlimited jurisdiction, including the jurisdiction to determine their own powers. Prima facie, no matter is deemed to be beyond the jurisdiction of a superior court unless it is expressly shown to be so; while nothing is within the jurisdiction of an inferior court unless it is expressly shown on the face of the proceedings that the particular matter is within the cognizance of the particular court. 19. Admiralty jurisdiction of the Indian High Courts is also originally based on the Admiralty Court Act, 1840, followed by the Admiralty Court Act, 1861 conferring larger powers upon the High Court of Admiralty S. 6 of Admiralty Court Act, 1861 empowered the High Court of Admiralty to assume jurisdiction over foreign ships in respect of claims to cargo carried into any port of England or Wales. As far as India is concerned, the names of the country 'England or Wales' has to be read as 'India'. It is true that the said provision does not apply to outward cargo whereas it was confined to inward cargo. The Administration of Justice Act, 1920 discarded the provision limiting the jurisdiction of the Admiralty Court to claims in respect of inward cargo alone as per S. 6 of Admiralty Act, 1861 and the jurisdiction of the Admiralty Court is extended to (a) any claim arising out of an agreement relating to the use or hire of a ship; (b) any claim relating to the carriage of goods in any ship, and (c) any claim in tort in respect of goods carried in any ship. Thus, the Act apply to both inward and outward cargoes. 20. Therefore, through the Administration of Justice Act, 1920, the jurisdiction of the Admiralty Court over foreign ships which was limited to inward cargo alone as per S. 6 of the Admiralty Court Act, 1861 was widened to outward cargo as well as inward cargo. Thus, the Act apply to both inward and outward cargoes. 20. Therefore, through the Administration of Justice Act, 1920, the jurisdiction of the Admiralty Court over foreign ships which was limited to inward cargo alone as per S. 6 of the Admiralty Court Act, 1861 was widened to outward cargo as well as inward cargo. At the same time, the jurisdiction which was limited to the case of foreign ships alone, has not been discarded, modified, or widened by the Administration of Justice Act, 1920. 21. The learned counsel for the plaintiff by relying on sub-section 7 of S. 20 of the Supreme Court Act, 1981 argued that it provides for the admiralty jurisdiction of the High Court in respect of "all ships or aircrafts, whether British or not and wherever the residence or domicile of their owners may be and to all claims wherever arising ". It is argued that the jurisdiction of the Admiralty Court is widened through the said provision in order to cover all claims or tort or contract arising out of any agreement for carriage of goods by sea. Based on the Supreme Court Act, 1981 it is argued that the admiralty jurisdiction is not limited to foreign ships, whereas it is applicable to any ship whether foreign or Indian. At the same time, the learned counsel for the respondents have pointed out that the statutes enacted in England during the post constitution period of India is not applicable to the Union of India. 22. At the same time, the learned counsel for the respondents have pointed out that the statutes enacted in England during the post constitution period of India is not applicable to the Union of India. 22. Article 225 of the Constitution reads: "Jurisdiction of existing High Courts.-Subject to the provisions of this Constitution and to the provisions of any law of the appropriate Legislature made by virtue of powers conferred on that Legislature by this Constitution, the jurisdiction of, and the law administered in, any existing High Court, and the respective powers of the Judges thereof in relation to the administration of justice in the Court, including any power to make rules of Court and to regulate the sittings of the Court and of members thereof sitting alone or in Division Courts, shall be the same as immediately before the commencement of this Constitution: [Provided that any restriction to which the exercise of original jurisdiction by any of the High Courts with respect to any matter concerning the revenue or concerning any act ordered or done in the collection thereof was subject immediately before the commencement of this Constitution shall no longer apply to the exercise of such jurisdiction.]" Article 372(1) says: "(1) Notwithstanding the repeal by this Constitution of the enactments referred to in Art. 395 but subject to the other provisions of this Constitution, all the laws in force in the territory of India immediately before me commencement of this Constitution shall continue in force therein until altered or repealed or amended by a competent legislature or other competent authority." 23. It was held in paragraph 9 of the decision in M.V. Al Quamar Vs. Tsavliris Salvage (International) Ltd. and Others, as follows: "The three erstwhile Presidency High Courts (in common and popular parlance Chartered High Courts) namely, Calcutta, Bombay and Madras were having the Letters Patent for the conferment of the ordinary original civil jurisdiction and by reason of the provisions contained therein read with the Admiralty Court Act, 1861 and subsequent enactment of Colonial Courts of Admiralty Act, 1890 and Colonial Courts of Admiralty (India) Act, 1891, the admiralty jurisdiction of the three High Courts noticed above can be fairly traced. This special admiralty jurisdiction was saved by the Government of India Act, 1915 as also that of 1935 and subsequently protected in terms of Articles 225 of the Constitution." 24. This special admiralty jurisdiction was saved by the Government of India Act, 1915 as also that of 1935 and subsequently protected in terms of Articles 225 of the Constitution." 24. In view of the provisions contained in Articles 225 and 372 of the Constitution of India, the provisions of the Admiralty Court Act, 1861, Colonial Courts of Admiralty Act, 1890 and Colonial Courts of Admiralty (India) Act, 1891 are saved and are applicable to the Admiralty Courts in India. Any statute enacted in England, after the coming into force of the Constitution of India cannot govern the courts in India. 25. The learned counsel for the defendants have invited the attention of this Court to paragraph 83 of M.V. Elisabeth (supra) wherein it was held: "The admiralty jurisdiction of the High Court is dependent on the presence of the foreign ship in Indian waters and founded on the arrest of that ship. This jurisdiction can be assumed by the concerned High Court, whether or not the defendant resides or carries on business, or the cause of action arose wholly or in part, within the local limits of its jurisdiction. Once a foreign ship is arrested within the local limits of the jurisdiction of the High Court, and the owner of the ship has entered appearance and furnished security to the satisfaction of the High Court for the release of the ship, the proceedings continue as a personal action." (emphasis supplied) 26. It cannot be said that the said proposition of law was enunciated by the Apex Court only because of the fact that the vessel M.V. Elisabeth involved in the case happened, to be a foreign ship and what was considered therein was relating to a claim in respect of inward cargo. Those things are evident from the wordings in paragraph 83 as reproduced above. It clearly shows that the presence of a foreign ship in Indian waters is a condition precedent for invoking the admiralty jurisdiction of a High Court in India. It is evident that arrest of such a ship can be made only when it is a foreign ship, and further, when it happens to be in Indian waters. 27. It clearly shows that the presence of a foreign ship in Indian waters is a condition precedent for invoking the admiralty jurisdiction of a High Court in India. It is evident that arrest of such a ship can be made only when it is a foreign ship, and further, when it happens to be in Indian waters. 27. In paragraph 88 of M.V. Elisabeth (supra) it was held: "Admiralty jurisdiction is an essential aspect of judicial sovereignty which under the Constitution and the laws is exercised by the High Court as a superior court of record administering justice in relation to persons and things within its jurisdiction. Power to enforce claims against foreign ships is an essential attribute of admiralty jurisdiction and it is assumed over such ships while they are within the jurisdiction of the High Court by arresting and detaining them." 28. In paragraph 90 it was held: "All persons and things within the waters of a State fall within its jurisdiction unless specifically curtailed or regulated by rules of international law. The power to arrest a foreign vessel, while in the waters of a coastal State, in respect of a maritime claim, wherever arising, is a demonstrable manifestation and an essential attribute of territorial sovereignty." 29. In paragraph 101 of M.V. Elisabeth (supra) it was held that: "The High Courts in India being courts of unlimited jurisdiction, repository of all judicial power under the Constitution except what is excluded are competent to issue directions for arrest of foreign ship in exercise of statutory jurisdiction or even otherwise to effectuate the exercise of jurisdiction." 30. From all the above, it is evident that what is contemplated under Admiralty Jurisdiction of a High Court in India is only with regard to the arrest of a foreign ship happens to be in Indian waters. When it is confined to a foreign ship happens to be in Indian waters, any ship owned by the President of India or the Union of India, or by a Indian Company incorporated or situated in India or by a partnership firm in India or even by a citizen in India cannot be arrested by invoking the admiralty jurisdiction of any High Courts in India. 31. The principles enunciated in International Conventions relating to maritime matters have no force of law, or they cannot substitute the provisions of statutes applicable to India. 31. The principles enunciated in International Conventions relating to maritime matters have no force of law, or they cannot substitute the provisions of statutes applicable to India. At the most, the principles enunciated through such International Conventions can only have some persuasive effect in interpreting the concerned provisions of the statute and nothing more, and it cannot be acted upon as statutory provisions. 32. The learned counsel for the defendants have invited the attention of this Court to the decision in Porto Maina Maritime Sa Vs. Owners and Parties Interested in The Vessel M.V. Gati Majestic,. After discussing the matter in detail, it was held that the observations of the Hon'ble Supreme Court in M.V. Elisabeth (supra) that the admiralty jurisdiction of the High Court is dependent on the presence of the foreign ship in Indian waters and founded on the arrest of that ship, determines the admiralty jurisdiction of me High Courts in India. In paragraph 20 of the decision in Porto Maina Maritime Sa (supra) it was held: "In view of the enunciation of the principle for attracting Admiralty jurisdiction of the High Court - as observed by the Supreme Court in paragraph 83 of its judgment rendered in M.V. Elisabeth and Others Vs. Harwan Investment and Trading Pvt. Ltd., Hanoekar House, Swatontapeth, Vasco-De-Gama, Goa, , (quoted hereinbefore) - there remains no manner of doubt, whatsoever, that it was not open to the plaintiff to invoke the Admiralty jurisdiction of this Court in respect of an action against M.V. Gati Majestic, being an Indian flag flying vessel registered under the Indian Laws." 33. In Fithaly Fernando Vs. Principal Officer and Shipping Master, a learned Single Judge of this Court held: "On a reading of M.V. Elisabeth's case (supra), I am satisfied that the admiralty jurisdiction of the High Court for arrest and detention of a ship is confined to a foreign ship, which has been abundantly made clear in that decision." 34. The learned counsel for me defendants have invited me attention of this Court to the decision in Kuwait International Finance Company Vs. M.V. Lakshmi Sagar wherein it was held: "Under the Admiralty Court Act, 1861, claim for damage to cargo is under S. 6. If S. 6 is the relevant provision this Court will have jurisdiction in the matter only if the owner or part owner of the ship is not domiciled in India. M.V. Lakshmi Sagar wherein it was held: "Under the Admiralty Court Act, 1861, claim for damage to cargo is under S. 6. If S. 6 is the relevant provision this Court will have jurisdiction in the matter only if the owner or part owner of the ship is not domiciled in India. As per S. 2 of the Colonial Courts of Admiralty Act, in place of the words 'England and Wales' the word 'India' has to be read there. Admittedly in this case the owner of the ship is an Indian company, which is a company with its domicile in India. But damage should be one which must be caused by the ship itself, not by the direct action of those who control her. If the plaintiff cannot have recourse to S. 6, there is no other provision under the Admiralty Act of 1861, by which he could invoke the admiralty jurisdiction. The ship being an Indian ship which has its domicile in India, the plaintiff is not entitled to invoke the admiralty jurisdiction of this Court." 35. From all the above it can safely be concluded that the admiralty jurisdiction of this Court cannot be extended to the matters in controversy in this suit. The questions involved in this suit are questions which arise from a contract for the repair works of an Indian ship by the plaintiff. It does not involve any jurisdiction for the arrest of such an Indian ship. In the absence of any such enabling provision for the arrest of an Indian ship by an Indian court, this Court cannot exercise the admiralty jurisdiction of this Court in this matter. 36. It has to be concluded that the ship in question being an Indian ship owned by the President of India, cannot be subjected to the Admiralty Jurisdiction of this Court. Therefore, the suit as such cannot be entertained in the admiralty jurisdiction of this Court. The plaintiffs are not entitled to get an order for arrest as prayed for. This suit is merely an ordinary money suit which is triable by an ordinary civil court competent to try it. As per S. 15 of the Code of Civil Procedure, 1908 every suit shall be instituted in the court of lowest grade competent to try it. The plaintiffs are not entitled to get an order for arrest as prayed for. This suit is merely an ordinary money suit which is triable by an ordinary civil court competent to try it. As per S. 15 of the Code of Civil Procedure, 1908 every suit shall be instituted in the court of lowest grade competent to try it. Matters being so, this suit ought to have been instituted as an original suit before the concerned Subordinate Judge's Court. Even though this Court has unlimited original jurisdiction also, on the basis of the principles contained in S. 15 of the C.P.C., the plaint has to be returned under Order VII R. 10 C.P.C., to be presented to the court in which the suit should have been instituted. In the result, I.A. 908 of 2014 is dismissed and I.A. No. 1017 of 2014 is disposed of by ordering the plaint in this suit to be returned under Order VII R. 10 C.P.C. to be presented to the court in which the suit should have been instituted.