Porto Maina Maritime Sa vs Owners & Parties Intersted In The Vessel

For the Plaintiff: Mr. Ratnanko Banerjee, Advocate Mr. Sotarup Banerjee, Advocate Mr. Subhojit Roy, Advocate Mr. Soubhagya Sen, Senior Advocate

For Defendant: Mr. Tilok Bose, Senior Advocate Mr. Asit Kumar De, Advocate

Judgment on: 24/09/2013

BISWANATH SOMADDER, J. - This Court had, suo motu,

raised a preliminary issue with regard to exercise of its 'Admiralty

Jurisdiction' in respect of the concerned vessel, which carries an

Indian flag and is registered under the Indian laws. Plaintiff was directed to serve notice upon the defendant. After notice was

issued, the defendant entered appearance.

It was submitted by the learned counsel for the plaintiff that

the plaintiff has a cause of action against the defendant vessel,

M.V. Gati Majestic (hereinafter referred to as 'the vessel') arising

out of damages of collision. The act of collision had taken place at

Haldia Docks between the vessel and the vessel owned by the

plaintiff, i.e., M.V.Porto Maina. The claim is for damages to the

vessel, M.V. Porto Maina for a sum of Rs.36,66,000/-. He

submitted that an Admiralty Suit is maintainable in this Court

against the Indian vessel for a claim on account of damages arising

out of a case of collision against the defendant vessel. The learned

counsel for the plaintiff has taken this Court through the

provisions of the Colonial Courts of Admiralty Act, 1890, as well as

the Colonial Courts of Admiralty (India) Act, 1891. He submitted

that the Admiralty Court Act, 1861, provides the scope of

Admiralty jurisdiction to be exercised by the Admiralty Courts in

India. He also submitted that the extent of Admiralty jurisdiction to

be exercised by Admiralty Courts has been further extended by the

interpretation given by the Hon'ble Supreme Court in the case of M.V.Elisabeth and Others vs. Harwan Investment and Trading

Co. and Another reported in AIR 1993 SC 1014 = 1993 Supp (2)

SCC 433 (hereinafter referred to as 'M.V.Elisabeth'). According to

him, the Admiralty jurisdiction under the Admiralty Court Act,

1861, does not prohibit or restrict any claim as against an Indian

vessel. In this context, he referred to section 7 of the said Act of

1861, which permits the High Court of Admiralty to have

jurisdiction over any claim for damages done by any ship. He

further submitted that the Letters Patent, 1865, continuing the

jurisdiction of the High Court, provides in clause 32 that the High

Court shall have and exercise Maritime jurisdiction.

According to the learned counsel, the scope of Admiralty

jurisdiction given in the Brussel's Convention of 1952 or the

Administration of Justice Act, 1956, in England, which jurisdiction

has been held to be exercised by the Indian Courts of Admiralty

jurisdiction by the Supreme Court in the case of M.V.Elizabeth

(supra) does not, in any manner restrict or prohibit arrest of an

Indian vessel under Admiralty jurisdiction by the Admiralty Courts

in India. He also referred to the judgment of Bombay High Court in the

case of Crown Maritime Co. (I) Ltd. Vs Barge Salina II and Ors.

reported in 2008 (1) Bom. CR 143 to support his contention that

the Admiralty jurisdiction of this Court can be invoked in respect of

an Indian flag flying vessel. The other judgments he referred to in

order to buttress his submissions are as follows:

1.

Jayaswal Shipping Company vs. The owners and parties interested in Steamship "S.S. Leelavati" reported in AIR 1954 Calcutta 415 (Vol.41, C.N.142)

2. Liverpool and London S.P. and I Asson. Ltd. vs. M.V.Sea Success I and Anr. reported in (2004) 9 SCC 512.

3. Epoch Enterrepots vs. M.V. WON FU reported in (2003) 1 SCC 305.

4. Chhatrapat Singh Singh Dugar vs. Kharag Singh Lachmiram and Others reported in 44 Indian Appeals page 11.

5. Mt. Sharbati Devi vs. Kali Pershad reported in AIR 1942 Lah

119.

6. M/s. Crescent Petroleums Ltd. vs. m.v. "MONCHEGORSK" & another reported in AIR 2000 Bom 161.

On the other hand, the learned counsel appearing on behalf

of the defendant has sought to distinguish the submissions made

by the learned counsel for the plaintiff by also referring to the

judgment of the Supreme Court in M.V.Elisabeth's case (supra). He submitted that the Supreme Court was dealing with arrest of a

foreign ship in respect of outward cargo, i.e., cargo carried from

India to places abroad. He further submitted that the Supreme

Court noted that section 6 of the Admiralty Act, 1861 is confined to

inward cargo i.e., goods carried from places abroad to "England

and Wales" (to be substituted for India). The Supreme Court traced

the development of law in England prior to 1947 and held that by

virtue of development of law in England prior to 1947 including

enactment of statutes, subsequent to Admiralty Courts Act, 1861,

English Courts could arrest vessels both for inward and outward

cargo. By virtue of Article 225 and 372 of the Constitution of India,

whatever developments took place in England prior to 1947,

should apply with equal force so far as India is concerned and

therefore, Indian Courts should also be entitled to exercise

jurisdiction to arrest foreign ships, both for inward and outward

cargo. He, however, referred to paragraph 36 of M.V.Elisabeth's

judgment to highlight the point that the admiralty jurisdiction was

not available if at the time of institution of the proceeding, any

owner or part owner of the ship was domiciled in England (to be

read as India in the context of the present matter). He further

submitted that the Administration of Justice Act, 1956, became a statute in England subsequent to India's independence and

therefore, by virtue of Articles 225 and 372 of the Constitution of

India, it can have no manner of application. He also referred to

section 1 (4) of the said Act of 1956, which removed restriction

based on ownership of the ship and jurisdiction applied to all ships

or aircrafts, whether British or not and whether registered or not

and wherever the residence or domicile of their owner may be and

in relation to all claims, wheresover arising. He submitted that,

unfortunately, there was no such similar provision in any Indian

statute, as contained under section 1 (4) of the Administration of

Justice Act, 1956. In the absence of such provision similar to

section 1 (4) of the Administration of Justice Act, 1956, the

statutes in England prior to 1947, will apply so far as India is

concerned, by virtue of Articles 225 and 372 of the Constitution of

India.

Further referring to paragraph 36 of M.V.Elisabeth's

judgment, he submitted that it makes it amply clear that prior to

independence, the admiralty jurisdiction of English Courts even for

damages done by ship was not available, if at the time of

institution of proceedings, any owner or part owner of ship was

domiciled in England. He further submitted that by reason of the observations made by the Supreme Court in paragraph 36 of

M.V.Elisabeth's judgment and in view of Articles 225 and 372 of

the Constitution of India, the admiralty law in India would be

governed by the English statutes which were in force prior to 1947

and which do not allow exercise of Admiralty jurisdiction in respect

of Indian vessels. He also submitted that Indian ships have been

defined in section 21 of the Merchant Shipping Act, 1958, to

include ships wholly owned by a citizen of India or a company

which has place of business in India (which is applicable to the

defendant herein).

He submitted that there is no fundamental difference between

an action in rem or in personam so far as Indian vessels were

concerned. He referred to Deichland, reported in 1989 (2) Lloyds

Law Report 113 at page 116 and submitted that in that judgment,

the purpose of admiralty action in rem has been summarized and

the Court of Appeal held that the whole purpose of admiralty

action in rem was procedural in nature, whereby the property of a

defendant was arrested as means of compelling his appearance

and bail or of providing fund for securing compliance with the

judgment. Once the defendant had appeared in the action, it could then proceed in personam. He submitted that in the facts and

circumstances of the instant case, the defendant has already

entered appearance, pursuant to the notice issued by the order

dated 15th May, 2012. He further submitted that in respect of an

Indian vessel, procedural benefit by institution of action in rem is

meaningless since an Indian company can easily be served and

there is no need for arrest of any property to compel the

appearance of such defendant nor is there any necessity by any

India company to provide fund for securing compliance with the

judgment. He submitted that such requirement would be wholly

contrary to the underlined principles laid down under Order 38

Rule 5, Code of Civil Procedure, 1908. He submitted that the fact

that Civil Procedure Code applies even in respect of Admiralty suits

is now well recognized. The Admiralty Rules for the High Court at

Calcutta have statutory force and were framed under section 7 of

the Colonial Court Act, 1890. Rule 51 of the Admiralty Rules for

the High Court at Calcutta provides, inter alia, that where no other

provision is made by these Rules, proceedings in suits brought in

the Court in exercise of its jurisdiction under Colonial Court Act,

1890, shall be regulated by rules and practice of the Courts in

suits brought in it in the exercise of its ordinary original civil jurisdiction. He, thereafter, referred to the case of Raman Tech. &

Process Engg. Co. and another vs. Solanki Traders reported in

2008 (8) SCC page 302 wherein it has been held in paragraph 4

that merely having just and valid claim of prima facie case will not

entitle the plaintiff to any order of attachment before judgment,

unless it is established that the defendant's action is an attempt to

remove or dispose of its assets with intention of defeating the

decree that may be passed. He also submitted that it has also been

held that the purpose of Order 38 Rule 5 is not to convert

unsecured debt into a secured debt and that such power should be

used sparingly and strictly in accordance with rule. The provisions

contained under Order 38 Rule 5, as interpreted by the Supreme

Court in Raman Tech. & Process Engg. Co. and Another (supra)

makes it clear that for Indian vessels, Order 38 Rule 5 principles

have to be observed. In an action for a suit in rem, only the vessel

is a party defendant, i.e., the plaintiff's only recourse is against the

property of the owner. The strict language of Order 38 Rule 5 will

militate against property of Indian defendant being proceeded with,

without first establishing a prima facie case in personam against

the Indian defendant.

After considering the submissions made by the learned

counsel for the parties and before deciding on the issue of

jurisdiction, it may be worthwhile to dwell briefly on the advent

and evolution of Admiralty law.

The expression "admiralty law", used in many countries with

Anglo Saxon legal traditions adds to the terminology debate.

Admiralty law refers to the body of law including procedural rules

developed by the English Courts of Admiralty in their exercise of

jurisdiction over matters pertaining to the sea. This jurisdiction

was distinctively different from that of the common law courts.

Admiralty law thus originally encompassed those subject matters

over which the admiralty courts possessed inherent jurisdiction

imbued through a process of evolution. Subsequently, these

subject matters, which bore a maritime character, were codified

and enumerated by statute. Interestingly enough, while in the

English language the word "admiralty" originates in the office of the

Lord Admiral, its root meaning is derived from Arabic.

The term shipping law is used to describe the law relating to

ships and shipping. It is mostly used interchangeably with the

term maritime law and encompasses all aspects of ships, shipping

and maritime transportation. It is both private and regulatory in scope and includes commercial maritime law, maritime safety,

pollution prevention and labour law as well as admiralty law in

common law jurisdictions, but does not extend to the public

international law of the sea. In common law jurisdictions,

admiralty law often connotes the maritime law relating to "wet"

matters, i.e., those involving ships when they are at sea, as

distinguished from "dry" matters also involving ships but

pertaining only to commercial aspects that are essentially land-

based issues.

While maritime law consists of two broad elements, dividing it

into two neat compartments and labelling them "public" and

"private", is rather an oversimplification. The shipping industry is

involved in many matters of general law and non-maritime legal

transactions which are not part of the lex maritime. It is well

acknowledged that many aspects of commercial maritime law are

in fact derived from the lex mercatoria. The bifurcation may be

attributable to perceptions that are politically tinged. As professor

Gold states -

...the new law of the sea has in the past decade addressed

itself to almost all areas of ocean use except the one that

since before the dawn of history, has been preeminent - the use of the ocean as a means to transport people and their

goods from place to place on this planet, so much more of

which is water than is land. Marine transport has been

discussed in an almost abstract manner, as if it did not really

fit or belong within the public domain but needed to be

confined to the more "private" region of international

commerce, which was considered to be outside the scope of

the law of the sea.

By contrast, writing in 1930, Professor Sanborn had this to say -

The words "maritime law", as commonly used today,

denote that part of the whole law which deals chiefly with the

legal relations arising from the use of ships. But in the earlier

period, of which this work treats, the law maritime had a

considerably wider scope. It dealt not merely with the

modern Admiralty law, but also with the primitive ancestors

of some branches of our modern commercial law, dealt, too,

with the germs of that public law which we today style

international law.

(Source: - Maritime Law and Admiralty Jurisdiction: Historical Evolution and Emerging Trends by Dr. Proshanto K. Mukherjee).

The Supreme Court, while rendering its decision in

M.V.Elisabeth, had delved deeply into the scope and jurisdiction of

High Courts in India in respect of Admiralty matters. The elaborate

discussion traces the advent and evolution of its Admiralty

jurisdiction right from the time when the Chartered High Courts

came into existence, till the early 1990s. However, to avoid

prolixity, this Court refrains from dwelling at length upon the

observations made by the Supreme Court in M.V.Elisabeth, except

to the extent it is imperative for the purpose of deciding the present

issue.

Now, coming back to the issue in hand, it may not be

necessary to consider all the judgments referred to and relied on by

the learned counsel for the parties barring two, which have been

rendered in the factual backdrop of Indian flag flying vessels. In

S.S.Leelavati, the concerned vessel was an Indian flag flying vessel

registered under the Indian laws. However, the issue in the suit

was not whether admiralty jurisdiction could be attracted in

respect of an Indian flag flying vessel, but on the point of

construction of the words, " domiciled in England and Wales"

appearing in section 5 of the Admiralty Court Act, 1861 and whether it could be dovetailed in the topography of India and when

so does, what will be the scope and extent of the meaning of those

words.

The Supreme Court, while overruling S.S.Leelavati, observed

in M.V.Elisabeth, to the effect, that the judgment of the High

Court was based on the reasoning that High Court as a Court of

Admiralty was required to be treated as a separate entity exercising

a distinct and specific or prescribed or limited jurisdiction. The

Supreme Court held, inter alia, that such reasoning was based on

restrictive construction, which was not warranted by the provisions

of the Constitution.

In Crown Maritime Co. (I) Ltd. (supra) - which has been

decided by the Bombay High Court in favour of its Admiralty

jurisdiction being attracted in a case concerning an Indian flag

flying vessel - it is noticed that the learned Single Judge had the

occasion to refer to the Supreme Court's judgment rendered in

M.V.Elisabeth (supra), in extenso. While relying on M.V.Elisabeth

he observed, inter alia, in paragraph 33 as follows:-

"Merely because the observations have been made in the context of the power of arrest of a foreign vessel does not mean that this Court would lose its jurisdiction, merely because the vessel is flying India Flag. I am of the opinion that all controversies on this aspect stand concluded as the last word is spoken by the Supreme Court. The Supreme Court in para 66 of its decision very clearly holds that High Courts in India are superior courts of records, they have Original and Admiralty Jurisdiction, they have inherent and plenary powers and unless expressly or impliedly barred and subject to the Appellate or Discretionary Jurisdiction of the Supreme Court, the High Courts have unlimited jurisdiction, including jurisdiction to determine their own powers. Such being the Authority and the jurisdiction of this Court as enunciated in the decision of M.V.Elizabeth (supra), the Supreme Court naturally turned down the request before it to hold that the Andhra Pradesh High Court would have not jurisdiction.............."

In paragraph 35, while referring to paragraphs 90 and 91 of

M.V.Elisabeth, the Court went on to observe as follows: -

" ................. The Supreme Court observes that all persons and things within the waters of the State shall fall within the Court's jurisdiction, unless specifically curtailed or regulated by Rules or International Law. The observations of the Supreme Court cannot be read out of context. The Supreme Court never meant that its observations should be construed so as to take away jurisdiction of the Admiralty Court to proceed against Indian Flag Vessel."

In paragraph 36, it has been categorically observed that after

the authoritative pronouncement of the Supreme Court in

M.V.Elisabeth, there should be no doubt about the jurisdiction of

that Court (Bombay High Court). Thereafter, it was observed to the

effect that in the absence of any express bar and in the light of

clear pronouncement of the Supreme Court, there was no

substance in the contention of the learned advocate for the

defendant on the issue of jurisdiction of the Bombay High Court.

This Court, however, is in respectful disagreement with

the view expressed by the learned Single Judge of the Bombay High

Court in Crown Maritime Co. (I) Ltd.'s case (supra). Although

M.V.Elisabeth has been extensively referred to and relied on by the

learned Single Judge, a significant and categorical observation

made by the Supreme Court in M.V.Elisabeth has not been taken

notice of in the judgment. In paragraph 83 of M.V.Elisabeth, the

Supreme Court has clearly observed as follows:-

"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." (emphasis supplied by this Court) The above observation of the Supreme Court makes it

categorically clear that it is only the presence of a "foreign ship" in

Indian waters, which determines the attraction of Admiralty

jurisdiction of the High Court. It can, therefore, be held that the

observations made by the Supreme Court in M.V.Elisabeth - as

referred to by the Bombay High Court in Crown Maritime Co. (I)

Ltd.'s case (supra) - cannot be an authority for the proposition

that a High Court, in its Admiralty jurisdiction, has the power to

entertain, try and determine an action against an Indian flag flying

vessel.

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, (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.

In such circumstances, the concerned department is directed

to de-register the plaint together with all interlocutory applications, forthwith. The plaintiff, however, is at liberty to approach a Court

of competent Civil jurisdiction for instituting the suit, afresh.

Urgent photostat certified copy of this judgment and order, if

applied for, be supplied to the parties on priority basis.

(Biswanath Somadder, J.)