TMI Blog2003 (11) TMI 627X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent. The first two vessels entered into a contract with the appellant's association for the years 1998-1999 and 1999-2000 but they have not paid the unpaid insurance premium due and payable by the 2nd respondent for various P I risks for which they had been insured. These unpaid insurance calls being necessaries was enforceable within the admiralty jurisdiction of the Bombay High Court. 3. For the arrest of the 1st respondent vessel which came to Mumbai Port within the territorial waters of India, a suit was filed by the club inter alia for the prayers : (a) for a decree against the respondents in the sum of US$1,18,194.89 together with interest at the rate of 12% per annum, which was the unpaid insurance premium amount due to the club and payable by the 2nd respondent; and (b) for arrest of the 1st respondent vessel to secure the claim. 4. On an application for arrest of the 1st respondent vessel having been made, the 2nd respondent appeared and undertook to furnish security in respect of the appellant's claim and further gave an undertaking that until the security is furnished the said vessel will not leave the Port of Mumbai. However, thereafter S.S. Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it: (i) The amount of arrears of insurance premium alleged to be due to the 1st respondent towards release calls is not a maritime claim entitling the Club to invoke the admiralty jurisdiction of the High Court as such unpaid insurance money does not constitute 'necessaries' within the meaning of Section 5 of the Admiralty Courts Act, 1861. (ii) Sufficiently direct and proximate connection between insurance and the vessel is a prerequisite for bringing an action in rem. Insurance is meant primarily as a means of indemnifying and protecting the vessel owner against the loss of his vessel and/or claims that that may arise as a result of damage or loss caused by the vessel. Although it may be a commercial necessity but the same would not come within the purview of the term 'necessaries' within the meaning of the provisions of the said Act. The provisions contained in the Admiralty Courts Act of 1840 and 1861, Section 22 of the Supreme Court of Judicature Act, 1925, the 1952 Brussels Arrest Convention as also the Administration of Justice Act, 1956 disclose one uniform feature that in order that a monetary claim qualifies for and is recognized as a maritime cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bursements made on account of a ship . (vii) In the decision of this Court in M.V. Elisabeth [1992]1SCR1003 , it was merely held that the High Courts in India will have an extended jurisdiction under the Admiralty Courts Act, 1861 and the said principle cannot be further extended. (viii) As the maritime jurisdiction of the High Courts in India was derived from the pre-independence statutes and as the High Courts of India exercise the same jurisdiction as that of the courts in England, it must necessarily be held that the interpretation of the word necessaries rendered by the English Courts and which has been followed by other courts except by the American Court should prevail. 9. Mr. Prashant S. Pratap, the learned counsel appearing on behalf of the Club, on the other hand, would submit that: (i) necessaries are the things which a prudent owner would provide to enable a Ship to perform the functions wherefore she has been engaged and, thus, the provision of services would come within the definition of necessaries. (ii) The term necessaries must be construed in a broad and liberal manner keeping in mind the ever changing requirements of a ship to be ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se the said court shall have full jurisdiction to take cognizance of all claims and causes of action of any person in respect of any mortgage of such ship or vessel, and to decide any suit instituted by any such person in respect of any such claims or causes of action respectively. 4. COURT TO DECIDE QUESTIONS OF TITLE, ETC.: The said Court of Admiralty shall have jurisdiction to decide all questions as to the title to or ownership of any ship, or vessel, or the proceeds thereof remaining in the registry, arising in any cause of possession, salvage, damage, wages or bottomry, which shall be instituted in the said court after the passing of this Act. 6. THE COURT IN CERTAIN CASES MAY ADJUDICATE, ETC.: The High Court of Admiralty shall have jurisdiction to decide all claims and demands whatsoever in the nature of salvage for services rendered to or damage received by any ship or sea-going vessel or in the nature of towage, or for necessaries supplied to any foreign ship or seagoing vessel, and to enforce the payment thereof, whether such ship or vessel may have been within the body of a country, or upon the high seas, at the time when the services were rendered or damage re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Courts of Admiralty Act, 1890 reads thus: 2. Colonial Courts of Admiralty. - (1) Every court of law in a British possession, which is for the time being declared in pursuance of this Act to be a Court of Admiralty, or which, if no such declaration is in force in the possession, has therein original unlimited civil jurisdiction, shall be a Court of Admiralty, with the jurisdiction in this Act mentioned, and may for the purpose of that jurisdiction, exercise all the powers which it possesses for the purpose of its other civil jurisdiction, and such Court in reference to the jurisdiction conferred by this Act is in this Act referred to as a Colonial Court of Admiralty.... (2) The jurisdiction of a Colonial Court of Admiralty shall, subject to the provisions of this Act, be over the like places, persons, matters, and things, as the Admiralty jurisdiction of the High Court in England, whether existing by virtue of any statute or otherwise, and the Colonial Court of Admiralty may exercise such jurisdiction in like manner and to as full an extent as the High Court in England, and shall have the same regard as that Court to international law and the comity of nations. 13. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he jurisdiction of the High Court of Admiralty in England used to be exercised in rem in such matters as from their very nature would give rise to a maritime lien - e.g. collision, salvage, bottomry. The jurisdiction of the High Court of Admiralty in England was, however, extended to cover matters in respect of which there was no maritime lien, i.e., necessaries supplied to a foreign ship. In terms of Section 6 of the Admiralty Act, 1861, the High Court of Admiralty was empowered to assume jurisdiction over foreign ships in respect of claims to cargo carried into any port in England or Wales. By reason of Judicature Act of 1873, the jurisdiction of the High Court of Justice resulted in a fusion: of admiralty law, common law and equity. The limit of the jurisdiction of the Admiralty court in terms of Section 6 of the 1861 Act was discarded by the Administration of Justice Act, 1920 and the jurisdiction of the High Court thereby was 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. 17. The admiralty jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es never considered the arrears of insurance premium as a 'necessary'. The Courts of England further maintained a distinction between a maritime claim and maritime lien. The decisions cited by Mr. Bharucha go to show that the English Courts proceeded on the premise that for the purpose of considering as to whether any necessary has been supplied to a ship or not must have a sufficient and direct connection with the operation of the ship. It held that unpaid insurance premium is not a maritime claim as it is not needed to keep it going. [See Queen v. Judge of the City of London Court (supra), Heinrich Bjorn (supra), The Andre Theodore (supra), The Aifanourious (supra). The English Courts, thus, refused to put a wide construction on that term. 24. A similar view was also adopted by an Australian High Court in Gould v. Cornhill Insurance Co. Ltd. [1 DLR 4th Ed. 183]. 25. In The Riga (1869) L.R. 3 A E 516, it is stated: The definition of the term necessaries given by Lord Tenterden in Webster v. Seekamp (4 B. Ald. 352) adopted and applied in proceedings in Admiralty. Semble, there is no distinction between necessaries for the ship and necessaries for the voyage. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt of Durban in M.V. Emerald Transporter 1985 2 SALR 448 with reference to the provisions contained in Admiralty Jurisdiction Regulation Act 105 of 1983 wherein it was held that services which are insured solely to the benefit of the ship owner would not be classed as necessaries. The said decision was, however, rendered in the context of ranking of claims against a fund comprising of sale proceeds of the vessel M.V. Emerald Transporter . 29. The House of Lords in The River Rima (supra) considered the provisions of Article 1(1)(k) of the 1952 Brussels Arrest Convention incorporating goods or materials wherever supplied to a ship for her operation or maintenance as a maritime claim. Having regard to the provisions contained in Section 6 of Admiralty Court Act, 1840 and Section 5 of Admiralty Court Act, 1861 it was held: In other words, what is now called a claim in respect of goods or materials supplied to a ship for her operation or maintenance is the equivalent of what used to be called a claim for necessaries , but without the restrictions which formerly applied to such a claim. (Emphasis Supplied) 30. The Singapore High Court also in Golden Petroleum 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The decisions rendered by different courts on marine insurance law even frequently apply to non-marine insurance. With the increase in marine traffic, the insurance law also developed and new varieties of insurance covers came into being. There has been a considerable expansion of the practice of insurance against various forums of legal liabilities which the assured may incur to the third parties. 35. P I mutual insurances cover the liabilities of assured shipowner incurred to third parties. In Modern Admiralty Law by Aleka Mandaraka-Sheppard at page 642, it is stated: P I mutual insurance (P I associations) cover the liabilities of their assured shipowner incurred to third parties, which include cargo claims, pollution liabilities, damage to harbours, piers, etc., and personal injury' or loss of life claims, which are all excluded from the RDC clause. In addition the P I association insures the remaining one-fourth of the assured' liability under the RDC clause. Legal costs in defending such claims are covered as well. 36. The title of a claimant to sue the defendant as regard cargo claim enquiry has been stated in Shipping Law by Simon Baughen, Second Editi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed if the parties agree to the incorporation of the SCOPIC clause. If the clause is incorporated it then needs to be invoked by salvor. This can be done even if there is no threat to the environment. Invoking the clause completely replaces the right of the salvor to claim under Article 14, even in respect of services performed before the invocation of the clause. The provisions of Articles 14(5) and (6), however, continue to remain effective. Within two days of the clause being invoked, Clause 3 obliges the shipowner to put up security for the salvor's claim under the clause in the amount of US $ 3,000,000. If the shipowner fails to do so, Clause 4 entitles the salvor to withdraw from the SCOPIC clause, provided the security is still outstanding at the date of withdrawal. Clause 5 provides that SCOPIC remuneration is to be calculated by reference to an agreed tariff of rates that are profitable to salvors, calculated by reference to the horsepower of the salvage tug/s employed. It also covers the salvor's out of pocket expenses. An uplift of 25% is applied to both these heads of claim. Clause 6 provides that SCOPIC remuneration is payable only in the event that it exce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more commercially expedient. No ship having regard to the ramification in international law can sail without such insurance. Apart from the 1952 Brussels Arrest Convention, the Merchant Shipping (Oil) Pollution Act, 1961 makes insurance compulsory. 41. As would be noticed hereinafter, P I insurance cover to call at major ports in India is new a statutory requirement, CHANGING SCENARIO: 42. The advancement in Taw would be evident from the 1999 Arrest Convention whereby significant changes to the law relating to in rem claims and arrest has been made. Pursuant to Article 14 of the 1999 Arrest Convention, such changes would come into force six months after ratification by the 10th State. 43. The countries which have ratified the Convention are as follows: Algeria, Antigua and Barbuda, Bahamas, Belgium, Belize, Benin, Burkina Faso, Cameroon, Central African Republic, Comoros, Congo, Costa Rica, Cote d'Ivoire, Croatia, Cuba, Denmark, Djibouti, Dominica, Republic of, Egypt, Fiji, Finland, France, Overseas Territories, Gabon, Germany, Greece, Grenada, Guyana, Guinea, Haiti, Haute-Volta, Holy, Seat, Ireland, Italy, Khmere Republic, Kiribati, Latvia, Luxembourg, Mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecified in Article 1 of the Convention. Other claims can only be secured if the vessel's home port is situated in a non-contracting State. 46. Apart from those restrictions resulting from the Convention, all kinds of claims can be secured by an arrest and there is no need to prove a connection with the operation of the vessel. As for example, a guarantee given by the owners for a subsidiary company or other principal debtor is as suitable as a claim resulting from the purchase of the ship or any other goods by the owners. However, in terms of Article 1(k) of the Convention claims for goods or materials supplied to a ship for her operation or maintenance are acknowledged as maritime claims. 47. What was expressly excluded in 1952 convention has been included in 1999 convention. The restrictions imposed under 1952 convention as regard 'Maritime claim' to operation of ship and maintenance thereof have been removed. 48. In Kapila Hingorani v. State of Bihar (2003)IIILLJ31SC this Court observed: Justice Holmes expressed the following view in Missouri v. Holland 252 US 416 (433)3 : When we are dealing with words that also are a constituent act, like t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve changes of the statute effected by passage of time. 51. Referring to the changing scenario of the law having regard to the declaration on the right to development adopted by the World Conference on Human Rights and Article 18 of the United Nations Covenant on civil and Political Rights, 1966, it was held: It is trite that having regard to Article 13(1) of the Constitution, the constitutionality of the impugned legislation is required to be considered on the basis of laws existing on 26.11.1950, but while doing so the court is not precluded from taking into consideration the subsequent events which have taken place thereafter. It is further trite that that the law although may be constitutional when enacted but with passage of time the same may be held to be unconstitutional in view of the changing situation. Justice Cardoze said : The law has its epochs of ebb and flow, the flood tides are on us. The old order may change yielding place to new; but the transition is never an easy process . Albert Campus stated : The wheel turns, history changes . Stability and change are the two sides of the same law-coin. In their pure form they are antagonistic p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trend. Flexibility is the virtue of the law courts as Roscoe Pound puts it. The pedantic approach of the law courts are no longer existing by reason of the global change of outlook in trade and commerce. The observations of Barker, J. and the findings thereon in the New Zealand case (1980) 1 NZLR 104 with the longish narrations as above, depicts our inclination to concur with the same, but since issue is slightly different in the matter under consideration, we, however, leave the issue open, though the two decisions as above cannot be doubted in any way whatsoever and we feel it expedient to record that there exists sufficient reasons and justification in the submission of Mr. Desai as regards the invocation of jurisdiction under Section 44-A of the Code upon reliance on the two decisions of the New Zealand and Australian Courts. 56. No statutory law in India operates in the field. Interpretative changes, if any, must, thus be made having regard to the ever changing global scenario. 57. This Court in M.V. Elisabeth (supra) observed that Indian statutes lag behind any development of international law and further it had not adopted the various conventions but opined that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aps because of other circumstances, such as lack of an adequate and specialised machinery for implementation of the various international conventions by co-ordinating for the purpose the Departments concerned of the Government. Such a specialised body of legal and technical experts can facilitate adoption of internationally unified rules by national legislation. It is appropriate that sufficient attention is paid to this aspect of the matter by the authorities concerned. Perhaps the Law Commission of India, endowed as it ought to be with sufficient authority, status and independence, as is the position in England, can render valuable help in this regard. Delay in the adoption of international conventions which are intended to facilitate trade hinders the economic growth of the nation. (Emphasis supplied) 60. M.V. Elisabeth (supra) is an authority for the proposition that the changing global scenario should be kept in mind having regard to the fact that there does not exist any primary act touching the subject and in absence of any domestic legislation to the contrary; if the 1952 Arrest Convention had been applied, although India was not a signatory thereto, there is obvi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme of Indian law keeping in view the changing global scenario. Global changes and outlook in trade and commerce could be a relevant factor. With the change of time; from narrow and pedantic approach, the Court may resort to broad and liberal interpretation. What was not considered to be a necessity a century back, may be held to be so now. INDIAN STATUTES OPERATING IN THE FIELD: 67. Section 352N of the Indian Merchant Shipping Act, 1958 makes such an insurance compulsory which reads as under: 352-N. Compulsory insurance or other financial guarantee. - (1) The owner of every Indian ship which carries 2000 tons or more oil in bulk as cargo, shall, in respect of such ship, maintain an insurance or other financial security for an amount equivalent to - (a) one hundred and thirty-three Special Drawing Rights for each ton of the ship's tonnage; or (b) fourteen million Special Drawing Rights, whichever is lower. 68. The Inland Vessels Act requires a compulsory third party risk insurance cover and the standard format charter parties mostly have printed clauses making it mandatory for a vessel to have a valid protection and indemnity cover for want ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ient documentation on board will be given a warning until 5th September, 2001. Thereafter ships will be detained until the requirement documentation is produced. AMSA officials have indicated that although the Notice requires that the amount of cover be set out in the Certificate of Entry it will be assumed if a dollar amount is not set out that Club cover in any event extends at least to the cover provided under the 1976 Convention as amended. AMSA officials have also indicated that if a vessel does not carry any original certificate of Entry they will be satisfied with the provision of a photocopy on the vessel's first visit. However on the second and subsequent visits vessels will be expected to carry an original Certificate of Entry. Please contact the Club if you need further information. Yours faithfully, THOMAS MILLER (BERMUDA) LTD. 73. A circular has also been Issued by the Insurance Association on 26.07.2000 regarding new legislation in U.S.A. (Alaska) which is to the following effect: 26 July 2000 TO ALL MEMBERS Dear Sirs OIL POLLUTION: UNITED STATES NEW LEGISLATION IN ALASKA FOR NON-TANK VESSELS FINANCI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roval A completed application form and appropriate documentation evidencing proof of financial responsibility which is submitted by 31 August 2000 will be deemed approved by ADEC for purposes of meeting the 1 September 2000 deadline. Following adoption of final regulations, ADEC will review each application to ensure that it meets the requirements of the statute and regulations. A formal approval will be given to those vessels which qualify, and non-qualifying applicants will be given 30 days to submit additional information as requested by the Department. Application Form A copy of ADEC's application form is attached. In Section (c), paragraph 1(b), proof of financial responsibility by entry in a P I Club must include a Certificate of Entry and must include all addenda pertaining to the amount and applicability of oil pollution cover and amount of deductibles. Deductibles With respect of deductibles, paragraph 1(c) of the application asks for proof of financial responsibility for any deductible, such as a certificate of deposit, or other financial information. It thus appears that ADEC will require some evidence of financial responsibility for any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich do not possess valued insurance cover will not be given an anchorage berth in the Mumbai Port for cargo work or for any other purpose, this notice period is given so that the owners, agents and shippers proposing to load cargo have sufficient time to ensure that such cargoes will be loaded on duly protected ships. Sd/- Deputy Conservators CALCUTTA PORT TRUST HARBOUR MASTER (PORT)'S OFFICE CIRCULAR NO. 10 DATED 26.6.2001 To All Shipping Agents To safeguard Port interest for damage cost of repairs due marine accident or otherwise, it is mandatory for the Agents to declare along with Berthing Application the details of P I Club Coverage including period of validity and a declaration that insurance provides comprehensive coverage, inter alia, the following risks: 1) 3rd party liability claims 2) Claims arising out of injury/death etc. 3) Claims arising out of damage to port properties 4) Claims against environmental damage owing to pollution caused by the ship or its personnel 5) Removal of the wreck comprehensively The above details required to be submitted along with Berthing application to Harbour Master ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ballentine's Law Dictionary, the term 'necessaries' has been defined as follows: Under the maritime law permitting the master of a ship to pledge the owner's credit for necessaries, the word does not import absolute necessity, but the circumstances must be such that a reasonable prudent owner, present, would have authorized the expenditures, and it is usually sufficient if they are reasonably fit and proper, having regard to the exigencies and requirements of the ship, for the port where she is lying and the voyage on which she is bound. 48 Am J1st Ship 133. 84. In 70 American Jurisprudence 2d, at page 478, it is stated: The term necessary in this connection does not mean indispensable to the safety of the vessel and crew; necessaries which will create a lien upon the ship are such as are reasonably fit and proper for her under the circumstances, and not merely such as are absolutely indispensable for her safety or the accomplishment of the voyage. Whatever a prudent owner, if present, would be supposed to have authorized, the master may order, and for such expenditures the vessel will be held responsible. 85. We may further notice that in M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontracts of marine insurance are not claims which entitle a claimant to proceed by way of action in rem and claimants in respect of P. I. Club membership are in no better position than those claiming in respect of traditional hull and cargo insurance. In this context there is one respect in which the insurance cover offered by P. I. Clubs differs from hull and cargo insurance and which has yet to receive the attention of the courts. Certain heads of P. I. Cover have ceased to be matters which are, as Sir James Hannen P. once described, merely prudence but have become compulsory by law. Compulsory liability insurance was introduced in the area of oil pollution liability by the International Convention on civil Liability for Oil Pollution 1969. Under the regime thereby introduced a shipowner is legally unable to trade or put to sea without having effected oil pollution indemnity insurance and having adequate liability insurance is as 'necessary' to a shipowner as having fuel, stores, navigational equipment or other well-recognised necessaries . It is also arguable that as oil cannot be lawfully transported without the carrier having the required insurance cover, a contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nventions, find this one sufficiently non-controversial to commend it to their legislatures. 91. The learned author further stated: The principles of international law relating to jurisdiction have evolved significantly since 1952, in Europe in particular under the European Convention on Jurisdiction and Judgments 1968, but also with the development in English Law of the doctrine of forum non convenient in cases such as the ABDIN DAVER [1984] A.C. 398. The terms of Article 7 have therefore been drafted to reflect the modern law, while retaining the original principle in paragraph 1 that, in the absence of another rule of the lex fori arresti, the courts of the state where the ship has been arrested shall have jurisdiction to decide the merits of the claim. 92. In Project Gabcikovo-Nagymaros (Op. Ind. Weeramantry) the International Court in its judgment dated 25.9.1997 at page 114 albeit in a different context observed:. As this Court observed in the Namibia case, an international instrument has to be interpreted and applied within the framework of the entire legal system prevailing at the time of the interpretation (Legal Consequences for States of the Cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e insurance is essential to keep a vessel in commerce, insurance is a necessary under 46 U.S.C. Section 971 and unpaid insurance premiums to give rise to a maritime lien under the FMLA. 95. Equilease Corp. (supra) has a greater persuasive value having regard to the fact that contemporary maritime statutes in England and other countries do not use the term necessaries but the American Federal Maritime Liens Act does. 96. The Indian courts need not follow the English judicial ideologies blindly. We must remind ourselves that in many fields, particularly, in the matter of preservation of 'Human Rights' and 'Ecology', Indian courts have gone far ahead than their English counterparts. 97. The decisions of the English Courts have been held to be a departure by the American Courts with regard to the jurisdiction of the admiralty but such departure is a well-known one. 98. Equilease Corporation has been noticed in Trident Marine Managers Inc. v. Serial No. CEBRF 0661586 [1988 American Maritime Cases 763]. 99. The question, however, is whether a prudent shipowner would provide for an insurance. A compulsory insurance regime has come into being and keepi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is, of necessity, a wanderer. She visits shores where her owners are not known or are inaccessible. The master is the fully authorized agent of the distant owners but is not usually of sufficient pecuniary ability to respond to unforeseen demands of the voyage. These and other kindred characteristics of maritime commerce underlie the practice of finding in the ship itself security, in many cases, for demands against the master or owners in their conduct of the ship as an instrumentality, whether commercial or not, or in their contracts made on account of the ship. 104. In British Shipping Laws, Volume 14, while contrasting maritime liens and statutory rights of action it is stated: Although, maritime liens and statutory rights of action in rem are similar in that they involve the Admiralty process in rem, there nonetheless exist fundamental differences between the two categories. These differences may be categories as follows: (1) Nature of the claim Although the point is not free of uncertainty it is probably the case that a maritime lien is a substantive right whereas a statutory right of action in rem is in essence a procedural remedy. The object behind the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry but not in others. The 'Club' in law, therefore, would be entitled to enforce its claims against the 'Vessel' keeping in view the law prevailing in India within whose territorial jurisdiction the ship is found. Only because, the claim can be enforced in our country and not in some other countries, by itself would not lead to the conclusion that it cannot be enforced at all irrespective of the domestic law. 107. Some countries like Canada, Australia and South Africa as well as communist regimes like China and Korea have made statutes as a result whereof the maritime claims stand codified. The expression 'necessaries' is not used in the said statutes except the statutes of United States. The domestic legislation indisputably will prevail over any international convention irrespective of the fact as to whether the country concerned is a party thereto or not. 108. The rules for ship arrest in international for a are not uniform. Despite International Convention on the Arrest of Sea-going Ships 1952 as amended in the year 1999 either having been adopted by some countries or adopted by others, the law is enforced by the concerned countries having regard t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the plaint the defences set out by the defendant are not obliterated as they will be entitled to raise all such contentions at the trial. Reliance in this connection has been placed on Prahladrai Agarwalla v. Shri Renuka Pal AIR1982Cal259 . 113. Mr. Pratap would further contend that the High Court has misread and misinterpreted the decision of this Court in Shah Babulal Khimji v. Jayaben Kania [1982]1SCR187 114. By way of an analogy, the learned counsel would argue that leave to defend a suit granted in favour of the defendant under Order 37 of the Code of civil Procedure would not be a 'judgment' within the meaning of Clause 15 of the Letter Patent being an interlocutory order as damage or prejudice in such a matter to the defendant must be a direct and immediate one. 115. Clause 15 permits an appeal against the order passed by a Single Judge of the High Court in the second forum. 116. The relevant portion of Clause 15 of the Letters Patent reads thus: And we do further ordain that an appeal shall lie to the said High Court of Judicature at Madras, Bombay, Fort William in Bengal from the judgment ... of one Judge of the said High Court or one Judge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Act but when it is not so subject to the special provision the power and jurisdiction of the High Court under Clause 15 to entertain any appeal from a judgment would be effective. The decision of this Court in Shah Babulal Khimji's case (supra) has been considered in some details by a Special Bench of the Calcutta High Court in Tanusree Art Printers and Anr. v. Rabindra Nath Pal (2000)3CALLT412(HC) . It was pointed out: If the right of appeal is a creature of a statute, the same would be governed by the said statute. Whether an appeal under Clause 15 of the Letters patent will be maintainable or not when the matter is governed by a Special Statute will also have to be judged from the scheme thereof. (e.g. despite absence of bar, a Letters Patent appeal will not be maintainable from a judgment of the learned Single Judge rendered under the Representation of People Act.) It was pointed out that in Shah Babulal Khimji's case (supra) this Court posed three questions namely: 1) Whether in view of Clause 15 of the Letters Patent an appeal under Section 104 of the Code of civil Procedure would lie? 2) Whether Clause 15 of the Letters Patent supersedes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers Patent may not be of much relevance. 120. In Tanusree Art Printers and Anr. v. Rabindra Nath Pal (2000)3CALLT412(HC) it has been noticed; In Merchants of Traders (P) Ltd. v. Sarmon Pvt. Ltd., reported in MANU/WB/0157/1997MANU/WB/0157/1997 : (1997)2CALLT38(HC) , learned Division Bench although did not consider this aspect of the matter but held that an order passed in terms of Order 37 Rule 5 of the Code of civil Procedure will not be appealable. 121. Reliance by Mr. Pratap upon a decision of the Calcutta High Court in Prahladrai Agarwalla and Ors. v. Smt. Renuka Pal and Ors . AIR1982Cal259 wherein it has been held that an order under Order 7 Rule 11 of the Code of civil Procedure refusing to reject a plaint is not a judgment, is not apposite. 122. In the said judgment, however, the judgment of this Court in Shah Babulal Khimji (supra) was not taken into consideration. The ratio of the decision of this Court in Shah Babulal Khimji , as regard scope and ambit of the word judgment had not been noticed by the Calcutta High Court. 123. The submission, however, to the effect that in the suit all defences would be open to the defendant, in our opinion, is misco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve of a right of the plaintiff and would accordingly be a judgment. 130. Yet again in Chittaranjan Mondal v. Sankar Prosad Sahani AIR1972Cal469 the Calcutta High Court held that an order refusing to grant an injunction restraining execution of the judgment-debtor was a judgment within the meaning of Clause 15. 131. As by reason of an order passed under Order 7, Rule 11 of the Code of civil Procedure, the rights conferred upon the parties are determined one way or the other, stricto sensu it would not be an interlocutory order but having regard to its traits and trappings would be a preliminary judgment. 132. It is true that in Shah Babulal Khimji (supra) it is stated that an order rejecting the plaint would be appealable but does not expressly state that an order refusing to reject would not be appealable. Therein this Court gave 15 instances where an order would be appealable which are only illustrative in nature. 133. Such observations have to be understood having regard to the concept of finality which are of three types: (1) a final judgment (2) a preliminary judgment and (3) intermediary or interlocutory judgment. 134. In our opinion the order r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... large number of visits by the appellant from distant places like Delhi and Bombay to Ranchi resulting in not only heavy expenses and loss of time and diversion of the appellant from his public duty in the various fields of activity including those in the House of the People. It would mean unnecessary harassment and expenses for the appellant which could certainly be avoided if the preliminary objection urged by him was decided at the initial stage by the Election Tribunal. 138. It was opined that in a given case a full dressed trial need not be undertaken. 139. Yet again in Samar Singh v. Kedar Nath AIR1987SC1926 it has been held : In substance, the argument is that the court must proceed with the trial, record the evidence, and only after the trial of the election petition is concluded that the powers under the Code of civil Procedure for dealing appropriately with the defective petition which does not disclose cause of action should be exercised. With respect to the learned counsel, it is an argument which it is difficult to comprehend. The whole purpose of conferment of such powers is to ensure that a litigation which is meaningless and bound to prove abortive sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ID Act confers valuable rights on the workmen and correspondingly imposes onerous obligations on the employer. The order in question passed by the learned Single Judge determines the entitlement of the workmen to receive benefits and imposes an obligation on the appellant to pay such benefits provided in the said section. That order cannot but be judgment within the meaning of clause 10 of Letters Patent, Patna. The High Court is obviously in error in holding that the said order is not judgment within the meaning of clause 10 of the Letters Patent of Patna. 142. We, therefore, are of the opinion that Letters Patent Appeal was maintainable. REJECTION OF PLAINT: 143. Whether a plaint discloses a cause of action or not is essentially a question of fact. But whether it does or does not must be found out from reading the plaint itself. For the said purpose the averments made in the plaint in their entirety must be held to be correct. The test is as to whether if the averments made in the plaint are taken to be correct in its entirety, a decree would be passed. CAUSE OF ACTION: 144. A cause of action is a bundle of facts which are required to be pleaded an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which were entered for P I risks with the Plaintiff Association. The said two vessels were entered into the Plaintiff's Association for the policy year 1999-2000 by Defendant No. 2, Singapore Soviet Shipping Co. Pte. Ltd. who, as per the terms of the insurance and Rules of the Plaintiff Association, were recognized and considered to be the owners of the said two vessels and the assured under the policy of insurance. The 1st Defendant vessel is owned and/ or controlled by Defendant No. 2 through its wholly owned 100% subsidiary, Singapore Soviet Shipping Corporation Inc., Monrovia. The 1st Defendant vessel is presently at the port and harbour of Mumbai within the territorial waters of India and within the Admiralty jurisdiction of this Hon'ble Court. The 2nd Defendant is the owner of the 1st Defendant and is also inter alia the party liable in personam in respect of the Plaintiff's claim. The Plaintiff submits as more particularly stated in paragraph 1 above, that the 1st Defendant vessel is a sister ship of the two vessels Sea Glory and Sea Ranger in view of the beneficial ownership, management of all three vessels having vested in Defendant No. 2. The Plainti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out the subordinate facts which are the means of proving it or the evidence sustaining the allegations. 149. The aforementioned dicta has been quoted with approval in Mohan Rawale v. Damodar Tatyaba, and Ors. (1994)2SCC392 . 150. It may be true that Order 7 Rule 11(a) although authorises the court to reject a plaint on failure on the part of the plaintiff to disclose a cause of action but the same would not mean that the averments made therein or a document upon which reliance has been placed although discloses a cause of action, the plaint would be rejected on the ground that such averments are not sufficient to prove the facts stated therein for the purpose of obtaining reliefs claimed in the suit. The approach adopted by the High Court, in this behalf, in our opinion, is not correct. 151. In D. Ramachandran v. R.V. Janakiraman and Ors. MANU/SC/0154/1999MANU/SC/0154/1999 : [1999]1SCR983 , this Court held: It is well settled that in all cases of preliminary objection, the test is to see whether any of the reliefs prayed for could be granted to the appellant if the averments made in the petition are proved to be true. For the purpose of considering a preliminary o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 5 Clause (d), the court is concerned the ascertain whether the allegations made in the petition show a cause of action. The court has not to see whether the claim made by the petitioner is likely to succeed: it has merely to satisfy itself that the allegations made in the petition, if accepted as true, would entitle the petitioner to the relief he claims. If accepting those allegations as true no case is made out for granting relief no cause of action would be shown and the petition must be rejected. But in ascertaining whether the petition shows a cause of action the court does not enter upon a trial of the issues affecting the merits of the claim made by the petitioner. It cannot take into consideration the defences which the defendant may raise upon the merits; nor is the court competent to make an elaborate enquiry into doubtful or complicated questions of law or fact. If the allegations in the petition, prima facie, show a cause of action, the court cannot embark upon an enquiry whether the allegations are true in fact, or whether the petitioner will succeed in the claims made by him. 156. So long as the claim discloses some cause of action or raises some questions fit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ird parties as well as affect the interest of owner and others is a question which must be gone into when passing a final order as regard interim arrest of ship or otherwise. For the aforementioned purpose the Vessel herein could file an application for vacation of stay. While considering such an application, the Court was entitled to consider not only a prima facie case but also the elements of balance of convenience and irreparable injury involved in the matter. In such a situation and particularly when both the parties disclose their documents which are in their possession, the Court would be in a position to ascertain even prima facie as to whether the Club has been able to make out that Sea Glory and Sea Ranger are sister vessels of the Vessel . 159. The reason for the aforementioned conclusion is that if a legal question is raised by the defendant in the written statement, it does not mean that the same has to be decided only by way of an application under Order 7 Rule 11 of the Code of civil Procedure which may amount to pre-judging the matter. 160. Furthermore, the question as to whether the asset of a 100% subsidy can be treated as an asset of the parent company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... troduced in 18th Century when there had been no joint stock companies and the concept of shares in a ship so as to encourage the individuals to pool their resources by a sister ship so that they may become co-owners is a matter which is required to be considered at an appropriate stage. We do not think that such a question can justifiably be gone into at this stage. 164. We do not intend to delve deep into the questions as to whether the two ships named hereinabove are the sister ships of the respondent No. 1 Vessel or whether the requirement of law as regard ownership of a ship in the Respondent No. 1 as beneficial owner has been fulfilled or not. Such issues must be considered at an appropriate stage. CONCLUSION: 165. We, therefore, direct that in the event, a proper application is filed either for dissolution of the interim order of injunction passed by the learned Single Judge or if the High Court in its wisdom thinks fit to decide any issue as a preliminary issue such questions may be gone into in greater details. Any observations made by us must be considered to have been made only for the purpose of disposal of these appeals and not for the purpose of determinin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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