9911796707
TMI Blog1999 (9) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... ant of Arrest has been obtained is vitiated by material misrepresentation or by suppression of material facts. In support of the first ground, it is submitted by Mr. Mukherjee, learned Counsel appearing on behalf of first defendant, that the present application proceeds as on a demurrer, that is, accepting the truth of the statements contained in the plaint and seeking a decision on the issue as a bare question of law. It is submitted that the suit is patently bad in that on the basis of the plaintiff's case, as pleaded, no case is made out asserting any personal cause of action against the owner of the vessel, N.B. Shipping Limited. The only contractual nexus that is pleaded is the contract concluded between the plaintiffs and Project Asia Line, hereinafter referred to as "PAL". According to Mr. Mukherjee, the foundation for plea of jurisdiction is pleaded in paragraph 13 merely on the supply of bunkers. The learned Counsel has pointed out that in para 10 of the plaint, the plaintiffs have merely stated that "they have a cause of action under section 5 of the Admiralty Courts Act, 1861, for necessaries supplied to the first defendant vessel". In paragraph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terers shall provide and pay for all the fuel except as otherwise agreed. Therefore, by no stretch of imagination can it be said that the owners were liable for the supply of necessaries. Knowing this fully well, the plaintiffs could not and did not assert that PAL was the owner of the vessel. In view of the above, the suit has to be dismissed as not disclosing a cause of action in rem against the owners. 3. In reply it is submitted by Mr. Pratap, learned Counsel for the plaintiffs, that the reliance on the judgment in Castlegate by the defendants is wholly misconceived. According to the learned Counsel, the law in India does not require that an action in rem would lie only if the owner is also liable in personam. This, according to the learned Counsel, has been settled by the Supreme Court in the case of M.V. Elisabeth and others v. Harwan Investment and Trading Pvt. Ltd, 1993 Supp. (2) S.C.C. 433. It is the submission of Mr. Pratap that the plaintiffs are relying on principles of English law which are contrary to the position of law under the Admiralty Courts Act, 1861 and the Brussels Convention of 1952, the principles of which form a part of the common Law of India. He submits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Naresh Shridhar Mirajkar v. State of Maharashtra). As stated in Halsbury's Laws of England, 4th Edn. Vol. 10 para 713: "Prime 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 cognisance of the particular Court." Mr. Pratap submits that the aforesaid passages clearly establish that the High Courts have plenary and unlimited jurisdiction, unless it is expressly or by necessary implication curtailed. He submits that examined in this light a bare perusal of sections 5 and 35 of the Admiralty Courts Act, 1861, makes it clear that (a) the High Court has jurisdiction to entertain any claims for necessaries supplied to any ship; and (b) such a claim may be made by an action in rem and/or by proceedings inpersonam. This apart, the Brussels Convention of 1952 provides that a vessel is liable to arrest on the basis of a maritime claim. The learned Counsel on the basis of the observation made by the Supreme Court in paragraph 76 of Elisabeth's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of the vessel, then it would not be necessary to decide the question of law raised by Mr. Mukherjee viz. for an action in rem to lie it is essential that the owner of the vessel is liable in personam. It would be necessary to decide this question only if the Court comes to the conclusion that necessary averments have not been made to disclose a cause of action in personam against the owner. Having perused the plaint and the documents which are made available, 1 am prima facie of the opinion that the necessary averments have been made by the plaintiffs to raise a triable issue with regard to the bunkers being supplied to the owners. Therefore, it would not be necessary to decide the question of law at this stage. I am, prima fade, satisfied that this is not the kind of case where the Court can come to the conclusion, at this interlocutory stage, that there are no averments showing that the bunkers have been supplied to the ship on the alleged authority of the owner. In paragraph 2 of the plaint, it is clearly stated as follows: "2. The first defendant is a motor vessel flying the Cypriot flag and is presently lying berthed and/or at stream at the port and harbour of Kandl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pledge the vessel's credit. It also states that he will give notice of the provisions of this Clause to the owner. Prima fade, without going into the merits or evidentiary value of the documents. I am satisfied that the plaintiffs are perfectly within their right to claim on the basis of the combined reading of confirmation of nomination together with paragraph 21 of the General Terms and Conditions of Sale that the necessaries/bunkers were supplied at the instance/authority of the vessel/owners. Thus, at this stage it would not be possible to hold that the contract has not been entered into by PAL on behalf of the owners of the vessel. In my view, this issue will have to be finally decided on the basis of the evidence which will be adduced at the final hearing of the case. Reading the aforesaid averments together it cannot be said that the plaintiffs have not stated that the supply of necessaries were not made to the owners of the vessel. So, even if the Court proceeds on the basis that action in rem lies only if the owner is liable in personam, the defendant cannot succeed at this stage. Thus I am unable to accept the submission of Mr. Mukherjee that the suit ought to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Terms and Conditions of Sale" prima facie, shows that the plaintiff has acted on the assurance given on behalf of the vessel. Prima facie therefore a rebuttable presumption would arise that the necessaries have been supplied to the vessel on the express or implied authority of the owner. In the case of The Owner of the Steamship "Heiwa Maru" v. Bird & Co., I.L.R. (Vol. 4) Rangoon Series 78 the Court observed: "Necessaries supplied to a ship are of course prima facie presumed to have been supplied on the credit of the ship but there is a passage in the judgment of Their Lordship of the Privy Council in the case of Foong Tai v. Buchheister, Law Reports, Appeal Cases 1908 p. 458 which shows that presumption can be rebutted, and in the case of The Castlegate, Law Reports, Appeal Cases 1893 p. 38, Lord Herschell said that disbursements made by the master on account of the ship must be limited to disbursements which he had a right to make on the credit of the owners of the ship and did not extend to disbursements made by him for purposes for which the charterers ought to have made provision, even though in a sense they might be said to have been made on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the defendants in the present suit is U.S. $ 1,37,000/-, of which a total sum of U.S. $ 70,000 was paid on 27th and 28th February, 1996, the balance sum of U.S. $ 66,000 was recovered pursuant to an attachment of PAL's account on 4th April, 1996. These facts came to the knowledge of the defendants only when interrogatories were served on the plaintiffs. Although the plaintiffs gave replies to the interrogatories, they did not supply the necessary documents tilt a very late stage. It was from the perusal of these documents that the defendants have come to know that the entire amount due for the supplies of necessaries to the vessel m.v. Monchegorsk had already been cleared. Therefore, the action in rem has not been brought in good faith. Had these facts been disclosed at the initial stage, it is possible that the ship would not have been arrested. The plaintiffs have clearly played fraud on the Court. Thus the suit deserves to be dismissed for abuse of the process of Court. In the alternative, the warrant of arrest is liable to be set aside. He submits that defendants are entitled to the refund of the money deposited in Court. 7. On the other hand it is submitted by Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. The suit was to be posted for framing of issues on 24th August, 1999. It was only after this order was passed on 22nd June, 1999 that the defendants took out the present Notice of Motion on 23rd July, 1999. In view of the above it is submitted by Mr. Pratap that the defendants themselves are not absolutely confident of the defence put forward. If the defendants had been certain of their claim for dismissal an application ought to have been filed immediately on the warrant of arrest of the ship being issued. In any event, the learned Counsel submits that there is no material concealment of facts before this Court. He relies on section 35 of the Admiralty Courts Act, 1861 which clearly provides that action in rem is independent of the action in personam. In any event, the plaintiffs are entitled to maintain action in personam and action in rem simultaneously in different jurisdictions. Action in rem is against the vessel whereas action in personam is against the contracting party. In the present case the plaintiffs filed an action in personam against PAL who are not the owners of the vessel. This action was filed in New York on 27-2-1996 in respect of outstandings due from PAL for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered opinion that there has been no material misstatement which would affect the merits of the action in rem. When the plea has been emphatically taken that the amount of U.S. $ 70,000/- and 66,000/- have not been adjusted against the claim of m.v. Monchegorsk it cannot be held that it is such a concealment which would entail the dismissal of the suit. Mr. Mukherjee had also referred to various documents on the record to demonstrate that the entire amount has been settled. However, in my view, perusal of the same, prima facie, would not lead to such an unequivocal conclusion, as put forward by Mr. Mukherjee. Different interpretations can be placed on all the documents which had been relied upon by either side. The plaintiffs are aware from the fax message, Exhibit-6 to the rejoinder, that it was almost impossible to obtain any information from PAL due to the fact that their Houston office is closed and New York is not staffed by any officers with access to correct documentation. How much reliance can be placed on these documents can only be decided when the evidence is led. In such circumstances it would not be possible to hold at this interlocutory stage that the plaintiffs have r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iability on his part, nor will it give rise to any judgment which is enforceable in personam against any such person." "But that an action in rem does raise considerations which take it outside an unqualified application of Article 21 is perhaps most simply illustrated by a quotation from one of the authorities to which Mr. Justice Brandon must have been referring: In (The Cella), 1888(13) P.O. 82 at p. 85, Sir James Hannen said: An unsatisfied judgment in personam is no bar to proceedings in rem. It is of the character of proceedings in rem that they are not alternative to proceedings in personam; they are cumulative. The cause of action in rem does not merge with a judgment in personam given in respect of a cause of action in personam arising from the same facts. As is also made clear by the 1952 Convention, an action m rem is not a form of execution. If an action in rem would be still open to a claimant after having recovered a judgment in personam (but without having obtained full monetary satisfaction), then how much more clearly must it be open to him to commence the action m rem whilst the action in personam is still pending and has not yet proceeded to judgm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a warrant of arrest. Therefore as a matter of England procedure there has to be an action before there can be an arrest and, subject now to section 26 of the 1982 Act, the arrest has to be in aid of a judgment capable of being obtained in that action. The form of the writ in an Admiralty action in rem is one which describes the action as an action in rem against the ship but which also refers to parties as plaintiffs and defendants. No problem arises about the identity of the plaintiffs which equates with the "Claimant" in the 1952 Convention and is, in essence, the same as a plaintiff in an action inpersonam. But the defendants are customarily described as "the owners of the ship" and the writ is addressed to "the defendants and other persons interested in the ship." I believe the same practice of describing the owner as the "owner" has continued in Bombay High Court. Thus I find no ambiguity in the cause title of the plaint. 10. Thus the matter would have to be permitted to go to trial. Even otherwise the courts are very reluctant to dismiss a plaint at the threshold unless the plaint is plainly and obviously devoid of any cause of acti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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