TMI Blog2017 (9) TMI 1883X X X X Extracts X X X X X X X X Extracts X X X X ..... the cause of action arises, and travels with the vessel and subsists whenever and wherever the action may be commenced. A claim for necessaries supplied to a vessel does not become a maritime lien which attaches to the vessel. The High Court was not correct in its view that it was proved by Respondent No. 1 that sale had taken place in April, 2000 by Fairsteel Corporation to Respondent No. 1 by which Respondent No. 1 became the owner of the vessel. It is clear, therefore, that Respondent No. 1 has failed to prove that there was a change of ownership of the vessel in its favour on the date of arrest i.e. on 2.5.2000 - The suit succeeds. - Civil Appeal No. 1930 of 2008 - - - Dated:- 14-9-2017 - Rohinton Fali Nariman and Sanjay Kishan Kaul, JJ. For the Appellant : Shyam Divan, Sr. Adv., Shatadru Chakraborty, Surbhi Anand, Harshita Verma, Sonia Dubey, Advs. for Victor Moses Associates For the Respondent : Ratnanko Banerjee, Sr. Adv., Amitava Mujumdar, Damayanti Sen, Siddhartha Dave, Jentiben A.O., Senthil Jagadeesan and Ashok Mathur, Advs. JUDGMENT Rohinton Fali Nariman, J. 1. The present appeal raises several interesting questions which arise in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... POULOS Lawyers Maritime Consultants of 100, Kololotroni Street, Piraeus, this Tuesday the 18th January 2000, by and between: A. CHRISOMAR CORPORATION, a company duly established and operating under the laws of Liberia, maintaining an office in Greece (5 Solomou Str. Kifissia) (hereinafter called Chrisomar), duly represented, for the purpose of this agreement by its authorized lawyer Mr. Dimitrios Voutsinos, B. THIRD ELEMENT ENTERPRISES LTD., a company duly established and operating under the laws of Cyprus (hereinafter called THE SHIPOWNERS ), duly represented for the purpose of this agreement by the President of the Board of Directors, Mr. Sotirios Soulkas, who also declared that he has the necessary authorization and capacity to bind the company to this agreement by his sole signature. C. Sotirios Soukas, of 145 Filonos Str, Piraeus, the following were stated and agreed. WHEREAS 1. The shipowners are the legal owners of the Cyprus flag vessel Nikolaos S, Int. Sign: P 3 KT 6 ( the vessel ) managed in Greece by Suter Shipping and Trading Ltd. 2. Chrisomar has sold and delivered to the vessel in the port of Durban a certain quantity of bunkers, on or about 26th N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled to. 7. Sotirios Soukas hereby guarantees to Chrisomar and in favour of the shipowner the due payment of the above amount, working the right of division and exclusion i.e. he admits that he will pay amounts due to Chrisomar without the latter having first to enforce its claim against the shipowners and their vessel. 8. If the vessel is lost, for any reason or if the mortgagee bank or any other claimant arrests the vessel before reaching Bangkok and as a result, the shipowners are unable to proceed for loading to Bangkok, and thus execute the above stated charter voyage, the above obligations of the guarantor shall cease to exist but Chrisomar will maintain its rights of recovery only against the shipowners and the vessel but not against the guarantor. 9. This agreement is subject to Greek law and the exclusive jurisdiction of the Piraeus Courts. 4. It appears that nothing in the meanwhile happened. At no point of time did the vessel sail for the port of Bangkok - it remained continuously in Haldia. It is only on 2.5.2000 that the vessel was re-arrested. The Court recorded that no payment had yet been made and that the claim of the Plaintiff continued to remain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent No. 1. It recorded that the said suit was dismissed for non-prosecution on 12.10.2004, and from the averments made in the said suit, it was clear that there was no concluded sale in favour of Respondent No. 1. 8. An appeal to the Division Bench by Respondent No. 1 however succeeded. By the impugned judgment dated 13.9.2006, it was held that the Plaintiff's first witness admitted the fact that the vessel's ownership changed hands and that on the date of re-arrest, i.e. 2.5.2000, it was Respondent No. 1 who was the owner. It also examined various documents to arrive at the conclusion that the vessel physically changed hands on 15.4.2000 and payments under the Letter of Credit were made pursuant to the agreement dated 21.1.2000 on 26.4.2000. The Division Bench further went on to hold that though the allegation as regards the successive transfers of title had not been proved by the Defendant, the said fact would make no difference. It also went on to hold that there could be a good title by estoppel. The Division Bench further went on to apply Section 62 of the Indian Contract Act, 1872 to the out of court settlement dated 18.1.2000 and stated that as there was a nov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resting a vessel. A writ of summons is issued Under Order 53 of the U.K. Code of Civil Procedure for service outside the jurisdiction of the court which is kept alive for a period of six months. Further, according to learned Counsel, Section 62 of the Contract Act is squarely attracted inasmuch as the settlement dated 18.1.2000 completely replaced the original agreement as a result of which the original cause of action pleaded in the suit has disappeared. Learned Counsel also painstakingly took us through various documents to show that the sale of the vessel to Respondent No. 1 had indeed taken place in April, 2000 and that, therefore, on the date of arrest, i.e. 2.5.2000, since his client was the owner of the vessel, the amounts could not be recovered from Respondent No. 1. 11. Admiralty law in England, as was held by Lord Halsbury in Currie v. M'Knight 1897 AC 97, is derived from the laws of Oleron1 and other ancient maritime codes like the Rhodian Sea Law, the Basilika, the Assizes of Jerusalem, the Baltic Laws of Wisbuy and the Hanseatic Code. In England, the common law courts could not give effective redress to cases which arose in admiralty, which were then left to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over twenty pounds, he shall not be entitled to any costs, charges, or expenses incurred by him therein, unless the judge shall certify that the cause was a fit one to be tried in the said Court. Colonial Courts of Admiralty Act, 1890 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 suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich by itself or its cargo threatens damage to the environment; (j) towage; (k) pilotage; (l) goods, materials, perishable or non-perishable provisions, bunker fuel, equipment (including containers), supplied or services rendered to the vessel for its operation, management, preservation or maintenance including any fee payable or leviable; (m) construction, reconstruction, repair, converting or equipping of the vessel; (n) dues in connection with any port, harbour, canal, dock or light tolls, other tolls, waterway or any charges of similar kind chargeable under any law for the time being in force; (o) claim by a master or member of the crew of a vessel or their heirs and dependents for wages or any sum due out of wages or adjudged to be due which may be recoverable as wages or cost of repatriation or social insurance contribution payable on their behalf or any amount an employer is under an obligation to pay to a person as an employee, whether the obligation arose out of a contract of employment or by operation of a law (including operation of a law of any country) for the time being in force, and includes any claim arising under a manning and crew agreement rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st of a vessel which is within its jurisdiction for the purpose of providing security against a maritime claim. Under Section 6 of the said Act, the High Court may also exercise admiralty jurisdiction by an order in personam in respect of the maritime claims referred to in Section 4. Section 9 of the Act sets out the inter se priority of maritime liens, but in so doing also informs us that they are restricted to five subject matters only. Section 9 reads as follows: Section 9 Inter se priority on maritime lien (1) Every maritime lien shall have the following order of inter se priority, namely: (a) claims for wages and other sums due to the master, officers and other members of the vessel's complement in respect of their employment on the vessel, including costs of repatriation and social insurance contributions payable on their behalf; (b) claims in respect of loss of life or personal injury occurring, whether on land or on water, in direct connection with the operation of the vessel; (c) claims for reward for salvage services including special compensation relating thereto; (d) claims for port, canal, and other waterway dues and pilotage dues and any other st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... russels Convention of 1952, a long list of maritime claims is given in Article 1 thereof. Suffice it to say that Sub-clause (k) of Article 1 states that important materials wherever supplied to a ship for her operation or maintenance would fall within the definition of a maritime claim. A maritime lien, on the other hand, attaches to the property of the vessel whenever the cause of action arises, and travels with the vessel and subsists whenever and wherever the action may be commenced. In The Bold Buccleugh, (1852) 7 Moo PCC 267, Sir John Jervis defined maritime lien as follows: [A] maritime lien is well defined ... to mean a claim or privilege upon a thing to be carried into effect by legal process ... that process to be a proceeding in rem.... This claim or privilege travels with the thing into whosesoever possession it may come. It is inchoate from the moment the claim or privilege attaches, and, when carried into effect by legal process by a proceeding in rem, relates back to the period when it first attached. 17. This judgment was referred to in M.V. Elisabeth and Ors. v. Harwan Investment and Trading Private Limited, 1993 Supp. (2) SCC 433, paragraph 56 and Epoch Enter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the fact that this Court does not base its conclusion on the concession of the Plaintiff's counsel but on the authorities cited. 17. It is not disputed that the jurisdiction of this Court is governed by the Admiralty Court Act 1861 (Imp). Section 5 of the 1861 Act provides: 5. The High Court of Admiralty shall have jurisdiction over any claim for necessaries supplied to any ship elsewhere than in the port to which the ship belongs, unless it is shown to the satisfaction of the court that at the time of the institution of the cause any owner or part owner of the ship is domiciled in England or Wales: Provided always, that if in any such cause the Plaintiff do not recover twenty pounds, he shall not be entitled to any costs, charges, or expenses incurred by him therein, unless the judge shall certify that the cause was a fit one to be tried in the said Court. 18. In the case of Laws and Ors. and Smith: the Rio Tinto : 9 PD 356, the Plaintiff had supplied necessaries to the vessel. The Trial Court held that the necessaries were supplied on the credit of the vessel and that the Plaintiff had a right to a maritime lien and that, therefore, in spite of the fact that the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... APP Cas 356, by which it was decided that no maritime lien attaches to a ship in respect of coals or other necessaries supplied to it. 20. In Saba International Shipping and Project Investment Private Limited v. Owners and parties interested in the Vessel M.V. Brave Eagle, previously known as M.V. Lima-I and Ors. (2002) 2 CHN 280 at 287-288 and 289-290, another single Judge of the same High Court differentiated between a maritime claim and a maritime lien and held as follows: 20. Now the issue is what is a maritime claim and what is a maritime lien. These questions are to be answered in this proceeding before continuation of the interim order or passing any further interim order. 21. All cases of maritime lien are based on maritime claims but all maritime claims do not give rise to a maritime lien on the ship. Normally a lien in the general law is a rather limited right over someone else's property. It is a right to retain possession of that property usually to receive a claim. But a maritime lien differs from other liens in one very important respect. Liens generally require possession of the 'res' before they can come into effect. As an example an innkeeper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty bound to enforce, or to ascertain and enforce, satisfaction of his demand; thus, a salvor has a maritime lien on the property saved for such an amount as a court exercising admiralty jurisdiction shall award. Maritime lien are distinguished from all other liens in these two chief particulars: (i) they are in no way founded on possession or property in the claimant, (ii) they are exercised by taking proceedings against the property itself in a form of action styled an action in rem (The Glasgow Packet, 2 Rob. W. 312; The Repulse, 4 Notes of Cas. 170), and, from this and their secret nature, they closely resemble the species of security known to Roman law under the name of hypotheca (Dig. xiii). Interest, if any allowed, and the costs of enforcing a claim for which a maritime lien exists, will be included in such lien (The Margaret, 3 Hagg. Adm. 240). 25. According to the well known treatise of Thomas on maritime lien, the following claims may give rise to maritime lien namely: (a) Damage done by a ship (b) Salvage (c) Seamen's wages (d) Master's wages and disbursements (e) Bottomry and Respondentia . 26. The aforesaid passage from Thomas has been appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing claims against the owner, demise charterer, manager or operator of the vessel shall be secured by a maritime lien on the vessel: (a) claims for wages and other sums due to the master, officers and other members of the vessel's complement in respect of their employment on the vessel, including costs of repatriation and social insurance contributions payable on their behalf; (b) claims in respect of loss of life or personal injury occurring, whether on land or on water, in direct connection with the operation of the vessel; (c) claims for reward for the salvage of the vessel; (d) claims for port, canal, and other waterway dues and pilotage dues; (e) claims based on tort arising out of physical loss or damage caused by the operation of the vessel other than loss of or damage to cargo, containers and passengers' effects carried on the vessel. 2. No maritime lien shall attach to a vessel to secure claims as set out in subparagraphs (b) and (e) of paragraph 1 which arise out of or result from: (a) damage in connection with the carriage of oil or other hazardous or noxious substances by sea for which compensation is payable to the claimants pursuant to int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is a peculiarity of the Anglo-American law, arises from a maritime lien or claim imposing a personal liability upon the owner of the vessel. A Defendant in an admiralty action in personam is liable for the full amount of the Plaintiff's established claim. Likewise, a Defendant acknowledging service in an action in rem is liable to be saddled with full liability even when the amount of the judgment exceeds the value of the res or of the bail provided. An action in rem lies in the English High Court in respect of matters regulated by the Supreme Court Act 1981, and in relation to a number of claims the jurisdiction can be invoked not only against the offending ship in question but also against a 'sistership' i.e., a ship in the same beneficial ownership as the ship in regard to which the claim arose. The vessel which commits the aggression is treated as the offender, as the guilty instrument or thing to which the forfeiture attaches, without any reference whatsoever to the character or conduct of the owner .... (Per Justice Story, The United States v. The Big Malek Adhel [43 US (2 How) 210, 233 (1844)]). xxx xxx xxx A ship may be arrested (i) to acquire juris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iction. An action in rem is directed against the ship itself to satisfy the claim of the Plaintiff out of the res. The ship is for this purpose treated as a person. Such an action may constitute an inducement to the owner to submit to the jurisdiction of the court, thereby making himself liable to be proceeded against by the Plaintiff in personam. It is, however, imperative in an action in rem that the ship should be within jurisdiction at the time the proceedings are started. A decree of the court in such an action binds not merely the parties to the writ but everybody in the world who might dispute the Plaintiff's claim. It is by means of an action in rem that the arrest of a particular ship is secured by the Plaintiff. He does not sue the owner directly and by name; but the owner or anyone interested in the proceedings may appear and defend. The writ is issued to owners and parties interested in the property proceeded against . The proceedings can be started in England or in the United States in respect of a maritime lien, and in England in respect of a statutory right in rem. A maritime lien is a privileged claim against the ship or a right to a part of the property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the latter in favour of the carriers. The Hamburg Rules are acclaimed to be a great improvement on the Hague Rules and far more beneficial from the point of view of the cargo owners. India has also not adopted the International Convention relating to the Arrest of Seagoing Ships, Brussels, 1952. Nor has India adopted the Brussels Conventions of 1952 on civil and penal jurisdiction in matters of collision; nor the Brussels Conventions of 1926 and 1967 relating to maritime liens and mortgages [(a) International Convention relating to the Arrest of Seagoing Ships, Brussels, May 10, 1952 (IMC); (b) International Convention on Certain Rules concerning Civil Jurisdiction in Matters of Collision, Brussels, May 10, 1952 (IMC); (c) International Convention for the Unification of Certain Rules relating to Penal Jurisdiction in Matters of Collision, Brussels, May 10, 1952 (IMC); and (d) International Conventions for the Unification of Certain Rules of Law relating to Maritime Liens and Mortgages, Brussels, April 10, 1926, and the Revised Convention on Maritime Lines and Mortgages, Brussels, May 29, 1967 (IMC).] India seems to be lagging behind many other countries in ratifying and adopti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of developments subsequent to the suit or even during the appellate stage, it is but fair that the relief is moulded, varied or reshaped in the light of updated facts. Patterson [Patterson v. State of Alabama, (1934) 294 US 600, 607] illustrates this position. It is important that the party claiming the relief or change of relief must have the same right from which either the first or the modified remedy may flow. Subsequent events in the course of the case cannot be constitutive of substantive rights enforceable in that very litigation except in a narrow category (later spelt out) but may influence the equitable jurisdiction to mould reliefs. Conversely, where rights have already vested in a party, they cannot be nullified or negated by subsequent events save where there is a change in the law and it is made applicable at any stage. Lachmeshwar Prasad Shukul v. Keshwar Lal Chaudhuri [FCR 84 : AIR 1941 FC 5] falls in this category. Courts of justice may, when the compelling equities of a case oblige them, shape reliefs - cannot deny rights - to make them justly relevant in the updated circumstances. Where the relief is discretionary, courts may exercise this jurisdiction to avoid i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 18.1.2000 entered into between the Petitioner and the original owner of the vessel, Third Element Enterprises. The agreement has been set out fully earlier in this judgment. A perusal of the agreement would show that so far as the Appellant is concerned, performance is over - namely that a certain quantity of bunkers has in accordance with the original agreement been supplied. Indeed this is expressly recited in the later agreement. It is only performance under the original agreement that is lacking from the side of the owner of the vessel, namely Third Element Enterprises. The very first Clause of the agreement shows that the ship owners confirm that they owe to the Appellant the original amount of the bunkers plus interest plus legal costs, which amounts are parasitic on the original invoice amount of US$ 94,611.25, and need to be recovered in order to put the Appellant in the same position as if the original contract had been performed by Third Element Enterprises. The agreement then goes on to state that since the vessel is being chartered for a voyage from Bangkok and will earn freight, the part of the freight amounting to the original invoice amount plus interest plus legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o in response to pressing demands for delivery under that contract and with a view to implement it. The arrangement has no independent contractual force, no meaning and content separately from and independently of the original contract. 15. The effect of the alterations or modifications is that there is a new arrangement; in the language of Viscount Haldane in 1918 A.C. 1 at p. 17 (A), a new contract containing as an entirety the old terms together with and as modified by the new terms incorporated. The modifications are read into and become part and parcel of the original contract. The original terms also continue to be part of the contract and are not rescinded and/or superseded except in so far as they are inconsistent with the modifications. Those of the original terms which cannot make sense when read with the alterations must be rejected. In my view the arbitration Clause in this case is in no way inconsistent with the subsequent modifications and continues to subsist. (at page 67) 35. We approve of the said judgment as laying down the correct law on the expression alter in Section 62 of the Contract Act. In order that a contract that is altered in material p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Kapurchand might have had in accepting ₹ 20 lacs in full satisfaction of the claim of the Appellants, he ultimately agreed to do so. Not only did he agree, but he actually endorsed full satisfaction and payment on all the promissory notes and thereafter he received payment of the second instalment of ₹ 8,75,000/- which along with the first instalment of ₹ 11,25,000/- made up the sum of ₹ 20 lacs. On these facts which are established by the evidence given on behalf of the Appellants themselves, the only conclusion is that there was full satisfaction of the claim of the Appellants. The legal position is clear enough. Section 63 of the Indian Contract Act reads: Every promisee may dispense with or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance or may accept instead of it any satisfaction which he thinks fit. Illustration (c) to the Section says A owes B 5000 rupees. C pays to B 1000 rupees, and B accepts them in satisfaction of his claim on A. This payment is a discharge of the whole claim. It seems to us that this case is completely covered by Section 63 and illustration (c) th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the original claim at a lesser amount. As has been held by us, it is only a means of enforcing the payment leg of the original transaction through a third party charterer. Consequent upon the vessel not sailing to Bangkok or the third party charterer failing to make payment, the original obligation of the Appellant continued, and was enforceable by the arrest of the vessel. It is settled law that an agreement such as the agreement dated 18.1.2000 is not to be construed legalistically but is to be construed as ordinary businessmen would construe it. In words which have become classic, Lord Wright in Hillas v. Arcos, [1932] All ER 494s at 503-504, has stated: Business men often record the most important agreements in crude and summary fashion; modes of expression sufficient and clear to them in the course of their business may appear to those unfamiliar with the business far from complete or precise. It is, accordingly, the duty of the court to construe such documents fairly and broadly, without being too astute or subtle in finding defects; but, on the contrary, the court should seek to apply the old maxim of English law, verba ita sunt intelligenda ut res magis valeat quam p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gree with the view taken by the Division Bench that there is a novatio of the original agreement in the fact circumstance of the present case. 43. However, Mr. Banerjee cited a passage from Halsbury's Laws of England and strongly relied upon a Singapore High Court judgment to argue otherwise. The passage from Halsbury (Vol. 37, 4th ed., p. 287) reads as follows: 391. Effect of settlement or compromise. Where the parties settle or compromise pending proceedings, whether before, at or during the trial, the settlement or compromise constitutes a new and independent agreement between them made for good consideration. Its effects are (1) to put an end to the proceedings, for they are thereby spent and exhausted; (2) to preclude the parties from taking any further steps in the action, except where they have provided for liberty to apply to enforce the agreed terms; and (3) to supersede the original cause of action altogether. A judgment or order made by consent is binding unless and until it has been set aside in proceedings instituted for that purpose and it acts, moreover, as an estoppel by record. 44. It is important to remember that when Section 63 of the Contract Act is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordance with the agreement dated 18.1.2000, the proceedings were not put an end to. Neither was the original cause of action superseded, as we have stated earlier. The moment there is a breach of the settlement agreement, the Appellants would be entitled to take appropriate legal steps against the ship owner, including the arrest of the vessel, which can only be if the original contract still subsists. 47. Mr. Banerjee laid great reliance on a judgment of the Singapore High Court in The Dilmun Fulmar, (2003) SGHC 270. On the facts of that case, the ship repairers repaired the vessel and supplied material to the vessel. The ship owner paid a sum of $650,000 for repairs, leaving an outstanding balance sum of $770,822.28 as at 8.5.2001. A subsequent settlement agreement was entered into in which the ship repairer agreed to accept a total sum of $310,000, inclusive of $25,000 interest and $25,000 as legal costs in full and final settlement of their claim in the admiralty suit, which was for a sum of $1,154,916.78. Paragraph 7 of the said judgment is important and reads as under: 7. The issue raised by this appeal touched on the true construction and effect of the Settlement Agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent No. 1 had become the owner of the vessel sometime in April 2000. On going through the deposition of Mr. Stephen Livanos, we are clearly of the view that no such admission was ever made. The answers to questions 257 to 262 would clearly show that the witness's statement that Respondent No. 1 was the end buyer of the vessel was equivocal at best, and was obviously hearsay as the answer to question 260 states that a lawyer in Greece had at some point of time told Mr. Livanos what happened with the vessel. To therefore conclude from this oral evidence that the vessel had changed hands in April, 2000 does not take the Respondent's case very far. 53. However, the High Court also relied upon a notarized bill of sale dated 14.4.2000, the notice of readiness of 15.4.2000, which was accepted by the Respondent at 11.00 A.M., and was followed by the delivery of possession of the vessel at 2.00 P.M. What is important to note is that the signatory to the physical delivery certificate was on behalf of Pennon Shipping Corporation, which was only an agent of Third Element Enterprises, and not an agent of Fairsteel. The High Court then went on to state that payment under the Lett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther, as per Clause No. 8 we confirm that the Buyers have received the Notice of Readiness (NOR) on 15.04.2000 from the Sellers or their Agents in Calcutta and authorize you to negotiate the L/C as per the terms. This Clause would again go to show that even on 26.4.2000 the owner of the vessel was Third Element Enterprises and not Respondent No. 1. 55. With regard to the High Court finding that full payment had been made under the Letter of Credit on 26.4.2000, the Respondent's own suit that was filed by it against Fairsteel on 9.5.2000 shows that no such payment had been made by the date of the filing of the said suit. The suit was for the relief of rescission of the agreement between Fairsteel and Respondent No. 1 dated 21.1.2000 on the ground of fraud. Para 27 of the suit is important and states as follows: 27. In the facts and circumstances aforestated, the Defendant No. 1 has fraudulently induced the Plaintiff to issue/open the said L/C through the Defendant No. 2 in favour of the Defendant No. 1. The Defendant No. 1 is not entitled to receive and should be restrained from receiving any payment under the said L/C and the Plaintiff claims a decree of perpetual in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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