9911796707
TMI Blog1999 (9) TMI 998X X X X Extracts X X X X X X X X Extracts X X X X ..... s managed by the first plaintiffs vests with the entities/owners unconnected with the plaintiffs. 2. The plaintiffs have taken out Notice of Motion No. 1663 of 1999 for an order of injunction restraining the defendants from making any further publication or claims in the media with regard to the unseaworthiness of the vessel m.v. YA MAWLAYA or to the effect that plaintiffs being an alter ego of Merali family. On the other hand, defendants have taken out Notice of Motion No. 1638 of 1999 for striking out the plaint as being unnecessary, scandalous, frivolous and vexatious and also being an abuse of the process of Court under Order 6, Rule 16 read with section 151 of the Code of Civil Procedure and Article 215 of the Constitution of India. The defendants have also taken out Notice of Motion No. 1272 of 1999 for dismissal of the suit under Order 7, Rule 11-A of the C.P.C; as being without jurisdiction. It is prayed that the issue of jurisdiction be decided as a preliminary issue. 3. The first plaintiffs, SNP Shipping Services Pvt. Ltd., are a Private Limited Company registered under the Companies Act, 1956 having its registered office in Mumbai, hereinafter referred to as "SNP& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the United Kingdom, for commercial management of the vessel. Its holding company Holbud Ltd. is also a company registered in United kingdom. Thus it becomes apparent that SNP is the only company registered in India. All the other companies are foreign. None of them carry on business in India. 6. The present controversy arises out of a collision that took place in the early hours of 20/21st December, 1994 between the vessel m.v. Ya Mawlaya and the vessel m.t. "New World". The collision" took place in international waters, about 200 nautical miles off the coast of Portugal. At the time of the collision the vessel m.v. Ya Mawlaya was laden with cargo of soyabeans consigned to Cereol. The cargo had been loaded at New Orleans. As a result of the collision extensive damage was caused. Human lives were lost. Several proceedings came to be filed in the District Court of Louisiana, U.S.A., hereinafter referred to as "the New Orleans Court", against the vessel m.v. Ya Mawlaya in remand against M/s. Kara Mara Shipping Co. Ltd., Holbud Ship Management Ltd., Holbud Ltd., Hydery (P) Ltd. in personam. Thereafter by an amendment and supplementary complaint, the seco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t No. 26 of 1995 on the ground of nonpayment for supply of necessaries. On 22-3-1996 Kara Mara filed Admiralty Suit No. 28 of 1996 seeking limitation of their liability and setting up of a Limitation Fund in respect of their liability arising from the collision of Ya Mawlaya with 'New World'. In both Admiralty Suits No. 26 of 1995 and 28 of 1996, this Court granted anti suit injunctions against WTCC restraining it from proceeding with its claims in the New Orleans Court. WTCC pleaded that this Court had no jurisdiction to entertain the Admiralty Suits No. 26 of 1995 and 28 of 1996. Both Single Bench and Division Bench held that this Court had the jurisdiction to entertain the suits. Against the aforesaid order, WTCC filed Special Leave Petition which was converted into Civil Appeal No. 8534 of 1997. WTCC had also filed C.A. No. 8535 of 1997 against the orders of this Court dated 20-8-97/21-8-97 in contempt proceedings. C.A. No. 8536 of 1997 was filed by WTCC against the order dated 21-11-1997 directing WTCC to deposit in this Court a sum of U.S.$ 12.3 million and interest accrued thereon to secure compliance by WTCC of orders passed by this Court. SLPs. (C) Nos. 3 and 4 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n order and decree of this Hon'ble Court that the plaintiffs being a company incorporated under the Companies Act, 1956 are exclusively owned and controlled by the second and the third plaintiffs who are Indian shareholders, citizens of India and are in no manner whatsoever linked, owned or controlled legally or beneficially by the Merali family or any other entity as alleged by the first and the second defendants; (c) That this Hon'ble Court be pleased to declare by an order and declaration of this Honourable Court that the legal and beneficial ownership of the vessels managed by the first plaintiffs vests with the entities/owners unconnected with the plaintiffs save and except to the extent, as stated, of the plaintiffs management of the vessels". 9. The WTCC took out Motion for Summary Judgment in the New Orleans Court. By its judgment dated 3rd March, 1999 the New Orleans Court has recorded certain findings of fact and granted certain reliefs to defendants Nos. 1 and 2. Under the heading of "LIABILITY" it is held that the bridge equipment aboard the m.v. Ya Mawlaya although defective was not serviced or repaired during the vessel's port call in New ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essels and loss of and/or damage to cargo on both vessels. Immediately following the collision, the surviving crew members of the m.t. "New World" were trapped in the wheelhouse of their vessel, with fires burning around them in the superstructure and in the water around the vessel, as the m.t. "New World" continued to turn in the wind and sea. M.T. "New World" transmitted distress called by radio, which were responded to by vessels m.t. Berge Stavanger, m.t. New Wisdom, m.t. Captadimitris and others but not by m.v. Ya Mawlaya. Despite the fact that Ya Mawlaya suffered much lighter damage than m.t. "New World" and no person on board m.v. Ya Mawlaya were injured or missing, the vessel made no effort to stop and aid the m.t. "New World" or to inquire into her need for assistance as required by applicable international maritime regulations. The judgment also takes notice of the fact that as a result of the collision, m.v. Ya Mawlaya became a constructive total loss. She was nonetheless taken in the shipyard at Malta where she was repaired. After repairs, this vessel was taken to the Port of Bombay, India in ballast solely to enable her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry, Vestman and Sperex are jointly and severally liable for the subject cargo damage along with HSM and SNP. It is further held that the evidence reveals that the defendants foreign litigation campaign was specifically designed and calculated to deprive the New Orleans Court of its proper jurisdiction by seeking injunctions against WTCC in suits brought in bad faith in Hong Kong and India. WTCC's Motion for Summary Judgment on liability has been granted. 10. In this suit the plaintiffs challenge the findings given by the New Orleans Court. It is stated that the New Orleans Court has wrongly held that all the defendants including SNP are jointly and severally liable to WTCC and Cereol. The joint and several liability has been determined by the New Orleans Court on the basis of the failure on the part of SNP to answer the requests in the nature of interrogatories. This has led the New Orleans Court; to conclude that SNP and others are "alter egos" of the Merali family. Adverse inferences have been wrongly drawn by the New Orleans Court solely on the basis of the failure on the part of SNP to respond to the interrogatories. It is stated that the adverse inferences wrong ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g industry". With regard to this report, the plaintiffs state that in this Article once again it has been wrongly implied that SNP in their capacity as managers of the vessel Ya Mawlaya were part of the Merali group/family. According to the plaintiffs, this assertion is designed to malign the plaintiffs when, to the knowledge of the defendants, the correct position was otherwise. It is stated that these reports are apparently published at the behest and motivation of the defendants. This is stated to be obvious by virtue of the fact that constant references are made to the Attorneys of the first defendants. It is stated that the publication in the newspapers smack of malicious motives. By an amendment in paragraph 21-A the plaintiffs have stated that the aforesaid articles have been published in well known and widely read shipping trade journals viz. Lloyds List and Trade Winds. These publications have a large international subscription and are read widely by persons in India who carry on business in the shipping industry. These articles have also featured on the internet thus making them freely available to an even wider readership. It is stated that due to the baseless alleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 1998 under Order 23, Rule 3. In the present suit, the plaintiffs cannot be permitted to say that they are not pressing for the relief in terms of prayers (e) and (f) in the Admiralty Suit No. 58 of 1998. Thus the plaint has to be rejected in view of Order 7, Rule 11(d) of the C.P.C. He further submits that this Court would not grant the relief of declaration, as it would serve no useful purpose. Declaration made under section 34 of the Specific Relief Act is only binding inter parties. Therefore, the Indian Authorities would not be bound by such a declaration. With regard to the relief of damages for defamation, learned Counsel Mr. Manohar has very fairly stated that this Court will have the jurisdiction to entertain the suit as according to the amended plaint wrong has been done within the territorial jurisdiction of this Court. He, however, submits that a look at the plaint together with the documents on the basis of which claim of defamation is made, would make it clear that the plaint is liable to be rejected as not disclosing a cause of action. Learned Counsel submitted that a bare perusal of the newspaper reports shows that they are fair, accurate and contemporaneous repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt, the plaintiffs are entitled to seek protection by way of a declaration that the SNP is an entirely Indian Company. According to Mr. Sundaram the' judgment given by the Supreme Court in the WTCC case was confined only to the jurisdiction of the Admiralty Court in a limitation action. Thus according to Mr. Sundaram the issue of jurisdiction will have to be decided keeping in view the impact of the findings of "alter ego" given by the New Orleans Court. With regard to the relief of damages, he submits that this Court clearly has the jurisdiction to entertain and decide the suit. The plaint cannot be rejected on the ground that the defence of privilege is a complete answer to the claims in the plaint. At this stage it cannot be said that the plaint is frivolous or vexatious. He further submitted that the plea of privilege would be available to the defendants as a defence. Mere raising of this plea at this stage would not render the plaint an abuse of the process of the Court. Both the learned Counsel have referred to a large number of authorities which would be adverted to a little later. 14. I have anxiously considered the arguments put forward by the learned Couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oking to the prayers in the suit. But we need not examine this aspect since in any event the Bombay High Court has no jurisdiction to entertain the limitation action. Of course, in theory, if in future any liability action is at all filed there which is capable of limitation, SNP would be entitled to set up limitation as a defence or file an independent limitation action. But the present suit is without jurisdiction." "36. SNP has claimed that the Bombay High Court has jurisdiction because a part of the cause of action has arisen within its jurisdiction. SNP under its management agreement with Kara Mara claims to have recruited the crew of the vessel YA Mawlaya in Bombay. Since the owner is required to establish" no fault or privity, on his part in respect of the "occurrence", one of the relevant factors for this purpose is recruitment by the owner of a competent crew. Since recruitment was in Bombay, SNP claims that a part of the cause of action has arisen in Bombay. Therefore, SNP contends that the Bombay High Court has jurisdiction. However, in view of what we have held above, this does not confer jurisdiction on the High Court in an admiralty action o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s placed on section 2(2) of the Merchant Shipping Act for this purpose. Section 2(2) however, has no application to a limitation action per se, as stated earlier. A limitation action is not directed against the ship nor can the action be instituted by the arrest of the foreign vessel present in the territorial waters of the Country where the action is instituted. It is an action by the owner acting personally against his claimants who arc seeking damages in respect of the loss or injury caused by the owner's vessel. Therefore, the presence of a foreign vessel in the territorial waters will not give the Court jurisdiction to entertain a limitation action by its owner unless the presence of the foreign vessel has given rise to an admiralty action by a claimant in that Court, which claim is subject to limitation or the presence of the vessel has created a likelihood of such action being taken there, or the Court is a domiciliary Court of the owner attracting such claims there. That is not the case here. In fact, at the time when Kara Mara filed the suit all claims were already filed against it in the foreign Court at New Orleans. U.S.A. No doubt Kara Mara had challenged the jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciple, when applied to the facts of this case, clearly rules out the jurisdiction of this Court to entertain the present suit. It has been held that except for SNP, the owners of both the vessels are foreigners. It is held that the acts of both the owners are outside the jurisdiction of the Bombay High Court. It is further observed that the conduct of SNP and Kara Mara has not been above board. They have indulged in "forum shopping". The observations in paragraph 35 relied upon by Mr. Sundaram clearly state that SNP and Kara Mara would be at liberty to defend any action filed by the defendants for enforcement of their rights. At that stage they may set up a limitation action or file a fresh action. The Supreme Court contemplated defensive action by SNP and Kara Mara and not fresh prosecution on some concocted cause of action. There is no scope for any confusion as to the meaning of the observations of the Supreme Court. To accept Mr. Sundaram's interpretation of the observations of the Supreme Court in paragraph 35, would amount to rewriting the same beyond recognition. The interpretation suggested by Mr. Sundaram is a complete distortion of the observations made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted or relinquished. As noticed earlier the plaintiffs have claimed identical relief of declaration in Suit No. 58 of 1998. The plaintiffs could have made an application in that suit to relinquish the relief of declaration with liberty to seek the same relief in the present suit. This application would have to be made under Order 23, Rule 1 of the C.P.C. seeking leave of the Court to pursue the relief of declaration in the present suit. The Court may at its discretion grant liberty to the plaintiffs to pursue the relief of declaration in the present suit. The plaintiffs would have to satisfy the Court that there are sufficient grounds for allowing the plaintiffs to continue with the relief of declaration in the present suit. But that application could have been made in the earlier suit and not in the present suit. This permission cannot be indirectly granted in this suit by accepting the statement of the learned Counsel for the plaintiff that they have "elected" to press for the relief of declaration in this suit rather than in the present suit. Accepting this proposition would render the provisions of Order 2, Rules 1 and 2 read with Order 23, Rules 1 and 3 nugatory. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sonam and not in rem. Thus the Indian Authorities would not be bound by the declaration. It would be of no effect, and thus futile. This apart, even if it is declared that SNP is an Indian Company, legally owned by Indians, it would not automatically mean that it is not an "alter ego" of the Merali family. Thus the declaration would be an empty formality. Courts refrain from passing meaningless orders. Thus this submission of Mr. Sundaram has also to be rejected. In any event, cause of action for seeking such a declaration can, conceivably, only arise on the WTCC filing a suit in this Court to enforce the judgment of the New Orleans Court. The plaintiffs are aware of this legal position as they have reserved their right to "challenge the decree as and when the defendants seek its implementation/execution/recovery". Additionally, therefore the plaint has to be rejected as disclosing no cause of action, under Order 7, Rule 11 (a). 17. However, part of the cause of action with regard to libel has clearly arisen within the jurisdiction of this Court. Inspite of this Court having jurisdiction, in my view, the plaint has to be rejected on the ground that it does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case the Court would be justified to look at the so called defamatory publications for the limited purpose of finding out as to whether they contain anything other than fair and accurate reports of the findings of the New Orleans Court. A perusal of the various articles relied upon by the plaintiffs shows that references are made to the findings given by the New Orleans Court. A fair and accurate gist of the findings have been reproduced. Alongwith the findings of the Court the intentions of the Counsel for the defendant to pursue the enforcement of the judgment in various parts of the world have also been mentioned. It would, therefore, appear that the statements made in the publications are privileged. The law with regard to privilege has also been settled, Mr. Manohar had referred to commentaries viz. (i) Salmond & Heuston on the Law of Torts (20th Edn.) page 165, (ii) Winfield & Jolowicz on Tort (12th Edn.) and (iii) Gatley on Libel and Slander. AH these commentaries make it clear that there are certain occasions on which public policy and convenience require that a man should be free from responsibility for the publication of defamatory words. The courts are unwilling to exte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... light difference between the law in England and the law in India with regard to the rejection of the plaint at the initial stage. In India, plaint can only be rejected, inter alia, if it discloses no cause of action. On the other hand in England the plaint can be rejected if it discloses no "reasonable cause of action". The provision is contained in RSC Order 18, Rule 19, which is as under : "(1) The Court may at any stage of the proceedings order to be struck out or amended any pleading or the indorsement of any writ in the action, or anything in any pleading or in the indorsement, on the ground that --- (a) it discloses no reasonable cause of action or defence, as the case may be; or (b) it is scandalous, frivolous or vexatious; or (c) it may prejudice, embarrass or delay the fair trial of the action; or (d) it is otherwise an abuse of the process of the Court; and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be. (2) No evidence shall be admissible on an application under paragraph (1)(a)..." A perusal of the aforesaid provision would show that, literally speaking, the power is a little w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indings recorded or what took place. Examined in this light, I do not find the newspaper reports to be beyond the scope of privilege. The findings returned by the New Orleans Court are much more serious than what is printed in the newspaper articles. Thus, in my view, this is a case where the defendants have an absolute defence to the claim of libel put forward by the plaintiffs. It is not a case where the story told in the pleadings was merely "highly improbable". It is a case that even if the plaintiffs are permitted to prove that the statements have actually been made, still the suit, would have to be dismissed as the statements would be privileged. There can be but one result. The dismissal of the suit. Applying the aforesaid principles to the facts and circumstances of this case, I am of the considered opinion that the plaint does not disclose a cause of action and has to be struck out under Order 7, Rule 11(a). 18. Furthermore, it is a settled proposition of law that it is an abuse of process to raise in subsequent proceedings matters which could and should have been litigated in earlier proceedings. I am clearly of the opinion that the plaintiffs have mixed up the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 32 is wholly misconceived. Article 32 is not a proper remedy for challenging a decision of this Court or reviewing it. Even otherwise there is no merit in the petition. It is dismissed". On 16th June, 1998 the crew members of Ya Mawlaya made an application for ad-interim anti suit injunction in the three suits filed by them being Admiralty Suit Nos. 4, 17 and 18 of 1996. They even prayed that the Notices of Motion be listed for hearing on 25th June, 1998 since the New Orleans Court proceedings were listed on that day. This was done inspite of the fact that anti suit injunctions earlier passed by this Court in Admiralty Suit Nos. 26 of 1995 and 28 of 1996 had been vacated pursuant to the judgment of the Supreme Court. Admiralty Suit Nos. 4, 17 and 18 of 1996 have also been dismissed by this Court by judgment dated 7th December, 1998 on the ground that this Court has no jurisdiction to entertain the suits. These suits have been decided after taking evidence on the preliminary issue of jurisdiction. Inspite of the categoric findings returned by the Supreme Court and this Court to the effect that this Court has no jurisdiction to entertain the suit, the plaintiffs filed Admira ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suits. The trial courts would insist imperatively on examining the party at the first hearing so that bogus litigation can be shot down at the earliest stage. The Penal Code is also resourceful enough to meet such men. (Ch. XI) and must be triggered against them. In this case, the learned Judge to his cost realised what George Bernard Shah remarked on the assassination of Mahatma Gandhi : "It is dangerous to be too good". 6. The trial Court in this case will remind itself of section 35-A, C.P.C. and take deterrent action if it is satisfied that the litigation was inspired by vexatious motives and altogether groundless. In any view, that suit has no survival value and should be disposed of forthwith after giving an immediate hearing to the parties concerned. 7. We regret the infliction of the ordeal upon the learned Judge of the High Court by a callous party. We more than regret the circumstance that the party concerned has been able to prevail upon one lawyer or the Other to present to the Court a case which was disingenuous or worse. It may be a valuable contribution to the cause of justice if Counsel screen wholly fraudulent and frivolous litigation refusing to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arly show that the suit is frivolous, vexatious and scandalous and abuse of the process of the Court. It is clearly filed out of vindictiveness against WTCC, perhaps as a pressure tactic for settlement. 19. I am of the considered opinion that it would be a traversity of justice to permit the plaintiffs to enter the portals of the High Court indirectly when their entry has been emphatically barred by the Supreme Court directly. This Court has the power to reject the plaint on the ground that it is an abuse of the process of the Court not only by virtue of Order 6, Rule 16, C.P.C. but also by virtue of the powers conferred on this Court under Article 215 of the Constitution of India. Paragraph 19 of the judgment in Bomi Munchershaw [supra] makes this proposition absolutely clear wherein it is held as under : "19. The above narration indicates that though the words "abuse of the process of the Court" occurred for the first time on 1-2-1977 in Order 6, Rule 16 of the Code of Civil Procedure, this power was immament in and arose from a High Court being a Court of Record under the Letters Patent as well as Article 215 of the Constitution." Thus, it is apparent tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his is that the applicant has no further remedy. In the case of Reg. v. Bodmin Corporation (2) Day, J., said: "As I read the authorities, it has always been held, whenever this objection has been taken, and the attention of the Courts has been called to the point, that no second application for a prerogative writ will be granted when the first application has been discharged. There are many authorities which support this contention; but I think apart from authority, that it is a most convenient view to take of the jurisdiction of the Court in such matters. It is a view which has commended itself to many Judges who have acted upon it, and it commends itself to me. It is no doubt extremely convenient that no second application for a high prerogative writ should be allowed after a first application has been refused. Such a writ is an extraordinary remedy, and persons seeking it may very reasonably be required not to apply for it unless they have sufficient cause for doing so. They must come prepared with full and sufficient materials to support their application, and if those materials are incomplete 1 think it is quite right that they should not be allowed to come again". I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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