Bombay High Court
Venantius Vincent vs Sale Proceeds Of Mv San Domino Imo No ... on 23 July, 2024
Author: R.I. Chagla
Bench: R.I. Chagla
8-ial-20543-2024.doc
jsn
Digitally
signed by
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
JITENDRA
JITENDRA
SHANKAR
NIJASURE
SHANKAR
NIJASURE
Date:
2024.07.24
ORDINARY ORIGINAL CIVIL JURISDICTION
17:20:26
+0530
IN ITS COMMERCIAL DIVISION
INTERIM APPLICATION (L) NO.20543 OF 2024
IN
COM ADMIRALTY SUIT NO.59 OF 2022
Venantius Vincent & Ors. ...Applicants /
Plaintiffs
Versus
M.V. San Domino (IMO No.8807129) ...Defendants
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Kunal Naik for the Applicants / Plaintiffs.
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CORAM : R.I. CHAGLA J.
DATE : 23RD JULY, 2024.
ORDER :
1. The Applicants have filed the present Interim Application , inter alia , seeking a determination of priorities of claims against the sale proceeds of the Defendant No. 1 , and an order for payment out of sale proceeds in satisfaction of the decree dated 29.04.2024 passed in favour of the Applicants .
2. The Defendant No. 1 Vessel was arrested by an order dated 18 th January 2021 passed in Commercial Admiralty Suit (L) No. 26345 of 2021 . By an Order dated 21 st June 2022 passed in Interim Application (L) No. 26347 in Commercial Admiralty Suit (L) No. 26345 of 2021 , the Sheriff of Mumbai was directed to conduct an auction sale of the Vessel. By Orders dated 15 th July 2022 and 04th August 2022 in the same proceedings, the sale of the Vessel to M/s 1/10 ::: Uploaded on - 24/07/2024 ::: Downloaded on - 25/07/2024 05:04:59 ::: 8-ial-20543-2024.doc New Goa Enterprises was confirmed for a consideration of Rs. 4.5 Crores. After deducting the Sheriff's expenses as per the orders of this Court , an amount of Rs. 4,47,22,143 /- have been transferred to the Prothonotary and Senior Master of this Court - where they currently lie. Mr. Naik , learned counsel appearing for the Applicants / Plaintiffs states that as on date, an amount of Rs. 4,87,71,099 is lying with the Prothonotary and Senior Master of this Court .
3. Mr. Naik submits that on 29th April 2024 , this Court decreed the suits in the Applicants' favour for an aggregate sum of Rs. 34,42,730.39 along with further interest on the relevant principal sums thereon @ 12 % p.a. WEF the date of institution of the suit till payment and/ or realization , along with costs of Rs. 3,00,000 /- .
4. Mr. Naik submits that pursuant to an Order dated 07 th February 2024 passed in Interim Application (L) No. 3560 of 2024 in Commercial Admiralty Suit No. 1 of 2023 , a public notice in terms of Rules 1087 and 1088 of the Bombay High Court (Original Side) Rules , 1980 , was issued by the Sheriff of Mumbai inviting claims against the sale proceeds of the Defendant No. 1 Vessel . This notice specified , inter alia, that the order of priority of claims against the sale proceeds of the Defendant No. 1 Vessel would not be determined until after the expiration of a period of 90 days from the date of publication of the notice and that any person having a claim against the ship or sale proceeds thereof shall file a suit to prove his claim before the expiration of the said period. Pursuant thereto , the notice was published in the Free Press 2/10 ::: Uploaded on - 24/07/2024 ::: Downloaded on - 25/07/2024 05:04:59 ::: 8-ial-20543-2024.doc Journal (English) and Navshakti (Marathi) newspapers on 08 th February 2024. The notice period for lodging claims against the sale proceeds of the Defendant No. 1 vessel expired on 08 th May 2024.
5. No new suits were instituted pursuant to publication of the notice in the newspaper against the sale proceeds of the Defendant No. 1 Vessel . However, the following suits were already filed against the Defendant No. 1 Vessel / sale proceeds thereof :
Sr No Case No. Plaintiff
1 COMASL/26345/2021 The Board of Trustees of the
Port of Mormugao [Port Suit]
2 COMAS/59/2022 Venantius Vincent & Ors.
[Crew Members Suit]
3 COMAS/01/2023 Elesbao Pereira & Sons
[Vessel Agents Suit]
6. At the outset, it may be expedient to extract Sections 9 and 10 of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, [the "Admiralty Act, 2017"] which read thus :
"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;3/10 ::: Uploaded on - 24/07/2024 ::: Downloaded on - 25/07/2024 05:04:59 :::
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(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 statutory dues related to the vessel;
(e) claims based on tort arising out of loss or damage caused by the operation of the vessel other than loss or damage to cargo and containers carried on the vessel. (2) The maritime lien specified in sub-section (1) shall continue to exist on the vessel notwithstanding any change of ownership or of registration or of flag and shall be extinguished after expiry of a period of one year unless, prior to the expiry of such period, the vessel has been arrested or seized and such arrest or seizure has led to a forced sale by the High Court:
Provided that for a claim under clause (a) of subsection (1), the period shall be two years from the date on which the wage, sum, cost of repatriation or social insurance contribution, falls due or becomes payable.
(3) The maritime lien referred to in this section shall commence--
(a) in relation to the maritime lien under clause (a) of sub- section (1), upon the claimant's discharge from the vessel;
(b) in relation to the maritime liens under clauses (b) to (e) of sub-section (1) when the claim arises, and shall run 4/10 ::: Uploaded on - 24/07/2024 ::: Downloaded on - 25/07/2024 05:04:59 ::: 8-ial-20543-2024.doc continuously without any suspension or interruption:
Provided that the period during which the vessel was under arrest or seizure shall be excluded.
(4) No maritime lien shall attach to a vessel to secure a claim which arises out of or results 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 any law for the time being in force;
(b) the radioactive properties or a combination of radioactive properties with toxic, explosive or other hazardous properties of nuclear fuel or of radioactive products or waste.
10. Order of priority of maritime claims.--(1) The order of maritime claims determining the inter se priority in an admiralty proceeding shall be as follows:--
(a) a claim on the vessel where there is a maritime lien;
(b) registered mortgages and charges of same nature on the vessel;
(c) all other claims.
(2) The following principles shall apply in determining the priority of claims inter se--
(a) if there are more claims than one in any single category of priority, they shall rank equally;
(b) claims for various salvages shall rank in inverse order of time when the claims thereto accrue."
7. Section 9, prescribes priority of maritime liens in the order of inter se precedence. In other words, the claim of a claimant 5/10 ::: Uploaded on - 24/07/2024 ::: Downloaded on - 25/07/2024 05:04:59 ::: 8-ial-20543-2024.doc falling in Clause (a) of Sub-section (1) of Section 9, would rank higher in priority to that of the claim of a claimant falling in Clause (b) and the succeeding order. Clauses (a) and (e) of Subsection (1) of Section 9, thus provide the highest priority to the claims for wages and other sums due to the crew members and lowest priority to claims based on tort arising out of loss or damage caused by the operation of the vessel other than the loss or damage to the cargo and containers carried on the vessel, respectively. The rest of the claims, which constitute a maritime lien, as defined in Section 2(1)(g) of the Admiralty Act, 2017 fall in between. A claim which falls in entry (a) stands on a higher pedestal than the one falling in Clause (b) which, in turn, gets priority over the one falling in Clause (c) and so forth.
8. Section 10 of the Admiralty Act , 2017 , on the other hand , regulates the order of maritime claims in determining the inter se priority. Under Clause (a) of Sub-section (1) the claim on the vessel, where there is a maritime lien, gets first priority:
followed by registered mortgages and charges of same nature on the vessel (Clause-b) and then rank all other claims (Clause-
c). Sub-section (2) of Section 10 incorporates the principles which shall govern the determination of priority of claims inter se. First, if there are more claims than one in any single category of priority, they shall rank equally (Clause-a). Second, claims for various salvages shall rank in inverse order of time when the claims thereto accrue.6/10 ::: Uploaded on - 24/07/2024 ::: Downloaded on - 25/07/2024 05:04:59 :::
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9. For the purpose of determination of the priorities, the relative position of the claimants' claims against the Defendant No. 1 Vessel / sale proceeds thereof may be appreciated, in a proper prospective, if the claims are compared and contrasted in a tabular form, and, thereafter, the aforesaid principles are applied. Thus, the following position emerges as regards the nature of the maritime lien/claim qua each of the claimants :
Sr Case No. Plaintiff Status of Amount Nature No the Suit of the Claim 1 COMASL/ The Board of Pending Rs. 68,14,808 Maritime 26345/202 Trustees of the as on Lien under 1 Port of 18.01.2022 Section 9(1) Mormugao (d) 2 COMAS/ Venantius Decreed Rs. 42,55,673 Maritime 59/2022 Vincent & Ors. as on Lien under 23.07.2024 Section 9(1)
(a) 3 COMAS/ Elesbao Pereira Decreed Rs. 30,83,894 Maritime 01/2023 & Sons as on Claim under 23.07.2024 Section 4(1)
(p) and 4(1)
(t)
10. Having determined the nature of the claimants' claims, and upon application of the mandate in the matter of determination of priorities, contained in Section 9 read with Section 10 of the Admiralty Act, 2017, the priorities would be as under:
7/10 ::: Uploaded on - 24/07/2024 ::: Downloaded on - 25/07/2024 05:04:59 :::8-ial-20543-2024.doc Case No. Plaintiff Status of Amount Nature of the the Suit Claim 1st COMAS/ Venantius Vincent Decreed Rs. 42,55,673 Maritime 59/2022 & Ors. as on Lien under [Crew Members 23.07.2024 Section 9(1) Suit] (a) 2nd COMASL/ The Board of Pending Rs. 68,14,808 Maritime 26345/202 Trustees of the Port as on Lien under 1 of Mormugao [Port 18.01.2022 Section 9(1) Suit] (d) 3rd COMAS/ Elesbao Pereira & Decreed Rs. 30,83,894 Maritime 01/2023 Sons as on Claim under [Vessel Agents 23.07.2024 Section 4(1) Suit] (p) and 4(1)
(t)
11. The Commercial Admiralty Suit filed by The Board of Trustees of the Port of Mormugao ["Port"] is pending decree. The Port will be required to prove its claim . Therefore , subject to the Port proving its claim , the above would be the order of priority.
12. The present Applicants are higher in priority than all other claims . In any event, the monies lying with the Prothonotary and Senior Master of this Court are sufficient to satisfy all three claims, and there is no impediment for the Applicants to be paid out from the sale proceeds. Further, the Applicants should not be made to wait indefinitely, whilst other claimants prove their claim and obtain a decree, for payment out from the sale proceeds in satisfaction of the decree passed in favour of the Applicants.
13. Accordingly, the present Interim Application is allowed. The following order is passed :
8/10 ::: Uploaded on - 24/07/2024 ::: Downloaded on - 25/07/2024 05:04:59 :::8-ial-20543-2024.doc a. The Applicants are entitled to be paid from the sale proceeds deposited with this Court in priority to the other Claimants ;
b. The Prothonotary and Senior Master of this Court is directed to forthwith release a sum of Rs. 27,84,057 deposited in this Court against sale proceeds of Defendant No. 1 Vessel to the Applicant No. 1 (Orig. Plaintiff No. 1) in satisfaction of decree dated 29.04.2024 ;
c. The Prothonotary and Senior Master of this Court is directed to forthwith release a sum of Rs. 6,51,232 deposited in this Court against sale proceeds of Defendant No. 1 Vessel to the Applicant No. 2 (Orig. Plaintiff No. 2A) in satisfaction of decree dated 29.04.2024 ;
d. The Prothonotary and Senior Master of this Court is directed to forthwith release a sum of Rs. 2,20,761 deposited in this Court against sale proceeds of Defendant No. 1 Vessel to the Applicant No. 3 (Orig. Plaintiff No. 3) in satisfaction of decree dated 29.04.2024 ;
e. The Prothonotary and Senior Master of this Court is directed to forthwith release a sum of Rs. 2,15,601 deposited in this Court against sale proceeds of Defendant No. 1 Vessel to the Applicant No. 4 (Orig. Plaintiff No. 4) in satisfaction of decree dated 29.04.2024 ;
f. The Prothonotary and Senior Master of this Court is 9/10 ::: Uploaded on - 24/07/2024 ::: Downloaded on - 25/07/2024 05:04:59 ::: 8-ial-20543-2024.doc directed to forthwith release a sum of Rs. 84,022 deposited in this Court against sale proceeds of Defendant No. 1 Vessel to the Applicant No. 5 (Orig. Plaintiff No. 5A) in satisfaction of decree dated 29.04.2024 ;
g. The Prothonotary and Senior Master of this Court is directed to forthwith release a sum of Rs. 3,00,000 deposited in this Court against sale proceeds of Defendant No. 1 Vessel to the Applicant No. 1 (Orig. Plaintiff No. 1) in satisfaction of decree dated 29.04.2024 ;
h. The above payments will be released within a period of three weeks from today ;
i. Interim Application is accordingly , disposed of . No order as to costs .
14. This Order will be digitally signed by the Personal Secretary / Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order.
[ R.I. CHAGLA J. ] 10/10 ::: Uploaded on - 24/07/2024 ::: Downloaded on - 25/07/2024 05:04:59 :::