Bombay High Court
M/S Nkd Maritime Limited vs Glander International Bunkering Dmcc ... on 6 January, 2021
Author: B.P. Colabawalla
Bench: B.P. Colabawalla
19.ial.6531.2020.docx
dik
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ADMIRALTY AND VICE ADMIRALTY JURISDICTION
IN ITS COMMERCIAL DIVISION
Dhanappa
I. Koshti INTERIM APPLICATION (L) NO. 6531 OF 2020
IN
Digitally signed
by Dhanappa I.
Koshti
Date: 2021.01.11
14:52:03 +0530
SHERIFF'S REPORT NO. 53 OF 2020
IN
COMMERCIAL ADMIRALTY SUIT (L) NO. 3579 OF 2020
M/s NKD Maritime Ltd. ...Applicant
In the matter between
Glander International Bunkering DMCC ... Plaintiff
Vs
M.V. KARNIKA (IMO 8521220) ... Defendant.
And
Asstt.Commissioner of Customs /Dy.
Commissioner of Customs & Anr. ...Respondents
Mr. Prathamesh Kamat a/w Mr. Vikrant Shetty, Jiphesh Jain i/b
Gurdeep Singh Sachar for the applicant/Purchaser
Ms. Ridhi Niyati i/b Ashwin Shankat for the plaintiff
Mr. Ajay Fernandes i/b Motiwala & Co for MbPT
Page 1 of 21
19.ial.6531.2020.docx
Mr. Osama Butt & Ms. Ankita Sen i/b Ganesh & Co for the
plaintiff in COMAS(L)/5166/2020
Mr. D.S. Chaudhari, Dy. Sheriff is present
CORAM : B.P. COLABAWALLA, J.
DATE : 6th JANUARY, 2021
P.C. :
1. The present Interim Application is filed by the
applicant, who is the auction purchaser of the defendant vessel,
seeking necessary directions against respondent No.1 to issue a
rectified bill in relation to levy of the Light Dues Charges as well
as against respondent No.2 for Port Dues and Anchorage
Charges.
2. The applicant is the successful bidder who
purchased the defendant vessel as per the order of this Court
dated 28th October, 2020. Its bid of USD 11,650,000/- for
purchasing the defendant vessel was accepted and the
defendant vessel was sold to the applicant for the purpose of
Page 2 of 21
19.ial.6531.2020.docx
scrapping. After the bid of the applicant was accepted, the
purchase price was paid by the applicant on 7th November, 2020
and the Bill of Sale in respect of the defendant vessel was issued
to the applicant on 9th November, 2020 at 1830 Hrs. Thereafter,
delivery of the defendant vessel was given to the applicant on
11th November, 2020 and the defendant vessel sailed out on 20th
November, 2020 at 0300 Hrs..
3. It is the case of the applicant that after taking
delivery, it was levied certain charges by respondent Nos.1 and
2 as per the bills raised by them and after perusing the same it
was noticed that respondent No.1 was charging "Light Dues
Charges" with respect to the defendant vessel on a monthly basis
as against its actual stay. Similarly, respondent No.2 was
levying Port Charges and Anchorage Charges with respect to the
defendant vessel to the applicant of approximately Rs.15 Lacs
per day as against the actual cost of approximately Rs.5 Lacs per
day. It is, in these circumstances, that the present application is
filed seeking the relief of rectification of their respective bills.
Page 3 of 21
19.ial.6531.2020.docx
4. When this Interim Application first came up on 18th
November, 2020, Mr. Fernandes, the learned advocate
appearing for respondent No.2 tendered a sheet for the perusal
of this Court which indicated that the Anchorage Charges per
day, inclusive of GST, came to Rs.17,62,193/- and respondent
No.2 claimed a sum of Rs.1,23,35,351/- towards seven days
Anchorage Charges from 11.11.2020 to 17.11.2020. On the said
date, Mr. Narichania, the learned senior counsel appearing for
the applicant, on instructions, submitted that at this stage and
without prejudice to their rights and contentions, the applicant
was ready and willing to deposit the amount of Anchorage
Charges claimed by respondent No.2 for the said period plus two
more days' Anchorage Charges @ Rs.17,62,193/- per day, in the
office of the Sheriff of Mumbai. It was further stated that the
applicant is also ready to deposit a sum of Rs.2,90,960/- towards
Light Dues Charges payable to respondent No.1. In compliance
with the aforesaid statement, the entire amount of Light Dues
Charges and Anchorage Charges (payable to respondent Nos.1
and 2) aggregating to Rs.1,64,17,674/- was deposited in this
Court. This figure includes Anchorage Charges from 11.11.2020
till 20.11.2020, when the ship sailed out.
Page 4 of 21
19.ial.6531.2020.docx
5. At the outset, I must state that as far as the "Light
Dues Charges" are concerned, Mr. Kamat, the learned advocate
appearing on behalf of the applicant, submitted that the amount
due thereunder is a negligible sum of Rs.2,90,960/- and hence
he is not pressing for any relief against respondent No.1 and the
said sum can be paid over to respondent No.1 out of the amounts
already deposited by the applicant in this Court. In view of this
statement, nothing survives as far as prayer clause (a) is
concerned. The Interim Application therefore, only survives
with reference to the charges levied by respondent No.2.
6. As far as the charges levied by respondent No.2 are
concerned, Mr. Kamat submitted that in the present case, the
applicant had purchased the defendant vessel in an auction
conducted by this Court as per the order dated 28th October,
2020. He brought to my attention paragraph 10 of the said order
which clarifies that the sale of the defendant vessel having been
confirmed in favour of the applicant, it shall be handed over to
them, free from all encumbrances. According to Mr. Kamat, this
Page 5 of 21
19.ial.6531.2020.docx
direction was passed in view of Section 8 of the Admiralty
(Jurisdiction and Settlement of Maritime Claims) Act, 2017 (for
short the "Admiralty Act"). He also brought to my attention
paragraph 5 of the Terms and Conditions of Sale which
stipulates that the defendant vessel is being sold on an as is
where is basis, free and clear from all existing liens,
encumbrances and claims. However, the costs, charges, fees and
expenses of any kind involved in removing the defendant vessel
- M.V. KARNIKA from her position would be solely to the account
of the successful purchaser. He submitted that even the Bill of
Sale at page No.3 mentions that the defendant vessel is being
sold free from all encumbrances. He submitted that therefore
any liability incurred by the defendant vessel before the date of
the issuance of the Bill of Sale in favour of the applicant cannot
be foisted or recovered from the applicant who was the
successful purchaser pursuant to a Court Sale.
7. In the facts of the present case, Mr. Kamat submitted
that the defendant vessel arrived within the port and harbour of
Mumbai at Y1 Anchorage (VCN : 2003589) under the agency of
Page 6 of 21
19.ial.6531.2020.docx
ISS Shipping India Pvt. Ltd. (agents of the erstwhile owner) on
23.03.2020 at 1413 hours till 2nd June, 2020, when she was
shifted to Port Lighterage Anchorage (for short "PLA") and
from 13.06.2020 onwards she was at V1 Anchorage till she left
the port and harbour of Mumbai on 20.11.2020 at 0300 hours.
Since the vessel was purchased by the applicant, the agency of
the vessel was transferred from ISS Shipping India Pvt. Ltd.
(agent of the erstwhile owner) to Preetika Shipping Agency Pvt.
Ltd. (the agents of the applicant) with effect from 11.11.2020.
8. Mr. Kamat fairly submitted that from 09.11.2020,
1830 hrs (6:30 pm) [date and time of issuance of the Bill of Sale]
to 20.11.2020, 0300 hrs [the date and time the defendant vessel
sailed out], the applicant would be liable to pay Anchorage
Charges to respondent No.2. He, however, submitted that
respondent No.2 had applied the wrong scale of rates that could
be charged to the applicant towards Anchorage Charges. In this
regard he brought to my attention Clause 2.15 of the SCALE OF
RATES revised by the Tariff Authority for Major Ports (for
short "TAMP") which deals with the Schedule of Anchorage
Page 7 of 21
19.ial.6531.2020.docx
Fees. Clause 2.15, in so far as is it relevant for our purpose, reads
as under:-
Page 8 of 21
19.ial.6531.2020.docx
9. Mr. Kamat submitted that admittedly when the Bill
of Sale was issued in favour of the applicant, the defendant
vessel (a Foreign going Vessel) was at V1 Anchorage and
remained there till 20.11.2020, 0300 Hrs, when she sailed out.
This means that after the applicant purchased the defendant
vessel (i.e. from 09.11.2020, 1830 Hrs to 20.11.2020, 0300 Hrs)
she was at V1 Anchorage for approx 11 days. Hence, under
clause 2.15, respondent No.2 had to charge Anchorage Charges
at the rate of USD 0.0047 per GRT (Gross Registered Tonnage)
per hour or part thereof. However, respondent No.2 is charging
the higher rate of USD 0.0118 per GRT per hour or part thereof,
on the basis that the defendant vessel was at V1 Anchorage for
more than 30 days, i.e. from 13.06.2020 till 20.11.2020. Mr.
Kamat submitted that the higher rate can never be applied to
the applicant because the defendant vessel was never at
Anchorage for more than 30 days after the applicant had
purchased the vessel. In fact, the applicant came into the picture
only on 09.11.2020, 1830 Hrs [date and time of issuance of the
Bill of Sale] and not before. He submitted that when one reads
section 8 of the Admiralty Act along with the Terms and
Conditions of Sale, it is clear that the liability of the applicant qua
Page 9 of 21
19.ial.6531.2020.docx
the defendant vessel starts only from the date of the issuance of
the Bill of Sale and not a day prior thereto. Hence, the liability of
the applicant to pay Anchorage Charges to the applicant would
start from 09.11.2020, 1830 Hrs and would finish on
20.11.2020, 0300 Hrs when the defendant vessel sailed out.
10. Mr. Kamat submitted that in fact the bill raised by
respondent No.2 is also only for the period from 11.11.2020 (the
date of taking possession) till 20.11.2020. [i.e. for 9 days].
However, under clause 2.15, respondent No.2, though raising the
bill on the applicant for 9 days, is seeking to charge the rate
which is applicable for a period beyond 30 days. He submitted
that this was totally incorrect on the part of respondent No.2
considering that the Bill of Sale was issued to the applicant only
on 9th November, 2020 and possession of the defendant vessel
was given only on 11th November, 2020. He submitted that
merely because the vessel was at V1 Anchorage from 13th June,
2020, the higher rate of USD 0.0118 per GRT per hour or part
thereof cannot be foisted on the applicant. To put it simply, Mr.
Kamat submitted that though the applicant is charged
Page 10 of 21
19.ial.6531.2020.docx
Anchorage Charges for 9 days, respondent No.2 has applied the
higher rate, namely, the rate applicable for the vessel being at
Anchorage for a period of more than 30 days. He submitted that
this could not have been done considering that the applicant
purchased the defendant vessel in a Court Sale free from all
encumbrances and charges as contemplated under Section 8 of
the Admiralty Act. He submitted that respondent No.2 is only
entitled to recover Anchorage Charges for a period of 9 days
calculated at the lower rate, namely, USD 0.0047 per GRT per
hour or part thereof, considering that possession of the
defendant vessel was given to the applicant on 11th November,
2020 and the vessel sailed out 9 days thereafter, i.e. on 20th
November, 2020.
11. On the other hand, Mr. Fernandes, the learned
counsel appearing on behalf of respondent No.2, submitted that
admittedly the defendant vessel arrived within the port and
harbour of Mumbai at Y1 Anchorage on 23rd March, 2020 at
1413 hours and was there till 2nd June, 2020 and was thereafter
shifted to PLA. From 13th June, 2020 onwards, she was at V1
Page 11 of 21
19.ial.6531.2020.docx
Anchorage till she left the port and harbour of Mumbai on
20.11.2020, 0300 Hrs. It is, therefore, clear that the defendant
vessel was at V1 Anchorage for a period of more than 30 days
and hence respondent No.2 is fully justified in charging the
higher rate of USD 0.0118 per GRT per hour or part thereof. He
submitted that respondent No.2 is not concerned with who is the
purchaser of the defendant vessel and when the vessel was sold.
Mr. Fernandes pointed out that these rates are fixed by TAMP
and are statutory in nature. When a person purchases the vessel
in a Court Sale he is well aware as to how long the vessel has been
at Anchorage and what would be the dues that would be payable
for the said vessel to sail out. He, therefore, submitted that there
was nothing wrong or incorrect on the part of respondent No.2
for applying the higher rate, namely, the rate of USD 0.0118 per
GRT per hour or part thereof. Consequently, he submitted that
there was no merit in the Interim Application and the same
ought to be dismissed.
12. I have heard the learned counsel for parties at some
length and have perused the papers and proceedings in the
Page 12 of 21
19.ial.6531.2020.docx
Interim Application. It is not in dispute that the applicant
purchased the defendant vessel in a Court Sale which was
sanctioned as per the order of this Court dated 28th October,
2020. In the said order it was recorded that the applicant was
the successful purchaser. The entire sale consideration was also
deposited by the applicant within the stipulated time.
Thereafter, the Bill of Sale was also issued in favour of the
applicant on 9th November, 2020 at 1830 Hrs and possession of
the vessel was given to the applicant on 11th November, 2020.
The vessel finally sailed on 20th November, 2020 at 0300 Hrs. In
this undisputed factual position, the only limited question I have
to decide is whether the applicant would be liable to pay
Anchorage Charges at the rate of USD 0.0047 per GRT per hour
or part thereof (the lower rate) or at the rate of USD 0.0118 per
GRT per hour or part thereof (the higher rate), and which was
applicable if the vessel was at V1 Anchorage for a period beyond
30 days.
13. To decide this controversy, it would be apposite to
refer to Section 8 of the Admiralty Act. Section 8 of the
Page 13 of 21
19.ial.6531.2020.docx
Admiralty Act talks about vesting of rights on sale of vessels and
reads thus :-
"8. Vesting of rights on sale of vessels.---- On the sale of a vessel
under this Act by the High Court in exercise of its admiralty
jurisdiction, the vessel shall vest in the purchaser free from all
encumbrances, liens, attachments, registered mortgages and
charges of the same nature on the vessel."
14. As can be seen from said Section, on the sale of a
vessel under Admiralty Act by the High Court in exercise of its
admiralty jurisdiction, the vessel shall vest in the purchaser free
from all encumbrances, liens, attachments, registered
mortgages and charges of the same nature on the vessel. It
would necessarily flow from this section that all charges and
expenses that are incurred by the vessel after its purchase
under the Court Sale, would have to be borne by the purchaser.
In the present case, the applicant-purchaser was issued the Bill
of Sale on 9th November, 2020 at 1830 Hrs. His liability,
therefore, would necessarily start from that date and time and
not earlier. In fact, prior thereto, the applicant was not even in
the picture to incur any liability in relation to the defendant
vessel. Admittedly, in the present case, the vessel sailed out on
Page 14 of 21
19.ial.6531.2020.docx
20th November, 2020 at 0300 Hrs. This is, therefore, less than
30 days. It cannot be disputed that from 9th November, 2020 till
20th November, 2020, the applicant being the auction purchaser,
would be liable for Anchorage Charges for the said period. But
this period is of 11 days or part thereof. If that be the case, at
least to my mind, the applicant could not have been foisted with
the liability to pay Anchorage Charges at the rate which was
stipulated for a period beyond 30 days. In fact, it is not even the
case of respondent No.2, as it cannot be, that the applicant is
liable to pay Anchorage Charges for any period other than from
9th November, 2020, 1830 Hrs [ i.e. the date and time of issuance
of the Bill of Sale] to 20th November, 2020, 0300 Hrs [i.e. the
date and time the vessel sailed]. This is being the case, I fail to
understand how respondent No.2 can apply the higher rate of
USD 0.0118 per GRT per hour or part thereof [applicable to a
period beyond 30 days] to the applicant, when, even according
to respondent No.2, the applicant is liable to pay Anchorage
Charges only for the period 9th November, 2020 to 20th
November, 2020 [i.e. for 11 days]. As mentioned earlier, the
applicant came into the picture only on the date when the Bill of
Sale was issued in its favour. As far as the applicant is concerned,
Page 15 of 21
19.ial.6531.2020.docx
it started incurring Anchorage Charges from 9th November,
2020, 1830 Hrs [ i.e. the date and time of issuance of the Bill of
Sale] and not prior thereto. Hence, as far as the applicant is
concerned, this is the starting point, and the rate that would
applicable would have to be determined from this date.
15. I may hasten to add that this does not mean that the
shortfall cannot be recovered by respondent No.2. It is not in
dispute that admittedly the defendant vessel was at Anchorage
for a period beyond 30 days, and therefore, they would be
entitled to apply the higher rate. However, to my mind, this
shortfall cannot be recovered from the auction purchaser. If at
all, this shortfall can be recovered from the sale proceeds of the
defendant vessel and/or its erstwhile owners. I must clarify that
whether respondent No.2 can look to the sale proceeds of the
defendant vessel is not being decided in the present Interim
Application. That issue would be decided as and when they make
a claim on the sale proceeds to recover the shortfall. In other
words, by this order, respondent No.2 is not precluded from
recovering the shortfall and neither should this order be
construed to mean that respondent No.2 is not entitled to the
Page 16 of 21
19.ial.6531.2020.docx
same. It is only precluded from recovering the same from the
auction purchaser i.e the applicant.
16. Mr. Fernandes has tendered an email dated 29th
December, 2020 addressed by respondent No.2 to its advocates
to show as to what would be the dues of the applicant towards
Anchorage and Pilotage Charges if it is calculated at the lower
rate, namely, at the rate of USD 0.0047 per GRT per hour or part
thereof. In this email it is reflected that the GRT of the defendant
vessel is 70,310 and the number of hours is 219 and the
exchange rate for USD is Rs.73.84. On this basis, the total that
the applicant would have to pay comes to Rs.65,68,541/-
(inclusive of 18 % GST). Mr. Fernandes also submitted that this
amount is for the period from 11th November, 2020, 0001 Hrs to
20th November, 2020, 0300 Hrs. However, under the Terms and
Conditions of Sale, the applicant has to pay Anchorage charges
from the date of the Bill of Sale, namely, 9th November, 2020,
1830 Hrs. He submitted that the amount of Rs.65,68,541/- does
not include the charges for the period from 9th November, 2020,
1830 Hrs till 10th November, 2020 2359 Hrs as the bill for the
Page 17 of 21
19.ial.6531.2020.docx
same has not yet been raised.
17. I must also mention that Mr. Kamat also raised a
contention that under the provisions of Section 50B of the Major
Port Trusts Act, 1963 the applicant would be liable to pay only
half the Anchorage Charges. He, however, without prejudice to
his rights and contentions, did not press this argument at this
stage and stated that the applicant was willing to pay the full
charges at the lower rate, namely, at the rate of USD 0.0047 per
GRT per hour or part thereof.
18. In view of the foregoing discussion, the following
order is passed:-
ORDER
(a) From the moneys that have been deposited in this Court by the applicant, namely, the sum of Rs.1,64,17,674/-, respondent No.2 shall be entitled to withdraw an amount of Rs.65,68,541/- towards Anchorage Charges and Pilotage Charges due from the applicant;
(b) For any shortfall, respondent No.2 shall be entitled Page 18 of 21
19.ial.6531.2020.docx to make a claim against the sale proceeds of the defendant vessel and/or the erstwhile owners thereof, which claim, if made, shall be decided on its own merits and in accordance with law;
(c) Similarly, from the amount of Rs.1,64,17,674/-
deposited in this Court by the applicant, respondent No.1 shall be entitled to withdraw an amount of Rs.2,90,960/- towards Light Dues Charges;
(d) The balance amount deposited by the applicant under the order dated 18th November, 2020 shall be refunded back to the agent of the applicant with accrued interest, if any;
(e) If any bill is raised by respondent No.2 towards Anchorage and other Charges for the period from issuance of the Bill of Sale (which was issued on 9th November, 2020 1830 Hrs) till 10.11.2020, 2359 Hrs, the same shall be paid by the applicant either through itself or its agent, within a period of one week from the date of receipt of such bill. It is made clear that even this bill shall be raised by calculating the lower rate, namely, the rate of USD 0.0047 per GRT per hour or part thereof.
19. At this stage, Mr. Fernandes, the learned counsel Page 19 of 21
19.ial.6531.2020.docx appearing on behalf of respondent No.2 prays for stay of this order. Mr. Kamat, the learned counsel appearing on behalf of the applicant, vehemently opposed for grant of any stay. He submits that if the Court is inclined to grant any such stay, then a statement can be recorded on behalf of the applicant that they shall not give effect to this order and shall not withdraw the amounts as mentioned herein for a period of two weeks from today. He further submitted that if respondent No.2 seeks to challenge this order then even the contention of the applicant regarding section 50B of the Major Port Trusts Act, 1963 be kept open for them to agitate in any appeal filed by respondent No.2 herein.
20. Having heard the learned counsel on the aspect of stay and considering that the applicant is not an Indian entity, it is directed that the applicant and/or its agent shall not withdraw the amount as set out in paragraph 18(d) of the operative part of the order for a period of three weeks from today. It is clarified that this order shall not preclude the applicant from taking up all contentions with regard to their argument based on section 50B of the Major Port Trusts Act, 1963 before the appellate Page 20 of 21
19.ial.6531.2020.docx court by filing cross objections to any appeal filed by respondent No.2.
21. This order shall be digitally signed by the Private Secretory /Personal Assistant of this Court. All concerned shall act on production by fax or e-mail of a digitally signed copy of this order.
(B.P. COLABAWALLA, J. ) Page 21 of 21