Orissa High Court
Paradip International Cargo vs M.V. Debi on 23 February, 2024
Author: V. Narasingh
Bench: V. Narasingh
IN THE HIGH COURT OF ORISSA AT CUTTACK
I.A No.
No.1 of 2024 arising out of
ADMLS No.1 of 2024
Paradip International Cargo ... Plaintiff
Terminal Pvt. Ltd.
Mr. P. N. Kamat,
Kamat Advocate
Mr. S.S Mohanty, Advocate
Mr. N. Naik, Advocate
-versus-
M.V. Debi ... Defendant
Mr. G. Misra, Sr. Advocate
Mr. S. Biswal, Advocate
CORAM: JUSTICE V. NARASINGH
ORDER
Date of Hearing : 21 21.02.2024 Date of Order : 23.02.2024
1. The Plaintiff prays for a decree against the Defendant, inter alia, to pay a sum of Rs.7,95,47,170/-
Rs.7,95,47,170/ in terms of Section 4(1)(n) read with Section 9(1)(d) of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 (hereinafter referred to as "Act, 2017") and as an interim measure in I.A No.1 of 2024 seeks arrest of the Defendant-Vessel Defendant in consonance with Section 5(1) of the Act, 2017.
Page 1 of 27// 2 //
2. For convenience of reference Section 4(1)(n), Section 9(1)(d) and Section 5(1) of the Act, 2017 are quoted hereunder:
"4. Maritime claim. - (1) The High Court may exercise jurisdiction to hear and determine any question on a maritime claim, against any vessel, arising out of any -
xxx xxx xxx
(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;"
"9. Inter se priority on maritime lien. - (1) Every maritime lien shall have the following order of inter se priority, namely:-
xxx xxx xxx
(d) claims for port, canal, and other waterway dues and pilotage dues and any other statutory dues related to the vessel;"
"5. Arrest of vessel in rem. -(1) The High Court may order arrest of any vessel which is within its jurisdiction for the purpose of providing security against a maritime claim which is the subject of an admiralty proceeding, where the court has reason to believe that -
(a) the person who owned the vessel at the time when the maritime claim arose is liable for the claim and is the owner of the vessel when the arrest is effected; or
(b) the demise charterer of the vessel at the time when the maritime claim arose is liable for the claim and is the demise charterer or the owner of the vessel when the arrest is effected; or
(c) the claim is based on a mortgage or a charge of the similar nature on the vessel; or Page 2 of 27 // 3 //
(d) the claim relates to the ownership or possession of the vessel; or
(e) the claim is against the owner, demise charterer, manager or operator of the vessel and is secured by a maritime lien as provided in section 9. (2) The High Court may also order arrest of any other vessel for the purpose of providing security against a maritime claim, in lieu of the vessel against which a maritime claim has been made under this Act, subject to the provisions of sub-section (1):
Provided that no vessel shall be arrested under this sub-section in respect of a maritime claim under clause (a) of sub-section (1) of section 4."
3. Heard Mr. P.N. Kamat being assisted by Mr. S.S Mohanty and Mr. N. Naik, learned counsel for the Plaintiff and Mr. Misra, learned Senior Advocate for the Defendant along with Mr. Biswal.
4. During the course of consideration of I.A No.1 of 2024 seeking arrest of the Defendant vessel in terms of Section 5(1) of the Act, 2017, it came to fore that Caveat Petition No.1 of 2024 has been filed at the behest of the Defendant.
5. It is apt to note here that the said Caveat Petition was filed under Section 148-A of the Civil Procedure Code, 1908 read with Rule 5 of Chapter VI of the Orissa High Court Rules.
6. The Plaintiff has brought the suit seeking arrest, sequestration, condemnation and sale of the Defendant Page 3 of 27 // 4 // Vessel for enforcement of its Maritime lien (which includes a maritime claim) against the Defendant vessel/Owner and for recovery of dues of the Plaintiff towards berth hire and penal berth hire charges etc. in terms of Section 4(1)(n) read with Section 9(1)(d) of the Act, 2017 for a sum of Rs.7,95,47,170/- which is inclusive of interest and legal cost of Rs.20,36,345/- and Rs.50,00,000/- respectively.
7. Learned counsel for the Plaintiff opposed the right of audience as sought to be exercised by the Defendant as a Caveator. It was objected to, inter alia, on the ground that the caveat not having been filed in terms of the Orissa High Court Admiralty (Jurisdiction and Settlement of Maritime Claims) Rules, 2020 (hereinafter referred to as "Rules, 2020"), the same has to be rejected in limine and basing on the same the interim order as being sought for in I.A No.1 of 2024 arising out of the admiralty suit in question cannot be resisted.
8. It is apposite to note that Section 16 of Act, 2017 deals with rule making power under the Act and in exercise thereof by notification dated 23rd July, 2020 Rules have been framed by this Court as Rules, 2020. Section 16 of the Act, 2017 reads thus :
Page 4 of 27// 5 // "16. Power to make rules.--(1) The Central Government may, by notification in the Official Gazette, make rules for carrying out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, the rules may provide for all or any of the following matters, namely:-
(a) the qualification, experience, nature of duties and fee to be paid to the assessors and other ancillary or incidental matters under sub-section (1) of section 13;
(b) the practice and procedure of admiralty jurisdiction under this Act including fees, costs and expenses in such proceedings; and
(c) any other matter which is required to be, or may be, prescribed.
(3) Until rules are made under sub-section (2) by the Central Government, all rules for the time being in force governing the exercise of admiralty jurisdiction in the High Courts shall be applicable.
(4) Every rule made under this Act shall be laid, as soon as may be after the rule is made, or notification issued before each House of Parliament while it is in session for a total period of thirty days comprised in one session or in two or more successive sessions and if, before the expiry of the session immediately following the session or the successive sessions aforesaid both Houses agree in making any modification in the rule or notification or both Houses agree that the rule or notification should not be made or issued, the rule or notification shall thereafter have effect, only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or notification."
9. Rule 30 of the said Rules deals with caveat against arrest of property. For convenience of ready reference, the same is extracted hereunder:
Page 5 of 27// 6 // "30. Caveat against arrest of property:- (1) Any person desiring to prevent the arrest of any property shall file in the Registry a praecipe, signed by himself or his Advocate, who may be acting for him requesting that a caveat be entered against the arrest of the said property and undertaking to enter an appearance in person or by a Vakalatnama in any suit that may be instituted against the said property and to give security in such suit in a sum not exceeding the amount to be stated in the praecipe or to pay such sum into the Registry. The caveat shall contain the name, address and e-mail address of the caveator and/or his advocate, as the case may be. A caveat against the issue of a warrant for the arrest of the said property shall thereupon be entered in a book to be kept in the Registry, called the "Caveat Warrant Book". The Caveat Warrant Book shall state the amount of security that the caveator has undertaken to provide as per praecipe.
(2) Copy of plaint in suit against property to be served before filing plaint on the caveator- Any person instituting a suit against any property in respect of which a caveat has been entered in the "Caveat Warrant Book" shall, before filing the plaint, serve a copy thereof upon the party on whose behalf the caveat has been entered or upon his Advocate and annex to the plaint a statement of such service.
(3) Caveator to give security on filing of plaint-Within three days from the filing of the plaint, the party on whose behalf the caveat has been entered shall, if the sum in which the suit has been instituted does not exceed the amount for which he has given the undertaking, give security in such sum or pay the same into the Registry, or if exceeds that amount, give security to the sum in which the suit has been instituted or pay the same into the Registry.
Page 6 of 27// 7 // (4) On default, the suit may proceed ex parte- After the expiration of three days from the filing of the plaint, if the party on whose behalf "a caveat has been entered shall not have given security in such sum or paid the same into the Registry, the plaintiff may apply to the Registrar to set down the suit forthwith for hearing as an undefended, suit;
Provided that the Court may on good cause shown and on such terms as to payment of costs as it may impose, extend the time for giving security or paying the money into the Registry.
(5) Judgment on the claim and enforcement of Judgment on the claim payment- When the suit comes before the Court, if the Court is satisfied that the claim is well founded it may pronounce Judgment for the amount which appears to be due, and may enforce the payment thereof by order of attachment against the party on whose behalf the caveat has been entered, and by the arrest of the property if it then be or thereafter comes within the jurisdiction of the Court. (6) Registrar to search for caveat before issue of warrant- Before issuing a warrant for the arrest of property, the Registrar shall ascertain, whether or not any caveat has been entered against the issue of warrant of arrest thereof.
10. Section 12 of Act, 2017 under Chapter III thereof deals with procedure and appeals. The said Section is extracted hereunder for convenience of ready reference:
"12. Application of Code of Civil Procedure.- The provisions of the Code of Civil Procedure, 1908 (5 of 1908) shall apply in all the proceedings before the High Court in so far as they are not inconsistent with or contrary to the provisions of this Act or the rules made thereunder:
(Emphasized) Page 7 of 27 // 8 //
11. On a combined reading of Section 12 of the Act, 2017 and Rules 2020 this Court holds that the caveat admittedly not having been filed in consonance with the Rules governing the field, the same cannot be taken cognizance of and as such the same is to be treated as non- est in the eye of law.
11-A. Caveat Petition No.1 of 2024 is accordingly disposed of.
12. It is stated that the Plaintiff-Paradip International Cargo Terminal Pvt. Ltd. ("PICTPL" for brevity) is a company incorporated under the Companies Act, 2013. The Plaintiff is a concessionaire of the Paradip Port under the Concession Agreement, on a Public Private Partnership Module, entered into between the Plaintiff and the Paradip Port Trust for a 30 years period commencing from April, 2016.
13. In terms of the concession agreement, the Plaintiff has constructed and developed a multipurpose berth at Paradip Port on a Build, Operate, Transfer (BOT) basis and the Plaintiff operates a multipurpose clean cargo terminal catering to various customers.
14. It is stated that the charges at Para-33 of the plaint for realization of which the suit is filed have been raised Page 8 of 27 // 9 // due to overstay of the Defendant Vessel at the berth of "PICTPL" (Plaintiff) and on the basis of concession agreement entered into between the Plaintiff and Paradip Port Trust for 30 years period commencing from April, 2016, the claim as enumerated in Paragraph-33 of the Plaint and extracted hereunder, has been raised:
"33. The Particulars of the present claim are given below for reference:
Sr. Particulars Details Amount (INR) No.
1. Berth Hire Charges Provisional Invoice 26,72,084 No.PPICT23110000007
2. Berth Hire Charges Provisional Invoice 31,57,917 No.PPICT23120000004
3. Penal Berth Hire Provisional Invoice 6,70,56,133 Charges No.PPICT23120000006
4. Berth Hire Charges Provisional Invoice 19,43,333 No.PPICT23120000007
5. HMC Charges Provisional Invoice 69,353 No.PPICT23120000012 Grand Total 7,48,98,820 Amount received an advance as on 29.11.2023 23,87,995 Balance Amount to be received (Principal Sum) 7,25,10,825
6. 2% Interest above the Charged on the Principal 20,36,345 prime lending rate of Sum from the date the sum SBI i.e. 14.85 % = fell due (i.e. 21.12.2023) 16.85 % (Clause 1.2. till the date of filing this
(vii) (b) of SOR suit.
7. Legal cost 50,00,000 TOTAL 7,95,47,170"
Page 9 of 27// 10 //
15. It is the further submission of the learned counsel for the Plaintiff that the aforementioned amounts under different heads have been claimed as per applicable Scale of Rates (SOR) which was gazetted vide Gazette No.191 dated 22.05.2018 (Annexure-2 of the plaint).
16. Claiming the same to be a maritime claim under Section 4(1)(n) read with maritime lien as per Section 9 (1)(d) of Act, 2017 pending disposal of the suit the Plaintiff seeks arrest of the Defendant Vessel in exercise of the power of this Court under Section 5(1) of the Act, 2017 for enforcement of such claim and lien.
17. Defendant by filing I.A. No.2 of 2024 challenges the maintainability of the admiralty suit, inter alia, on the ground stated therein and also adopted the same during submission resisting the prayer for interim order in terms of Section 5 of the Act, 2017. The prayer in I.A. No.2 of 2024 is quoted hereunder:
"xxx xxx xxx a. Dismiss the present admiralty suit as not maintainable in view of the facts and circumstances as narrated herein before :
And/or b. Reject the Plaint filed by the Plaintiff under Order 7 Rule 11 of the Code of Civil Procedure, 1908 read with Section 12 of the Admiralty Act, 2017 and also Section 42 of the NDPS Act, 1985;Page 10 of 27
// 11 // And/or c. Dismiss the suit summarily for non-joinder of necessary and proper parties as per the provisions under Order 1 Rule 10 of Code of Civil Procedure, 1908;
And/or d Hold that the suit is not maintainable for lacking actionable maritime claim;
And/or e Hold that the suit is not maintainable for the lack of privity of contract between the parties;
And/or f Pass any other order in the interest of justice, equity and good conscience as this Hon'ble Court deems fit.
xxx xxx xxx"
18. It is stated by the learned Senior Counsel, Mr. Misra for the Defendant during the course of submission that the suit is not maintainable, inter alia, for non joinder of parties, there is no privity of contract between the Plaintiff and the Defendant and the claim as being made is not covered under Section 4(1)(n) of Act, 2017 and lien under Section 9(1)(d) of Act, 2017 as claimed. And, because of the ongoing criminal investigation which is being carried out by the authorities under the N.D.P.S Act and Customs Act, the claim has to be negated. And prayer for arrest order under Section 5(1) of the Act, 2017 does not merit consideration.Page 11 of 27
// 12 // 18-A. By referring to the additional affidavit filed during the course of hearing on 21.02.2024, it is the further submission of the learned Senior Counsel for the Defendant that the Plaintiff has to share only 11.044% of the revenue generated with Paradip Port Authority and hence this Court ought not to be swayed away by the bogey of "sovereign dues" as asserted by the Plaintiff.
19. It is his further submission that admittedly on the intervening night of 30.11.2023 and 01.12.2023 there was detection of 22 packets of contraband substance believed to be Cocaine onboard Defendant Vessel MV DEBI. And, referring to Annexure-4 (Dt.01.12.2023) of the plaint, the communication issued by the Assistant Commissioner, Paradeep Customs Division addressed to the Traffic Manager, Paradip Port Trust, Paradip directing that no movement authorizations be given to the vessel without prior consultation, a copy of which was also marked to the Plaintiff as is evident from the endorsement in the said letter, it is asserted that the overstay in the berth was beyond the control of the Defendant and the same ought to weigh with this Court while considering the prayer under Section 5(1) of the Act, 2017.
19-A. As such, the Defendant is only liable to pay the charges till 30.11.2023 in terms of Scale of Rates Page 12 of 27 // 13 // (SOR) at Annexure-2 of the plaint and the demand of additional sum as stated in Paragraph-33 of the plaint and extracted hereinabove is usurious.
20. Learned Senior Counsel for the Defendant further relying on Section 26(1)(g) and Section 31 of the Major Port Authorities Act, 2021 extracted hereunder made the submission that there is scope for remission from payment of any rate or charge leviable and the Port Authorities on being requested also have the power to arrest such vessel.
"26. Powers of Board in respect of planning and development.- (1) For the purposes of planning and development of the Major Port, the Board in relation to that Major Port shall have the power to make regulations, not inconsistent with the Customs Act, 1962 (52 of 1962) or any rules made thereunder, to-
xxx xxx xxx
(g) provide exemption or remission from payment of any rate or charge leviable on any goods or vessels or class of goods or vessels under this Act;"
"31. Recovery of rates and charges by distraint of vessel.- (1) If the master of any vessel in respect of which any rates or penalties are payable under this Act, or under any regulations or orders made in pursuance thereof, refuses or neglects to pay the same or any part thereof on demand, the Board on its own or on request of the concessionaire appointed by the Board under the Public Private Partnership project, may distrain or arrest such vessel and the tackle, apparel and furniture belonging thereto, or any part thereof, and detain the same until the amount so due to the Board or such concessionaire, together with such further amount as Page 13 of 27 // 14 // may accrue for any period during which the vessel is under distraint or arrest, is paid.
(2) In case any part of the said rates or penalties, or of the cost of the distress or arrest, or of the keeping of the same, remains unpaid for the space of fifteen days next after any such distress or arrest has been so made, the Board on its own or on request of such concessionaire may cause the vessel or other thing so distrained or arrested to be sold, and, with the proceeds of such sale, shall satisfy such rates or penalties and costs, including the costs of sale remaining unpaid, rendering the surplus (if any) to the master of such vessel on demand."
21. Referring to the same, learned counsel for the Defendant submits that in fitness of things the Paradip Port Authorities ought to have been impleaded so also the officials of customs and Special Act (NDPS).
22. Learned Senior Counsel relied on the judgment of the Apex Court in the case of Margaret Almeida and others vrs. Bombay Catholic Cooperative Housing Society Limited and others (2013) 6 SCC 538 and Ravi Kamal Bali vrs. Kala Tech & others 2008 SCC OnLine Bombay 496.
23. It is the further submission of the learned counsel for the Defendant that since all the invoices and notices have been raised admittedly against the Seaways Shipping and Logistics Limited, Asia Pacific Shipping Co. Ltd. and Dava PTE. Limited by Email/Speed Post at Annexure-20 (Dt.08.02.2024) as agent of the Defendant, owner of vessel Page 14 of 27 // 15 // in question M.V. DEBI and charterer in Indian Waters respectively, in their absence the suit is not maintainable.
23-A. It is his submission that their non-joinder in the facts of the present case raises serious doubts regarding bona fide of the Plaintiff and hence, "discretionary relief"
under Section 5(1) of the Act, 2017 should be refused.
24. Learned Senior Counsel for the Defendant Mr. Misra relied on the judgment of the Gujarat High Court in the case of Navigation Key Inc. Vrs. MV Manticore (R/ADMIRALTY SUIT No.7 of 2022 dated 11.02.2022) and also the judgment of the Apex Court in the case of Dalip Singh Vrs. State of Uttar Pradesh and others, 2010 (2) SCC 114 relating to non-disclosure of vital facts and relying on the same, learned Senior Counsel for the Defendant submitted that the Plaintiff is not entitled to any interim relief since lis itself is not maintainable and the Plaintiff has not approached this Court with clean hands.
25. Learned counsel for the Plaintiff Mr. Kamat opposed such submission of learned Senior Counsel for the Defendant with vehemence.
25-A. Learned counsel for the Plaintiff also relied on the judgment of the Bombay High Court in the case of Board of Trustees of the Port Mumbai Raj Shipping Agencies vrs. Barge Madhwa and another, 2020 SCC OnLine Bom 651, Page 15 of 27 // 16 // Mumbai Port Trust vrs. Shri Lakshmi Steels and others, (2018) 14 SCC 317 and S.J.S. Business Enterprises (P) Ltd. vrs. State of Bihar and others (2004) 7 SCC 166 and the judgment of the Madras High Court in the case of Value Shipping Limited vrs. Owners and parties interested in the Vessel MV Nadhenu Purna (Application Nos.138 and 479 of 2023 in C.S. (Comm. Div.) No.4 of 2024 disposed of on 2.2.2024)
26. In M.V. Elisabeth and others vrs. Harwan Investment and Trading Pvt. Ltd., Hanoekar House Swatontapeth, Vasco-De Gama, Goa, 1993 Supp. (2) SCC 433 : AIR 1993 SC 1014, the Apex Court has held that for the purpose of exercise of admiralty jurisdiction the ship has been treated as a separate judicial personality, an entity having not only rights but also liability.
26-A. Para-44 and 55, 65 and 88 of the judgment of the Apex Court in the case of M.V. Elisabeth, (1993 Supp. (2) SCC 433) runs thus:
"44. "The law of admiralty, or maritime law, .... (is the) corpus of rules, concepts, and legal practices governing ... the business of carrying goods and passengers by water." (Gilmore and Black, The Law of Admiralty, page 1). The vital significance and the distinguishing feature of an admiralty action in rem is that this jurisdiction can be assumed by the coastal authorities in respect of any maritime claim by arrest of Page 16 of 27 // 17 // the ship, irrespective of the nationality of the ship or that of its owners, or the place of business or domicile or residence of its owners or the place where the cause of action arose wholly or in part.
"... In admiralty the vessel has a juridicial personality, an almost corporate capacity, having not only rights but liabilities (sometimes distinct from those of the owner) which may be enforced by process and decree against the vessel, binding upon all interested in her and conclusive upon the world, for admiralty in appropriate cases administers remedies in rem, i.e., against the property, as well as remedies in personam, i.e., against the party personally ...."
(Benedict, The Law of American Admiralty, 6th ed., Vol. I p. 3.)"
(Emphasized) xxx xxx xxx
55. 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.
xxx xxx xxx "65. It is likewise within the competence of the appropriate Indian Courts to deal, in accordance with Page 17 of 27 // 18 // the general principles of maritime law and the applicable provisions of statutory law, with all persons and things found within their jurisdiction. The power of the court is plenary and unlimited unless it is expressly or by necessary implication curtailed. Absent such curtailment of jurisdiction, all remedies which are available to the courts to administer justice are available to a claimant against a foreign ship and its owner found within the jurisdiction of the High Court concerned. This power of the court to render justice must necessarily include the power to make interlocutory orders for arrest and attachment before judgment.
xxx xxx xxx
88. Admiralty jurisdiction is an essential aspect of judicial sovereignty which under the Constitution and the laws is exercised by the High Court as a superior court of record administering justice in relation to persons and things within its jurisdiction. Power to enforce claims against foreign ships is an essential attribute of admiralty jurisdiction and it is assumed over such ships while they are within the jurisdiction of the High Court by arresting and detaining them."
(Emphasized) 26-B. The said judgment has also been referred to in the case of Chrisomar Corporation vrs. MJR Steels Private Limited and another, (2018) 16 SCC 117.
27. In Mumbai Port Trust vrs. Shri Lakshmi Steels and others (supra), the Apex Court in Para-18,23, 26 and 37 held thus:
Page 18 of 27// 19 // "18. Before dealing with these issues, it would be relevant to refer to the provisions of the Act. As already mentioned above, the Tariff Authority for Major Ports is constituted under Section 47A of the Act and the imposition and recovery of rates at Major Ports are fixed by the Tariff Authority. Section 48(1) of the Act provides that the authority shall, by notification in the Official Gazette, frame a scale of rates and a statement of conditions under which, any of the services specified hereunder shall be performed by a Board in relation to a port. Sub-section (1)(d) of Section 48 deals with wharfage, storage and demurrage of goods. Section 53 of the Act empowers the Board to exempt, either wholly or partially, any goods or vessels or class of goods of vessels from the payment of any rate or of any charge leviable in special case, for the reasons to be recorded in writing. Section 58 deals with time for payment of rates on goods. Section 59 of the Act provides that the Board shall have a lien on the goods which are kept in the port in respect of the amount due to the Board under the provisions of the Act.
xxx xxx xxx
23. The issue whether an importer is liable to pay demurrage charges even when the imported goods have been detained by the Customs Authorities and later it is found that the version of the importer is correct, has been the subject matter of a number of decisions. In the case of Trustees of the Port of Madras v. M/s Aminchand Pyarelal1, the Customs Authorities had issued 1 (1976) 3 SCC 167 detention certificate of imported goods. There was no fault or negligence on the part of the importer. The Trustees of the Port of Madras waived demurrage charges for the period of detention; the importer paid the balance amount and cleared the goods. Later, the Board wrote to the Customs Authorities that the detention certificate had been wrongly issued. Thereafter, the Board sued the importer for recovery of the balance demurrage charges.Page 19 of 27
// 20 // It was urged that the Board could not charge demurrage for the period during which the goods had been detained for no fault or negligence of the importer or his agent. This Court, after noticing the provisions of the Madras Port Trust Act, especially Sections 42, 43 and 43A thereof, which are similar to the provisions of the Major Port Trusts Act, 1963 referred to above, held that the Board was entitled to claim the rates as framed under the provisions of the said Act. This Court held that the Port Trusts were public representative bodies entrusted by the Legislature with authority to frame the scale of rates and the conditions subject to which these rates and services were to be rendered. These rates were approved by the Central Government and, thereafter, the rates had the force of the law. It was held that the Port Trusts were under a statutory obligation to render services of various kinds in the larger public and national interest. In case there is congestion in the port it would affect the free movement of ships and of essential goods. Therefore, the scale of rates had to be framed in such a manner that it worked both as an incentive to the importers to remove the goods as expeditiously as possible from the transit areas and also acted as a disincentive to keep the goods in the premises of the Board for a long time, thereby increasing the demurrage charges substantially with passage of time. This Court held that the High Court was in error in holding that the Board's power to charge demurrage was limited to cases where the goods were not removed from its premises due to some fault or negligence on the part of the importer.
xxx xxx xxx
26. In all these cases, this Court took the view that the Board of Trustees of the Ports, which are creations of a statute, are entitled to charge demurrage and other charges from the importer even in respect of those periods during which the importer was unable to clear goods from the premises of the Board, for no fault or Page 20 of 27 // 21 // negligence on the part of the importer. It was further held that the Boards were entitled to charge demurrage from the importer even when the importer was unable the clear the goods because of the detention thereof by the 3 (1987) 1 SCC 648 Customs authorities, which detention may later on have been found to be unjustified.
xxx xxx xxx
37. We have already referred to a number of decisions wherein the law has been clearly laid down that even if the importer is not at fault, it is the importer alone who is liable to pay the demurrage charges. As far as detention charges are concerned, this is a private contract between the importer and the carrier, i.e. Shipping Line. The DRI/Customs authorities can be directed to pay the demurrage/detention charges only when it has proved that the action of the DRI/Customs Authorities is absolutely mala fide or is such a gross abuse of power that the officials of the DRI/Customs should be asked to compensate the importer for the extra burden which he has to bear. Even if an importer feels that it has been unjustly dealt with, it must clear the goods by paying the charges due and then claim reimbursement from the customs authority."
(Emphasized)
28. To fortify his submission relating to "action in rem"
and opposing the ground of non-joinder, learned counsel for the Plaintiff relied, apart from the "locus classicus" on Admiralty Law the judgment of the Apex Court in the case of M.V. Elisabeth (supra), the judgment of the Bombay High Court in the case of Board of Trustees of the Port Mumbai Raj Shipping Agencies vrs. Barge Madhwa and another (supra).Page 21 of 27
// 22 // 28-A. The Bombay High Court in Paragraphs- 22, 33 and 88 held thus:
"22. A ship or a vessel as commonly referred to is a legal entity that can be sued without reference to its owner. The purpose of an action in rem against the vessel is to enforce the maritime claim against the vessel and to recover the amount of the claim from the vessel by an admiralty sale of the vessel and for payment out of the sale proceeds. It is the vessel that is liable to pay the claim. This is the fundamental basis of an action in rem. The Claimant is not concerned with the owner and neither is the owner a necessary or proper party. The presence of the owner is not required for adjudication of Plaintiff's claim. That is why no writ of summons is required to be served on the owner of the vessel. The service of the warrant of arrest on the vessel is considered sufficient.
xxx xxx xxx
33. Thus a maritime lien is a concept which is Sui Generis, can only be enforced by an Admiralty action in rem against the ship, adheres to the ship and continues to bind the ship until discharged, is not defeated by a transfer or sale of the Ship - res (except a judicial sale by an Admiralty Court), has the highest priority amongst all claims and there can be no loss of such lien in the absence of any statutory provision expressly prohibiting the exercise or implementation of such lien. This is an established practice in the law of the seas and is universal in nature. Personal liability of the owner of the ship is not necessary for a maritime lien to attach to the res and it follows the res even in the hands of a bonafide purchaser who may have no notice of the lien. Judicial opinion and textbook writers hold that a maritime lien such as seamen's wages is a right to a part of property in the res and a privileged claim upon a ship, aircraft or other maritime Page 22 of 27 // 23 // property and remains attached to the property travelling with it through changes of ownership. It is also acknowledged that it detracts from the absolute title of the "res" owners. As noted in O. Konavalov12, the seamen's right to their wages have been put on a high pedestal. It is said that a seaman had a right to cling to the last plank of the ship in satisfaction of the wages or part of them as could be found.
xxx xxx xxx
88. Also, to be borne in mind is the difference between an arrest and an attachment. An arrest cannot be equated to an attachment. A maritime claimant has a right in rem which he is entitled to exercise by an arrest of the ship. The only test he has to satisfy is to show that he has prima facie a maritime claim and identify the ship. As against this, an attachment before judgment is a discretionary interim order that any type of Claimant would be entitled to apply upon satisfying the requirements of the Code of Civil Procedure (CPC). He is not entitled to an attachment as a matter of right or as a manner of enforcement of a right."
(Emphasized)
29. It is apposite to state that the Bombay High Court quoted extensively from the judgment of the Apex Court in the case of M.V. Elisabeth (supra) to highlight the special features of the admiralty jurisdiction in the light of the enactment of Act, 2017.
30. What in essence is pleaded and prayed for by the Defendant by filing I.A No.2 of 2024 "An application challenging the maintainability of the admiralty suit", inter Page 23 of 27 // 24 // alia, on the ground of non-joinder of necessary party the Narcotic Department and the Customs Department etc. which was elaborated at the stage of argument, to decide the maintainability of the lis at the threshold.
31. If the contention of the Defendant is to be accepted then Admiralty Jurisdiction will be denuded of its special feature as distinct from the common law forum which are governed under Section 9 of the Civil Procedure Code.
32. In the considered view of this Court such approach will defeat the unique nature of jurisdiction exercised by this Court under Act, 2017.
33. So far as Defendant's reference to Major Port Authorities Act, 2021 is concerned, on a bare perusal of the provisions of the said Act would enumerate that the said Act and the Act, 2017 operate in clearly distinct and designated fields.
33-A There is no overlap and interplay between Act, 2017 and M.P Act, 2021 as being canvassed by the Defendant, to assert that had the Port Authorities been impleaded as parties there could have been effective adjudication without, ipso facto resorting to the punitive measure of arrest as envisaged under Section 5(1) of the Act, 2017, has to be negated.
Page 24 of 27// 25 //
34. The claim of the Plaintiff as stated in Paragraph-33 of the plaint extracted hereinabove are "cargo related" and "vessel related" in terms of Annexure-2.
34-A. Admittedly the applicability of the said rates have not been questioned by the Defendant.
34-B. Chapter-3 of the Scale of Rates at Annexure-2 relates to cargo related charges and Chapter-4 thereof deals with berth higher charges and penal berth hire charges.
34-C. It is apposite to state that the Plaintiff has valued the suit at Rs.7,95,47,170/- which is inclusive of interest and legal cost and has paid court fees accordingly.
35. Following the dictum of the Apex Court in the case of Chrisomar Corporation (supra) and of the Madras High Court in Value Shipping Limited (supra), this Court holds that interest and legal costs along with the principal amount as stated in Para-33 of the plaint and extracted hereinabove have to be regarded as maritime claim.
35-A. Hence, keeping in view the judgment of the Apex Court in M.V. Elisabeth (supra) and Videsh Sanchar Nigam Ltd. vrs. M.V. Kapitan Kud, (1996) 7 SCC 127 and on a conspectus of the materials on record, this Court holds that ex facie the Plaintiff has been able to establish that he has "reasonably arguable best case". And, an enforceable Page 25 of 27 // 26 // maritime claim in terms of Section 4(1)(n) read with Section 9(1)(d) of the Act, 2017 as enumerated in Paragraph-33 of the of the plaint (as extracted above) and prima facie has been able to fortify its stand that the suit will be rendered infructuous unless the order to arrest the Defendant is passed in exercise of the power of this Court under Section 5(1) of the Act, 2017.
36. Accordingly a separate judge order for arrest of Defendant Vessel is passed.
36-A. Defendant-vessel (M.V Debi) be arrested at Paradip Port.
37. The Plaintiff is at liberty to communicate the order along with letter of the Marshal of this Court, which is defined under Rule (2) of the Admiralty Rules of the Orissa High Court, 1981 through Fax, E-mail and hand delivery. The Plaintiff is also at liberty to serve the warrant of arrest in course of next twenty four hours. All parties shall act on ordinary copy of this order duly authenticated by the learned Deputy Registrar (Judicial) of this Court.
38. I.A No.2 of 2024 filed at the behest of the Defendant will be decided at the appropriate stage of the ADMLS. The Plaintiff is at liberty to file his objection to such I.A. Page 26 of 27 // 27 //
39. It is apt to state here that the observations made herein are only for the purpose of consideration of the claim of the Plaintiff in seeking interim order in terms of Section 5(1) of the Act, 2017.
40. I.A. No.1 of 2024 arising out of ADMLS No.1 of 2024 is thus disposed of.
(V. NARASINGH) Admiralty Judge Signature Not Verified Digitally Signed Signed by: PRADEEP KUMAR SWAIN Designation: Assistant Registrar-cum-Senior Secretary Reason: Authentication Location: Orissa High Court, Cuttack Date: 23-Feb-2024 16:12:57 Page 27 of 27