Kerala High Court
Union Of India vs Commander K.P.Shashidharan on 20 July, 2010
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE THE CHIEF JUSTICE MR.ASHOK BHUSHAN
&
THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE
MONDAY,THE 22ND DAY OF FEBRUARY 2016/3RD PHALGUNA, 1937
WA. No.2022 of 2010 ( ) IN WP(C). No.25534/2003
---------------------------------------------
AGAINST THE ORDER/JUDGMENT IN WP(C) NO.25534/2003 OF HIGH COURT OF
KERALA DATED 20.7.2010.
APPELLANT(S)/RESPONDENTS:
----------------------------------------------
1. UNION OF INDIA,
SECRETAYR TO THE MINISTRY OF DEFENCE, NEW DELHI.
2. THE CHIEF OF NAVAL STAFF,
NAVAL HEAD QUARTERS, NEW DELHI-110011.
3. THE FLAG OFFICER COMMANDING-IN-CHIEF,
SOTHERN NAVAL COMMAND, KOCHI-682004.
4. THE DIRECTOR GENERAL OF COAST GUARD,
COAST GUARD HEAD QUARTERS, NATIONAL STADIUM COMPLEX,
NEW DELHI-110001
BY ADV.SRI.T.SANJAY, CGC
RESPONDENT(S)/PETITIONER:
---------------------------------------------
COMMANDER K.P.SHASHIDHARAN,
177-A, WARD NO.IX, THATTEKKADU,
PANAPARAMBU ROAD, MARADU GRAMA PANCHAYAT, MARADU,
KANAYANNOOR TALUK, ERNAKULAM DIST-682304
BY ADVS. SRI.N.SUKUMARAN,
SRI.S.SHYAM
SRI.N.K.KARNIS
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 02-02-2016, ALONG
WITH WA. 291/2011, THE COURT ON 22.02.2016 DELIVERED THE FOLLOWING:
WA. No.2022 of 2010 ( )
APPENDIX
APPELLANTS' ANNEXURES:-
A1:- THE TRUE COPY OF THE DETAILS OF THE CAPITATION CHARGES CLAIMED
BY THE APPELLANTS.
A2:- THE TRUE COPY OF THE RATES PRESCRIBED AS PER THE MINISTRY OF
DEFENCE, GOVERNMENT OF INDIA FOR CAPITATION RATES.
RESPONDENT'S ANNEXURES:-
R1(A):- TRUE COPY OF THE AGREEMENT DATED 6.12.1996 REGARDING
SALVAGE MONEY FOR SALVAGING.
KRJ
//true copy// P.A to Judge
'C.R'
ASHOK BHUSHAN, C.J &
A.M.SHAFFIQUE, J
= = = = = = = = = = = = = = = = = = =
W.A Nos.2022 of 2010
& 291 of 2011
= = = = = = = = = = = = = = = = = = = =
Dated this the 22nd day of February, 2016
JUDGMENT
Ashok Bhushan, CJ These two writ appeals have been filed against common judgment dated 20.7.2010 in W.P(C) No.25534 of 2013. First respondent in W.A No.2022 of 2010 was the petitioner. The writ petition has been decided directing payment of 10 lakhs to the writ petitioner as his share towards salvage money. Both the parties being aggrieved by the judgment of the learned Single Judge have come up in appeal.
2. Parties shall be referred to as described in the writ petition.
3. In the writ petition, counter affidavit was filed on behalf of respondents to which, reply was also filed. In the writ appeals, an affidavit dated 20.11.2015 was also filed by Union of India to WA.2022/10&291/11 -:2:- which reply affidavit dated 17.12.2015 has been filed by the writ petitioner.
4. Brief facts of the case as emerged from the pleadings of the parties are:-
The petitioner, an officer of Indian Navy, was on deputation to the Coast Guard between September, 1995 to December, 1996. Petitioner was the commanding officer of the ship "Coast Guard Ship Vajra" (hereinafter referred to as, CGS Vajra). A container carrier vessel "MC Pearl", registered at Bahamas with cargo and 27 crew members on board, was sailing from Kandla port to Dubai on 24.9.1995. At 02.30 hours a message about MC Pearl being in distress was received. CGS Vajra, which was under the command of the petitioner, had already been on operational deployment in the area was diverted to render necessary assistance. CGS Vajra reached the ship MC Pearl which was in a position, 43 nautical miles north-west of Dwaraka, another ship "CGS C-136" WA.2022/10&291/11 -:3:-
was also send from Coast Guard Station, Okha for rendering assistance to MC Pearl. CGS Vajra with the help of coast guard helicopter brought 14 crew from the deck of MC Pearl on CGS Vajra. The other 13 crew of the said vessel, who had earlier been picked up from the life rafts by Merchant Vessel "MV Noble Fortune", were also taken on board of CGS Vajra. The crew of CGS Vajra extended help to the MC Pearl, with whose assistance to the vessel, the list was reduced to 17 degrees. On 25.9.1995, the master and the 12 crew at their request, were transferred to MC Pearl. A team of technical sailors from CGS Vajra provided assistance in starting the distress ship's generator. The owner of the vessel M/s. Commander Maritime Corporation, Greece contracted salvage firm M/s.Wijsmuller Salvage, Holland for salvage operation and the said firm's tug at about 20.00 hours on 28.9.1995, arrived from Oman. On 29.9.1995 M/s.Wijsmuller Salvage tug with salvage team commenced repair on MC Pearl and CGS Vajra was relived and returned to Mumbai. WA.2022/10&291/11 -:4:- Thereafter at a later date, MC Pearl was escorted by said tug of M/s.Wijsmuller Salvage to Dubai, which was the port of discharge for the cargo on board. The ship MC Pearl was allowed to sail to Dubai after an agreement was entered between Coast Guard and M/s.Wijsmuller wherein Coast Guard was treated as co-contractor in salvage services. A settlement agreement was entered between the Coast Guard and M/s.Wijsmuller where the claim of Coast Guard was settled for an amount of 1,37,28,773/-. The aforesaid amount was credited to Controller of Defence Accounts (Navy).
5. The petitioner, who was the Commander of the CGS Vajra, submitted a representation dated 9.7.1998 (Ext.P8) to the Flag Officer, Commanding-in-Chief, Southern Naval Command, Kochi for payment of successful salvage of MC Pearl. In the representation, he claimed that MC Pearl was salvaged on 24th September, 1996, after receipt of the distress message. Although owners of MC Pearl had engaged a salvage firm M/s.Wijsmuller and the tug Berkut engaged WA.2022/10&291/11 -:5:- by M/s.Wijsmuller had arrived and carried certain minor works and towed away the ship, the master of the ship has signed certificates and handed over to the petitioner which has been filed as Exts.P1 to P5. Petitioner was entitled for his share in the salvage amount.
6. A communication dated 10.11.1998 was sent by Coast Guard Headquarters in reference to the petitioner's representation informing that CGS Vajra under the command of petitioner had rendered rescue assistance to MC Pearl subsequent to distress message received from the ship. It rescued the crew and stood by to provide assistance. The ship owners had engaged M/s.Wijsmuller Salvage for salvage assistance. The company reimbursed the claim of Coast Guard towards capitation and other hire charges for the service rendered in accordance with the Government orders, which amount has been forwarded to the Controller of Defence Account (Navy) for crediting to the Coast Guard account. The amount is neither reward nor salvage money. Another communication dated 19th November, 1998 WA.2022/10&291/11 -:6:- was sent on behalf of the Chief of the Naval Staff informing that the statutory representation of the petitioner has been considered and after receipt of the clarification offered by the Coast Guard Headquarters, the competent authority has rejected the officer's representation. Petitioner being dis-satisfied with the communication dated 19.11.1998 again represented on 14.12.1998 (Ext.P12) requesting that case be referred to the Government for consideration.
7. Petitioner filed O.P No.3744 of 1999 which was disposed of by this Court on 15.2.1999 directing the Chief of Naval Staff to consider and pass orders on the representation dated 14.12.1998 (Ext.P12) within two months. The Government of India vide order dated 3.8.1999 rejected the statutory representation submitted by the petitioner. It was observed in the order that, under Section 14 of the Coast Guard Act, it is one of the primary duties of the Coast Guard to provide assistance to vessels in distress and no monetary awards are given to the CG personnel rendering assistance. Aggrieved by the WA.2022/10&291/11 -:7:- order dated 3.8.1999, petitioner filed O.P No.30694 of 1999 which was decided on 1.7.2002 by this Court quashing the order of Government of India dated 3.8.1999 and directing the Government to consider the matter afresh taking note of the provisions contained in Section 402 of the Merchant Shipping Act, 1958.
8. After the order of this Court dated 1.7.2002, Government of India reconsidered the matter and again passed an order dated 2.5.2003 rejecting the representation and holding that the petitioner is not entitled for any salvage money in his capacity as Commanding Officer of CGS Vajra. Aggrieved by the order of Government of India dated 2.5.2003, W.P(C) No.5534 of 2003 has been filed by the petitioner praying for the following reliefs:
"A. Call for the records relating to Exts.P to P13, P15 to P19 and P21 to P25 from the Respondents and Quash Ext.P19 by the issue of a writ of certiorari or other appropriate writ, direction or order;
WA.2022/10&291/11 -:8:- B. Issue a writ of mandamus commanding the Ist Respondent to allow the claim advanced by the Petitioner in Ext.P12;
9. The above writ petition was heard by the learned Single Judge. The learned Single Judge vide his judgment dated 20.7.2010 held that this Court by earlier judgment (Ext.P18) had already held that the petitioner is entitled to claim the share of salvage charges. Out of the amount of 1,37,22,134/- received from MC Pearl, the petitioner's share is being fixed as 10 lakhs which amount be paid to the petitioner within one month. Aggrieved by the judgment of learned Single Judge dated 20.7.2010, the appellants who are Union of India, the Chief of Naval Staff, the Flag Officer Commanding-in- Chief, Southern Naval Command, Kochi and the Director General of Coast Guard have come up in W.A No.2022 of 2010.
10. After filing of the appeal by Union of India, the petitioner has also filed W.A No.291 of 2011 against the same judgment. The petitioner prays that the appeal of the petitioner be allowed by WA.2022/10&291/11 -:9:- awarding 7 Crores to the appellant as share of salvage money. Both the appeals have been heard together and are being decided by this common judgment.
11. We have heard Sri.T.Sanjay, learned counsel appearing for Union of India, Sri.N.Sukumaran, learned Senior Counsel assisted by Sri.S.Syam for the writ petitioner.
12. Learned counsel for Union of India contends that the writ petitioner was not entitled for any salvage money since the rescue operation was not conducted within the territorial waters of India and Section 402 of the Merchant Shipping Act, 1958 is not applicable to the facts of the present case. It is further contended that Government of India had not claimed any salvage amount to be paid to the Commanding Officer or any crew of the ship CGS Vajra. Hence, there was no occasion to make any payment to the writ petitioner. It is submitted that the Government of India had only claimed capitation and hire charges which were paid by the salvor company WA.2022/10&291/11 -:10:- M/s.Wijsmuller. It is further submitted that for rescuing any life on the sea, no salvage amount is to be paid since saving life on the sea is regarded as a duty of every seamen. It is further contended that without any basis the learned Single Judge has allowed payment of 10 lakhs to the petitioner which deserves to be set aside.
13. Learned counsel for the writ petitioner refuting the submissions of learned counsel for the appellant contends that the operation carried on by CGS Vajra was a salvage operation which is amply proved from the certificates Exts.P1 to P5 issued by the master of the ship. It is submitted that M/s.Wijsmuller arrived after the completion of the salvage operation. Hence, it was the petitioner who was entitled for the salvage amount. It is submitted that Government of India have granted award of TATRAKSHAK and other awards to the crew of CGS Vajra for the same operation. Hence, it is not open for the Government of India to contend that no salvage operation was conducted by CGS Vajra. It is submitted that WA.2022/10&291/11 -:11:- the master of the ship having signed certificates Exts.P1 to P5, Government of India, the Director General, Coast Guard ought to have claimed the salvage amount for the petitioner and the crew as well as for the Coast Guard. The amount received from M/s. Wijsmuller was for the salvage operation which should have been distributed among the Commander, crew and the Coast Guard, denial of any payment to the petitioner was not in accordance with law.
14. We have considered the submissions of the parties and have perused the records.
15. From the submissions of learned counsel for the parties and pleadings on record, following are the two main issues which arise for consideration:
1. Whether under Section 402 of the Merchant Shipping Act, 1958, the petitioner was entitled for payment of any salvage amount?
2.Whether the petitioner was entitled for his share of salvage amount, out of the amount 1,37,22,134/- received by the Government of India from M/s.Wijsmuller on behalf of MC Pearl?
WA.2022/10&291/11 -:12:-
16. Both the issues being interconnected, are being taken together.
17. As noted above, in pursuance of the judgment of this Court dated 1.4.2002 wherein this Court directed the Government of India to reconsider the matter afresh taking note of the provisions of Section 402, the Government of India had passed Ext.P19 order 2.5.2003 rejecting the representation. From the order passed by the Government of India, two reasons for denying the claim have been clearly stated. The reasons are mentioned in paragraphs (4) and (6) of the order which are quoted below:
"4. In the meantime, the owners of the ship M/s Commander Maritime Corporation of Greece who had apparently contracted M/s Wijsmuller Salgage B V Holland for salvaging the vessel, sent a tug which arrived in the area at about 2000 hours on 28th September, 1995.
On 29th September 1995 the salvage tug with salvage team commenced repairs on the distressed vessel and CGS Vajra was diverted to return to Mumbai. CGS Vajra had thus not completed the salvage work, but the same was carried out and completed by the above referred WA.2022/10&291/11 -:13:- contracted firm which towed the vessel to Dubai Port. The Coast Guard thus did not claim salvage, but instead, capitation charges as per laid down Central Government rates for covering the cost of the service rendered by the Coast Guard Ships and helicopter, were recovered. Since no salvage was claimed or received there was no question of its further distribution to the Commanding Officer and crew of CGS Vajra. But in recognition of the exemplary duties performed by the ships staff, recommended personnel were appropriately awarded medals and commendations.
6. Sub-section (1) states about applicability of salvage in cases where such acts are undertaken wholly or in part within the territorial waters or near the India coast. The term 'coast' has been defined in this Part of the Merchant Shipping Act, 1958, in Section 390 to include the coasts of wrecks and tidal rivers. In addition, the term 'near the coasts of India' is defined in the Merchant Shipping (Wreck & Salvage) Rules 1974, as "any port or place in India or within the territorial waters of India". The reference to salvage operations by a Coast Guard or Naval Ships contained in sub - section (3) of Section 402 relates to cases where such operations are undertaken in the territorial waters and finally the salvaged vessel is brought to an India Port. In the WA.2022/10&291/11 -:14:- instance case the incident occurred 43 nautical mils north west of Dwaraka off Gujarat Coast and the vessel was taken by the tug belonging to the salvage firm M/s Wijsmuller Salvage to Dubai Port."
18. First we proceed to consider the second reason given by the Government of India and submission of the parties in that regard.
19. The claim of the petitioner for salvage amount is based on Section 402 of the Merchant Shipping Act, 1958. Part XIII of the Act from Sections 390 to 404 deals with "wreck and salvage". Under the heading 'Salvage', there are three sections viz., Sections, 402, 403 and 404. Section 402 of the Act is as follows:
"402. Salvage payable for saving life, cargo or wreck.-
(1) where services are rendered--
(a) wholly or in part within the territorial waters of India in saving life from any vessel, or elsewhere in saving life from a vessel registered in India; or
(b) in assisting a vessel or saving the cargo or equipment of a vessel which is wrecked, stranded or in distress at any place on or near the coasts of India;or
(c) by any person other than the receiver of wreck in saving any wreck, there shall be payable to the WA.2022/10&291/11 -:15:- salvor by the owner of the vessel, cargo, equipment or wreck, a reasonable sum for salvage having regard to all the circumstances of the case.
(2) Salvage in respect of the preservation of life when payable by the owner of the vessel shall be payable in priority to all other claims for salvage. (3) Where salvage services are rendered by or on behalf of the Government or by a vessel of the Indian Navy [or of the Coast Guard] or the commander or crew of any such vessel, the Government, the commander or the crew, as the case may be, shall be entitled to salvage and shall have the same rights and remedies in respect of those services as any other salvor. (4) Any dispute arising concerning the amount due under this section shall be determined upon application made by either of the disputing parties--
(a) to a Judicial Magistrate of the first class or Metropolitan Magistrate, as the case may be, where the amount claimed does not exceed ten thousand rupees; or
(b) to the High Court, where the amount claimed exceeds ten thousand rupees.
(5) Where there is any dispute as to the persons who are entitled to the salvage amount under this section, the Judicial Magistrate of the first class or the WA.2022/10&291/11 -:16:- Metropolitan Magistrate or the High Court, as the case may be, shall decide the dispute and if there is more persons than one entitled to such amount, such Magistrate or the High Court shall apportion the amount thereon among such persons.
(6) The costs of and incidental to all proceedings before a Judicial Magistrate of the first class or Metropolitan Magistrate or the High Court under this section shall be in the discretion of such Magistrate or the High Court, and such Magistrate or the High Court shall have full power to determine by whom or out of what property and to what extent such costs are to be paid and to give all necessary directions for the purpose aforesaid."
20. Section 403 deals with savings which is not relevant for the present case. Section 404 empowers the Central Government to make rules respecting wreck and salvage. In exercise of the powers under Section 404, the Central Government have framed the rules viz., the Merchant Shipping (Wreck and Salvage) Rules, 1974 which shall be referred to hereinafter.
21. The reason as is stated in paragraph (6) of the order is that WA.2022/10&291/11 -:17:- the claim under Section 402 relates to cases where such operations are undertaken in the territorial waters of India. It is stated that the incident occurred at 43 nautical miles north west of Dwaraka off Gujarat Coast and the vessel was taken by the tug belonging to the salvage firm M/s.Wijsmuller Salvage to Dubai Port.
22. We revert back to Section 402(1). Section 402(1)(a) provides that where services are rendered wholly or in part within the territorial waters of India in saving life from any vessel, or elsewhere in saving life from a vessel registered in India or, (b) in assisting a vessel or saving the cargo or equipment of a vessel which is wrecked, stranded or in distress at any place on or near the coasts of India. The above provision would indicate that insofar saving life from any vessel is to take place wholly or in part within the territorial waters of India or anywhere else from a vessel registered in India, and for assisting a vessel or saving the cargo or equipment of vessel which is wrecked, stranded or in distress at any place or near the coasts of WA.2022/10&291/11 -:18:- India. Thus, the above provision refers to two condition, i.e., insofar as operation regarding saving life from a vessel is concerned, it should be within the territorial waters of India and insofar as assisting a vessel or saving cargo or equipment or a vessel which is wrecked at any place or near the coasts of India.
23. The territorial waters of India has been defined by an Act viz., the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act, 1976. Section 3 (2) of the Act defines the limit of territorial waters which is at a distance of 12 nautical miles from a nearest point of the baseline. Section 3(2) of the Act is quoted below:
"3. Sovereignty over, and limits of, territorial waters.-
(1) xxxxxxx (2) The limit of the territorial waters is the line every point of which is at a distance of twelve nautical miles from the nearest point of the appropriate baseline."
24. The second phrase used in Section 402(1)(b) is "at any place on or near the coasts of India". What is the meaning of the WA.2022/10&291/11 -:19:- words "near the coast of India" are to be found out. As noted above, under Section 402, rules have been framed viz., the Merchant Shipping (Wreck & Salvage) Rules, 1974 which defines the word "near the coasts of India" in Section 2(d). Section 2(d) is as follows:
"2(d) "near the coast of India" means at any port or place in India or within the territorial waters of India;"
25. Thus, near the coasts of India means at any port or place in India or within the territorial waters of India. Present is not a case of incident or operation having taken place at any port or place in India and hence, to be covered by definition "near the coasts of India", it should be within the territorial waters of India.
26. From the above statutory provision, it is clear that both, for saving life from any vessel, or assisting a vessel or saving the cargo or equipment of a vessel, operation has to be within the territorial waters of India. From the facts of the present case as noted above, it is clear that at 2.30 hours on 24.9.1995, the Coast Guard received a WA.2022/10&291/11 -:20:- distress signal with regard to MC Pearl which was in a position 43 nautical miles north west of Dwaraka and 25.5 nautical miles from the nearest Indian coast. The petitioner in his reply has pleaded that the nearest port was 23 nautical miles. The aforesaid pleading was stated in paragraph (6) of the reply affidavit which is extracted under:
"6. ........The counter affidavit has also incorrectly indicated the distance to nearest coast as 25.5 nautical miles from position of salvage. The petitioner who was present at the scene has clearly recorded the distance from the nearest coast as 23 nautical miles."
27. From the facts, it is clear that CGS Vajra arrived at the place where the vessel MC Pearl was in distress at 6 a.m. on 24.9.1995 and remained in station till it was relieved. All the operations by CGS Vajra are thus claimed on the place where the vessel was distressed since after arriving of M/s.Wijsmuller, further salvage operations were undertaken by M/s.Wijsmuller and the vessel was towed to Dubai. It is thus clear that all salvage operations claimed by the petitioner are not within the territorial waters of India. WA.2022/10&291/11 -:21:- The ship was not registered in India and was registered in Bahamas, as noted above.
28. From the above it is clear that Section 402(1) was not applicable and the petitioner cannot place his claim on Section 402 (1). The claim under Section 402(3) has to relate to the claim as referred to Section 402(1). From the above, it is clear that the claim of the petitioner for carrying salvage operation in the vessel MC Pearl does not fall under Section 402(1). The learned Single Judge has also considered the aforesaid submission raised on behalf of the Union of India and the submission was not accepted by the learned Single Judge for the reason given in paragraph (9) of the judgment. Paragraph (9) reads as under:-
"The last contention raised is that salvage charges are payable only in cases where the Acts are undertaken wholly or in part within the territorial waters or near the Indian Coast. To reject this contention what is necessary is only quote read subsection 1 and 3 of Section 402 of the Marine Ship Act together, which reads thus: WA.2022/10&291/11 -:22:-
"Sub section 1:-
(a) wholly or in part within the territorial waters of India in saving life from any vessel, or elsewhere in saving life from a vessel registered in India, or
(b) in assisting a vessel or saving the cargo or equipment or a vessel which is wrecked, stranded or in distress at any place on or near the coasts of India, or
(c) by any person other than the receiver of the wreck in saving the wreck; there shall be payable to the salvor by the owner of the vessel, cargo, equipment or wreck, a reasonable sum for salvage having regard to all the circumstances of the case.
Subsection 3:-
where salvage services are rendered by or on behalf of the Governments or by a vessel of the Indian Navy or of the Coast Guard or the commander or the crew of any such vessel, the Government, the commander or the crew, as the case may be shall be entitled to salvage and shall have the same rights and remedies in respects or those services as any other salvor."
In fact in Exhibit P18 judgment, quoting that sections only this Court has held that the petitioner is entitled to claim share of the salvage charges.
29. The learned Single Judge has repelled the submission without entering into statutory provision, only on the ground that earlier judgment of this Court (Ext.P18) has already held that WA.2022/10&291/11 -:23:- petitioner is entitled for the claim. A perusal of Ext.P18 judgment indicate that the learned Single Judge although noticed Section 402 and definition of salvage under Section 3(4), but there was no consideration regarding the issue as to whether the operation is required to be held within the territorial waters of India with regard to any vessel not registered in India. For appreciating the observation of the learned Single Judge, it is useful to extract the entire judgment of this Court dated 1.4.2002 (Ext.P18), which is to the following effect:
"It is an admitted case in Ext.P17 that "the Central Government has noticed that the ship M.C.Pearl was on passage to Kandla to Dubai and was reported to be in distress at about 02.30 hours on 24.9.1995....." It is also an admitted fact in Ext.P17 that C.G.S. Vajra under the commandership of the petitioner and on routine deployment in the area was diverted to provide necessary assistance to M.C.Pearl. It is again a noted fact by the Government of India that "the Coast Guard ship Vajra had rescued the crew WA.2022/10&291/11 -:24:- and stood by to provide assistance". Thus saving of life and property at the sea is an admitted fact. But the salvage is denied to the petitioner on the ground that it was his bounden duty under Section 14 of the Coast Guard Act to render assistance to the ship in distress. While considering this aspect in Ext.P17, the Government had not adverted to Section 402 of the Merchants' Shipping Act, 1958 which provides for payment of salvage for saving life, cargo or wreck. Sub section (3) therein provides:
Where salvage services are rendered by or on behalf of the Governments or by a vessel of the Indian Navy [or of the Coast Guard] or the commander or the crew of any such vessel, the Government, the commander or the crew, as the case may be shall be entitled to salvage and shall have the same rights and remedies in respects or those services as any other salvor".
Section 3(4) defines salvage as under:
"Salvage" includes all expenses properly
incurred by the salvor in the performance of
salvage services".
The commander of Coast guard is also treated as a "Salvor" in terms of Subsection (3) of Section 402. Therefore, he will also be entitled to salvage as provided in Section 3(40) of the Act, the petitioner WA.2022/10&291/11 -:25:- submits. This aspect is not noticed while the Government considered the issue in Ext.P17. Even going by the contention of the Central Government standing Counsel, the Government is also entitled to salvage.
2. When it is an admitted fact that the petitioner is the commander of a ship and the crew had saved the life and property of M.C.Pearl at the sea, necessarily, it cannot be taken that, they shall be denied of the salvage merely because it was their duty cast under section 14 of the Coast Guard Act. Over and above, the provisions in Section 402 entitles him to get salvage. Had it been considered, necessarily, the petitioner could have resorted to the remedies available to him in Section 402 of the Merchants' Shipping Act. There was no consideration of entitlement to raise a dispute to be adjudicated under Sub section (4) of Section 402.
Accordingly, I quash Ext.P17 and direct the Government to consider the matter afresh taking note of the provisions contained in Section 402 as above. Original petition is allowed."
WA.2022/10&291/11 -:26:-
30. The aforesaid judgment cannot be read as a judgment of the Court deciding the issue that even if operation was held beyond territorial waters of India, the claim by the petitioner under sub- sections (1) and (3) of Section 402 is maintainable. More so, this Court quashed the earlier decision of the Government and directed the Government to re-consider the matter afresh taking note of the provisions contained in Section 402. The operative portion of the judgment clearly entitles the Government of India to have a fresh consideration, including the provisions of Section 402. Thus, the Government of India have been, in no manner, inhibited to consider the conditions required for fulfillment of Section 402 and we are of the clear opinion that the reasons given by Government of India in paragraph (6) for rejecting the claim of the petitioner under Section 402 was based on correct interpretation of the statutory provision and cannot be faulted. The claim of the petitioner being based under Section 402 and there being direction of this Court for consideration WA.2022/10&291/11 -:27:- of claim under Section 402 and the claim was rejected under Section 402, the learned Single Judge ought not to have issued any direction and the direction issued by the learned Single Judge that petitioner is entitled for payment without appreciating the conditions under Section 402, thus deserves to be set aside.
31. Now, we come to the first reason given by the Government of India for rejecting the petitioner's claim. From the facts as noted above, with regard to the salvage operation, following sequence of the event is to be noticed:
(a)The distress message was received by Coast Guard at 2.30 a.m on 24.9.1995, immediately the CGS Vajra, which was in the operational area, was diverted at the place.
(b)When CGS Vajra reached it was found that 12 members of the crew have already been evacuated by another merchant ship viz., M.V.Noble Fortune. Rest of 13 members of the crew were evacuated by coast guard helicopter and brought on the board CGS Vajra. The crew members who were on the merchant ship M.V.Noble Fortune were also brought on CGS Vajra. WA.2022/10&291/11 -:28:-
(c)On 25.9.1995 the master and 12 crew members of MC Pearl at their request were transferred to MC Pearl with the assistance of CGS personnel. The CGS Vajra extended assistance to the vessel due to which, listing of the said vessel was reduced. Technical sailors of CGS Vajra assisted the crew in starting the generator and engines of MC Pearl.
(d)In the meantime, the owners of ship MC Pearl contracted salvage firm M/s.Wijsmuller Salvage Holland for salvage operation and the said firm's tug arrived at the sea on 28.9.1995 from Oman. On 29.9.95, M/s.Wijsmuller Salvage tug with salvage team commenced repairs on MC Pearl and CGS Vajra being relieved, returned to Mumbai.
(e)Salvage operation continued. MC Pearl was subsequently towed by the tug of M/s.Wijsmuller to Dubai. The salvage operations were terminated on 26.10.1996.
32. From the above, it is clear that salvage operations undertaken by CGS Vajra were continued by M/s.Wijsmuller which repaired the ship and towed it to Dubai Port. There was an agreement between the Coast Guard and M/s.Wijsmuller to accept the Coast Guard as sub-contractor of M/s.Wijsmuller and a subsequent agreement was entered on 6.12.1996 between WA.2022/10&291/11 -:29:- M/s.Wijsmuller Salvage and Indian Coast Guard. The petitioner himself has brought on record the settlement agreement dated 6.12.1996 along with reply affidavit dated 4.1.2016. The agreement arrived at was that M/s.Wijsmuller shall pay to the Indian Coast Guard an amount of 1,37,22,134/- which shall be in full and final settlement of all the claims whether by way of salvage or otherwise. It is useful to refer to paragraphs (1) to (4) which are as follows:
"1. Wijsmuller shall pay and the Indian Coast guard shall receive the sum of Indian Rupees 1,37,22,134.00 or equivalent United States Dollars ('the settlement sum").
2. The settlement sum shall be paid to Controller of Defence Accounts (Navy), Mumbai on or before the 20th January 1997 whereafter interest at the rate of 12% shall be payable on any unpaid balance thereof.
3. The settlement sum is accepted by the Indian Coast Guard:
(a) in full and final settlement of all claims of whatsoever nature that they may have against Wijsmuller, their servants and/or agents whether under the ISU Sub Contract or however, and
(b) in full and final settlement of all their claim(s) (whether by way of salvage or otherwise) against the salver property.
WA.2022/10&291/11 -:30:-
4. For the purpose of, among other things, the Sub-
Contractors indemnity requirements of Clause 18 of the Lloyd's Form and Clause 3 of the ISU Sub Contract, the Indian Coast Guard hereby undertake to bring or pursue no other claim whatsoever against the salved property in respect of the Coast Guard services and hereby undertake when called upon so to do forthwith to indemnify Wijsmuller in respect of any such claim whether already pending or to be brought and whether by the Indian Coast Guard or by any person who is or was a Member of the Coast Guard (including any personnel or vessel seconded thereto or operating under its aegis) at any material time;"
33. As noted above, petitioner's claim being not covered under Section 402, he cannot by virtue of Section 402(3) claim any share of any amount received from M/s.Wijsmuller However, since the amount was received and was noticed by learned Single Judge and out of that amount direction has been issued to pay 10 lakhs, it is necessary for us to consider the nature of the amount received and the entitlement of the petitioner, if any, to claim any amount out of that. The appellants before the learned Single Judge have contended WA.2022/10&291/11 -:31:- that the amount received from M/s.Wijsmuller was the amount towards capitation and hire charges. But, the said argument was not accepted by learned Single Judge observing that Government have not chosen to produce any document in support of their contention.
34. In W.A No.2022 of 2010, the appellants have filed an additional affidavit dated 20.11.2015 where the details of the capitation charges claimed by the appellants have been brought on record. It has been pleaded by the appellants that hire charges and capitation charges have been claimed by them as per the rates prescribed by the Ministry of Defence. Annexure-A1 is the details of the charges claimed by the appellants, totalling to 1,37,22,134/-. Annexure-A1 clearly indicates that the amount charged is only capitation and hire charges. No salvage amount to be paid to Commanders or its crew was claimed in Annexure-A1. By Annexure- A2, the instructions regarding claiming hire charges and services rendered have been provided. Learned Single Judge held the entire WA.2022/10&291/11 -:32:- amount as salvage charges since Government of India had not brought relevant material before it. Annexure-A1 having been brought before us, which clearly indicate that no charges for payment of any salvage money to Commander or the crew of CGS Vajra have been claimed and the Government, Coast Guard having entered into a settlement with salvor M/s.Wijsmuller direction for payment of salvage money to the petitioner from the aforesaid money is not sustainable. The petitioner is well aware of the fact that Coast Guard have entered into an agreement to be a sub-contractor to the salvage, which is clear from his representation Ext.P8.
35. The Coast Guard Act, 1978 was enacted for constitution and regulations of armed forces of the union for ensuring the security of maritime zones of India and with a view to protect the maritime and other national interests in such zones. The object and purpose for constitution of the Coast Guard is contained in Section 4(1) which is to the following effect:
WA.2022/10&291/11 -:33:-
"4. Constitution of the Coast Guard.-(1) There shall be an armed force of the Union called the Coast Guard for ensuring the security of the maritime zones of India with a view to the protection of maritime and other national interest in such zones."
36. Section 5 of the Act provides that general superintendence, direction and control of the Coast Guard shall vest in the Central Government and the provisions of the Act shall vest in an officer to be appointed by the Central Government as the Director General of the Coast Guard. Section 5 of the Act reads as under:
"5. Control, direction, etc.- (1) The general superintendence, direction and control of the Coast Guard shall vest in, and be exercised by, the Central Government and subject thereto, and to the provisions of this Act and the rules, the command and supervision of the Coast Guard shall vest in an officer to be appointed by the Central Government as the Director General of the Coast Guard."
WA.2022/10&291/11 -:34:-
37. The officers of the Coast Guard, including the petitioners, were thus under control of the Central Government under the command and supervision of the Director General of Coast Guard. The agreement of settlement which was entered on behalf of the Deputy Director General was thus on behalf of the Coast Guard where the Indian Coast Guard agreed to the settlement. It is useful to extract the few statements made in terms of settlement which is extracted below:
"A. In September 1995, the "MC PEARL" suffered a casualty in waters off the Gulf of Kachchh, and B. Units and personnel of the Indian Coast Guard rendered services in the nature of salvage ("the Coast Guard services") to the "MC PEARL", her Owners and and/or demise Charterers, her cargo, containers, freight and bunkers (together "the salved property"), and C. The Indian Coast Guard entered into an International Salvage Union Sub-Contract (Award Sharing) 1994 dated 13th October 1995 with Wijsmuller ("the ISU Sub-Contract"), and D. Wijsmuller were engaged as salvors under a Lloyd's Open Form of Salvage Agreement (1995) dated the 24th September 1995 ("the Lloyd's Form") to salve the salved property, and WA.2022/10&291/11 -:35:- E. The salve services terminated on 26th October, 1995, and F. The parties hereto wish to settle and finalize all claims of the India Coast Guard in connection with the foregoing."
38. The Coast Guard thus, entered into International Salvage Union Sub Contract (Award Sharing) 1994 with M/s.Wijsmuller which was in accordance with the international maritime law. The operation having not been done within the territorial waters of India, international maritime law is applicable and the Coast Guard having rendered services to the vessel MC Pearl, were clearly entitled to enter into settlement.
39. We having found that in the claim which was made by Coast Guard before M/s.Wijsmuller as sub-contractor of the salvor did not include any salvage money to be paid to the Commander of the vessel CGS Vajra and other crew members, the claim of the petitioner to apportion the said amount and the direction of the learned Single Judge to pay 10 lakhs are unsustainable. WA.2022/10&291/11 -:36:-
40. In view of the foregoing discussions, we are of the view that the judgment of the learned Single Judge cannot be sustained and is set aside.
In the result, W.A No.2022 of 2010 is allowed. The judgment of the learned Single Judge is set aside and W.P(C) No.25534 of 2003 is dismissed.
W.A No.291 of 2011 stands dismissed.
Sd/-
ASHOK BHUSHAN CHIEF JUSTICE Sd/-
A.M.SHAFFIQUE JUDGE krj.18/2/16 //true copy// P.A to Judge