Bombay High Court
Kenneth Barry Stewart vs Msv Malayviya Thirty Six And Anr on 14 December, 2018
Author: A.K. Menon
Bench: A.K. Menon
hcs
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ADMIRALTY AND VICE ADMIRALTY JURISDICTION
IN ITS COMMERCIAL DIVISION
COMMERCIAL ADMIRALRY SUIT NO.770 OF 2017
Kenneth Barry Stewart .. Plaintiff
Vs.
MSV Malaviya Thirty Six & Anr. .. Defendants
Mr.Prathamesh Kamat with Mr.Amanprat Singh i/b Harsh G.Pratap for the
plaintiff.
Ms.S.Priya for Defendant No.2 - Official Liquidator.
CORAM : A.K. MENON, J.
DATED : 14TH DECEMBER, 2018.
P.C. :
1. The plaintiff, a British National claims to have served as a Diving Superintendent on the defendant no.1 - vessel pursuant to a contract entered into between the plaintiff and defendant no.2-company, who is the registered owner of the defendant no.1. It is plaintiff's case that his salary for the months of July and August, October, November and December 2016 had not been paid and he claims a maritime lien on the defendant no.1 -
vessel. This resulted in a maritime claim against the defendant no.2. Defendant No.1 is an Indian vessel registered under the Merchant Shipping Act, 1958 and at the material time it was said to be lying at Hughes Dock at Mumbai and therefore within Admiralty and Vice Admiralty jurisdiction of 1/13 ::: Uploaded on - 15/12/2018 ::: Downloaded on - 27/12/2018 07:42:09 ::: comas770.17.odt this Court. The defendant no.2 is liable to pay the plaintiff's dues, however, presently the defendant no.2 is in liquidation pursuant to the order dated 5th May, 2017. Defendant No.2 was therefore represented by the Official Liquidator, High Court, Bombay. The suit has been filed on 10th August, 2017 after obtaining leave of the Company Court.
2. The suit seeks to recover a sum of USD 1,89,000/- equivalent to Rs.1,20,96,000/- and interest at the rate of 12% per annum from the date of suit till decree. As against defendant no.1 - vessel, the plaintiff sought arrest of vessel and sale of vessel along with her hull, engines, gears, machinery, articles, things, bunkers, apparel, plant, furniture and all other appurtenances then lying and being at the port and harbour of Mumbai within our territorial waters and for application of net sale proceeds towards satisfaction of plaintiff's claim in the suit. On 11th August, 2017, the vessel came to be arrested. Defendant No.1-vessel is owned by defendant no.2 which has since been in liquidation.
3. It is the plaintiff's case that being knowledgeable and experienced in diving methods and therefore competent to supervise diving operations, defendant no.2 appointed him as a "Diving Superintendent". The plaintiff entered into contract of employment dated 4th September, 2015 for a period of one year during which the plaintiff was to be paid a remuneration of USD 1750/- per day. He was also entitled to remuneration at half day rate for travel, chopper cancellation and for waiting at base for any requirement of 2/13 ::: Uploaded on - 15/12/2018 ::: Downloaded on - 27/12/2018 07:42:09 ::: comas770.17.odt defendant no.2. Remuneration was payable to the plaintiff on or about 10th of each month following the rendering of service. It is contended that the plaintiff joined the vessel on 19th June, 2016 and signed off on 21st August, 2016 pursuant to the contract of employment dated 4th September, 2015. A second contract came to be executed on 23rd October, 2016 and he signed off on 19th December, 2016. It is for the aforesaid two periods that the salary is stated to be unpaid. The plaintiff has relied upon true copies of attendance sheets for months of July, August, October, November and December 2016 as also the Seaman's Discharge book. The total amount payable to the plaintiff towards outstanding salary is USD 1,89,000/-. The amounts which are due are as follows :
Sr.No. Month No. of Days Wages (in USD)
1. July 2016 31 54,250/-
2. August 2016 20 35,000/-
3. October 2016 9 15,750/-
4. November 2016 30 52,500/-
5. December 2016 18 31,500/-
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1,89,000/-
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4. Mr.Kamat, learned counsel for the plaintiff submitted that on 3rd May, 2017 the plaintiff had addressed an email to the defendant no.2 that since 3/13 ::: Uploaded on - 15/12/2018 ::: Downloaded on - 27/12/2018 07:42:09 ::: comas770.17.odt some of the crew members were paid their salaries for June 2016, the plaintiff should also be paid. Defendant No.2 replied on 4th May, 2017 contending that arrangements were being made to make payment to the plaintiff on that very day but no payment was received. In response to a reminder dated 8th May, 2017, the Accounts Department of defendant no.2 promised that the plaintiff's account would be credited on the following day. The salary payable to the plaintiff for the period of 12 days of June 2016 was paid only on 9th May, 2017. An email was sent to defendant no.2 reminding them that all the crew members had been paid salary for the year 2016 but the plaintiff was still awaiting remittance of his wages for the months of July, August, October, November and December 2016. The Defendant no.2 vide an internal email dated 17th June, 2017 instructed its Accounts Department to remit the amounts due to the plaintiff to avoid legal action but to no avail.
5. Mr.Kamat submitted that the plaintiff's claim towards arrears of salary due to him was a maritime claim and the plaintiff has a lien against the vessel and he was entitled to invoke the Admiralty jurisdiction of this Court by way of an action in rem. He invited my attention to the fact that vide order dated 5th May, 2017 passed in Company Application (L) No.367 of 2017 in Company Petition No.756 of 2016, the Company Court had granted leave to file the present suit.
6. Mr.Kamat relied upon decision of the Supreme Court in the case of 4/13 ::: Uploaded on - 15/12/2018 ::: Downloaded on - 27/12/2018 07:42:09 ::: comas770.17.odt O.Konavalov vs. Commander, Coast Guard Region and Others 1 in support of his submission that Seamen who have a right to receive their wages can enforce the claim against the vessel in proceeding with action in rem and the seaman's lien will follow the ship and its proceeds in whatsoever hand they may come by title or purchase from the owner and the lien reattaches after sale and to whatever is substituted for it. He therefore submitted that the plaintiff is entitled to enforce the maritime claim. In the Company Petition filed, a provisional liquidator has been appointed since defendant No.2 was obviously unable to pay its debts. Mr.Kamat submitted that the plaintiff is therefore entitled to a decree for the principal sum of USD 1,89,000/- and interest thereof. He submitted that the plaintiff's claim is not barred by law of limitation and going by exchange rate applicable as on date of filing of the plaint being (Rs.64 = 1 USD), the total amount of Rs.1,20,96,000/-is payable. He therefore submits that the suit be decreed as prayed.
7. On behalf of liquidator, learned counsel submitted that as set out in the written statement, there were 31 vessels belonging to defendant no.2 in working condition and employed with ONGC. Accordingly, the liquidator after initially taking symbolic possession has since taken possession of the registered office and 19 vessels which were lying at various locations in the country. It is further contended that averments in the plaint relate to a period prior to date of winding up and therefore defendant no.2 has 1 (2006) 4 SCC 620 5/13 ::: Uploaded on - 15/12/2018 ::: Downloaded on - 27/12/2018 07:42:09 ::: comas770.17.odt denied the contents in the plaint for want of knowledge. It is contended that the plaintiff cannot claim special status in winding up. It is further contended that the plaintiff's claim is an ordinary claim and cannot be granted special status and will be adjudicated and paid by the liquidator as contemplated in section 529, 529A and 530 of the Companies Act read with Company (Court) Rules, 1959. In terms of provisions of section 529A the workmen of the company have pari-passu charge with Secured Creditors to the extent of workmen portion as determined by the Official Liquidator and in accordance with the provisions of section 549(1)(c) of the Companies Act, 1956.
8. Pursuant to appointment of the Commissioner further evidence was led by way of examination in chief, documents were marked Exhibit P-1/1 to P- 1/19. The Plaintiff's affidavit in lieu of examination in chief has been notarised in United Kingdom is marked as Exhibit P-1/20. The Court ordered that if the Advocates for the defendant do not appear for cross examination, the cross examination of PW 1 should be closed, no adjournment be granted to any party on any ground whatsoever unless the situation is so grave that it warrants an adjournment, it should be for reasons recorded by the Commissioner. On 1st August, 2018 the Court recorded that the evidence of the plaintiff who is the sole witness on behalf of the plaintiff has been concluded and the plaintiff does not wish to lead any further evidence. On behalf of defendant no.2, counsel submitted that the company was under 6/13 ::: Uploaded on - 15/12/2018 ::: Downloaded on - 27/12/2018 07:42:09 :::
comas770.17.odt provisional liquidation and the Official Liquidator does not wish to lead evidence and, therefore, evidence was closed. The matter stood adjourned for final arguments. I have heard learned counsel for the parties and with their assistance have perused the record.
9. The following issues were framed on 7th March, 2018 and the same are answered as follows :
Issues Answer (1) Whether plaintiff proves that plaintiff had entered into two contracts of Employment dated 4th September Yes 2015 and 20th September, 2016 with the company (in liquidation) under which plaintiff was appointed as Diving Superintendent ?
(2) Whether plaintiff proves that under these two contracts, plaintiff has not been paid outstanding Yes salary of USD 189000 and plaintiff is entitled to the said amount ?
(3) Whether plaintiff proves that he is entitled to decree In the affirmative in the sum of USD 189000 together with interest thereon to the extent it at 12% p.a. from the date of the suit until payment/ concerns the realization ? Principal sum of USD 189000 and at 6% (4) What decree ? What order As below 7/13 ::: Uploaded on - 15/12/2018 ::: Downloaded on - 27/12/2018 07:42:09 ::: comas770.17.odt Issue No.1 & 2 :
10. Pursuant to the directions of this Court the plaintiff's attorneys sought that evidence be led before a Court Commissioner and by using Video Conferencing facilities. In view of the fact that the counsel for the liquidator had no objection, the Court permitted examination in chief by way of affidavit and appointed a Commissioner for recording evidence. The plaintiff's affidavit of evidence came to be filed on 2nd May 2018. The witness having been administered oath has confirmed truth of contents the affidavit marked as Exhibit P-1/20. In the affidavit, the plaintiff has deposed to the fact that defendant no.2 had appointed the plaintiff as a diving superintendent vide Certificate of Appointment dated 18th September, 2018 issued under the Regulation IMCA D014 International Code of Practice for offshore Diving operations 2007 and Diving Operations at Work Regulations 1997. The original certificate has been tendered in the evidence.
11. A contract of employment was initially entered on 4th September, 2015 and original contract has been tendered in the Court and pursuant to permission granted by the Court, a photocopy of the same is provided. Thereafter a second contract Exhibit P-1 came to be executed. In the affidavit of documents filed on 28th March, 2018 the plaintiff has disclosed original contract registration certificate, contracts of employment dated 4th September, 2015 and 20th September 2016, Attendance Sheets and the Seaman's Discharge Book along with copies of correspondence. 8/13 ::: Uploaded on - 15/12/2018 ::: Downloaded on - 27/12/2018 07:42:09 :::
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12. The witness has deposed to having been engaged in terms of the contract and has confirmed execution of contract for himself and Mr.Anil Netto, Fleet Personnel, GOL Offshore Ltd. on behalf of defendant no.2. He has deposed to truth of contents thereof as also original Registration Certificate and Residential Permit dated 15th January, 2016. The witness has also deposed to the fact that he has worked on defendant no.1 vessel for several years during which he embarked and disembarked on several occasions as recorded in Seaman's Discharge book.
13. On behalf of the liquidator learned counsel cross examined the witness during which it has become evident that the plaintiff was paid salary only for the month of June 2016 and reiterated his claim. To a question as to how he received a copy of attendance sheet since he left the vessel on 19th December, 2016, the witness has stated that Mr.Dastur, his successor on the vessel provided him a copy of the attendance sheet. He has deposed that the amount payable to him is the suit claim which is based on a contract. In my view the cross examination has not elicited any response unsupportive of the claim made by the plaintiff. Perusal of the certificate Exhibit P-1/1 reveals that the plaintiff was appointed by defendant no.2 on 9th April, 2014 as a Diving Superintendent having certified his position under the Regulation IMCA D014 International Code of Practice for offshore Diving operations 2007 and Diving Operations at Work Regulations 1997. The witness has also produced contract of employment Exhibit P-1/2. Perusal of Exhibit P- 9/13 ::: Uploaded on - 15/12/2018 ::: Downloaded on - 27/12/2018 07:42:09 :::
comas770.17.odt 1/2 reveals that Kenneth Barry - the plaintiff described in the agreement as KBS was to be paid remuneration of 1750 USD per day inclusive of overtime commencing from date of arrival onboard till date of departure from the vesse1. Remuneration was payable at a half day rate for travel in the event of chopper cancellation and for waiting period at the base for any requirements of defendant no.2. Remuneration was payable to the plaintiff's nominated bank account on or before 10th of the following month. The bank account details provided by the plaintiff are as under :
Bank Name : LLOYDS TSB Bank PLC
Bank A/C No. : 01381772
SWIFT CODE : 30-93-94
Fed Wire Routing :
Chips ABA No. :
Bank ADDRESS : LLYODS TSB BANK PLC, HYTHE KENT,
BRANCH, PO BOX 99, BX1 1LT
14. I have also perused the report of the Commissioner dated 11th July, 2018 and 30th July, 2018. The Commissioner's report records that pursuant to the order dated 6th June, 2018 passed by this Court an affidavit in lieu of examination in chief of the plaintiff has been filed within time and a preliminary meeting was fixed. Directions were issued for conducting cross examination via skype. The report records that cross examination was completed and there was no re-examination on behalf of the plaintiff. The plaintiff's evidence was then closed.
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15. The plaintiff has deposed to the fact that his salary for the months of July, August, October, November and December 2016 have not been received. He has also deposed to the fact that attendance sheets in respect of six months for which services were rendered are signed by ONGC representative as well. He has relied upon attendance sheets recording his service on the days on which salary has been claimed. He has also deposed to the fact that the defendant no.2 has periodically agreed to pay outstanding amounts in paragraph 13 of his affidavit. He has set out in detail the total amount due towards the months of July, August, October, November and December 2016 at the rate of USD 1750 and of the fact that he has not been paid salary and he is entitled to interest at the rate of 12% per annum. The witness has deposed to fact of the emails that have been received by him and those sent by him.
16. The execution of the contract is not in dispute. On behalf of defendant no.2 there is virtually no cross examination on this aspect. None of the documents have been disputed. Exhibit P-1/4 is Registration Certificate and Residential Permit of the plaintiff permitting him to reside in India and naming defendant no.2 as his employer. He is described as a Rig Officer. The said certificate is issued by the registering authority at the Foreigner's Regional Registration Office (FRRO). Exhibit P-1/5 is Seaman's Discharge book which sets out dates on which the plaintiff rendered services and was discharged. Exhibit P-1/6, Exhibit P-1/7, Exhibit P-1/8 and Exhibit P-1/9 are 11/13 ::: Uploaded on - 15/12/2018 ::: Downloaded on - 27/12/2018 07:42:10 ::: comas770.17.odt attendance sheets for the months of July, August, October, November and December 2016. They indicate the name of the plaintiff at Serial No.1 as a Diving Superintendent. It certifies the plaintiff for rendering services for 31 days for July 2016, 20 days in August 2016, 9 days in October 2016, 30 days in November 2016 and 18 days in December 2016. These are signed by a representative of ONGC which had employed vessel as well as the plaintiff as a diving superintendent. The witness has confirmed that ONGC representative of the vessel has counter signed attendance sheets for the month of July, October and November. He has further deposed that in the August and December attendance sheets were signed by Mr.Raju Ashok Dastur since the plaintiff has disembarked before the end of the month. None of these documents have been called into question. The email exchange fairly admits liability and constitute an unconditional promise to pay on behalf of the defendant. Nothing has been brought on record to dispute the claim of the plaintiff. Issue Nos.1 and 2 are therefore answered in the affirmative.
17. I am of the view that the plaintiff has proved beyond doubt that defendant no.2 is liable to pay unpaid wages. In my view the plaintiff is entitled to judgment. Issue No.3 is also answered in the affirmative. The principal sum is an undisputed amount, however, there is no evidence of any agreement by which the Plaintiff can claim interest at the rate of 12% per annum save for the rate of interest, the suit is 12/13 ::: Uploaded on - 15/12/2018 ::: Downloaded on - 27/12/2018 07:42:10 ::: comas770.17.odt liable to be decreed.
18. Hence I pass the following order :
(a) The suit is decreed in terms of prayer clause (a) except that the plaintiff will be entitled to an interest on USD 1,89,000 at the rate of 6% per annum from 10th August, 2017 till payment or realization.
(b) The plaintiff shall be entitled to the costs of the suit quantified at Rs.1,00,000/-.
(A.K. MENON,J.) 13/13 ::: Uploaded on - 15/12/2018 ::: Downloaded on - 27/12/2018 07:42:10 :::