Kerala High Court
Ocean Lanka Shipping Co. (Pvt.) Ltd. vs M.V. Janate on 4 December, 1996
Equivalent citations: 2(1997)ACC63
Author: K.S. Radhakrishnan
Bench: K.S. Radhakrishnan
JUDGMENT K.S. Radhakrishnan, J.
1. Vessel 'M.V. Janate' was cruising smoothly through the Arabian Sea to Dubai when it was caught in rough weather which led the ship to anchor at New Mangalore Port. The trouble did not stop there. Vessel could not leave the New Mangalore Port due to an arrest warrant issued by this Court at the instance of the petitioner. M.F. Janate was originally known as M.V. Madhiaa which was a Maldivian Flag Vessel. Vessel was built in Korea in August 1970 and the official number of the vessel is 208-10-T.
2. Petitioner is a shipping company registered under the Sri Lankan Companies Act, having its head office at Colombo. Company is engaged in the business of shipping, including chartering of the vessels owned by foreign companies/nationals. Vessel M.V. Madhiaa was owned by the second respondent M/s. Madhiaa (P) Ltd. having its registered office at Male. Petitioner chartered the vessel as per Ext. PI charter-party. During the course of its charter vessel M.V. Madhiaa arrived at the Port of Colombo in the first week of April, 1995 and berthed there to discharge and/or receive the cargo. According to petitioner on 5th April, 1995 on account of negligence of the crew of the said vessel, materials inside the vessel caught fire. Master of the vessel informed the Sri Lankan Port authorities, which took steps to extinguish the fire, thereby saved the vessel and the cargo. Later Sri. Lankan Port authorities raised six bills for a total amount of US $ 44,545.75 to the second respondent. Ext. P2 is the communication sent by the Sri Lankan Port authorities to the second respondent for settling the bills. Petitioner was also directed by the Sri. Lankan Port authorities to arrange payment of the bills. According to petitioner, as charterer of the vessel, Sri Lankan Port Authority have a right to recover from the petitioner the bill amount which is payable by the second respondent. Sri Lankan authority, according to petitioner, is legally entitled to debit the bill amount in the account of the petitioner. It is petitioner's case that vessel M.V. Madhiaa however clandestinely left the Sri Lankan Port without settling the dues, and discharging the cargo of the Indian shippers. Later, it was understood that the vessel reached Male and discharged the entire cargo consigned by Indian Shippers and sold the same to strangers and misappropriated the entire sale proceeds thereof. In fact, Sri Lankan Port authorities informed the Tuticorin Port authorities stating that M.V. Madhiaa which sailed from the Port of Colombo without obtaining the necessary clearance and settling payment to the Sri Lankan Port Authority. According to petitioner, second respondent wrote to the Sri Lankan Port Authority vide letter dated 26.9.1995 agreeing to settle the dues and requested for details of the port dues. It was also pointed out vessel was subsequently sold to another party, and second respondent have completely stopped doing shipping business.
3. Petitioner submits in order to avoid payment and get over maritime lien, second respondent clandestinely transferred the vessel in a sham transaction and changed its name to M.V. Fus Faru and thereafter to M.V. Golden Fish. When the name was changed to M.V. Golden Fish the vessel's ownership was changed in the name of the third respondent, which is a company owned by none other than the Managing Director of the second respondent-company. Petitioner submits respondents 2 and 3 are family concerns with Managing Directors as father and son. It is also his case, even though the name of the vessel was changed, port registration of the Vessel remained unchanged as 208-10-7.
4. Alongwith the petitioner, some Indian cargo owners are also tracing the hereabouts of the vessel since cargo entrusted with the Vessel was clandestinely disposed of at Male, In fact, Sri Lankan Port authorities and their local agents and Indian cargo owners were in search of the whereabouts of the vessel and then they came to know from the Sri Lankan Port Authority that the vessel was berthed at Tuticorin in the first week of September, 1995. However, before any step could be taken, vessel sailed out of Tuticorin. Later, during the course of its voyage it had to come to Vizhinjam Port. The authority requested M/s. Leans Lines Pvt. Ltd. To take appropriate legal action to arrest the vessel. For the said purpose, they duly constituted Mr. LA. Xavier D'Cruz, the Managing Director of M/s. Leans Lines Pvt. Ltd. as their Attorney. He then filed O.P. No. 960 of 1996 before this Court for the arrest of the vessel, M/s. Golden Fish invoking the admiralty jurisdiction of this Court. When the said petition came up for admission on 16.1.1996, this Court issued notice by special messenger to the first respondent. Another writ petition, O.P. No. 971 of 1996 was filed by the company on 16.1.1996 on behalf of M/s. Revathi & Co., invoking the powers under Section 443(1) of the Merchant Shipping Act, to whom also large amounts are due from the second respondent. Petitioner in O.P. No. 971 of 1996 also moved a petition before the Director of Ports on 17.1.1996 under Section 443(2) of the Merchant Shipping Act requesting the Director to arrest the vessel till this Court finally disposes of O.P. No. 971 of 1996. Director of Ports issued a direction to the Port Conservator, Vizhinjam not to give port clearance to M.V. Golden Fish until further orders received from his office. Later the vessel M.V. Golden Fish and their local agents, S & J Travels & Cargo Services Pvt. Ltd. filed O.P. No. 1217 of 1996 before this Court challenging the order passed by the Director of Ports. In the meantime, several cargo owners have filed writ petitions, such as O.P. Nos. 1217, 1276, 1520 and 1522 of 1996, since the issue involved. According to him, he is a bonafide purchaser and that he was unaware of any maritime Hen in respect of the vessel. It is stated all the formalities have been completed. It is his case that no amount is due to Sri Lankan Port Authority and Sri Lankan Port Authority have no claim for the amount from respondents 1 and 4 of the vessel. He also denied the allegation that ship caught fire and the Sri Lankan Port Authority extinguished the fire. It is also stated, even if there is any claim over the ship in question, petitioner has no locus standi to move this Court and he has no legal right to act on behalf of Sri Lankan Port Authority. It is also their case that no cause of action has arisen within the admiralty jurisdiction of this Court so as to entertain this petition. Respondents 1 and 4 also maintain the stand that if at all Sri Lankan Port Authority has got any legal right oh the basis of Ext. P1 charter-party, Sri Lankan Port Authority has to invoke the admiralty jurisdiction of Sri Lanka Admiralty and Chamber of Commerce and not before this Court. Counsel referred to paragraph 2 of Ext. P1.
5. I heard Counsel for the petitioner as well as Counsel appearing for respondents 1 and 4 at length. Question of jurisdiction of this Court in the matter of settling claims under the admiralty jurisdiction is not mere res integra. Supreme Court has settled the issue in M.V. Elisabeth v. Harwan Investment & Trading P. Ltd. Goa . Supreme Court held the admiralty jurisdiction of the High Court is dependent on the presence of the foreign ship in Indian waters and founded on the arrest of that ship. This jurisdiction can be assumed by the concerned High Court whether or not the defendant resides or carries on business, or the cause of action arose wholly or in part, within the local limits of its jurisdiction. Once a foreigh ship is arrested within the local limits of the High Court, and the owners of the ship have entered appearance and furnished security to the satisfaction of the High Court for the release of the ship, the proceedings continue as a personal action. It was also stated by the Supreme Court once a foreign ship is arrested in Indian waters by an order of the High Court, in exercise of the admiralty jurisdiction vested in it by statute, or inherent in it as a Court of record in respect of any maritime claim against its owner, wherever the cause of action may have arisen, and whether or not the ship is subsequently released by the owner furnishing security, proceedings must continue against the owner as in any other suit. The arrest of the vessel while in Indian waters by an order of the concerned High Court, as defined under the Merchant Shipping Act, 1958 Section 3(15), attracts the jurisdiction of the competent Court to proceed with the trial, as in the case of any other suit, as an action against the owner, and any decree obtained by the plaintiff is executable against any property of the owner available within jurisdiction, including the security furnished by him for release of the vessel. Therefore, admiralty jurisdiction of this Court is attracted when the cause of action wholly or in part arises within the jurisdiction of this Court or vessel is within its jurisdiction. Section 3(15) of the Merchant Shipping Act defines 'High Court1 as follows:
High Court', in relation to a vessel means the High Court within the limits of whose appellate jurisdiction-
(a) the port of registry of the vessel is situated; or
(b) the Vessel is for the time being; or
(c) the cause of action wholly or in part arises.
6. In the instant case, the vessel M.V. Janate admittedly anchored at the New Mangalore Port, which is not within the jurisdiction of this Court. Again it is admitted case that vessel is not registered within the jurisdiction of this Court. There is nothing to show that cause of action in respect of the vessel has arisen within the jurisdiction of this Court. Claim raised by the petitioner on behalf of Sri Lanka Port Authority is with regard to an incident which happened at Colombo and not within the jurisdiction of this Court. Mere fact that the vessel once upon a time passed through Vizhinjam Port would not give rise to cause of action for this Court to proceed against the vessel. Even in M.V. Elisabeth's case, Supreme Court was dealing with an order passed by the Andhra Pradesh High Court. It was a case where the vessel M,.V. Elisabeth was arrested when it entered the port of Visakhapat-nam on 13.4.1984 within the jurisdiction of the Andhra Pradesh High Court. Andhra Pradesh High Court had jurisdiction since the vessel was within the jurisdiction of that Court. In the instant case, it is admitted that the vessel is not anchored within the jurisdiction of this Court , Counsel for the petitioner referred to the decision of the Bombay High Court in Sigma Coatings BV v. M.V. Agios Nikolaos AIR Bom. 281 stating even though petitioner company is a foreign company, they have legal right to invoke the admiralty jurisdiction of that Court. I am of the view that decision cited by the petitioner is not applicable to the facts of this case. That was a case where company incorporated under the laws of the Netherlands moved action in rent on the admiralty side against a foreign flat vessel known as M.V. Agios Nikolaos. It is evident from the facts of that case, the ship was anchored within the jurisdiction of the Bombay High Court. Therefore, that gave jurisdiction to that Court to proceed against the vessel. Therefore, both the cases cited at the bar are' cases where the ships were anchored Within the jurisdiction of the respective High Court. In the instant case, as I have already mentioned ship is not anchored within the jurisdiction of this Court. In that view of the matter, I am of the view that this Court cannot exercise its admiralty jurisdiction against the vessel M.Y. Janate anchored at New Managalore Port.
7. This admiralty jurisdiction has been invoked by a company, Ocean Lanka Shipping Co. Ltd. which is a company registered under the Sri Lankan Companies Act, having its head office at Colombo. Case of the petitioner is that money is due not to the petitioner but to the Sri Lanka Port Authority. Sri Lanka Port Authority has not invoked the admiralty jurisdiction of this Court. As stated, he is representing the Sri Lanka Port Authority. There is nothing to show that they are represented by the petitioner, apart from mere assertion. It is also pertinent to note that Ocean Lanka Shipping Co. Ltd. itself is represented by Agent, M/s. Leans Lines Pvt. Ltd. There is no case for the petitioner that any money is due to the petitioner from the respondents. They have no case that any money is due to the amount to the Sri. Lankan Port Authority. Claim is with regard to the fire which occurred in'the Sri Lankan Port, which is a dispute which cannot be resolved by this Court. Further, contention of Counsel for the petitioner is that since this vessel, Golden Fish, has violated this Court 's order, this Court has got jurisdiction to entertain this petition. As rightly pointed out by Counsel for respondents 1 and 4 that a Division Bench of this Court has already disposed of the appearance holding that those are disputed questions of fact, which cannot be decided by this Court. Division Bench took the view that those are matters to be decided by the concerned authority and that if the petitioner has got any claim over respondents, he has to take such steps as are necessary in tort against the ship. In view of the said circumstances, I am of the view that petitioner is not entitled to get the reliefs prayed for in this writ petition. Petitioner has got a further contention that the transaction entered into between the parties is a sham transaction, which is evident from the sale consideration. I have found that this Court has no jurisdiction to resolve the dispute. Therefore, I am not expressing any opinion on the merits of the case. Considering the entire circumstances of the case, I am of the view that this writ petition is without any merit. Accordingly, the same is dismissed.