Bombay High Court
Fujairah National Shipping Agency, A ... vs M.V. Sagar Shakti (Ex. Al Karim), A Motor ... on 27 March, 2003
Equivalent citations: AIR2003BOM470, 2003(4)MHLJ103, AIR 2003 BOMBAY 470, (2003) 6 BOM CR 454
Author: D.Y. Chandrachud
Bench: D.Y. Chandrachud
JUDGMENT D.Y. Chandrachud, J.
1. The plaintiff sues for the recovery of an amount of US $ 8298/-, on a claim for the supply of necessaries to a Vessel by the name of m.v. Al Mutawakil. The claim in the suit comprises of a principal sum of US$ 7650.26 and interest of $647.72. The supplies are alleged to have been effected on 2nd April 1997. The erstwhile owner of the vessel was a company known by the name of Al-Mutawakil Shipping Company Ltd., Malta. On 9th April, 1997, the ownership of the vessel was stated to be transferred to the present owners, Rank Shipping Ltd.
2. From the averments in the plaint, the case of the Plaintiff is that a supply of bunkers to the vessel, Al Mutawakil, took place in pursuance of a communication received from one "Delta International Shipping". In paragraph 2 of the Plaint, the Plaintiff avers that in pursuance of a communication received from Delta International Shipping, the Plaintiff confirmed by its telex dated 2nd April 1997 that it would be making supplies. The Plaintiff has averred that it verily believes that the vessel m.v. Al Mutawakil is a sister ship of the defendant vessel m.v. Sagar Shakti. In paragraph 3, it has been averred that the Plaintiff by a telex dated 2nd April 1997 confirmed that the vessel m.v. Al Mutawakil had arrived at the nominated site, that the supply of bunkers was accordingly facilitated and that the quantity supplied was 30.001 M.T. M.G.O. According to the Plaintiff, bunkers were supplied on 2nd April 1997 which was acknowledged by the Chief Engineer of the vessel without any reservation as to quality or quantity. The Plaintiff avers in paragraph 4 that it drew an invoice dated 2nd April 1997. According to the Plaintiff, by a communication of 23rd April 1997, it called upon the Defendant through its representative, Mr. M. Fouad to pay the outstandings and followed this up by a communication dated 15th May 1997. To this, there was a reply dated 19th May 1997 in which it was stated that the order for the supply of bunkers had been placed by Delta International Shipping and it is to them that the Plaintiff should look for the receipt of payment. The case of the Plaintiff is that the supply of bunkers is in the nature of necessaries without which the vessel would not be in a position to sail. According to the Plaintiff, the vessel was named m.v. AL MUTAWAKIL at the time when supplies were effected and that subsequently, the name was changed to m.v. Jaimata. The Plaintiff avers that though this change is reflected in Lloyds Shipping Index, it verily believes that the alleged sale is only a device or strategem on the part of the owners/manages/beneficial interests concerned in the vessel with the intent of defrauding her creditors. The Plaintiff has further averred that in any event, the supply of necessaries "constitutes a maritime line which lien travels with the res and survives change in ownership." The Plaintiff also claimed to have effected supplies to the Defendant vessel, m.v. Sagar Shakti (formerly, m.v. Al Karim). The arrest of the Defendant vessel was sought and obtained in Admiralty Suit No. 95 of 1997. The jurisdiction of the Court in those proceedings is invoked in paragraph 11 of the Plaint on the basis that at the time the Admiralty Suit was instituted the vessel was in port and harbour Mumbai.
3. The Written Statement on behalf of the Defendant has been filed by Rank Resources Limited, a company which claims to have purchased the vessel on 9th April, 1997. The defendant contends that this Court has no jurisdiction to entertain or try the suit. Moreover, according to the Defendant, the supplies, if any, were made to the vessel Al Mutawakil and the Defendant vessel was not liable in respect of the alleged supplies. The Defendant also avers that the Plaintiff is not entitled to claim a maritime lien either under the laws of U.A.E. or of India in view of the change of ownership of the vessel. In paragraph 3 of the Written Statement, the defence is that the alleged supply, if any, had been made at the request of Delta International Shipping and not at the request of the owners of the vessel. The Defendant claims to have made payment in respect of the bunkers on board to the previous owners of the vessel. The Defendant has denied that the vessel Al Mutawakil and m.v. Al Karim are sister ships and that m.v. Sagar Shakti and m.v. Al Mutawakil are sister ships as alleged or at all. The contents of paragraphs 2, 3, 4, 5 and 6 of the Plaint are not admitted in the Written Statement. The Defendant has denied that the alleged supplies of necessaries constitutes a maritime lien and that the same travels with the res and survivors a change in ownership as alleged or at all. According to the Defendant, it purchase the vessel m.v. Al Mutawakil for valuable consideration from the previous owner and it has denied the allegation that this was merely a device for the purpose of defrauding creditors. The defence is that the Plaintiff is not entitled to a maritime lien and that in any event, the same does not survive a change of ownership.
4. By an order of 9th March, 2001, the following issues were framed in the suit:
1) Whether this Court has jurisdiction to entertain and try the suit?
2) Whether the Plaintiffs prove that they have supplied Bunkers to the vessel Al Karim at the request of Delta International Shipping and/or that they are entitled to a sum of US $ 7650.26?
3) Whether the plaintiffs prove that they are entitled to interest and if so at what rate?
4) Whether the plaintiffs prove that the vessel Al Karim and Al Mutawakil are sister vessels?
5) Whether the Plaintiffs prove that the supplies if any made are in the nature of necessaries?
6) Whether the plaintiffs prove that the claim for necessaries constitutes a maritime lien?
7) Whether the defendants prove that Rank Resources Ltd. have become owners of the vessel m.v. Sagar Shakti?
8) Whether the defendants prove that under the laws of UAE a claim in the nature of necessaries does not have the maritime lien?
9) What orders and what reliefs?
5. The Defendant-vessel was arrested by an order dated 30th September 1997 passed by this Court. On 3rd October, 1997, an order for the release of the vessel was passed subject to the condition that a Bank Guarantee be furnished. The ship has since been released from arrest upon the Bank Guarantee being furnished.
6. During the course of the hearing, Counsel appearing on behalf of the Defendant has not pressed his objection in respect of the jurisdiction of this Court and correctly so since the invocation and assumption of jurisdiction was based on the presence of the vessel within jurisdiction. The vessel, as already noted earlier, came to be arrested on 30th September 1997. Counsel appearing for the Defendant has not pressed the defence that under the laws of UAE a claim in the nature of necessaries does not constitute a maritime lien. Issue No. 1 is, therefore, answered in the affirmative. Issue No. 8 is not pressed.
7. ISSUE NO. 2: Whether the Plaintiffs prove that they have supplied Bunkers to the vessel Al Karim at the request of Delta International Shipping and/or that they are entitled to sum of US $ 7650.26?
8. In so far as this issue is concerned, the pleading set up on behalf of the Plaintiff is that in pursuance of a communication received from Delta International Shipping, the Plaintiff confirmed by a telex dated 2nd April 1997 its willingness and ability to supply 30 M.T. M.G.O. at US $ 255 per M.T. at 45 DDD to a vessel by the name of m.v. Al Mutawakil which the Plaintiff states it verily believes is the sister ship of the Defendant vessel. Besides setting out of the terms of payment, the telex provided the Master of the vessel with instructions regarding the prior notice that was required to be given to the Plaintiff so as to organise the supply of bunkers. Then in paragraph 3 of the Plaint, it has been averred that by a subsequent telex dated 2nd April, 1997, the Plaintiff confirmed that the vessel Al Mutawakil had arrived at the nominated site and that the supply of bunkers was accordingly facilitated and that the quantity supplied was 30.001 M.T. M.G.O. According to the Plaintiff, the bunkers were supplied to the vessel on 2nd April, 1997 and this was acknowledged by the Chief Engineer of the vessel without reservation at to quality or quantity supplied. In paragraph 4 of the Plaint, there is an averment with regard to the invoice dated 2nd April 1997 drawn by the Plaintiff and in Paragraph 5 to the communications addressed by the Plaintiff on 23rd April 1997 and 15th May 1997 seeking payment of the outstandings. The communications were addressed to Mr. M. Fouad. In reply, M. Fouad stated on 19th May 1997 that the Plaintiff should look for payment to Delta International which had placed the order for supplies of bunkers.
9. In support of its case, the Plaintiff has adduced the evidence of Capt. Sushil Kumar Bhasin. In the course of his deposition, Capt. Bhasin stated that by a fax followed by a telex dated 2nd April 1997, he had recorded the placement of the order for supply and the instructions which were required to be given to the Master of the vessel regarding pre-arrival notices. According to the witness, the Plaintiff contacted an intermediary, M/s. Shell, who supplied the bunkers to the vessel and obtained a bunker delivery receipt from the Chief Engineer. The documents which have been proved on behalf of the Plaintiff include inter alia, a telex and fax dated 2nd April 1997 from the Plaintiff to Delta International Shipping. The witness has, however, admitted in the course of the cross-examination that he had no document to show that Delta International Shipping were either Charterers or operators of m.v. Al Mutawakil. Similarly, the witness stated that he has no document to show that Delta International Shipping were owners of the vessel.
10. On the present case, there is neither any pleadings, nor any documentary material to establish that the supplies were effected at the behest of the owners of the vessel m.v. Al Mutawakil or an agent of the owners. Indeed, at the present stage, it would be material to note that unlike in companion Admiralty Suit No. 95 of 1997 where there was a communication of the Master of the Vessel to the effect that the vessel was arriving at Fujairah for receipt of bunkers as per nomination of the owners, in the present case, there is neither any pleading, nor any evidence to that effect. The Photo copy of an alleged receipt for Marine Bunker Fuels issued in favour of the supplier, M/s. Shell, by the Chief Engineer of the vessel is not, in my view, sufficient to establish the claim of the Plaintiff against the Defendant. To repeat there is a complete absence of pleading and of documentary evidence to establish that the supplies were effected at the behest of the owners or of an agent nominated by the owners.
11. In order to enable the Plaintiff to succeed in a claim based on the supply of necessaries, it is necessary to aver that the supply of necessaries was effected at the request of the owners, or, that in the alternative, the supply was effected for and at the behest of an agent of the owners who was duly authorised to place an order for the supply of necessaries. This position in law has been elucidated in a judgment of a Learned Single Judge of this Court, Mr. Justice D.K. Deshmukh, in Raj Shipping Agencies v. M.M.Bunga Mas Tiga 2002(1) ALL M.R. 145.. The Learned Single Judge, after referring to the judgment of the Supreme court in M.V. Elisabeth v. Harwan Investment & Trading Pvt. Ltd. held thus:
"It is thus clear that even for maritime lien there has to be an enforceable right in the plaintiff against the owner of the vessel. That right is enforceable against the vessel. But existence of a right in the Plaintiffs against the owner of the vessel, is a must. In so far as the present case is concerned, averments in the plaint do not disclose any existing right in the Plaintiffs against the owner of the vessel."
In the case which came up for consideration before the Learned Single Judge, there were two contracts which were entered into, the first between the owner of the vessel and North End Oil Pvt. Ltd. under which the owner had agreed to purchase oil at a stated price from the latter. The second contract was between North End Oil Pvt. Ltd. and the Plaintiff. The Learned Single Judge held that the supply of necessaries would not make the owner of the vessel liable to pay the price of the supplies unless the Plaintiff proved that the supplies were made at the instance of either the owner of the vessel or at the instance of persons authorised by the owner of the vessel.
12. The judgment of the Learned Single Judge in the aforesaid case has been followed in a subsequent judgment dated 11th July 2002 of another Learned Single Judge, Mr. Justice S.A. Bobde, in S. Scandinavian Bungering AS v. m.v.CHOPOL-2 (Notice of Motion No. 69 of 2002 in Admiralty Suit No. 26 of 2001). In that case, the plaint was rejected under the provisions of Order 7, Rule 11 of the Code of Civil Procedure, 1908 on the ground that there was a failure to aver and plead that the supply of necessaries had been effected at the request of the owner or of an agent duly authorised by the owner to place an order for supply. In the aforesaid case, the vessel in question was m.v. Chopol-2. The owner of the vessel was the Second Defendant, M/s. Korean Polish Shipping Co. Ltd. The order for the supply of bunkers was placed by M/s. Anderson Hughes & Co. Ltd. Bunkers were supplied on the basis of the said order after the plaintiff issued a bunker confirmation on 15th February 2000. The Learned Single Judge while dealing with the facts of the case, recorded in paragraph 6 of the judgment that "according to the Plaintiff, the bunkers were supplied to the vessel in accordance with the bunkers confirmation, the Plaintiff's own document, and the Chief Engineer accepted the bunkers for and on behalf of the Defendant-vessel". Having recorded this, the Learned Single Judge made the following observation which to my mind is extremely significant : "It is noteworthy that the acceptance is not attributed to the Master. The Learned Single Judge noted that in paragraph 4 of the Plaint, it was in fact, the averment of the Plaintiff that irrespective as to who has placed the order for supply of bunkers, the receipt of the bunkers by the vessel creates a contract between the Plaintiff and the vessel and those concerned with her ownership, operations and maintenance. Thereafter, in paragraph 5, there was an averment that M/s. Anderson Hughes & Co. Ltd., had acted in the capacity of agents for and on behalf of the defendant vessel and those concerned with her operation and maintenance. The Learned Single Judge noted that the words " those concerned with her ownership" were missing in para 5. In this context, the Learned Single Judge concluded thus in paragraph 14:
"14. In short, the plaintiff's case is that the act of accepting bunkers which was done on behalf of the vessel by the Chief Engineer results in a contract between the owners and the plaintiff. In the Bunga Mas Tiga case, supra, the learned single Judge has held that supply of necessaries does not make the owner of the vessel liable to pay the price of the supply unless the plaintiff shows that the supplies were made at the instance of either the owner of the vessel or at the instance of the person authorised by the owner of the vessel. There must, therefore, be clear averments that supplies were made at the instance of the owner of the vessel."
13. In the present case, the case of the Plaintiff is that it had supplied bunkers to the vessel by the name of m.v. Al Mutawakil in pursuance of a communication received from Delta International Shipping. A perusal of the averments contained in the plaint would reveal a complete absence of any pleading to the effect that the bunkers were supplied at the behest of the owners or the agent of the owners. Unlike in the case of companion Admiralty Suit No. 95 of 1997, there is significantly, the absence of pleading to the effect that the Master of the Defendant-vessel had confirmed the time of arrival of the vessel so as to facilitate the supply of bunkers. Similarly, unlike the companion suit, there is no document or communication originating in the Master of the vessel stating that he was authorised to accept supplies by the owners. Learned Counsel for the Plaintiff accepts this position. In that view of the matter, the principle of law which has been formulated in the judgments of the two Learned Single Judges of this Court in the decisions referred to earlier would squarely stand attracted. In the absence of an averment in the pleadings and in the absence of any evidence that the supply was effected at the behest of the owners or an agent of the owners, this issue will have to be answered in the negative.
14. ISSUE NO. 4: Whether the plaintiffs prove that the vessels Al Karim and Al Mutawakil are sister vessels?
The Plaintiff he failed to establish that the vessels m.v. Al Karim and m.v. Al Mutawakil are sister vessels. In any event, upon the sale of the vessels, they cannot possibly be regarded as sister vessels. The witness for the Plaintiff admitted in cross examination that m.v. Al Mutawakil was sold around 20th April 1997 and the vessel, m.v. Al Karim was also sold around the same time. The witness has admitted that he has no document to show that m.v. Al Karim and m.v. Al Mutawakil, are sister ships. The issue is answered in the negative.
15. ISSUE NO. 5: Whether the plaintiffs prove that the supplies, if any, made are in the nature of necessaries?
In view of the decision and findings on Issue No. 2, this issue does not survive.
16. ISSUE NO. 6: Whether the claim for necessaries constitutes a maritime lien?
This issue stands concluded by a recent judgment of the Supreme Court in Epoch Enterrepots v. M.V.WON FU . In fairness, it must be stated that both the Counsel, have fairly accepted before the Court that the judgment of the Supreme Court would conclude this issue. In the case which was decided by the Supreme Court, a suit for the recovery of an amount of Rs. 11 lakhs was instituted by the Plaintiff together with interest thereon by reason of loss and damages allegedly suffered on account of a breach of contract by the Defendant-vessel. The Plaintiff there had entered into an agreement with a mining company in Taiwan for the export of a consignment of Feldspar. In order to complete the agreement between the parties, the Plaintiff had entered into an agreement with the Defendant ship's disponent owner for the export of the cargo from Tuticorin harbour to Taiwan. The agreement was stated to have been evidenced in the form of a fixture note dated 20th October, 1995. The suit came to be dismissed by a Learned Single Judge of the Madras High Court in the Admiralty jurisdiction and that judgment was affirmed in appeal by the Appellate Bench. A bench of two Learned Judges of the Supreme Court held that a maritime lien can be said to exist and is restricted in the event of (a) damage done by a ship; (b) salvage; (c) seamen's and master's wages; (d) master's disbursement; and (e) bottomry. The Supreme court held that "in the event a maritime lien exists in the aforesaid five circumstances, a right in rem is aid to exist. Otherwise, a right in personam exists for any claim that may arise out of a contract." Referring to "the limited applicability of such a lien", the Supreme Court held that "not every kind of service or every kind of damage which arises in connection with a ship gives rise to a maritime lien." (para 22). However, the Court held that statutory enactments may list out other forms of maritime liens. In arriving at this conclusion, the Supreme court adverted to the prior judgment of the Court in M.V.AL Quamar v. Tsavliris Salvage (international) Ltd. and Ors., and the provisions of the International Convention for Unification of Certain Rules Relating to Maritime Liens and Mortgages at Brussels (1967). In so far as the facts of the case before the Supreme Court were concerned, ti was held that inasmuch as the claim arose out a contract de hors a maritime lien, no action in rem was permissible and a suit in the exercise of the original jurisdiction of the Madras High Court could not be maintained against the vessel. In view of the judgment of the Supreme Court, this issue will have to be answered in the negative. The claim of the Petitioner is not based on any of the five categories set out in the judgment of the Supreme Court wherein only a maritime lien has been held to exist.
17. ISSUE NO. 7: Whether the defendants prove that Rank Resources Ltd. have become owners of the vessel m.v. Sagar Shakti?
On this issue, the evidence of Vinod Kumar Dang, Chairman of Rank Resources Limited is that Rank Resources have become owners of the vessel m.v. Sagar Shakti for value. The detailed evidence that has been led in this connection has been considered in the judgment of the Court in companion Admiralty Suit No. 95 of 1997. For the reasons indicated in the judgment delivered therein, this issue is answered in the affirmative.
18. In view of the findings above, particularly on issues 2, 4, 5 and 6, the claim of the Plaintiff is liable to be rejected. Issue No. 3 is thus also answered in the negative. The suit is liable to be dismissed and shall accordingly stand dismissed with costs.