Gujarat High Court
Bank Of Sharjah vs Joplin Overseas Investment Limited & on 4 December, 2014
Author: N.V.Anjaria
Bench: N.V.Anjaria
O/OJCA/178/2014 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
CIVIL APPLICATION (OJ) NO. 178 of 2014
In ADMIRALITY SUIT NO. 9 of 2014
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE N.V.ANJARIA
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1 Whether Reporters of Local Papers may be allowed to see Yes
the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law as No
to the interpretation of the Constitution of India, 1950 or any
order made thereunder ?
5 Whether it is to be circulated to the civil judge ? No
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BANK OF SHARJAH....Applicant(s)
Versus
JOPLIN OVERSEAS INVESTMENT LIMITED & 1....Respondent(s)
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Appearance:
MR. TIRTHRAJ PANDYA, ADVOCATE for the Applicant(s) No. 1
MR DAXAY D PATEL, ADVOCATE for the Respondent(s) No. 1
MR DHAVAL M BAROT, ADVOCATE for the Respondent(s) No. 2
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CORAM: HONOURABLE MR.JUSTICE N.V.ANJARIA
Date : 04/12/2014
Page 1 of 26
O/OJCA/178/2014 CAV JUDGMENT
CAV JUDGMENT
The applicant-Bank has filed the present application praying for permission to be joined as party-defendant in the Admiarlity Suit No.09 of 2014 and thereupon to intervene in the said Suit. The said Admiarlity Suit is by one Joplin Overseas Investment Limited-opponent No.1 herein wherein the plaintiff seeks an order of arrest of the defendant-vessel M.V. Meen IMO 834119, which is based on the ground that the plaintiff has an agreement in its favour to purchase the vessel.
2. The case of the applicant-Bank in this application is that the applicant has a claim against the vessel in question as a mortgagee, having given the finance. A copy of Mortgage Agreement dated 23rd May, 2012 between the applicant-Bank and one M/s.Sunrise Ship Management S.A. is annexed. Also annexed is the Facility Agreement between the said two parties in respect of the facilities requested by the borrower, and approved and extended the same by the Bank. Their produced also an Assignment Agreement between the applicant-Bank, said Sunrise Ship Management S.A. and the assignor-one Marakeb S.A. The applicant has claimed on the basis of these transactions that its dues runs into USD2,200,000-in words United State Dollars Two Million Two Hundred Thousands Only and the same is outstanding; therefore the applicant-Bank is entitled to get possession of opponent No.2-vessel. The applicant-Bank thus pleads that it is likely to be affected by any order which Page 2 of 26 O/OJCA/178/2014 CAV JUDGMENT may be passed in the Admirality Suit. It is further given out by the applicant that the applicant had filed Caveats before the High Court of Bombay in the Admirality Suit No.94 of 2014 and that in the order dated 27th December, 2013, the High Court of Bombay recognized the applicant as mortgagee.
2.1 The aforesaid order dated 27th December, 2013 passed by the High Court of Bombay is a common order passed in Admirality Suit No.94 of 2013, where the plaintiff is Al-Baharia Insurance and Reinsurance SAL, along with Admirality Suit No.93 of 2013 by one South East Asia FZC Ajman, along with Admirality Suit (L) No.1086 of 2013 by one Munjasa DMCC, all against the very vessel herein named M.V. Meem. In the Admirality Suit (L) No.1086 of 2013 aforesaid, the applicant-Bank filed Caveat No.46 of 2013.
2.2 In order to have a total perspective, an outline of the facts and the case pleaded in the Admirality Suit No.09 of 2014 in question may be noted. The plaintiff-Joplin Overseas Investment Limited has prayed for a decree in sum of US$7,19,761, on the basis of an agreement dated 27th February, 2013 with the owner Marakeb S.A., stating further that pursuant to the said agreement the plaintiff had deposited amount of USD 760,039.80. It is further case that pursuant to the said agreement 40% amount being USD 760,039.80 was remitted towards purchase price to the owners and further that the plaintiff had requested the owners of the vessel expended further amount of USD 13,45,924.53. In its plaint the Page 3 of 26 O/OJCA/178/2014 CAV JUDGMENT plaintiff mentioned the details of various Admirality Suits pending before the High Court of Bombay and in one of which being Chamber Summons No.935 of 2013 was filed by it.
3. As far as the pleadings in the present Application are concerned, opponent No.1-the plaintiff in the Suit filed affidavit-in-reply dated 02nd April, 2014 (Pages 37 to 59). Rejoinder affidavit dated 25th April, 2014 (Pages 60 to 75) to the said reply affidavit was filed by the applicant. Affidavit-in- reply on behalf of defendant-vessel dated 25th April, 2014 is filed (Pages 76 to 79). Another affidavit-in- reply dated 19th June, 2014 by respondent No.1 (Pages 80 to 87). The sur-rejoinder affidavit dated 19th June, 2014 was filed by opponent No.1 (Pages 88 to 108). Additional affidavit dated 05th August, 2014 by the applicant figures at Page 109. Respondent No.1 along with Purshish dated 20th November, 2014 produced Xerox copy of affidavit of Attorney at Law stating that original is in transit. On 04th December, 2014 applicant filed Purshish stating that the crews on defendant-vessel have left the vessel.
3.1 Adverting to the contentions of the parties available from the aforesaid pleadings of the parties, it is contended by opponent No.1 that the purported Mortgage Agreement dated 23rd May, 2012 relied on by the applicant is signed by Sunrise Ship Management as owner of the defendant-vessel, but at the relevant time the owner was one Marakeb S.A. It is contended that the Mortgage Agreement is therefore non-est in eye of law. The Sunrise Ship Management was owner of Page 4 of 26 O/OJCA/178/2014 CAV JUDGMENT vessel from 01.05.2011 to 01.05.2012, and when the alleged mortgage with Bank of Sharjah was entered into, the said Sunrise was not the owner, it was contended. Registered owner of the vessel since 01.05.2012 was Marakeb S.A. as per the Lloyd Intelligence Website. Thirdly it was contended that the name of the vessel was Sunrise V and from 02.05.2012 it was changed to M.V. Meem and the ownership was shown to be of Marakeb S.A. It was thereby sought to be contended that the documents produced are not genuine.
3.2 With regard to the mortgage it was contended further that the document did not inspire confidence and it was not authentic because, submits opponent No.1, that the Mortgage Deed is not registered with the Authority concerned; from the certificate dated 07.03.2014 produced at Page 52, issued by Republic of Panama General Vessels Titles and Encumbrances from Panama Maritime Authority, it was shown that no registration was effected with the said Registry. It was submitted that since the mortgage is not registered with the Panama Maritime Registry, the document has no evidentiary value.
3.3 It was further denied that the claim of the applicant was recognized by the High Court of Bombay and that in the proceedings before the said High Court it was a voluntary statement made that the applicant had first preferred mortgage, for which no documentary evidence is produced. It was then contended referring to other Admirality Suits filed against the very Page 5 of 26 O/OJCA/178/2014 CAV JUDGMENT vessel-M.V. Meen in the Bombay High Court. It was contended that the plaintiff of Admirality Suit No.1086 of 2013 one Munjasa DMCC has stated that the plaintiffs Al-Bahriah Insurance & Reinsurance, and South East Asia F.Z.C. respectively in the Admirality Suit Nos.94 of 2013 and 93 of 2013 have their claims against the vessel on their own and not in capacity of owners. It was contended that thus the Suits before the Bombay High Court does not create any right in favor of the applicant-Bank.
3.4 The contentions in the affidavit-in-reply of opponent No.1 were countered by the applicant in its rejoinder affidavit dated 25th April, 2014. It was stated that (i) one Sunrise Ship Management S.A. wanting to purchase the defendant-vessel approach the applicant Bank on 16th May, 2012 with a letter of request which was signed by Mr.Khalid Jamil, requeting the applicant-Bank to finance the balance on the acquisition of the defendant-vessel; (ii) On 17th May, 2012 the payment was made; (iii) as the applicant made the payment, the Sunrise executed Mortgage Deed dated 23rd May, 2012 providing the defendant-vessel to the security of the said loan advanced. The Sunrise entered into a Facility Agreement recording the purpose of the advance and terms and conditions regarding its repayment; (iv) the Sunrise was desirous to transfer its ownership in the defendant-vessel to its sister concern Marakeb S.A., for which a tripartite Assignment Agreement dated 30th May, 2012 was entered into, whereunder all rights and liabilities under the Mortgage Agreement as well as Page 6 of 26 O/OJCA/178/2014 CAV JUDGMENT the Facility Agreement stood transferred to Marakeb S.A. The Panama Registry issued fresh Navigation Provisional Registry Certificate on 30th May, 2012 recording Marakeb as the owner of the defendant- vessel; (v) Marakeb S.A. through Mr.Khalid Jamil applied for a preliminary registration of the mortgage of the ship's first mortgage somewhere in June, 2012, which application mentioned about the defendant-vessel being mortgaged to the applicant; (vi) the Mortgage Deed was registered before the Panama Registry on 09th April, 2014.
3.5 On behalf of defendant-vessel reply affidavit dated 05th April, 2014 has been filed stating the relevant facts and setting out a stand, which in its relevant part is usefully extracted hereinbelow.
"3. Marakeb is current the owner of the Defendant vessel. Prior to 26th May, 2012 the Defendant vessel was under the ownership of Sunrise Ship Management S.A. ("Sunrise"), a related company. Mr.Khaled-Jamil, is the sole share holder and director of both Sunrise Ship Management S.A. and Marakeb S.A.
4. The Applicant had financed the acquisition of the Defendant vessel by providing funding of US$7,350,000 on 17th May, 2012. The Applicant and Sunrise thereafter entered into a Mortgage Agreement dated 23rd May, 2012 to provide security in the form of mortgage of the Defendant vessel to the Applicant. On the same day the Applicant and Sunrise entered into a Facility Agreement setting out the purpose of the advance and the manner of repayment and securities to be provided. Since Mr.Khaled Jamil wanted to transfer the Page 7 of 26 O/OJCA/178/2014 CAV JUDGMENT ownership from Sunrise to Marakeb, the Applicant, Sunrise and Marakeb entered into an Assignment Agreement dated 30th May, 2012. Under the Assignment Agreement Sunrise assigned its rights and obligations under the Facility Agreement etc., to of Marakeb. At the time it was agreed and understood between all parties that the Applicant would continue to have a mortgage over the Defendant vessel, despite the change in ownership.
5. In June, 2012, Marakeb made an application for preliminary registration of the mortgage before the Panama Registry. However, Mr.Khaled-Jamil, hwo is the defacto owner of the Defendant vessel as well as both, Sunrise and Marakeb, had outstanding with the Panama Registry on account of non- petition ayment of certain statutory amounts. Due to the said outstanding, the Panama Registry did not register the said the Mortgage Agreement dated 23rd May, 2012 and Assignment Agreement dated 30th May, 2012. However, the Mortgage Agreement has been registered on 9th April, 2014.
6. In light of the above I confirm that the Applicant has valid and subsisting mortgage on the Defendant vessel. I further confirm that, pursuant to Order dated 27th December, 2013, passed by the Hon'ble Bombay High Court, the Applicant, on behalf of the Defendant vessel made remittance of USD 453,963 towards crew wages, port dues and repatriation cost. These expenses were necessary as Marakeb was in financial difficulty and was not in a position to pay the crew and statutory dues. Due to this there was discontent amongst the crewmen and an urgent need to pay their dues. Without the assistance of the Applicant there would have a very dangerous and volatile situation onboard the Defendant vessel.
7. I further say that, as informed to the Bombay High Court on 3rd March, 2014, the Page 8 of 26 O/OJCA/178/2014 CAV JUDGMENT Applicant, after setting the claim of Omega Bunkers (PLAINTIFF in Admiralty Suit 18 of 2013 before the Hon'ble Gujarat High Court) was to take over possession of the Defendant Vessel as per its rights under the Mortgage Deed. However, the Applicant has not been able to take possession of the Defendant vessel because of the present suit."
3.6 The plaintiff in the Suit-opponent No.1 Joplin filed sur rejoinder affidavit to the applicant's affidavit-in-rejoinder on 19th June, 2014 and denied the contentions. Applicant filed additional affidavit dated 05th August, 2014 inter alia submitting that the Suit of the plaintiff-Joplin Overseas was liable to be dismissed because Joplin was guilty of contempt of High Court of Bombay and the said High Court had issued notice to its Directors in Contempt Petition (L) No.01 of 2014. According to the applicant-Bank, the said contempt arose because the Joplin Overseas approached Bombay High Court with forged documents, false statements and unclean hands claiming ownership of the defendant-vessel. On 27th November, 2014 in course of the hearing of the matter, the opponent No.1 filed through Registry the documents in respect of Admirality Suit No.07 of 2014 filed by the applicant-Bank before the High Court of Bombay and the orders passed by the High Court of Bombay in the said Suit.
4. It was on the basis of the above highlighted facts and the documents referred and part of the application, that learned senior counsel Mr.Mihir Joshi assisted by learned advocate Mr.Tirthraj Pandya submitted that the applicant-Bank has financed and is Page 9 of 26 O/OJCA/178/2014 CAV JUDGMENT a mortgagee, that in view of the mortgage, the applicant-Bank has a clear and crystal right and interest to become party and intervene in the Suit of the plaintiff. He submitted that the mortgage is now even registered with the Panama Registry. In furtherance and in fortification of his contention, a decision by the Apex Court in ICICI Bank Limited Vs Sidco Leathers Limited [(2006) 10 SCC 452] was referred to, to rely on the statement of law in paragraph 41 thereof that right to recovery the money lent by enforcing a mortgage would also be a right to enforce an interest in the property.
4.1 Learned senior counsel thereafter referred to the Rules called Admiralty Jurisdiction Rules for Regulating the Procedure and Practice in Cases brought before the High Court under the Colonial Courts of Admiralty Act, 1890 and relied on Rule 949 thereof which deals with interveners and in particular sub- rule (2) thereof. Sub-rule (1) of Rule 949 says that where property against which a suit in rem is brought is under arrest or money representing the proceeds of sale of that property is in court, a person who has interest in that property or money, may intervene in the suit with leave of the Judge. Emphasizing sub-rule (2), it was submitted that application for grant of leave under this Rule could be made ex-parte by affidavit showing the interest, thereby wanting to suggest that in an admiralty action right of a person having interest in the subject matter suit and proceedings stand on a vast pedestal. However, learned senior counsel, when confronted with a query and Page 10 of 26 O/OJCA/178/2014 CAV JUDGMENT situation that the aforesaid Rules of 1890 referred to by him are not adopted by this Court and they do not apply to the admiralty proceedings brought before this Court, he hastened to clarify that it was only an analogical reference and reliance so as to indicate the wide scope for a prayer to become party and to intervene the Admirality Suit, once the person shows a semblance of interest. He submitted placing reliance on decision in Videsh Sanchar Nigam Limited Vs M.V. Kapitan Kud and others [(1996) 7 SCC 127] that plaintiff of an Admirality Suit would be entitled to invoke the admiralty jurisdiction of the court, provided he has some prima-facie case which is not "hopelessly beyond doubt". It was therefore submitted that it could not be insisted that in an Admirality Suit when a person wants to become a party to intervene, the degree of prima-facie case and interest require to be shown by him is higherer or stricter than the principle to be applied to judge the prima- facie case of the plaintiff.
4.2 Learned senior counsel submitted further that the proceedings of Admirality Suit is a proceeding in rem and a person interested is always permitted to port bail and seek release of the vessel. By virtue of nature of proceedings itself, submitted learned senior counsel, that a person having interest becomes entitled to intervene. In support of the above submission, he relied on Delhi High Court decision in M/s.Indian Associates Vs Shivendra Bahadur Singh [AIR 2003 Delhi 292] and in particular paragraph 29, 30 and 32 thereof.
Page 11 of 26 O/OJCA/178/2014 CAV JUDGMENT4.3 It was next submitted that the prayer at this stage being only for become a party and intervene in the Suit of the plaintiff, it did not call for any final adjudication of rights of the parties. In support, decision in Mukhtiyar Mohammad Vs Panna Lal and others [AIR 1985 Madhya Pradesh 122] was relied on and contended that once direct interest in the suit property was shown, the applicant was become entitled to the prayer.
4.4 Learned senior counsel buttress his submissions by placing reliance on a Queen's Bench Division decision in the Mardina Merchant [(1975) Vol.1 Weekly Law Reports 147], as well as another Queen's Bench Division (Admiralty Court) decision in The "Gulf Venture" [(1985) Vol.1 Lloyds Law Reports 131].
4.5 Learned senior counsel proceeded further to submit that above all and in any view, direct interest of the applicant in the Suit of Joplin Overseas is being directly witnessed by the fact that the applicant-Bank has filed Admirality Suit No.747 of 2014 before the High Court of Bombay against the very vessel and the Bombay High Court on 05.08.2014 has passed order for sale of the vessel. He submitted that since the proceedings of the Admirality Suit is a proceeding in rem and that the applicant itself has initiated admiralty action before the High Court of Bombay where the very vessel is defendant, the applicant could be said to be, as learned counsel put Page 12 of 26 O/OJCA/178/2014 CAV JUDGMENT it, "an invitee by procedure" in the present Admirality Suit No.09 of 2014.
4.6 Learned senior counsel Mr.Saurabh N. Soparkar with learned advocate Mr.Daxay Patel submitted that not only the applicant-Bank does not have any interest in the property, his whole case is rested on a weak foundation of facts. It was submitted that in order to claim a right on the basis of the mortgage, the Deed of Mortgage has to be get registered. He submitted that the Mortgage Deed dated 23rd May, 2012 at Annexure-A was admittedly not a registered mortgage. He referred to certificate dated 07.03.2014 given by Panama Maritime Authority (Annexure-R1, Page 52). He submitted that not only that applicant's application for registration which was made on 29th November, 2012 (Pages 70, 71 and 72) was withdrawn. Referring to rejoinder affidavit dated 25.04.2014 of the applicant, it was sought to be demonstrated that these tale-telling facts are admitted facts.
4.7 In this regard, a Xerox copy of affidavit dated 17.11.2014 (since the original was stated to be in transit) sworn by one Ms.Susel Almanza G., the Attorney at Law of the law firm Torrijos & Asociatos of Panama placed on record, was relied on for its contents that initially registration was applied, the application was withdrawn, then again applied and that it was registered upon a fresh application only on 09th April, 2014. The said Purshish and the copy of the affidavit forms part of the record. The contents Page 13 of 26 O/OJCA/178/2014 CAV JUDGMENT therein were relied on by learned senior counsel.
4.8 Learned senior counsel therefore vehemently contended to emphasise that neither on 23rd May, 2012 being the date on which the mortgage is claimed to be created as per the copy annexed, nor on the date of Deed of Assignment on 30th May, 2012, the mortgage was registered. It was submitted that the registration of the mortgage was an act subsequently created and it was beyond pale of controversy that the mortgage document relied on was not a registered mortgage on the date of its execution, nor it was registered when the present Admirality Suit was filed on 03rd March, 2014. Learned senior counsel furthered his contention in this regard by submitting that unless the mortgage is registered, the party claiming thereunder would not be entitled to an action in the Admiralty jurisdiction. The provisions of Section 47 to 51 of the Merchant Shipping Act, 1958 were relied on reading the same with Section 11 of the Admiralty Courts Act, 1861.
4.9 In other words, what was emphasized by learned senior counsel that in order to he entitled to be an intervener in the present suit, it was necessary for the applicant-Bank to show that it has got a valid mortgage. When there was none, he submitted that the right to be impleaded or intervene was also none. Countering the argument that the proceedings of Admirality Suit being in rem, the applicant had right to intervene, it was the submission that the owner had already appeared and filed his reply in the Suit, Page 14 of 26 O/OJCA/178/2014 CAV JUDGMENT therefore, the controversy travelled out of the realm in rem and became the Suit in personam.
4.10 With regard to the order dated 27th December, 2013 of the Bombay High Court, learned senior counsel for opponent No.2 submitted that the said order based on a voluntary statement made and it therefore does not give any locus to the applicant-Bank to become party and intervene in the present Suit. He submitted that the applicant has to establish his interest and right to be entitled to become a party here de horse the order of the High Court of Bombay which is upon agreement of the parties.
4.11 The rival contentions with regard to the mortgage were divided into two limbs. First was that the Deed was between the applicant and the Sunrise when it was entered and now the owner is shown to be Marakeb S.A. In this regard the facts available on record show that both the companies were owned by one owner Khalid Jamil having cent percent ownership. Marakeb S.A. is shown to be the current owner. The transactions relating to change of owner, etc., are internal and for their own purpose. The vessel is the same. The factum of finance by the applicant-Bank is not disputable. Therefore on the said first count, the contentions of the other side could not be countenanced.
4.12 As to the contention raised that the mortgage was not registered, in rejoinder learned senior counsel submitted that the issue that the Page 15 of 26 O/OJCA/178/2014 CAV JUDGMENT document of mortgage dated 23rd May, 2012 was not registered was unnecessarily harped upon by the opponent in as much as the registration talked of is the registration with the Panama Maritime Authority. It was submitted that General Directorate of the Public Registry of Titles and Encumbrances of Ships- Panama Maritime Authority keeps record about details of the ships which remain continuously on move in the sea and travel to territorial waters of different countries, for the benefit of sea-operation and parties interested in having information relating to the ships. This record of information about ships including registration thereof is lie a "horoscope of the ship", submitted learned senior counsel.
4.13 It was further submitted that non- registration of mortgage by the applicant would not bar invocation and operation of admiralty jurisdiction. In this respect, learned counsel made reference to decision of Bombay High Court in Dallah Albaraka Investment Company Limited Vs Mt. Symphony 1" Ex.Mt. 'Arabian Lady' [2005 (5) BCR 589], which took into account clause (ix) of Section 22(1) of Supreme Court of Judicature (Consolidation Act), 1925. The said provision state that the High Court shall in relation to the admiralty matters, have the jurisdiction in respect of matters set-out in clauses
(i) to (xii), of which clause (ix) is 'Any claim in respect of the mortgage of any ship being a mortgage duly registered in accordance with the provisions of the Merchant Shipping Acts, 1894 to 1923, or in respect of any mortgage of a ship which is, or the Page 16 of 26 O/OJCA/178/2014 CAV JUDGMENT proceeds whereof are, under arrest of the Court." The Bombay High Court observed, and which observation were relied on by the applicant's counsel, that in view of the provisions of the said Section 22 of the Act, it is no more necessary that the claim in respect of the mortgage of any ship can be filed in a Court law in India only if it is in accordance with the provision of Merchant Shipping Act, 1894, or newly enacted Merchant Shipping Act, 1958. It also empowers the Court to exercise the jurisdiction where mortgage is sought to be exercised for a ship as provided in clause (ix) as above.
4.14 Learned senior counsel submitted that for all the above reasons the aspects of non-registration or late registration of the mortgage matters least. It was submitted, as is also contended in para 9 of rejoinder affidavit, that assuming without admitting that the mortgage is not registered, even so there is a mortgage in equity and the rights of the applicant cannot be defeated. It was his submission that legal right and obligation flowing in law from the mortgage document executed stand independent of the registration aspect, the registration being with the Panama Maritime Authority, which could be said akin to procedural aspect rather than decisive on substantive aspect. In any case, pointed out learned senior counsel, that the mortgage is now registered before the Panama Registry on 09th April, 2014 which should be clinching factor.
5. The above submission and the explanation Page 17 of 26 O/OJCA/178/2014 CAV JUDGMENT regarding non-registration of mortgage and its nature and effect canvassed by the counsel for the applicant could not be brushed aside lightly, which considering the prayer of the applicant to be joined and intervene in the present Suit. What would be the nature of rights, and how they would arise, as also the extent of such rights, if exercisable, on the basis of the mortgage in question, and how would they fare against the defendant vessel as well as vis-à-vis against the other claimants, creditors or stake-holders, are all questions not to be gone into, probed or adjudicated at this stage for the purpose of present application.
5.1 What is really relevant for judging the locus standi of the applicant to be allowed to become intervener in the Suit is whether the applicant has an interest in the subject matter of the Suit, and not whether he has got a crystalised right. Stating jurisprudentially, the concepts of 'rights' and 'interests' have a clear distinction. Interest at its best is an inchoate right. Whether party's interest is to fructify or crystalise as an enforceable right is a matter of adjudication. An interest shown at present, may or may not become a right in future. The stage of consideration whether a person is entitled to get impleaded as party in the Suit and/or intervener, is not the stage of adjudication of rights. 5.2 Once it is shown that a person has an interest in the subject matter and his present would help the complete and wholesome adjudication of the controversy and the dimension of the dispute involved, he would be entitled to become party. In the Page 18 of 26 O/OJCA/178/2014 CAV JUDGMENT Admirality Suit, having regard to its nature that it is in rem, consideration of interest of the party seeking to become intervener may receive a liberal consideration. The discretion of the Court could be conceived to be a wider, once a subsisting interest is shown; a person able to establish a reasonable degree of interest in the property or subject matter of the Admirality Suit could be allowed to become party and intervene. For the facts and aspects enumerated hereinabove which are arising in the present case, it could be said with certainty that the applicant has such interest so as to be permitted to become a party intervener. A party intervener in the Admirality Suit may be reasonably allowed to be treated as one of the defendant in the Suit.
5.3 In Gulf Venture (supra), the plaintiff alleged the cost of maintaining the vessel under arrest exceeded Pound 5,000 per month, the question was whether the vessel should be sold for benefit of creditors, the observations by the Queen's Bench, which bear relevance on the controversy were thus:
"As to the fourth point, there is no disadvantage to the plaintiffs in the risk that the mortgagees will intervene with a prior claim at this stage. Indeed, if at some stage mortgagees are going to intervene and claim priority over the plaintiffs, it is in the interests of the plaintiffs that they should do so before the plaintiffs have incurred very substantial legal costs."
5.4 The decision in M/s.Indian Associates (supra) was a case under the probate proceedings and Page 19 of 26 O/OJCA/178/2014 CAV JUDGMENT the Court considered impleadment of party under Order I Rule 10, CPC, to observe as under, "Having given our anxious consideration to all relevant aspects of the matter, we feel that as soon as it is established that a person or legal entrity, has an interest in the estate, it would be permissible to the said party to apply to the concerned court, for being permitted to intervene or being impleaded as a party even in the testamentary proceedings since the judgment of the court in probate proceedings is a judgment in rem, and not a judgment in personam." (para 29) 5.5 In Mardina Merchant (supra), the Queen's Bench had a case before it where as ship was arrested in an action in rem by the admiralty marshal while she laid in port. The question considered was whether the Port Authority having no claim in action, could intervene to apply for order to remove ship for loss and damage caused to the Port Authority. Brandon, J. observed, "I am of the opinion that there must be an inherent jurisdiction in the court to allow a party to intervene if the effect of an arrest is to cause that party serious hardship or difficulty or danger. One can visualize cases where the presence of a ship in a particular place might cause not merely financial loss or commercial difficulty but even danger to persons or property. In all such cases it seems to me that the court must have power to allow the party who is affected by the working of the system of law used in Admiralty actions in rem to apply to the court for some mitigation of the hardship or the difficulty or the danger. If it were not so, then there would be no Page 20 of 26 O/OJCA/178/2014 CAV JUDGMENT remedy available for such persons at all."
6. It could not be gainsaid that interest for the applicant-Bank to become a party and intervene in the present Suit could be claimed as derivable from the order passed in the proceedings before the High Court of Bombay as well. It could also not be overlooked that as on date the mortgage is registered wit Panama Maritime Registry on 09th April, 2014. A significantly bearing aspect demonstrating the subsisting interest of the applicant-Bank in the subject matter of the Suit and its claim against the defendant-vessel is clearly discernible from the affidavit filed by the owner Marakeb S.A. which in its relevant part extracted hereunder.
"I have also perused a statement of the amount purported to have been remitted/incurred by Joplin Overseas Investment Limited in the proceedings filed in this Hon'ble Court. In the said statement it is claimed that Joplin Overseas Investment Limited paid a sum of US $ 1,431,954.68. I dispute the said statement, the amount which have been paid to us directly is us $ 760,039.80 and thereafter sum part items in respect of crew wages, and port disbursement at Bhavnagar aggregating sum of US $ 57971.20 have been aid on behalf of the owners. I say that any other purported payment referred to in the statement filed by Joplin is neither on account of the owners nor on behalf of the owners and in any event it was only at the final price to be determined and the claims of Al Baharia, Monjasa, South East Asia, and Bank of Sharjah has been settled by Joplin. After taking into account these amounts the balance amount due and payable under the MOA dated 27th February, 2013 is US $ Page 21 of 26 O/OJCA/178/2014 CAV JUDGMENT 1,082,088.50"
7. In course of the hearing it was sought to be debated by rival sides as to which Rules and principles would apply and govern the prayer for becoming a party and intervening the Suit. When learned senior counsel for the applicant referred to Rule 949 of the Admiralty Jurisdiction Rules of 1890, it was submitted by other side that the said Rules do not have application and admiralty proceedings in this High Court are governed by the Bombay High Court Original Side Rules and Forms. The position is not disputed that the aforesaid Bombay High Court Original Side Rules are adopted and applied in this High Court for regulating procedure and practice. The said Rules however do not contain any provision regarding impleadment and about interveners. Rule 52 thereof however provide that the other proceedings in Suit brought in the Court in exercise of its jurisdiction under the Colonial Courts of Admiralty Act, 1890 not provided by these Rules shall be regulated by the Rules and Practice of the Court in Suits brought in exercise of its Ordinary Original Civil jurisdiction. 7.1 In this context, when the Bombay High Court Original Side Rules does not provide for joining a party and/or about interveners in an Adimrality Suit brought before the Court, decision of Division Bench of this Court being oral judgment dated 01.11.2012 in Glori Ship Management Private Limited Vs Jaisu Shipping Private Limited, (O.J. Appeal No.23 of 2005 in Miscellaneous Civil Application No.35 of 2005 in Admirality Suit NO.10 of 2000) wherein the question Page 22 of 26 O/OJCA/178/2014 CAV JUDGMENT arose was whether defendant could be permitted to file written statement at belated stage and whether the time could be granted to file written statement, which was something not provided in the Bombay High Court Original Side Rules. The Division Bench referred to above Rule 52 and considered the same in light of observations by the Apex Court in its judgment in Iridium India Telecom Limited Vs Motorala INC. [(2002) 5 SCC 145]. In that, the Supreme Court has ruled interpreting Section 129 of the Code of Civil Procedure, 1908 that the non-obstante clause with which the Section 129 begins is not merely declaratory but it is indicative of Parliament's intention to prevent the application of the C.P.C. in respect of civil proceedings on the original side of the High Courts. The Division Bench in Glori Ship Management Private Limited (supra) concluded by relying on the decision of the Apex Court in Iridium India Telecom (supra) to hold that when there is a specific provision already existing in the Original Side Rules, there is no question of Civil Procedure Code being applied on that point but the same would not the position as there is an absence of provision in the Original Side Rules. It was held that in such eventuality, "the Civil Procedure Code will be applicable and it will be only and only Civil Procedure Code which will govern the situation and not anything else."
7.2 The Division Bench observed, ".... The settled position is that 'whenever there is a subordinate legislation as in the Page 23 of 26 O/OJCA/178/2014 CAV JUDGMENT case on hand the High Court has framed the Rules to govern its Original Side Civil jurisdiction being empowered by Section 129 of the Civil Procedure Code, the Civil Procedure Code is the parent legislation. The parent legislation will govern the field and will provide solution to the problem."
7.3 The above binding decision of the Division Bench therefore unequivocally tells that the question about entitlement of a party to be joined in the Admirality Suit and/or the consideration of his prayer to intervene in the Suit would be governed and informed by the principles in that regard available from the Code of Civil Procedure which is the Rules applicable to the Ordinary Civil jurisdiction. The yardstick in Order I Rule 10, CPC as to who could be a proper party or a necessary party to get impleaded and whether a party should be so allowed, and to be permitted to intervene, and the analogous principles and parameters would apply. The question would have to be addressed in that light.
7.4 Therefore in deciding whether the applicant is entitled to become a party and intervene, principles of Order I Rule 10, CPC, which would apply for consideration as per the judgment of the Division Bench above, could be taken into account. All the above considerations and aspects noted holding the applicant to be entitled to become a party and intervene in the Admirality Suit satisfies the test of the parameters of Order I Rule 10, CPC under which the Court may allow a party to be joined. The Page 24 of 26 O/OJCA/178/2014 CAV JUDGMENT concept of "necessary party" and the concept of "proper party" are well settled. In State of Assam Vs Union of India [(2010) 10 SCC 408], as in several decisions of the Apex Court as well as of this Court, it is held that necessary party is one without whom no order can be made effectively; the proper party is one in whose absence an effective order may be possible but his presence is necessary for complete and final decision of the question involved in the proceedings. The object of permitting a party to be joined, as highlighted in Anilkumar Singh Vs Shivnath Mishra [(1995) 3 SCC 147] is to bring on record all persons who are interested in the dispute relating to subject matter so that the dispute involved can be determined fully and finally and prolongation or multiplication of proceedings can be avoided.
8. On the score of the above principles, the applicant-Bank could be said to have made out a case for becoming a party in the Suit and to intervene.
9. In light of forgoing factual and legal discussions, the present applicant-Bank of Sharjah is permitted to be a party to intervene in Admirality Suit No.09 of 2014 by becoming an intervener.
10. Present Application is allowed accordingly.
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