IMPORTANT POINT
There is no sufficient evidence available in this case as regards the action in rem making the vessel liable in the contract said to have been entered into as recorded in Fixture Note. It is in the nature of a breach of contract and liability of vessel would not arise in admiralty jurisdiction wrongly basing it on maritime lien.

Headnote:Admiralty Jurisdiction of Madras High Court-Maritime Lien-Meaning and attributes (See Paras 12 to 15)-Fixture Note-Disponent owner was an intending charterer of the vessel from the owner-No charter party or agreement-Suit filed for recovery-Claim arising out of an alleged contract-Prayer to arrest the ship to enforce an action in rem-Whether maintainable?-High Court s Single Judge and DB holding No -Appeal to Supreme Court-Whether liability of vessel (as a juridical person) would arise in such a case? (No)-Appeal dismissed-Case law discussed.
       Held : Turning attention on to the appeal presently before us the cardinal issue arises for consideration stands out to be the applicability of the concept Maritime Lien on the basis of the fixture note as above stated and save that the appeal by the plaintiffs stands rejected and the present appeal before this Court by reason therefor. (Para 9)
       Held also : Even, however, assuming the agreement has in fact been entered into by the disponent owner, unless sufficient evidence is laid that the charter was by demise, whereby the possession and control of the vessel was given to the disponent owner, question of pursuing the cause of action against the vessel would not arise. Needless to add that charter parties are of three kinds; (a) Demise Charter; (b) Voyage Charter; and (c) Time Charter. Whereas in demise charter, the vessel is given to the charterer who thereafter takes complete control of the vessel including manning the same, in both voyage charter and time charter, master and crew are engaged by the owner who act under owner s instructions but under the charterer s directions. Simply put, voyage charter is making available the vessel for use of carriage for a particular voyage and the time charter correspondingly is where the vessel is made available for carriage of cargo for a fixed period of time. In the contextual facts, apart from the fixture note, no other documentary support is available as to whether ownership arose through a charter by demise and possession and control of the vessel has already been given to the disponent owner. The facts disclose that the disponent was an intending charterer of the vessel from the owner and it is on expectancy of such a contract, the fixture note was issued. There was as a matter of fact no charter party or agreement with the charterer and some eventuality in future is stated to be the basis of the cause of action. It is on this score we think it expedient to record that even upon assumption of the appellant s case at its highest, no credence can be attached thereto. The disponent owner was not a demise charterer but it is on the happening of such an event in futuro that such a fixture note has been issued. In our view there is no sufficient evidence available as regards the action in rem making the vessel liable in the contract said to have been entered into, as recorded in the fixture note. It is in the nature of a breach of contract and liability of the vessel would not arise, though however, we are not expressing any opinion as regards the maintainability of an action in personam or its eventual success. (Para 34)
       Held in addition : Inasmuch as the claim in the present case arises out of contract de hors a maritime lien, no action in rem is permissible, neither a suit in the original jurisdiction of the Madras High Court can be maintained against the vessel. (Para 35)
       Held finally : On the wake of the aforesaid, this appeal fails and is dismissed, without, however, any prejudice to initiate further action in personam. No costs. (Para 36)

JUDGMENT

Banerjee, J.-Leave granted.

2. Issuance of warrant for the arrest of the vessel M.V. WON FU berthed at Madras Port has been the principal controversy before the Madras High Court in its Admiralty Jurisdiction.

3. The plaintiff being the appellant herein instituted a suit for recovery of damages of 11 lakhs for breach of contract with interest at the rate of 24 per annum by reason of loss and damages suffered and caused by breach of contract by the defendant vessel. The factual element we will refer shortly here after but presently be it noted that against the refusal to entertain the suit and the consequent dismissal of the same before the learned trial judge, the plaintiff moved the appellate forum in the High Court but having failed to obtain the relief the petition for special leave under Article 136 has been moved before this Court and this Court at the admission stage itself upon issuance of notice and upon the grant of leave as appears herein before proceeded to deal with the issue without much of procedural formalities.

4. Turning attention to a brief reference on to the factual score it appears that the plaintiff being a sole proprietor concern stands involved in the business of export of mines and minerals especially in Feldspar. In the usual course of events plaintiff entered into an agreement with M/s. SAN I. Mining Company at Taiwan to export Feldspar and to complete the agreement between the parties the plaintiff entered into an agreement with said to be defendant s ship disponent owner, to export the cargo of Feldspar from Tuticorin harbour to Taiwan. The agreement is stated to be evidenced in a fixture note dated 20.10.1995. The relevant extract whereof are as below:

It is this day mutually agreed between Taiyo Senpaku Kaisha, Ltd. Tokyo as disponent owners and Epoch Enterrepots, Madras as charterers on the following terms and conditions

- Vessel: X/Y WONFU AS DESCRIBED.

- Cargo: XIN 8.000 MI IN IF BLS FELDSPAR UPTO VSLS FULL CAPA CHOP

- L/D Port: 1SB SP Tuticorin India/1-SB 1 SP TAICHUNG, TAIWAN

- Laycan: 25th Oct. - 5th Nov. 1995

- L/D Rate: 1.200 XT PWDSSEX BIU/1.500MT PWDSEEX W IUARC

- Freight: VSD 25.00 PWI FIOST BSS 1/1

- Payment: 100 pet frt payable w/I 5 banking days acol S/BLS/L

FET - prepaid

- Full frt TB deexed earned by ovrs CH is discountless non-returnable whether CGO/VSL Lost or not lost.

- CGO TB loaded in unobstructed main hold only

- Demurrage: USS 4000.00/DHD Vis be

- Agents Owners Agents be

..................................

Disponent owners Charterers

TAIYO Senpaku Kaisha Ltd. Manager

M. Takahashi, EPOCH Entrepots

Managing Director Suguna Apartments

12-A, Lloyds Road,

Madras-600014"

5. On the factual matrix the learned Senior Advocate Mr. ATM Sampath rather emphatically contended that the contract stands completed by the signing of the fixture note and the plaintiff has also acted in terms therewith by exporting stock 8400 MT of Feldspar to Taiwan through the defendant s vessel on 26.10.1995. It has been the contention that the defendant s ship has failed to act in terms of the fixture note by reason wherefor the plaintiff has not been able to send the cargo to the purchaser as per the schedule thus exposing the plaintiff to suffer a loss of 11 lakhs by reason of a deliberate act of default to ship the cargo on the vessel.

6. As detailed above the learned single Judge dismissed the suit and recorded inter alia the following:

"The plaintiff sought for the claim of arrest of the vessel and for damages. The arrest of the vessel can be sought for only under the Admiralty Jurisdiction. Nothing was performed with regard to loading of cargo in the ship. The plaintiff states that since the contract for export of goods was dropped, t

Click Here to Read the rest of this document

2002 Supreme(SC) 1070

Cases Referred (3)