Judgement

CHINNAPPA REDDY, J.:- The principal questions raised in the two appeals are the same and we are, therefore, disposing of both the appeals by a common judgment. There are, however, some points of difference which we shall mention in the course of the narration of facts.

2. In Civil Appeal No. 179 of 1985, Chowgule & Co. Pvt. Ltd. are the appellants. They carry on the business of exporting iron ore to various countries from India. It appears that previously iron ore used to be brought to the Mormugao harbour from various mines in the territory of Goa by barges and unloaded in the harbour. Thereafter, the ore would be loaded on board ocean going ore carriers. Alternately, they would be directly unloaded in stream into the ocean going ore carriers. On account of the shallow draught of the Mormugao harbour which prevented large ocean going ore carrying vessels from entering the harbour or from having iron ore loaded to full capacity on such vessels within the harbour, considerable time was wasted in the loading process resulting in substantial increase of the cost of transporting iron ore from Mormugao. Therefore, in about 1967, the appellant company conceived the idea of acquiring a transhipper into which barges could unload iron ore and from which large quantities of iron ore could be loaded into large vessels in open anchorages. Such a transhipper would have to be specially fitted with special and adequate equipment to carry out those tasks. The operation of loading a vessel in open anchorage by the use of transhippers is described as topping up. On July 26, 1967, the appellant Company applied to the Government of India, Ministry of Transport and Shipping, for necessary permission for "purchasing a second hand vessel of about 15000 DWT for use as a topping up vessel at Mormugao harbour for iron ore exports." By their letter dated January 16, 1968, the Government of India granted their permission subject to certain conditions regarding foreign exchange, etc. Thereafter the appellant company acquired a second hand tanker called "The Tropical Grace" and had it converted at the Yokohoma Shipyard in Japan as a transhipper. "A certificate of condition" in respect of the vessel was given by BUREAU VERITAS. Among the main characteristics of the vessel, it was mentioned in the certificate, "The Vessel originally a T 2 Tanker was converted into an ore loading barge at Yokohoma by Nippon KK, Asano Dockyard from April to September 1969 under the supervision of our society." It was further certified as follows :

"The vessel will be entered into the Marine Register Book of BUREAU VERITAS with the following class and notation mark : I 3/3 Ore Carrier, Small Coasting Trade starting from September l969, for a period of four years. The vessel will be mainly employed as an ore loading in the Harbour of Goa (India), with the possibility to extend her exploitation in certain periods of year, as a bulk carrier for small coasting trade.

As a result of the aforesaid surveys for conversion and reclassification, the undersigned believes that S/S "TROPICAL GRACE" is at present time in a position to undertake the self-propelled voyage from YOKOHOMA to Goa."

The vessel arrived in the harbour of Mormugao on or about October 15, 1969. The Deputy Conservator, Mormugao Goa Port Trust, Mormugao harbour was informed on the same day about the arrival of the vessel and it was stated in the letter, "this is an old 72 Tanker converted and equipped to do the work of topping up of the bulk carriers, after they are loaded at the mechanic plant to the permissible draught." On October 20, 1969, the petitioner company applied to the Government of India for the issue of General Licence under S. 406, Merchant Shipping Act, 1958. It was stated that the general licence was sought to ply the vessel for topping purpose in stream at Mormugao harbour. The name of the ship was also changed to Maratha Transhipper. Licence was granted by the Government of India for use of the v