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SUPREME COURT OF INDIA
Indira Banerjee, A.S. Bopanna, JJ.
Owners and Parties Interested In the Vessel M.V. Polaris Galaxy – Appellant
Versus
Banque Cantonale De Geneve – Respondent
Civil Appeal Nos. 6897-6898 of 2022 (Arising Out of SLP (C) Nos. 19314-19315 of 2021)
Decided On : 23-09-2022
ADMIRALTY SUIT - Addition of party - Appeal - Whether an appeal lies to the Commercial Appellate Division of the High Court from an order of the Commercial Division (Single Bench) of the same High Court for addition of a party, in an Admiralty Suit governed by the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017.
Fact of the Case:
The Respondent Bank instituted the Admiralty Suit being C.S. (Commercial Division) No. 96 of 2021 before the Commercial Division of the Madras High Court. In the plaint filed in the said Admiralty suit, the Respondent Bank pleaded that its claim in the present suit arises under a Bill of Lading and is for mis-delivery of cargo. The claim is a maritime claim under section 4(1)(f) of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 (hereinafter referred to as the said Act). The claim is against the owners of the Defendant vessel. The Defendant vessel is within the territorial jurisdiction of this Hon’ble Court. In the circumstances the Plaintiff is entitled to file the present Suit in rem against the Defendant vessel and entitled to an order of arrest of the Defendant vessel in respect of its maritime claim. The Appellant filed its response to the interim application being Application No.1494 of 2021, filed by the Respondent Bank for summary judgment under Order XIV Rule 8 and Order XIIIA of the Code of Civil Procedure 1908, as amended by the Commercial Courts Act 2015 (hereinafter referred to as “Commercial Courts Act”). In its response/Counter-Affidavit, the Appellant pleaded that the Plaintiff’s customer Gulf Petrochem who is alleged to have cheated and defrauded the Plaintiff and provided the Plaintiff with false and fraudulent documents on the basis of which credit was granted by the Plaintiff, is a necessary and/or proper party whose presence is necessary to effectively adjudicate the issues that arise in the suit. Whether the Plaintiff has been paid any amounts by Gulf Petrochem is an issue that can only be gone into at trial and requires the presence of Gulf Petrochem.
Finding of the Court:
The Division Bench erred in law in allowing the appeal from the order of the Commercial Division (Single Judge) adding Gulf Petroleum as party defendant to the suit. An appeal does not lie to the Commercial Appellate Division of the High Court from an order of the Commercial Division (Single Bench) of the same High Court for addition of a party in an admiralty suit governed by the Admiralty Act.
Issues: Whether an appeal lies to the Commercial Appellate Division of the High Court from an order of the Commercial Division (Single Bench) of the same High Court for addition of a party, in an Admiralty Suit governed by the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017.
Ratio Decidendi: An order for addition of a party under Order 1 Rule 10(2) of the CPC is not appealable under section 14 of the Admiralty Act. Gulf Petrochem is a party to the dispute and the suit transaction and the Contract of Carriage (Bill of Lading) and hence is a necessary party. Gulf Petrochem is also a proper party whose presence is necessary for complete and final decision on questions in the suit.
Final Decision: The appeals are allowed. The impugned judgment and order of the Division Bench is set aside.
JUDGMENT :
Indira Banerjee, J.
Leave granted.
2. These appeals are against a judgment and order dated 28th October 2021 passed by the Commercial Appellate Division of the High Court of Judicature at Madras allowing Commercial Appeal being O.S.A (CAD) No.88 of 2021 filed by the Respondent, and setting aside an order dated 24th September 2021 passed by the Commercial Division (Single Bench) of the High Court, adding Gulf Petroleum FZC as defendant in the Admiralty Suit filed by the Respondent, Banque Nationale De Geneve being CS (Commercial Division) No.96 of 2021.
3. The Appellant, M/s Galaxy Marine Services Limited is the registered owner of the Vessel, M. V. Polaris Galaxy, a sea-going oil tanker, flying the flag of Liberia, which is hereinafter referred to as, “the Vessel”.
4. M/s Polaris Marine Services, acting as Commercial Managers of M/s Galaxy Marine Services, entered into a charterparty agreement with Profitable Wealth Inc., a company registered in the British Virgin Islands and operated by Wirana Shipping Corporation Private Limited, a well-known maritime company based in Singapore, for charter of the vessel to Profitable Wealth Inc. Profitable Wealth Inc. in turn sub-chartered the vessel to Gulf Petroleum FZC for carriage of cargo of Marine Fuel Oil.
5. On 6th May 2020, Gulf Petroleum FZC entered into a contract for purchase of 27-28,000 Metric Tons (MT) of Marine Fuel from Indian Oil Corporation Limited (IOC) which was to be loaded at the Kandla Port, for discharge at Fujairah.
6. Gulf Petroleum FZC requested the Respondent, Banque Cantonale de Geneve, hereinafter referred to as the Respondent Bank, to finance the purchase of the said 27-28,000 MT of Marine Fuel Oil from IOC. Gulf Petroleum FZC informed the Respondent that the Marine Fuel Oil had been sold to Aramaco for delivery at Fujairah, on open credit.
7. By a letter dated 11th May 2020, the Respondent Bank requested Gulf Petroleum FZC to provide a copy of the Sale Contract between Gulf Petroleum FZC and Aramco and also sought certain clarifications. On the same day i.e., 11th May 2020, Gulf Petroleum FZC and Aramco entered into a Sale Contract for delivery of Marine Fuel Oil at Fujairah between 23-30 May 2020, against credit of 60 days from the date of invoice.
8. On 12th May 2020, a copy of the Sale Contract between Gulf Petroleum FZC and Aramco was forwarded to the Respondent Bank. Thereafter, the Respondent Bank agreed to finance the transaction. The Respondent Bank issued a Letter of Credit in favour of IOC for USD 6,050,000.00. The Letter of Credit provided that if original Bills of Lading were not available, then payment under the Letter of Credit would have to be made against a Letter of Indemnity.
9. On 15th May 2020, Gulf Petroleum FZC requested the Respondent Bank to amend the Letter of Credit by changing the Port of Discharge from Fujairah to Singapore. The Respondent Bank sought certain clarifications on the proposed amendment.
10. On 15th May 2020, Gulf Petroleum FZC and Aramco made an addendum to their Sale Contract changing the Port of Discharge from Fujairah to Singapore. On 17th May 2020, Gulf Petroleum FZC forwarded a copy of the addendum to the Sale Contract, to the Respondent Bank. On 18th May 2020, the Respondent Bank amended the Letter of Credit by changing the Port of Discharge from Fujairah to Singapore.
11. On 21st May 2020, the Master of the Vessel issued a Bill of Lading No.21052020/01, in respect of cargo of marine fuel. In terms of the Bill of Lading the consignee was the Respondent Bank, the ‘Notify Party’ was Gulf Petrochem FZC and the Port of Discharge was Singapore. On the said date Gulf Petroleum FZC instructed the Master of Vessel that the cargo should to be discharged to Chevron Singapore Private Limited (hereinafter referred to as “Chevron”) at the Horizon Terminal at Singapore.
12. On 24th May 2020, Profitable Wealth Inc. gave a Letter of Indemnity to Polaris Marine Services. Gulf Petroleum FZC, in turn gave a counter-indemnity to Pro
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