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1999 Supreme(Bom) 724

IN THE HIGH COURT OF BOMBAY
S.S. Nijjar, J.
M/s. Crescent Petroleum Ltd...... Plaintiffs.
Versus
m.v. "MONCHEGORSK" another..... Defendants.
Notice of Motion No. 2317 of 1999 in Admiralty Suit No. 45 of 1996, decided on 23-9-1999.
Advocates appeared :
P.S. Pratap with Madhu M. i/b V. Subramanium, for the plaintiffs.
S.K. Mukherjee with Ms. F. Sethna i/b Dunmorr Sett, for defendant No. 1 in support.

An action in rem lies only if the owner of the vessel is personally liable for the suit claim.

Headnote:

ADMIRALTY - JURISDICTION - ACTION IN REM - NECESSARIES - OWNERS' LIABILITY - ARREST OF VESSEL - DISMISSAL OF SUIT - ALTERNATIVE RELIEF - BANK GUARANTEE.

Fact of the Case:

The plaintiffs, suppliers of bunkers to the defendant vessel, filed a suit in rem against the vessel and its owners for non-payment of the bunker supplies. The defendants filed a Notice of Motion for dismissal of the suit and for directing the plaintiffs to pay to the defendants the sum of U.S.$ 349,518,56 towards the defendants' claim for wrongful arrest and detention of the first defendant vessel. Alternatively, it was prayed that pending the hearing and final disposal of the suit, the plaintiffs be directed to furnish a Bank Guarantee of a Nationalised Bank in favour of the Prothonotary and Senior Master, High Court, Bombay, in the sum of the defendants' claim of U.S.$ 349,518,56.

Finding of the Court:

The Court held that the plaintiffs had made out a prima facie arguable case and that the arrest of the vessel was justified. Therefore, no relief of damages or for provision of security as claimed in prayer Clauses (b) and (c) of the Notice of Motion could be granted to the defendants.

Issues: 1. Whether the suit in rem is without jurisdiction and not maintainable against the defendant vessel? 2. Whether even on the plaintiff's reasonably best arguable case the suit as framed is not maintainable? 3. Whether the suit as framed and on the basis of which the Warrant of Arrest has been obtained is vitiated by material misrepresentation or by suppression of material facts?

Ratio Decidendi: 1. The Court held that an action in rem lies only if the owner of the vessel is personally liable for the suit claim. However, in the present case, the supplies of necessaries have been made not at the instance of the owner. Pleadings do not reflect any contract with the owner. Therefore, the suit has to be dismissed as not disclosing a cause of action in rem against the owners. 2. The Court held that the plaintiffs have made out a prima facie arguable case and that the arrest of the vessel was justified. Therefore, no relief of damages or for provision of security as claimed in prayer Clauses (b) and (c) of the Notice of Motion could be granted to the defendants. 3. The Court held that there has been no material misstatement which would affect the merits of the action in rem. The plaintiffs could only have been non-suited if the non-disclosure would have materially affected the merits of the action in rem or the suppression had enabled the plaintiffs to obtain a relief which they would not have otherwise obtained.

Final Decision: The Court dismissed the Notice of Motion with no order as to costs.

JUDGMENT - S.S. NIJJAR, J.:---This Notice of Motion has been taken out by the defendants for dismissal of the suit and for directing the plaintiffs to pay to the defendants sum of U.S.$ 349,518,56 towards the defendants claim for wrongful arrest and detention of the first defendant vessel. Alternatively it is prayed that pending the hearing and final disposal of the suit, the plaintiffs be directed to furnish a Bank Guarantee of a Nationalised Bank in favour of the Prothonotary and Senior Master, High Court, Bombay, in the sum of the defendants claim of U.S.$ 349,518,56.

2. The defendants claim the dismissal of the suit on three grounds. These are:

(i) That the suit in rem is without jurisdiction and not maintainable against the defendant vessel;

(ii) That even on the plaintiff's reasonably best arguable case the suit as framed is not maintainable;

(iii) That the suit as framed and on the basis of which the Warrant of Arrest has been obtained is vitiated by material misrepresentation or by suppression of material facts.

In support of the first ground, it is submitted by Mr. Mukherjee, learned Counsel appearing on behalf of first defendant, that the present application proceeds as on a demurrer, that is, accepting the truth of the statements contained in the plaint and seeking a decision on the issue as a bare question of law. It is submitted that the suit is patently bad in that on the basis of the plaintiff's case, as pleaded, no case is made out asserting any personal cause of action against the owner of the vessel, N.B. Shipping Limited. The only contractual nexus that is pleaded is the contract concluded between the plaintiffs and Project Asia Line, hereinafter referred to as "PAL". According to Mr. Mukherjee, the foundation for plea of jurisdiction is pleaded in paragraph 13 merely on the supply of bunkers. The learned Counsel has pointed out that in para 10 of the plaint, the plaintiffs have merely stated that "they have a cause of action under section 5 of the Admiralty Courts Act, 1861, for necessaries supplied to the first defendant vessel". In paragraph 3 of the plaint it is merely pleaded that "On 24th July, 1995 a contract was concluded between the plaintiffs and one M/s. Project Asia Line, the owners/charterers/operators of the first defendant vessel for supply of fuel oil and marine diesel oil to the first defendant vessel. The plaintiffs crave leave to refer to and rely upon the confirmation dated 24-7-1995 from the plaintiffs to M/s. Project Asia Line and the General Terms and Conditions of Sale when produced." Thus, according to Mr. Mukherjee, it becomes obvious that no averment is made of any contract having been entered into between the plaintiffs and the owners i.e. N.B. Shipping Limited. The plaintiffs have merely impleaded the defendant No. 1 vessel by name m.v. MONCHEGORSK. The defendant No. 2 are merely described as owners, charterers, operators of the defendant vessel. This description is wholly vague and shows that the plaintiffs have no idea of the relationship of defendant No. 2 to defendant No. 1. According to Mr. Mukherjee the plaint proceeds on the assumption that it does not matter whether PAL are owners or charterers. It is further submitted that an action in rem against the vessel would lie only if the owner is personally liable for the suit claim. He submits that save in exceptional cases i.e. action for wages, bottomry and maritime salvage, an action in rem is dependent on the personal liability of the owner or the person in possession of the vessel i.e. demised charterer. For this proposition, the learned Counsel relies on a judgment of the House of Lords in the case of (David Morgan v. The Steamship "Castlegate")1, reported in 1893 Appeal Cases 38. He submits that in the present case the supplies of necessaries have been made not at the instance of the owner. Pleadings do not reflect any contract with the owner. The contract pleaded is with PAL. The registered owner of the vessel is N.B. Shi












































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