2001 Supreme(Bom) 461
IN THE HIGH COURT OF BOMBAY
D.K. Deshmukh, J.
I.C.I.C.I. Ltd. .... Plaintiffs.
Versus
M.F.V. ’Shilpa’ others.... Defendants.
Admirally Suit No. 3 of 1994, decided on 3-5-2001.
Advocates appeared :
V.C. Kotwal with Rishab Shah i/b. Niranjan Jagtap Co., for plaintiffs.
A. Ramakrishna with A. Satyanarayanan, for defendants.
Headnote:Recovery of Debts Due to Banks and Financial Institutions Act, 1993 - Sections 2(g); 17 and 34 - Merchant Shipping Act, 1958, Sections 2, 3(15) and 51 - Evidence Act, 1872, Section 41 - Constitution of India, 1950, Article 225 - Admiralty jurisdiction of High Court of judicature at Bombay - ICICI provided loan facility for buying vessels - Proper mortgation of ship with ICICI - Dues pending - Suit seeking dues can be filed at Bombay High Court in its admiralty jurisdiction - Act of 1993 does not oust the jurisdiction of High Court of Bombay - Instead the Tribunal lacks proper jurisdiction in such matters. - Unless and until the Union Parliament, in exercise of its power under Entry 95 List I of Seventh Schedule of Constitution enacts a law, the admiralty jurisdiction of this Court cannot be curtailed. The DRT Act, 1993 by no stretch of imagination can be termed as a law enacted by the Union Parliament in exercise of its legislative competence under Entry 95 List I of Schedule VII of Constitution. Therefore, it cannot be said that admiralty jurisdiction of this Court which is served by Article 225 of Constitution is taken away by provisions of Section 34 of DRT Act, 1993 in so far as claims of Banks and financial institutions are concerne
JUDGMENT - D.K. DESHMUKH, J.:---This is a suit filed by the plaintiff Financial Institution which claims to be a company registered under the provisions of the Companies Act. According to the averments in the plaint, the business of the plaintiffs is to grant financial assistance by lending or granting loans or advances to industrial, commercial, professional or trading enterprises. According to the plaintiffs, it has advanced loan to the defendant No. 3 for the purchase of the defendant Nos. 1 and 2 vessels and defendant Nos. 4 to 7 have entered into agreements guaranteeing the repayment of the loan. According to the plaintiffs, the defendant Nos. 1 and 2 are mortgaged with the plaintiffs. The plaintiffs have in paragraph 33 of their plaint stated that the plaintiffs' claim against the defendant Nos. 1 and 2 vessels is on the basis of the mortgage of defendant Nos. 1 and 2 vessels and that the plaintiffs are entitled to proceed for recovery of their claim in admiralty jurisdiction of this Court. It is further stated that the claim of the plaintiffs against the defendant No. 3 is on the basis of the loan agreements executed by the defendant No. 3. It is further stated that the claim against the defendant Nos. 4 to 7 is on the basis of deed of joint, several and personal guarantee executed by them. The plaintiffs have valued their claim at Rs. 4,16,15,421/-. It is further stated that the defendant Nos. 1 and 2 vessels are in the admiralty jurisdiction of this Court as the said vessels are within the territorial waters of India. It is further stated that the loan agreements and the guarantee agreements between the plaintiffs' and the defendant Nos. 3 to 7 were executed at Bombay, the amounts were advanced at Bombay, the loan was also repayable at Bombay. Therefore, a part of the cause of action has arisen at Bombay and the plaintiffs are entitled to file this suit in the admiralty jurisdiction of this Court as the plaintiffs claim is secured by statutory mortgage of the vessels. The plaintiffs seek an order of arrest of the vessels, it also claims money decree against the defendant No. 3 as also the defendant Nos. 4 to 7.
2. On the basis of the written statement filed by the defendants, issues have been framed and parties have agreed that following issues which are relating to the jurisdiction of this Court to entertain the suit can be tried as preliminary issues and that for that purpose, it is not necessary for this Court to record any oral evidence. The issues that the parties have agreed can be decided as preliminary issues are as under:-
"(6) Whether this Court has jurisdiction to decide the above matter?
(7) Whether this Court can entertain the above suit in view of the fact that all the defendants including the vessels are from the State of Andhra Pradesh which is outside the territorial jurisdiction of this Court?
(8) Whether this Court can entertain the above suit when the charge of mortgaged property is registered in the State of Andhra Pradesh?
(9) Whether this Court has jurisdiction to entertain the above suit in view of the fact that the vessel itself is registered in the State of Andhra Pradesh?
(10) Whether this Court can entertain the above suit in view of the establishment of Tribunals under Recovery of Debts Due to Banks and Financial Institutions Act (51 of 1993)?".
3. It is clear from the above referred issues that first objection that is raised by the defendants is that because of the provisions of the Debt Recovery Tribunal Act (for short, D.R.T. Act), this Court loses the jurisdiction to entertain this suit and second objection is that because all the defendants are from Andhra Pradesh and as the vessels are also from Andhra Pradesh, this Court will not have the jurisdiction to entertain the suit.
4. Now, taking up the first issue regarding the ouster of the admiralty jurisdiction of this Court to entertain the suit, it is submitted on behalf of the defendants that there is no dispute that the provisions of t
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