2007 Supreme(Bom) 1144

Bombay High Court
S. C. DHARMADHIKARI
NEW ERA SHIPPING LTD -Appeallant
Versus
M.V.P.EXPRESS -RESPONDENTS
ADMIRALTY SUIT 32 Of 2007
Decided On: 08/21/2007

Headnote:

The court held that the first defendant vessel was not a ship within the meaning of the Admiralty Court Act, 1861, and therefore, the order of arrest dated 12th July 2007 was vacated. The court also allowed the intervention application and made absolute the notice of motion to vacate the order of arrest.

Fact of the Case:

The plaintiffs, a company engaged in the business of owning barges and ships, filed a suit in the Admiralty and Vice Admiralty jurisdiction of the court for damages against the first and second defendants on account of collision of the first defendant vessel with that of the vessel chartered by the plaintiffs. The first defendant vessel was a foreign flag ship presently lying at Port Alang, Gujarat. The second defendants were the representatives of the owners of the vessel. The third defendants were Gujarat Maritime Board, a Statutory authority in the State of Gujarat, established, inter alia, to supervise and control ship breaking activities in that State. The plaintiffs contended that the vessel is currently under the jurisdiction of the third defendant. The suit was filed seeking damages against the first and second defendants on account of collision of first defendant vessel with that of the vessel by name m. v. KINSHIP modesty. This vessel viz., KINSHIP MODESTY was chartered by the plaintiffs. The vessel of plaintiffs was in Gujarat for charterers operations. She had completed discharge of her cargo at Port Bhavnagar and was waiting at the anchorage outside Bhavnagar port for her next cargo assignment. Her engines were off and her anchor was dropped as required for the vessel that would be waiting for her position to receive cargo. At about 05.15 hrs. on 6th July 2007, the first defendant vessel came in physical contact with the plaintiff's vessel. The first defendant vessel was on her journey to Alang and was on duty to look out for the vessels that are in anchor. Whilst the first defendant vessel was making her approach, the plaintiff's Master apprehended that first defendant vessel was moving too close to the plaintiff's vessel. He and the Chief Officer called on the first defendant vessel on VHF Channel No. 16 and 17 and tried to get his attention by flashing lights. This was intended to warn the Master and crew of the first defendant vessel of their manoeuvre to avoid plaintiff's vessel. Notwithstanding the same, the first defendant crew paid no heed to the warning signals and made unfortunate contact with plaintiff's vessel arising out of their negligent and reckless navigation. As a result of this contact, plaintiff's vessel suffered damage and investigations revealed the extent of the same. The same is disclosed in a statement, a copy of which is annexed as Annexure "e" to the plaint. Plaintiffs' vessel was, therefore, required to be repaired and the cost estimated for the same was rs. 25 lakhs. Plaintiff's vessel will lose its six days before she enters her dry dock and, thereafter, it is likely that the vessel will undertake repairs for 14 days in dry-dock after which only she will be able to undertake any commercial employment. Consequently, she will not be entitled to charter hire assignments for this period. The vessel was fixed for charter at rs. 88,000/- per day and it is expected to lose a sum of Rs. 17,60,000/- towards loss of income and that is how the claim for damages has been made. The above mentioned prayers and reliefs are based upon these averments in the plaint. An application for arrest of first defendant vessel was made and this Court passed an order of arrest of first defendant vessel on 12th July 2007. The notice of motion is on behalf of applicants/proposed defendant No. 4 praying for vacation of the order of arrest dated 12th July 2007, either on the basis of erroneous averments in the plaint or that this Court lacks jurisdiction to pass the same. Further relief is that the plaintiff be directed to compensate the applicant-proposed defendant No. 4 @ Rs. 75,000/- per day with effect from 12th July 2007 until the date the demolition activity at Floor No. 24-A (55) in respect of first defendant vessel can occur or commence.

Finding of the Court:

The court found that the first defendant vessel was not a ship within the meaning of the Admiralty Court Act, 1861, and therefore, the order of arrest dated 12th July 2007 was vacated. The court also allowed the intervention application and made absolute the notice of motion to vacate the order of arrest.

Issues: Whether the first defendant vessel was a ship within the meaning of the Admiralty Court Act, 1861.

Ratio Decidendi: The court held that the first defendant vessel was not a ship within the meaning of the Admiralty Court Act, 1861, because it was not used in navigation and was not capable of being legally put to use for navigation. The court also held that the order of arrest was vacated because the plaintiffs did not have a maritime lien on the vessel.

Final Decision: The court vacated the order of arrest dated 12th July 2007 and allowed the intervention application and made absolute the notice of motion to vacate the order of arrest.