The central legal point established in the judgment is that poundage is payable only when there is actual seizure or attachment of properties and the amount is realized, emphasizing the need for the goods to be turned into money for poundage to be claimed.

1. These two suits are totally unrelated. They have been tagged together and heard today is because a very important issue that arises time and again in admiralty suits has to be decided. The issue relates to payment of poundage to the Sheriff of Mumbai under the table of fees which forms part of the Bombay High Court (Original Side) Rules.

2. The issues can be split as under:

(i) In a case where, before the Sheriff of Mumbai executes the warrant of arrest issued by the Admiralty Registrar or before he serves the order of arrest passed by this Court in cases where warrant of arrest has been dispensed with, the parties settle the matter, whether the Sheriff will be entitled to any poundage?

(ii) In a case where, order of arrest has been served or warrant of arrest has been executed/levied against the vessel, parties have entered into an Agreement to refer the disputes either to arbitration or submit to the jurisdiction of a Court other than this Court, may be in a different country and have exchanged letters of undertaking to pay such amount as awarded by the Arbitrator or the Court, whether any poundage is payable?

COMMERCIAL SUIT NO.98 OF 2015

3. This suit relates to a transaction for sale and purchase of defendant vessel, wherein plaintiff (purchaser) advanced an amount of USD 4,92,602/- to owner of defendant vessel, viz., defendant no.2 (the seller) towards purchase of defendant vessel. As defendant no.2 failed to honour its obligations under the suit contract, plaintiff was constrained to initiate these proceedings seeking to recover refund of principal sum of USD 4,92,602/- and further sum of USD 1,27,389/- towards interest, cost and damages. An application seeking arrest of defendant no.1 vessel was moved on 4th August, 2015 and the Court was pleased to pass an order of arrest of defendant no.1 vessel at around 3.30 p.m. By the time the authenticated copy of the order of arrest was made available to plaintiff's advocates, plaintiff's advocates received instructions stating that the disputes have been sorted out between plaintiff and defendant no.2, who was the owner of defendant no.1 vessel, and therefore, there was no need to arrest defendant no.1 vessel and if the order of arrest has already been passed, then not to execute the order. Consequently, plaintiff did not serve the order of arrest upon any of the authorities, viz., Port or Customs and did not even request the Sheriff of Mumbai to execute it. The order of arrest, therefore, never came to be served upon either the vessel or any of the authorities and Sheriff did not do anything. Therefore, no arrest or seizure or detention or attachment of first defendant vessel was executed/levied. It is the case of Shri Shenoy, counsel for plaintiff, that no poundage, therefore, is payable.

4. Shri Shenoy submitted that this Court in Malpani Brothers Vs. Ramjidas Shyamlal Saboo and Anr. (1987 MH.L.J. 223)has held that poundage can be levied only where there is actual attachment or seizure and plaintiff is not liable to pay any poundage to the Sheriff when there is no attachment or seizure or arrest even if an order of arrest has been passed by the Court. Shri Shenoy added that plaintiff will not be liable to pay any poundage to the Sheriff even if plaintiff recovers any amount from defendant as such amount has been received without the actual arrest or attachment of the property. Shri Shenoy submitted that it is only where actual seizure is effected or where actual attachment is levied or where there is actual arrest of the vessel and thereafter, if any amount is realised, that the Sheriff, under the existing Rules, can demand poundage.

5. In response, Ms. Kantharia, Learned Government Pleader, in fairness submitted that she cannot, as an Officer of this Court, disagree with the submissions made by Shri Shenoy. Ms. Kantharia stated that the judgment of this Court in Malpani Brothers (Supra) is quite clear on this aspect. Therefore, my answer to issue no.(i) as raised abov