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High Court Of Calcutta
A. N. RAY, BARIN GHOSH
LEE YOUNG SANG - Appellant
Versus
BOARD OF TRUSTEES FOR PORT OF CALCUTTA - Respondent
Admiralty Suit 12 Of 1997
Decided On : 07/08/1997
ARREST BEFORE JUDGMENT - [SECTION 94 OF THE CODE OF CIVIL PROCEDURE, 1908] - [ORDER XXXVIII RULE 1 OF THE CODE OF CIVIL PROCEDURE, 1908] - [SECTION 14 OF THE INDIAN PORTS ACT, 1908] - [PRINCIPLES] - Held, a warrant of arrest under Order XXXVIII Rule 1 of the Code of Civil Procedure, 1908 should not be issued unless the court is satisfied that the suit is instituted bona fide and is reasonably likely to produce some decree ultimately; that the defendant is about to leave India and the execution of the decree might be delayed or obstructed by reason of the departure itself; and that the defendant has no property in India against which execution can be levied.
Fact of the Case:
Two foreign nationals, the master and the managing director of a shipping company, were arrested before judgment in a suit filed by the Port of Calcutta for damages caused by the sinking of a ship. The plaintiffs alleged that the sinking was caused by the negligence of the crew and that the defendants were liable to compensate the Port Authorities for the loss. The defendants denied negligence and claimed that the sinking was caused by an act of God. The plaintiffs also claimed that the defendants were liable to furnish security for the salvage of the ship under section 14 of the Indian Ports Act, 1908.
Finding of the Court:
The court held that the plaintiffs had not made out a prima facie case of negligence against the defendants. The court also held that the managing director was not liable to furnish security for the salvage of the ship because he was not the owner of the vessel. The court further held that the master of the vessel was not liable to furnish security for the salvage of the ship because he did not have the means to do so. The court concluded that the arrest of the defendants was not justified and ordered their release.
Issues: 1. Whether the plaintiffs had made out a prima facie case of negligence against the defendants? 2. Whether the managing director was liable to furnish security for the salvage of the ship? 3. Whether the master of the vessel was liable to furnish security for the salvage of the ship? 4. Whether the arrest of the defendants was justified?
Ratio Decidendi: 1. In order to issue a warrant of arrest under Order XXXVIII Rule 1 of the Code of Civil Procedure, 1908, the court must be satisfied that the suit is instituted bona fide and is reasonably likely to produce some decree ultimately. 2. The managing director of a shipping company is not liable to furnish security for the salvage of a ship under section 14 of the Indian Ports Act, 1908, unless he is the owner of the vessel. 3. The master of a vessel is not liable to furnish security for the salvage of a ship under section 14 of the Indian Ports Act, 1908, unless he has the means to do so. 4. The arrest of a defendant before judgment is not justified unless the court is satisfied that the defendant is about to leave India and the execution of the decree might be delayed or obstructed by reason of the departure itself.
Final Decision: The court allowed the appeals and set aside the orders of the lower court. The defendants were ordered to be released.
( 2 ) THE appeal has been heard out on the most expeditious basis because by those two orders His Lordship directed to the effect that the two appellants should not leave Calcutta unless security to the extent of Rs. 50 lakh is furnished in the case of such of those two persons.
( 3 ) THE only provision on the basis of which such an order of semi-arrest can be supported is contained in Order XXXVIII Rule 1 of the Code of Civil Procedure which deals with an arrest before judgment.
( 4 ) THAT rule is preceded in the Code by section 94 which permit the making of such an arrest.
( 5 ) BOTH the appellants who have been arrested are foreign nationals. The authority which has obtained the arrest of these two persons is the Port of Calcutta, more accurately the Trustees for the Port of Calcutta operating under, inter alia, the Major Port Trusts Act of 1963.
( 6 ) ON the 30th of June 1997 His Lordship gave time for filing of affidavits. Three weeks were granted for filing the affidavit-in-opposition. If the ad-interim order remains, two foreign nationals would, against their will, be confined to the limits of the City of Calcutta. We thus heard out the appeal so as either to permit the detention or to cancel it if that did not appear to be just and in accordance with law.
( 7 ) SOME facts have to be set out at this stage. A ship named "green OPAL" under a bare boat charter of the charterers, who are also defendants in the suit, suffered the misfortune of sinking in a navigational channel of the Calcutta Port. This occurred on the 19th of June 1997.
( 8 ) THE sunken ship is still there. We are told by the Port Authorities that the top of the ship can still now be seen during low tide. The Port Authorities complained that the blockage of their navigational channel is causing them a daily loss of Rs. 1 crore.
( 9 ) THEY further alleged that the ship sank due to negligence of the crew including the master of the vessel. The master is the first appellant, also a defendant in the suit, is the Managing Director of the Charterers, who are Dooyang Line Co. Ltd.
( 10 ) THE owner of the ship is a certain Baron Shipping, and the ship is registered in Panama. The cargo carried by the ship, we are told, included certain valuable steel coils which were being imported by TISCO, it is sold that the value of these coils is between Rs. 5 and 6 crore.
( 11 ) IT is said by plaintiff supporting the orders under appeal that the orders were rightly passed against the Managing Director of the Charterer and the master of the vessel; they say that if these orders for security were not passed the decree in the suit as and when passed would be unreasonably obstructed or delayed in execution.
( 12 ) THEIR case is that due to the negligence of, amongst others, the master of the vessel the event has happened and the master and the other defendants are liable to compensate the Port Authorities for the loss which they are suffering because of the negligence of the concerned defendants. There is another very important head of claim in the suit. It is not directly concerned with negligence but is concerned with salvage. Under section 14 of the Indian Ports Act, the Conservator of a port is entitled to serve a notice upon the owner of a sunken ship calling upon such owner to salvage of destroy the ship and during the process of such salvage or destruction as the case might be, to furnish adequate security therefor to the Conservator. It is submitted that in the present case the Trustees for the Port of Calcutta are the Conservator. Further according to them they have authorised the Director of the Marine Department to serve a notice on their behalf and this notice was served on the 20th of June 1997, i. e. the day after the sinking.
( 13 ) IN this notice salvage is directed to be
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