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2000 Supreme(Cal) 523
High Court Of Calcutta
Vinod Kumar Gupta, Arunabha Barua
BOARD OF TRUSTEES - Appellant
Versus
SWADESH KUMAR KHATUA - Respondent
Admiralty Suit 16 Of 1984
Decided On : 09/29/2000
Important Points
Subject
Maritime Law - PRIORITY OF CLAIMS
Headnote
MARITIME LAW - PRIORITY OF CLAIMS - CREW WAGES - PORT TRUST CHARGES - MORTGAGEE'S CLAIM - MARITIME LIEN - SECTION 139, 146, MERCHANT SHIPPING ACT, 1958 - SECTION 64(2), MAJOR PORT TRUSTS ACT, 1963 - SECTION 52, MERCHANT SHIPPING ACT, 1958.
Fact of the Case:
Two Admiralty suits were filed by crew members of two vessels, MV Charisma-N and MV Alexandra-N, claiming unpaid wages. The vessels were sold, and the sale proceeds were deposited with the Calcutta Port Trust (CPT). The Shipping Development Fund Committee (SDFC), the predecessor-in-interest of ICICI, and the Union of India filed suits for enforcement of mortgages created in their favor in respect of the vessels. CPT applied to intervene in the suits and claimed a lien over the vessels for port charges, berth hire, and deck dues under section 64(2) of the Major Port Trusts Act, 1963. The issue before the court was to determine the ranking of priorities between the crew members, ICICI, and CPT.
Finding of the Court:
The court held that the crew members had a priority over all other claims because their claim for unpaid wages was based on a maritime lien. The court also held that the lien of CPT under section 64(2) of the Major Port Trusts Act was paramount and could not be superseded by the claim of any other party. However, the court held that the claim of ICICI under section 52 of the Merchant Shipping Act, 1958, could not supersede the claim of CPT.
Issues: 1. Whether the crew members had a priority over all other claims for unpaid wages based on a maritime lien? 2. Whether the lien of CPT under section 64(2) of the Major Port Trusts Act was paramount and could not be superseded by the claim of any other party? 3. Whether the claim of ICICI under section 52 of the Merchant Shipping Act, 1958, could supersede the claim of CPT?
Ratio Decidendi: 1. The court held that the crew members had a priority over all other claims for unpaid wages based on a maritime lien because: - A seaman's right to wages and provisions is a statutory and universal maritime law right that cannot be forfeited or abandoned. - Section 139 of the Merchant Shipping Act, 1958, recognizes the old Maritime Law that a seaman or any other Member of Crew has a lien which cannot be forfeited. - The right of a seaman to recover wages does not depend upon the ditrain or detention of the vehicle and the Crew would have the right to unpaid wages in preference to the rights of all others. 2. The court held that the lien of CPT under section 64(2) of the Major Port Trusts Act was paramount and could not be superseded by the claim of any other party because: - The lien created under section 64(2) of the Major Port Trusts Act is totally paramount and cannot be dispensed with, compromised, or superseded by the claim of any other party. - The judgments reported in AIR 1988 Bombay 329 and AIR 1998 SC 1828 clearly support the view that the lien of CPT is paramount in the light of the mandatory legal requirement as contemplated under section 64(2) of the Major Port Trusts Act. 3. The court held that the claim of ICICI under section 52 of the Merchant Shipping Act, 1958, could not supersede the claim of CPT because: - Section 52 of the Merchant Shipping Act, 1958, by itself cannot supersede or override the superior claim of CPT. - Even though ICICI has a claim over the sale proceeds of the two ships in question under section 52 of the 1958 Act, the claim of CPT will rank prior to that of ICICI.
Final Decision: The appeals were dismissed, and the judgment of the learned single Judge was upheld. The court directed that the claim of the three parties involved in the appeal shall rank priority wise as follows: (i) crew members; (ii) CPT; (iii) ICICI.
( 1 ) THIS Appeal is directed against Judgment dated 13th February, 1998 passed by a learned single Judge of this Court in two Admiralty Suits, being Admiralty Suit No. 15 of 1994 (Anil Kumar Sen and Others v. Owners and Parties interested in the Vessel MV-Charisma-N), and Admiralty Suit No. 16 of 1994 (Swadesh Kumar Khatua and Others v. Owners and parties interested in the Vessel M. V. Alexandra-N ).
( 2 ) THE brief facts leading to the filing of this Appeal are as herein below stated :nilhaat Shipping Company Limited at the material time was the owner of the Vessels namely M. V. Charisma-N and M. V. Alexandra-N. Nilhaat Shipping Company was wound up by an order of the Company Court passed in this Court's Company petition No. 51 of 1995 and Official Liquidator had stood appointed who was directed to take possession of the assets of the said dissolved Company. M. V. Alexandra-N had in the meanwhile arrived at Haldia Dock Complex of Calcutta Port Trust on 18th October 1982 and was incurring Port charges, berth hire and deck dues etc. till the said Vessel was sold and the possession thereof was handed over to its Purchaser in terms of the Order passed by this Court. After the said Vessel M. V. Alexandra had arrived in Haldia Port in October 82, Shipping Development Fund Committee, the Predecessor-in-interest of ICICI and Union of India filed a Suit in this Court, being Admiralty Suit No. 1 of 1983 for enforcement of the mortgage created in favour of the said Shipping D. F. Committee in respect of the said Vessal. In or about December 1983 Calcutta Port Trust (CPT for short) applied in the said Suit for leave to intervene and to proceed against the said Vessel in terms of section 64 (2) of the Major Port Trusts Act, 1963 (1963 Act for short) and to deposit the surplus after adjustment of its calim against the sale proceeds of the Ship with the Registrar, Original Side of this Court. In October 1985 the said Vassel was sold to the highest bidder for Rs. 1,46,00,000/- in favour of one Amar Steel Industries and the said sale was confirmed by order of this Court. The sale proceeds of the said Vessel were-directed to be deposited with the CPT. The Crew Members made an application for some ad-hoc payment and by an order of this Court, CPT was directed to pay on ad-hoc basis an amount of Rs. 5,00,000/- to the Crew Members from out of the said sale proceeds. This order was however passed without prejudice to the rights and contentions of the parties, The Vessel was ultimately handed over to the purchaser by CPT. In or about 24th January, 1986 CPT applied to this Court inter alia for a direction that it was entitled to be paid the hire charges and berth hire charges up to 11th December, 1985 as also reserve moorings charges at the prescribed rates from 12th December 85, claiming priority over anyone else, by way of its first charge over the said Ship purportedly in terms of section 64 (1) of the 1993 Act.
( 3 ) THE other Vessel namely "mv-Charisma-N" arrived at Haldia Dock Complex of CPT on 15th October, 1982. The members of the Crew filed a Suit in this Court claiming their unpaid wages. In the said Suit also CPT applied for the sale of the said Vessel in exercise of its similar power under section 64 (2) of 1963 Act. The Shipping Development Committee also had filed a Suit in Bombay High Court for enforcement of its mortgage right and for sale of the said Vessel M. V. Charisma-N. In the said Suit from time to time various orders were passed in Bombay High Court. Finally the said Vessel was sold on 12th December 1984 by order of Bombay High Court for an amount of Rs. 1. 17 Crores and the Vessel was taken delivery of by its purchaser on 25th December, 1986. Whereas in respect of the Vessel M. V. Alexandra-N, CPT claims Rs. 99,97,852. 31, in respect of the Vessel M. V. Charissma-N, CPT's claim is to the tune of Rs. 1,25,63,203. 23.
( 4 ) THE only point to be determined in those two Appeals exactly is the ranking of prio
