Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1992 Supreme(SC) 193

SUPREME COURT OF INDIA
T.K. THOMMEN AND R.M. SAHAI, JJ.*
M.V. Elisabeth and others, Appellants
Versus
Harwan Investment & Trading Pvt. Ltd., Hanoekar House, Swatontapeth, Vasco-De-Gama, Goa, Respondents.
Civil Appeal No. 896 of 1992 (arising out of S.L.P. (C) No. 10542 of 1985) with I.C. No. 27 of 1987
Decided on 26-2-1992.
WITH
M.V. Elisabeth and another, Petitioners
Versus
M/s. Harwan Investment & Trading Co. and another, Respondents.
ANDHRA PRADESH HIGH COURT AND MADRAS HIGH COURT VESTED WITH ADMIRALTY JURISDICTION

Advocates:
AMARIK VACHHER, ARVIND VERMA, Dhruv Mehta, G.L.SANGHI, J.M.Rao, RAJU RAMACHANDRAN, S.K.MEHTA

Headnote:
Constitution of India,1950 - Articles 225, 372 and 215 - States Re-organisation Act, 1956 – Sections 52 and 30 - Government of India Act, 1915 - Section 106 - Government of India Act, 1935 - Section 223 - Indian Independence Act - Section 18 - Colonial Courts of Admiralty Act, 1890 - Section 2(2) - Administration of Justice Act, 1928 - SC of Judicature (Consolidation) Act, 1925 - Merchant Shipping Act, 1958 - Section 3(15) - Courts of Admiralty (India) Act, 1891 - Andhra State Act, 1953 - States Re-organisation Act, 1956 - Documents for the goods shipped - Preliminary objection - Tort or a breach of obligation - Order allowed Civil Appeal No. filed by 3rd defendant against order of High Court dismissing its petition for condonation of delay in presenting O.S.A.S.R. No. in High Court – Court held appeal filed by 3rd defendant had to be heard on merits particularly on question of law regarding liability of the agent - Alleged to have arisen when vessel was lying in Port when vessel left Port without issuing bills of lading or other documents for goods shipped as required by plaintiff-shipper and, subsequently when goods were discharged and handed over to consignee at port of destination - United Arab Emirates during period notwithstanding the direction of the plaintiff not to deliver goods by reason of buyers failure to pay agreed price – Held, High Courts in India being courts of unlimited jurisdiction - Repository of all judicial power under Constitution except what is excluded are competent to issue directions for arrest of foreign ship in exercise of statutory jurisdiction or even otherwise to effectuate exercise of jurisdiction - Jurisdiction to entertain a suit on tort or contract in relation to cargo going out of country in a ship is found to exist under 1890 Act High Court of Andhra Pradesh was competent to direct arrest of foreign ship when it appeared in Indian waters - High Court rightly negatived objection to issue direction to arrest ship - Necessity to add few words to opinion of brother without narrating facts or extracting sections as they have been dealt in detail by him, both to impress upon urgency of enacting upto-date law - Admiralty and to express agreement - the reasons stated by us in our separate but concurring judgments – Court dismiss appeal arising from SLP (C) No. - Transferred Case No. is returned to Andhra Pradesh High Court to be heard and disposed – Ordered Accordingly

Judgement Key Points

Key Points: - The High Courts in India possess admiralty jurisdiction as a continuation of colonial framework, and this jurisdiction is not strictly limited to the Admiralty Court Act of 1861 but extended by the Colonial Courts of Admiralty Act, 1890 and related statutes, as applicable to India (discussion of Act lineage and Art. 225, 372, 215) (!) (!) (!) (!) . - The question before the Court was whether the Andhra Pradesh High Court could maintain an action in rem against a foreign vessel for outward cargo, and the Court held that such jurisdiction exists and that arrest of the foreign ship in Indian waters is permissible to satisfy maritime claims arising from carriage of goods (outward cargo) under the 1890 Act and subsequent Indian statutes (!) (!) (!) (!) (!) . - The Court emphasizes that admiralty jurisdiction extends to all ships within Indian waters and to all claims wherever arising, including those related to carriage of goods by sea, not limited to inward cargo, and is not frozen to 1861 Act restrictions (discussion of 1890 Act, 1920-1981 expansions) (!) (!) (!) (!) (!) (!) (!) (!) (!) . - The case concludes with dismissal of the SLP and restoration of transferred case to be heard on merits in the Andhra Pradesh High Court, reinforcing continuation of admiralty jurisdiction and arrest power within Indian waters [103] (!) . - The judgment discusses international law context and the principle that arrest of ships is a tool to secure jurisdiction and security for claims, not seizure in execution, and that Indian courts may rely on international conventions as persuasive but not strictly binding statutory requirements in absence of specific Indian legislation (!) (!) (!) (!) (!) .

How to determine whether Indian High Courts have admiralty jurisdiction over foreign ships in respect of outward cargo?

What is the scope of admiralty jurisdiction of Indian High Courts under the Colonial Courts of Admiralty Act, 1890 as applied to India pre- and post-1950?

What are the circumstances under which a foreign ship can be arrested in Indian waters to enforce maritime claims arising from carriage of goods by sea?

JUDGMENT

THOMMEN, J.:—We grant leave in SLP(C) No. 10542 of 1985 which arises from the order of the Division Bench of the Andhra Pradesh High Court affirming the finding of the learned single Judge that the respondents suit against the appellants was maintainable and that the High Court was competent to try the same in exercise of its admiralty jurisdiction. The Transferred Case No. 27 of 1987 the appeal filed by defendants 1 and 2 against the judgment of the learned single Judge of the Andhra Pradesh High Court decreeing the suit. The case stood transferred to this Court pursuant to this Courts order dated 25-11-1986.

2. By our Order dated August 28,1991 we allowed Civil Appeal No. 3392 of 1991 filed by the 3rd defendant against the order of the High Court dismissing its petition for condonation of delay in presenting O.S.A.S.R. No. 39789 of 1988 in the High Court. We held that the appeal filed by the 3rd defendant had to be heard on the merits particularly on the question of law regarding the liability of the agent.

3. We shall now deal with the appeal arising from SLP(C) No. 10542 of 1985 where the only question is whether the learned Judges of the High Court have rightly held that the respondents suit was maintainable in respect of a cause of action alleged to have arisen on or after 1-2-1984 when the vessel, M. V. Elisabeth, was lying in the Port of Marmagao; on 8-2-1984 when the vessel left the Port without issuing bills of lading or other documents for the goods shipped as required by the plaintiff-shipper; and, subsequently when the goods were discharged and handed over to the consignee at the port of destination at Ras-Al-Khaimah, United Arab Emirates during the period from 13-2-84 to 19-2-84, notwithstanding the direction of the plaintiff not to deliver the goods by reason of the buyers failure to pay the agreed price. The 1st defendant, M. V. Elisabeth, is a vessel of foreign nationality and it is owned by the 2nd defendant which is a foreign company carrying on business in Greece, and the 3rd defendant is stated to be the local agent of the 2nd defendant at Goa.

4. The plaintiff is a private limited company having the registered office in Goa. The case of the plaintiff is that the defendants acted in "breach of duty" by leaving the port of Marmagao on 8-2-84 and delivering the goods to the consignee in breach of the plaintiffs direction to the contrary, thereby committing conversion of the goods entrusted with them. The suit was instituted in Andhra Pradesh High Court invoking its admiralty jurisdiction by means of an action in rem. The vessel was arrested when it entered the Port of Vishakhapatnam on 13-4-84 after returning from foreign ports. On the owner of the vessel entering appearance and providing security by furnishing a Bank Guarantee under protest in the sum of Rs. 14,25,000/-, the vessel was released from detention.

5. The defendants moved an application in the High Court. raising a preliminary objection to the jurisdiction of that Court. They contended that the plaintiffs suit against a foreign ship owned by a foreign company not having a place of residence or business in India was not liable to be proceeded against on the admiralty side of the High Court by an action in rem in respect of a cause of action alleged to have arisen by reason of a tort or a breach of obligation arising from the carriage of goods from a port in India to a foreign port. They did not, however, contend that the alleged cause of action not having arisen in the Andhra Pradesh, the suit ought not to have been filed in Andhra Pradesh. Their sole contention on the question of jurisdiction was as regards the lack of admiralty jurisdiction of any Court in Andhra Pradesh or any other State in India to proceed in rem against the ship on the alleged cause of action concerning carriage of goods from an Indian port to a foreign port. The preliminary objection was overruled by the learned single Judge and his order was confirmed by the learned

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1992 Supreme(SC) 193

How to determine whether Indian High Courts have admiralty jurisdiction over foreign ships in respect of outward cargo?

What is the scope of admiralty jurisdiction of Indian High Courts under the Colonial Courts of Admiralty Act, 1890 as applied to India pre- and post-1950?

What are the circumstances under which a foreign ship can be arrested in Indian waters to enforce maritime claims arising from carriage of goods by sea?

Cases Referred (5)