The division judge bench of Justice Indira Banerjee and Justice J.K Maheshwari of the apex court in the case of M/S NKD Maritime Limited Vs The board of trustees of the port of Mumbai & Ors held that prior anchorage was of the Vessel under sale and the rate that it attracts as a result of such prior anchorage is in the nature of encumbrances for the purposes of anchorage fees to be applied after the date of Bill of Sale and till the Vessel sells at the instance of the purchaser.
BRIEF FACTS
The factual matrix of the case is that the vessel was owned by Jalesh and had been sailing under the flags of the Bahamas. Thereafter, the admiralty suit was filed against the owners and parties interested in the Vessel for recovery of USD $2,213,320, being the charges for the bunkers along with accrued interest before the Commercial Division of the Bombay High Court. The commercial division of the Bombay High Court directed the Sherrif of Mumbai to sell the Vessel through public auction by issuing newspaper advertisements. However, the vessel was purchased by the NKD and the bill of sale was issued in which it was clearly stated that the vessel was sold was free from all the encumbrances. Further, Respondent No.1 raised bills in respect of Anchorage charges, and Respondent No.4 raised bills in respect of Light Dues Charges.
NKD filed an application in Commercial Admiralty before the Commercial Division of the High Court seeking directions on the Customs Authorities and the Mumbai Port Trust to raise revised bills, levying Light Dues Charges and/or Anchorage Charges from the date on which physical possession of the vessel was made over to NKD.
The learned counsel appearing on behalf of the appellant has contended that after referring to the terms and conditions of sale of the vessels it has clearly mentioned that the vessel has been sold free from all the encumbrances. The learned counsel further relied upon Section 8 of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017. It was further argued that the vessel was sold on “as is, where is” basis, free from all encumbrances, any liability in respect of Anchorage Charges or Light Dues Charges that accrued prior to the date of sale would have to be met by the erstwhile owners of the Vessel and/or met by the Prothonotary and Senior Master of the High Court from out of the sale proceeds of the Vessel lying with him.
The learned counsel appearing on behalf of the respondent contended that no pre-sale liabilities have been foisted upon the NKD. It was further submitted that all the expenses in respect of the vessel are to be borne by the purchaser from the date of sanction of the sale by the high court and the NKD had only been charged anchorage charges from the date of sanction of the sale till the date of removal of the vessel from the anchorage.
COURT’S OBSERVATION
The hon’ble court held that the Division Bench rightly held that it is far-fetched to suggest that prior anchorage was of the Vessel under sale and the rate that it attracts as a result of such prior anchorage are in the nature of encumbrances for the purposes of anchorage fees to be applied after the date of Bill of Sale and till the Vessel sells at the instance of the purchaser. As held by the Division Bench, NKD purchased the Vessel on ‘as is, where is’ basis free from encumbrances in the instant case, anchorage charges have been levied from the date of the sale. The rates were payable on the basis of the number of days for which the
Vessel was docked. NKD, in its cross objection, contended that anchorage charges fall within the expression ‘port dues’ under Section 50-B of the Port Trusts Act. Under Section 50-B, when a Vessel enters a port but does not discharge or take in any cargo or passengers, she is charged with port dues at a rate to be determined by the Authority, which, in any event, should not exceed half the rate with which she otherwise would be chargeable. It is submitted that the Port Trust could not have charged more than half the rate under the Scale of Rates for anchorage charges.
The hon’ble court dismissed the appeal and stated that the division bench rightly allowed the appeal and set aside the order of the single bench.
CASE NAME- M/S NKD Maritime Limited Vs The board of trustees
CITATION- CIVIL APPEAL NO. OF 2022
CORUM- Justice Indira Banerjee and Justice J.K Maheshwari
DATED- 22.09.22
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