Gujarat Ambuja Cement Ltd. vs Sealand Shipping And Exports ...
2003 Latest Caselaw 682 Bom

JUDGMENT

D.Y. Chandrachud, J.

1. An order of a Learned Single Judge dated 30th April 2003 declining to stay under Section 10 of the Code of Civil Procedure, 1908, a suit instituted in the Admiralty jurisdiction of this Court, has been called into question. The first respondent who is the original Plaintiff in the suit instituted in this Court, claims to have been, at all material times, the owner of a sea going vessel by the name of m.v. Concord. By a Charter-party agreement dated 7th August 2001, the first respondent is stated to have let the vessel on a time Charter to a Company by the name of Kinship Services (India) Pvt. Ltd., Kochi. According to the Appellant, it entered into a contract of affreightment on 26th July 2001 with Kinship Services (India) Pvt. Ltd. The vessel arrived at Port Muldwarka for loading a consignment of bagged cement on 24th September 2001, to be discharged partly at the Ports of Kochi and Vizhinjam. Bills of Lading dated 29th September 2001 are stated to have been issued in respect of certain quantities of bagged cement. The vessel, according to the first respondent, capsized and sank on 1st October 2001 shortly after the crew on board abandoned the vessel apprehending danger. On 1st October 2001, the Appellant lodged its claim with Kinship Services (India) Pvt. Ltd. and on 5th October 2001 furnished particulars of its claim of Rs. 1,11,60,593.48. On 27th September 2002, the Appellant instituted a suit in the Court of the Civil Judge, Senior Division, Veraval, in the District of Junagad in Gujarat (Special Civil Suit No. 172 of 2002) for the recovery of an amount of Rs. 1,11,60, 593.48 and interest at 18% p.a. from 1st October 2001.

2. On 18th October 2002, the first respondent instituted Admiralty Suit 33 of 2002 before this Court in its Admiralty Jurisdiction. The basis and foundation of the suit instituted by the first respondent is that the loss of the vessel and cargo on board the vessel did not result from any fault or privity on the part of the first respondent. According to the first respondent, the vessel was in a seaworthy condition and had the requisite statutory certificates. In instituting the suit before this Court in its Admiralty Jurisdiction, the first respondent seeks to limit its liability under Part XA of the Merchant Shipping Act, 1958, to the extent set out in Section 352B of the Act. The jurisdiction of the Court has been invoked on the basis that the vessel was registered at the port of Bombay. The reliefs which have been prayed for in the suit are to the following effect:

"a) For a decree under Section 352-C of the Merchant Shipping Act, 1958, limiting the Plaintiffs liability to Rs. 12,34,290.75 for the claim for loss of the cargo and all the claims (if any) arising from the sinking of the said vessel on 1st October 2001;

b) That for the above purpose, this Hon'ble Court be pleased to determine the amount of the Limitation Fund to be set up in accordance with Part X-A of the Merchant Shipping Act, 1958;

c) That this Hon'ble Court be pleased to determine the amount and the form of security to be furnished by the Plaintiffs;

d) That on constitution of the said Limitation Fund, this Hon'ble Court be pleased to decide and determine the claims of other possible Claimants that may be made upon the Plaintiffs and thereafter disburse the amount amongst the Claimants;

e) That all suits filed against the Plaintiffs in other Courts in respect of claims arising out of or in relation to the suit upon constitution of the Limitation Fund be ordered to be stayed."

3. On 4th March 2003, the 1st Respondent filed its written statement in the suit instituted by the Appellant at Veraval. On 7th March 2003, the Appellant took out a Notice of Motion under Section 10 of the Code of Civil Procedure, 1908 for stay of the suit instituted in this Court by the 1st Respondent. Issues have been framed on 16th April 2003 in the suit filed in this Court. The Notice of Motion was heard and by an order dated 30th April 2003, a Learned Single Judge, F.I. Rebello, J. dismissed the motion for stay.

4. In assailing the order of the learned Single Judge, Counsel appearing on behalf of the Appellant urges that the first respondent has filed its written statement on 17th March 2003 in the suit instituted by the Appellant before the Civil Judge, Senior Division, Veraval. In paragraph 17 of the Written Statement filed in the Court at Veraval, the First. Respondent has submitted that it is entitled to limit its liability under Part XA of the Merchant Shipping Act, 1958 and in paragraph 18, there is a reference to the suit which has been instituted before this Court by the first respondent, being Admiralty Suit No. 33 of 2002. Counsel for the Appellant urges that there has been no loss of life arising out of the sinking of the vessel, and since the vessel was carrying only the cargo of the Appellant, the sole claim against the first respondent in respect of the incident is the claim which has been lodged by the Appellant, which forms the subject matter of the suit pending before the Court at Veraval. The submission urged is that since the first respondent has in its written statement before the Veraval Court asserted its right to limit its liability under Part XA of the Merchant Shipping Act, 1958, it is that Court which would have jurisdiction to decide that question. Moreover, it was urged that while in the suit instituted before this Court in its Admiralty Jurisdiction, the second defendant is described as "all persons having claim against the Plaintiff by reason of sinking of m.v. Concord off port of Dabhol on 1st October 2001", there is no other person who has a claim save and except the Appellant. Hence, the submission is that all ingredients for the grant of a stay under Section 10 of the Code of Civil Procedure, 1908 have been duly established.

5. Section 10 of the Code of Civil Procedure, 1908 postulates the following requirements:

i) The matter in issue must be directly and substantially in issue in a previously instituted suit;

ii) The previously instituted suit must be between the same parties or between parties under whom they or any of them claim litigating under the same title;

iii) Such suit must be pending in the same or any other Court having jurisdiction to grant the relief claimed.

6. Now, it is well settled that Section 10 "does not contemplate an identity of issues between the two suits, nor does it require that the matter in issue in the two suits should be entirely the same or identical....the identity required is a substantial identity." (Chagla, C.J. speaking for the Division Bench of this Court consisting of the Learned Chief Justice and Gajendragadkar, J. as the Learned Chief Justice then was in J. H. Iron Mart v. Tulsiram, ). The suit instituted by the first respondent in the Admiralty Jurisdiction of this Court is for the limitation of its liability and for the constitution of a Limitation Fund in accordance with the provisions of Part XA of the Merchant Shipping Act, 1958.

7. The basis of an action for limitation of liability is succinctly act out in Halsbury thus:

"In a claim for limitation of liability, the claimant, normally the owner of a ship, seeks a decree by which his liability in respect of claims arising out of an occurrence is limited to an amount based upon the tonnage of the ship. A decree of limitation will be denied if it is proved that the loss resulted from the claimant's personal act or omission, committed with the intent to cause such loss, or recklessly and with knowledge that such loss would probably result." [Halsbury's Laws of England, Fourth Edition, Vol. 1(1), Para 363].

In England where any shipowner or other person seeks to limit the amount of his liability in connection with a ship or other property under the Merchant Shipping Act) 1995, 'he may commence a limitation claim in the High Court. Every such limitation claim is taken by the admiralty Court. [Halsburys Vol. 1(1) Para 364].

8. In India, the provisions relating to actions for limitation of liability have been codified in Part XA of the Merchant Shipping Act, 1958. Section 352A provides for the circumstances in which the owner of a sea-going vessel may limit his liability in accordance with the provisions of Section 352B of the Act. Section 352C contemplates the setting up of a Limitation Fund and for the consolidation of claims against the owner. Section 352C provides as follows:--

"352C. Limitation fund and consolidation of claims against owners. --

(1) Where any liability is alleged to have been incurred by the owner of a vessel in respect of claims arising out of an occurrence and the aggregate of the claims exceeds or is likely to exceed the limits of liability of the owner under Section 352B, then the owner may apply to the High Court for the setting up of a limitation fund for the total sum representing such limits of liability.

(2) The High Court to which the application is made under Sub-section (1) may determine the amount of the owner's liability and require him to deposit such amount with the High Court or furnish such security in respect of the amount as in the opinion of the High Court is satisfactory and the amount, so deposited or secured shall constitute a limitation fund for the purpose of the claims referred to in Sub-section (1) and shall be utilised only for the payment of such claims.

(3) After the fund has been constituted, no person entitled to claim against it shall be entitled to exercise any right against any other assets of the owner in respect of his claim against the Fund, if that Fund is actually available for the benefit of the claimant.

(4) Subject to the provisions of this Part, the High Court may distribute the amount constituting the Fund rateably amongst the several claimants and may stay any proceedings pending in any other Court in relation to the same matter and may proceed in such manner and subject to such rules of the High Court as to making persons interested parties to the proceedings, and as to the exclusion of any claims which do not come in within a certain time, and as to requiring security from the owner, and as to payment of any costs, as the High Court thinks fit.

(5) Where the owner establishes that he has paid in whole or in part any claim in respect of which he can limit his liability under Section 352A, the High Court shall place him in the same position and to the same extent in relation to the Fund as the claimant whose claim he has paid.

(6) Where the owner has established that he may at a later date be required to pay in whole or in part, any of the claims under this Part, which could be settled from the Fund, the High Court may notwithstanding the foregoing provisions of this section order that a sufficient sum may be provisionally set aside for the purpose to enable the owner to enforce his claim against the Fund at a later date in accordance with the provisions of Sub-section (4).

(7) If the owner is entitled to make a claim against a claimant arising out of the same occurrence, their respective claims shall be set off against each other and the provision of this Part shall only apply to the balance, if any.

9. Section 352C thus has expressly provided that the owner may apply to the High Court for the setting up of a limitation fund for the total sum representing the limits of his liability. Under Sub-section (2) of Section 352C, it is the High Court to which the application is made which is to determine the amount of the owner's liability and which may require him to deposit such amount or furnish security. The distribution of the amount which is thus constituted is to be carried out by the High Court under Sub-section (4). In fact, the High Court may stay any proceedings pending in any other Court in relation to the same matter.

10. The provisions of Part XA of the Merchant Shipping Act, 1958 came up for consideration before the Supreme Court in World Tanker Carrier Corporation v. SNP Shipping Services Pvt. Ltd and Ors., 1998(3) SCALE 165. Construing the provisions of Part XA, the Supreme Court held thus:

"A limitation action as in the present case, falls under the High Court's Admiralty jurisdiction. But a limitation action, though filed in Admiralty, is not against a vessel. It is a protective action against claims which may be filed by others against owner of the vessel in admiralty jurisdiction. Therefore, a plea of limitation can be taken as a defence by the owner in an action in admiralty filed against him by the claimant against him and his ship. Hence, the Court having jurisdiction to entertain an admiralty action against the vessel of the owner has jurisdiction to set up a limitation fund for the owner. Similarly, if the owner initiates the "defensive" action in limitation, the Court which has jurisdiction to entertain a liability claim will have jurisdiction to entertain the limitation action. If a liability claim is already filed, that Court will have jurisdiction over limitation action also. But claims may be several, and they may be actually filed or may be apprehended. Any Court where such a claim is filed or is likely to be filed will have jurisdiction to entertain a limitation action. The Court of domicile of the owner and the ship is a Court where such a claim is likely to be filed. Therefore, that Court will also have jurisdiction. Out of these, the owner has the option to choose his Court for filing a limitation, action."

11. In the present case, the first respondent has instituted a suit before this Court in the exercise of the Admiralty jurisdiction and has sought inter alia the constitution of a limitation fund. Section 352C, enables the owner to move the High Court for setting up a limitation fund. As the Supreme Court held in World Tanker, the owner has the option to choose his Court for filing a limitation action. The Court must of course be a Court of jurisdiction, one of those enunciated in the judgment of the Supreme Court. Counsel for the first respondent urged that the suit before this Court is instituted, besides the Appellant, against all other claimants who may have claims in respect of damage caused by the sinking of the vessel while the suit at Veraval is only between the Appellant and first respondent. On the other hand, the Appellant would urge that apart from it there is no other claim forthcoming in respect of the sinking of the vessel and both the suits involve the same parties. For the purpose of the application under Section 10 of the Civil Procedure Code it would neither be appropriate nor proper at this stage to investigate into whether as a matter of fact any other claims are apprehended. Even on the assumption that the Appellant is the sole claimant, having regard to the provisions of Section 352C and the position in law enunciated in World Tanker it cannot be said that the ingredients for the grant of a stay under Section 10 of the Civil Procedure Code are established.

12. In that view of the matter, we do not find any merit in the appeal.

13. The Appeal is dismissed.