Bombay High Court
Sembcorp Marine Repairs And ... vs M. V. Karnika (Imo No. 8521220) on 6 December, 2022
Bench: N. J. Jamadar
19-IA4650-2022INCOMA27-2021.DOC
sSantosh
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ADMIRALTY AND VICE ADMIRALTY JURISDICTION
IN ITS COMMERCIAL DIVISION
INTERIM APPLICATION NO. 4650 OF 2022
SANTOSH IN
SUBHASH COMM ADMIRALTY SUIT NO. 27 OF 2021
KULKARNI
Digitally signed by
SANTOSH SUBHASH
KULKARNI
Date: 2022.12.09
Sembcorp Marine Repairs & Upgrades Pte.
18:36:29 +0530
Ltd. ...Applicant
In the matter between
Sembcorp Marine Repairs & Upgrades Pte.
Ltd. ...Plaintiff
Versus
Sale Proceeds of M. V. Karnika (IMO No.
8521220) ...Defendant
Mr. Ram Jay Narayan, i/b Shweta Sadanandan, for the
Applicant/Plaintiff.
CORAM: N. J. JAMADAR, J.
DATED : 6th DECEMBER, 2022
ORDER:-
1. This is an application for summary judgment under Order
XIII-A read with Order XII Rule 6 of the Code of Civil Procedure,
1908 ("the Code").
2. The plaintiff is a company incorporated under the laws of
Singapore. The plaintiff is engaged in the business of, inter alia,
ship repair and refurbishment yard. The vessel, MV Karnika
(IMO No.8521220) was flying the flag of Bahamas. Jalesh
Cruises Mauritius Ltd. ("Jalesh") was the registered owner of MV
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Karnika. Pursuant to orders passed by this Court on 7 th
October, 2020 and 28th October, 2020 in Admiralty Suit No.53 of
2020, MV Karnika was sold and the sale proceeds stand
deposited with the Prothonotary and Senior Master of this
Court. Pursuant to further order dated 22 nd December, 2020 in
Commercial Admiralty Suit (L) No.4374 of 2020 a notice inviting
claims was published by the Sheriff of Mumbai. In response
thereto, the plaintiff, who claims to have a maritime claim
against the defendant - vessel has instituted this suit.
3. The plaintiff avers that on 1 st March, 2019 Jalesh and
plaintiff concluded a Ship Refurbishment Contract for repairs
and refurbishment of MV Karnika for the value of US$
50,00,000. The value was subsequently revised to US$
40,60,165. The contract provided for, inter alia, payment of
interest at the rate of 18% p.a. (i.e. 1.5% per month) on the
outstanding amount receivable by the plaintiff beyond the credit
period.
4. During period from 12th March, 2019 to 7th April, 2019, the
plaintiff repaired and refurbished MV Karnika at its yard in
Singapore. Invoices were raised for an aggregate amount of
US$ 40,60,165. Jalesh made a lumpsum payment US$
30,00,000 on 5th April, 2019. The said amount was adjusted
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against the first three invoices. An amount of US$ 10,60,165
covered by the last invoice dated 6 th April, 2019, remained
outstanding. Jalesh confirmed the correctness of the
outstanding amount under the final invoice dated 6 th April,
2019.
5. Correspondence ensued between the parties. Vide
Confirmation (Exhibit-J), Jalesh acknowledged the outstanding
amount of US$ 144,851.43 as of 6th February, 2020. Jalesh also
acknowledged liability to pay interest at the rate of 1.5% per
month on the said amount. In addition thereto, Jalesh
admitted liability in subsequent communications dated 28th
July, 27th August and 28th September, 2020. Jalesh however
failed to pay the outstanding amount.
6. In the meanwhile, Jalesh has gone into liquidation in
Mauritius. The plaintiff asserts it has not received any amount
in the said liquidation proceedings. As the plaintiff has a
maritime claim within the meaning of Section 4(1)(m) of the
Admiralty (Jurisdiction and Settlement of Maritime Claims) Act,
2017 ("the Admiralty Act"), the plaintiff is entitled to enforce the
same against the defendant - vessel, in rem. Hence this action
against the sale proceeds of the defendant.
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7. In the application, it is averred that the claim of the
plaintiff represents an admitted liability. There are clear and
unequivocal acknowledgments. Despite service of the writ of
summons, none appeared for Jalesh. In view of the clear and
explicit admissions of liability, there is no real prospect of the
claim of the plaintiff being successfully defended. Hence, this
application.
8. I have heard Mr. Narayan, the learned Counsel for the
applicant - plaintiff. I have perused the averments in the plaint,
application and documents annexed thereto.
9. The ship repair and refurbishment contract executed on
1st March, 2019 evidences the transaction between the plaintiff
and Jalesh. The terms of the contract, inter alia, provided for
payment of full amount of the invoices within seven days and
payment of interest at the rate of 1.5% per month for the
delayed period. The plaintiff has placed on record documents
which indicate that the plaintiff did provide repair and
refurbishment services to MV Karnika. The invoices (Exhibits-F
to F3) evidence the services rendered by the plaintiff to the MV
Karnika. The invoice dated 6th April, 2019 (Exhibit-F3) records
part payment of US$ 30,00,000 and the outstanding amount of
US$ 10,60,165. The said invoice also contains the term of
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payment and charge of interest at the rate of 1.5% per month for
the delayed payment. The material on record thus establishes
beyond the pale of controversy that the applicant had rendered
repair and refurbishment services to MV Karnika.
10. The claim of the plaintiff that Jalesh had confirmed the
outstanding balance by executing the balance confirmation is
substantiated by the balance confirmation (Exhibit-J) dated 6th
February, 2020. Jalesh had thereunder acknowledged the
liability in the sum of US$ 144,851.43. The liability to pay
interest on the outstanding amount at the rate of 1.5% per
month was also duly acknowledged. Jalesh agreed to repay the
outstanding amount by 12th April, 2019.
11. It becomes evident that thereafter Jalesh faced financial
constraints. Initially in response to the demand by the plaintiff,
Jalesh assured the plaintiff that it was in the process of
arranging the funds and the outstanding amount would be
cleared soon. The communications dated 28th July, 2020
(Exhibit-K), 27th August, 2020 (Exhibit-K) and 28 th September,
2020 (Exhibit-L) clearly indicate that Jalesh assured to pay the
outstanding amount. It does not appear that at any point of
time Jalesh disputed the liability. In the weight of the
circumstances which ensued in the wake of Covid-19 Pandemic,
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Jalesh seems to have imploded resulting in liquidation, arrest
and sale of the defendant - vessel.
12. In the totality of the circumstances, especially the clear
and explicit acknowledgment of liability by executing balance
confirmation and addressing letters assuring to clear the
outstanding amount, coupled with indisputable rendering of
services by the plaintiff to MV Karnika, for which a substantial
part payment had already been made, there does not seem to be
any real prospect of defendant successfully defending the suit.
13. I find substance in the submission of Mr. Narayan, that
the claim for repairs and refurbishment charges of the vessel
constitutes a maritime claim under Section 4(1)(m) of the
Admiralty Act.
14. In view of the admitted liability and there being no
compelling reason not to pass a decree without leading
evidence, I do not find any impediment in allowing the
application.
15. Hence, the following order:
:ORDER:
(i) The application stands allowed.
19-IA4650-2022INCOMA27-2021.DOC
(ii) There shall be a summary judgment and decree in
favour of the applicant - plaintiff and against the sale
proceeds of MV Karnika in the sum of US$
14,25,921.93 along with further interest at the rate of
8% p.a. on the principal amount of US$ 10,60,165
from the date of the the suit till payment.
(iii) The plaintiff is also entitled to costs quantified at
Rs.5,00,000/-.
(iv) The suit stands decreed in aforesaid terms.
(v) Decree be drawn accordingly.
[N. J. JAMADAR, J.]
